It is also clear from both historical observation and praxeological reasoning that socialism and statism are naturally associated with great disparities of wealth and class divisions, whereas even a relatively free market gives rise to economic mobility and a burgeoning middle class. Even in mixed economies such as the United States, where (as we saw in Section 4) regulations pose numerous impediments to employment, advancement, and entrepreneurship by lower-income individuals, the vestiges of economic freedom enable many to transcend conditions of poverty. A Treasury Department analysis of tax returns over a ten-year period, for example, found that of the persons who fell in the lowest income quintile in 1979, 86% had risen to a higher quintile ten years later (1988). Perhaps more remarkably, the number of persons who rose from the lowest to the highest quintile exceeded those who remained in the lowest quintile at both the beginning and end of the period (source).      Next page
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