Libertarianism: Inequality In The United States

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From a moral standpoint, one typically agrees that not one life is more important than another, and that every life is valuable. The debate of the appropriate level, if any, of income distribution to some extent reflects this question of morality. It ponders either the amount of resources to devote to the lower strata of society, the method to get those resources to the lower strata, or both. The United States today remains at a high level of well-being relative to the rest of the world in terms of GDP per Capita. However, the United States also has a high Gini coefficient relative to the rest of the world, which is associated with high levels of inequality. Under conditions of high inequality, the debate of taxation is very prevalent within …show more content…
Inequality is a natural result of a free market economy; some will win, and some will lose. In a free market economy, those with the proper resources will provide jobs for those without, and generally those who are most capable are the winners-leaving some behind. The libertarian approach to income distribution leaves the wellbeing of those at the bottom of society in the hands of the economy. Supporters of the libertarian approach suggest that limiting government intervention will result in the most efficient economy, even with the presence of "losers." Libertarians support some level of inequality in order to achieve an efficient economy and rely on the heightened growth of the economy to raise the wellbeing for the lower …show more content…
Complete inequality would diminish the possibility of a formation of any market; if all wealth is held in one household, then there is no possibility for transactions -the basis of a market. Furthermore, in a 7-year-old study published by the International Monetary Fund, Economists Andrew Berg and Jonathan Ostry compare the effects of libertarian policies on economic growth. They state that "reduced inequality and sustained growth may thus be two sides of the same coin." If there is a relationship between economic growth and reduced inequality, there must be some correct balance of income distribution. While libertarians suggest that lessening government intervention will foster economic growth, and thereby improve wellbeing for the lower strata, this study suggests that reducing inequality may actually aid economic
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