Jared Meyer: You write, “ the forces that have made modern life possible go hand in hand with enormous economic inequality ” (emphasis in original). Please explain.
Don Watkins: We have seen an amazing increase in our standard of living over the last hundred fifty years or so, and any economic discussion has to start by asking: what made that possible? It was not physical labor. Marx’s arguments to the contrary notwithstanding, muscles did not make Manhattan.
What transformed human life was the intellectual efforts of inventors, entrepreneurs, and financiers who used their minds to discover and implement new technologies and productive processes.
It started in the 19th century and only in the West because people had an unprecedented amount of freedom to put ideas into action, and to profit from their efforts. Free societies become rich because they liberate human ability and reward achievement.
And ability and achievement are far from equal. Individuals create vastly different amounts of economic value. My wife is a very good teacher, but she provides value to a few dozen children each year. She is inevitably going to make less than Jeff Bezos, who provides value to millions of people through his efforts at Amazon. But so what if he earns more income? Bezos is not taking anything away from her—on the contrary, he is making her life better.
Whole thing here.