Saturday, 2 March 2019


There is nothing wrong with inequality. Most arguments against it fail, indeed most arguments against it are not in fact against inequality, they are against poverty.

Inequality drives economic growth by incentivising invention and innovation. It incentivises production at the current level of technology. Incentives matter. High earners will not work as hard if you tax them. A tax system which enforced perfect equality would mean there would be no point taking more difficult jobs at all, let alone doing them full-time.

Entrepreneurs are motivated by becoming rich, and both inequality and economic growth are inevitable consequences of this. The poor are quite obviously better off today than they would have been if perfect inequality had been enforced for hundreds of years.

What are the good arguments against inequality? That it makes people feel bad, and that it causes crime.

People are hierarchical animals, and they feel bad at the bottom of the social status hierarchy. There are genuine negative health effects of being at the bottom of a status hierarchy (though these do not show up epidemiologically, contrary to some claims). Nowadays, the whole society feels like one big status hierarchy.

If you're at the bottom of a society, you probably don't have a realistic expectation of bettering your lot in life. Crime becomes attractive.

However, these are not good enough reasons to enforce equality. 100% tax rates remain a bad idea. A flourishing civilisation is more important than some people's suffering.

What can we do, then? Separation. People compare themselves to their neighbours. International inequality does not have the downsides listed above, particularly regarding crime. Separation also makes crime impossible.

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