Inequality is a stupid measure. What matters is absolute poverty. If I have a comfortable standard of living, what do I care if Bill Gates has a million times more money than me?
Inequality of wealth means inequality of power. High levels of inequality mean a small number of people have vastly disproportionate power to shape society in their own interest, at the expense of the majority. Now whether or not you think that is a problem depends on whether you care about things like self determination, democracy and social justice.
Rich people don't act as a cabal though. For every Koch there's a Soros. So while individual billionaires do have a lot of power, probably more than they should, it's still very strongly tempered by the mob, so to speak.
Not exactly, but then again the country is neither as libertarian as Koch would like or as progressive as Soros would like. And frankly, there are things that Koch and Soros probably agree on that aren't the status quo either, so how do you explain that?
The fact is, there are as many viewpoints as there are billionaires, and that's what keeps them from forming a cabal. If you want to find someone who can form a cabal to bend the system for private profit, look for a corn farmer.
They've managed to get the government to subsidize them heavily, price their competitor, cane sugar, out of the market, and support corn-based ethanol production. Of course, HFCS is worse for you and doesn't taste as good, corn in general isn't a particularly healthy staple food, and it makes no technical sense to make ethanol fuel out of corn in the first place.
The point is, policy isn't corrupted by billionaires, it's corrupted by large, politically powerful blocs, which may or may not have individual rich people in charge. It helps if the blocs are geographically concentrated, because the political system works state-by-state.
Well the corn farmers have helped the economy by getting ethanol into all of the gas. Doing that has lowered mileage (so we spend more) and destroyed engines (so we pay for more service). This doesn't count the extra stuff I now have to buy to keep the ethanol from destroying my engines.
At least many gas stations are starting to offer completely ethanol free gas now, although at a premium.
Corn farmers who grow corn for human consumption, feed and ethanol are all the same? Small family farmers are the same as giant agri-business farms? Corn farmers in Iowa are the same as corn farmers in New York?
Their interests are aligned. I'm just making an empirical argument: corn farmers have managed to get themselves a damn good deal from Uncle Sam at the expense of practically everyone else in the world, while George Soros hasn't.
You'd think, but as it turns out, inequality has strong negative effects to the point that even the rich in an inequal country do worse than the more poor in a more equal country.
I haven't seen either talk, but I am really curious now about why TED would post Wilkinson's talk but not Hanauer's, if they both address the subject income inequality.
From reading the transcript of Hanauer's, Wilkinson's talk is just way better. He has A LOT of actual data, in fact the whole talk is data, data, data, on obesity, happiness, violence & homocide, lifespan, infant mortality, trust, teenage pregnancy, addiction, child wellbeing, mental illness, highschool dropout, social mobility; all on a country level and on a US state level. He also shows that inequality is the problem and that GNP per capita hardly matters ... while Hanauer's talk is 99% rhetoric. Even though the message is roughly the same, Wilkinson's talk definitely is a lot more objective rather than subjective political assertions, so it's a lot harder to argue that he's simply pushing a political agenda.
That's not an appeal to authority. It's a link to information. If you manage to find any contradicting studies, please do post them here. That said, his data seems pretty solid, unless he's flat out lying (unlikely). Keep an open mind!
Your position is correct, but nonetheless fails to account for human nature. It's all fine and dandy to have a system where, through 100% morally justified means, 1% holds all assets. Then you get an uprising of the other 99% and the whole country/system falls on its face. Morally, I don't agree with income redistribution for the sake of egalitarianism either; but pragmatically, one cannot but acknowledge its importance for the stability of a social system. And in the end, that trumps dogmatism.
You may not care, and I certainly wouldn't care, but the desire for absolute socioeconomic equality is extremely common. There's a word for it: "egalitarianism." Egalitarianism is a fundamental principle behind many political systems, from socialism to modern American liberalism.
Because he has million times more power than you, power over things you hold near and dear. It is fortunate that Gates/Buffett are using their influence for good but not everyone is doing the same.
>I don't see how fixing the income inequality fixes the root problem there.
It doesn't, but it might make the lives of millions of people better in the medium term, and possibly result in knock on legislative changes that give more power to working people: repeal of anti-labour laws and so on. Which makes further real change to the system more likely and possible.
You will find many far left wing types have little interest in proposals to fiddle with the tax system, for the reasons you describe: it doesn't fix the real problem. And in a funny way it may well be against the interests of the proletariat: it prolongs the slow death of the current system. That doesn't mean the far left doesn't talk about income inequality of course, but they do so with a different aim: to increase awareness among the working class of their exploitation, with eventual revolutionary goals.
People have been debating the relative merits of gradual reform/revolutionary change for a long time now…
The issue is that a very small number of very wealthy people are holding onto a very large amount of money. Any money that isn't being used to buy, sell, or invest in something is effectively just taken right out of the economy. Everyone is poorer because this money is "gone" from the system. All this wealth is locked away as a number in a computer.
If the money is in bank accounts, then it is contributing to the economy. One of the worst economic problems of recent years has actually been the lack of money just sitting in reserve to give the banks stability.
I almost agree with this. Of course it's a very small percentage of US wealth that's literally sitting locked up doing nothing. Money in a bank is doing something, being lent out or invested somewhere.
There's some wealth that's genuinely locked up, sitting in items that provide no utility for example. Say fine art locked in someone's vault or basement. But it's not all that much as a percentage.
Where the bigger problem in recent years has been is all the wealth tied up in what is essentially sophisticated gambling mechanisms in the financial markets. Money tied up in ways that aren't providing any true value to the economy (mumbo jumbo justifications aside). I'd be all for rules that stopped that sort of thing with funds subject to public bailouts. Your own money, your own risk, fine go ahead. Your money but risk assumed by the government? No. No thanks.
> If the money is in bank accounts, then it is contributing to the economy.
It is, but only in the most limited fashion. Money sitting in bank accounts is doing very little to improve unemployment. Buying physical goods would be much better for that.
> One of the worst economic problems of recent years has actually been the lack of money just sitting in reserve to give the banks stability.
In a way, that's true although I wouldn't frame it that way. The banks could make loans and then sell those loans as investments -- they didn't need any money on hand for that. Increasing deposits, for example, wouldn't change anything.
So arguably investment activity can merrily continue with low capital ratios at the banks (assuming they can effectively manage the securitisation of loans and/or the market stays hungry for them), but what happens when you reach an economic crisis? Such as in Greece right now where there are runs on banks. That's where having more deposits helps and where the potential downside is catastrophic rather than merely non-optimal.
You, as an individual, may not care. Unfortunately, historical evidence and social science evidence suggests that (bearing in mind that you as an individual may not care) when income inequality grows too great, other parts of society begin to suffer and eventually break down. This even affects things like the average health outcomes for the people living in the unequal the society.
There's a strong correlation that indicates that poorer health outcomes, higher crime, poorer standard of living all go hand in hand with greater income inequality.
Again, you may not care, for your own sake, but the country is a fair bit larger than you, and this problem does affect us all, whether we care or not.
I'd say it's the other way round: the greater the suffering of a society (poor health outcomes, higher crime etc.) the greater the inequality. Your ability to protect yourself grows with your income. Therefore those who earn less are more likely to loose which widens inequality.
