I agree with Ramesh, obviously. But I think someone who understands the economics of all this — like Ramesh — could do a really good piece on how income inequality is something of a myth. Oh, I guess the numbers are right generally speaking. But the numbers tell less and less of the story. One hundred years ago, or even fifty, monetary wealth was a huge indicator of physical well-being. Removed from farms and rural life, the ability to feed yourself depended largely, if not entirely, on the money in your pocket. Major tools for improving or sustaining your life — education, transportation, comfortable housing, clean water, etc — cost a great deal of money. Today, very little of this is true. Food is astoundingly cheap and obesity, not hunger, is the chief nutritional problem for the poor. The typical “poor” American, according to the government’s numbers, has a car, air conditioning, a refridgerator, a stove, a VCR and a color TV. Here’s how Robert Rector of the Heritage Foundation summarized the situation for NR a few years ago:
“These facts are gleaned from the government’s own surveys of the living conditions of the poor. The surveys indicate that most poor Americans today are better housed, better fed, and own more property than average Americans throughout most of the century. Today, expenditures per person among the poorest fifth of households equal those of the average household in the early 1970s (adjusted for inflation).”
So, in other words, income inequality defined as the relative proportion of disposable income as distributed among the population may be increasing, but equality of well-being is increasing even more quickly.
Let me put it this way: In a world where the poorest people live like millionaires, would it really be so terrible if the richest people were trillionaires? We ain’t there yet obviously, but I sometime suspect those who denounce income inequality today would still be denouncing it under those circumstances too.