Opinion of redistribution of income/wealth

[parochial boy]

The nature of capitalism is to redistribute wealth/income upwards. The whole model is based on the idea that you only have a job if the value of your labour exceeds the cost of it; if you are paid less than you produce for your employer.

So really, the only morally acceptable solution to this is a redistribution of income so that workers incomes can approach the value of the wealth that they generate for owners.

[parochial boy]

No, inequality by itself, is a bad thing. It leads to shorter, unhealthier, more isolated, lower quality lives. And it does this across all levels of society, regardless of how wealthy the society is. That is before you even factor in the morality of allowing some people to have significantly more comfortable and luxurious lives than others, especially when a great deal of your wealth in life is a direct result of the wealth and social class of your parents.

There is also an increasing consensus that inequality is bad for economic growth and bad for economic stability, you know, marginal propensity to consume and all that. The reduced level of redistribution certainly hasn't made all of society wealthier, as the flat lining median income over the last 4 decades shows. In many respects, living standards have declined, sure, we have nice flashy gadgets; but home ownership is increasingly out of reach, social isolation has skyrocketed and more.

In any case, economics is a collaborative process. The wealthy as a whole rely tremendously on the labour, capital and innovations of other people; and many of the great innovations in recent years have been driven collaboratively and directly by tax funded government spending. A major part of the reason Bill Gates made his wealth is that he was able to exploit his power, and the work of others; which would have happened regardless of whether he was there or not.

[parochial boy]

Fair enough, but I think their are really two sides to it. One is the moral argument of course, but the other is really that we shouldn't ever let Conservatives get away with the "muh, make the pie bigger" argument - seeing as redistribution is absolutely not something that will stop the pie from getting bigger; whereas failing to redistribute actually is.

[parochial boy]

No, inequality by itself, is a bad thing. It leads to shorter, unhealthier, more isolated, lower quality lives.

Citation? (And do not give some observational study. Far more likely that countries with shorter life expectancy and lower quality of life also suffer from income inequality, rather than the latter being a cause of the former.)

Kate Pickett and Richard Williamson "The Spirit Level". And to pluck one example from the ether, the USA has a lower life expectancy than Denmark, in spite of both being largely equal in terms of per capita income.

By the way, if you are going to write off observational studies, you might as well write off any sort of research into this sort of area, given the nature of the independent variable at hand.

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And taking an excessive share of income to achieve this would be immoral. Other people have children too, and social class is one of the major determinants of the opportunities that you are afforded in life. So "allowing" for inequality will have an adverse impact on the ability of others to "secure a better life for their children".

In any case, the moral argument still stands, the free market rewards power as much as it rewards anything else; and we should morally stick up for those who don't have as much power of influence over what happens to them. As human beings, we also shouldn't allow some of us to have much better lives than others.

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Economic growth depends on a lot of things, but it does actually rely on people spending as well as investment. In an era where savings/asset ownership provide a higher level of return than working, then that does create a perverse economic incentive. Tying up a high level of your wealth in a non-liquid asset like property does not really drive the sort of productive investment you were talking about.

In fact one of the key economic issues of recent times is precisely that savings have not been immediately returned into "productive" investment. Bank lending for example, has reduced; and there has been a high reliance by major companies to use the cash generated by their profits to simply buy back shares. That is, they use their retained earning (savings) to artificially prop up their share price rather than re-invest it.

A huge proportion of invested savings also goes into speculation on things like derivatives; which is of somewhat limited economic advantage (yes, I know that currency options and the like do have an economic reason, but the current derivatives market has gone well beyond this).

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The GINI coefficients for both income and wealth, which, have increased dramatically since the 1970s.

Argue what you want, but there is a pretty strong correlation between a highly progressive income tax system; a strong welfare net and business regulation with lower levels of inequality.

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Well that's a what if question, we can only hypothesise.

We know that private investment is not always efficient. People aren't always rational actors, simple as that.

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And Higgs was awarded the Noble prize too. Even he, however, would recognise that this was thanks to the huge public investment in building the Large Hadron Collider, and the teams of Physicists working at CERN.

As I am sure you are aware, modern science is not about the isolated individual genius, but about large teams working together and bouncing research and ideas off of each other.

[parochial boy]

i know it's a tired point to certain people here by now but... from the end of world war 2 to around nixon income inequality was falling. not even 'stable,' falling. it seems almost impossible to imagine now but it's true. the idea that it would actually *grow* was just not something people thought about. this trend towards rising inequality since the late 70s was not inevitable by any means. a lot of it really was policy choices. not all of it.. i mean i think some decline was going to happen in the 70s-80s. just because of globalization and the recovery of europe and japan and all that. but a lot of it. it didn't need to get this bad by any means.

I would point out technology is another reason for inequality, to a smaller extent now, but probably even more in the future.

That would seem to be the case, although it is at least in part due to the fact that we haven't yet developed, and there is seemingly no real political will to implement, policies to mitigate the effects of technology.