Archive for July 10th, 2011

Denying the significance of statistics on income distributions, you often get some complaints. In particular, the role of government to help the poor has been expressed over and over again. Many people claim more redistribution was needed to allow everyone to live in freedom. If some people have x times the income or wealth of other people, they say, society will divide.

First of all, this is an empirical question. And we do see that countries with very high Gini coefficients (i.e. very high inequality) tend to suffer from social unrest. However, in most cases an ill-defined role of government and misbehavior by incumbents causes this unequal distribution of wealth in the first place. The same holds true for today’s Western countries. In fact, back in 1978 Friedman already explained how government intervention creates the poverty that many politicians want to fight through new government programs.

First of all, the government doesn’t have any responsibility. People have responsibility. Second, the question is how can we as the people exercise our responsibility to our fellow men most effectively.

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