Using the Gates Foundation as the base? Only benefit seems to be to the rest of the world [health programs, some educational programs] but to the US they only benefit educational programs, if I wanted money to found a business making hand knit penis cozys I would be shit out of luck.
To benefit the rest of the population of the US they would have to make some of the business morons realize that you don’t have a great business by raping the lower employees … making 5 of them do the work of 8 and minge out on the pay, minge out on the benefits and have the top echelon of employees make 50 or more times what the lower end employees make. For what the top bosses do, they are making way too much money that could be spread out to the people who actually do the work. [and IMHO they could bring back employment contracts. I can remember when my Dad first went to work for the company he did, he had an actual 7 year contract that specified wage, vacation, bonus structure and such, we found his copy when we were going through his papers after he died.] We were a better company when companies actually had a modicum of loyalty to their employees.
On the abstract, there isn’t anything inherently “bad” about wealth inequality. The problems arise from how people get there, and what they do to everyone else in the process. Wealth isn’t the problem, greed is the problem. Wealth inequality is just much easier to quantify on a chart.
Philosophically, yes. In practice, they could stand to improve. A lot. And maybe “great” was a bit of a stretch.
But, as a symbol of wealth creation through “goods-based” capitalism as opposed to wealth creation through wall street or through raping the environment, they’re comparitively “good guys”.
True, the absolute amount of wealth isn’t a constant, and can be increased. But that isn’t the point. The ‘wealth disparity’ refers to all the wealth available at any given point in time.
So right now, all the wealth in existence equals 100%. And of this total, the amount held by the upper rung is X%, while everybody else together holds Y%.
The problem is that last (week, month, year) the value of X was smaller, and the value of Y was larger. And (tomorrow, next week, next month, next year) by present trends the value of X will be even larger and the value of Y even smaller. That is what is meant by a ‘growing wealth disparity’. It is independent of the creation of new wealth.
Conceptually we can envision a continuation of these trends to the point that x equals 100% and Y gets what the littlest piggie got. Of course, that won’t actually happen. At some values of X and Y there will indeed be a “redistribution”. And if that redistribution isn’t arranged amicably, then it will be bloody instead.
I don’t have the papers in front of me, but I’ve read papers linking wealth inequality to political instabilility, reduced economic growth, higher rates of crime, etc.
If they suddenly “lost” some % of their wealth to pay for roads, schools, hospitals and police, the poor would be better off.
There has been some suggestion from left-wing bastions like The Economistthat extreme wealth inequality can lead to political and social instability, prevent talented and intelligent poor people from acheiving their potential because they lack access to education, encourage croneyism, and encourage populist government polices of redistribution, all of which serve to hurt the economy overall.
Personally, I don’t believe in wealth redistribution. And I think that’s great that a teenage college kid can become a billionaire by inventing a social media website. Because…why not…society needs a way to tell people we haven’t talked to since high school that we like some new internet meme. Anyhow, the point is that rather than simply redistributing wealth, I think we should look at why we have become such a “winner take all” society where the top 1% are rewarded beyond their wildest dreams while everyone else has to scrape by.
To play devil’s advocate on the semantics a little, “linked to” isn’t the same as “attributed to.” I’ll reference an earlier example here, Rio de Janeiro. Hugely obvious disparities between the wealthy neighborhoods and the impoverished favelas. But is this the cause of trouble, or a symptom?
The problems aren’t simply attributable to the wealth gap, they are largely caused by corruption in politics and the police, combined with a rampant drug & gang element. Simply put, greed without consideration of the social ramifications.
But after winning the bid to host the 2016 Olympics, a huge pr and cleanup campaign has begun. The economic disparity is still there, but many of the other elements are being wiped out, because now there is motivation for social improvement.
This makes no sense, you do not pay for things with percentages of national wealth, you pay with certain amounts of money.
If the amount of money the non-rich have goes up and/or the amount of money needed to buy things goes down then total welfare for the non-rich has gone up. This is independent of what happens to the wealthy. If total welfare for the non-rich goes up, who cares if the welfare for the rich goes up more? And if it goes down or stagnates then that is the problem. From 2007-to 2009, income inequality fell to ratios not seen in thirty years as a result of the financial crisis. Yet just because the incomes of the rich fell it did not help the non-rich at all. It would be cold comfort to someone who lost their job in the great recession to remind them that many banking executives lost tens of millions of dollars in stock values.
Think of a basketball team. The highest paid players on the Miami Heat make over 17 million dollars a year. The lowest paid makes $275,504. Now should we all be very concerned about how horrible it is that the lowest paid player gets paid 1/68th of what the top players make for doing the same job? Of course not, since he still makes plenty of money to have a great lifestyle. Likewise, we should care about the lifestyles of the non-rich and we have it better than 99% of the people who have ever lived on this planet.
The book “The Spirit Level” is basically a collection of it.
Its gotten critique, but its a peer-reviewed work with all the critique being non-reviewed griping from people who feel research kicked them in their politics.
Most directly, there’s some stuff I read awhile ago (I think in Pinker’s The Blank Slate) showing that wealth inequality has psychological repercussions. People who are poor but live in relative equality with their neighbors display fewer mental illnesses than people who are poor but live in extreme inequality with their neighbors. Keeping up with the Joneses may be an innate feature of humanity, and an inability to do so may be an actual bad thing.
Less directly, when we talk about property, what we’re really talking about is that as a society we’ve agreed that I’m the only one allowed to use certain things, and society will use guns to prevent you from using those things. Wealth isn’t the default state of affairs; it’s an immensely artificial construct. And it’s immensely useful, no doubt, don’t get me wrong. But when we push it to extremes–“Bob can have seventeen giant houses, Larry can’t have a roof over his head”–we’ve moved beyond the place where this artificial construct is immediately useful or efficient at meeting needs.
That’s a different matter. That’s a society that isn’t funding government at an appropriate level. And I can imagine plenty of scenarios where the roads, hospitals and schools were improved, but the lives of the poor were not. There has to be opportunity in society.
I don’t think income inequality becomes a real problem unless there is a very high percentage of people living in real poverty. People struggling just to put food on the table. But if most people are relatively comfortable, as they are in the US for example, it’s just not going to get traction as a “problem” that has to be fixed.
Wealth inequality is like water for the Economic Farm.
If you have no water, your crops dry up and the economy suffers.
If you have water, your crops thrive and the economy grows.
If the creek rises and submerges your crops in 3 feet of water, and your silo roof springs a leak that ruins half your stored crop, and you need to turn your tractor into a boat, that’s not so good either.
Changes in water levels away from historically productive levels should be viewed with suspicion and concern rather than ignored as “who cares how much it rains? Water is important for crops.”
Yes, wealth is created. There is more element of risk involved in this scenario, because you might not deliver your part of the bargain. But in principle there is not all that much difference.
Keep in mind that these transactions are entered into voluntarily by both parties - no one else decides what the widgits and whatzits “should be” worth.
Is there something about income inequality that is illustrated by your example? It doesn’t have to, if you want to discuss wealth creation, but I think we agree that investment also creates wealth.
You are conflating income with wealth. Note the absence of the word ‘income’ from my post.
The “rising tide” argument (“If total welfare for the non-rich goes up, who cares if the welfare for the rich goes up more?”) will be answered by most poor people as “I do!” See, that’s the whole idea of a disparity. If “goes up” means that the rich are able to afford a second yacht and a fourth and fifth house while the poor person can afford an additional half hour of child care services so he can work longer hours, they are both perhaps better off, but the disparity between them increases. And the disparity between the gazillionaire who lost paper value in the crash and the working poor schmuck who is now a poor, destitute schmuck with no job, no car, and no place to live is probably greater than before the crash.
Your comparison to basketball is flawed since all the members of the team do not perform “the same job” and pay is based on both actual performance and ability to draw paid admissions. Regardless, this has nothing whatsoever to do with living conditions for “99% of the people who have ever lived on this planet”.
I think that if we are to examine/debate wealth in the US, then we should start by arguing what is the minimum amount of wealth that someone should have a certain point in their life.
The fact that Mark Zuckerberg has a ton of wealth in Facebook stock has zero impact on my life. However, the fact that a home in Silicon Valley is very highly priced because of the Facebook and Google millionaires DOES have an impact on my life. I will take that cost in exchange for my own turn at the IPO lottery.
Not yet, that was just a setup for a point i was going to make regarding the time value of whaztits when we add more widget demanders and only one person owns all the widgets, but if we’re going to keep this a 2-person system, then most of my unintended-consequences-due-to-greed-driven-banking-and-global-profiteering widget analogies don’t exactly apply
Statistical tests can only show correlation, not causation, so you can never show “attributed to” in economics. All you can do is show correlation, and posit a reasonable mechanism for how the causation would work. E.g., if you have an economic theory that inequality lowers market demand for machine-produced goods*, and you can show that one change leads the other (e.g., income inequality increases, then after a time lag mechanization goes down) then you have some support for your theory. But if you’re waiting for proof that one caused the other, you’ll be waiting a long time.
*This is a popular theory for how inequality lowers economic growth. It goes: a large middle class results in a wide demand for products, and a domestic industry builds up to supply that need. With high inequality you never build up the demand for these products so you never develop the domestic manufacturing capacity to build them–the rich are by definition a small percentage of the population, so their demand will be limited and they will order handmade products or products from overseas, while the poor can’t afford them.
One fear is that the one may be linked to the other - that extremes of wealth inequality leads, in essence, to less social mobility. The reason for believing this may be true is that, with greater wealth, those above a certain level of income can effectively live differently - bypass public schools and health care - and so entrench their kids in occupations which lead to them, too, having a higher level of income.
While this is somewhat speculative, there is at least some evidence that, for whatever reasons, the US is experiencing lessened levels of social mobility alongside greater levels of wealth inequality:
Preach it! I don’t mind sending money to schools and hospitals and roads, and hell, even food programs, but come adulthood, you’ve got to take responsibility for your choices. That includes your chosen profession.
Second, this completely neglects mobility. Liberals love to say that it doesn’t exist in America, but I’m curious how they expect more than 1 in 100 people to reach the top 1% in the first place. The top 1%, by and large, weren’t born there. Most of them did their time in the second quintile.
