Income Inequality

This subject just won’t go away. A lot of politicians, pundits, and activists keep complaining about income inequality. Often they seem to be complaining about wealth distribution, an entirely different thing, but I suspect this is just a reflection of their not very rigorous thought process.

Economics teaches that capitalism leads to two related things: improvements in everyone’s standard of living (but especially for the poor) and unequal distribution of wealth. Capitalism is far and away the best thing to ever happen to poor people, but the price for that is unequal distribution of wealth. That’s just how it works.

The only reason that the notion of “fixing income inequality” gains any traction at all is because of the sorry state of economic understanding among the general public, coupled with the perpetual need of politicians to push any popular cause, no matter how destructive or nonsensical.

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One response to this post.

  1. […] income inequality problem – Apr. 7, 2011Mouse here forRelated LinksRelated LinksIncome Inequality Tags: high-income americans, how to fix the nation8217s income inequality problem 8211 apr 7 2011, […]

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