More data supports the hypothesis that inequality is rising because some people have more money than others, and currently it's easier to earn significant returns from capital than from labor. Of course, not everyone agrees, but Piketty et al have some evidence for the hypothesis. Is there anyone with data-driven support for the claim that changes in overall inequality are primarily driven by divergence in high-skill vs. low-skill labor incomes? To be clear, I obviously know there is a difference in high-skill vs. low-skill labor incomes, but it's not clear its magnitude is enough to account for the changes seen in macro-scale indicators like the Gini index.
I'm not sure, but there have been a lot of economists who disagree with Piketty and written about where he goes wrong. I assume that this implicitly proves the other direction, that capital growth isn't larger than wage growth, or whatever, so it might be a good idea to look there.
and that money, where did it come from? look at fortune 500, what percentage inherited it? what percentage inherited it from someone further down the ancestral line than their parents?
rich people without skill will squander their fortunes.
or the gains for being lucky and fortuitous are more and more extreme, and the cost of being left out is more bleak.
The Economist just ran a profile on Chris Hughes, Mark Zuckerberg’s second-year roommate, who, by virtue of being his roommate, lucked into a huge net worth from the early stage creation of Facebook.
> OK - would you agree that this presents us with an ethical problem?
My instinct is that inequality is not inherently unethical if it's a fair reflection of people's skills and/or efforts. If people are so poor that their needs are going unmet that's an ethical problem, but those people are not made any worse off by the existence of wealthy people.
> How about a societal/practical problem? Is an unequal society sustainable?
An unequal society where people still feel like they're contributing something seems to be sustainable. I think we're hitting an issue where it becomes clear that some people have essentially no ability to contribute to society, and that might be unsustainable, but I don't think we can or should turn back the technological clock to make them able to contribute. At which point we're down to handouts or make-work jobs, and while I'm all for supporting the worst off, that doesn't address the fundamental problem.
>those people are not made any worse off by the existence of wealthy people. //
How does that work? If there are wealthy people using more than their share of resources and energy, staying wealthy on the back of other's labour (rent-seeking, capitalism), then surely the presence of those wealthy people makes resources/energy more scarce and the need to pay the excess in order to maintain the wealthy means all goods/services/resources are more costly.
If one person owns the farmland and charges rent without giving back value then all the workers must work harder than if the farm is owned cooperatively.
Most of the cost of most things - especially most things consumed by wealthy people - rests much more in labour than in physical resources; poor people are net sellers of labour so wealthy people inflating the price of labour helps them more than it hurts them. Land is an exception (being in limited supply) and I do think a land value (Georgist) tax would be morally desirable, with the proceeds distributed equally to everyone.
If you consider the unnecessary death and suffering of other people, and major environment impacts, to be "sustainable" then yes, unequal society has been entirely sustainable.
In practice the inequality has lead to massive unrest (eg civil war), disease, and famine time and again.
You can't honestly look back at history and consider that inequality has been anything other than a cause of immeasurable misery.
from my point of view all those deaths and massive unrests resulted from various groups trying to do away with inequality, usually by taking what's not theirs.
Lenin (for example) didn't walk into a prosperous, free, egalitarian country, and persuade everyone to rise up against the existing system. The inequality, poverty, and misery gave rise to people willing to listen to Lenin, and to try what he was selling.
I'm not excusing Lenin. I'm not apologizing for him. But without the existing inequality, he would have gotten no traction.
he also wouldn't have gotten any traction if people had no concept of envy. yet eliminating envy is just as stupid as eliminating natural differences between individuals.
i agree. free market capitalism should replace current corporatism. but that's currently impossible - there will always be lobbying and special treatments while the goverment is able to interfere with the market.