Here are four things I've seen recently:
- Political Scrapbook reminds us that a hedge fund run by George Osborne's best man made millions from the sell-off of Royal Mail.
- Suzanne Moore says Camden council gave her £15,000 to leave a council flat in King's Cross that is now on the market for over £500,000; its price rise is no doubt partly due to the publicly-funded regeneration of the area.
- Tom Streithorst writes: "Without more cops and their more aggressive policing, the average Manhattan apartment today would not be worth $1 million."
- David Runciman says that Richard Branson "has made his fortune out of the regulated parts of the economy, which he has milked to extract government subsidies, tax breaks, licensing agreements and protected income streams."
These are all examples of how state actions help to enrich the well-off. There are, of course, many other examples. Bankers get a subsidy of billions (pdf) of pounds a year; QE made the rich better off; outsourcing hands millions of pounds of taxpayers money to firms of dubious efficiency and propriety; tax credits are, in part a subsidy for low-wage employers; housing benefit enriches landlords at least as much as tenants; welfare benefits generally help capitalists as well as the jobless; trade union power was broken in part because Thatcher used a state-owned industry, and state policies, to raise unemployment, to do so.
I could go on, but you get the picture. As Joe Stiglitz has said, inequality is "not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies."
One implication of all this is that it is just silly for libertarians to pretend that inequalities are fair. Many - perhaps most - of them arise from the sort of state interventions which consistent libertarians should deplore. When they claim that the inequalities arising from a free market are just, they are talking about a parallel universe of no relevance to the one we inhabit. And, in truth, smarter libertarians have always seen this. In Anarchy, State and Utopia Robert Nozick wrote:
There is no argument based upon the first two principles of justice, the principles of acquisition and transfer, for such a more extensive state [than the minimal one]...If, however, these principles are violated, the principle of rectification comes into play...One cannot use the analysis and theory presented here to condemn any particular scheme of transfer payments, unless it is clear that no considerations of rectification of injustice could apply to justify it. (p230-1, Nozick's emphasis)
However, I don't want to merely poke fun at the right. There's an embarrassment here for the left as well. If the state can be used to increase inequality - not least by selling assets cheaply or by using state policies to attack workers - why should egalitarians look to it as a solution rather than the problem?
* I write all this as a beneficiary of state-induced inequality; state education spending gave me my human capital, and easy money policies and planning restrictions gave me a near £500,000 tax-free gain on my London flat.