Wealth, Private Property, and Government Spending on the Poor

Key Insight

Economic inequality, a stark reality where the richest 2% of adults owned over half of global household wealth in 2000, and the richest 10% owned 85%, elicits conflicting explanations and moral judgments from different political ideologies. In the US, the top 1% of families' income share rose from 9% in 1978 to 23.5% in 2007, a period linked to conservative political hegemony. Conservatives readily accept such inequality as legitimate, attributing poverty and wealth to internal character and personal effort, rather than external structural injustices, aligning with their high 'Belief in a Just World'.

Leftists, viewing economic inequalities as unmerited and exploitative, favor fiscal policies aimed at increasing economic equality, such as heavier taxes on the rich (progressive taxation) and more social spending on the poor. Socialist and Communist states, reflecting this, often expropriate property from wealthy individuals and corporations to redistribute wealth. Examples include Bolivian President Evo Morales nationalizing foreign-owned energy companies and Venezuelan President Hugo Chavez expropriating over 200 businesses in 2010 as part of his 'economic war' against the 'bourgeoisie'.

Conversely, governments on the far right hold a positive view of private property and the inequalities it entails. Augusto Pinochet's far-right military dictatorship in Chile (1973-1990) privatized state-owned industries that Allende's socialist government had nationalized, leading to increased economic inequality but attracting foreign capital. Conservatives argue against greater taxes on the rich, seeing wealth as an incentive for work, and believe government assistance lessens the poor's incentive to contribute productively, especially if beneficiaries show no effort. Some conservatives, like Howard Flight of the UK House of Lords, have expressed concern that social spending could increase poverty by giving the lower class an 'undue reproductive advantage,' while Sir Keith Joseph, a Conservative Party member, in 1974, explicitly denigrated the poor as 'least fitted to bring children into the world,' advocating against their reproduction. Peru's government under Alberto Fujimori sterilized 300,000 women from the lowest socio-economic classes as an 'antipoverty measure' between 1996 and 1998.