Is the wealth gap really all that bad?

The financial crisis wiped out trillions of dollars of savings and capital in America, sparking an entire movement against the top 1 percent of earners and shining a bright light on income inequality and the wealth gap in the United States.

U.S. businessman Edward Conard makes the capitalist’s case for the importance of the unequal distribution of household wealth in his book, The Upside of Inequality.

Conard argues two main points in justifying his view.

First, we need unequal incentives to push innovation and risk-taking, the engine of a capitalist economy. Without the promise of outsized rewards, where would the desire for improvement come from?

Take away the outsized rewards through taxation and redistribution of wealth and we remove the innovative engine of the economy, writes Conard.

OK, I’ll admit, I’m sympathetic to that idea.

Second, Conard argues, we need concentrations of wealth in the hands of risk-taking capitalists to fund the innovative ideas of entrepreneurs who have more talent than money. Take away the piles of money in the hands of capitalists, and you remove the fuel from the engine.

OK, I find this argument of Conard’s plausible as well.

I don’t agree with Conard’s view because of any ideological attachment to capitalism. But practically speaking, the miracle of lifting billions of people out of poverty in recent decades happened under market-based

MICHAEL TAYLOR