The part about the middle class v.s. the rich plus the very poor hadn't occurred to me until thinking through that last entry as I wrote it. That warrants more thought.

So, while I'm arguing with them right now, the Libertarians to have a good point.

By restricting the market, less wealth is created.

As in the example I gave, if you let the employers discriminate by wealth maximizing preferences, they will pay men more. But if you look at the productivity of a man who has a child v.s. a woman who has a child (most people have children), the man will be more productive on the job. When you expand this dynamic outwards, on net it leads to more wealth being created: a bigger pie if you will.

So it creates a bigger, but disproportionally distributed pie. Men on average get more than women.*

So in the opposite corner from the Libertarians, you have the special interests groups. These include race, gender, the elderly, people with disabilities, and endless others. These groups want to redistribute the pie in ways that are more favorable to them.

I'm personally in a special interest group (women), and have redistribution preferences related to it.

Now the tricky thing, is that with redistribution, the size of the pie shrinks, because the pie is not being created with maximum efficiency.

Being part of the special interest group of Women, my group maximizes its wealth by some redistribution of the big pie.

At some point though, the pie shrinks so much that my special interest group actually reaps less pie in total than if the laws weren't discriminating in its favor.

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