Helgason argues equality policies can weaken incentives to succeed

In an opinion article published by Morgunblaðið, Jens Garðar Helgason argues that policies focused on equal outcomes can discourage effort and weaken the creation of value.

Helgason recalls that he was not especially absorbed by books or schoolwork during his years at an upper-secondary school in Akureyri. He managed to pass his exams, but his active involvement in school life brought his grades down. Some classmates, by contrast, put great effort into their studies and set social activities aside. An eight out of ten was a shock for them, he writes, while it would have been a “Christmas miracle” for him in the spring.

His lesson, he says, is that people who work hard should reap rewards in proportion to their effort. He imagines what would happen if grades were redistributed equally: a student with a ten would give up part of the mark to a student with a five, leaving both with 7.5.

That might work for a year, he argues, but students would soon change their behaviour. Those who worked hardest would see little reason to make further effort if their results were shared, while those who did less would learn to rely on others. Over time, Helgason says, ambition and motivation would fade, grades would fall and both students would fail.

He says this illustrates the problem with an egalitarian approach that treats equality as an end in itself and focuses on distributing wealth rather than how it is created. In his view, value is created when people work, invest, establish businesses, take risks and produce something useful to others.

Helgason argues that raising taxes and levies whenever individuals or companies succeed sends the message that the more they contribute, the more will be taken from them. He says this discourages work, investment and initiative, ultimately weakening society as a whole.

Politicians who promise to spend other people’s money are not in short supply, he writes. What is lacking, he argues, are those who ask how more value can be created. He says politicians should not compete to divide the pie while making it smaller.

A fair society, Helgason writes, is not one in which everyone ends up with the same grade, but one in which people have equal opportunities to contribute, benefit from their hard work and improve their circumstances through their own efforts. He quotes Davíð Oddsson on the state’s role: “We must change people’s attitude towards the public sector. It should not be like a herring net that traps people, but like a safety net that no one falls through.”

Freedom and responsibility go together, Helgason writes. The right to enjoy the results of one’s success is not opposed to compassion. On the contrary.