What Is Economic Inequality?

Where there is anything like an equal distribution of wealth—that is to say, where there is a general patriotism, virtue, and intelligence—the more democratic the government the better it will be; but where there is a gross inequality in the distribution of wealth, the more democratic the government the worse it will be; for, while rotten democracy may not itself be worse than rotten autocracy, its effects upon national character will be worse. To give the suffrage to tramps, to paupers, to men to whom the chance to labor is a boon, to men who must beg, or steal, or starve, is to invoke destruction. To put political power in the hands of men embittered and degraded by poverty is to tie firebrands to foxes and turn them loose amid the standing corn; it is to put out the eyes of Samson and to twine his arms around the pillars of national life.

- Henry George, Progress and Poverty, X, 4

Podcast of the Day

Why do so many people object to inequality? Is there something intrinsically wrong with it? Is it wrong because it has bad consequences? Or is there nothing wrong with it? Harvard philosopher Tim Scanlon discusses these questions with Nigel Warburton in this episode of the Philosophy Bites podcast.

Listen to Tim Scanlon on What's Wrong with Inequality?

Video of the Day

Short Article of the Day

A world where a few people have most of the wealth motivates others who are poor to strive to earn more. And when they do, they’ll invest in businesses and other areas of the economy. That’s the argument for inequality. But it’s wrong.

Our study of 21 OECD countries over more than a 100 years shows income inequality actually restricts people from earning more, educating themselves and becoming entrepreneurs. That flows on to businesses who in turn invest less in things like plant and equipment.

Inequality makes it harder for economies to benefit from innovation. However, if people have access to credit or the money to move up, it can offset this effect.

We measured the impact of this by looking at the number of patents for new inventions and then also looking at the Gini coefficient and the income share of the top 10%. The Gini coefficient is a measure of the distribution of income or wealth within a nation...

Continue reading Chris Doucouliagos' article: Don't listen to the rich: inequality is bad for everyone

Further Reading

Distributive justice is often considered not to belong to the scope of economics, but there is actually an important literature in economics that addresses normative issues in social and economic justice. A variety of economic theories and approaches provide many insights in these matters. Presented below are the theory of inequality and poverty measurement, welfare economics, the theory of social choice, the theory of bargaining and of cooperative games, and the theory of fair allocation. There has been a good deal of cross-fertilization between these different branches of normative economics and philosophical theories of justice, and many examples of such mutual influences are exhibited in this article...

Continue reading the Stanford Encyclopedia of Philosophy article on Economics and Economic Justice by Marc Fleurbaey

Bonus Webcomic

On A Plate - The Pencilsword

Related Topics

 CapitalismEconomics | Equality | Feminism | Globalization | Justice | Political Philosophy | Sociology

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