Is economic inequality inevitable?

One may as well be living under a rock if they have never encountered an overtly passionate discussion or debate with both sides throwing about utopian ideals of equality, justice and freedom. Many ravish over lost opportunities, failed aspirations and unreachable daydreams. For some it leaves a bitter aftertaste like the famous fox and sour grapes story, but for some it is quintessentially an integral belief that defines a huge part of what they are. Sometimes we sway with logic, sometimes with passion and sometimes with just the anecdotal evidence that presents itself at a decisive point in time. 

I am not here to rationalise why we do this, for I am not neither a psychologist nor the nosy next door neighbour. Instead I wish to plant a few more seeds of doubt and in the process confuse you, confuse me and hopefully even further confuse this overly confused world. This may seem like a smirky play on words but honestly I fear for the day that we reach utopia. The moment we snap out of confusion and into a notion of absolute confidence that the world has reached utopia, we may have very well lost the final chances of ever reaching utopia. Well, the uncertainty in my wording is fairly due to the point I make, in having no absolutist claim. So non-absolutist, such that my very claim of not being absolutist may be wrong. Now, I am going to stop with my disclaimers and get to the point. Let's talk about equality, or even better let us specifically talk about economic equality.

Communism has one definition, capitalism another and some sway towards a centrist definition of economic equality. In the current age you would have most likely heard quite a few neo-phrasings on economic equality. Some go along the lines of 'Equity not Equality', 'Equality of Opportunity', 'Equality of Outcome'. I shall start with one of Jordan Peterson's most common points : 'Equality of Opportunity but not necessarily Equality of Outcome'.  This simply means that an equal opportunity is a requisite but one should not base towards an equality of outcome. Basically give everyone the opportunity to make it big, but not everyone might make it big. So the goal should be to strive for equal opportunity always but never based on getting an equality in outcome. 

I really liked this phrase when I first heard it. Very simple and subtle yet so groundbreaking. I am not going to delve into the correctness of this statement but I shall first try to approach a more practical question : 'Is it even possible?'. Many have tried and have beautifully explained this, and despite paling in comparison, I shall try to plant my seed of doubt into you.

Let's keep this one simple and a mere dishing out of confusion. Remember that this is not a belief that I am trying to convince you off, but instead a close to failing attempt to confuse you. I say this because most confused people move on to more interesting things rather an a confused rambling of a maniac. And if you stuck on so far, you must be pretty bored or I must have fueled your inflating ego with a burning desire to contradict me. I believe that I do care but at the same time maybe I don't, so let's just go ahead.

Is economic inequality inevitable? 

If you haven't heard of the Pareto principle, then it probably wouldn't matter if I don't tell you now and if you did you already know so I am not going to elaborate. This simple principle of nature represents the non uniform nature of nature. One may have seen the 80-20 rule which states that 80% of the consequences come from 20% percent of the causes. In the world of marketing, one of the attributions is that 80% of the revenue comes from 20% of the customers or in industry 80% of the injuries are caused by 20% of the hazards. This was first introduced when Pareto observed that 80% of Italy's land was owned by 20% of the population. Although this is yet another principle it has shown relevance in many areas and fields of scientific enquiry.  

A 1992 United Nations development program report showed that over 80% of the world's income is generated by 20% of the world's population. These numbers may seem alarming at first but then think again. If this is the natural order of things is it worth forcing an alternative. 

Imagine a hypothetical past where policies were very different. Suppose in the 1950's the world forced onto humans a notion of economic equality. I believe it may have resulted in a forced outcome where everyone has near equal economic standings or economic opportunity. But then we would have never have had big corporations get the funding to take risks with big ideas like the smartphone, current space travel, DNA sequencing, cancer drugs and many more. One may argue that people need not necessarily innovate for money. Although  that is true, only with money can scaling and cutting edge technology be deployed. furthermore to fund scientific endeavour which is riddled with money draining failures there is no alternate option. 

This brings us to people with lots of money - namely Billionaires. One argument is that these billionaires with their spending trickle down the money through the expensive goods they buy and the people they hire . This trickle down economy has been criticised heavily and shown that it does not work. Forget trickle down economy and instead look towards a trickle down standard of living. These innovations and inventions at the behest of pooling of money has led to a rapid increase in the standard of living for all of humanity. If we had forced economic equality a 100 years ago we may have never had cars or modern hospitals and our average lifespan could have been stuck at 50 years. Today with strides in technology and research that require rich people to take risk and spend money we are able to boast great improvements for the poorest 1%. 

Poverty is not yet eliminated but the threshold of poverty has constantly been redefined and lifted. I am not considering war torn nations like Syria but a standard developing country like India where over 90% of the population has mobile phones and over 70% have access to internet. Without these strides we might have had economic equality but a way worse condition might have followed.

I present a simple dilemma.

Would you rather have everyone have an average lifespan of 40 years or would you have the population have the lifespan distributed between 50-80 years. The answer is obvious. As long as everyone is better off why should we force equality and hinder progress?

Alternatively a moral dilemma

If there were a 100 innocent prisoners. You have two options. Let all 100 remain in jail or let 80 people go free and keep the rest in prison. Although not economic equality, this dilemma of equality draws a pretty convincing parallel.

Or an even more palatable analogy

If we had 100 people walking barefoot in a village. One alternative is to get everyone shoes. Other alternative is to get everyone something randomly between a cycle, car or helicopter. Although the first represents economic equality the second one is much better in my opinion.

                                    

So unless we are sure that that outcome will lead to betterment of people we should not take it. And many paradoxes like Jevon's Paradox, brass Paradox, Goodhart's Law further substantiate my claim.

So the question is economic equality really possible? Even if so at what cost?

Well, this is just a confusing thought with more to come.