In a recent interview by CNN Chile (in Spanish only), the brilliant young astronomer Teresa Paneque speaks passionately about her space research and education efforts to promote critical thinking informed by facts and science, so as to advance human knowledge and wellbeing. But when the interviewer asks about the role of wealthy entrepreneurs, such as Elon Musk and Jeff Bezos, in the exploration and commercial exploitation of space, she abandons reason.
She claims that it is unethical for these billionaires to have gained such immense wealth through profit making that is not accessible to ordinary people. Their wealth, she says, gives them too much [economic] power that others don’t have, making them fundamentally unethical.
This view, shared by many, is based on a moral code – egalitarianism – that uses equity of outcomes as its standard of value. By that standard, choices and actions are good if they lead to approximately the same outcomes for all. In other words, there should not be large differences in income, wealth, and standard of living, and if there are, those differences should be reduced by highly progressive income taxes and “redistribution” programs that require those who have more to sacrifice for those who have less. This is the socialist norm in most mixed economies: To each according to need, and from each according to ability.
The underlying assumption of egalitarianism is that anyone’s wealth or poverty is mostly determined by luck and therefore it is not deserved. But that assumption is unfounded and untenable.
Most successful entrepreneurs become rich, not because of luck or having been handed extraordinary opportunities, but because they have worked hard. They, like Bezos and Musk, have created products and services that people want and are willing to pay for, such as an efficient online shopping platform and cloud computing services, or electric vehicles and space rockets – but also space telescopes and AI to analyze astronomers’ data.
Successful entrepreneurs’ companies make money through voluntary, mutually beneficial trade of their products and services with their suppliers, employees and customers. That is the only way wealth can be sustainably created. That wealth gives them power – but only economic power to invest and to create and trade products, not political power to coerce others to act against their will.
Egalitarianism does not acknowledge that such production and trade, propelled by the profit motive, are necessary to human flourishing. Instead, it curtails the profit motive by insisting that the more productive sacrifice for the less productive through the taxation and “redistribution” schemes of the government.
Consistent with egalitarianism, Paneque wants governments to coordinate and fund space research and exploration through taxpayers’ money – and she wants entrepreneurs stay out it. But if she desires to thrive in her research, she needs to use reason also to acknowledge that without productive companies driven by the profit motive, there would not be enough wealth to invest in space research nor tools and technologies her investigations and educational activities require.
To motivate entrepreneurs to innovate and create wealth, an alternative moral code to egalitarianism is needed. Rational egoism is such a code. Originally developed by Ayn Rand, it promotes the pursuit of self-interest by adherence to reality through the means of reason and by productive work and voluntary trade. Unlike egalitarianism, egoism does not demand sacrifice of the more productive to the less productive. Instead, it advocates trade in which each party wins, regardless of their ability or wealth, according to their productive contributions.
Levels of ability, ambition and effort vary among people and so does the levels of wealth they achieve. But wealth differences do not matter (as long as they are not the result of coercion or fraud, made possible through government corruption or incompetence) – only the level of overall wealth does. Higher overall wealth works to everyone’s benefit, because more wealth is invested. Investment creates more opportunities (for education, training, jobs, venture capital) and a higher level of income for all.
If we want to advance human knowledge and wellbeing, we need not worry about wealth differences that are the result of different productive abilities and outputs and must reject the egalitarian efforts of “redistribution.” Embracing rational egoism instead will encourage everybody to pursue their rational self-interest by cultivating and using their productive abilities to their fullest potential in any field, whether space research and education, or something else.
