Although my instincts are the same (i.e. inequality per se should not be a problem, logically), both introspection and some academic studies* suggest inequality

Although my instincts are the same (i.e. inequality per se should not be a problem, logically), both introspection and some academic studies* suggest inequality actually is a problem. While the incremental benefits of more _absolute_ wealth seem to vanish in the limit, the psychological cost of _relative_ poverty seems to be constant. In his excellent book "Fault Lines", for example, Raghuram Rajan attributes a lot of the pressure on US politicians to funnel credit to ever wider segments of society to growing inequality in the US. The problem is compounded by growing inequality of opportunity or decreasing social mobility (lower now than in many parts of supposedly "socialist" Europe, even!). Indeed, from my perspective -- as a European of East-Asian stock and traveling between the two regions -- the US looks more and more like a plutocracy, not unlike post-communist Russia, and not like a liberal democracy. The start-up system acts like a pressure valve in that system, but that just means there is pressure to begin with. Which indicates another problem with high inequality: it seems to be self-reinforcing (ossification is the keyword here). You can see this on so many levels, starting with the fact that higher education in the US costs real money. _____________________ * which I'm too lazy to locate and properly cite here and now