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Yeah I've wondered about this a lot. I mean, what kind of inequality are we talking about, and in which cases does it matter. (A) 3 people earn 25k a year, 4 p
by IkmoIkmo 9y ago
Yeah I've wondered about this a lot. I mean, what kind of inequality are we talking about, and in which cases does it matter.
(A) 3 people earn 25k a year, 4 people $30k, 3 people 40k.
moves to:
(B) 4 people earn 50k a year, 4 people earn 60k a year, 1 person earns 300k a year.
B is typically viewed as both preferable and less equal to A. I'm not saying we were at A and got to B. What I'm saying is that I don't know, and a treatise of A/B is always left out from every single article I come across on the topic of inequality. What kind of inequality are we talking about and is it an issue?
It's like the gender gap. Tons of studies indicate if you correct for things like job choice, experience, overtime etc, the gender gap is about 2 or 3 cents on the dollar (and shifts in favour of women under certain conditions. Cultural gender roles likely influence things like job choice and you can make a sensible claim that this ought to be fixed. But the framing of unequal pay (20% less!) for equal work just isn't the case. However, plenty of data now shows the gender gap isn't as big as we think, mostly unrelated to blatant discrimination and quickly becoming smaller and smaller. The literature is more nuanced than some of the political movements behind it. But in the realm of inequality all I read is 'top x% makes y% of the money', without delving much deeper into why this is a problem, there's no nuance or depth in most news articles on the topic, and I'm not familiar with (or too interested in reading) super technical research on the topic.
Don't get me wrong, I'm a leftist, I'm aware that inequality correlates strongly with a whole range of shitty social outcomes like crime or teenage pregnancy. But I want to know what I'm arguing against and why, and I've got no clue whether we're talking about inequality between regular folk growing, or inequality between equal regular folk and a few bill gates types growing, and which is problematic and why.
So point me to some (not too extremely academic) literature if you can! Thanks.
- ergothus 9y ago> B is typically viewed as both preferable and less equal to A. Your examples involved totals of 325k and 740k, so yeah, of course the one with more than twice the wealth (and divided among one fewer person) is considered more deisreable. An example to match the inequality we have today would be closer to 1 person earning 900k, 90 people earning 10k, and 9 people earning 100k. The issue isn't just inequality, your point that some level of inequality is?expected and even good in a capitalist system is correct. The issue is EXTREME inequality and increasing inequality.
- sgt101 9y agoThe other side of the equation should be rebalanced too - there is every reason to believe that less extreme inequality would lead to greater overall economic activity and wealth (so more money in the pot). So the it should be $740k distributed more evenly vs $325 skewed to the right.
- ergothus 9y agoThat might be true....if we hadn't spent the previous two generations in a period of extreme wealth creation and far more equitable wealth distribution. I can certainly accept a level of inequality being healthy. I see no evidence for "every reason to believe" - I actually see the opposite: We have evidence that such extreme inequality is not necessary. Even if the argument was accepted, one would have to prove such inequality truly generated 2x the wealth creation, which is an economically HUGE difference. Thirdly, comparing 1@900k, 9@100k, 90@10k (1 mill total) vs 100@10k (1/2 mill total) and you see that the difference is only there for those 10 people. Were I one of the 90 (and to be clear, I'm one of the 9 in this model) I'd not give much care for arguments that the extreme difference is worthwhile. Lastly, In addition to inequality, there's also the issue of mobility (one might defend my example by saying the 90 want the chance to be one of those 10). Social mobility has been dropping for quite a while. If you want to live the American Dream, you have notably better odds outside of America. The chance at social mobility as an incentive is not an effective argument for the point-in-time system of today. A system where it IS an effective argument doesn't have to be radically different, but it does have to be different.