Why I’m for Equality, Not Equity
Recently, there have been calls by various leftist groups for equity. I am a big fan of equality, where everyone gets equal opportunities. If there are any barriers holding people back like racism, sexism, anti-competition, good-ol boy networks, or so on, they should be removed so that everyone has a level playing field. I am against equity, where everyone gets the same outcome. Here’s why on both issues.
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Equality is obviously fair. Everyone should get the same opportunity and barriers that hold some people back but not others should be removed. Often in market systems, collusion (where individuals of companies make agreements to keep others out) and crony capitalism (where individuals and companies collude with the government to gain an advantage and hold others back) are performed, leading to barriers to entry. These should be removed by government to keep a free and open competition.
An example of the former is agreements by large, established merchants that suppliers can only provide their products to them and not their competitors. This keeps competitors from emerging for the merchants since others cannot get the products they need to sell. This does not serve society since it short-circuits the ability of the free enterprise system to minimize prices and maximize wages for workers while ensuring an adequate quality of goods and services for consumers through competition. Some of the examples of why capitalism doesn’t work, such as the huge monopolies that dominated different US industries in the early 1900’s, came about because these types of practices were allowed. Today they are still seen from some retailers and also in places like online affiliate advertising programs. Governments should make sure these types of arrangements are removed to make a free and fair market, which will benefit other business owners, consumers and workers.
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An example of the latter is the environmental and safety regulations placed upon businesses. While there are certainly some regulations that are needed, many regulations take the form of preparation and maintenance of huge amounts of documentation, large amounts of capital in escrow accouts or large insurance policies, and costly testing and verification. Large companies lobby for these regulations because they know that they can afford to pay for them and then pass the costs along to the customers. Small companies just getting stated are not large enough to hire the staff needed and pay for creation of the documentation, the testing required to comply, or buy the large insurance policies needed, so small businesses go out-of-business and other companies don’t start at all. Think about how hard it would be to start an insurance company with the capital requirement, or to start a mutual fund company with all of the paperwork that must be created. The large companies love these regulations because it means they don’t have competition that they otherwise would.
Equality is important for a society to do well. People with talent come from all populations, so a society that allows one group to work and succeed but holds another back will be throwing away the talents of some exceptional individuals if it favors one group of people while putting barriers in front of another. In corrupt socialist countries, many jobs are given out to people based on connections rather than talent. This leads to ineptitude and poor results. Perhaps the person who should be running a company or an agency is home scraping for food while a completely incompetent person who knew somebody in the party is running the agency that distributes food. This is bad for the society.
Recently there has been advocacy for equality, generally by groups who would like to see socialism enacted. One individual, Angus Maguire, created the cartoon below to explain why he feels that equity is better than equality.
As illustrated on the left, with equality, everyone gets the same resources and opportunity. Each person gets the same size box to stand on, so it is “equal.” But as the cartoon conveys, this may not result in equal outcomes, because not everyone has the same natural advantages. The man on the left is tall enough to see the game from the ground, so giving him the box really does nothing for him. The boy in the middle, of medium height, can just see over the wall with the box. Finally, the toddler on the far right is too short to see over the wall, even with the box.
The situation on the right, where more boxes are given to those who are less naturally advantaged, creates the situation instead where everyone has an equal outcome and can see over the wall. Resources are given out based on need, rather than everyone getting the same things, which cancels out the effects of natural advantages. By giving more resources to those who are less naturally advantaged, everyone ends up equal. Yay, equity!
But, wait, there is another point that the cartoon conveys that is also true with equity. Something that is not necessarily a good thing. While it is true that everyone ends up equal in the right frame due to the uneven distribution of boxes based on need, note that everyone ends up in the middle in height. No one is exceptional. It is true that everyone ends up equal, but everyone ends up, mediocre.
In the left frame, where everyone is given the same level of support, the guy who is naturally tall ends up way over the wall. In the right frame where the resources are given out based on need, everyone ends up right in the middle. The natural advantages the man has are discarded and erased since he’s given nothing beyond his natural ability. And if someone were to decide to not even use their natural abilities, for example, if the toddler decided to sit on the box instead of stand, making them equal in the end would mean making them end up at an even lower level than the man starts naturally. The group would end up poorer.
This same situation is often seen in a story by a guy I know who was enrolling his son in the public education system. While his son was a toddler, the parents had taught him to read at home through phonics and he was reading whole books by the time he was three. At an interview with the counselor at the public school, the parents told her that their son could already read and asked what the school would do since he already had that skill.
The counselor told them that they didn’t need to worry about that. She put her hands in the air, one high above her head and one down near her waist. She then said, “Some students start out up here, others start out down here, but by the end of the first year, they all end up right here,” she said, bringing her hands together at shoulder level. In other words, all of the work that the parents had done to get their child a head start was all for naught. The school was going to keep his education stagnant and teach him nothing the first year so that he would be right where the others were after a year! The parents decided private school was the way to go.
Equity disincentivizes work
Going back to our baseball fans, how did the crates get there in the first place? Let’s say they needed to carry them to the stadium, and because they’re made of lumber, they’re probably somewhat heavy, maybe 20 pounds each. It is doubtful that the toddler would be able to carry something so heavy for the mile or two from their house to the stadium, so the man on the left probably ended up carrying two of them with the boy in the middle carrying one. The man doesn’t really even need a box at all, but in the situation at the left, he carries not only one for him, but one for the toddler as well. He does this as an act of kindness for the toddler since be had the strength to carry two boxes. Having his own box, he figures he can put in a little more effort and carry one to help out the toddler as well, just to make things equal.
Now we move to the equity situation on the right. In this case the man is expected to still carry the two boxes, but he doesn’t even get to use a box at all. Instead, he ends up exactly where everyone else is. There is really no benefit to him, except maybe for the feeling that he did something good. Charity typically only goes so far, however, and maybe the tall man isn’t generous enough to carry the boxes week after week if he doesn’t get some reward for doing so. Very few people will give more to another person than they get for themselves. Maybe they all then fight over the box that the boy brings and no one gets to enjoy the game. The whole group is poorer because there is no incentive for the tall man to use his national abilities and produce the transportation of the box.
For some reason, once you start declaring that resources should be passed out based on need, not based on what is earned, creating and producing starts to be seen as a bad thing. Many people who promote equity actually start to feel that it would be unfair for the person who produces the most and pays the most in to share in the benefits of the program. There is often means testing for programs because it is felt that those who make above a certain amount of money shouldn’t get to benefit from the program even though they are usually the ones who are paying the lion’s share of the costs of the program. One would think that these individuals would be most deserving of sharing in the benefits of the program since they’ve paid their share and then some. Instead, those who have paid nothing are seen as the most deserving and those who have paid the most are told to shut up and keep paying.
The sentiment often becomes that the people who are making a lot should be penalized through high taxes just because they are making a lot. Not to raise revenue or pay for things, but just as a penalty for making a high income. President Obama was once asked whether taxes should be raised on the wealthy even though it had been shown that raising taxes often actually reduces the total amount collected by the government since the people who produce more lose their incentive and begin to produce less (or move away). This is known as the Laffer Effect, where there is an optimal tax rate at which the government collects the most revenue. Raising taxes above this reduces collections.
President Obama said that he did believe the amount collected would often be less. but still felt that taxes should be higher, just to penalize those who produce more out of “fairness.” Note that those making a lot more (the “1%”) were paying both at higher tax rates and a lot more in taxes numerically than those in the bottom 90% of earnings were, but President Obama still thought their taxes needed to be raised. Even though the goal of taxes is supposed to be to raise money for the government and to pay for necessary government programs, he wanted to raise taxes on the high earners, thereby reducing how much the government collected, out of “fairness.” Note that when the high earners made less money, it means that they would produce less business, which means fewer jobs and less income for everyone. Plus fewer services and products for people to enjoy.
Equity and production
Let’s say now that our three gentlemen aren’t trying to watch a baseball game for free, but instead are engaged in production. Let’s say they are picking apples from a 12-foot tall apple tree and using the boxes to reach the apples. If they were to use the equality model where everyone got a box, the boy and the man would be able to cover a fairly large portion of the tree. The boy would be able to reach the apples at the bottom and the man would be able to reach those in the middle. Perhaps the toddler could reach some of the lowest branches from his box, perhaps not, but the group as a whole would be able to collect about twice as many apples if they were each given a box under the equality model.
Under the equity model where they are all given the same outcome and end up at the same height, they would all be able to reach the tree but only the lower branches. They would all be able to collect apples, but the total number of apples collected would be fewer, so the group as a whole would be poorer. If one of them broke his leg and was unable to collect apples, the others would be less willing to share since they may not be collecting enough to satisfy all three as it was. There would be more apples collected under the equality model where they were each given a box and the man was able to reach higher into the tree, so it would be easier to share since an excess could be produced. If the group decided to give more than one box to the tall man, he could reach even higher into the tree and maybe they would be able to pick all of the apples. Giving an advantage to the most capable naturally can produce even more superior results for the group.
So, by giving everyone the same opportunity, the people with greater natural abilities were able to reach higher and produce more for the good of all. Since the group as a whole would be getting apples they wouldn’t otherwise if they had gone with equity, even if the tall man kept more of the apples because he picked more, everyone would still be better off than they would have been under equity. Yes, they would not have an equal number of apples, but they would all have more apples under equality than equity. The man would have enough to share because he was able to gather more and have an excess.
(To get a perspective on the effects of socialism from someone living under it, read Dear Leader, written by one of Kim Jung-Il’s former poets. )
Equality and equity in schools
Let’s now turn from this cartoon scenario to real life. Obviously, talent comes from all over the population, so it would be to society’s disadvantage to deny resources to one group and give them to another arbitrarily. If all of the nation’s resources were used to educate students East of the Mississippi, while those West of the Mississippi were left uneducated, you would waste the talents of those in the West. Perhaps there is a girl in Denver who would have invented a cure for cancer if she had gotten the education she needed, but instead she spends her life sweeping floors because she does not get to go to school and learn chemistry and biology. If you give at least a basic education to everyone, you are much more likely to find those with special talents to do what others cannot. You can then give out advanced, specialized education to those who show a natural ability so that they can go on to do the great things society needs.
Unfortunately, there is a large segment of the population in the poorer neighborhoods who do not get the education and the encouragement needed to show their talents. It has been found that there are just as many bright kids in poor neighborhoods as there are in rich ones, but the schools in poor neighborhoods tend to be terrible with low proficiency rates. To make things worse, the whole attitude in some of these neighborhoods is of low expectations and failure. No one is expected to go to college. No one is expected to get a good job. Many are expected to join gangs, or get pregnant at 16, or end up dead in a drive-by shooting. The kids who grow up in these areas are expected take a working-class job or no job and not go on to move up into the middle or upper classes. (Really, it is a chicken-and-egg thing, where the schools are bad so people get low expectations, but the low expectations mean that no one tries and the kids don’t do what is needed to do well. This leads to lots of distractions in the classrooms, making it hard even for the kids who want to do well, so the schools get bad.)
So kids don’t try to do well in school. Parents don’t push them to get their homework done, instead asking them to watch their siblings or run errands. No one worries or does anything when test scores are low because the kids are expected to fail. Often the environment is blamed for the results. “Who could be expected to do well in school in a place like that?” This may be true, but it doesn’t make things better. Instead, it adds to the feeling of hopelessness and the expectation of failure. People accept it when the gangs move in, or the payday loan places get everyone addicted to high-interest credit, or prostitutes walk the streets. That part of the population is thrown away and their talents lost.
Are their kids in these neighborhoods who try their best and get their homework done despite all of the negativity around them and people asking them to do things besides what should be their primary goal: getting an education? Of course. Are their great parents living in these areas, pushing their kids to do well and trying to get their kids a great education despite having terrible schools and the parents needing to work long hours in low-wage jobs? Of course there are. There are people who go to college from these neighborhoods, who get middle-class jobs, and some who even become very wealthy. A few become tradesmen like electricians and plumbers who are able to make a good income and move to a better area for their kids. There just aren’t a lot of them. The opportunity they have, because of where they live, is not the same as that those living in the suburbs where there isn’t a lot of crime and where everyone is expected to go to college and/or get a good job after school. A drive-by shooting in south Chicago is just another Saturday night. One in Beverly Hills would be front-page news and would result in all sorts of reaction.
So, promoting equality would say, let’s find a way for these kids in the bad neighborhoods to have the conditions they need to thrive. The best result would be for the neighborhoods to be cleaned up where things were safe, there weren’t gangs and crime, and all of the kids would be focused on getting through school and working jobs in their free-time. The expectations of everyone in the neighborhood would be that the kids were going to finish high school with good grades and get great jobs and/or go to college after, just as they are in the suburbs. That school was their primary task and and everyone would be focused on that goal and supporting the kids. Note that having high expectations costs nothing.
But it is very difficult to get to that point since the entire culture of the neighborhood, built up after generations of repeating the cycle and learning that “this is just the way it is, no one gets out of here,” would need to be changed. And the attitudes of those outside the neighborhoods, who also don’t expect the kids from those neighborhoods to thrive, would also need to change. Society in general is writing the kids from these neighborhoods off before they are even born. People just learn to ignore these places and pretend they don’t exist.
A more workable solution would be to get the kids who want to succeed and are willing to put in the work needed, possibly with their parents, out of these neighborhoods and into a better environment where those around them have high expectations. A first step in creating this equality is creating new schools for these kids, separated from the failing schools, and/or giving these kids a way to get to other existing schools that have a better environment. One that will motivate them to do well and finish, rather than pull them down out of envy and spite. Getting them into a better school, however, may not be enough, if they go home to an environment not conducive to doing the homework they need to do. It might be necessary to have boarding school for the kids, or even create neighborhoods for the kids who are going to these schools where their parents could buy a house or rent an apartment if their kids are attending the school. Maybe have family dorms or something so that the kids could live in an area of high expectations rather than one of low expectations.
The equity solution would be to just give everyone the same thing after they get out of school, regardless of whether they finish school and are working a job where they’re producing lots of things or not. If you work 100 hours per week and provide things for 1000 people, you get a two bedroom, 1200 square-foot house. If you don’t work at all, you still get a two bedroom, 1200 square-foot house. Maybe you don’t actually give out houses and things, but if the guy working 100 hours per week makes $100,000 per year, you take $75,000 away from him and give out $25,000 each to three people who aren’t working, so they all end up with the same.
And if you are working, it really doesn’t matter if you’re doing something of high value or low. If you’re a doctor, having spent 10 years in college and medical school and having spent $250,000 on your education, you get $25,000 per year. If you don’t finish school and spend your days making art out of dog excrement, you get $25,000 per year. There is no incentive to do things that are valuable, it all pays the same.
Realize that since all of the stuff there is to buy is being produced by the people working, not those who are not. Realizing that they end up the same whether they work or not, many would stop working and spend their time doing something else because it made no difference. Maybe others wouldn’t stop working, and maybe you require that everyone works, but in the least there would be no people working and producing a lot because there would be no reason for doing so. People would work only as much as they needed to in order to get the things they needed, then stop. This would mean that there would be less of everything, which would mean that everybody would be poorer, both those who have a lot now, and those who do not. We would all be equal, but no one would have anything.
Equity and superstars
Society has a few superstars – people like Henry Ford, Elon Musk, Steve Jobs, and Sam Walton. People who build the big companies and produce the new products that make our standard-of-living better. These are not common people. Everyone does not have the drive, talent, and insight needed to do these types of things. If you give opportunity and equality, you are most likely to find these people and have them go on to do these great things. You get those who reach the apples at the top of the tree and everyone benefits.
If you have equity, there is no reason for these superstars to do these great things that benefit everyone. Instead, those who can do more and have natural talents just do things for themselves. Maybe they’ll spend their time working on their homes or writing poetry. Maybe they’ll build inventions in their garage and use them around their homes, but they won’t even try to mass produce them and share them with others. It is more fun to do the technical work, rather than undergo the headache it takes to produce and sell them. Maybe they’ll open a store, but there is no reason for them to expand and hire others. It is easier if they don’t need to manage others, and there is no incentive for them to make more money, so they don’t.
With equality, you get the superstars to shine and bring out their talents for everyone’s benefit. With equity, the superstars keep their talents to themselves since there is no benefit of them sharing. Society loses access to their talents. Again, everyone is equal, but everyone is poorer. There are no superstars under equity. Everyone is just average.
Equity and sports
As a final example to show why equity is not what you want, let’s look at sports. Just like in economics, you want everyone to have a chance to play sports since the superstars will come from all segments of the population. But if you choose equity, it would mean that everyone would get the same chances to play and get to play the same amount. The rosters of teams would be decided by lottery instead of by try-outs. Or you would have so many teams that everyone who wanted to play would do so. You wouldn’t have starters, everyone would play equal amounts. There would be no pro teams – (who would want to watch a series of company softball games?)
I was never able to run very fast, hit a baseball very well, or do a lay-up (although I could shoot a three-pointer fairly well). But someone like me, if I desired, would get the same positions and the same playing time as someone like Michael Jordan on a basketball team or Hank Aaron on a baseball team. Rather than having the truly talented players play and do the amazing thing that they can do, you’d have people like me playing. Because they would be running circles around me, maybe you’d put ankle weights on people like Scotty Pippin and have heavy hitters like Matt Stairs use a foam bat. People ike me would get to use a metal bat, so that everyone would have an equal outcome.
No one would want to watch sports because the games would be dull. Mediocre. You wouldn’t get amazingly talented athletes doing things that seem to defy gravity and physics. You’d have pudgy, old folks like me walking up the court to throw a brick or hitting grounders to the shortstop, but then making it to first anyway because the shortstop would overthrow the base.
Everything would be equal. Is this what you want? Or do you want to foster greatness?
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