Income "Distribution"

Despite a voluminous and often fervent literature on "income distribution," the cold fact is that most income is not distributed: It is earned. People paying each other for goods and services generate income. While many people's entire income comes from a salary paid to them by a given employer, many others collect individual fees for everything from shoe shines to surgery, and it is the sum total of these innumerable fees which constitutes their income. Other income is distributed from a central point as social security checks, welfare payments, unemployment compensation, and the like. But that is not how most people get most income.

To say that "wealth is so unfairly distributed in America," as Ronald Dworkin does, is grossly misleading when most wealth in the United States is not distributed at all. People create it, earn it, save it, and spend it.

If one believes that income and wealth should not originate as they do now, but should instead be distributed as largess from some central point, then that argument should be made openly, plainly, and honestly. But to talk as if we currently have a certain distribution result A which should be changed to distribution result B is to misstate the issue and disguise a radical institutional change as a simple adjustment of preferences...

...To say that a shoe shine boy earns "too little" or a surgeon "too much" is to say that third parties should have the right to preempt the decisions of those who elected to spend their money on shoe shines or surgery. To say that "society" should decide how much it values various goods and services is to say that individual decisions on these matters should be superseded by collective decisions made by political surrogates. But to say this openly would require some persuasive reasons why collective decisions are better than individual decisions and why third parties are better judges than those who are making their own trade-offs at their own expense.

Again, no one would seriously entertain such an arrogant and presumptuous goal, if presented openly, plainly, and honestly. They may, however, be led in that direction if the anointed are able to slip undetected back and forth between one definition of "distribution" and another, as the exigencies of the argument require.

Thomas Sowell, The Vision of the Anointed