[weberc2]

I appreciate your nuanced comment, but I think it's important to also recognize that it's better for everyone's fortunes to increase even unequally than for everyone to be equally impoverished. There is no economic law that says equality begets wealth creation, so the conversation needs to be about balancing equality with wealth creation. The left seems to think the conversation should only be about equality, and the right seems to think it's only about wealth creation. And if I had to be overly simplistic, I would err on the right, given the respective track records of capitalism and socialism (I know a lot of people throw a fit at any positive mention of 'capitalism', but please note I'm not saying that unregulated markets are optimal--only that they significantly outperform planned economies).

[logicchains]

I did my bachelors in economics, and one of our textbooks taught that all other things being equal (ceteris paribus), more equality means less wealth creation. Why? Wealth will naturally concentrate in the hands of those more capable of creating it: if Jo is making 2% per annum return and Jane is making 4% per annum return, and they both start with the same amount, then Jane's share of the total wealth pool will continuously increase relative to Jo. The key thing to note is that as Jane's making better use of resources, producing twice as much from them as Jo, if we take resources from Jane to give to Jo then they'll be used less effectively, slowing overall growth.

To illustrate, imagine they both start with $1000 each. The total wealth pool is hence $2000, and they both have 50% each, perfect equality. Now, let's look 50 years in the future, assuming the previously mentioned interest rates per annum compounding annually. According to http://www.moneychimp.com/calculator/compound_interest_calcu..., Jo will have $2,691.59 and Jane will have $7,106.68. The total wealth pool is $9,798.27. Jo hence now has 27.47%, and Jane has 72.53%. They're both less equal, but they're also both wealthier, and the overall wealth pool has increased.

Now, let's look ahead another 50 years. If no wealth transfer occurs, Jane will have $69,633.20 and Jo will have $19,128.28, with the total wealth pool being $88,761.48. If we equalise wealth, however, such that both have $4,899.13, then in 50 years they'll each have $34,816.57, for a total wealth pool of $69,633.14. This is 78.45% of the total wealth pool that there would be if no wealth transfer took place.

In this sense there is hence a direct tradeoff between growth and financial equality.

[weberc2]

Thanks for the informative comment. I'm getting some downvotes, so I want to clarify that I agree with you, and if my comment suggested otherwise, it's a miscommunication.

[logicchains]

I didn't downvote you and didn't mean to imply your comment suggested otherwise, I was just elaborating.