What's more, these are not forces of nature. They're the products of government policy. Matthews makes an important point about that in a post entitled "The government is the only reason US inequality is so high." He points out that our "tax and transfer" policies are the main reason we score significantly lower than some European democracies, including Sweden, on the equality scale.
And, lest we forget: those government policies are the product of a money-driven electoral system.
False Future
The scenario of a prosperous but highly unequal future which Matthews later paints is, I would argue, a fundamentally improbable one. We've critiqued the right/libertarian dystopias of Tyler Cowen and Tom Friedman in the past, but those scenarios (created by Cowen and adopted by Friedman) are much more plausible than Matthews'. Cowen's clear on this point: there will be a small minority of very successful and prosperous individuals, surrounded by an impoverished "shanty town" majority.
While that future is anything but inevitable (although Cowen argues that it's exactly that), at least it has internal coherence. Matthews' does not. A consumer-driven economy -- one in which people buy things -- leads to high employment and robust wages. But the high-earning individuals in our society aren't making their profits from consumer goods. That's one of the main reasons they're doing so well: No employees and low overhead, at least in the US, means higher profits ...
Present Tense
... in the short term. But that kind of growth can't go on forever. And as the "rentiers" come up against the limits of growth, the temptation to cheat becomes irresistible. In other words, inequality is an unstable system subject to perpetual job-losing shocks and "corrections," along with wage-suppressing employment uncertainty.
Which, in turn, produces more inequality ...
But why are we arguing about hypothetical futures and ignoring the very real present? We're still in a situation where the "multiplier effect" -- the amount of growth which can be achieved through government spending -- is very high. The situation cries out for higher taxation on the wealthy and corporations, coupled with investment in jobs and growth. In other words, it calls out for the very same policies which would reduce inequality.
In the end it's one challenge, not two or three.
To Hate Inequality is Human
It may be true that people sometimes argue against inequality without considering the larger economic implications. That's only human -- literally, as it turns out. Studies have shown that human beings are intrinsically "hard-wired" to dislike inequality. So, yes -- people would still be dissatisfied in Matthews' hypothetical, unequal Utopia.
For that matter, I would be dissatisfied with a society in which middle-class and lower-middle-class earners have no chance to better themselves. In my opinion, the opportunity for self-improvement is a fundamental human right.
What's more, it's not just those individuals who lose out. When social mobility is denied to any group, society loses a vast talent pool filled with people who could make things better for everyone.
One Challenge
And an unequal nation's politics -- even a hypothetical, prosperously unequal one -- will inevitably be dominated by the wealthy few and their preferred policies of deregulation, under-spending, and lack of government investment. That would inevitably lead to future crises like those we face today.
So let's stop arguing about which issue to focus upon. It's the same fundamental challenge, no matter how you look at it, so why not work on fixing it instead?
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