Earlier quoted context omitted.
It depends which model you're looking at. Fair wealth distribution is a sustainable model. If Norway behaved like the US, most of the money from oil would probably go to a small handful of privileged people.
I've always operated under the assumption that equal wealth distribution ('fair' is a loaded word) has an economic cost, since inequalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. Therefore I've assumed that relatively equal wealth distribution is only sustainable when there's a whole lot of wealth to go around. I could be wrong, though. Can anyone come up with an…
I've always operated under the assumption that unequal wealth distribution ('fair' is a loaded word) has an economic cost, since equalities in wealth (+ economic freedom) encourage economy-expanding activities like entrepreneurship. [removed the last point as it is fair one on its own, but is not entailed from the previous statements.]
I could be wrong, though. Can anyone come up with an example of voluntary equal wealth distribution in a country relatively lacking in resources?
There is a game-theoretic problem with voluntary wealth distribution. I'm happy to give up my income if all my peers do, but I'm really not inclined to do this if my peers don't.
Anyhow, the Anglo idea-sphere seems to have a glut of free-market-is-the-best notions, and a vacuum where the counter-arguments lie. Here's one, for you, then: if there is more equal wealth distribution, then more people have more money (by definition), which almost always means that more people are better educated and have more economic opportunity. This means more people are free to invent stuff, to start businesses, and to generally innovate. It takes a particular level of education and economic opportunity to have the human capacity to support an Apple or a Google -- a level of education that is possessed by, conservatively, less than 20% of the population. Much of the American population is simply not equipped, by age 16, to have said opportunity. Imagine, then, what might happen if we doubled the size the base of people that could start/support an Apple or a Google -- wouldn't this lead to higher GDP and overall wealth?
The parent's inequality=economically-good assumes that the population's entrepreneurial spirit is static, and not affected by means or opportunity (while, granted, one can succeed in spite of a lack of opportunity, it does not follow that added opportunity will not encourage entrepreneurship or innovation).
My contention, thus, is:
more equality ==> a greater number of empowered people ==> more and better businesses and economic activity ==> more wealth.