There is a great yawning divide between those who care very much about economic inequality and would do anything [Editor: anything?] to make sure that henceforth everybody will have the same amount of stuff, and those whose only response to the reams of data proving beyond doubt that some people are richer than others is to ask: ‘so what?’
It is easy to see why some people care about inequality – obviously that’s because of Justice and Fairness. But it is not as easy as you’d think to answer the ‘so what’ question asked by those who don’t care whether other people have more stuff than they do. Some people simply don’t care how much stuff other people have, and they’re not interested in studying the Rich Lists to see which wealthy fecker has moved up or down this year's rankings.
Let’s explore some ways to answer the ‘so what’ question and see if we can get everybody to be very worried about inequality. Shouting ‘because justice!’ or ‘because fairness!’ may feel very satisfying in a fighting-for- what's-right kind of way, but it's not really going to persuade people who don’t think it’s unjust or unfair that they have less stuff than other people. In the absence of any reasonable or rational ways to approach this problem, we must turn to politics. Politics allows us to introduce variables such as how angry and upset people are – these unhappy emotions are obviously very relevant in the political realm especially if there’s an election coming up or if it’s the summer and hence riot season is upon us.
We can learn a lot by examining the welfare state and government redistribution policies. The bigger the welfare state, the harder the government is working to make everybody more equal. This is good news for those who are on the receiving end of welfare payments and it’s also good news for those who are donating their tax money to help other people become more equalized in terms of how much stuff they can afford to buy, as befits the status of all members of advanced industrial nations where everybody has equal rights in terms of amassing wealth. Assuming that we’re dealing with a mature democracy, we can assume that the size of the welfare state is a reflection of voter preferences, and indicates the degree to which the majority of voters would like to see an egalitarian society where nobody has the temerity to be richer than other people. We assume also that the voting outcome is not in any way skewed and that the society is subject to the rule of law where nobody will get away with trying to gain an unfair advantage over others through strategies such as theft or back-stabbing.
In that light it becomes easier to understand the inequality debates. They are political debates where each side is posturing for influence in trying to gain support for the method they consider most effective in constructing the ideal society. To some there can be no more effective path than through the market, while to others it would be preferable to have a go at centralized coordination and see what happens.