The rising tide lifts all boats. In a market society, the economy grows, and everybody is better off than they were before. This means that the rich get richer, and the poor also get richer. Income inequality ceases to be viewed as a problem, because everyone sees that their lives are growing in abundance.
This theory is of course contested, as not everyone sees the world as a forum in which progress is beneficial to everyone. There is a perspective which focuses on how progress is distributed, and asks not whether the rising tide lifts all boats, but whether all boats are lifted at the same speed and to the same extent. The idea is that if there is unequal or uneven progress, that's unfair and therefore it's unacceptable.
This is a difficult question. In arguing that inequality is a huge and growing problem and we should do something about it, Piketty addresses the 'rising boats' theory:
Piketty's critique reflects the perspective that as the economy grows, richer people are indeed better off than they were before, but poorer people are worse off. Thus the gap between the rich and poor just grows wider.
So, is the ‘all boats’ theory true? Or is it the case that free markets make a few people wealthier at the expense of the masses who remain poor? Do market forces tend to make poor people worse off, and if so would it be better to have a centrally planned economy controlled by a benevolent government, where wealth can be carefully collected up from the rich and then redistributed fairly amongst the poor?
The idea that capitalism makes inequality worse by the second has many adherents, and they have plenty of data to back their dry and gloomy theories:
But not everybody considers it to be a reason for sorrow if rich people tend to grow richer. It's not a problem if the rising tide raises the wealthy boats, because when you look carefully, you notice that the rising tide is raising all the boats. Although the relative speed of progress might differ from one person to the next, over time the rich get richer, and the poor also get richer. That sounds more like a reason to celebrate.
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