“The extent and continuing increase in inequality in the United States greatly concern me,” Fed Chairwoman Janet Yellen said last week at a conference on economic opportunity and inequality sponsored by the Federal Reserve Bank of Boston.

Vilfredo Pareto would tell Dr. Yellen to relax—inequality is and always has been a constant. Pareto is known for discovering the Pareto principle, or what most people know as the 80-20 rule. Pareto observed in 1906 that 80% of the land in Italy was owned by 20% of the population and developed the principle by observing pea pods in his garden; 20% of the pods contained 80% of the peas.

The longer you live, the more you observe Pareto’s principle play out over and over in many different contexts. 80% of revenue is provided by 20% of customers. The ratio also applies to customer complaints. I dined with the owner of a Vietnamese restaurant the other night who said that 80% of his revenue came from his noodle soups, which at most comprise 20% of his menu. My experience in the nonprofit world was that 80% of donations came from 20% of those on the mailing list.

Pareto observed that the 80/20 pattern “repeated consistently whenever he looked at data referring to different time periods or different countries,” writes Richard Koch in his book The 80/20 Principle.

So while inequality has been the norm throughout history, the new Fed chair claims that, “By some estimates, income and wealth inequality are near their highest levels in the past hundred years, much higher than the average during that time span and probably higher than for much of American history before then.”

She went on to say, “The distribution of wealth is even more unequal than that of income. … The wealthiest 5% of American households held 54% of all wealth reported in the 1989 survey. Their share rose to 61% in 2010 and reached 63% in 2013. By contrast, the rest of those in the top half of the wealth distribution families that in 2013 had a net worth between $81,000 and $1.9 million held 43% of wealth in 1989 and only 36% in 2013.”

So what? As Mr. Koch explains in his book (emphasis his), if 20% own 80%, “then you can reliably predict that 10 percent would have, say, 65 percent of the wealth, and 5 percent would have 50 percent. The key point is not the percentages, but the fact that the distribution of wealth across population was predictably unbalanced.”

But Yellen has fallen in with Pope Francis, who told the United Nations assembly, “As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world’s problems.”

While it doesn’t seem like it here in America, the world is becoming freer and because of that, poverty is falling.

In the article “Pope Francis, Bad Economist,” James Harrigan and Anthony Davies wrote (link in original):

Over the past two generations, while the number of people on Earth doubled, the number of people living in extreme poverty declined by 80 percent, largely as a result of increased economic freedom globally.

Today, almost all people in economically free countries can afford cures for diseases that killed the richest people only a century ago. The average person with a cell phone today has better and quicker access to more complete information than the President of the United States enjoyed just a generation ago. A plot of land that a century ago could feed one family today can feed hundreds of families.

But the leaders of the Catholic and Monetary Churches don’t care about lifting people out of poverty—it’s envy they’re engaged in. And as Helmut Schoeck showed in his book Envy: A Theory of Social Behavior:

[W]e are least capable of acting sensibly in economic and social matters when we face, or believe we face, an envious beneficiary of our decision. This is true especially when we mistakenly tell ourselves that his envy is a direct consequence of our being better off, and will necessarily wane when we pander even to unrealistic demands. The allocation of scarce resources, in any society, is rarely optimal when our decision rests on fear of other men’s envy.

The Chairwoman continued to stoke the fires of envy with more statistics. “After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. By comparison, the average real income of the other 95% of households grew less than 10%.”

There is no need for Yellen’s preaching. Envy has been institutionalized in this country with the progressive income tax and inheritance taxes. As Schoeck points out, “Envy can become more easily institutionalized than, say desire or joy.” And it has.

Despite these headwinds, the serially successful and productive continue to earn and accumulate the vast share of wealth. That’s why resource investing legends Rick Rule and Doug Casey urge speculators to back entrepreneurs who have proven track records. Rule wrote on Casey Research:

A substantial body of evidence exists that it is roughly true across a variety of disciplines. In a large enough sample, this remains true within that top 20%—meaning 20% of the top 20%, or 4% of the population, contributes in excess of 60% of the utility.

The key as investors is to judge management teams by their past success. I believe this is usually much more relevant than their current exploration project.

Despite some of the highest tax rates in the world and libraries full of regulations to contend with on the national, state, and local levels, the entrepreneurial spirit overcomes, while—as expected—nonproducers hold very little wealth. “The lower half of households by wealth held just 3% of wealth in 1989 and only 1% in 2013,” Yellen told her audience. But in America, the lower half doesn’t have to stay that way and rarely does.

Pareto’s insight is that wealth will never be equal, whether under capitalism, fascism, communism, or whatever-ism. What freedom offers is the possibility to ascend from poverty to wealth with brains, hard work, and good decision making.

Pareto’s principle should not only be accepted but celebrated, and envy ridiculed, not institutionalized. Schoeck explained:

Envy’s culture-inhibiting irrationality in a society is not to be overcome by fine sentiments or altruism, but almost always by a higher level of rationality, by the recognition, for instance that more (or something different) for the few does not necessarily mean less for the others: this requires a certain capacity for calculation, a grasp of larger contexts, a longer memory; the ability, not just to compare one thing with another, but also to compare very dissimilar values in one man with those in another.

Ironically, Ms. Yellen’s zero-interest policy puts more separation between the middle class and the rich than Pareto could ever imagine. But then again, a “higher level of rationality” is severely lacking at the central bank.