5 ms·
A mere change in market equilibrium doesn’t constitute a market distortion.
by LudwigNagasena 5y ago
A mere change in market equilibrium doesn’t constitute a market distortion.
- oblio 5y agoYou can label anything "a mere change in market equilibrium", apparently even someone inheriting more money than the GDP of an average sized country ...
- LudwigNagasena 5y agoThe magnitude doesn't matter, it is a qualitatively different phenomenon. This provides a definition of a market distortions: https://en.wikipedia.org/wiki/Market_distortion https://en.wikipedia.org/wiki/Market_distortion This may help understand why it is defined this particular way and why it excludes inheritance and other wealth transfers: https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics https://en.wikipedia.org/wiki/Fundamental_theorems_of_welfar... https://en.wikipedia.org/wiki/Pareto_efficiency https://en.wikipedia.org/wiki/Pareto_efficiency
- nicoburns 5y agoI'd argue that any significant wealth inequality constitutes a market distortion. It undermines the "wisdom of the crowd" that underpins capitalism.
- LudwigNagasena 5y agoBut it has nothing to do with inheritance as wealth inequality would exist even before inheritance.
- nicoburns 5y agoIt does have something to do with inheritance. Inheritance directly causes wealth inequality because some people inherit money while others don't (and the amounts inherited vary widely). It's not the only mechanisms which causes wealth inequality, but it is one of them.
- deleted 5y ago[deleted]