Why is wealth inequality a problem? People should be free to pursue maximum compensation for their skills and abilities, not be limited because they are better at somethings than other people.
When people talk about wealth inequality as a bad thing they're normally talking about self-perpetuating wealth inequality, or wealth inequality that is caused by things that are seen as inherently unfair, like the family you are born into.
A lot of people who have comparative wealth and have worked hard for it feel they have earned their wealth, disregarding the fact that a lot of other people work equally hard and do not have the same amount of wealth. This sort of thing muddies the issue.
Also muddying the issue is the fact that some people think that if X amount of money could lift Y poor people out of poverty, vs making rich person Z marginally richer, it is self-evidently the case that it is better and therefore right for X to be spent on the Y rather than person Z. I.e. as long as some people are below a minimum acceptable level of wealth, all wealth inequality is, in this view, bad.
People who think wealth inequality is a problem are being short sighted.
>wealth inequality that is caused by things that are seen as inherently unfair, like the family you are born into.
I, like my father before me, am making sacrifices to benefit my future generations. It's not unfair, it's called being responsible and thinking about the future.
A certain amount of inequality encourages economic growth and innovation. Zero wealth inequality would be perfect communism. A lot of people--myself included--presume that would retard growth due to a lack of incentives.
The maximum amount of wealth inequality would be for one person to own the entire world, and for everyone else to have nothing. This is practically impossible, of course. We can only approximate it, such as by 1% of Earth's population owning 99% of its wealth. This generally encourages the other 99% of the people to take some of that wealth by force, without regard to any increased productivity the current owner may be able to squeeze out via economies of scale or capital investment, or whatever.
A medium amount of inequality encourages people with less wealth to do neat and interesting things in order to become more wealthy (economic mobility), and for those with more to make capital investments that increase productivity, purchase luxury goods, and finance megaprojects (concentration of capital).
So the problem is when the amount of wealth inequality moves away from the optimal profile, which remains undiscovered. My perception is that we are moving away from the optimum, rather than toward it.
>A lot of people--myself included--presume that would retard growth due to a lack of incentives
No need to presume anything, we have a number of examples to look at throughout history. Actually, stunted economic growth is the best case scenario for socialist systems. Most of them achieve no more than mass starvation and death of millions of citizens.
Wealth inequality is a problem because it is an inefficient distribution of society's resources. When we divert productive capacity to build someone a yacht instead of feeding the homeless, we allow many to suffer in exchange for the marginal improvement in happiness for one person.
It can be argued that inequality leads to more utility being created overall, but I feel this justification is rarely scrutinised in much detail. Instead it is elevated to a moral premise that those who are able to earn more "deserve" their excess share of society's resources, regardless of how many suffer for their consequently smaller share.
Personally, it seems to me we have the resources to feed and shelter everyone in our society, and I'm highly sceptical that doing so would create less utility overall than whatever it is we're doing with those resources instead. Indeed, I wouldn't be surprised if this argument extends to the world as a whole.
Why should people be free to pursue maximum compensation? Why can't they be free to pursue any unprofitable work that benefits society as a whole instead of chunking out more candy crush/Farmville/clash of clans clones or other making pointless artificial rents (e.g. something you use to own, but now only available as an electron-SaaS) or other economic/socialogical waste?
Dumb luck? What is dumb luck? So the wealth differences between a high school drop out and a college grad can largely be attributed to this "dumb luck"?
boffinism|8 years ago
A lot of people who have comparative wealth and have worked hard for it feel they have earned their wealth, disregarding the fact that a lot of other people work equally hard and do not have the same amount of wealth. This sort of thing muddies the issue.
Also muddying the issue is the fact that some people think that if X amount of money could lift Y poor people out of poverty, vs making rich person Z marginally richer, it is self-evidently the case that it is better and therefore right for X to be spent on the Y rather than person Z. I.e. as long as some people are below a minimum acceptable level of wealth, all wealth inequality is, in this view, bad.
sudoke|8 years ago
>wealth inequality that is caused by things that are seen as inherently unfair, like the family you are born into.
I, like my father before me, am making sacrifices to benefit my future generations. It's not unfair, it's called being responsible and thinking about the future.
edit: changed delusional to short sighted.
logfromblammo|8 years ago
A certain amount of inequality encourages economic growth and innovation. Zero wealth inequality would be perfect communism. A lot of people--myself included--presume that would retard growth due to a lack of incentives.
The maximum amount of wealth inequality would be for one person to own the entire world, and for everyone else to have nothing. This is practically impossible, of course. We can only approximate it, such as by 1% of Earth's population owning 99% of its wealth. This generally encourages the other 99% of the people to take some of that wealth by force, without regard to any increased productivity the current owner may be able to squeeze out via economies of scale or capital investment, or whatever.
A medium amount of inequality encourages people with less wealth to do neat and interesting things in order to become more wealthy (economic mobility), and for those with more to make capital investments that increase productivity, purchase luxury goods, and finance megaprojects (concentration of capital).
So the problem is when the amount of wealth inequality moves away from the optimal profile, which remains undiscovered. My perception is that we are moving away from the optimum, rather than toward it.
sudoke|8 years ago
No need to presume anything, we have a number of examples to look at throughout history. Actually, stunted economic growth is the best case scenario for socialist systems. Most of them achieve no more than mass starvation and death of millions of citizens.
aninhumer|8 years ago
It can be argued that inequality leads to more utility being created overall, but I feel this justification is rarely scrutinised in much detail. Instead it is elevated to a moral premise that those who are able to earn more "deserve" their excess share of society's resources, regardless of how many suffer for their consequently smaller share.
Personally, it seems to me we have the resources to feed and shelter everyone in our society, and I'm highly sceptical that doing so would create less utility overall than whatever it is we're doing with those resources instead. Indeed, I wouldn't be surprised if this argument extends to the world as a whole.
Can_Not|8 years ago
vowelless|8 years ago
I could be mistaken though.
unknown|8 years ago
[deleted]
ada1981|8 years ago
sudoke|8 years ago