There are two anti-wealth scenarios we hear a great deal about these days.
First, income/wealth inequality is bad because it leads to a few super rich powerful gaining control and thus destroying our democracy; ala Russian oligarchs.
Second, wealth inequality is bad because it results from the transfer of money from the middle class to a few.
Politicians will switch from income inequality to wealth inequality in the same sentence as if they are the same thing. I recently heard a politician say “Americans can’t buy things” because of income inequality. We are also told taking more from the wealthy will “level the playing field.”
I guess there is a third mostly unspoken scenario. I resent your success and that you have much more than I do and I don’t like it and I think I deserve some of what you have. That’s just human nature.
Wealth inequality will not hamper our democracy unless the political class participants in it. We are not Russia. The political class can’t do that unless Americans help them. That includes electing and re-electing individuals to office, including people with significant financial problems (several current members of Congress are deeply in debt and some have a negative net worth).
This process simply puts us at greater risk from individuals who are increasingly subject to those who seek influence. If we can’t trust ourselves, then we need term limits to help protect us.
Before accepting the second assumption that wealth inequality somehow transfers money from the middle class to the wealthy, we need one question asked; how? Wealth is not part of a finite pie, it expands. Who did Gates, Zuckerberg, Musk or Bezos take wealth from…and how? Each of these individuals created their wealth via the process I describe above. Others create their wealth through investing, including in the companies represented by these individuals.
There is one element of inequality that we should be concerned about. That is inequality of opportunity, of the inability to move up in income class. There is a great deal of research on the issue. Upward mobility is hampered by many factors including family structure, the family you are born to, poverty to start your life, where you live, education and training, race, declining industrial jobs, technology and within all that, motivation and attitude. I would add that trying to complete in a global world is also a factor because it directly affects jobs and wages.
Understanding and dealing with all these factors should be our focus. We waste our time by simply labeling the cause of social problems as income and wealth inequality or by creating the illusion that taking more in taxes from the wealthy will somehow solve the problems all the money spent to date has not solved.
Perhaps we should address the relationship between property taxes and school budgets, a process that goes back to 17th century Massachusetts. There is no logical connection, but great disincentive for some towns to adequately fund their schools or simply the inability to do so.
In any case, even critics are starting to acknowledge that generalizations about inequality and billionaires are not valid.