It is well known that wealth inequality in the USA and UK
has grown greatly in recent decades. E.g.
the index of inequality in disposable income over 1975-2009 has risen in both
countries:
UK: from 0.25 to over 0.34
US: from 0.31 to 0.37
I do not see wealth differentials as intrinsically wrong as
long as those at the bottom of the ladder are above a minimum standard of
living. If people want to devote their lives to building up personal fortunes,
with multiple yachts and houses, that to me is their misfortune as slaves to
materialism. Pursuit of wealth for its own sake is destructive of the
individual and the society around him or her. Becoming wealthy as an incidental
part of seeking to build up the world or add value to it and its people is just
something that happens, though the degree of wealth is not in proportion to the worthiness of the
activity. People who acquire wealth this way presumably enjoy it. On the other hand there are children living on rubbish tips in India who seem happier than most westerners living in luxury.
But these mounting and extreme inequalities are morally wrong,
economically unhealthy and socially divisive, a consequence of obsession with
gain per se. Society cannot exist without hierarchy but it is not
acceptable to consign millions of people to a life without hope, unable to earn
a living, and in a constant state of insecurity about housing, food, health, elderly
care and the education of their children. Such a society does not
reflect the values of Christ.
Insight into the problem of wealth inequality in the
Anglo-American world and how to deal with it emerged from a recent one page
book review by Richard Lambert, former editor of the Financial Times. It
appeared in the August 2012 issue of Prospect and the book in question is
The Price of Inequality by the Nobel laureate Joseph Stiglitz.
This is what I got from it:
Inequality is happening because
the new rich use their political power to gain a larger share of wealth
IT increases the productivity of those who can use it while replacing the jobs of those who can’t
globalisation increases and therefore cheapens the supply of labour
Joseph Stiglitz |
Moreover, as large wealth differences set in it leads to a decline in social mobility which in turn leads to fewer talented people getting into positions where these talents can be utilised for wealth creation.
Thus large inequalities of wealth mean lower economic efficiency, to the detriment of all. They also have bad social consequences. ‘Stiglitz describes a grim future in which society is
divided into haves and have-nots: the rich living in gated communities, the
rest in a world marked by insecurity, poor healthcare and mediocre education.
At the bottom are millions of young people alienated and without hope.’
Three remedies are suggested, particularly for the UK but no
doubt they have a more general relevance to the USA and other nations :
/1/ help young people in houses where no one works to find their way into work
/2/ increase the incentives to take on and train British workers
/3/ reform the tax system, making it simpler, more progressive and free of tax havens
The most just economy is also the most efficient and I don’t
believe this is coincidence. It is the way reality has been set up.
John
Reach me at cosmik.jo@gmail.com