There is a classic scene in the film Wall Street where Michael Douglas’ character Gordon Gecko boldly declares “greed is good” to the thunderous applause of his audience of bankers and corporate executives. I thought this week I would make a similar controversial statement. Please hear me out and read the entire column before writing to me or the editor.
“Inequality is good.” There I said it! While I believe we are all created in God’s image and equal in His eyes, we are also all born with different talents, personalities, and life circumstances. Because of this, a desire for all to be equal in all situations is neither natural, nor even possible. Father of modern economic thought Adam Smith was right when he said “Wherever there is great property, there will also be great inequality.”
It is true our nation’s prejudicial and discriminatory past held down certain groups and forced inequality that was both immoral and artificial. I also believe it’s true that, to some extent, the ramifications of these evil acts are still felt today. Particularly, when it comes to the educational and economic opportunities given to those born into certain communities. As much as I believe America provides a more level playing field than any society in human history, the fact that all still do not have a truly equal opportunity to reach their potential means there is still work to be done.
The trouble is too many in our society today are less interested in producing equal opportunity and focused more on producing equal outcomes. While their intentions in doing so may be good, the end result of these actions are usually not. I believe we are naturally self-interested beings. When the opportunity to succeed and fail is taken away the end result is often apathy and sloth.
I understand accepting or even rooting for greater economic inequality violates certain “modern sensibilities”. However, I would argue the opportunity of an individual to improve their own situation has been one of the fundamental drivers of progress throughout our nation’s history and without it we would be worse off.
While running for president in 2019 avowed socialist Bernie Sanders was quoted as saying “billionaires should not exist”. I would argue not only should billionaires be allowed to exist, their existence is essential to the future of the nation and the world. Think about it, are you better off because Bill Gates brought computers to the masses? If you’re reading this column on your smartphone phone you have Steve Jobs to thank for that. During the pandemic how much worse would it have been if Jeff Bezos had not developed Amazon? The innovations of these and many other brilliant people have resulted in the improvement of our society. But without the chance of obtaining an unequal portion of the world’s wealth these individuals throughout history might have never even bothered trying.
The good that comes from natural inequality isn’t limited to economic matters however. Sports are another area where inequality not only exists but is critical. While not immune to the bigotry and prejudice of sinful people that denied others the right to compete, sports has long been as pure of an example of meritocracy as any on the planet. As we get ready for the summer Olympics to begin, it is the thrill of seeing men and women competing to be declared the best that makes it great. I have a son who played tee-ball in a league where scores were not kept players where never called out by the umpires and everyone got a trophy. It was awful. Without the opportunity for both success and defeat sports are meaningless.
At Stewardship Capital our role in financial advising would be about as pointless as this kind of tee-ball game if all companies were forced to produce equal outcomes. It wouldn’t matter if we invested in Tesla or Ford, Coke or Pepsi, or Apple or Google, your results would be the same and we would all suffer. If you don’t believe me, look at what’s happening in Cuba as we speak.
So, the next time you hear someone on TV or in print decrying the inequality that exists in America, take a moment to really look at the root causes of that inequality. It might not be as unfair and immoral as some portray it to be.
(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)