by Chidem Kurdas
Law and government should treat people equally. This old principle may seem obvious and firmly in place, but in fact it’s much violated. Instead, the focus is on income distribution. Thus Robert H Frank in the NYT points to the bad effects of income inequality – like people spending too much money to emulate the rich – and suggests we “try to do something about it.”
His column about the costs of income differences shows no awareness of the costs of equity-promoting policies.
Attempts to create income equality erode equality before the law, as F. A. Hayek made clear. The Road to Serfdom – the historic experience as well as the title of Hayek’s book – is paved with egalitarian good intentions. If you feel “serfdom” is too extreme a word, the operative term here is “the road”.
Given that individuals are not the same to begin with, “To produce the same result for different people, it is necessary to treat them differently,” Hayek pointed out. Once a legislature gets into the business of redressing particular wrongs or helping specified groups, people are no longer treated equally by law. They’re treated unequally with the purpose of bringing them closer together economically and possibly socially.
To that end, certain groups –whether defined by income, occupation, business, geography, gender, ethnicity or some other criterion – have to be favored at the expense of others. However well intended – Hayek took that as a given – such policies corrode both freedom and overall economic well-being.
A government that takes on the responsibility of addressing the inequities suffered by one set of individuals can’t refuse the responsibility of addressing inequities suffered by other groups. Therefore people concentrate on getting access to and influencing political authority in their favor. The impartial rule of law is cumulatively destroyed as differential treatment – whether it takes the form of programs, tax rules, regulations or other policies – becomes increasingly common.
As it reaches into all nooks and crannies of society to remedy grievances and in doing so creates new grievances that cry for remedy, the government grows at the expense of civil society. People who mind their business in the market and stay out of the political arena get no protection. So they are in effect discriminated against, bearing the burden of taxes and regulations. Anybody who has the means to organize does so to get the legislature and other powers to address their grievances and give them benefits.
Does that sound familiar?
Since the path to wealth is increasingly through the political authority, there is less incentive to invest, innovate and produce for the free market. If the process continues, economic sclerosis sets in. Hayek, James Buchanan and other pioneers led the way in studying this downward spiral.
Now, I would not have bothered to write about the well-known vicious effects of the re-distributive interventionist state, but the commentary on my previous post persuaded me that it is worthwhile to express the point in plain language. That post is on Thomas Sowell’s insight that two distinct visions of human nature underpin political differences.
One of these, the unconstrained vision of intellectual and moral abilities, supports targeted policies to make society more egalitarian economically. It aims at equality of results. By contrast, the constrained vision – Hayek was a foremost proponent –aims at equality of process. This means treating people equally, not trying to make them more similar in material conditions or other characteristics—-which in any case can’t really be achieved.
Equality before the law is the achievable goal. It’s the real thing and the only way to prevent government arbitrariness and bloat
Sometimes it looks like the message needs to be repeated no matter how many times it’s been said before. I apologize to readers who are familiar with the above observations. There is a lot of great material about Hayek on ThinkMarkets and its Blogroll, including Cafe Hayek.