Capitalist free markets do not create a situation where everyone has the same amount of stuff. Sadly, progress yields unequal outcomes. Enter the welfare state, a creature of most modern capitalist economies. The idea is that taxes will be collected to create a repository of public funds to provide a safety-net for the poorest and most vulnerable in society. Thus the welfare state would be expected to meet the costs of unemployment insurance and pensions for those who found themselves cast on the heap when the company they worked for goes bust.
In Capitalism and Freedom Friedman tries, although without much success judging by the state of things today, to challenge us to think about the meaning of 'equality' in the context of work and pay. Something a bit more sophisticated than 'having the same amount of stuff' or 'paying everyone the same wage'.
It's official. The Economist reports that America is the country where people care the least about inequality. Many Americans care about inequality, sure, just not as high a proportion as, say, the number of people in Sweden or just about any other rich country where people care very much about inequality and have the high taxes to prove it.
The real meaning of poverty is not having enough money to allow you to participate in the social life of your community. These days poverty does not mean having no food to eat; it's more about having no money to keep up with the Joneses. The idea of social inclusion as a fundamental human right introduces a whole new meaning of Deprivation and Want.
The terms 'poverty' and 'inequality' are often used interchangeably. As long as there are some people with lots of stuff, and other people who have less stuff, there will always be inequality. The only way to eradicate inequality is to ensure that everybody has exactly the same amount of stuff.
Some people make risky choices, just for the thrill of it, but when it comes to work, who chooses to work and who can say they were forced to work by their employer? Yes, this is about Uber again.
There is a great yawning divide between those who care very much about economic inequality and would do anything [Editor: anything?] to make sure that henceforth everybody will have the same amount of stuff, and those whose only response to the reams of data proving beyond doubt that some people are richer than others is to ask: ‘so what?’
If we start by asking whether we can reduce inequality while still enhancing market efficiency, we are assuming that ultimately we want to continue enhancing market efficiency; or at least we don’t want to push inequality-busting policies beyond the point at which efficiency would begin to erode.
What does it mean to say that a worker is being paid more than they deserve, or less than they deserve?
We are all concerned with being paid as much as other people so we can all have the same amount of stuff and feel that life is equal and fair, but we don’t usually worry about the inequality of production, or the fact that some people and nations are far more productive than others.