Are Income And Wealth Inequality Inevitable?

Thanks to the Occupy Wall Street slogan We Are The 99%, growing income and wealth inequality in the United States was a source of much discussion in 2011. That talk has largely disappeared now, replaced by the great distraction called the presidential political campaign. Andrew Hacker recently wrote an interesting article on this subject called We're More Unequal Than You Think in the New York Review Of Books. In a review of some books about the benefits of a more equal distribution of a society's income and wealth, Hacker started off with this provocative text—

Imagine a giant vacuum cleaner looming over America’s economy, drawing dollars from its bottom to its upper tiers. Using US Census reports, I estimate that since 1985, the lower 60 percent of households have lost $4 trillion, most of which has ascended to the top 5 percent, including a growing tier now taking in $1 million or more each year.

Some of our founders foresaw this happening. “Society naturally divides itself,” Alexander Hamilton wrote in The Federalist, “into the very few and the many.” His coauthor, James Madison, identified the cause. “Unequal faculties of acquiring property,” he said, inhere in every human grouping. If affluence results from inner aptitudes, it might seem futile to try reining in the rich.

All four of the books under review reject Hamilton and Madison’s premises. All are informative, original, and offer unusual insights. None accepts that social divisions are inevitable or natural, and all make coherent arguments in favor of less inequality, supported by persuasive statistics.

Are income and wealth inequality inevitable as the nation's founding fathers believed? Or are social divisions based on wealth not natural and inevitable? Making coherent arguments in favor of less inequality and not accepting that inequality as inevitable is all well and good, but it's a lot like closing the barn door after the horse has left. If income and wealth inequality are not natural and inevitable, why are people (whom we might call Progressives) constantly forced to argue that we need to achieve (or return to) a state of less inequality? Karl Marx comes to mind, but many, many others have made the same argument over the course of human history. Indeed, historical experience makes it quite clear that great income and wealth inequality are the norm in complex human societies, not the exception.

Under this view, the rise of the middle class in the United States in the prosperous decades after World War II looks more and more like an anomaly, and the fall of that middle class over the last three decades signals that we have returned to a more normal state of affairs. Indeed, this swing to a more unequal society calls the very notion of Progress into question, which is why this issue is so controversial. The Progressive believes in the possibility of permanent improvements in the Human Condition. A long-lasting, more equitable distribution of the wealth in human societies would certainly qualify as an improvement. Yet that is not what we see.

The rest of Hacker's review covers the evidence that great income and wealth inequality exists, which is screamingly obvious, and the benefits greater equality would bring, which are also screamingly obvious unless you're one of those who extols the virtues of slave laborers living hand to mouth. The rich (or Erin Burnett) like to blame the poor for being poor, citing their lack of initiative (sloth) or lack of aptitude (innate inferiority) or saying that poverty builds character. Blaming the victim is a favorite psychological ploy of those who hold an indefensible amount of wealth amidst a rising tide of poor people. And poverty is not a virtue; it is merely hardship.

I thought you might enjoy this data from Hacker's review.

The issue is complex, but ever since the Agricultural Revolution and the domestication of animals in the early Holocene, all human societies of sufficient size and complexity have been characterized by great income and wealth inequality. All socialist (communist) experiments to fix this problem have failed. Jared Diamond's Guns, Germs and Steel includes a chapter called From Egalitarianism To Kleptocracy which explains (to my satisfaction) why the problem is intractable. There is no reason why the United States should be a sacred exception to the rule, and it is not.

Comments

[Wanooski]

Income and wealth inequality are unavoidable, in a society that allows private ownership of capital and the monopolization of resources that a land base has to offer, again; giant extortion racket.