Why all the posts on income inequality?

Giełda na Wall Street

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I tend to save a lot of articles about income inequality to my del.icio.us bookmarks. It’s one of those things I think is the root of many other social problems. Poverty, health problems, crime, educational attainment…even political stability. But it’s not a cause unto itself. It’s a symptom of the underlying imbalance of our society. Kevin Drum articulates this nicely today:

What kind of system would have produced Wall Street titans with less income and less power? Answer: a system in which there were competing power centers that prevented the rise of inequality in the first place.

That’s precisely it. In a democratic society, a centre of power needs to be checked by other, equal powers. The American Founding Fathers recognized this, amongst others. (hence the 3 pillars of the American government: Executive, Legislature, and Courts). Who are those other centres of power? Labour unions, public interest groups, the press, and so on. But over the last few decades the power of these groups has been eroded or co-opted until we see today where one group – let’s call it the “corporate interest” – sets the agenda. And that agenda mainly benefits their interest. There’s nothing necessarily sinister about it, it’s human nature to address the issues you think are important and that affect you the most. But it does lead to imbalance, an imbalance that can create a feedback loop that causes things to go south fast.

We today still enjoy the lingering fruits of past prosperity. But I don’t have a lot of confidence for the future unless the imbalance is addressed soon. And to be quite frank, I don’t see it happening.