Socialism vs. capitalism: Income inequality can be a good thing, former Bain Capital director says
Income inequality may pose risks to working families’ economic security, however, former Bain Capital managing director Ed Conard it’s actually not so bad.
“I think what you find is that capitalists and socialists want the same thing from our talent,” Conard, who is also the author of the controversial best-seller ‘The Upside of Inequality,’ told FOX Business’ Stuart Varney on Tuesday. “We want the maximum amount of value from others for the lowest possible cost.”
In Conard’s opinion the increasing wealth of most successful Americans isn’t the reason for deteriorating middle-class incomes. In America, middle-class incomes are actually 15 to 30 percent higher, compared to the rest of the world, largely because of the massive contribution of American-made innovation. And by some measures, America produces seven times more innovation than the rest of the world, because it gets exposure to leading-edge ideas from companies like Google and Microsoft. As a result, Americans with talent are motivated to take more risks, work longer which ultimately results in more middle-class wealth.
“I think the comparisons between the U.S. and Europe show that it takes a fairly high price to get your talent to work hard and take the risks that increase middle-class income,” he said.
Conard said that there is also a moral component to his argument.
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“I think that if you’re born with talent, that you have a moral responsibility to put that talent to work,” he said, “And we know, even liberal economists will agree that, you have to put five dollars of value in other peoples’ pockets to put a dollar in your own pocket.”