Inequality

Economic Inequality: A Simple Rebuttal

Paul Graham argues that "economic inequality per se is not bad." http://paulgraham.com/sim.html

Beyond a certain point this is not true.

In a state of nature, everyone is basically poor because no one cooperates. But this isn't bad for
everyone. If you look like this guy (http://nerdist.com/wp-content/uploads/2015/06/Dwayne-Johnson.jpg)
you can take anyone else's stuff, be a warlord, and generally have your way with the world.

Over the centuries we've developed a Social Contract in most places. We protect the basic rights
of everyone, get a little cooperation going, and everyone benefits. Even The Rock who, instead of
being a Warlord, can have a nice career as an actor instead.

The trick is that everyone needs to participate in their fair share of the gains. This is
because everyone is participating in creating the society in which some people get fantastically
rich. There's no way these guys (http://cdn.financebuzz.io/images/2015/06/09/billgates_warrenbuffett.jpg)
make it back in the caveman days. Someone would beat them over the head and steal their stuff.

So if inequality goes too far the people on the bad side of the equation start to wonder if they're
making a bad deal. They start to wonder if it's time to sharpen their pitchforks and go hunt down
Marie Antoinette. We can argue about where exactly that line is, but in America today there are
definitely rumblings that we've either passed it, or we're really close. There's a reason that
Donald Trump is in the news so much right now and this is it.

So when Mr. Graham says that "economic inequality per se is not bad" he is right, to a point. But
beyond a certain point he is absolutely wrong.

(Critiques welcome. I wrote this in 5 minutes.)

I have found myself in the same interesting position of "So when Mr. Graham says that "economic inequality per se is not bad" he is right, to a point. But beyond a certain point he is absolutely wrong." after reading.

It's impossible to run with a positive slope and an upper limit. With this graphed, it seems obvious that inequality increasing is not positive. I am unsure if it's possible to decrease inequality elsewhere while allowing startups to continue producing inequality. The only option other than 0 net change is a uniform lack of change, which would be totally impossible to shift into from where we are now (ignoring wether we should).

I'm sure my ignorance in this debate and it's economic prerequisites shows, but I still want to thank you for a thought provoking gist.