Wealth inequality

[Astaroth]

As we all know, wealth inequality is extreme in many Western countries.

But especially conservatives and libertarians like to reply to that, "let's just make the pie bigger" -- because supposedly, if the rich get 60% more wealth, everyone else might get 5% richer as well. Or something like that.

Regardless of whether that is even true, my question is a different one:

When is the wealth inequality "too big" in your view?

Is it when the top 1% have 50% of the wealth? Is it when the top 5% hold 95% of the wealth?

Or do you think it would be totally fine if the top 1% had 99.9% of the wealth in a country/the world?

[Adar]

I am far more interested in the needs of the poorest and social mobility than the exact distribution of wealth.

So for me there are two things that are important in a society:

1) Poor people should not starve and should have access to good healthcare.

2) Social mobility in society should be high. This essentially mean that all children should get a chance to work and and become rich if they are skilled and determined enough.

So for me it would be better with a society where the top 1 % own 50 % of the wealth but all children have the ability to rise to top than with a society where the top 1 % only got 5 % of the wealth but where the bottom 10 % are starving.

[Diamat]

What is an even more interesting question to answer is "why do some people see wealth inequality as too high while others do not? To what social strata do people who think so or don't think so belong? What is their level of education? What is their family background? Where do they live? Etc." These are the questions that should be asked, from a social scientist's point of view. Indeed, I am very interested in such empirical data, so that I may induce from it, why people think this way under definite conditions. If anyone knows some great academic articles on this matter, I'd appreciate it if you could point them out, since this is not my field.

[Astaroth]

@Adar:
That doesn't answer the question.

I would like to know where you would draw the line.

What is too much inequality, regardless of any other factors?

Or would you say that as long as nobody else has to starve (although I don't think that increased wealth inequality helps against poverty) you would be fine with the top 1% holding 99.9% of the total wealth?

[Adar]

Or would you say that as long as nobody else has to starve (although I don't think that increased wealth inequality helps against poverty) you would be fine with the top 1% holding 99.9% of the total wealth?

In that case you forget about the issue of social mobility.

But yes I could live with 1 % holding 99.9 % of the total wealth provided that somehow society ensure a minimal living standard and an utopian education system which allow even the poorest kids to learn and compete with the children of rich people.

In Sweden the current distribution is that the top 20 % control 74 % of the wealth and excellent social mobility which I am happy with. My only objection to this distribution is that much of this wealth is locked up in very low return investments which can be shown by the fact that these 20 % only earn 36 % of all the income in Sweden (source).

So in my opinion the great issue with Sweden isn't inequality, it's that the wealthiest people aren't using their money as effective venture capital.

[JP226]

It's not wealth inequality that matters, it's consumption and the availability of credit.

[Thorn777]

It's not wealth inequality that matters, it's consumption and the availability of credit.

I get that this sounded great when things went rolling along, but I think by now you should know better.

There is only so much credit to handle and it couldnt be handled no more. Deleveraging is the name of the game today.

Instead of credit we need earned incomes. But for some its seems about right what we have been doing within neo-liberalism. You included I guess. Shame that govts prolly cant stem another one.

[Big War Bird]

I am curious as to why you think it matters at all.

It's not wealth inequality that matters, it's consumption and the availability of credit.

This. My neighbor can be 100 times wealthier than me (and I suspect he is, I really do) and it has no negative impact on me whatsoever. Wealth concentration is only a problem if it interferes with most peoples ability to provide for themselves.

[Phier]

I am curious as to why you think it matters at all.

^this.

[chilon]

I am curious as to why you think it matters at all.

I would guess because the greater the wealth inequality and more concentrated in very few hands, the greater the societal instability and chance for general societal breakdown. Crime becomes a lot more rational a choice for poor people when they do not see any legit way out of their predicament.

[Phier]

I would guess because the greater the wealth inequality and more concentrated in very few hands, the greater the societal instability and chance for general societal breakdown. Crime becomes a lot more rational a choice for poor people when they do not see any legit way out of their predicament.

So you are assuming a zero sum game?

[chilon]

So you are assuming a zero sum game?

No, not at all.

[Astaroth]

I would guess because the greater the wealth inequality and more concentrated in very few hands, the greater the societal instability and chance for general societal breakdown. Crime becomes a lot more rational a choice for poor people when they do not see any legit way out of their predicament.

This.

Also, the more wealth there is in the hands of the few, the more open it is to manipulation.

1. A few rich individuals are more likely to avoid taxation than tens of thousands of average people

John Doe who only has a few thousand $ saved up will usually not move his money to the Caymans. Even when there are tens of thousands of John Doe.

X, who has hundreds of millions saved up, is much more capable of and willing to avoid taxes.

2. Money is (political) power

a. Influencing elections
The more money you have, the easier you can influence elections etc via ads and the likes.

(IMO at least) it is much more democratic if 1,000,000 people come together and donate some tens or hundreds of dollars each than if one person is easily able to spend the same amount by himself and thus influence the elections as much as 1,000,000 regular people.

b. Influencing politicians
Lots of politicians are always going to pander to the wealthy. The more wealthy some people are compared to others, the more politicians will support and push their (the wealthy's) personal interests.

So yeah, there are quite a few problems with wealth inequality. And those are but a few of them.

[Celsius]

This.

Also, the more wealth there is in the hands of the few, the more open it is to manipulation.

1. A few rich individuals are more likely to avoid taxation than tens of thousands of average people

John Doe who only has a few thousand $ saved up will usually not move his money to the Caymans. Even when there are tens of thousands of John Doe.

X, who has hundreds of millions saved up, is much more capable of and willing to avoid taxes.

2. Money is (political) power

a. Influencing elections
The more money you have, the easier you can influence elections etc via ads and the likes.

(IMO at least) it is much more democratic if 1,000,000 people come together and donate some tens or hundreds of dollars each than if one person is easily able to spend the same amount by himself and thus influence the elections as much as 1,000,000 regular people.

b. Influencing politicians
Lots of politicians are always going to pander to the wealthy. The more wealthy some people are compared to others, the more politicians will support and push their (the wealthy's) personal interests.

So yeah, there are quite a few problems with wealth inequality. And those are but a few of them.

Citizens United we thank you.

[Big War Bird]

I would guess because the greater the wealth inequality and more concentrated in very few hands, the greater the societal instability and chance for general societal breakdown. Crime becomes a lot more rational a choice for poor people when they do not see any legit way out of their predicament.

So basically you are saying in order to keep crime at bay, it is necessary to effect the orderly dispossession of justly held property and transfer ownership to the would be criminals.

[Menelik_I]

So basically you are saying in order to keep crime at bay, it is necessary to arrange the orderly dispossession of justly held property to the would be criminals.

I am have become skeptical about the ''Robin Hood'' theory that people engage in crime because they are needy, so far from history and personal experience most of the criminals are either able bodied people who are too lazy to work or people who almost middle class and steal because they want luxury things.

Poverty is not the cause of crime.

[chilon]

So basically you are saying in order to keep crime at bay, it is necessary to effect the orderly dispossession of justly held property and transfer ownership to the would be criminals.

Nope. Your statement above is not what I was saying.

[Big War Bird]

Nope. Your statement above is not what I was saying.

Then do enlighten us, as you are forecasting societal instability and breakdown which is, at the very least, consistent with extraordinarily high crime rates.

[Phier]

I would guess because the greater the wealth inequality and more concentrated in very few hands, the greater the societal instability and chance for general societal breakdown. Crime becomes a lot more rational a choice for poor people when they do not see any legit way out of their predicament.

So you have proof of this then? You say its not a zero sum game, but then why do the poor see no legit way out of their predicament? My father came from, at best, very low middle class roots. He's a happy member of the 1% club now. He's also worked 5-6 days a week since he was about 14. For him, he will be retired, when he goes to a 4 day a week work week.

If we are just using slogans without proof, my guess is your types welfare has caused more crime and misery than any other single factor in the modern west. They might see crime as the only way out, but not because of some rich guys living in the Hamptons. They see crime as the only way out because they have never seen what hard work and effort can do, they assume they are incapable, they have no role models, they don't have fathers they have "baby daddies" and they are told their problems are due to society not their own lack of effort.

The "war on poverty" is the biggest failure of a policy in US history.

[chilon]

So you have proof of this then?

What? That excessive income inequality correlates to higher crime among other things?
Go check my previous post two posts above yours