Created Equal – The Conflict Between Equality of Opportunity and Equality of Outcome
The fifth major argument in Free to Choose is a profound philosophical and practical exploration of the concept of “equality.” The Friedmans contend that the word “equality,” as used in political and social discourse, has come to have two fundamentally different and conflicting meanings. The failure to distinguish between these two meanings has been a primary source of intellectual confusion and has led to government policies that, in the name of promoting equality, have severely undermined individual liberty.
The two competing concepts are Equality of Opportunity and Equality of Outcome. The Friedmans argue that the first of these is a core component of a free society and is entirely consistent with liberty. The second, however, is a radical departure from the classical liberal tradition and is in direct and irreconcilable conflict with liberty. The drive to achieve equality of outcome, they contend, has been the single most powerful force behind the expansion of government power in recent decades and represents a grave danger to the future of a free society.
The Original Meaning: Equality Before God and the Law
To understand the distinction, we must begin with the original meaning of equality as it was understood by Thomas Jefferson and the other founders of the United States when they wrote in the Declaration of Independence that “all men are created equal.” They did not mean this literally, in the sense that all people are identical in their talents, abilities, or character. Jefferson himself was a towering genius—an inventor, architect, scholar, and statesman—and was acutely aware of the vast differences among individuals.
Rather, the statement was a moral and philosophical assertion: all men are equal before God. Each individual is a precious and unique being, an end in himself, not merely a means to be used for the purposes of others. Each person is endowed with “unalienable Rights,” including “Life, Liberty, and the pursuit of Happiness.” This concept of personal equality meant that no person, whether king or aristocrat, had a natural right to rule over another. Government was to be the servant of the people, not their master, established to protect these fundamental rights. In this original conception, equality and liberty were not in conflict; they were two sides of the same coin. Liberty was an essential part of the definition of equality.
The Evolution to Equality of Opportunity
In the nineteenth century, as the nation grappled with and eventually abolished the institution of slavery, the concept of equality evolved to what is now known as “equality of opportunity.” This ideal holds that no arbitrary obstacles should prevent individuals from using their unique talents and ambitions to achieve their full potential. Characteristics such as birth, nationality, race, religion, or sex should not determine a person’s station in life. The French revolutionary phrase captures this spirit perfectly: Une carrière ouverte aux talents—a career open to the talents.
Like personal equality, equality of opportunity does not and cannot mean literal identity. A child born to supportive and educated parents in a prosperous country does not have the same starting point as a child born into poverty and neglect. The ideal is not to make these starting points identical—an impossible task—but to ensure that the rules of the game are fair. It means equality before the law, where the same rules apply to everyone, and the race is won by the swiftest, not by the one whose father is a judge.
This concept of equality is also fully consistent with liberty. In fact, it is an essential component of it. Denying a person a job or an education for which they are qualified based on their race or religion is a direct violation of their liberty—an interference with their right to pursue their own happiness. The American “melting pot” ideal, the system of free enterprise, and the explosion of social mobility that characterized the United States in the 19th and early 20th centuries were all manifestations of this powerful commitment to equality of opportunity. It was a system that unleashed human energy on an unprecedented scale, because it allowed individuals to reap the rewards of their efforts and bear the consequences of their failures.
The New Meaning: Equality of Outcome
In the twentieth century, a radically different concept of equality began to gain currency, first in Europe and then increasingly in the United States: “equality of outcome.” This is the belief that everyone should finish the race at the same time. It is not enough that everyone starts at the same line with the same rules; the results themselves must be equalized. As the Dodo in Alice in Wonderland declared, “Everybody has won, and all must have prizes.”
This new ideal is often expressed in slogans like “fair shares for all” or Karl Marx’s famous dictum, “From each according to his ability, to each according to his needs.” The Friedmans argue that this concept, however appealing its rhetoric, is in direct and fundamental conflict with liberty.
The conflict arises from a simple, unavoidable question: If “fairness” is to be the criterion for distributing the prizes, who decides what is fair? “Fairness” is not an objective, scientific concept. It is inherently subjective and is “in the eye of the beholder.” If a society is to enforce “fair shares,” some group—a government, a planning board, a committee of experts—must be given the power to decide what each person’s fair share is. This immediately creates a state of profound inequality: the inequality of power between those who get to decide and those who must abide by the decision. As George Orwell so brilliantly satirized in Animal Farm, a society dedicated to this principle will inevitably end up in a state where “all animals are equal, but some animals are more equal than others.”
To enforce this equality of outcome, the state must be given immense coercive power. It must take from those who have “more” than their fair share and give to those who have “less.” What incentive, then, is there for anyone to work hard, to innovate, to take risks? If the rewards of your success will be confiscated and the penalties of your failure will be subsidized, the motivation to produce is severely diminished. How is it to be decided who will be the doctor and who will be the garbage collector if the outcomes are to be equalized? The only answer is that people must be assigned their roles. The pursuit of equality of outcome, when taken to its logical conclusion, requires the abolition of private property and the use of force to compel individuals to perform the tasks and live the lives that the state decrees. The end result is not equality in any meaningful sense, but a society of equal servitude to an all-powerful state. The historical experiences of the Soviet Union, Maoist China, and Pol Pot’s Cambodia provide grim and undeniable evidence of this tragic outcome. Even in these totalitarian states, a new, privileged elite of rulers and bureaucrats emerges, enjoying a standard of living and a degree of power far beyond that of the masses they rule in the name of equality.
The Unfairness of Life and the Source of Progress
The moral fervor behind the drive for equality of outcome often stems from a genuine and understandable outrage at the unfairness of life. It is not “fair” that one child is born with a brilliant mind and another with a debilitating handicap. It is not “fair” that one is born to wealthy parents and another to poor ones.
The Friedmans acknowledge this unfairness but argue that attempts by the government to “correct” it are not only a threat to freedom but are also destructive of the very sources of human progress. Life is not fair. And much of the progress we enjoy is a direct result of this “unfairness.” It is not “fair” that Muhammad Ali was born with the unique physical gifts that made him a legendary boxer, but millions of people who enjoyed watching his fights benefited from this accident of birth. It is not “fair” that Henry Ford had the peculiar genius for mass production, but his “unfair” talent brought the automobile within reach of the common person and transformed society.
To pursue an abstract ideal of equality by leveling such differences would be to impoverish everyone. If Muhammad Ali had been forced to accept the same pay as an unskilled dockworker, he would have had no incentive to endure the grueling training regimen required to become a champion, and the world would have been deprived of his extraordinary performances. The market allows people to benefit from the “unfair” talents of others. It gives exceptional individuals an incentive to cultivate their gifts to the fullest, and in the process of pursuing their own self-interest, they create products, services, and experiences that enrich the lives of millions.
This dynamic is illustrated by a simple game of chance. If a group of people start a poker game with equal stacks of chips, by the end of the evening, some will be big winners and others will be losers. This is an unequal outcome. Should the winners be forced to return their winnings to the losers to restore equality? To do so would be to destroy the entire point of the game. No one, not even the losers, would want to play under such rules. The element of risk, of taking a chance on an uncertain outcome, is what makes the game exciting and worthwhile.
Life itself is a series of such choices under uncertainty. The free market system is one in which individuals are free to take these chances—to choose an occupation, to start a business, to make an investment—and to bear the consequences of their choices. This freedom to choose, and to accept the resulting inequality of outcomes, is the engine of innovation and progress. The fortunes created in a capitalist system are, for the most part, not taken from a fixed pie. They are created by making the pie bigger. Henry Ford’s fortune was a small fraction of the new wealth created for society by the mass-produced automobile.
Who Really Favors Equality of Outcome?
Despite the widespread rhetoric in its favor, particularly among intellectuals and politicians, the Friedmans argue that there is very little genuine support for the ideal of equality of outcome. The actions of people, they contend, speak louder than their words.
- Government Actions: Governments that pay lip service to equality, such as that of New York State, actively promote massive inequalities through state-run lotteries and off-track betting, which they advertise heavily to their citizens.
- The Behavior of Intellectuals: The most ardent preachers of equality are often found in what Irving Kristol called the “new class”—academics, journalists, and government bureaucrats. These are, by and large, among the highest-paid members of society. They show little inclination to practice what they preach on a “do-it-yourself” basis by voluntarily giving away the portion of their income that exceeds some egalitarian standard. If they truly believe in a society of enforced equality, they are free to join or form communes that practice it. The fact that so few do so, and that such communes are notoriously fragile, is powerful evidence against their stated preferences. In Israel, where egalitarian communes (kibbutzim) are highly respected, never have more than 5% of the population chosen to live in them.
- The Public at Large: The popularity of Las Vegas, lotteries, and other forms of gambling is a clear indication that most people are not opposed to inequality per se. They are attracted by the small chance of a highly unequal outcome in their favor.
The Consequences of Egalitarian Policies
The attempt to pursue equality of outcome, even in the less extreme forms seen in Western democracies, has had consistently negative consequences. Great Britain, which for decades after World War II was dominated by this ideal, provides the most instructive example. Confiscatory tax rates on income and inheritance were imposed to “soak the rich.” A vast welfare state was created to provide for the poor.
The results were not a more equitable society, but a stagnant and class-ridden one. A new privileged class of government bureaucrats and powerful trade union leaders replaced the old aristocracy. The high taxes stifled incentives, leading to a “brain drain” of the country’s most talented and ambitious citizens and a dramatic decline in economic productivity relative to its neighbors. A culture of tax evasion and “fiddling” became endemic, corroding respect for the law.
The Friedmans conclude with a powerful warning. A society that puts equality of outcome ahead of freedom will end up with neither. The use of force to achieve equality will destroy freedom, and the power created for this purpose will inevitably be captured by an elite who will use it to promote their own interests.
By contrast, a society that puts freedom first will, as a happy byproduct, achieve both greater freedom and greater equality. A free society does not guarantee equal outcomes, but it does ensure mobility. It allows the disadvantaged of today to become the privileged of tomorrow. It unleashes the creative energies of all its people, producing a dynamic and progressive society in which everyone, from the top to the bottom, can enjoy a fuller and richer life. The promise of America was never that everyone would be the same, but that everyone would be free to become different.