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A Capitalism for the People: Recapturing the Lost Genius of American Prosperity by Luigi Zingales

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8

EQUALITY OF OPPORTUNITY

You cannot lift the wage earner up by pulling the wage payer down.

—Abraham Lincoln

AS I EXPLAINED IN CHAPTER 2, DEMOCRACIES CONSTANTLY wrestle with the tension between providing the right incentives—to build human capital, to invest, to work hard—and assuring that the benefits of the free market are widely shared, so that people maintain their faith in both the efficiency and the fairness of the system. Without some inequality, there are no incentives: people go to college and study hard not just because they love learning but also because they expect to earn more money afterward. Without the promise of a higher reward for good performance (or threat of a lower reward for laxity), most people will not exert extra effort. ...

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