Since wealth is created, there is no limit to how much can exist–and the wealth of others cannot inhibit us from creating and enjoying our own.
Income inequality is a natural and desirable part of a free, prosperous society. […]
Criticisms of income inequality are always couched in a certain type of language. For example, it is claimed that wealthier Americans "command" an "unfair share" of our "national wealth." Such language implies that American wealth is a communal pie that belongs equally to all of us.
But it is no such thing.
The vast wealth that exists in America has been created–through the productive activities and voluntary arrangements of individuals. And individuals do not necessarily create the same amount of wealth. Compare the value brought into existence by the entrepreneur whose productivity software is eagerly bought by millions–and the checkout clerk at a store that sells it. Such vast differences in productivity–which can be caused by vast differences in ability, work ethic, interests, skills, and choices–are the root of vast differences in income.
Because all wealth is created, it rightly belongs to those who earn it (or their chosen beneficiaries)–and no one can rightly claim to deserve wealth earned by others. If someone wants to make more money, he is free to enter a new field, gain new knowledge, start a business, or do anything else to enable himself to create more value.
It is often implied that the rich get richer at the expense of everyone else–that if some get big slices of pie, the rest get only crumbs. But the exact opposite is true. Since wealth (including pie) is created, there is no limit to how much can exist–and the wealth of others cannot inhibit us from creating and enjoying our own. Further, the wealth creation of the richest Americans makes us far more productive and well-off.
Consider how the wealthiest individuals in any free economy, businessmen, make their money. The job of a businessman is to orchestrate productive enterprises that efficiently coordinate people, resources, and tools to create valuable products. Businessmen profit when they bring out valuable products at desirable prices; thus, they are continually making more, better, and cheaper products for everyone to purchase. Businessmen profit when they make others more productive; thus, they are continually seeking to create new jobs that can add to their bottom line, and providing their workers with as many productivity-enhancing tools and technologies as they can. Businessmen's pursuit of profit has been the driving force behind the incalculable increase in our standard of living over the last 150 years–and economic history shows that the freer they are left to make money, the greater the increase in productivity and wages at all levels.