Economic Inequality: The Simplified Version

when people say that inequality is bad, what they are talking about is that it is bad that, even though average incomes grew a lot, incomes for the lower brackets grew a lot less than incomes for the higher brackets. As you can see from my link, even taking out successful startup founders ( by not looking at 1%) shows the same trend.

It is a separate discussion whether or not startups increase income inequality ( just because startup founders get rich, it doesn't mean overall inequality has to increase because their products could raise average incomes in other brackets by raising productivity, for example ).

But, focusing on startups is just not terribly relevant for the inequality debate, again, as demonstrated by the fact, that there is a lot of inequality in the 60%th percentile vs 20th percentile, which has nothing to do with startups

Out of the usual reasons people encourage you to either found or work for a startup, "get rich" is not the primary motivator, and "get richer than other people" certainly isn't. (To claim that "get rich" implies "get richer than other people" is to invoke the pie fallacy, which Paul Graham debunked recently.) "Change the world," "have more freedom / creative control than a traditional job", etc. are, and those don't seem to require economic inequality.

For instance, Paul Graham writes in http://paulgraham.com/mit.html :

"For nearly everyone, the opinion of one's peers is the most powerful motivator of all—more powerful even than the nominal goal of most startup founders, getting rich. [...] Even if you start a startup explicitly to get rich, the money you might get seems pretty theoretical most of the time. What drives you day to day is not wanting to look bad."

If you want to imagine startups not causing economic inequality, one approach is a radical restructuring of society, probably involving heavy taxes, as I suggested in a comment previously. But another simple one is to have more people do startups, and to explicitly invest primarily in people and communities that don't have other easy routes of getting rich.

The argument is over economic inequality which I believe most take to mean wealth inequality, not income inequality.

Do you think that technology alone can't produce extreme income inequality? Why?

Of course not. You need people using the technology as well. Extreme inequality results from the simple fact (as exhaustively supported by Piketty) that r > g. Capital, by definition, is technology.