The more I think about this, the less I think the issue is the gap per se (though it does seem to have some bad consequences) as much as the methods/systems that help some people and companies amass outsized wealth restrict a lot of people's ability to achieve a dignified standard of living. (You could argue starting with the system of money itself, which has organized society in a way where sometimes it's impossible for someone to secure food / shelter etc without having to depend on a job that gives them access to currency in the first place)
Like Larry I appreciate your willingness to write about the nuance that is easy to overlook, in this case the simple fact of stats being used to support a thesis that should not be paired together. This takes a ton of work, and I appreciate your willingness to do it!
I like the fact that you’re willing to create a post that goes against the zeitgeist of the inequality story-line, even if you’re mostly agreeing with it (and I’m someone who totally agrees with it). We live in a culture where you have to be all in on one side or another and if you say anything that undermines your side, you’re letting down the team. But your post made me think more about the messaging that goes along with fighting inequality.
I’m particularly thinking about the idea that “billionaires shouldn’t exist.” I’m all for taxing billionaires more than we do here in the US so we can have a functioning society. If that means they’ll be taxed so much that they’re no longer billionaires, then fine! But I don’t think that should be the end goal in itself. (I still need to read your essay about your alternative idea to address inequality.)
I do think there’s a link between the rich getting richer and the poor getting poorer when you look at the policies most of the rich in this country support, like abolishing or suppressing the minimum wage, fighting unionization, pushing for a more regressive tax code, scaring people about universal healthcare, etc. And globally, at least historically, the profits of Dole and the oil companies were linked to the immiseration of people in Central America and Africa. But maybe that’s changing? I’m not sure!
"That some should be rich, shows that others may become rich. Let not him who is houseless pull down the house of another; but let him build one for himself." --A. Lincoln, 1864
Elle, thanks for following up! I do think the increased wealth of people at the top does matter for a bunch of reasons, but one that has come to my attention recently - because it's increasing the gap, not just between the poorest and the richest, but also between the upper middle class and the billionaires. Peter Turchin speaks to this, as I outline in my post that you refer to - mass civil unrest occurs when this gap becomes too apparent.
"But wealth is not the problem—poverty is—and we need to stop pairing them together as if wealth is the cause of poverty."
Yes, in theory, but in practice, I don't know that you can completely separate them . . . I think it's an empirical question.
I don't claim to have the answer, but I do think that even if the Oxfam framing is an oversimplification, it's worth paying attention to some of the research that suggests dangers of increasing inequality (even if poverty is decreasing).
Economic research shows that high wealth inequality coincides with lower intergenerational mobility, meaning the presence of a lot of really rich people goes hand in hand with ordinary people struggling to do better financially than their parents did — an observation dubbed the Great Gatsby Curve. According to research by City University of New York economist Miles Corak, wealth chasms make it more likely for “family background to play a stronger role” in determining your success in adulthood, with your “own hard work playing a commensurately weaker role.”
For all that America is championed as a land of opportunities and bootstraps, the hundreds of billionaires that have popped up here since the ’80s may actually mean your hustle and grind matter less today.
According to economist Salvatore Morelli, director of the GC Wealth Project, the US once had a relatively low incidence of inheritance compared to other developed countries, but it has started to shift to a “European level” of inheritance. The gap between the haves and have-nots shapes “the opportunity and the chances that people start with in their life,” he tells Vox. Examples of unequal opportunities include things like education: You might have the grades to attend an Ivy League school, but if someone’s parent is a billionaire who can outspend yours to hire the most expensive college consultants and even make a generous donation to the school, that heir may just snatch your spot. With an exploding number of ultrarich families in the US, the bar for having a chance at financial success — even a slim chance — keeps getting raised.
The more I think about this, the less I think the issue is the gap per se (though it does seem to have some bad consequences) as much as the methods/systems that help some people and companies amass outsized wealth restrict a lot of people's ability to achieve a dignified standard of living. (You could argue starting with the system of money itself, which has organized society in a way where sometimes it's impossible for someone to secure food / shelter etc without having to depend on a job that gives them access to currency in the first place)
Like Larry I appreciate your willingness to write about the nuance that is easy to overlook, in this case the simple fact of stats being used to support a thesis that should not be paired together. This takes a ton of work, and I appreciate your willingness to do it!
Well said!
I like the fact that you’re willing to create a post that goes against the zeitgeist of the inequality story-line, even if you’re mostly agreeing with it (and I’m someone who totally agrees with it). We live in a culture where you have to be all in on one side or another and if you say anything that undermines your side, you’re letting down the team. But your post made me think more about the messaging that goes along with fighting inequality.
I’m particularly thinking about the idea that “billionaires shouldn’t exist.” I’m all for taxing billionaires more than we do here in the US so we can have a functioning society. If that means they’ll be taxed so much that they’re no longer billionaires, then fine! But I don’t think that should be the end goal in itself. (I still need to read your essay about your alternative idea to address inequality.)
I do think there’s a link between the rich getting richer and the poor getting poorer when you look at the policies most of the rich in this country support, like abolishing or suppressing the minimum wage, fighting unionization, pushing for a more regressive tax code, scaring people about universal healthcare, etc. And globally, at least historically, the profits of Dole and the oil companies were linked to the immiseration of people in Central America and Africa. But maybe that’s changing? I’m not sure!
TL;dr: Tax the rich, don’t hate the rich.
"That some should be rich, shows that others may become rich. Let not him who is houseless pull down the house of another; but let him build one for himself." --A. Lincoln, 1864
Elle, thanks for following up! I do think the increased wealth of people at the top does matter for a bunch of reasons, but one that has come to my attention recently - because it's increasing the gap, not just between the poorest and the richest, but also between the upper middle class and the billionaires. Peter Turchin speaks to this, as I outline in my post that you refer to - mass civil unrest occurs when this gap becomes too apparent.
"But wealth is not the problem—poverty is—and we need to stop pairing them together as if wealth is the cause of poverty."
Yes, in theory, but in practice, I don't know that you can completely separate them . . . I think it's an empirical question.
I don't claim to have the answer, but I do think that even if the Oxfam framing is an oversimplification, it's worth paying attention to some of the research that suggests dangers of increasing inequality (even if poverty is decreasing).
I find _The Spirit Level_ findings that greater inequality contributes to worse social outcomes (on a number of metrics) interesting. They don't demonstrate a cause, but there a number of correlations: https://equalitytrust.org.uk/sites/default/files/SpiritLevel-jpg_0.pdf
There's some evidence that high amounts of inherited wealth make society less dynamic: https://www.vox.com/2024/1/22/24043104/billionaire-get-rich-people-parents-generational-wealth-transfer-trust-fund
________________________________________________
Economic research shows that high wealth inequality coincides with lower intergenerational mobility, meaning the presence of a lot of really rich people goes hand in hand with ordinary people struggling to do better financially than their parents did — an observation dubbed the Great Gatsby Curve. According to research by City University of New York economist Miles Corak, wealth chasms make it more likely for “family background to play a stronger role” in determining your success in adulthood, with your “own hard work playing a commensurately weaker role.”
For all that America is championed as a land of opportunities and bootstraps, the hundreds of billionaires that have popped up here since the ’80s may actually mean your hustle and grind matter less today.
According to economist Salvatore Morelli, director of the GC Wealth Project, the US once had a relatively low incidence of inheritance compared to other developed countries, but it has started to shift to a “European level” of inheritance. The gap between the haves and have-nots shapes “the opportunity and the chances that people start with in their life,” he tells Vox. Examples of unequal opportunities include things like education: You might have the grades to attend an Ivy League school, but if someone’s parent is a billionaire who can outspend yours to hire the most expensive college consultants and even make a generous donation to the school, that heir may just snatch your spot. With an exploding number of ultrarich families in the US, the bar for having a chance at financial success — even a slim chance — keeps getting raised.
---------------------------------------------------------------