Uploaded February 2026 | Updated September 2026, 1 week ago
Freedom requires tolerance toward differences in income or wealth, but it demands equality before the law. Coercive equality imposed from above by the state leads to extortion, dispossession, unequal treatment, and the institutionalization of envy.
As Margaret Thatcher recognized, income inequality is a natural feature of a free-market economy.
Some producers create goods and services that are more valuable to others than those of their competitors, and as a result, they earn greater profits. Yet this inequality is not fixed: nothing guarantees that today’s wealthy will remain so tomorrow—at least not when there is open competition, free markets, and an environment that rewards innovation and entrepreneurial rivalry.
Moreover, accepting a certain degree of inequality often goes hand in hand with improvements in overall living standards. Freedom is a rising tide that lifts everyone.
Economies that chase absolute equality inevitably run into diminishing returns: there is a limit to how much can be redistributed before eroding the incentives to produce.
In fact, the developed nations that today sustain high levels of redistribution only managed to do so after first fostering an environment of economic freedom that created prosperity. One cannot distribute what has not been produced. And when the obsession with equality becomes the overriding priority, it poisons the very source that sustains creators and entrepreneurs—the individuals ultimately responsible for economic progress and rising material well-being.
Freedom requires tolerance toward differences in income or wealth, but it demands equality before the law. Coercive equality imposed from above by the state leads to extortion, dispossession, unequal treatment, and the institutionalization of envy.
As Margaret Thatcher recognized, income inequality is a natural feature of a free-market economy.
Some producers create goods and services that are more valuable to others than those of their competitors, and as a result, they earn greater profits. Yet this inequality is not fixed: nothing guarantees that today’s wealthy will remain so tomorrow—at least not when there is open competition, free markets, and an environment that rewards innovation and entrepreneurial rivalry.
Moreover, accepting a certain degree of inequality often goes hand in hand with improvements in overall living standards. Freedom is a rising tide that lifts everyone.
Economies that chase absolute equality inevitably run into diminishing returns: there is a limit to how much can be redistributed before eroding the incentives to produce.
In fact, the developed nations that today sustain high levels of redistribution only managed to do so after first fostering an environment of economic freedom that created prosperity. One cannot distribute what has not been produced. And when the obsession with equality becomes the overriding priority, it poisons the very source that sustains creators and entrepreneurs—the individuals ultimately responsible for economic progress and rising material well-being.
