The rapid economic advance that we have come to expect seems in large measure to be the result of this inequality and to be impossible without it... new things will often become available to the greater part of the people only because for some time they have been the luxuries of the few.
In sport of this perspective I would like to discuss computer technology.
I am writing this out home on my computer. The technology in it was probably available many years ago, perhaps 5 to 10. During that time frame some rich people purchased it and operated computers superior to all most all others of the time. Today they are probably running computers that I may afford in several years. The point being that when they entered the market they drove down the price through economies of scale. This made the product more affordable and even more slightly less rich people entered the market. This process repeated until eventually enough people entered the market and I was able to purchase this computer myself. In turn people like me though economies of scale again will reduce the price further more so even poorer people will enjoy computers of equal value. Some might call it trickle down economics.
I expect to be able to purchase the equivalent of a top of the line computer today in the future for the same reasons. However, lets suppose our society becomes more "fair," suppose through "progressive" taxation we all where made to have a much more equal standard of living what would happen? If we had no rich to purchase todays top line computers who would drive the quantities through the factories to further reduce price and stimulate even further more orders until the price drops to a level I would purchase at? If there where no rich people to buy dvd players ten years ago would I be able to purchase one now?
This cares over into all sort of real life government policies. I am very thankful for the rich and I hope the wealth inequity continues to grow regardless of whether I am at the top or at bottom of the economic ladder.
You would have to agree that income inequality is a social problem that has bad outcomes. Any society that has a large gap in income between the top and bottom eventually try and "correct" this. I think it is a basic human trait. Now, I don't know if America has a problem with this yet but you do hear pundits talking about it. Even if they are wrong we all like thinking we are victims of an unjust system. Once you get enough people mad that can be an issue.
ReplyDeleteI would only agree there is something to "correct" if the top is using coercion to get there. Example: slavery. Otherwise the rich are only serving the rest by trying out, selecting, and reducing the price of new ideas, goods, and services.
ReplyDeleteWouldn't you also agree, that the spread of wealth or sharing of it, should not be established by hefty taxation or any political policies, rather, by establishing economies of scale, providing lower-skilled jobs AND charitable giving? This gives the less fortunate a fighting chance at increasing their overall social welfare.
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