The headline here is a bit odd - it seems self-evident.
If we define the poor as a group which relies on regular labour to survive, and the wealthy as a group who does not, then many income sources of the wealthy dry up if the poor cease to exist.
One fairly obvious example is renting. The existence of a rental market is not undesirable. People will always want to live in a place temporarily, as a trial, as a holiday, as a stepping stone. But I'd imagine a huge majority of the rental market exists solely because the tenants either cannot afford, or have too little financial security to risk a mortgage.
More broadly, the cost of labour is reduced by the existence of poverty. The minimum wage is an attempt to alleviate this - in a world without poverty, a minimum wage would be unnecessary.
The question is whether we can do better. Axiomatically wealth inequality is good for those on top, at least in a direct sense.
Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing. If someone does something amazing and unique, they should be able to profit from it.
Think about a world with perfect wealth equality and you'd have the opposite sort of problems - like it or not, capitalism and yes, wealth inequality have brought more people out of poverty than any other system in the history of the planet. More of those poor people in 1st world countries are fighting to pay for high end smartphones than to pay for food these days. It's far from black and white, but China is an amazing recent example of this. Going from an agricultural nation of the dirt poor to a highly industrialized nation with a decent middle class in the span of a few decades.
I think the question we should ask ourselves is not how to eliminate inequality, but what baseline level of services and opportunities we want to give people at any stage in their life, regardless of their competitiveness and productivity, including when they're otherwise poor and a net drain on society.
In other words, is stable housing a basic right or is it a luxury? If it's a basic right (and/or a net positive if it gives people the chance to bootstrap themselves into higher earnings), then we should strive to increase the reach and quality of tax-funded government housing programs - together with other baseline programs, such as public education, social services, etc. Or if you're a small-government person, substitute "tax-funded" with "charitable" and make it dependent on individuals' goodwills.
If it's a luxury then the status quo seems acceptable - markets need to be able to pick their customers, and baseline services are losing products unless the "exploitative" pricing makes up for it.
Abolishing inequality isn't desirable at all, but the range of inequality doesn't have to go from 0 to billionaire. We can provide a baseline that still leaves enough incentive for people to work their way up but is decent enough to live with dignity, greater than 0. Soviety provides some of that today. Discuss where to draw that line and who, taxpayer or otherwise, can provide it. A functioning society is never completely equal or completely without minimum support, always somewhere in between.
If the top end is short of "billionaire", I think you get a world without Tesla, Space-X, Blue Origin, the Bill and Melinda Gates Foundation, and several other things that I believe are valuable and worthwhile.
You may argue that the cost is too high and that we'd be better off without those things.
I wasn't arguing for lowering the top end, I think it's fine as is.
A broader bottom end may mean that it gets a bit harder to make it to that point, but in practice that's not where most of the resources for providing more/better housing would come from anyway. Ambitious people will find a way to make it to the top, while putting their wealth into self-directed charities and moonshot companies instead of government-controlled tax revenue. That's not necessarily a bad thing, and it can and will continue either way.
In the end it's the decision of the broad public, the "middle class" if you will, to determine how much we want to collectively spend on housing security, and how to create mixed-income communities to facilitate upward mobility and avoid creating poor-people slums or monocultural wealth enclaves. The main ingredient for that is (valuable city) land, so I don't believe technology can do much about improving things too much. Nonetheless we always have the option to contribute to affordable housing, universal basic income, yadda yadda. I don't think that's mutually exclusive with high-profile billionaire projects.
> I wasn't arguing for lowering the top end, I think it's fine as is.
Sorry. I was reading my own bias/worldview into it and taking as a given that there will always be people with negative net worth (debts in excessive of assets). You were clear enough in speaking to that as unnecessary, but I read right through that without really internalizing your point of view. (I still believe in any system where credit exists that there will always be some net debtors, but that doesn't give me the right to argue against a point of view you weren't espousing.)
Maybe in a more equal world were people would not be whipped, I mean "incentivized", into working all the time, a larger portion of the population would be able to contribute their passions to society than just the elites of today? Hence maybe surpassing the results of the current aristocratic version of this.
>Wealth inequality is good for all in a lot of ways, so I hate it when people talk about it like it's an inherently bad thing.
It's not the wealth inequality that's good for all, it's the capitalist incentive structures. The wealth inequality itself is a negative side effect of those incentives, because it represents an inefficient allocation of resources in terms of utility created.
The question is to what extent the efficiency benefits of capitalist incentives offset the inefficiencies of the resulting wealth inequality. Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy. If you put wealth inequality in these terms, I think you'll find most people - especially those who've been exposed to other systems are fairly accepting of it.
> Personally, I think the extent of inequality we permit is far far more than is necessary to incentivise wealth creation. People would still want to be rich even if the alternative didn't suck.
I see where you're coming from but I think there's definitely a fine line to tread here - if you push this too far you could argue that what you're doing is actually just serving to slow down the march of progress in society and make those poorer individuals lives much worse.
Think about it like this - would you rather be upper class, one of the richest people in the world just 200 years ago or middle class today? The medical and technological advances are so enormous. To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
To use an extreme example: Sure, maybe you don't feel that medical company shouldn't be raking in so much from a unique patented drug - but what if their next creation with that money is a cure for cancer. These are the risks you take when putting such limits on this system.
Now, that's not to say I'm strictly anti-regulation or anything, just that it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more. And if you do things like have a 90% tax rate on the uppermost bracket like some places have, well, don't be surprised when you wind up killing off that kind of thing.
>Wealth inequality is the intended effect of that incentive structure though, not a negative one. The idea being that those who provide more to society - more unique skills, better creations, etc should be more wealthy.
Wealth inequality is the mechanism by which the incentives are supposed to work, but the goal is still the incentives, not the inequality itself. If it were possible to achieve the same without inequality that would be better.
But you say they "should" be wealthy, are you suggesting a model of morality that prefers rewarding merit rather than improving outcomes (even in the long term)?
>To hamper them in any way would arguably make many lives much worse. And what you're suggesting poses that risk. We could lose out on many such advances.
Or we could find out that the excessive inequality was unnecessary, and that we've been giving people shitty lives for no good reason. Or we could even find out that happy people are far more productive than people terrified of poverty. These possibilities are just as much a risk as your suggested outcome.
Personally, I'm inclined to think it would be far better for technological progress to ensure every person has the resources to educate themselves as much as they want without worrying about survival. And I don't think you need to offer people loads of money to give them an incentive to try and cure cancer.
> it's a lot more of a delicate balance than many people make it out to be. You need to be careful to keep those top performers extremely motivated to do more.
At a certain point, inequality can start to act against motivation, because the richest will continue to live in luxury almost regardless of what they do. Higher taxes (and ideally wealth taxes rather than income taxes) can actually encourage them to keep expending effort so they can maintain their standard of living.
If we define the poor as a group which relies on regular labour to survive, and the wealthy as a group who does not, then many income sources of the wealthy dry up if the poor cease to exist.
One fairly obvious example is renting. The existence of a rental market is not undesirable. People will always want to live in a place temporarily, as a trial, as a holiday, as a stepping stone. But I'd imagine a huge majority of the rental market exists solely because the tenants either cannot afford, or have too little financial security to risk a mortgage.
More broadly, the cost of labour is reduced by the existence of poverty. The minimum wage is an attempt to alleviate this - in a world without poverty, a minimum wage would be unnecessary.
The question is whether we can do better. Axiomatically wealth inequality is good for those on top, at least in a direct sense.