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What We Can Learn from Margaret Thatcher on Income Inequality

An ideological standard-bearer of free markets and limited government recently moved on to the freedom of which she saw only a glimmer in her lifetime. I’d venture to guess that most of you have also seen this video of Margaret Thatcher’s last House of Commons speech, but it is worth watching again and starting anew a serious discussion on income inequality. With her signature poignancy, Baroness Thatcher articulates the hypocrisy of those who bemoan income inequality:
People on all levels of income are better off than they were in 1979. The honorable Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy!
Many have argued that income inequality perverts politics in this country, with Wall Street’s influence in Washington brought forth as an example of the undue clout of the wealthy. There have been those that have also argued that income inequality was a root cause of the financial crisis because politicians tried to counter the growing gap between rich and poor by encouraging poorer folk to take on more credit. In one article, the following was proposed:
Governments need to keep their focus on pushing up the bottom and middle rather than dragging down the top: investing in (and removing barriers to) education, abolishing rules that prevent the able from getting ahead and refocusing government spending on those that need it most.
It is worthy of praise that this idea focuses on raising the floor rather than lowering the ceiling, but we ought still to be cautious when we rely on government spending as the answer. There is virtually no manner of government spending through which the income floor can be raised. Government does not create wealth, but rather takes wealth out of the economy through taxation, regulation and spending. This means that the very government programs that work to artificially “push” the bottom up simultaneously “drag” the top down. The only way for the income floor to rise is by through innovation, investment and opportunity—the hallmarks of limited government and free markets. In an interview with yours truly, Art Carden said of his Christian call to help the poor:
I want to see poor people made richer. A lot of ways that people go about doing that are wrong. I want to move people past simply meaning well, get them past thinking of benevolence only as hand-outs … We need to get meaningfully involved in other people’s lives.
As far as I am aware, there is no parable of Christ in which the Master says “well done, good and faithful servant, you meant well but accomplished little.” As Carden said, we need to move past meaning well and actually do well. It is vital that as Christians, we do not advocate for policies the end results of which are that the poor are poorer, provided that the rich were less rich.