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Thursday, October 19, 2017

Is There an Ideal Amount of Income Inequality?

Brian Gallagher
Originally published September 28, 2017

Here is an excerpt:

Is extreme inequality a serious problem?

Extreme inequality in the United States, and elsewhere, is deeply troubling on a number of fronts. First, there is the moral issue. For a country explicitly founded on the principles of liberty, equality, and the pursuit of happiness, protected by the “government of the people, by the people, for the people,” extreme inequality raises troubling questions of social justice that get at the very foundations of our society. We seem to have a “government of the 1 percent by the 1 percent for the 1 percent,” as the economics Nobel laureate Joseph Stiglitz wrote in his Vanity Fair essay. The Harvard philosopher Tim Scanlon argues that extreme inequality is bad for the following reasons: (1) economic inequality can give wealthier people an unacceptable degree of control over the lives of others; (2) economic inequality can undermine the fairness of political institutions; (3) economic inequality undermines the fairness of the economic system itself; and (4) workers, as participants in a scheme of cooperation that produces national income, have a claim to a fair share of what they have helped to produce.

You’re an engineer. How did you get interested in inequality?

I do design, control, optimization, and risk management for a living. I’m used to designing large systems, like chemical plants. I have a pretty good intuition for how systems will operate, how  they can run efficiently, and how they may fail. When I started thinking about the free market and society as systems, I already had an intuitive grasp about their function. Clearly there are differences between a system of inanimate entities, like chemical plants, and human society. But they’re both systems, so there’s a lot of commonalities as well. My experience as a systems engineer helped me as I was groping in the darkness to get my hand around these issues, and to ask the right questions.

The article is here.