There have always been rich people and poor ones. A safe bet is that there will always be this split in the years ahead. History has never revealed a utopia where everyone was wealthy. So what are the issues underpinning the current outcry about income inequality?
Is income inequality part of a “rigged” system as some politicians would have use believe?
Is income inequality something a new law can eradicate?
And at what distribution of income would income inequality disappear?
Throughout history, people like kings, noblemen, and dictators have been richer than craftsmen, servants, or peasants. Under capitalism, the name of the game is “monopoly” where the capitalist winner garners all the available money or goes bust in the process of trying. Even in social expedients such as communism where everyone earns according to their needs, there has always been a few who were exceedingly rich compared to the masses.
One might infer that income inequality can appear in most forms of government or economic system. One might also observe that inequality tends to increase and rarely decreases without outside pressure.
So the issue is less about existing wealth distribution but more about what happens to the next earned dollar. Who gets what percent of that dollar. If the wealthy take even more of percent, then income inequality increases. If the wealthy share more with lower economic groups, then income inequality narrows.
The masses, however, have traditionally been all for taking from the wealthy and giving to themselves. This practice is the red meat of revolutions if not just social unrest. But when the owners of wealth create or support conditions which do not share productivity fairly with those who produce, then the wealthy deserve (and the democracy requires) some corrective rules or regulations (such as increased personal income taxes for the wealthy, or employee severance or retraining requirements when a company closes an office or factory).
Income inequality in the extreme (if left unchecked) will concentrate wealth into an even smaller circle. As this happens, the standard of living of what were once the comfortable middle and upper classes decreases. Suddenly there becomes less buying power amongst the population and consumption of the goods and services the wealthy own or control decreases. Hmmm.
Donald Trump and Bernie Sanders’ campaigns represent a seminal call to do something about the increasing income inequality. Sanders represented the traditional “take from the rich and give to the poor” approach while Trump presented an example of potential social power grab. Trump seeks for power to pass to the few in response to the popular call for fixing what’s wrong. The Trump path leads the masses to less freedom and strangely the wealthy to even more wealth.
Income inequality can (and must) be lessened to levels similar to the 1950s. 60s, and 70s. Without following the paths to socialism/communism or worse, fascism, Congress and the new President must take wise steps to gradually reverse the growing current income inequality while invigorating the economy.
Such a path forward requires a lot of optimism given GOP controlled Congress’ past performance.