Avenging Inequality

CEO Dan Price became a business superstar in 2015 when he announced the implementation of a minimum salary of $70,000 at his company Gravity Payments.
Since then, perhaps not surprisingly, he has met plenty of controversy surrounding what his true motives may have been.

Nevertheless, Price’s move was bold. The documentary Inequality for All with former Secretary of Labor Robert Reich demonstrates the vicious cycle brought about by income inequality. I recommend watching the whole film for a thorough understanding; one of the main main takeaways is that when wages and salaries stagnate, the middle and lower classes stop buying stuff, so businesses make less money and governments receives less income from tax. The truly elusive question is whether or not government redistribution of income or wealth is the right answer to the question of inequality.

There are two schools of thought from which arguments against the redistribution of income and wealth are based. The first is libertarian: taxes are in direct violation of the non-aggression principle, because a government does not have the right to seize justly earned income or property, for such an act is aggressive. The libertarian perspective is black and white: revoking the right to keep your entire income is as much an infringement of personal liberty as revoking your right to free speech.

The second school of thought that argues against redistribution is, when presented earnestly and free of doublespeak, social-Darwinist. The idea of survival of the fittest playing out on a social landscape goes back to very beginnings of Darwinism (and contrary to what Darwin apologists say, he was well aware of these social implications). One interpretation of “fit” in this discussion is wealth. This view justifies a capitalist system in which the strong survive and the weak are weeded out due to their diminished ability to afford safe and healthy lives. The other interpretation of the word “fit” is more biological: producing more offspring. In this view, poor people in modern society are technically more “fit,” as they tend to have higher numbers of children per household than the rest of society. No matter which definition is used, the same utilitarian logic applies: redistribution of income is counterproductive to social progress because it allows the weakest people in society to survive and reproduce at disproportionately high rates, and if we allow it to continue, it follows that the hilarious but slightly uncomfortable film Idiocracy is a prophetic vision America’s future.

The point is that it sucks, for lack of a better word, that inequality is such a problem, and we seem to think the only solution is government-mandated redistribution, which might forever be deeply unpalatable and controversial to most of us.

That’s why we need more Dan Prices and Blake Mycoskies. I’ve written before, specifically here and here, that we need a new “third way.” Businesses have the power to fight inequality by helping their employees. We need to let the product markets do their thing and at the same time compensate employees better or profit-share with them. Businesses also have the power to fight inequality (and protect the environment) with their products or charities. Consumers are changing, and they’re saying they want to buy products from socially responsible companies. Business leaders need to realize that the most competitive thing they can do right now in 2016 is knock their employees’ socks off with compensation, transform into a PBC, or at least declare some sort of improve-the-world vendetta.