What does racing have to do with income distribution?

Income distribution discussions typically ignore unavoidable dilemmas

Income distribution policies and racing have more to do with each other than it seems. Income distribution is one of the most important policy topics. But despite its relevance, most discussions surrounding this topic treat the subject quite superficially (I think).

Consider a race where all participants start from the same starting line. This equality in starting conditions represents the rule of law. In this case, each competitor will cross the end line at different times (this represents income). Some competitors work more than others. Some competitors are willing to take higher-risk jobs than others. Some competitors are willing to travel more or take high-stress jobs. And so on. Under these conditions, the only way a policy can make income distribution equal is by having each competitor start at different points, that is, by giving up the rule of law.

These two scenarios are not symmetric. The rule of law produces a peaceful environment. But, history teaches us that serious attempts to guarantee income are likely to lead to authoritarian governments.

¹

Many areas of life can be equal or unequal. To mention just a few:

• Income

• Wealth

• Consumption

• Social rights

• Political rights

The point is that enforcing equality in one area leads to inequality in other areas. Typically, advocates of income distribution policies are silent about what equality they propose to abandon to achieve income equality.

---

1. This tendency toward authoritarianism is one of the arguments in Hayek’s (1944) The Road to Serfdom.