18 October 2011 ~ 0 Comentarios

Inequality and ‘the indignant ones’

by Carlos A. Montaner

Indignados Wall street

(The Miami Herald) The anger grows. "The indignant ones" — those who protest on public squares — reserve their largest quota of ire against the unfair differences in income. To them, it is shameful that some executives or business owners make more than 100 times what ordinary workers earn, especially now that 10 percent of the population is unemployed.

Are they right? I don’t think so. In a free economy, it is the market that — to a great extent — sets people’s incomes. Don’t forget that the market is the result of the decisions of millions of people. For example, by their tenacious determination to watch Oprah Winfrey’s program, television viewers enable that lady to make $290 million a year. If the average income of the janitor who cleans a TV studio is $29,000 per annum, Oprah makes 10,000 times that amount. Should she be condemned for greed? Why, if her income is the result of the decision of the sovereign consumer?

The same could be said about novelists James Patterson ($88 million a year, the writer with the world’s largest income) and Stephen King ($28 million); tennis player Rafael Nadal ($31 million); baseball player Alex Rodriguez ($38 million); soccer star David Beckham ($40 million); golfer Tiger Woods ($75 million) and movie directors James Cameron ($257 million), George Lucas ($170 million) and Steven Spielberg ($107 million).

All these figures and others are just a click away, on a website called paywizard.org. It includes people who work for one dollar a year, such as the mayor of New York City, multimillionaire Michael Bloomberg, and Pope Benedict XVI, who doesn’t even receive the one dollar but is remunerated with housing, food, clothing and the rest of the expenses generated by his complex job as leader of the Roman Catholic Church.

It is known that we are born with an innate perception of distributive justice. Babies are capable of realizing that other creatures receive more milk or food than they do, and they show their displeasure when that happens. But along with that intuitive reaction there is another: to seize the largest amount of food or someone else’s toys, without stopping to think that that action generates a sort of comparative grievance. The child is annoyed when someone else has more food than he does, but is very pleased when the opposite happens.

The same occurs among adults. Michael Moore, apostle of the indignant ones, earns through his documentaries, books and public appearances 30 or 40 times what his fans make, but, in his case, that economic superiority is perceived as a confirmation of his talent, not as proof of the unfairness of the system. Hypocrisy? Could be. The smug fellow now has a subject for a much-needed movie against himself and against the industry of social denunciation.

Simply put, the free economy does not seek an equal distribution of income but the material success of those who — through their talent, luck, connections or whatever, so long as they obey the law — end up profiting, a phenomenon that sometimes irritates most of the citizens but at other times seems to please them.

For example, the recent death of Steve Jobs, the creator of Apple, generated a huge wave of sympathy for him and increased devotion toward his firm, especially among young people, a group that included the indignant ones who protested against Wall Street and inequality. They didn’t realize that, thanks to the greed of the investors, who saw in the electronic-gadget company a chance to make money, Apple had become the second wealthiest company in the U.S. market, with a capitalization of more than $319 billion, more than the GNP of Colombia or Venezuela. I might mention that Apple’s CEO, Tim Cook, earns an annual salary of $59 million.

Naturally, what is very bad is for governments to rescue the companies that have lost favor among the consumers and, to boot, pay the executives their salaries with public money. That is going against the market. If Bank of America decides to pay something less than $2 million a year to its president, Brian T. Moynihan, it should do so with the shareholders’ money, not the taxpayers’, who were forced into the questionable task of saving that financial institution.

The indignant ones are right to protest when losses are socialized and profits are privatized. They are wrong when they become irritated by the differences in income. That’s the way the market is. Where it works, society as a whole is a lot more prosperous, even though sometimes more unequal.


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