Does Wealth Inequality Itself, Actually Matter?

[GennGreymane]

Does wealth inequality actually matter on its own? I dont think so. It is the symptoms that are the real issue, which is political influence. If there is limits on that type of influence, and a high enough standard of living, wealth inequality on its own is not an issue

What do you think?

[PosPosPos]

Well duh.

There will always be inequalities in wealth. The problem when it is taken to the extreme and leaving the bottom feeders in abject squalor and poverty.

[Kokolums]

I don't think it matters. What matters is if the basic needs of everyone is met. If there is not enough food, you get riots. If everyone has a 2 TVs, a computer, a cell phone, and a full belly, it doesn't matter if the top 1% have a billion or a trillion dollars.

[Independent voter]

If you're into materialism wealth inequality matters a lot. Where's my Porsche? Why don't I have my own private swimming pool? This is assuming you have enough to cover food, shelter and other basics.

If you're non-materialistic wealth inequality doesn't matter.

[alexw]

Does wealth inequality actually matter on its own? I dont think so. It is the symptoms that are the real issue, which is political influence. If there is limits on that type of influence, and a high enough standard of living, wealth inequality on its own is not an issue

What do you think?

Yes of course it does. The amount of evidence that it has severe negative consequences is overwhelming.

Just for starters it results in severe social strain. Hence the increase in despair, anger, and criminality. Then there are the negative effects it has on economic growth. The economies of the west are 5-15% smaller than they would otherwise be due to the excessive amounts of inequality those economies now have. There has been whole books written on these subjects.

[Sunseeker]

People will always have differences in wealth. Just like how people will always be different from each other. When we talk about "wealth inequality" we're not just talking about how Bob has more money than Joe. We're talking about a symptom of a larger economic problem. If the masses lack wealth, they lack purchasing power, if they can't buy things, noone starts businesses to sell things, which means noone creates jobs, which means more wealth inequality, but we've at the same time, developed a system where people can gamble their money in hopes of making more money, and if you have enough money you basically can't stop making more money, but in doing so, you didn't have to sell a single product or create a single job.

[Primalthirst]

Wealth inequality is irrelevant, unless you want to purchase goods or services. Then it matters.

[Wells]

There's a vast pool of data showing that extreme wealth inequality is bad for growth so yeah. Beyond that though it presents other issues. Wealth is effectively the ability to exert influence on government. Extreme inequality in wealth means an inequality in our ability to petition government and actually be listened to.

Additionally, one could argue that it itself is a failure, not just a sign of one. An economy is just a way to distribute limited goods in the face of unlimited wants. Its hard to hold the position that meeting so many of a few peoples' wants and so few of so many others is proof of failure alone.

[Hey There Guys its Metro]

Wealth only matters because we make it such a big deal.
There was a time where there was no currency. You worked to survive. There are still people who live this way on this planet.

The only reason wealth inequality matters is because people subscribe to working full time and don't feel their effort is worth less than some one else's.

Aside from all this, the people with this massive amount of wealth should be using it to better the planet, not themselves. If some one at the high end of this spectrum is not contributing back in some way, they should be taxed heavily to make sure some one else is benefiting.

[Chromeshellking]

https://www.youtube.com/watch?v=ORlmTj-dMt8

Defer to the 6:40 mark and watch till after her bit about making thieves then punishing them.

Most if not all humans are greedy by default and it is in survival instinct to ensure your well being but no one else. So when you compound that with a structure like society is at today and both sides argue that the rich are 100 percent at fault while the other is the reverse. Which isn't as accurate. It still does matter because when you look at the lower income brackets you have to ask this. Are they on government assistance programs? If so which ones? How long have they been on it? Do they have kids? And so on, it is true that people make choices to where they are going in life but some don't have many other options and there isn't a simple fix for what can be done about it.

[Gestopft]

Mattering just as much, if not more than the actual amount of inequality is the stability of the relative inequality. There's always going to be a gap (within and between countries), but when the gap widens, it has a noticeable effect on people's standard of living. The larger the gap gets, the greater the squeeze put on the lower and middle classes.

[Endus]

It depends on precisely what level you want to focus on.

Looking at individual welfare, wealth inequality leads to a large, relatively poor working class, and an oligarchic aristocracy based on wealth. Given that wealth has well-recognized advantages in terms of providing opportunities, this leads to a largely self-reinforcing system, where the wealthy and their descendents tend to stay wealthy, while the working class has less and less opportunity to rise above that station. This is a big part of why the USA has such relatively low social mobility between classes; the so-called American Dream is far more true in most other Western nations.

Looking at societal welfare, wealth inequality puts the majority of wealth into the hands of a few, which leads to reduced consumption by the working class, who have a decreasing share in the total wealth available. In any consumer-based economic system, this stifles the economy, and restricts growth, leading to less productivity and wealth generation overall, not just for the working class.

The only people who "benefit" from high wealth inequality are those wealthy individuals. And it explicitly comes at the expense of everyone else.

[Sunseeker]

If you're non-materialistic wealth inequality doesn't matter.

Maybe not in a cosmic karmic sense, but it still matters in an economic sense even if you don't mind it.

[Cthulhu 2020]

Pretty huge correlation between wealth inequality and crime.

https://www.ted.com/talks/richard_wilkinson?language=en

[Sylreick]

It most likely will exist so long as there is a system that allows it to function, and those with the greed/ambition to keep it the way it is. It is pretty terrible, but it can be lessened if the gap is smaller. The rich will be rich even if the gap in income is 1 dollar to 10. At the moment it's more like 1 dollar to 7-800 (being a little modest, I think).

What's worse is, you get deluded people thinking that others just aren't working hard enough, when the problem is the pay just isn't equal to the effort put in. Still more deluded folk saying "where's that money going to come from, oh the consumers", basically saying it's alright for those on top to not take the proper hit to their own paychecks and shift the burden even more to those in need. It's pretty absurd.

[May90]

I think what matters is not as much inequality itself, as the absolute values, particularly those for the lowest class. If the lowest class can make a decent living, like in the First World, then it doesn't really matter how much the upper class is richer: most people live fine. If, however, like in most third world dictatorships, the lowest class is nearly starving, and the upper class lives in luxury at their expense - then a social bubble starts growing, and eventually it pops, resulting in a revolution or something like that.

[Deleted]

Just as with many things, once you put the words "too much" or "too little" in front of it, it becomes a bad thing.

[Kasierith]

High degrees of inequality ultimately stifle economic growth due to the accumulated wealth essentially removed from the economy. Ie, if someone poor gets 50 dollars, he's going to probably need to spend it, whether it be on food or clothes or housing or drugs or whatever, transferring it to someone who will spend it, who will spend it, and so on and so forth. Numerous chains of transactions from billions of interactions. But there is no pressing need for someone wealthy to spend an extra 50 dollars. More often it is saved, put aside until needed. This really isn't a problem until you have massive stores of it in the hands of a few, essentially stifling economic transactions across the board.

[Luxxor]

It depends on precisely what level you want to focus on.

Looking at individual welfare, wealth inequality leads to a large, relatively poor working class, and an oligarchic aristocracy based on wealth. Given that wealth has well-recognized advantages in terms of providing opportunities, this leads to a largely self-reinforcing system, where the wealthy and their descendents tend to stay wealthy, while the working class has less and less opportunity to rise above that station. This is a big part of why the USA has such relatively low social mobility between classes; the so-called American Dream is far more true in most other Western nations.

Looking at societal welfare, wealth inequality puts the majority of wealth into the hands of a few, which leads to reduced consumption by the working class, who have a decreasing share in the total wealth available. In any consumer-based economic system, this stifles the economy, and restricts growth, leading to less productivity and wealth generation overall, not just for the working class.

The only people who "benefit" from high wealth inequality are those wealthy individuals. And it explicitly comes at the expense of everyone else.

A side question but what is the role of the middle class? A lot of politics is spent on talking about the "middle class."

Who are they in America and why are they so important economically?

[Charge me Doctor]

As long as people can afford living (in sense of food, house, education and entertainment) + little extra - no it doesn't. If someone have to choose between moving out of 1 room apartment or sending their kid to school - that's when things are fucked up