By: Douglas J Utberg

The notion of equality is one that has achieved quite a bit of attention over the years.  The immortal words in the US declaration of independence proclaims: “We hold these truths to be self-evident: that all men are created equal.”  It is most certainly true that people are equal under God and equal before the law, but not much else about humanity is very equal.

People are born into different countries, different families, and with different abilities.  To many, this disparity in location, ability, and wealth feels extremely unfair . . . and they are right.  There is nothing about life that is ‘fair’ and most people would be extremely disappointed if fairness actually happened.

According to the IMF, The United States had a 2009 GDP per capita of $46,443 in comparison to the World GDP per capita of $10,348.  Is it ‘fair’ that the United States GDP per capita is over four times the world average?  In a world where fairness abounded, everybody would live the same lifestyle . . . meaning that the average US resident would need to sacrifice over 75% of their living standard for the sake of fairness.  I suspect that most people who advocate for greater ‘equality’ would balk at sacrificing such a great amount of their well-being for the sake of this goal.

Another key insight to consider is that innovation and technological progress create inequality when the people who drive such progress are rewarded.  The founders of Google are fabulously wealthy, but the lives of millions upon millions of people have been made better through the products and tools created by Google.  In an attempt to create greater equality, many governments inadvertently stifle the engine of growth and innovation by excessively taxing and regulating productive business activity.  The times when inequality become greatly problematic is when it results from government fiat instead of free market competition.

There is a great trade-off that exists between growth and equality.  If economic growth is desired, it requires the tolerance of inequality of outcomes, as the results of innovation are rewarded.  If equality is desired, it requires the suppression of growth by reducing the incentives for innovation and achievement through taxation and redistribution.  Regardless of which end is desired, there is no ‘free lunch’ that can satisfy both goals optimally.  The fundamental question to ask yourself is not whether you would like life to be more fair, but whether you would rather have a higher standard of living with greater inequality or a lower standard of living with less inequality?

In the midst of this dynamic tension between growth and inequality is one great equality that is immutable between all people and all cultures.  That one equality is time.  No matter where you are born, whom your parents are, or what skills you possess all people have the same 24 hours per day, and seven days per week to shape their life.  Each person has the same amount of time to form their future, regardless of whether they personally value growth or equality.  The key question to ask is what you are doing to form your future?