Take a look at the Fraser Institute’s (A Canadian free-market think tank) report on the economic freedoms enjoyed in North America. Here’s the money quote:
One of the common criticisms of capitalism is that it allegedly increases income inequality. There is a growing body of literature at the country level that shows otherwise. There has been some state-level work as well. Ashby and Sobel (2008) examined income inequality. They found that both the level and growth of income in the lowest income quintile was positively associated with the growth in economic freedom. They found similar results for the middle quintile and the highest income quintile, but in the latter group only income growth (not income level) was statistically significant. They also found that the growth of economic freedom was negatively associated with the ratio of the highest income quintile’s income share to the lowest income quintile’s income share, meaning that increased freedom was associated with less income inequality.
Read the whole thing – it’s rather disturbing in that the United States is now well behind Canada in term of economic freedom. (At least one prescient author/philosopher saw this coming many years ago.)
The report speaks to several fallacies of income inequality, while yr. obdt. denies that income inequality is anything but a problem, but is rather an inevitable fact of human existence; what matters is overall standard of living, which is still very high in the U.S. – although it’s slipping.
How have we come to this pass? Why is this happening? What has happened to our country? Who is John Galt?