| > you're confusing some arbitrary ideological measure Well I'm not using a well defined measure of utility here, but I thought it was fairly non-controversial to say that, at least in immediate terms, food for many people creates more utility than a yacht for one person. That they're homeless isn't the point, and I should have left out that rehetoric. The point is just that they're less able to demand the food than the rich person is the yacht, despite it providing them more utility. > luxury articles provide firms with the rewards of motivation Yes, I said that. Inequality is what drives the supply side, and I agree that this may lead to better outcomes overall, but my point is that it complicates the process, and detaches money from being a raw measure of utility. The possibility of a yacht may encourage someone to produce food more efficiently, but this is a lot harder to measure. Maybe the level of inequality doesn't matter that much as long as people perceive higher social status? Maybe the inequality reduces opportunities for many potential innovators, destroying more efficiency than it encourages? Or maybe the lack of security discourages people from taking risks even if they have opportunities? I'm not asserting any of these ideas, just pointing out factors that confound measuring the utility created by inequality. |