Kevin Williamson explains why we’ll always have income inequality, and what happens when government tries to say otherwise:
The textbook American case of this happened when President Franklin “The Hyde Park Hammer” Roosevelt decided he was so smart that he knew what every American should be paid and what everything should cost, which he decided to enforce under color of law through federal controls on wages and prices. The Hammer actually wasn’t half as clever as he thought he was, and when he started threatening to throw newspaper editors in jail for giving their staffers raises, people kind of looked askance, and businesses started giving their best employees raises without giving them raises: company health insurance, the company car, the other “fringe benefits.” (When I was little, I thought this was “French benefits,” which turn out to be a lot more generous in reality and come with really good coffee.) This is, incidentally, why you are in the situation of getting your health insurance through your employer, whose incentives on that matter are very different from yours. (See cost-shifting, above.) The people with lots of market power, because their products or labor were more highly valued on the underlying hierarchy of real values, got paid more. It’s just that we had to waste a lot of resources figuring out a way to pay them more while creating an enormously destructive and deeply stupid health-insurance system, which we’re still trying to sort out.