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Michael Magoon's avatar

Could it be that this is really more about Status rather than Inequality? We could reduce inequality to near zero, but people would still have differences based on social status within the group. People can also have high status and low income (in for example art, academia, etc).

I believe that people inherently desire status, that some people do more than others, that it is zero-sum, and it completely separate from income and wealth inequality. Fortunately, people can have high status in one domain and derive pleasure from it while being low status in all other domains. For example, a person who is a really good welder can derive status among his peers, while still being relatively low status in the rest of his life.

But since people are not comfortable being seen talking about their low status, they express it as a concern for inequality.

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Swami's avatar

Good discussion. Everyone seems to agree that poverty is bad, and that unfairness is bad. The question is what is the relationship between inequality and unfairness?

I would add that much of the confusion here is because we have multiple definitions of fairness, only some of which hinge on inequality of outcome.

1) We have equality of outcome similar to Marxism or how parents treat children. Pirate charters were notable in how they would define how booty would be divided equally between crew. Inequality here could be viewed as a problem.

2) We have rewards commensurate with need. Pirate charters also provisioned higher shares for crew injured in battle.

3) We have rewards commensurate with role. The Captain and Quartermaster got defined double shares.

4) We have rewards commensurate with effort or contribution as seen in sports or commissioned sales or an Uber driver. Here there is no necessary connection between equal outcomes and fairness. The inequality isn’t a side effect, it is a necessary part of the incentive system.

5) There is also a higher level of fairness of the system and whether it is one which we would join. Rawlsian or Harsanyian fairness.

I think people value all these types of fairness, depending upon the context and what is needed in that institutional setting. I also think some people don’t distinguish well between the systems of fairness, and they judge one based on the framework of another. This can create problems and confusion.

I would choose an economic and political system which generates growth and provides for reasonable safety nets (not easily exploited), even if it leads to massive inequality in outcomes. Indeed, I think the system is driven or powered in great part via the signals and incentives generated by unequal potential outcomes.

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