> huge levels of inequality necessarily means that a small group of people are consuming vastly more of the available resources than everyone else.
Why would you think so? Inequality means wealth inequality, it does not measure consumption. There are still people starving in the world; that is because they cannot afford to buy food, not because Bill Gates and Warren Buffet are eating 1000000x more food than the average person.
> It would be hard to argue that inequality increased between
Based on averages, why would it be? Inequality does not measure where you are coming from, it measures the relative economic distance between groups now. We can all live better these days and yet have a far greater difference in wealth between the richest and poorest.
"I don't care about income inequality. I care about the absolute condition of the poor--whether they are hungry, cold, and sick. But I do not care about the gap between their incomes, and those of Warren Buffet and Bill Gates."
The entire article seems to be about income inequality.
Inequality is unfair. The more unfairness someone has to put up with the less sensitive they will be to other stressors and perceived unfairness.
This obviously isn't as simple as I'm making out. Individual people will have different stressors. However when we talk large scale I think this simplistic view can be warranted.
> wealth inequality doesn't mean more poor people.
Wealth, inequality, and poor are not well-defined.
Using the typical measures:
poor being near the poverty line for an area
wealthy being access to capital (be it over 100x the poverty wealth line or double the average) and inequality, the gap in absolute terms from top to average. The pareto principle will always illustrate how greater inequality defines that there are more poor people, even when the poverty line changes. Abstract equations, notwithstanding.
> The idea that the food availabe to people is getting worse or less
Ironically, the beef industry may be kept on life support due to the ongoing climate change. New grazelands will appear from beneath the tundra across the world offering another few generations of opportunity. Buy your land in the US Dakotas for your grandchildren. It's a golden opportunity.
> Inequality causes dangerous levels of political instability
Does it? I think that's just a hypothesis. I haven't seen any careful research justifying it.
It is clear that when people are literally starving, instability results. But that isn't the same as inequality. Remember that Hillary lost the election despite outspending Trump 2:1. We still live in a democracy, 1 man 1 vote.
> economic inequality is not intrinsically the problem
People keep saying that, and I personally agree that there are other related problems that are bigger than inequality, but inequality by and of itself is a problem, and a significant one at that.
"The average well-being of our societies is not dependent any longer on national income and economic growth. That's very important in poorer countries, but not in the rich developed world. But the differences between us and where we are in relation to each other now matter very much."[1]
And even the wealthy in more unequal societies are less well off than less wealthy people in more equal societies. I think this is an important finding because it is counterintuitive, even surprising.
> how many more rich people are in the current generation compared to the previous one
Fewer isn't it? There is _increasing_ inequality.
Anyway, it's structural, whether the social systems deliver the economic product to a smaller number or larger number of people. It's not down to differences between individuals receiving or not receiving the product.
> the problem isn't inequality, it's how good the low and average standards of living are, and whether they're improving
I understand this perspective, but I still think inequality is important. Inequality is a measure of how good the low standards are Vs how good they could be.
> "we're 10% over so you 10% take one for the team and die this month, sorry"
While it is indeed not entirely like that, it does come a lot closer to the truth than you would expect (and it has always done that).
In the 18th century when France did not have enough food, almost everybody was worse off, but most people were not actually hungry, they just paid more for the food they ate.
Because inequality is so big and following a power-law (as you go closer to the top, people have exponentially more) the prices go up a little until demand of the top x% is met, and the bottom x% cannot pay and goes hungry until starvation. And because of the exponential difference, the bottom will starve while the top will actually notice very little. There is a group in the middle between those extremes that has trouble paying more and goes undernourished, but it's not actually that large of a group. The larger the inequality is, the smaller the group in the middle.
Think about how many people in the US will go hungry because of the worldwide wheat shortage as compared to some African countries. The small price difference will be barely noticeable in the US, a country which adds on tons of other value by turning the wheat into salmon bagels in a complex process. But these price differences are huge for many African countries, which only grind the wheat and mix it with water.
> Inequality seems to be a completely pointless buzzword to me.
It seems pointless right up to the moment that those on the losing side of the equation start baying for blood. High inequality is often correlated with violent revolution[1].
Because if you define "bad" as "produces human misery", inequality, in and of itself, has been shown to be bad. Relative deprivation has been demostrated to be a major source of disutility.
> Inequality is not the problem. Poverty is the problem.
Not necessarily. The article doesn't develop the argument, but hints at the fact that if the perception of unfairness (due to observed wealth inequality irrespective of the poverty rate) in a society becomes sufficiently widespread, there could be negative consequences. The most extreme example is probably a violent revolution of the less wealth against the extremely wealthy.
>Wouldn't it be more important to fight absolute poverty than inequality?
Well that too, but the tension comes directly from the inequality. e.g. Being hungry sucks, but it sucks more if you see fellow citizens live like kings.
> The pedanticism was pointing out that your second sentence was a non-sequitur. Starving and smartphones are about poverty, not necessarily inequality.
I don't know how inequality came into the discussion?
The original point I commented didn't mention anything about equality, did it? "But many people also live in a far more precarious economy [...]" sounds like a complaint about poverty, not at all about inequality?
> Would you argue that economic inequality has decreased in US over the past few decades?
I don't live in the US, and don't care too much about that country. Even its poorest inhabitants are already rich and well off by global standards and are offered opportunities many can only dream off.
From what I absorbed over the Internet, it seems the answer to the US specific question depends a lot on exactly how you operationalize it:
I (and many economists) prefer measures of consumption (in)equality, because people don't eat money. Presumably income is only a means to the the end of consumption.
Though to be honest, I suggest we should care much more about the absolute welfare of poor people than about whether rich people have slightly more than they did yesterday (ie inequality).
> It relates to economic models insofar as said models are used to justify the persistence of certain inequalities in society.
Not quite. Models only explain relationships between parameters.
Moreover, inequality is a meaningless concept that is the posterchild of how the goalpost is kept moving by populist politicians. It's meaningless in its definition, as it is kept very maleable to fit the argument, and it's meaningless in the conclusion, as there is no problem in having someome earning more than his neighbor.
Inequality within countries is increasing, and is more directly connected to experienced disutility (though media saturation from one country to another can also make inequality b/w coubtries a factor in experienced disutility.)
A problem with naive economic analysis is that it tends to pretend that absolute material wealth is the prime determinant of experienced utility (and consequently that disutility is mostly driven by absolute deprivation), which while true in the most abject poverty isn't true beyond that level.
Why would you think so? Inequality means wealth inequality, it does not measure consumption. There are still people starving in the world; that is because they cannot afford to buy food, not because Bill Gates and Warren Buffet are eating 1000000x more food than the average person.
reply