> The most common mistake people make about economic inequality is to treat it as a single phenomenon. The most naive version of which is the one based on the pie fallacy: that the rich get rich by taking money from the poor.
For most of us, our largest single expense is housing, whether that be rent or mortgage repayments. Supply of housing is quite inelastic, something that should be clear to all of us who live in California, New York, or London.
By driving up the costs of homes, those of us who have more to spend are driving those who have less further out from the urban centres where the jobs are found, reducing their leisure by forcing them to spend more time commuting instead of with their families.
While the cost of manufactures has been falling as the economy grows, food - the other major expense for the poor and middle class, has also seen much higher inflation than the headline figures.
Entrepreneurial progress is a great thing. But we need to recognise that for many, the 'pie fallacy' really isn't a fallacy. For someone on the median income, a reduced share of total earnings is materially increasing deprivation.
The biggest thing we could do to increase entrepreneurialism would be to redistribute more and make more people feel secure. It's much easier to take risks when you have the security of parental wealth.