Free Equitism: A Better Framework Than Gary Stevenson’s Economic Analysis

Gary Stevenson’s YouTube channel “Gary’s Economics” has gained significant attention for its takes on inequality and economic policy. While Stevenson correctly identifies inequality as a pressing concern, his analysis and proposed solutions demonstrate fundamental misconceptions about how markets and inequality actually work. Free equitism offers a more coherent framework that addresses these issues while avoiding Stevenson’s economic fallacies.

Where Stevenson Goes Wrong

1. The Wealth Tax Fallacy

Stevenson frequently advocates for wealth taxes as a solution to inequality. This reveals several misunderstandings:

• He fails to distinguish between investment and consumption inequality
• He ignores the deadweight loss created by wealth taxes
• He doesn’t recognize how wealth taxes can actually reduce economic efficiency by disturbing optimal capital allocation

2. The “Money Isn’t Wealth” Confusion

One of Stevenson’s most problematic claims is that we shouldn’t implement Universal Basic Income because “giving people money isn’t wealth” and “doesn’t grow the economy.” This argument fundamentally misses the point:

• The goal of UBI isn’t to create wealth but to address consumption inequality
• Economic growth comes from market exchange and innovation
• Redistribution and growth are separate issues that Stevenson incorrectly conflates

3. Misunderstanding Market Failures

Stevenson treats various economic problems as disconnected issues requiring separate solutions, rather than understanding them as related market failures that need systematic addressing.

The Free Equitism Alternative

Free equitism offers a more coherent framework that avoids these pitfalls while actually addressing the inequality Stevenson cares about.

1. Distinguishing Investment from Consumption

Unlike Stevenson’s approach, free equitism recognizes that:

• Investment inequality isn’t inherently problematic
• We want efficient capital allocation by successful investors
• The real issue is consumption inequality
• These can be addressed separately

2. Efficient Redistribution

Instead of Stevenson’s wealth taxes, free equitism advocates for tools that minimize or eliminate deadweight loss:

• Land value taxes (neutral deadweight loss)
• Pigovian taxes on negative externalities (negative deadweight loss)
• Universal basic income (no distortion of market incentives)

This achieves redistribution without the economic damage Stevenson’s proposals would cause.

3. Understanding Market Freedom

Contrary to Stevenson’s piecemeal approach to economic problems, free equitism recognizes that addressing market failures makes markets more free by enabling efficient voluntary exchange. This includes:

• Breaking up monopolies
• Pricing negative externalities
• Ensuring information transparency
• Providing public goods
• Solving coordination problems

Why This Matters: Practical Policy Implications

The differences between Stevenson’s approach and free equitism lead to very different policy recommendations:

Stevenson’s Approach

• Wealth taxes (creates deadweight loss)
• Opposition to UBI (misunderstands its purpose)
• Disconnected solutions to market failures
• Focus on wealth rather than consumption inequality

Free Equitism’s Approach

1. Tax Reform

• Replace wealth taxes with land value taxes
• Implement carbon taxes and other Pigovian taxes
• Eliminate taxes that create dead weight loss

2. Market Reform

• Systematic approach to market failures
• Strong antitrust enforcement
• Carbon pricing
• Information disclosure requirements

3. Income Support

• Universal basic income funded by efficient taxes
• Direct cash transfers over in-kind benefits

The Key Insights Stevenson Misses

1. On Wealth: Not all wealth is the same. Invested capital drives economic growth and shouldn’t be confused with consumption inequality.
2. On UBI: The purpose isn’t to “create wealth” but to address consumption inequality directly. Stevenson’s argument against it reveals a fundamental misunderstanding of its purpose.
3. On Market Failures: These aren’t separate problems but symptoms of markets not being free enough. The solution is systematic market reform, not piecemeal interventions.

Conclusion

While Stevenson correctly identifies inequality as a major problem, his analysis and proposed solutions would make things worse by:

• Creating deadweight loss through wealth taxes
• Opposing efficient redistribution tools like UBI
• Failing to systematically address market failures

Free equitism offers a more coherent framework that actually achieves what Stevenson claims to want: reduced inequality without sacrificing economic efficiency. By understanding the distinction between investment and consumption, using efficient redistribution methods, and properly addressing market failures, we can build a more equitable and prosperous society.

This isn’t just theoretical — it provides clear guidance for policy that would actually work, unlike Stevenson’s misconception-based proposals. As inequality continues to be a pressing concern, we need frameworks that genuinely understand and address the problem rather than popular but flawed analyses like Stevenson’s.