What are we really talking about when we discuss income equality within society? Does that really mean that it doesn’t matter how much money we all make as long as it’s the same? All poor is the same as all comfortable, or all well off?

This person is wondering whether or not a baseline “good” quality of life wouldn’t be more effective than striving to make income the same across the board – or at least, effective enough that no one would be struggling and unhappy on a daily basis.

CMV: Good baseline quality of life should be the target in society, not income equality.

I believe that society should aim to have a good baseline quality of life, rather than income equality.

First of all, if the baseline is good, who cares if some people far exceed that baseline? Why does it matter how much income varies if the lowest in society are still OK?

Secondly, the richest in society, often referred to as ‘the 1%’, often use their income the most productively, investing in new business ventures which boost the economy and benefit everyone.

Finally, if income equality is the target, everyone being equally impoverished would be considered a good outcome. However, if a good baseline is the target, everyone being at least OK financially would be considered a good outcome.

Prepare to change my view on this: I’d love to hear your opinions on this one.

What does Reddit think? As usual, there’s a great conversation going and all 14 of these people have good thoughts on the matter!

14. Is happiness the goal?

Regarding the baseline being good, people won’t care, that makes sense assuming the baseline is a fixed point, how would that baseline be defined? Is it just enough to eat? Does it mean owning your own home? Does it mean earning above a certain amount? Is that fixed or does it depend on your geographical and socioeconomic circumstances?
I would probably judge it by a measure such as Gross National Happiness (GNH). And there probably would be a fixed baseline level of income used to calculate the baseline as well.

How often do they actually do this? And is this compared to how often they spend money lobbying or using corruption to further their own goals as opposed to society as a whole?
In capitalism, people advance their interests by doing more business and investing, which gives them more money. More business leads to a larger economy, which is good for everyone. Furthermore, these new business ventures are most profitable when the product derives a significant benefit to the consumer. And so, they are good for society as a whole.

People outside of the 1% cannot have as much of an impact as they do not have the funds to do so, so I think you have missed the point.
Totally agree. The only thing I would add is that the people who have a lot of money are the people who are good at making money, which they get by doing business with others, which is good for society, as explained above.

And when you mention that if income equality is the aim, then everyone being impoverished would be considered a good outcome, I agree, but that’s only theoretically. When you consider that the actual outcome would more likely be no one is impoverished. The idea is to spread the wealth, not remove it, the total wealth available hasn’t changed, just moved.
Do you have an example of this having worked in practice?

You have not yet changed my view, as your main point seems to be that less income inequality leads to a better baseline quality of life. And therefore, that is still the target, which is what I am suggesting.

13. An excellent argument.

I’m going to take these out of order.

>> everyone being equally impoverished would be considered a good outcome.

This is a strawman. There is no meaningful constituency for the argument that the *only* goal should be income inequality. I believe that income and wealth inequality are particularly bad problems in our society, but that doesn’t mean I think that any way of addressing that would be good, because other things are important too. The most efficient way of achieving that one goal is, obviously, the destruction of the human race, but no one is advocating that as a solution to inequality for this reason.

>> the richest in society, often referred to as ‘the 1%’, often use their income the most productively, investing in new business ventures which boost the economy and benefit everyone.

I believe what you are referring to is what is called the marginal propensity to save. It is true that the wealthy have a higher propensity, and marginal propensity, to save (meaning that as a proportion of the money they have/make, they spend less and save/invest more). However, this is not necessarily a good thing. Consumption is necessary for the economy as well. Many of the recent economic problems we have had are due to a demand deficit, i.e. consumption is too low. How many industries are millennials killing these days? This is largely because younger people don’t have much money. It is also independently clear that investment is too high. I work in finance, and in the profession it has been clear for a while now that there has been a massive shift in power from investors to companies. The IPO boom, asset bubbles and prices, the rise of unicorns, multiple share classes, SPACs, etc all are indicative of the fact that investors, the ones who supply the money, have decreasing negotiating power relative to those supplying vehicles for that investment (that is, companies), and a central reason for this is a *massive* increase in the supply of investment dollars. We have too much investment and not enough consumption. The obvious solution to this is to move money from investors to consumers; that is, down the income/wealth distribution. Now I am not claiming that this is the main reason to decrease the income and wealth gaps, but the point is that the current distribution is causing economic problems, even from a mainstream economic perspective, counter to your argument.

>> if the baseline is good, who cares if some people far exceed that baseline? Why does it matter how much income varies if the lowest in society are still OK?

Let’s imagine that we lived in a world where everyone’s needs were taken care of, and still had massive income/wealth inequality of the kind we have today. What would happen is what is happening now. The wealthy would use their massive wealth to maximize their cultural, economic, and political power. They would use that power to increase their wealth, which would increase their power, and so on. We are all familiar with some potential mechanisms for this. They would start and expand wars, give themselves and their companies tax breaks, steal from their employees, strip and privatize the welfare state or whatever exists in its place to support the people, and ultimately society would no longer have such a strong baseline standard of living.

This is in fact exactly what happened to the United States since the post-war boom. Of course there were massive wealth disparities then as well, not to mention massive proportions of the population that were left out of the boom, often intentionally, but the same story can be told for its beneficiaries. There was, for a while, a historically large middle class, but the mechanisms of extreme wealth accumulation and the political power of that wealth have grown in tandem over the last 50+ years to the extent that even that secure middle class existence is increasingly unrealistic for a massive proportion of the population. The point here is that wealth is power, and in a democratic society where we value all people, it is necessary to prevent anti-democratic interests from exerting undue influence over our society, and extreme wealth is the most obvious and powerful such interest.

They are likely to use that influence to support their own ends, usually at the expense of the rest of the populace. We have clear and direct evidence of this in our immediate past. When such powerful interests exist, no societal arrangement is stable that does not benefit those interests.

12. A nice piece of pie.

Larger economies are good for everyone when everyone’s portion of the pie gets bigger as the size increases. How much larger has the economy gotten in the last 50 years compare that to average increase in wages for a non-ceo.

The average persons size of the pie has decreased with increasing economy size. Whats a huge economy worth to society if the average person is no better off than they were generations ago. Bigger is always better.

11. What’s in a name?

‘income equality’ is a REALLY BAD term implying everyone should have equal income (terrible name)

really it’s to combat the wildly UNEQUAL shift that’s happened in the last 60 years, our grandparents enjoyed a robust safety net and good wages because wealthy people were taxed, now they’re not.

the goal is to partially level the field, not completely flatten it. the motivation for this is because the bottom baseline is unlivable, because it all went to the top.

none of this misperception is your fault, it’s a TERRIBLE NAME that would lead any logical person to conclude what you did (equal means equal)

10. People shouldn’t be getting hurt.

The people who it hurts, obviously. If the “economy” gets “bigger” because monopolization increases profits, for instance, that is actually bad for most people. The fact that a company is now able to extract more money from it’s customers due to increased market power is bad, despite the fact that stock prices and even possibly consumption may increase. It’s important to be careful not to make broad generalizations like this, especially when there is only a tenuous connection between the related ideas. The economy and well-being are very much not the same thing.

To give a more concrete example, Medicare for All proposes to essentially eliminate the private health insurance industry by simply guaranteeing healthcare to everyone. The industry value will go to essentially zero. However this would actually be very good for most people, because they would no longer face cost incentives not to seek and receive medical care.

And by the way, you don’t have to think that M4A would succeed in this goal to understand the logic. It is clearly possible that the existence and value of an economic structure can be harmful to the populace relative to certain alternatives.

9. Being more stable would be nice.

Additionally, there is an abundance of historical data that a high level of inequality is indicative of political instability. A value called the Gini Coefficient is a calculation that economists use as a measure of income inequality. A GC of .25 shows low inequality. A GC of .65 would be very high.

The US has gone from about .40 to .47 over thw last couple of decades. That’s higher than any other G7 country. That feels about right as politics in the US has become more divided over that same time span. Inequality is not bad because some people have more and some have less.

It’s bad because those who have more use their resources to exploit those who have less, and that makes overthrowing the government sound like a great idea to the huddled masses

8. Everyone is worse off when things stagnate.

I’ll merely state, a recent study saw that between 1975 and 2015, the growing income inequality meant that people making 35,000 today, are making nearly half as much as they would be had income inequality stayed the same since 1975. They also found that the growth of our economy actually slowed as a result of this.

You are right that the 1% can more powerfully invest, but that’s as an individual. If everybody else had greater access to wealth, they collectively can do much more than the 1% can. As they say, a rising tide lifts all boats, but that rise has to start from the bottom to work its way up.

7. We have a long way to go.

I think it’s also important to consider though, that even if you raise the baseline for everyone else, the ultra rich still have considerably more political and economic power than they should based on demographics alone.

Sure, it would be great if all working Americans made $15 an hour minimum and it would so a lot to better the lives of at least half of working Americans… BUT because of the role of money in politics, we end up with a political system where the policies the vast majority of Americans support do not become law or influence legislation because a small number of interests with exponentially more *discretionary* money pour it into elections and lobbying to undermine the interests of the majority.

That’s why any progress in addressing inequality or even raising the lowest standards in America are such an uphill battle. We don’t make policy based on the results of our representational democracy. We largely make policy based on which industries put the most money into politics and that dynamic never changes as long as 1% of the people hold 60% of the wealth in the country and have far more money to buy influence than anyone else.

6. Humans have certain needs.

First of all, if the baseline is good, who cares if some people far exceed that baseline? Why does it matter how much income varies if the lowest in society are still OK?
Because humans are social animals that seek validation and if one groups of people is constantly denied that validation by being kept at the bottom, that’s rather destructive as it can easily lead to depression and/or aggression.

Not to mention that money entitles you to someone else’s time. Either by buying services or by buying goods that had cost them time and passion to make, so a massive economic inequality also always includes a social inequality with the corresponding tension. Not to mention that it has an influence on democracy as well. If one person like Rupert Murdoch being able to buy an entire media apparatus to push his conservative agenda that’s not the same right to free speech as a poor person standing on a soapbox. The ability to draft laws and write studies supporting your bulls**t or again standing on a makeshift soapbox.

It doesn’t have to be 100% flat everybody the exact same, not everybody needs glasses, prosthetic knees or whatnot, a person doing physical labor needing more food than one working a desk job is stuff that everybody can understand without feeling invalidated, but if one person makes as much as 10000 other people you’re incapable of arguing for that with special needs or special abilities and that leads to tensions.

Secondly, the richest in society, often referred to as ‘the 1%’, often use their income the most productively, investing in new business ventures which boost the economy and benefit everyone.
Not really, paying people to push money around is not productive. Productive is what people actually produce and the most productive work is done by those who receive the least benefit for that.

Finally, if income equality is the target, everyone being equally impoverished would be considered a good outcome. However, if a good baseline is the target, everyone being at least OK financially would be considered a good outcome.
No the target is everybody having a roughly equal income AND not be impoverished. Also how exactly do you plan to raise the baseline of society with the rich consuming 99% of the stuff? I mean how much do you have to grow to retain that distribution and still have the bottom half not starving? Or do you limit the scope of what you consider society and simply don’t care about the 99%?

5. Don’t get caught up in the hype.

I still don’t agree with total redistribution of wealth

No one is asking for that or “income equality” as you define it. People are asking for a good baseline quality of life and proposing methods that accomplished this in the past. Whenever you do see “income equality” the arguments are always about equal pay for equal work, generally taking into account experience and cost of living disparities.

They are never about forcing equal pay for radically unequal work, minus a few people you can cherry-pick from online discussion boards who are irrelevant to policy discussions.

Maybe you’ve had someone present a distorted definition of “income inequality” to you and took their word on it, but whatever source that was is a source you should view with suspicion, because they are clearly not presenting social issues or public discourse honestly.

4. Has the internet changed things?

Perhaps true, but the internet lowers the bar. Anyone can post something on the internet, sometimes even for free, and all 4 billion people who are on it can find it.
Me making a blog post is not comparable to one of the most influential media empires in the world. 4 billion people can, that doesn’t mean it’s remotely possible they will.

It’s not ‘moving money around’, because the people making the most money in society help the economy to grow. Furthermore, it is necessary If it was simply moving money around, I might well agree with you, but it just isn’t. Furthermore, it is impossible for the productivity to be useful without people organising and directing the power of the working class.
How are they getting to grow the economy? Why can’t the working class organize itself?

I have one final question for you: how do you propose enforcement of this redistribution? If all your needs are met regardless of whether you work hard or do nothing, why not just do nothing and get your free baseline quality of life?
You don’t need to enforce a redistribution, you just need to stop enforcing the current redistribution. Nobody can make a billion dollars through their own labor, there’s a massive apparatus currently in place to allow a small minority to extract wealth from an overwhelming majority.

3. The goal is a healthy society.

Based on the other comments, you’re arguing against a strawman. No one is literally arguing that all income should be strictly equal – rather that the disparities should be reduced to reasonable levels. Having billionaires while millions are unable to afford food and healthcare isn’t healthy for society. These people are kept functionally in slavery – if you can’t afford to take a day off work, you can’t afford to take an active role in society. You can’t take care of your health or your future, and you can’t educate yourself.

Finances aren’t the only (or even the primary) form of risk. Bill Gates was able to take the risk of dropping out of college and starting a business because even if it went bust, he still had well-off parents and friends to fall back on – he could have just gone back to college and continued with his wife. A poor student who’s the first in their family to make it to college doesn’t have that luxury – they have no such fallback. They don’t even have rich family friends to provide the initial investments. There are entirely different classes of risk.

A healthy society requires people who are educated and able to participate in it. The baseline for participation is for people’s basic needs (food, housing, healthcare, internet access) to be stable. If you’re constantly worried about whether you can pay your next bill or if a trip to the hospital will ruin you, you’re not able to get to that kind of stability. Income inequality is about the fact that far too much of productivity gains are given to the few rather than to those actually responsible for them. It’s not about risk, it’s about labor and exploitation.

2. Perception is key.

Hmmmm. What I’ve heard from anthropologists is that perceived quality of life is often far more important than overall quality of life. I sort of see the point, people in reclusive towns in rural areas seem to be pretty happy as long as they don’t compare themselves with others (pretty sure Amish people could be an example but idk).

I personally take anthropologists takes on stuff with a grain of salt (they believe sapiens are like 800,000 years old lmao) but I haven’t read the scientific literature regarding the matter. I imagine there must be some interesting correlations between the Gini index, per capita income, and average happiness index; food for thought.

1. One thing will lead to another.

Isn’t the point that income equality, or at least minimizing the disparity between incomes, will lead to a higher baseline quality of life?

Regarding the baseline being good, people won’t care, that makes sense assuming the baseline is a fixed point, how would that baseline be defined? Is it just enough to eat? Does it mean owning your own home? Does it mean earning above a certain amount? Is that fixed or does it depend on your geographical and socioeconomic circumstances?

What you say about the 1% I feel is misleading,

often referred to as ‘the 1%’, often use their income the most productively, investing in new business ventures which boost the economy and benefit everyone.
People outside of the 1% cannot have as much of an impact as they do not have the funds to do so, so I think you have missed the point. And you say “often”, which is a bit ropey to me. How often do they actually do this? And is this compared to how often they spend money lobbying or using corruption to further their own goals as opposed to society as a whole?

And when you mention that if income equality is the aim, then everyone being impoverished would be considered a good outcome, I agree, but that’s only theoretically. When you consider that the actual outcome would more likely be no one is impoverished. The idea is to spread the wealth, not remove it, the total wealth available hasn’t changed, just moved.

This has really got me thinking, how about you?

Drop your opinion on the matter down in the comments!