Why gross inequality is harmful in itself

I am not bothered by the fact that there are people in the world who have a lot more riches than I do.  I’m amused, not resentful, that John McCain couldn’t remember how many houses he owns or that Mitt Romney had an elevator for his car.   So long as I have a house that satisfies me, what difference does it make if someone else owns a mansion, or many mansions?

What does bother me is the means by which the upper 1 percent have gotten rich.  We have a financial elite that, with some exceptions, have gotten rich not by creating value, but by milking the system and by transferring wealth upward—CEOs who get huge compensation packages while laying off workers and managing decline, Wall Street financiers who profit from manipulation of the system and outright financial fraud.

But in the TED talk shown in the video, Richard Wilkinson presents facts and figures that gross inequality is an evil in itself, regardless of the cause.  The facts and figures in his slides the more unequal a society is, the worse off the people tend to be in many measurable ways.  Once a society reaches a certain level, once it is possible for everybody to have a minimum amount of food, clothing, shelter, medical care, education and leisure, then alleviating inequality becomes the most important factor in promoting human well-being.

I’m not sure exactly why that should be, but this seems to be the fact.

Of course growth and equality are not always contradictory, and certainly it would be easier to lessen inequality in a growing economy than otherwise.   And I know of no society that strives for complete equality of income and wealth.  What’s in question is the degree of inequality and the processes that create it.


The following links are about how the system promotes the upward redistribution of wealth.

The Reagan Legacy by Ian Welsh.

Inequality: Government Is a Perp, Not a Bystander by Dean Baker for TruthOut,

How Do We Define Value? by Ilargi on The Automatic Earth.

The danger of frontloading inequality by Lane Kenworthy.  The writer argues that public policy should focus on such things as full employment, an inflation-indexed minimum wage, better public services, better health care, better educational opportunity and so on, rather than inequality as such.   [Added 12/29/13]

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8 Responses to “Why gross inequality is harmful in itself”

  1. pystew Says:

    Reblogged this on New NY 23rd.


  2. solodm Says:

    Could it be that once necessities are satisfied, the nature of some is to then look for power in order to “keep” their security?
    There appears to no longer be a common goal amongst Americans. The goals of recovery and a thriving economy that developed after the second World War, appear to missing in today’s society. Americans do not seem invested.
    One reason may be that unless one had military members in their families in the last ten years, life just seemed to cruise along without much consideration for the need of sacrifice, human or monetary. People were told to “go and shop”, and encouraged to close their eyes to reality.
    This country has gotten mean. Many Americans expect that “someone else” will fight the war, pay the sacrifice, feed the poor, and worse; try to “take” what they have earned (?).
    Power seems, to me at least, to be the acme of “wealth” US leaders strive for, which of course always needs more money to maintain. “Power tends to corrupt, and absolute power corrupts absolutely” — Sir John Acton


  3. philebersole Says:

    It’s not hard for me to understand why gross inequality makes people unhappy. If you present two small boys with a platter of 10 cookies, and one of the boys grabs eight of them, the other boy is going to be more unhappy than if he never were offered any cookies to begin with.

    You may not think this is a good metaphor for what’s going on in the United States today. I do, for reasons stated in the linked articles and in my posts tagged “The 1% and the 99%.”

    What I don’t understand is why gross economic inequality is correlated within developed societies with higher rates of mental illness, homicide rates, incarceration rates, life expectancy, infant mortality, teenage births and obestity, and lower trust among individuals, social mobility and math and literacy scores.

    And why these things are not correlated with the total wealth of a society,

    Richard Wilkerson in his TED talk says that a high degree of inequality in a competitive society leads to greater stress and stress-related diseases. I think there must be more to it than that, but I don’t know what,


  4. BOB McGILL Says:

    Everyone has the same opportunity to become wealthy. Not everyone has the brains or the ambition. Some people are content with what they have or what they do. If Joe wants to go fishing and Bill wants to day trade stocks, why hate Bill for making more money and Joe for having more fish ? You want equality ? What if equality meant living in a cardboard box or under a bridge ? There is only so much wealth and if all things were equal you would have much less than you do now !


    • Deb Meeker Says:

      Bob your first two sentences, contradict themselves.
      No one I know “hates” Bill” for having money he earned, as long as he pays his taxes and doesn’t try to cheat “Joe” out of having access, and the rights that enable him to fish.

      All things “being equal” just means every person does what they can for the good of all. “To those whom much is given, much is expected”. –JFK


    • philebersole Says:

      I think fishing creates more value than trading stocks.

      One activity results in fish, which is good to eat.

      The other activity results in money being transferred from one set of pockets to another, which is a zero sum game with no net benefit to anyone.


  5. BOB McGILL Says:

    philebersole, look up how much New York State gets in taxes from Wall Street. New York would be broke in a flash without the revenue from Wall Street. Meeker ever heard of Bill Gates ? Billions are given to charity by rich folks every year. Not to mention that they pay 95% of ALL TAXES !!!!! You people pick on the GOP, the RICH and REED but you always leave out what would happen without them. Can I say BIGOT without getting in trouble ?


  6. philebersole Says:

    Bob, your comments are tangential to the point of Richard Wilkinson’s TED talk, which is about the statistical evidence that indicates greater human flourishing and less social dysfunction in societies with a moderate amount of wealth and a moderate amount of inequality, such as Denmark and Japan, that in societies with a greater amount of wealth, but also a greater degree of inequality, such as the UK and the USA.

    However, I will respond as best I can.


    I think honest and efficient financial markets are essential to a capitalistic, free market economy. My retirement savings are mainly in the form of mutual funds that are invested in stocks and bonds.

    But I think the financial sector should be the servant of the goods-producing and services-producing part of the economy, and not the master of the economy as it is now.

    I am in favor of the following changes.

    1, Break up the “too big to fail” banks and investment firms. This would not put them out of business, any more than Standard Oil was put out of business when it was broken up a century or so ago.

    2. Prosecute and jail individuals guilty of financial fraud, as was done in the aftermath of the S&L crisis.

    3. Enforce the Volcker rule, which limits risky investments made with government-guaranteed funds, and restore the Glass-Steagall Act.

    4. Enact a transaction tax of between 1/10th and 1/100th of 1 percent in order to discourage speculators who churn the financial markets without affecting actual investors.

    5. Stop illegal foreclosures.

    6, End the revolving door between Wall Street and Washington,

    I don’t think any of these reforms would impair the efficiency of financial markets nor present any honest financier from making a good living.


    As I remarked in my original post, I am content with what I have and don’t envy Bill Gates or any other multi-billionaire their fortunes,

    I am bothered by the fact that virtually all the gains in income of the past couple of decades in the United States have flowed to the top income earners, and that the gains in productivity have not translated into gains in median wages.

    Bill Gates, unlike, say, the Walton heirs or Jamie Dimon of JP Morgan Chase, at least acquired his billions through a positive accomplishment, and not just by milking the system.

    I think Gates’ charitable contributions are commendable, but I have read that middle-class, working-class and even poor Americans give away higher percentages of their incomes to charity than the ultra-rich.


    I would be interested in comments that present information that rebutted Wilkerson’s arguments about gross inequality, or that provided an explanation for why gross inequality is so closely linked to social dysfunction.


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