Avoid the trap of the income 'gap'

There are those who want to dismantle today's liberal economic system because it can lead to gaps in levels of income. Their battle cry is hugely damaging when taken seriously, writes Stockwell Day.

It's the warning first famously emblazoned in the subways and walkways of London, entreating pedestrians to watch out for that space between the edge of the platform and the sliding door of the train. Catch your foot in the death grip of that space and it won't really matter if you've purchased your ticket or not. The only ride you'd take might be one to the morgue.

In spite of the fact that gap exists, millions of people take the risk daily and are generally well served by a transit system that moves masses of citizens to their destinations in relatively efficient fashion. We are all better off for that system despite its ongoing frustrations and problems.

How silly would it seem if people took to the streets and attempted to tear the subway system apart because of its imperfections and the ongoing "gap." Overall we benefit. Even though in the process of its operation some people get hurt in the system, we use it. As long as efforts are made to reduce the hurt, we still want it to run.

Contrast that with the rationale some people are using to want to dismantle or at least seriously impair our system of relatively free markets and the freedom to be enterprising.

Their battle cry is shrill, impervious to reality, and hugely damaging when taken seriously.

Stockwell Day says critics like this Occupy protester in downtown Fort Lauderdale, Fla. are wrong to focus on the gap between rich and poor as a problem of the free market system. (J Pat Carter/Associated Press)

Simply put, because today's liberal economic system can lead to gaps in levels of income, there are those who want to dismantle it. They see the "gap" itself as evidence of inherent evil. They believe that gives justifiable cause for an economic exorcism to purify society of this demonic oppression.

We are besieged with media reports from a plethora of purported economic studies and institutes which proclaim that there is an income gap. The fact that some in society earn more than others is apparently a burning indictment of the system itself. Should we not be factoring in some broader considerations here that go beyond this narrow and suffocating view of how the world works?

A wise man once observed, "The poor you have always with you." He was not being dismissive of those who are economically marginalized. As a matter of fact he spent a large part of his work on caring for the poor. He was simply stating a human reality that has existed since the beginning of time and which will continue to the end of time (whether that end comes this December according to the Mayan calendar, or in 2.648 billion years according to those who gamely predict the sun's ability to sustain our planet).

In a debate on a university campus I once proposed the following socio/economic experiment. Select a hundred people at random from a telephone directory. Give each of them one million dollars with no strings attached, other than they are not allow to use the money in any illegal means.  At the end of the month do an audit on each one. You will find that some have used their talents to become multi-millionaires. And others will have blown it all away. And still others of the group will have become indebted and will be in worse shape than before their million-dollar windfall.

That's the way the world works. In a relatively free system some people will move ahead, some will not. The key is not to punish or inhibit those who enhance what life has dealt them. The key is to make sure everybody has equal opportunity, not to naively attempt to legislate equal outcome.

Any system, whether political or economic, has its imperfections. After all, imperfect human beings operate systems, thus no system is perfect. The key question, broadly put, is what system produces the highest quality of life and living for the largest number of people?

Any rational survey of modern, even postmodern, economic history amply demonstrates  a very basic truth. That is, liberal, free trading, enterprising economies which allow people to invest or spend their capital freely, will produce more economic and social benefits than those systems which do not afford those freedoms.

Let us base our policy debates on those realities, and not on the politics of envy. If a Hollywood star or top athlete is able to make millions because of the spending choices of their fan base, then so be it. I would not want to see a law that forces Adele to fork over her earnings at punitively high rates or prohibits David Foster from moving to the U.S.A. to make his fortune.

Whether it's Eminem with his lyrics, Steve Jobs with his tech brilliance, Warren Buffet with his investing skill or Tim Horton with his hunch that Canadians might like a good cup of coffee, let the rewards and risks of their efforts flow freely to them.

Yes, we need contract law, sensible regulation and a tax system that does not punish success and hard work. Of course, within the system there must be programs which people can access easily to raise their skills, increase levels of education and to properly care for those who cannot truly care for themselves. What we do not need are people focused on the fact that somebody makes more or has more than we do. Those who have more generally do more for the poor than the rest of us do anyway.

It is absolutely undeniable that in more and more places around the world where market principles are being allowed to operate we are witnessing millions of previously impoverished people becoming upwardly mobile. In spite of the fact that there is still corruption and the inappropriate granting of privilege in too many places, people are working towards levels of substance and substance which even 15 years ago would have been unthinkable.

Improve the system? Yes. Trash it because some people are better off than I am? No.

Avoid the trap of minding the gap.