# Let's debate wealth inequality
**URL:** https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819
**Category:** Great Debates
**Created:** [January 20, 2005, 11:44pm UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819 "2005-01-20T23:44:25Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 20, 2005, 11:44pm UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/1 "2005-01-20T23:44:25Z")
In this thread – [http://boards.straightdope.com/sdmb/showthread.php?t=297670](http://boards.straightdope.com/sdmb/showthread.php?t=297670) – I was surprised to find I couldn’t get a consensus on what seems to me an entirely unobjectionable proposition: The growing inequality of wealth in American society is a **problem,** in and of itself. What causes is is debatable; whether it can be reversed, and how, even more so. But how can anyone doubt this is a Very Bad Thing? In a democracy (or “republic,” whatever), **power** is supposed to be distributed more or less equally among all the people; and in our society, money is the most important form of power. If a small minority of the people have a disproportionate share of the wealth/power – and (as they have) a resultant disproportionate influence over public policymaking – then what you have is an oligarchy or plutocracy, not a democracy.
The top 1% of Americans own as much wealth as the bottom 95%. The top 60% own 500 times as much as the bottom 40%. And the bottom 40% own less than one fifth of one percent of the nation’s wealth. See [http://www.worldrevolution.org/Projects/Features/Inequality/USInequality.htm;](http://www.worldrevolution.org/Projects/Features/Inequality/USInequality.htm;) [http://www.inequality.org/facts.html](http://www.inequality.org/facts.html).
“Wealth Inequality in 21st Century Threatens Economy and Democracy” was Project Censored’s #1 unreported story for 2005. From [http://www.projectcensored.org/publications/2005/1.html:](http://www.projectcensored.org/publications/2005/1.html:)
> [@](#):
>
> . . . [S]ince the late 1970s wealth inequality, while stabilizing or increasing slightly in other industrialized nations, has increased sharply and dramatically in the United States. While it is no secret that such a trend is taking place, it is rare to see a TV news program announce that the top 1% of the U.S. population now owns about a third of the wealth in the country. Discussion of this trend takes place, for the most part, behind closed doors.
>
> During the short boom of the late 1990s, conservative analysts asserted that, yes, the gap between rich and poor was growing, but that incomes for the poor were still increasing over previous levels. Today most economists, regardless of their political persuasion, agree that the data over the last 25 to 30 years is unequivocal. The top 5% is capturing an increasingly greater portion of the pie while the bottom 95% is clearly losing ground, and the highly touted American middle class is fast disappearing.
>
> According to economic journalist, David Cay Johnston, author of “Perfectly Legal,” this trend is not the result of some naturally occurring, social Darwinist “survival of the fittest.” It is the product of legislative policies carefully crafted and lobbied for by corporations and the super-rich over the past 25 years.
>
> New tax shelters in the 1980s shifted the tax burden off capital and onto labor. As tax shelters rose, the amount of federal revenue coming from corporations fell (from 35% during the Eisenhower years to 10% in 2002). During the deregulation wave of the ‘80s and the ‘90s, members of Congress passed legislation (often without reading it) that deregulated much of the financial industry. These laws took away, for example, the powerful incentives for accountants to behave with integrity or for companies to put away a reasonable amount in pension plans for their employees—resulting in the well-publicized (too late) scandals involving Enron, Global Crossing, and others.
>
> THE GLOBAL IMPACT
>
> As always, America’s economic trends have a global footprint—and this time, it is a crater. Today the top 400 income earners in the U.S. make as much in a year as the entire population of the 20 poorest countries in Africa (over 300 million people). But in America, national leaders and mainstream media tell us that the only way out of our own economic hole is through increasing and endless growth—fueled by the resources of other countries.
>
> A series of reports released in 2003 by the UN and other global economy analysis groups warn that further increases in the imbalance in wealth throughout the world will have catastrophic effects if left unchecked. UN-habitat reports that unless governments work to control the current unprecedented spread in urban growth, a third of the world’s population will be slum dwellers within 30 years. Currently, almost one-sixth of the world’s population lives in slum-like conditions. The UN warns that unplanned, unsanitary settlements threaten both political and fiscal stability within third world countries, where urban slums are growing faster than expected. The balance of poverty is shifting quickly from rural to urban areas as the world’s population moves from the countryside to the city.
>
> As rich countries, strip poorer countries of their natural resources in an attempt to re-stabilize their own, the people of poor countries become increasingly desperate. This deteriorating situation, besides pressuring rich countries to allow increased immigration, further exacerbates already stretched political tensions and threatens global political and economic security.
>
> UN economists blame “free-trade” practices and the neo-liberal policies of international lending institutions like the IMF and WTO, and the industrialized countries that lead them, for much of the damage caused to Third World countries over the past 20 years. Many of these policies are now being implemented in the U.S., allowing for an acceleration of wealth consolidation. And even the IMF has issued a report warning the U.S. about the consequences for its appetite for excess and overspending.
>
> In developing countries, the concentration of key industries profitable to foreign investors requires that people move to cities while forced privatization of public services strip them of the ability to become stable or move up financially once they arrive. Meanwhile, the strict repayment schedules mandated by the global institutions make it virtually impossible for poor countries to move out from under their burden of debt. “In a form of colonialisation that is probably more stringent than the original, many developing countries have become suppliers of raw commodities to the world, and fall further and further behind,” says one UN analyst. World economists conclude that if enough of the world’s nations reach a point of economic failure, such a situation could collapse the entire global economy.
Now, you don’t have to believe that poor people have some kind of “right” to the wealth of the rich, to acknowledge that all of this constitutes a substantive social problem, in the same sense that crime, drug addiction and illiteracy are social problems. Does anyone care to dispute that?
---
### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [January 21, 2005, 12:06am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/2 "2005-01-21T00:06:02Z")
Well, I for one don’t see it as a major problem. What difference does it make if the gulf is wider if standards of living come up all around? And if you look at it in terms of decades standards of living HAVE increased in the US over the last 2 centuries…the poor, middle class AND the rich have gotten richer.
If the rich get richer, but everyone else does too, I don’t really see a problem. To me this smacks of the old zero sum game analogy…if the rich get richer then everyone has to get poorer. Smaller bits of a shrinking pie and all that. Thats just not so. The pie gets bigger as long as the economy continues to expand. Certainly there are ups and downs, and right now we are in a down cycle, but over all things are continueing to expand.
I’m told my posts tend to ramble so I’ll leave it here for now.
-XT
---
### Author:  [@Bill\_H](https://boards.straightdope.com/u/Bill_H)
#### Post date: [January 21, 2005, 12:14am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/3 "2005-01-21T00:14:14Z")
What he said.
---
### Author:  [@Age\_Quod\_Agis](https://boards.straightdope.com/u/Age_Quod_Agis)
#### Post date: [January 21, 2005, 12:14am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/4 "2005-01-21T00:14:56Z")
I would like to dispute that. 🙂 (I posted again in the other forum because I didn’t know about this thread. Thanks for opening it up.)
Money is not “the most important form of power.” The vote and the voice are more important forms of power. Money certainly provides its own benefits, and that’s why people want to earn it. But money, even with all its benefits, is still far from the most important thing.
I guess I just don’t see why it’s inherently harmful for some people to be incredibly rich.
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 12:40am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/5 "2005-01-21T00:40:50Z")
> [@xtisme](#):
>
> Well, I for one don’t see it as a major problem. What difference does it make if the gulf is wider if standards of living come up all around?
Well, I believe that is included in this debate. The standard of living in the US is rather quickly slipping behind other nations on more modern economic systems - countries like:
> [@Wikipedia on UN Quality of Life Index 2004](#):
>
> Norway
> Sweden
> Australia
> Canada
> Netherlands
> Belgium
> Iceland
> United States
> Japan
> Ireland
>
> Switzerland
> United Kingdom
> Finland
> Austria
> Luxembourg
> France
> Denmark
> New Zealand
> Germany
> Spain
>
> Italy
> Israel
> Hong Kong (SAR)
> Greece
> Singapore
> Portugal
> Slovenia
> South Korea
> Barbados
> Cyprus
The problem is that many in America see no problem with this. As long as nothing is too bad, they don’t ask the questions about why we aren’t higher on that list. That is a lazy way of approaching the issue. We need to look at the nations that are higher than us, and the nations that are catching up to us. According to recent economics, the Irish are richer than Americans, based on population and GDP.
While it can be argued that it is easier for a smaller state to have higher standards of living than a large one, that isn’t the sole proximate cause for the rankings.
Honestly, I was pretty surprised to see Slovenia that high up. I’ll need to look into that one.
---
### Author:  [@Age\_Quod\_Agis](https://boards.straightdope.com/u/Age_Quod_Agis)
#### Post date: [January 21, 2005, 1:02am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/6 "2005-01-21T01:02:40Z")
> [@Demorian](#):
>
> According to recent economics, the Irish are richer than Americans, based on population and GDP.
Nope. According to the [Economic and Social Research Institute in Ireland](http://www.esri.ie/content.cfm?t=Irish%20Economy&mid=4):
> [@](#):
>
> Ireland’s GDP per capita in 2002 is estimated at US$ 32,600, with only **the US** , Norway and Luxembourg ranking higher.
(emphasis added) They also point out the following:
> [@](#):
>
> GDP measures the total output produced by factors of production located in the Irish economy. Therefore it includes the substantial profits made by foreign multinationals, much of which is repatriated. Gross National Product (GNP) adjusts for these repatriations and may give a better indication of income and hence living standards for the Irish case. The difference between the two output measures is stark in the Irish case with GNP accounting for just 83% of GDP in 2003.
---
### Author:  [@Bone](https://boards.straightdope.com/u/Bone)
#### Post date: [January 21, 2005, 1:17am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/7 "2005-01-21T01:17:32Z")
**BrainGlutton** , I think you have confused equal opportunity with equal outcome. Power is an outcome. I see no problem whatsoever with an income or wealth or asset distribution as you’ve described. None. If you could show a cause, then perhaps, but as it stands, I see your OP as one of emotion. Like, _”what of the children”_ variety. It just isn’t compelling.
As an aside, while I do see crime as a social problem, I see absolutely nothing wrong with drug addiction in and of itself, nor do I see a problem with illiteracy. With the amount of social services available in this country, both of those two things can be characterized as voluntary in nature, and as long as there are no other infringements on anyone else, I consider those lifestyle choices.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 21, 2005, 1:31am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/8 "2005-01-21T01:31:22Z")
> [@Age Quod Agis](#):
>
> Money is not “the most important form of power.” The vote and the voice are more important forms of power. Money certainly provides its own benefits . . .
Including wildly disproportionate influence over votes and voices, **Age.** That’s how it is and will remain, unless and until we get some effective campaign finance reform in this country and break the hold of a handful of giant corporations over our media outlets.
> [@Bone](#):
>
> **BrainGlutton,** I think you have confused equal opportunity with equal outcome. Power is an outcome.
You have it backwards, **Bone.** Power is an **opportunity.** Money, as such, is an outcome. The rich get richer for a lot of reasons – and one reason is that they use their money to buy political influence (see above, and the Project Censored excerpt in the OP).
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 1:32am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/9 "2005-01-21T01:32:00Z")
> [@Age Quod Agis](#):
>
> Nope. According to the [Economic and Social Research Institute in Ireland](http://www.esri.ie/content.cfm?t=Irish%20Economy&mid=4):(emphasis added) They also point out the following:
[http://www.finfacts.com/comment/unhumandevelopmentreportirelandcomment18.htm](http://www.finfacts.com/comment/unhumandevelopmentreportirelandcomment18.htm)
> [@](#):
>
> July 19,2004–Ireland has moved to 10th place in the UN Human Development Quality of Life Index, up 2 places from 2003 and eight places since 2002. However, we have the second highest level of poverty in the western world after a decade of economic growth that has only been surpassed by China.
>
> The Irish are now richer than Americans. Our GDP per capita adjusted for purchasing power is $36,360 compared with a US figure of $35,750. The Irish economy grew by an annual average of 6.8% in the period 1990-2002, only behind China which had an annual average growth of 8.6 per cent. We remain one of the world’s most open economies with 83% of our goods and services imported and 98% exported.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 21, 2005, 1:34am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/10 "2005-01-21T01:34:42Z")
Oh, and **Bone** – illiteracy is a social problem. It is not a “lifestyle choice.” I can’t believe even a Libertarian would say that.
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 1:43am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/11 "2005-01-21T01:43:09Z")
> [@Age Quod Agis](#):
>
> Money is not “the most important form of power.” The vote and the voice are more important forms of power.
Yea, I’m sure the letter I sent to the State Department regarding the situation in Sudan has just as much influence as the $5 million donation by some lobbiest. :rolleyes:
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 21, 2005, 1:44am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/12 "2005-01-21T01:44:47Z")
> [@Demorian](#):
>
> Well, I believe that is included in this debate. The standard of living in the US is rather quickly slipping behind other nations on more modern economic systems - countries like:
>
> > [@](#):
> >
> > Originally Posted by **Wikipedia on UN Quality of Life Index 2004**
Nitpick: I think you mean the UN Human Development Index ([http://en.wikipedia.org/wiki/UN\_Human\_Development\_Index](http://en.wikipedia.org/wiki/UN_Human_Development_Index)). The Physical Quality-of-Life Index is a different measure, developed in 1979 by Morris Davis Morris for the Overseas Development Council ([http://en.wikipedia.org/wiki/Physical\_quality-of-life\_index](http://en.wikipedia.org/wiki/Physical_quality-of-life_index). These measures, and the Genuine Progress Indicator ([http://en.wikipedia.org/wiki/Genuine\_Progress\_Indicator](http://en.wikipedia.org/wiki/Genuine_Progress_Indicator)), were developed as alternatives to GDP, which many regard as an unsatisfactory way to measure how well a national economy is doing. From [http://en.wikipedia.org/wiki/Gross\_domestic\_product:](http://en.wikipedia.org/wiki/Gross_domestic_product:)
> [@](#):
>
> Although GDP is widely used by economists, its value as an indicator has also been the subject of controversy. Criticisms of GDP include:
>
> Very often different calculations of the GDP are confused among each other. For cross-border comparisons one should especially regard whether it is calculated by purchasing power parity method or current exchange rate method.
>
> GDP, as a measure of economic size, fails to measure well-being and standard of living accurately.
>
> GDP doesn’t take into account the black economy, non-monetary economy such as bartering, volunteer work, or informal creation of wealth, such as unpaid childcare provided by non-working parents, or production of goods taking place at home. Hence, in countries with major business transactions occurring informally, portions of local economy are not easily registered, resulting in inaccurate or abnormally low GDP figures.
>
> GDP doesn’t measure the sustainability of growth, as a country may achieve a temporary high GDP by over-exploiting natural resources.
>
> GDP counts work that produces no net gain, and does not account for negative externalities. **For example, if a factory pollutes a river, that boosts GDP, and when the taxpayers pay to have it cleaned up, that boosts GDP again.** See parable of the broken window.
>
> GDP also does not tell us the actual distribution of the wealth of a country. Certain groups of people within a country might not be benefiting from its economic wealth. A high GDP could be the result of a case of a few very wealthy people contributing to the economy, while most of its citizens live at or below the subsistence level.
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 1:45am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/13 "2005-01-21T01:45:24Z")
> [@BrainGlutton](#):
>
> Oh, and **Bone** – illiteracy is a social problem. It is not a “lifestyle choice.” I can’t believe even a Libertarian would say that.
I love Libertarians. They’re so cute with their little self-defined world and all.
---
### Author:  [@Age\_Quod\_Agis](https://boards.straightdope.com/u/Age_Quod_Agis)
#### Post date: [January 21, 2005, 1:53am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/14 "2005-01-21T01:53:30Z")
Thanks for the updated figures, **Demorian**. What about the rest of my post, which appears to point out a serious problem with using GDP to measure Ireland’s per capita wealth?
> [@Demorian](#):
>
> Yea, I’m sure the letter I sent to the State Department regarding the situation in Sudan has just as much influence as the $5 million donation by some lobbiest.
Maybe not. But 5 million votes are worth more than $5 million.
---
### Author:  [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)
#### Post date: [January 21, 2005, 1:55am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/15 "2005-01-21T01:55:04Z")
> [@BrainGlutton](#):
>
> In a democracy (or “republic,” whatever), **power** is supposed to be distributed more or less equally among all the people; and in our society, money is the most important form of power.
Your first mistake is thinking that a condition of democracy is also a condition of republicanism. Democracies are based on political equality. Republics can have powerful patrician classes, & may in fact be oligarchies.
Soviet Russia was a republic, but not a democracy. The United Kingdom is a (partial) democracy, but not a republic.
> [@](#):
>
> Now, you don’t have to believe that poor people have some kind of “right” to the wealth of the rich, to acknowledge that all of this constitutes a substantive social problem, in the same sense that crime, drug addiction and illiteracy are social problems. Does anyone care to dispute that?
Well, getting people to “acknowledge” others’ economic reality makes pulling teeth look easy. Many people aren’t even aware of the state of other regions & classes, or don’t comprehend the inequity, but they’ll dispute it, from their ignorance.
---
### Author:  [@Bone](https://boards.straightdope.com/u/Bone)
#### Post date: [January 21, 2005, 2:00am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/16 "2005-01-21T02:00:07Z")
**BrainGlutton**
First you state that in a democracy, power is supposed to be distributed more or less equally. You then say that money is the most important form of power. If that is the case, then could I infer that you believe that money is supposed to be distributed more or less equally? Is that a fair conclusion to draw from your statements?
But then you go on to say: _“You have it backwards, **Bone.** Power is an **opportunity.** Money, as such, is an outcome.”_
I disagree with your assessment. No one starts with power, it is acquired in one way or another. That is an outcome. If you believe that everyone should start with equal money/power more or less, I can accept that. I would strongly disagree with you, but alas, no big deal. However, your statements don’t seem to reconcile.
* * *
Illiteracy. “It is!” “It isn’t!” “It is!”
In this country [USA], education is free. There are free programs available that teaches adults to read and write as well. Unless there is some thing forcing these people to remain illiterate and not take advantage of the means available to them, anyone who is illiterate beyond any significant time period, is illiterate by choice. I personally think that’s a dumb choice, but alas. If you can show non-anecdotally that this is not the case, that people who want to learn to read and write, are barred from doing so, I’ll listen.
* * *
**Demoiran** , appreciate all of your contributions.
---
### Author:  [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)
#### Post date: [January 21, 2005, 2:01am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/17 "2005-01-21T02:01:15Z")
> [@Age Quod Agis](#):
>
> Maybe not. But 5 million votes are worth more than $5 million.
Sure. But when ten people, or one Great Man, can put together $5 million, that makes it about $500,000 a vote. Is your vote worth that much? So what makes you think the poor can get enough voice to beat it?
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 2:02am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/18 "2005-01-21T02:02:50Z")
> [@Age Quod Agis](#):
>
> But 5 million votes are worth more than $5 million.
I’d debate that point. We can start calculating how much money the Bush and Kerry campaigns spent in their run for office, and try to figure out how many people were actually influenced by any of it rather than voting along party lines or special interest issues.
$5 million buying a senator’s seat is worth more than 5 million votes that put him/her there, though.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [January 21, 2005, 2:04am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/19 "2005-01-21T02:04:17Z")
> [@foolsguinea](#):
>
> Your first mistake is thinking that a condition of democracy is also a condition of republicanism. Democracies are based on political equality. Republics can have powerful patrician classes, & may in fact be oligarchies.
:rolleyes: Oh, **please,** let’s not get into that one!
---
### Author:  [@Demorian](https://boards.straightdope.com/u/Demorian)
#### Post date: [January 21, 2005, 2:08am UTC](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819/20 "2005-01-21T02:08:31Z")
> [@Bone](#):
>
> I disagree with your assessment. No one starts with power, it is acquired in one way or another. That is an outcome. If you believe that everyone should start with equal money/power more or less, I can accept that. I would strongly disagree with you, but alas, no big deal.
Just for fun, what is your case that everyone shouldn’t start with equal money/power?
> [@](#):
>
> In this country [USA], education is free. There are free programs available that teaches adults to read and write as well. Unless there is some thing forcing these people to remain illiterate and not take advantage of the means available to them, anyone who is illiterate beyond any significant time period, is illiterate by choice.
Well, technically it isn’t free, it is tax payer supported.
And even more technically, the quality of public education varies greatly based on the local economy, meaning that poorer neighborhoods get less funding, worse teachers, less oversight, lower scores, and in general lower standards, allowing students to graduate just because they don’t have enough room to fail them (LA Unified School District let something like 10,000 kids graduate with failing grades because they couldn’t fit them in the next year. And that isn’t uncommon).
> [@](#):
>
> **Demoiran** , appreciate all of your contributions.
Thanks. Nice to know that you make a difference, y’know?
[Next page](https://boards.straightdope.com/t/lets-debate-wealth-inequality/285819.md?page=2)