Equality in the enjoyment of life can be achieved only by taxing society – which is to say, increasing net suffering – by an amount that exceeds the amount of suffering it ameliorates. The economic friction imposed by transaction costs alone ensures this result. To it must be added the friction of search costs – the costs associated with finding the resources you want to tax, and the people whose suffering you want to relieve.
This static cost accounting is relatively straightforward. But there are hidden, dynamic costs, that go much deeper, and are much greater.
Optimality – i.e., achievement of the ineradicable minimum of suffering – for society at large is achieved when resources are accurately allocated to their best use, where they will generate the most enjoyment at the least cost in suffering. This will always mean that some projects, some lives, are more favored than others, as being more apt to reality as it actually is, better coordinated within themselves and with other worthy projects, and better ordered toward the Good (it’s no use to have a really well run operation spinning off tons of profit on production of something evil). The reduction of the suffering of the average life requires that some suffer more, or enjoy less, than others.
The projects that must suffer more or enjoy less are those that are inept, or poorly run, or ordered to evil. We want such projects to be starved of resources. The poverty of such projects is a good that society should seek, if it wants to be good – which is to say, if it wants to prosper, or even to survive.
To increase equality in the allocation of resources – by which is generally meant to reduce the differentials in allocations to projects, so that the distribution of suffering in society is clustered more closely to the mean of the distribution – you must decrease optimality. A society that is perfectly “fair” – wherein everyone suffers and enjoys to more or less the same degree – must tend toward its own destruction, because to achieve that perfect fairness it must blind itself to the relative worthiness of projects; and this it can only do by blinding itself to the world, to its own condition, and to the Good. A society that has a pervasive poor fit to reality, is poorly coordinated throughout, and everywhere poorly ordered toward the Good is a society that is very, very poor – much poorer than need be. And the longer a society continues poor, the poorer it will get; for poverty, like prosperity, is a compounding function.
Thus the price of perfect fairness is perfect poverty, and maximal suffering, for everyone. If you want to see what a perfectly fair society looks like at its point of homeostatic equilibrium, look at the Ik:
There is no better or more heartbreaking example of the alienation of the human capacity to love than the story of the Ik tribe of Uganda. Colin Turnbull in his book Mountain People documents how Milton Obote nationalized traditional hunting lands as national park for European tourists, and prevented the Ik from hunting in their traditional hunting grounds. After a couple of generations of starvation conditions, the Ik, originally a cooperative, child loving tribe, became a group of selfish cruel people who don’t trust or help anybody. They would desert children at an early age and one story Turnbull tells is how after abandoning a baby to be eaten by wild animals the animals were hunted an [sic] eaten.
– Claude Steiner
Equality then is an evil project. It aims at the death of sociality per se:
In such condition there is no place for industry, because the fruit thereof is uncertain, and consequently, not culture of the earth, no navigation, nor the use of commodities that may be imported by sea, no commodious building, no instruments of moving and removing such things as require much force, no knowledge of the face of the earth, no account of time, no arts, no letters, no society, and which is worst of all, continual fear and danger of violent death, and the life of man, solitary, poor, nasty, brutish, and short.
– Thomas Hobbes, Leviathan
What then should be done about the poor? They ought surely to be helped, but never so as to subsidize the vices that vitiate their lives: you get more of what you pay for, so if you pay for vice, you’ll get more of it. The poor, then, should be helped only in exchange for their renunciation of any vices that made or kept them poor, and their adoption of such virtues as can improve their chances of prosperity.
Put another way: the organs of society should starve vice of resources, and shower them upon virtue.
 This is a special case in the realm of economics of the general thermodynamic fact that you can’t increase orderliness in one part of the universe without decreasing it commensurately elsewhere, in the process losing some of the transferred order, permanently, to friction or other dissipative processes. An increase of orderliness anywhere entails a cosmic destruction of orderliness. Work devours potential. This indicates first that value in general is a measure of order, and second that there is conservation of value across all economic transactions. That this is so does not mean that the human economy cannot grow in total embodied value – i.e., capital – but that such growth can happen only if funded exogenously – by sunlight, in the penultimate analysis. So long as the sun keeps shining, everyone can indeed keep getting richer, at least in principle. At Pareto optimality, the dead weight loss of potential economic value to dissipation involved in the human rearrangement of matter and incorporation of value in human bodies is minimized. The efficiency realized as a culture approximates to Pareto optimality is an increase in the rate of compounding of human wealth.
That store of value is called “capital” because it has value at all only insofar as it is available for deployment by human intelligence. E.g., a hammer is not a tool at all, except to a person who has some use for it. Capital then is just banked human intelligence, residing nowhere but in human heads: capita. Thus also none of the four classical factors of production – land, labor, capital goods, and entrepreneurship – can be deployed except by entrepreneurship. Entrepreneurship is – as its term explicitly declares – the rearrangement or transport of value from one locus to another, that rearrangement being the fundamental procedure of the growth of social wealth, of the total human capacity for living a good life. Entrepreneurship then – intelligent enterprise in the coordination of human activity – is the form of all capital. When activity is not coordinated by intelligence – literally, by reading off the values implicit in apprehended teloi, and selecting among them – it is nothing more than a disordered sequence of convulsions.