Something Important About Income Inequality We Can't Afford to Overlook
"Income inequality" has risen in the rankings of Google searches. Obama mentioned it in his recent State of the Union. And now John Mauldin has begun a series of articles dissecting and explaining what it really means. If interested, especially if you want to move beyond envying or condemning "the rich" for the income inequality that certainly exists in our society, a look at Mauldin's latest would be a good beginning to broaden your horizons on this subject. (Click HERE.)
One of Mauldin's most important points is that during periods of great innovation, income inequality grows. For example, the Industrial Revolution saw many of the innovators and entrepreneurs benefit tremendously, vs. the average worker. On the other hand, as time passed, the workers themselves saw their lives improve - at least materially. The latest revolution - the Information Age, which began somewhere around the 1970s - has seen the same result for the inventors and entrepreneurs, although we've yet to see the rest of us benefit as workers did during the Industrial Revolution.
While this does throw some light on our current bout of income inequality, and put the growth of billionaires (almost 2,000 of them at last count) into some perspective, there's something missing. I think we need to consider the fact that, while workers may have eventually, over time, benefited from the Industrial Revolution, the world also witnessed the growth of socialism, specifically Marxism, which arose in response to what were clearly not only difficult but unjust conditions for many of the workers who were ground up by the Industrial Age. We could also note that the social unrest of those times lasted for many decades, and affected the 20th century quite profoundly - a century arguably among history's worst, if not the worst, when you consider the Great Depression, and the two world wars.
To the extent that we can cite the example of the U.S. as some sort of paragon of rising income and wealth spread out amongst a broad segment of the population (again, over time), we also note the growth of fascist governments, especially in Europe and Asia (Italy, Germany and Japan being the prime examples) which, once they aggrandized enough power, spread death and destruction over virtually the entire world in World War I and World War II.
The point here is that income inequality may have its reasons, which reasons may make some logical sense, but the phenomenon itself may present a clear and present danger of growing social unrest, with Ukraine being the latest, albeit it, mercifully, not the most terrible example of what happens when a small group of people own the vast majority of the wealth of a country or society. We would be wise to look around and take note of how our current bout of income inequality progresses and keep our minds alert to any incidents and trends that signal the coming of social strife.
Remember that only a few days ago Viktor Yanukovych was a seemingly all-powerful dictator in Ukraine; now he is on the run, hunted by his own people for crimes against humanity. And over 100 mostly innocent Ukrainians died - and continue to die from the wounds inflicted by government killers - over the last week because of the strife caused by inequality.
Pay attention and you'll see that the dangers of income inequality have already claimed victims in many place in the world, including our own part of the world. If you think about this, you may very well conclude that we could be seeing just the beginning of the potentially disastrous effects of income inequality.
One of Mauldin's most important points is that during periods of great innovation, income inequality grows. For example, the Industrial Revolution saw many of the innovators and entrepreneurs benefit tremendously, vs. the average worker. On the other hand, as time passed, the workers themselves saw their lives improve - at least materially. The latest revolution - the Information Age, which began somewhere around the 1970s - has seen the same result for the inventors and entrepreneurs, although we've yet to see the rest of us benefit as workers did during the Industrial Revolution.
While this does throw some light on our current bout of income inequality, and put the growth of billionaires (almost 2,000 of them at last count) into some perspective, there's something missing. I think we need to consider the fact that, while workers may have eventually, over time, benefited from the Industrial Revolution, the world also witnessed the growth of socialism, specifically Marxism, which arose in response to what were clearly not only difficult but unjust conditions for many of the workers who were ground up by the Industrial Age. We could also note that the social unrest of those times lasted for many decades, and affected the 20th century quite profoundly - a century arguably among history's worst, if not the worst, when you consider the Great Depression, and the two world wars.
To the extent that we can cite the example of the U.S. as some sort of paragon of rising income and wealth spread out amongst a broad segment of the population (again, over time), we also note the growth of fascist governments, especially in Europe and Asia (Italy, Germany and Japan being the prime examples) which, once they aggrandized enough power, spread death and destruction over virtually the entire world in World War I and World War II.
The point here is that income inequality may have its reasons, which reasons may make some logical sense, but the phenomenon itself may present a clear and present danger of growing social unrest, with Ukraine being the latest, albeit it, mercifully, not the most terrible example of what happens when a small group of people own the vast majority of the wealth of a country or society. We would be wise to look around and take note of how our current bout of income inequality progresses and keep our minds alert to any incidents and trends that signal the coming of social strife.
Remember that only a few days ago Viktor Yanukovych was a seemingly all-powerful dictator in Ukraine; now he is on the run, hunted by his own people for crimes against humanity. And over 100 mostly innocent Ukrainians died - and continue to die from the wounds inflicted by government killers - over the last week because of the strife caused by inequality.
Pay attention and you'll see that the dangers of income inequality have already claimed victims in many place in the world, including our own part of the world. If you think about this, you may very well conclude that we could be seeing just the beginning of the potentially disastrous effects of income inequality.
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