Economic Inequality: The Simplified Version

> that completely ignores negative side effects

What I'm saying is that if you take all the possible wealth distribution curves, the efficient frontier probably won't be at the extremes. That's not ignoring the negative side effects, rather it's cost-benefit analysis.

I don't buy the assertion that startups increase economic inequality. I mean, I suppose some of them might, but a few people getting rich by producing something of value doesn't equate to an increase in general poverty. A startup might even improve economic inequality. Depends what it does. The whole argument seems to boil down to a fear that improving the general welfare might involve slamming the brakes on innovation, but I don't see anyone making the argument that we should do that. If anything, poverty, and its associated problems, is itself a huge brake on innovation. How can you innovate if you're worried about feeding your family tomorrow? Wouldn't people be more likely to take risks like startups if they were less worried about the downsides, like losing their health insurance? Wouldn't there be more innovation if people didn't have to worry about starving because of going without a steady income for a couple of years?

I cleared up the language, hope it makes it more obvious what I mean.

Economic inequality is bad per se. Here's a good paper on the effects on economic stability of income inequality:

https://www.policyalternatives.ca/sites/default/files/upload...

Income redistribution is a valid goal of taxation -- not because the government needs to tax the rich to fund the poor (the government can fund whatever it wants since it issues the currency) but because tax policy can reduce the types of extreme inequality that cause instability.

When people become wildly rich, they often misattribute that success to their own hard work, ignoring the social conditions that made their success possible, and the role that "good fortune" plays in all such success stories. This talk by Michael Lewis is an excellent summary of why this "meritocratic mindset" is dangerous:

https://www.youtube.com/watch?v=CiQ_T5C3hIM

So yes, we should definitely address income inequality directly through tax policy.

We should also address the root causes of poverty, which are primarily lack of government will to pursue full employment since the Friedman/monetarist view of macro economics won out over the Keynsian economic theories during the supply side inflation caused by the oil shocks in the 1970s.

Power corrupts. Absolute power corrupts absolutely. Money is power.

It's a very complicated issue. The Capitalist class does deliverer Capitalist development. But at the same time it immediately captures most of the value that it delivers leaving a system of servitude called employment... and systems which are homogenous but yet are functional in the form that is found acceptable to its logic of production and consumption through efficiency.

On the other hand the Capitalist class because it has money and therefore power, at times acts in corrupt ways destroying the environment, taking away people's rights, making things unnecessarily hard.

Given its fight with Communism, it was not as if it played it cool, sitting back and watching and saying, maybe Communism can do certain things better.

Instead it immediately went to war demonizing and fighting it as much as it could.

It seems as if the Capitalist class can only be subdued when it feels that its own game is over. And it seems like we have to let it do just that.

People are greedy and have many social problems. This was one way of ordering them. There are a million other ways of ordering them. Whose time will soon come.

Just sit back and watch the show.

Paul is fan screaming for the home team, when the game is over and they've won. But soon there will be no more games. Their time has come and gone.