World Distribution of Household Wealth- see the stats

Today's comment is by John Pugsley, Chairman of The Sovereign Society, best-selling author, and long-time libertarian.

Dear A-Letter Reader,

According to "The World Distribution of Household Wealth," a report released last week by the United Nations, the richest 1% of the world's adults own 40% of all global assets. The 37 million people who hold that 40% chunk all have a net worth of $500,000 or more. The report also concluded that the richest 10% of adults own 85% of global wealth, while 50% of the world's adult population owns barely 1%.

One of the report's authors, James Davies, an economics professor at the University of Western Ontario, said the UN will begin tracking changes in wealth over time and will recommend new programs to address inequities.

It's not surprising that the United Nations would study and recommend programs to bring about a more equitable world. The case against inequality, i.e., that it is distinctly evil and unjust, permeates the intellectual and political world. It is rare indeed to find anyone willing to challenge the goodness of programs to overcome the inequity between the rich and poor. In fact, in the eyes of the majority, the ultimate good would be an egalitarian world.

But ask yourself, should egalitarianism be an unquestioned ethical ideal? In his 1961 book, Welcome to the Monkey House, Kurt Vonnegut imagined a world in which this ideal was achieved:

"The year was 2081, and everybody was finally equal. They weren't only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General."
Anyone sensitive to the swelling tide of government agencies sees that Vonnegut might have a real window on the future. And, as the late economist Murray Rothbard wrote, "The egalitarian world would necessarily be a world of horror fiction - a world of faceless and identical creatures, devoid of all individuality, variety, or special creativity."

In the real world in which we live, some are born tall, some short, some black, some white, some bright, others dim. Professor Richard Herrnstein estimated that 80% of the variability in human intelligence is genetic in origin. And he concluded that any political attempts to provide environmental equality for all citizens will only intensify the degree of socioeconomic differences caused by genetic variability. He notes that in light of human nature, an egalitarian society could only hope to achieve its goals by totalitarian methods of coercion.

And so it has been demonstrated. While equality had a vast political constituency, the pursuit of the goal is a pernicious evil that has wrought the worst destruction and agonies in mankind's history. For confirmation of this fact, we need look no further back than the communist experiment in Russia and China in the past century in which tens of millions were murdered in a futile attempt to force individuals to live in an egalitarian society.

While we might recognize physical equality as unachievable, what about wealth? At a minimum, should wide inequalities of wealth be erased through government programs?

The concept of creating a more just distribution of wealth, to "level the playing field," is the foundation of many political ideologies, particularly of both socialism and communism. It's also the genesis of a cornucopia of destructive laws. The egalitarian urge, for example, is the rationale for the progressive income tax, which is based on inequality of incomes, and the "unfair" nature of taxing the rich and poor at the same rates.

Most of us recognize the inequity in the distribution of wealth in the world. And most of us wish to see the poverty and hunger alleviated. The challenge is to identify the cause, and only then can the cure be designed. If the UN report is accurate, and half of the world's population owns only 1% of the world's assets, we must first ask "why are some poor and some rich?"

Is it because the poor are less intelligent? Some may be, just as some of the rich are not.

By definition most people are of 'average' intelligence, whether they live in poverty or affluence. The poor in Afghanistan, or Bangladesh, or Mexico, or the inner cities of the U.S. were not selected out and placed there because of low IQs.

Is it because they lack ambition? Millions of the poor risk their lives climbing fences, digging tunnels, setting to sea on rafts, to migrate to places where they can get jobs in order to better themselves. No, it's not lack of ambition.

Is it because they lack education and knowledge? As well as being a road to wealth, knowledge itself is an asset, it is capital, and therefore it is wealth. Education and knowledge is just an aspect of what they lack. It tells us nothing to say they are poor because they lack wealth.

How, then, does the poorer 50% of the population that owns a mere 1% of the worlds wealth differ from the 10% who own 85%? The answer is they differ in "opportunity." The opportunity to use their intelligence and ambition to create the affluence they desire. And where does 'opportunity' come from? It's the natural offspring of individual liberty.

The Heritage Foundation/Wall Street Journal Index of Economic Freedom measures 161 countries against a list of 50 independent variables divided into 10 broad factors of economic freedom. It demonstrates incontrovertibly that the freer individuals are to direct their efforts to where they are most productive, the higher the production and accumulation of wealth. The correlation between freedom and affluence is well documented.

That means wealth comes from the efforts of individuals, not the actions of government.

As I see it, the world doesn't need more government programs to address inequities between the rich and poor. The world needs sovereign governments to step out of the way, and allow sovereign individuals the freedom to produce, exchange, and invest.

JOHN PUGSLEY, Chairman
On behalf of The Sovereign Society