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Is economic inequality a problem in and of itself? Why? Economic quality seems like a red herring for actual issues like how well off people are. Is the actual

by Pyxl101 11y ago

Is economic inequality a problem in and of itself? Why? Economic quality seems like a red herring for actual issues like how well off people are. Is the actual concern about how poorly off the poor are? Imagine a thought experiment where aliens come to earth and give every human 100x the resources they have currently (or 100x a year's min wage), as an annuity. The poor are all now rich, and the wealthy can buy their own space stations. Is this intrinsically a problem, and why? If the actual concern is about how well off the lower and middle class are, then that's reasonable: we're talking about the welfare of actual people. But actual people are not harmed or affected directly by some mega-rich person being much richer. I expect that someone will reply to explain that inequality is the symptom of or cause of some other dysfunction, and it is the actual problem - and that's great, that's what I'd like to understand better. Whatever the actual problem is, let's talk about it. If the problem is about lack of adequate education, opportunities, etc. then let's discuss those concerns directly.

danhak 11y ago
The issue is always inequality and not absolute wealth, so your hypothetical of everybody having 100x the resources is not fundamentally different than the current situation. The issue is that wealthy people do not have a monopoly on talent, good ideas or intelligence. But they have a monopoly on power and influence. Society therefore suffers when the best ideas do not necessarily compete on an equal basis within the marketplace or the political arena, if they make it there at all.
- trav4225 11y ago
  I think many of us agree that "society therefore suffers when the best ideas do not necessarily compete on an equal footing". Where many of us disagree is regarding the extent to which we have the moral license to do anything about it policy-wise. Just my 2¢ :)
- DevX101 11y ago
  Multiplying everyone's MONEY by 100x wouldn't make any difference, but multiplying everyone's RESOURCES (what OP said) by 100x would absolutely make a big difference in human society.
- Pyxl101 11y ago
  Excellent! Thank you for clarifying. It sounds like the concern is that some people hold a monopoly on power, such that good ideas don't compete on their merits. Is that a good way of saying it? I ask because that problem does not seem to me to be directly related to income equality. In communist societies everyone had very similar income, and yet a small group had all the power and functioned as kingmakers in business. Or even outside communism, simple corruption: for example, until the 90s you needed a very hard-to-get license in order to start a business or do business at all in India (known as "license raj"). This stifled their business environment and innovation for decades. This type of problem still affects many countries today, especially corrupt ones. https://en.m.wikipedia.org/wiki/Licence_Raj https://en.m.wikipedia.org/wiki/Licence_Raj It seems to me that good ideas are capable of flourishing in the US without any gatekeepers getting in the way. It's easier than ever before to start a company. Why do you believe that good ideas aren't already competing effectively on merit? (Examples?) Take Google, Microsoft, Facebook, Uber, etc. Did these not win on merit? Is there a legislative barrier to you starting your own competitor to one of these services?
  - danhak 11y ago
    > In communist societies everyone had very similar income... Again we're reverting to the straw man of 100% (or nearly) equal society. Our society must be unequal to some extent because capital is a reasonable and effective reward for figuring out how to best allocate resources. But extreme inequality prevents a large % of the population from fully developing, exploring and disseminating their talents, shutting them out of this virtuous cycle altogether. You bring up Google, Microsoft, Facebook and Uber as examples of companies that succeeded on their merits. All four of those companies were started by straight white men with upper middle class upbringings. Do you believe that's a coincidence? Or are there some "lost Zuckerbergs" out there who never had a chance to fully explore computers when they were kids? Is a family's ability to afford the latest technology a material advantage for the next Zuckerberg / Gates / Brin / Page / Kalanick? In your original example, who is going to invent the next great space tech? Probably the kid whose family is buying a space station.
    - Pyxl101 11y ago
schmichael 11y ago
As long as money begets power: yes, it is a problem as it undermines the fundamental principle of equality in a democracy. Now the extent to which money begets power and therefore undermines democracy is a subject open to much debate.
jernfrost 11y ago
No, actual inequality does cause actual problems. 1) Happiness is affected by absolute wealth but as we get richer the effect wears off. Relative wealth however retain its effect on happiness regardless of absolute wealth level. 2) Inequality distorts supply and demand in society. In any society there is a limit to labour. If you shift larger part of society's wealth to a few they will command an increasing share of the labour of a society. This will affect what gets produced in society and relative prices. 3) High concentrations of wealth distorts politics. With more equal distribution politicians will mainly cater to the interests of the majority of the people. With extreme wealth concentration society will become increasingly like an oligarchy. Studies show that this has already started to happen in the US. Studies show that what becomes actual practical politics is generally not in line with the will of the majority, but rather with the will of the wealthy few. If you look at societies with high wealth concentrations like those with large oil wealth or other resource wealth you find typically very weak political institutions and poor development of democracy. The super rich gulf states e.g. are far behind politically speaking from much poorer countries.
lmm 11y ago
Human values are complex, but most of us have the instinct that inequality is bad, just as we have an instinct that murder or theft is bad. Even if everyone had 100x what they have now, the inequality would still feel wrong to me. In terms of ethical theories: from a utilitarian perspective, inequality causes unhappiness, and even a partially destructive redistribution of wealth would probably be better for the greatest happiness of the greatest number. Other approaches (e.g. virtue ethics) I'm less familiar with.
mrxd 11y ago
> But actual people are not harmed or affected directly by some mega-rich person being much richer. True, but that goes for welfare as well. Someone who is freezing cold does not get colder when someone with 100 blankets gets 100 more.
dikdik 11y ago
>If the problem is about lack of adequate education, opportunities, etc. then let's discuss those concerns directly. That is a large part of the concern and it is happening because of inequality. Funding for public education gets cut > rich people move towards private education > more education funding gets cut, partially swayed by rich people who have no vested interest in public education > public education gets shittier and shittier > private education becomes leagues ahead of public education > only rich can afford great education > only rich can afford nice jobs. Things like this happen slowly over decades in all sorts of areas. That is how the middle class in the US has been hallowed out. It's not about the rich becoming richer, it's about the lower and middle classes becoming poorer. And in many cases, though not all, the poor becoming poorer is directly tied to the rich becoming richer.

by Pyxl101 11y ago

danhak 11y ago

The issue is always inequality and not absolute wealth, so your hypothetical of everybody having 100x the resources is not fundamentally different than the current situation. The issue is that wealthy people do not have a monopoly on talent, good ideas or intelligence. But they have a monopoly on power and influence. Society therefore suffers when the best ideas do not necessarily compete on an equal basis within the marketplace or the political arena, if they make it there at all.

trav4225 11y ago
I think many of us agree that "society therefore suffers when the best ideas do not necessarily compete on an equal footing". Where many of us disagree is regarding the extent to which we have the moral license to do anything about it policy-wise. Just my 2¢ :)
DevX101 11y ago
Multiplying everyone's MONEY by 100x wouldn't make any difference, but multiplying everyone's RESOURCES (what OP said) by 100x would absolutely make a big difference in human society.
Pyxl101 11y ago
Excellent! Thank you for clarifying. It sounds like the concern is that some people hold a monopoly on power, such that good ideas don't compete on their merits. Is that a good way of saying it? I ask because that problem does not seem to me to be directly related to income equality. In communist societies everyone had very similar income, and yet a small group had all the power and functioned as kingmakers in business. Or even outside communism, simple corruption: for example, until the 90s you needed a very hard-to-get license in order to start a business or do business at all in India (known as "license raj"). This stifled their business environment and innovation for decades. This type of problem still affects many countries today, especially corrupt ones. https://en.m.wikipedia.org/wiki/Licence_Raj https://en.m.wikipedia.org/wiki/Licence_Raj It seems to me that good ideas are capable of flourishing in the US without any gatekeepers getting in the way. It's easier than ever before to start a company. Why do you believe that good ideas aren't already competing effectively on merit? (Examples?) Take Google, Microsoft, Facebook, Uber, etc. Did these not win on merit? Is there a legislative barrier to you starting your own competitor to one of these services?
- danhak 11y ago
  > In communist societies everyone had very similar income... Again we're reverting to the straw man of 100% (or nearly) equal society. Our society must be unequal to some extent because capital is a reasonable and effective reward for figuring out how to best allocate resources. But extreme inequality prevents a large % of the population from fully developing, exploring and disseminating their talents, shutting them out of this virtuous cycle altogether. You bring up Google, Microsoft, Facebook and Uber as examples of companies that succeeded on their merits. All four of those companies were started by straight white men with upper middle class upbringings. Do you believe that's a coincidence? Or are there some "lost Zuckerbergs" out there who never had a chance to fully explore computers when they were kids? Is a family's ability to afford the latest technology a material advantage for the next Zuckerberg / Gates / Brin / Page / Kalanick? In your original example, who is going to invent the next great space tech? Probably the kid whose family is buying a space station.
  - Pyxl101 11y ago

schmichael 11y ago

As long as money begets power: yes, it is a problem as it undermines the fundamental principle of equality in a democracy. Now the extent to which money begets power and therefore undermines democracy is a subject open to much debate.

jernfrost 11y ago

No, actual inequality does cause actual problems. 1) Happiness is affected by absolute wealth but as we get richer the effect wears off. Relative wealth however retain its effect on happiness regardless of absolute wealth level. 2) Inequality distorts supply and demand in society. In any society there is a limit to labour. If you shift larger part of society's wealth to a few they will command an increasing share of the labour of a society. This will affect what gets produced in society and relative prices. 3) High concentrations of wealth distorts politics. With more equal distribution politicians will mainly cater to the interests of the majority of the people. With extreme wealth concentration society will become increasingly like an oligarchy. Studies show that this has already started to happen in the US. Studies show that what becomes actual practical politics is generally not in line with the will of the majority, but rather with the will of the wealthy few. If you look at societies with high wealth concentrations like those with large oil wealth or other resource wealth you find typically very weak political institutions and poor development of democracy. The super rich gulf states e.g. are far behind politically speaking from much poorer countries.

lmm 11y ago

Human values are complex, but most of us have the instinct that inequality is bad, just as we have an instinct that murder or theft is bad. Even if everyone had 100x what they have now, the inequality would still feel wrong to me. In terms of ethical theories: from a utilitarian perspective, inequality causes unhappiness, and even a partially destructive redistribution of wealth would probably be better for the greatest happiness of the greatest number. Other approaches (e.g. virtue ethics) I'm less familiar with.

mrxd 11y ago

> But actual people are not harmed or affected directly by some mega-rich person being much richer. True, but that goes for welfare as well. Someone who is freezing cold does not get colder when someone with 100 blankets gets 100 more.

dikdik 11y ago

>If the problem is about lack of adequate education, opportunities, etc. then let's discuss those concerns directly. That is a large part of the concern and it is happening because of inequality. Funding for public education gets cut > rich people move towards private education > more education funding gets cut, partially swayed by rich people who have no vested interest in public education > public education gets shittier and shittier > private education becomes leagues ahead of public education > only rich can afford great education > only rich can afford nice jobs. Things like this happen slowly over decades in all sorts of areas. That is how the middle class in the US has been hallowed out. It's not about the rich becoming richer, it's about the lower and middle classes becoming poorer. And in many cases, though not all, the poor becoming poorer is directly tied to the rich becoming richer.