6

While wealth/income inequality has generally been a Liberal concern, its increasing severity seems to have drawn Conservatives to consider it, including causing our current Conservative President to have several campaign goals on improving the economy and job growth for the middle-class.

However, from this answer:

The conservative view on this topic is that wealth inequality allows to create incentive systems which encourage people to contribute to society in order to increase their wealth.

In other words: work more, work well, provide the goods and services other people demand and you will receive more wealth and live a better life than your peers. The conservative believe is that when you are poor, then you are being punished for not contributing to society. If you don't want to be poor anymore, look for a job which is in higher demand, get paid for it, and get rewarded with a higher standard of life.

The idea of inheritance is that people don't just care about themselves but also about their children and want them to live a better life, even when they themselves are not alive anymore. So working hard and well does not just improve one's own life but also the lives of one's children.

Liberals often recommend utilizing taxes and wage adjustments as a solution, but that generally goes against much of the Conservative philosophy.

When wealth inequality reaches a point where the Conservative party has become interested in reversing it, what is/has been their solutions, and how have those solutions impacted the economy?

  • 7
    What country are you discussing, that has a conservative President? You've tagged the question as united-states, but to the (not very great) extent the current US President could be said to have a consistent political philosophy, it's populist, not conservative. And there's also the question of whether actual conservatives would even see wealth disparity as a "problem" needing a "solution", or as a driver of economic activity. – jamesqf Dec 4 '19 at 6:27
  • 2
    @jamesqf The current U.S. administration's fiscal policies are definitely not populist. It likes to say populist-style things, but it mostly does things like supply-side tax cuts and aggressively reducing public spending for social programs and increasing it for business concerns. Whether or not deficit-driven supply-side tax cuts are officially conservative, they're definitely the preferred approach for politicians identifying themselves as advancing conservative policy. – Upper_Case Dec 4 '19 at 23:27
  • @Upper_Case-Stop Harming Monica: I suppose we could argue definitions, and perhaps need to come up with a name for a set of policies that are sui generis. But whatever you'd call them, it's not conservative. E.g. conservatives might want actual supply-side tax cuts, but the current administration's cuts are more of a pretense intended to curry favor with voters, hence IMHO populist. Likewise tariffs &c being more a case of pandering to anti-foreigner sentiment (again, populist) than any real economic purpose. – jamesqf Dec 5 '19 at 18:15
  • @jamesqf I'll agree there's not much point in debating specific definitions. But it's not a strong argument that a policy is populist because the intention behind it potentially suits some voter preferences-- pretty much everything an administration might do would then be "populist". The driving force of many current policy initiatives aren't even populist in a broad sense, as they seek to satisfy specific, relatively small subsets of voters. But suggesting that policies fit into broad categories totally divorced from how they are applied in reality may simply be unrealistic. – Upper_Case Dec 5 '19 at 18:28
  • This is a confusing question. It's tagged US but speaks of "the Conservative party". There's no such thing in the US. Furthermore, the Republicans don't all have the same ideas on how to deal with this, if they agree it's a problem at all. Some people would argue that Trump is more populist than [a small government] conservative when it comes to the economy etc. – Fizz Jan 16 at 20:12
10

First, a useful definition for understanding the following.

Rent-seeking

Rent-seeking is a concept in public choice theory, as well as in economics, that involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, lost government revenue, heightened income inequality, and potential national decline.


National Review: The Conservative Inequality Paradox

Conservatives have two intellectual commitments that are increasingly incompatible. They believe that the American economy is clogged up with crony-capitalist corruption that hands out special favors and protections to organized interests. They also hold that economic inequality — in particular, the surging share of total income earned by those at the very top — is morally justified by the rights of property and the tendency of free markets to raise living standards overall.

So, it looks like (at least some) conservatives are of the belief that income inequality is not necessarily an issue that needs to be tackled, but the current state of inequality came about via corrupt influences over the market, and that situation is something worth fixing.

[W]e argue that conservatives are not mistaken about the extent of what we call “regressive regulation” — government-created distortions of markets that have the effect of funneling income and wealth up the socioeconomic scale. Such schemes of upward redistribution have proliferated in the past few decades, an era that is often misunderstood as one of unceasing deregulation. And because these reverse–Robin Hood policies work by squelching and misdirecting competition, they exert a powerful downward drag on output and growth as well.

They define these corrupt influences as being rooted in too much government intervention in the markets.

In the best of all worlds, conservatives would respond to this state of affairs by attacking rent-derived inequality at its source. Their economic agenda would focus on curtailing subsidies for finance, excessive protection of intellectual property, the licensing of high-end professionals, and overly restrictive land-use regulation. Doing so wouldn’t require conservatives to become crusading egalitarians, as these reforms would also unleash economic dynamism, innovation, and growth — familiar conservative priorities.

This article argues that the best solution would thus be to tackle the issue of undue government influence in the markets so that wealth can be redistributed naturally by the marketplace in accordance to ability rather than through rent-seeking behavior.

Nevertheless, making regressive regulation a conservative priority would be a distinct change in approach. Too often, conservatives’ idea of a pro-growth policy agenda starts and ends with tax cuts, despite the overwhelming evidence that moderate increases or decreases in the top rate have little effect on growth. When conservatives do turn their attention to regulation, they usually think about providing “regulatory relief” for business by lightening health, safety, environmental, and labor regulations. In our view, though, the regulations with the most pernicious economic effects are the ones that subsidize business by blocking competition or by otherwise distorting markets.

However, this article makes clear that this is not the typical approach taken by conservative policy makers. Rather, the typical approach would be to focus on a pro-growth agenda through the use of tax cuts. Furthermore, when typical conservative policy turns to deregulation, it tends to focus on regulations that are more burdensome for businesses rather than on those regulations that distort the market effects.

Many conservatives did not look carefully at the evidence behind these dodgy empirical claims because they believed that they held the moral trump card: By cutting taxes, they were returning wealth to its rightful owners. But in the “captured economy” we’re currently living in, this belief is due for reexamination. Not only is a significant fraction of the rich’s income morally tainted by government favoritism, but it is also used to fund yet more rounds of regressive rent-seeking.

This article argues against the traditional solution of tax cuts because this returns wealth to the current holders of wealth rather than the rightful owners. That is, the wealthy have engaged in rent-seeking behavior to promote government intervention into the markets so that they can maintain or grow their wealth. By cutting taxes, the wealth returns to these individuals that corrupted the market so that they can in turn use their wealth to further corrupt the markets. However, in an ideal market, rent-seeking behavior should be discouraged and wealth should be distributed according to ability and ones contributions to the marketplace.

One way to begin solving this problem would be to build a veritable bonfire of the deductions that the wealthy use to shield their income from taxation. The exclusion from taxes of employer-paid health insurance, retirement savings through 401(k)s and IRAs, and education savings accounts could either be scrapped or converted into refundable tax credits. We could also consider a financial-transaction tax, which could raise a lot of revenue while also reducing the incentives for excessive trading of assets. Changes such as these would allow us to claw back some of the rents at the top of the economy without increasing the marginal income-tax rates that conservatives are so concerned with.

Some proposed solutions would be to do away with some of the financial instruments that promote rent-seeking behavior in the wealthy so that their assets are more likely to re-enter the marketplace for redistribution via market forces.

If conservatives took seriously the presence of ill-gotten gains at the top of the income spectrum, they might also look at immigration policy in a new light. Over the past few decades, the United States has exposed those at the bottom of the economic pile to intense global competition, whether in the form of products from China or workers from Mexico. As Dean Baker has argued, it is high time to expose the wealthy to those same bracing forces of competition by opening up the economy to more high-skilled immigrants, especially in protected professions such as medicine and dentistry.

Some further proposed solutions are in promoting more high-skilled immigration to the United States in order to bring more competition into the top end of the marketplace.


It looks like the general conservative viewpoint is that inequality is natural and a consequence of a healthy marketplace. Some conservatives presumably view the current situation as a natural consequence that does not require fixing. However, as is argued in this article, some conservatives view the current inequality as unnatural and a result of too much government intervention, so the solution would be to reduce the government influences on the markets. Overall, in regards to this latter argument, there is a lot that liberals would agree with: most notably that the wealthy elites have used their economic positions to influence government in their favor.

It might be worthwhile to note that I am on the political left, so it's possible that this summary is distorted by my viewpoint (however, I've tried to avoid this).

  • 1
    It seems to me that the proposed solution in your source falls apart because it doesn't actually target the intended group. The goal is to reduce wealth inequality at the very top, say the top 1%. Their intended measures on health insurance or education saving hit everyone in the upper middle class, and for a comparable amount of absolute dollars. So for the top 1% the effect is there but neglible. Similar for the argument about immigration of doctors and dentists. This may have an effect on the upper middle class but not really on the top 1%. – quarague Dec 4 '19 at 14:35
  • @quarague Yeah, most liberals tend to put their emphasis on executives for large businesses that funnel wealth into themselves and away from the workers (e.g. Walton family versus average Walmart employee). The proposed solution seems inadequate to tackle that issue. I don't know many people that think doctors or engineers make too much money (although I am an engineer, so that may play a role here). I'm also dissatisfied with how this article emphasizes the corrupting influences of the wealthy without addressing anything to stymie this influence. – Nelson O Dec 4 '19 at 15:43
-4

By building a strong economy and keeping a lid on immigration. It is far better for the government to have people earning high wages as high wage earners contribute more per person in tax, the more individual surpluses you have in terms of consumption of government resources the stronger your economy is. If you have too many people who are net consumers of government resources you go broke, not a very conservative approach to governing

  • 2
    A big emphasis on reducing low-skilled immigration. Without immigrants, wages would be a lot higher in entry-level jobs - just like in Japan. – JonathanReez Dec 4 '19 at 3:36
  • 5
    I'm not sure how accurate this is since nominal libertarians should be against such a policy, and the current formulation of anti-immigration rhetoric doesn't seem to be focused on economic effects of increasing labor supply and decreasing wages. "They're bring drugs. They're bring crime. They're rapists." seem pretty far removed from landscapers or farm hands taking American jobs or whatever. – Teleka Dec 4 '19 at 3:44
  • @JonathanReezSupportsMonica - Studies in the UK show immigration affected wages in unskilled jobs by only 0.2%. fullfact.org/immigration/… – GeoffAtkins Dec 4 '19 at 7:11
  • 5
    Except that conservatives are not for high wages, and strongly support policies that increase income disparity. And while building walls and arresting undocumented immigrants is good red-meat stuff, it seems that a much more straighforward measure - stiff punishment for hiring illegal workers - is never even considered. Finally, net illegal immigration over the past decade or so has been near zero, and the percentage of illegal workers compared to total workforce has declined sharply, while income inequality has grown, so I'm not sure there is a cause/effect link that has been demonstrated. – PoloHoleSet Dec 4 '19 at 14:56
  • 1
    @JonathanReez Supports Monica: Except that a lot of Americans simply won't take those jobs, especially if they involve hard work. – jamesqf Dec 4 '19 at 19:27
-4

Curb mass migration

  • Direct result: straightforward lower number of low skilled workers, higher relative wage for them, higher employment rate on the bottom of society.

  • Indirect result: what would make even conservatives worried about wealth disparity? Threat to social cohesion. How else could this problem be solved? Less unintegrated migrants.

  • 11
    So what this answer is saying is that the conservative view is that mass migration is the only reason for wealth disparity? Is this really the dominant view among mainstream conservative politicians? – Philipp Dec 4 '19 at 9:52
  • @Philipp No, you clearly did not understand the question, as it does not ask for multiple REASONS for the issue, but for which of them conservatives are happy to point a SOLUTION. – Shadow1024 Dec 4 '19 at 17:04
  • 2
    OK, let me rephrase my criticism: Is this answer saying that, according to conservative politicians, preventing immigration is the only thing that needs to be done to solve wealth disparity? Is this really the primary strategy of mainstream conservative politicians to address this problem? – Philipp Dec 4 '19 at 17:09
  • 1
    What I think isn't relevant because the question asks about the conservative solution, not our solution (which would be off-topic). To be a bit more direct: I believe that this answer misrepresents the conservative view on wealth disparity. It reduces conservativism to being nothing but against immigration. Yes, many conservatives are also against immigration and they also tend to mention wealth inequality as a reason for that. But that doesn't mean that "curb immigration" is everything conservatives have to say about that issue. – Philipp Dec 4 '19 at 17:48
  • 2
    @Shadow1024 If the solution to a problem is to eliminate something, does that not imply that you believe the thing being eliminated is causing the problem? – user253751 Dec 5 '19 at 11:50

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .