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Inequality is inherently bad for dynamic market economies. Often the argument is that increasing inequality is fine if the economy is growing and the lower clas

by tdb7893 7mo ago

Inequality is inherently bad for dynamic market economies. Often the argument is that increasing inequality is fine if the economy is growing and the lower classes aren't losing income but inequality also slows growth as more of the investment goes to consumption for fewer and fewer people. So economically I agree that inequality is not zero sum but it seems like inequality lowers the total productivity of the economy in the long term (so it's net-negative sum). This is in addition there are effects on the civics and reduction in welfare of people. Like many things in economics, inequality is a hard thing to do good experiments on but the data suggest that inequality itself has a host of effects that you're ignoring. This article is a decent primer on the effect of inequality and what we know and don't know (and also some of the difficulties studying it): https://en.wikipedia.org/wiki/Effects_of_economic_inequality https://en.wikipedia.org/wiki/Effects_of_economic_inequality Edit: there's a lot of literature on this. If you use Google scholar you can find tons of articles talking about the various effects of inequality (though as always with economics, the papers struggle to get good data). Modern economics definitely doesn't view it as an isolated and benign thing.

Ajedi32 7mo ago
> inequality is a hard thing to do good experiments > the papers struggle to get good data Note also that I'm specifically talking about inequality in isolation ("as long as it's caused by the rich getting richer and not by the poor getting poorer"), which I would argue is even harder to study. It would be completely unsurprising to learn high inequality is correlated with higher rates of poverty, which is correlated with all sorts of other negative causes and effects. I don't know how you could control for that well enough to be able to convincingly claim that inequality itself is what's causing the problem and not the poverty (or the underlying causes thereof). I would also acknowledge higher inequality certainly makes people envious, and that that probably has some negative societal effects. But I don't know I'd go so far as to count making someone envious as "materially harming" them even if there are other significant downstream effects to that. I'll admit there's a lot more reading up I could do on this, but it would take a lot to convince me of the idea that making one group of people wealthier without hurting anyone else's finances is a net negative on society merely because it "increases inequality".
- tdb7893 7mo ago
  My point is that inequality in isolation doesn't happen. It's a hypothetical that doesn't exist. It's like talking about sugar and ignoring calories
  - Ajedi32 7mo ago
    Except in this case we're commenting on a thread about the middle class getting wealthier, and you implied that's a bad thing because, in isolation, the middle class getting wealthier increases inequality. (Apologies if that's not what you were trying to say.) My point is I don't think that's the right way to look at this news.

by tdb7893 7mo ago

Ajedi32 7mo ago

> inequality is a hard thing to do good experiments > the papers struggle to get good data Note also that I'm specifically talking about inequality in isolation ("as long as it's caused by the rich getting richer and not by the poor getting poorer"), which I would argue is even harder to study. It would be completely unsurprising to learn high inequality is correlated with higher rates of poverty, which is correlated with all sorts of other negative causes and effects. I don't know how you could control for that well enough to be able to convincingly claim that inequality itself is what's causing the problem and not the poverty (or the underlying causes thereof). I would also acknowledge higher inequality certainly makes people envious, and that that probably has some negative societal effects. But I don't know I'd go so far as to count making someone envious as "materially harming" them even if there are other significant downstream effects to that. I'll admit there's a lot more reading up I could do on this, but it would take a lot to convince me of the idea that making one group of people wealthier without hurting anyone else's finances is a net negative on society merely because it "increases inequality".

tdb7893 7mo ago
My point is that inequality in isolation doesn't happen. It's a hypothetical that doesn't exist. It's like talking about sugar and ignoring calories
- Ajedi32 7mo ago
  Except in this case we're commenting on a thread about the middle class getting wealthier, and you implied that's a bad thing because, in isolation, the middle class getting wealthier increases inequality. (Apologies if that's not what you were trying to say.) My point is I don't think that's the right way to look at this news.