Lab c1: Economic Justice and Welfare

Economic justice and welfare

On the OboxPlanet, there are no states and no income distribution programs. The income of the rich tends to grow faster than that of the poor, but all groups of people are significantly wealthier than on Earth, and there is considerable mobility among income categories.

The rich on the OboxPlanet invest heavily in philanthropic, charitable, and prestigious projects on a scale unimaginable on Earth. The reason is straightforward. While wealthier individuals on Earth may consume a substantial portion of their income, the rich on the OboxPlanet can only consume a small fraction of theirs. Additionally, everyone enjoys much higher disposable income because there are no taxes—no levies on income, wealth, capital gains, or anything else.

Is there greater inequality of income and wealth on OboxPlanet? Perhaps yes, perhaps no. Most wealth inequality on Earth today stems from asset price appreciation, driven by easy monetary policies and fractional lending—factors absent on the OboxPlanet.

Regardless, wealth and income inequality are of much less significance for several reasons.

The overriding principle is that “a rising tide lifts all the boats”. As we will see under “wealth creation”, wealth on the OboxPlanet far exceeds the Earth’s wealth and without borders, it is world-encompassing.

Secondly, there is remarkable social flexibility. Even on Earth, today’s wealthiest individuals are often newcomers, and statistically, few remain at the bottom of the ladder for life. Without the constraints on the poor and the privileges for the rich on Earth, OboxPlanet exhibits even greater social flexibility.

One important aspect is, paradoxically, the greater downward mobility (they are actually the same, just from a different angle). Several mechanisms on Earth impair downward mobility (for example, government guarantees for industries, too-big-to fail banks), and these artificial structural support programs hinder healthy, new companies to expand and and thus impair upward mobility.

Thirdly, there are more opportunities for youngsters and the disadvantaged to get a foot into the labor market. There are no minimum wages, no maximum hours, no paperwork for hiring and firing, no license requirements and no and legal traps like equity criteria or quotas. Newcomers with little qualification can be hired and trained for food and lodging and handshake is as good as an elaborate working contract on earth. This flexibility helped the spread of skills with the corresponding productivity increases in labor markets all across OboxPlanet.

Lastly, people do not care about the income differences with the hope of levelling them by taxes and income distribution because there is no use in doing so. There simply exists no state which could take from some and give to others. And since “opportunity makes the thief”, where there is no opportunity, there are no thieves. And less envy.

What about the question of equal opportunity? Once again, there is no state which could enforce any rule that supposedly equals opportunities for some. There are charitable organizations and employers who support unfortunate fellow humans but all in all, equal opportunity is considered an absurd idea. How do you equal the basketball-opportunities of a short person or the programming abilities of somebody completely disinterested?

Exploration room: more details of the planet

1. Welfare and poverty, a non-issue

In the introduction, we highlighted why people on the OboxPlanet are significantly wealthier than on Earth, with abject poverty being a non-issue and robust private welfare available for those few who may be unable to work or temporarily face dire circumstances through no fault of their own.

2. Economic justice and envy – a non-issue as well, almost…

The question of economic justice often arises on Earth, with concerns about individuals having varying levels of talent and consequently amassing different levels of wealth. The idea of wealth redistribution is sometimes considered to address feelings of injustice.

On the OboxPlanet, the question of economic justice in the sense of equal wealth and incomes has a completely different quality. It is not a political issue, because politics doesn’t exist. It is like debating about other things in life like the height of people. It’s as futile as being upset about someone’s sex, skin color, or eye color.

Human differences, be it in height, health, character, intelligence, discipline, or attractiveness, exist and can vary. Some of these traits can be changed, to a certain extent, while others cannot be altered at all. Is this fair?

On Earth, people generally accept such differences, realizing that having certain traits doesn’t guarantee a good life. Some tall people benefit from it, others suffer from the same fact, super-intelligent geniuses often end up in the loony bin.

Similarly, on the OboxPlanet, people acknowledge these natural variations. However, unlike on Earth, there is no contemplation or upset about wealth differences. The idea of someone having 100 times more wealth than another could be a reason to question the universe’s justice doesn’t even cross people’s minds. It’s as pointless as being upset about the height of other people because there’s simply nothing anyone can do about it. There’s no state to tax and redistribute wealth. The notion of getting upset about wealth differences is perceived as simple stupidity.

To sum it up: Income and wealth differences have the same envy-potential as other facts of life. Some envy others for their beauty or whatever, and they might envy you for your wealth. But it has a different quality than on Earth because on the OboxPlanet, there is no state that could do something about it.

Retrieve area: experiences on Earth

What experiences on Earth, past and present, help us understand life on the OboxPlanet?

1. Freedom produces wealth. More freedom produces more wealth. See graph 1 and chapter D “Wealth Creation”

2. More wealth trickles down to the poorest parts of the population. The poorest 10% of people in the freer countries earn the same or more than the average of the bottom half of the world’s population, see graph 2

3. In the last about 40 years, the World has experienced an unprecedented increase in average incomes, mainly in the most populous countries like China, India and Indonesia. And there is no doubt whatsoever to it’s cause: economic liberalization, a move toward capitalism, see graph 3.

All graphs see the Economic Freedom of the World: 2022 Report, World Bank.

In summary: Freedom produces wealth, and this has one logical consequence:

For those readers who do care about human welfare, the example of the OboxPlanet should be a guiding star, a standard of measure for politics on Earth.

For those readers for whom human welfare is not important, life on the OboxPlanet, with no state and maximum freedom, has nothing to inspire or to teach.