First of all, let’s define “inequality/high disparity.” Political inequality is unequivocally bad: It means the absence of equal protection of the law. Capitalism is the system of political equality—that is, the inalienable individual rights to life, liberty, property, and the pursuit of happiness and its corollary, the equal protection thereof under the law.
Second, let’s be clear that we are talking about when we say “capitalists.” I am answering as a capitalist in the broad philosophical sense, not in the narrower sense as a businessperson or investor.
Economic inequality/high disparity is a sign of a healthy and highly moral society where each individual is free to rise economically as far as his own personal attributes—his rationality, ability, ambition, values, goals, interests, temperaments, natural potentialities, personal circumstances, moral character, et al—will productively carry him. How high any productive individual’s attributes will carry him is determined not by central state planners (physical coercion) but by the market—that is, the cumulative voluntary choices of the individuals the producer trades with.
Why “highly moral?” Because in a capitalist society, where force is banned from human relationships and government protects individual rights equally and at all times, the only way to advance economically is to earn (make) money is through voluntary trade; that is, to produce a value that others, by their own judgment, willingly pay you for.** Trade is the win-win exchange of value for value. To make money is to create value for others. Those who make a lot of money are those who produce a lot of value for a lot of people. Those who make mega-fortunes improve the lives for millions. I love my Dell computer, which I’m typing on right now. It’s made my life better. Should I resent Michael Dell his fortune, just because there are tens of millions of other similar individual Dell owners? But it doesn’t end there. Michael Dell benefits once—my payment--and in an incalculably small way. I benefit every time I turn on my Dell computer, for as long as I have it. It’s more than five years worth of benefit, and counting. Inequality? You bet. I benefit vastly more from my one Dell computer than Michael Dell does. Dell’s fortune results from the fact that there are tens of millions of beneficiaries just like me. What great humanitarians the Michael Dells of the world are!
Capitalist economic inequality is not bad. It is capitalism’s virtue. What can be more virtuous than a social system whereby the rich build their fortunes by lifting everyone they deal with.
Socialism is immoral precisely because it seeks to equalize people in direct contradiction to the rich diversity across the individual spectrum of society. Socialism is thoroughly utopian--that is, contrary to human nature--by philosophical design. By design, socialism—in the name of stopping inequality—forcibly prevents people from expressing their personal desires and attributes through economic activity, impoverishing everyone. Stop someone from making money, and you stop his would-have-been customers from improving their lives. Perhaps the worst part of socialism is not that it prevents the best and brightest from flourishing and making the world a better place. The worst part of socialism that it kills aspiration and hope of ever flourishing and prospering, sacrificing upward mobility on the altar of economic equality.
Capitalism—of which I mean laissez-faire, not today’s cronyistic, mixed economy regulatory welfare states—naturally results from freedom, which means the right of each individual to pursue his own happiness, for his own sake, by his own effort, so long as he respects the same rights of others, dealing with others by voluntary consent to mutual advantage, in a free market, without government favors. Such human interaction results in economic inequality. Capitalists do not have to “justify” economic inequality/high disparity, because it is not a flaw. Inequality/high disparity should be celebrated. It is the economic justification of capitalism. The only way to kill inequality is to cripple individual achievement by force, which is why socialism always leads to economic paralysis and collapse, and ultimately to totalitarianism of one form or another (e.g., communism, national socialism, etc.). Political equality and economic inequality are corollary, mutually reinforcing hallmarks of capitalism, which is why capitalism is the only moral social system. Socialism is capitalism’s antipode.
Related Reading:
Equal Is Unfair: America's Misguided Fight Against Income Inequality—Don Watkins and Yaron Brook
* [Quora is a social media website founded by two former Facebook employees. According to Wikipedia:
Quora is a question-and-answer website where questions are created, answered, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.[3]Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users' answers.[4]
You can also reply to other users’ answers.]
** [NOTE: money “earned” through fraud is not truly earned, and laws against fraud are vital to capitalism. Also, I am leaving aside the issue of gifting or inheritance, which is irrelevant to the current discussion.]
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