Inequality = Bad?

 

To follow up from the post of SHSS course I posted late last week, I would like to share some thoughts about one of my favorite topic; namely, wealth inequality.

piketty_capital
Retrieved from Google 17 July 2017. All rights reserved.

In 2014 after the English version of Capital in 21st Century by Thomas Piketty was published, wealth inequality once again became a popular topics among economists (Ted, 2014). While the focal point is nothing new – I believe everyone knows that the world is very unequal – but this book shows further comparison and the cruel realities of the current society in regard of wealth distribution. Piketty also stated some possible causes of increasing inequality, one key reason is r>g. Since I am here to share my opinion and not his thus I will not go too deep of the explanation of those variables. If you are interested but has low or no economic background, I recommend you to read this Ted summary or watch this khan academy video before actually attempt to read the book.

So is having wealth inequality (from here on: inequality) MUST be bad?
Being a little philosophical, nothing in the world is absolute thus the easy answer is no. But if you surf the net, consult the expert, ask people around you or just think about it deeper, inequality does sound really bad. This statement assumed that you are not from the upper class or you are a reasonable billionaire that could put yourself in the other’s shoes. Before judging me to be contradictory, let’s see why inequality is bad to the society based on T.M. Scanlon (2014);
1. Economic inequality can give wealthier people an unacceptable degree of control over the lives of others — I say power exploitation
2. Economic inequality can undermine the fairness of political institutions — I say money play in politics
3. Economic inequality undermines the fairness of the economic system itself — I saw social mobility being impede due to dirty politics
4. Workers, as participants in a scheme of cooperation that produces national income, have a claim to a fair share of what they have helped to produce. — A bit complex to me, but seems like equal profit sharing is the workers’ rights.
Looking from just these four very reasonable concerns, once again inequality really does cause damaged. But when I looked at them deeper, all of the points above were the result of the rich exploitation and people’s greediness/unwillingness to share. To get a better understanding, I read some papers of this issue and there is this research where it argued that “some level of inequality is necessary in a modern economy” (OECD, 2014), and another history book argued being strictly equal could impede economic growth for example China in 1930s to 1940s. Summing up all the research results and analysis, I believe that this negativity of inequality originated from society that on the top of having high level of inequality also allowed money talk. Conclusion first, just like almost everything in the world, inequality in good up to some degree and when it passed beyond this level – and become too unequal – problem arise. The unfavorable outcomes especially amplified in the society that favor money.

Disclaimer: This is my own argument with no proof or data (yet!), just following my logic and limited readings.

So up until here, I put a lot of other people’s arguments but from here on I am going philosophical.

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Retrieved from Google 17 July 2017. All rights reserved.

All humans were born unique, meaning we have different physical attributes, different personality and interest and different family situation. Everyone has their own problems and ways to solve them. Our talent different to one another and even our life time ticking in different speed on the different clock. There is always sky above a sky but all of them are sky: you always find couple people above you and above them and above them but in the end you can be anywhere because by nature you are the same. A group of people are luckier than another, another handful have more opportunities than the rest. But the rest might strive on their one and only chance by hard work and persistence. You might think that you work more than the others but the others might also think the same way. So in the end, the society is never equal and fair because the one who initiate the change will create their own fate while the left-over people will stuck in a place where they could only moan on their unfortunate live.

 

Moving on, Piketty’s argument of capital as the driver of inequality is so logical. If your parents are rich then you might be better off and maybe become richer. However, this does not mean that it is totally unfair. Their parents work very hard to save all the wealth they have to pass it on to their children, it is not like they actually had a gold tree from God thus they became rich. Discarding those who attained their wealth with dishonesty, I believe that the rich also had worked hard to save more. If they happened to buy and sell property right before the market burst, etc then it is their luck. Also, not every rich people give their fortune to their kids (though rare) and not every kids could maintain the wealth and social status the received (more common), so it is just part of how the world work. For those who pile their wealth dishonestly which correlate with the second point from Piketty where CEOs pushed their salary way beyond the bar and piled up property that later might be handed down to their offspring, frankly nothing can be said from this, it’s just there are evil and greed, balance of the world. Yin and Yang.

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Retrieved from Google 17 July 2017. All rights reserved.

In conclusion, inequality is part of the nature, good or bad, one should just embrace it and do our best to strive despite the initial situation. Then their attitude will be tested once their succeeded, if they are willing to share, utilize the power they have for good, then the society will improve together and have a healthy level of inequality. But if they are corrupt, then it is up to those who want to change the situation to take actions.
Lastly, despite everything I mentioned, I must admit that the inequality level in the current society has way passed beyond the bar and it is bad. However, here I want to relay that inequality itself is not better or worse than being equal but how the society; especially the rich and powerful group, cope with the situation is the key.

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