I see inequality not as something that should be abolished entirely but something that should be dealt with differently. I do not believe capitalism inevitably drives inequality ad infinitum but that capitalism should be more inclusive of welfare systems and the meritocratic shunning of those who don’t succeed needs to disappear. Instead, dignity needs to be restored to everyone, so that inequality can occur but those who aren’t at the top don’t feel as if they are disenfranchised or ignored. Socialism’s flattening of inequality is not a practical way of solving inequality as without it, there are no incentives to innovate and grow business and capital markets, which the world economy needs to develop. Inequality is an inherent part of the human structures and has been through evolutionary development — there were those who led and those who straggled. This is important because it shows us that the default was never perfect equality nor would that have been the goal worthy of pursuit. However, early hominids may have done a better job at supporting their stragglers than the modern US has. Studies have shown that flat hierarchical structures can struggle under uncertainty as there is no definitive decision making process or leadership. As Matthew Syed points out in reference to Google’s failed attempt at ridding themselves of managers, ‘people desire a dominance hierarchy when there is uncertainty’. Instead of complete equality he argues, what is needed is cognitive diversity. However, it is also this desire for hierarchy under uncertainty, along with the meritocratic hubris of the winners and humiliation of the losers, that has driven the populist affinity for strongmen leaders and the broader recognition of their plight. Democracies only function because a small group of ‘representatives’ (sometimes) manages to make good decisions. But when you think about it, if say 51% gets a government — or representative for that matter — elected, the 49% doesn’t get much say. That isn’t equality, but a reasoned tempering of inequality on scales that wouldn’t be able to function properly if it wasn’t done. This is the same in economics — there will always be and will need to be inequality to some degree, but not necessarily the inequality that is apparent in many nations today. Around the world inequality has been rising at an unacceptable rate, to the point where the richest 1% have earned more than the entire combined bottom half of the global population over the last 25 years. In the US Land of Opportunity, the Gini Coefficient — a measure of income inequality – is the highest among any Western Liberal Democracy, and those born in 1980 have just a 50% chance of making more money than their parents, compared to 92% in 1940. It is clear that the promise of unlimited social mobility and the ability to ‘make it if you try’ is a relic of the past. To go forward, societies need to recognise this and instead of promising an endless meritocratic fairytale, recognise that some people make it and others don’t, and those who don’t must not be shunned as ‘losers’ but supported with dignity of work and unstigmatised welfare. It is the idea that we are responsible for our own success that on the flip of the coin tells us that we are also solely responsible for our failures. This is what drives the people who have not made it to ‘the top’ to cling on to populist promises and simultaneously caused many to turn a blind eye on those who have not gained from the neoliberal globalisation project. We are not entirely responsible for our successes, nor is there any moral desert or social value in the wealth or income we attain. In the words of Frank Knight, ‘having talents that enable me to cater to market demand is no more my own doing than inheriting valuable property’. This does not mean — as some people would interpret it — that no wealthy person has a right to anything they earn. Instead, it means that this does not constitute a moral or ethical claim to their wealth. This is the small but important difference between ‘deserved’ and ‘entitled’. John Rawls suggests that according to the ‘difference principle’ and the hypothetical consent of collective obligations, rather than punishing those with talents, redistribution must be used to ensure the less fortunate benefit from the success of the more fortunate. Nor is there any evidence that lowering taxes for the rich benefits economic growth or ‘trickles down’. In fact, many billionaires including Elon Musk, Bill Gates and Warren Buffett have accepted and even promoted such ideas, even when it would ostensibly make them worse off. Nobel Prize winning economist couple Abhijit Banerjee and Esther Duflo debunked the idea that higher (but still reasonable) taxes reduces incentives to work hard and create new jobs, leading to Gates saying that they had only given him ‘more reason to advocate for a tax system in which the rich pay more taxes than we currently do’. Taxes on the wealthy are much lower in the US than in other developed liberal democracies such as Australia and France — so arguing for a better welfare system, particularly in the US, really is not that far fetched. Nor is it an attack on capitalism in any way. Capitalism is the only reason welfare states can function and provide the capital to those who need it. The famed nordic welfare states rely on a very capitalist market economy to provide the services they do — much as Rawls describes. As such, a capitalism with less inequality doesn’t require an overhaul of the system, but rather a shift in outlook. Ultimately, moderate inequality can exist as long as those who are at the bottom can be supported to a reasonable extent and we recognise that someone’s societal value is not determined by their wealth.
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I concur 😀. Optional preferential voting is better than “first past the post”. Interesting that only Ireland, Malta and Australia do this. Why not elsewhere?
https://en.wikipedia.org/wiki/Optional_preferential_voting?wprov=sfti1
https://youtu.be/PaxVCsnox_4