When fighting inequality, before redistributing, eliminate some of its worst man-made causes.

Sir, on the front page you label Martin Wolf’s “A more equal society will not hinder growth” as “Robin Hood’s economy” April 23. Just in case, and since so many have recently been mixing up Robin Hood with the Sheriff of Nottingham, let us be clear in that Robin Hood indeed helped the poor, but he was not a tax collector for King John… much the contrary.

Many years ago in an op-ed, I wrote that since justice lies on a never ending continuum, which made it hard to know where you find yourself, the most effective way to fight for justice was by attacking the much easier identifiable injustices. In the same vein, since it is hard to define what equality we need, before the grave, it is better to combat the most egregious sources of inequality.

Right now many economic injustices firmly anchored in what is known as rent extraction or crony capitalism are important inequality drivers. Trying to make up for the bad results, by for instance a tax on wealth, without correcting those drivers will lead to even more inequality.

There are many man-made causes for inequality. Two of those that I have been proposing to end are:

First: It makes no sense if we want to make our capitalism vigorous that the usually ample profits obtained under the protection of a patent, or through the power of an extravagant market share, should be taxed at the same rate, that those more meager profits resulting from having to compete naked and unprotected in the market. As a result the capital accumulation of “the protected” will be higher than that of “the unprotected” with very dire long term implications to the dynamism of capitalism.

Second: It makes no sense whatsoever to allow banks to obtain higher risk-adjusted returns on equity when lending to “the infallible” than when lending to “the risky”. And that is the direct result of those so obnoxious risk-weighted capital requirements. Robin Hood would never agree with allowing banks to lend, in risk-adjusted terms, more favorably to the “infallible sovereign” or to the AAAristocracy than when lending to a “risky” Sherwood Forest entrepreneur.

Again, let us be sure that we fight inequality by reducing its causes, not by increasing the profits of the intermediaries in redistribution, the merchants of inequality reduction.

PS. Sir, just to let you know, I am not copying Martin Wolf with this, as he has asked me not to send him any more comments related to the capital requirements for banks, as he understands it all… at least so he thinks.