But what is inequality, and is it inherently unjust? The answer: It depends on its nature and source.
The American Founders believed in a certain type of equality; equality before the law, or political equality, which means that every individual's rights are protected by government equally and at all times. They understood rights to mean freedom of action in pursuit of one's personal goals, values, and happiness—such as the right to freedom of speech, freedom of religion and conscience, and freedom to earn and keep property by work and trade.
Obama's concept of equality is economic equality, in which everyone is entitled to equal life outcomes and opportunity, which can only be achieved by obliterating political equality. To bring about economic equality, the purpose of government must be turned on its head, becoming a rights violator rather than a rights protector. It must forcibly regulate successful businesses in order to give weaker competitors a better opportunity (antitrust laws), or forcibly tax some people's earnings to give equal educational opportunities to others (government schools and college subsidies). It must forcibly redistribute wealth to provide a "safety net" for "the poor" and increasingly the middle class.
The egalitarian Obama notion of equality is what lies behind the growing attacks on the "1%." The "occupy" or "99%" movement is rooted in a corrupt and destructive anti-life premise that is a threat to ability and achievement on any level. As long as there is any economic inequality, there will be a top 1%. Cut down the top 1%, and a new top 1% emerges—the next in line—the previous 99th percentile. Then the process repeats itself on down the line to to 98th percentile, then the 97th, and so on and on. This means that, under the inexorable egalitarian logic of the 99% against the 1% premise, no one who achieves anything by his own work is safe from those who have less, because everyone below him is the eventual 99%.
What lies behind the notion that the 99% has a justifiable claim on the 1%? The failure to distinguish between two fundamentally different paths to wealth—theft vs. production. As Ari Armstrong explains in The Justice of Income Inequality Under Capitalism at the Objective Standard blog:
[T]hroughout most of human history, great income inequality arose when the political class looted the masses.
But the income inequality under tyranny is fundamentally different from that under capitalism. One arises from looting and forcing; the other from producing and thinking. Looters seize available wealth. They add nothing to the supply of wealth, opting instead to smash things, divert human effort to the task of looting, and squash the incentive of their victims to produce much of anything. Thus, even if looters could achieve income equality, doing so would constitute a moral atrocity. Producers create new wealth: They restructure their own resources—their land, machinery, seeds, and minerals—to create goods and services that benefit human life. Producers earn money by trading voluntarily with those who also benefit from the exchange. Often producers hire others, improving the lot of employer and employee alike.
Looters win (in their own short-sighted view) at the expense of others. Producers win as they help others win. At worst, a looter takes your life; at best, he steals what you produce. At worse, a producer leaves you alone; at best—and most typically—he greatly enriches and expands our lives.
America’s capitalists have nothing in common with dictators in the Middle East or with any other type of looter. (I mean actual capitalists, not those pretenders in business who wield political power to seize subsidies and hamstring their competitors.) Steve Jobs did not earn a fortune by attacking others or stealing from them; he grew wealthy by building remarkably advanced machines that dramatically improve the lives of tens of millions of people. Whatever wealth Jobs personally gained, he added enormously more value to his customers’ lives. The same can be said of any of America’s business leaders, whether the energy producer George Mitchell, retailer Jeff Bezos, software developer Bill Gates, internet visionary Mark Zuckerberg, or anybody else who lives by thinking and producing at whatever scale. Producers trade goods and services for money, and the exchange benefits both parties. A producer’s wealth indicates the scope of his mutually beneficial exchanges.
To be sure, in a mixed economy—a mixture of government controls and economic freedom, such as we have now—some income inequality is unjust. As Armstrong notes:
From the economic point of view, as Ludwig von Mises wrote in a 1955 letter: “Destitution is in a feudal society the corollary of income inequality, but not in a capitalist society. The fact that there is ‘big business’ does not impair, but improve[s] the conditions of the rest of the people.” Mises writes here of productive business in a free economy, not politically-connected “business” that seeks reward in handouts and special favors. To the degree that today’s economy has brought some closer to destitution, the cause is not productive big business, but instead the looting mentality of inflationary government spending, political support for irresponsible mortgages, bailouts for banks and unions, out-of-control entitlements, corporate welfare, and the like. In short, the cause is government interference in the economy.
The 99 vs. 1 percent premise doesn't just fail to distinguish between earned vs. looted fortunes. It equates the two, and thus obliterates the earned side. More and more people have come to see other people doing well economically as the 1%—whether or not they are statistically in the top 1%—and equate that, ipso-facto, consciously or unconsciously, with obtaining money dishonestly. And who is the victim of that 1 percenter? The implicit answer; "I, the 99 percenter, am the victim." How? Somehow, some way—maybe that unaffordable mortgage I took out, or "wage theft," or something I can't afford. The 99/1 premise gives rationalization to the parasite, the lazy, the entitled, the dependent, the envious, and denigrates the productiveness, self-motivation, self-discipline, pride, and thinking that goes into earning wealth and income. In short, the 99/1 premise glorifies vice over virtue.
This is Obama's "equality" campaign. He unleashed all of the anti-achievement mental poison that always exists in the dark cultural backwaters of the life-haters, and gave it voice and legitimacy. He has largely succeeded in his 2008 campaign promise to "fundamentally transform America." He has legitimized freeloading and diminished self-support.
The Legitimization of Freeloading: Today's State of the Union and Obama's Promise to "Fundamentally Transform America"
Why the GOP Must Stand Firm on "Tax Cuts for the Rich"
Envy/Hatred of the Good for Being the Good—Ayn Rand