Just Inequality?

One of the central issues for economic inequality is how much of it is legitimate. For instance, few bat an eye at the "inequality" of a person with twenty-five years of experience in a particular occupation making more than a person with five years. Experience counts for something. But what if there is an unequal distribution of skill and ability within the human population? The unequal reward would be justified, would it not? Is there a skill distribution pattern that prevails across various human endeavors, including economics? Mark Perry raises this issue by comparing Olympic medal distribution with income distribution.

Carpe Diem: Share of Olympic Medals = Share of Income

The chart above shows 2006 income shares from the IRS, and medal shares at the 2004 Summer Olympics. Notice the amazing similarity? For example, the top 5% of U.S. taxpayers earned 36% of all income, and the top 5% of the 74 medal-winning countries (the top three: U.S., Russia, and China; and 70% of fourth place Australia's points to total 3.7 countries) won about 33% of the total medal points (598.3 out of 1832.

Perhaps any competitive process, whether it's athletics or the economy, distributes results (medals, income) unequally? And perhaps that unequal distribution, whether it's income or Olympic medals is a natural, expected outcome of any competitive process?

The Olympic medal winners are respected and admired, despite the inequality of outcome in those competitions. We should pay the same respect to the winners of our free enterprise system - the successful workers at the top of our economic ladder.

Comments

[ZZMike]

This is also sometimes known as the "80-20 principle": 80% of the work is done by 20% of the workers.

"But what if there is an unequal distribution of skill and ability within the human population?"

I take that as a rhetorical question.

[Michael W. Kruse]

Pretty much. But it is asked in the context of so many who by default think that "justice" is everyone making about the same level of income. Is that just in light of differing degrees of performance? There will always be a tiny sliver of folks who contribute far more than others in any human endeavor. Justice is not as easy to discern as it might first seem.

[Harrison Bergeron]

Michael:

This is not fair!

I also don't think it's fair that so many other blogs, not nearly as informative and well written, get so many more comments. And Drudge has an incredibly ugly site, but has so many readers. Also not fair.

I will be phoning my congressperson to ask them to correct this with legislation.

Harrison Bergeron

[Michael W. Kruse]

LOL

Better yet, simply address your letter to:

Diana Moon Glampers,
United States Handicapper General