Quote:
Originally Posted by 1overcosc
Income inequality is a misplaced concern. The real concern is how well the standard of living is for each social class. If over a certain time period, the wealthiest have, say, a 20% increase in income, the rest of the population has a 10% increase in come, and inflation goes up 5%, it means that literally everyone's lives are getting better even though income inequality would actually increase.
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I think this is a seductive line of reasoning based on the math but it is mostly untrue given how our society and psychology work.
One big problem with this theory is that under our capitalist system, those with the most money can direct the overall path that society takes. This happens through the courts, lobbying, and direct spending. If you are poor you have less agency, and your level of agency can decline even if your material wealth does not. When the rich have 90% of the wealth they direct society and everyone else loses out even if their wealth on paper isn't going down.
Another fact is that, at the end of the day, humans judge whether or not they have a good standard of living by looking at other humans. The lifestyle of a well-off 18th century merchant would be considered unacceptable for a poor person today because our standards have scaled up. This process will continue. Average people will be really unhappy if they have a slightly better than 2018 standard of living in 2100 while a few rich people never have to work, live for 150 years, and go on trips to Mars.
A third quasi-objection is that inflation is hard to measure and even when it seems like incomes are going up people often lose some kinds of purchasing power or some aspects of their quality of life. Real incomes have been growing around here for example but housing is less affordable, there's more gridlock, fewer people have secure jobs with good hours and benefits, etc. I don't believe that slightly positive income growth for the lower quintile of our society as measured by current methods truly signifies an improvement in the standard of living.