Friday, April 29, 2005

United for a Fair Economy

United For a Fair Economy (UFE) is an organization with the mission to "raise awareness that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart" and supports and helps "build social movements for greater equality." I don't know why I was so surprised that such an organization would exist, but I was.

The name of the organization is United for a Fair Economy, implying that somehow an economy should be or can be fair. This idea however neglects one of the most important issues in economics, scarcity. Any student of economics will tell you we live in a world of unlimited wants, only some of which can be satisfied with limited available resources. Accordingly, economics is the study of choice and examines how people chose among available alternatives. The way in which people chose those alternatives does not always yield a fair or equitable outcome. Some people will chose more effectively than others and increase their wealth accordingly. The only part of the process that is guaranteed to be fair is the part where everyone has the opportunity to chose for themselves, to make their own decision.

The claim that concentrated wealth and power undermine the economy is really making two assertions. First, concentrated wealth undermines the economy and second, concentrated power undermines the economy. I do not see how concentrated wealth alone can undermine the economy. Concentrated power however that provides favorable policies to one group over another can undermine the economy by interfering with market activity and creating unfair advantages for one group compared to another.

In fact, I don't see how concentrated wealth undermines democracy, or deepens the racial divide, and tears communities apart. I think that concentrated power certainly does though. Because concentrated power allows special rights to be extended to some while denied to others, democracy is undermined, racial divides are deepened, and communities can be torn apart.

That being said it is still the purpose of UFE to strive for greater equality. Their energies then should be focused on ensuring individuals have the same opportunities and are not given special treatment.

Why then do they oppose Bush's Social Security reforms? UFE released a press release highlighting the fact that Social Security payments are capped and that some individuals, especially those working on Wall Street reach that cap within a day of earning wages. UFE advocates it is unfair that individuals earning less income have to contribute a higher annual percentage of income to Social Security. These same individuals want more money back from the government than they ever contributed. They want the stock brokers pay what they do not save. This seems unfair to me.

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