Talk:Economic inequality

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[edit] Factual Accuracy

comment on cited studies I'm writing a paper on income inequality, and I found this page useful in terms of tracking down sources. However, I skimmed one of the papers cited as evidence (Inequality, Trust, and Political Engagement* Eric M. Uslaner and Mitchell Brown) and the methodological errors were so extensive that if you actually look at their data, you'll come up with a very different conclusion than they do. First of all, they use tons of variables that aren't statistically significant, which you're not supposed to do, since even if they don't mean anything, it throws in static and drives up your r^2. But secondly - and my bigger objection - what their data basically shows (go to the graphs at the end) is that year and Gini coefficient” and “year and trust” are significantly more highly correlated than “Gini coefficient and trust." Basically, trust is decreasing and income inequality is increasing, both fairly linearly as the years go by(given that "inequality" and "trust" are both index numbers, and it's sort of strange to talk about an index of qualitative measures increasing "linearly."). Since they're both doing something linearly, necessarily they're correlated with each other, but since they're correlated a whole lot less with each other than they are with year, it looks like there are other historical factors at play here. I'm not saying that all of the other papers cited lose credibility based on one fairly awful paper, but it does make me wonder. Most people who read this aren't going to actually check up on the citations. Bad papers shouldn't be cited as evidence for their arguments.

---Hmmm, Interesting. Are there any studies or articles that point out all the errors in their study? Perhaps we should try to find some and include that as a footnote in the main Article... --KodeMizer

It has been about a month and no furthur data has come out on the validity of that paper and their r squared values. As per "No original research" I am removing the "factual accuracy disputed" tag. If we find a source that contradicts their findings or criticizes their work please do include it and feel free to repost the factual accuracy tag. I'll post a note reffering to the talk page. We cant include criticisms on the actual article due to No Original Research, but I feel we should make a note of it somewhere. --KodeMizer

[edit] Major reworking today

Hello everyone, this article needs a major reworking. I've got a few hours today so i think i might devote it to this article. If I annoy anyone with my major reorganization, please don't be offended! Here is my proposal for a new layout for the article, feel free to chime in with new ideas

  • Introduction
  • History of Inequality
    • Inequality pre industrial revolution
    • Inequality industrial rev -> WWI
    • Inequality WWI -> late 1980s
    • Inequality since late 1980s

(The reason I have devided it in this way is that we see large shifts in the inequality of western societies in each of these periods, reflecting a change the the underlying economic structure and hence the causes of inequality.) If anyone would like to put something in about inequality in non-western countries, please do - this is simply not my area of expertise.

  • Causes of inequality
    • Supply, Demand, and the wage differential
      • Education
      • Innate ability
    • Descrimination
      • Race
      • Gender
      • Other
    • Inter-generational inequality
    • Mitigating effects
      • Taxes
      • Unions
  • Effects of Inequality
    • social cohesion
    • epidimiological considerations
    • Economic efficiency
      • Incentive to work harder
      • Not aggregate utility maximizing
  • Views on inequality
    • marx
    • libertarians
    • inequality vs social mobility
    • others?
  • notes and other stuff


Thanks everyone! -- Kodemizer, December 1st, 9:30 AM pacific

Update: I've completed the major reorganization, I will now be adding a few sections and updating the rest to be nicer. There are a few sections I dont want to deal with - for these I have added a clean-up tag. Thanks everyon! --Kodemzer, December 1, 2005

Hello again! A few questions for the community. Can we remove the neutrality warning? I think we've dealt with the neutrality issues a long time ago. also, I am tempted to remove the Job Negotiation section from the article entirely as I don't think it adds anything. Is this a good idea? Thanks everyon! Kodemizer -- december 1st 2005

[edit] Misapplication of individual vs. national inequality

By my reading, the article doesn't make the proper distinction between person-level inequality and nation-level inequality. The stats cited under "Global inequality among individuals" speak to nation-level disparity. Most of the world's wealth/income is concentrated in the Western world due to much higher per-capita levels in developed nations. This is a country-level disparity, rather than a person-level one. Personal disparity is much more relevant for within-country comparisons between individuals. Unless someone strongly objects, I'll move the text around to better match the term, b/c both national and personal inequality are important. Feco 20:49, 25 May 2005 (UTC)

This article needs work!! – Merovingian

[edit] ?

When can old discussion be deleted? Below does not apply anymore, not all of it anyways.

[edit] ...

1. The opening line of this article defines its subject: "Social inequality refers to the distribution of material wealth in a society." Is this really a good definition of social inequality? Maybe we should move this page to wealth inequality ( - or to Economic inequality). It seems to me that social inequality could easily refer to a much wider range of social phenomena, such as noble/commoner distinctions.

2. It would be really nice if we could get some sources to list for the statistics and surveys in this article. - Nat Krause 07:23, 7 Oct 2004 (UTC)

[edit] The wiki is not a communist mouth peice

Rhetoric does not NPOV make. Please keep it on the level. Sam [Spade] 01:11, 9 Nov 2004 (UTC)

Neither is it a capitalist mouth piece. But while we're on the subject, where is the "communist rhetoric" you were objecting to? My changes were, for the most part, purely cosmetic, with little or no added or removed content. -- Mihnea Tudoreanu 15:46, 21 Nov 2004 (UTC)
I find you comment suprising (purely cosmetic, with little or no added or removed content???), and if you insist on biasing this article, it will end up with a factual as well as a neutrality dispute. If, however, you would like to discuss some particular, please bring it to my attention. [[User:Sam Spade|Sam Spade Arb Com election]] 19:13, 21 Nov 2004 (UTC)
The only one who insists on biasing this article is you. But since you appear to hold your POV edits very dear, let's discuss them in more detail:
  1. You change "others see inequality as the natural consequence of capitalism" to "others see inequality as the natural consequence of social darwinism". Do you dispute the fact that some people see inequality as the natural consequence of capitalism? This is an extremely well-known fact; and the view is held by many advocates of capitalism, not just opponents.
  2. You insist on prominently mentioning Nazism as an ideology which sees unemployment as bad. Yes, it is true that Nazism holds that view, but on the other hand, there are countless other theories who also see unemployment as bad. There is not a single good reason for emphasizing Nazism among them - that's a bit like editing the article on moustache to specifically mention that Adolf Hitler wore a moustache. Since Nazism has a popular image of being evil incarnate, I can only conclude that you have an agenda of trying to discredit certain political views with veiled ad hominem attacks.
On a non-POV note, why did you change the last paragraph? It seems to me you just made it more ambiguous. -- Mihnea Tudoreanu 12:36, 28 Nov 2004 (UTC)

Lets see...

  1. Do you dispute the fact that some people see inequality as the natural consequence of social darwinism? This is an extremely well-known fact; and the view is held by many advocates of social darwinism, not just opponents. I instilled a compromise, BTW.
  2. Nazism is famous, and if you think Nazism is less popular than Communism... lets just say you haven't been to Germany lately ;)

and, as to the last paragraph, you seem to have understood my correction, and your latest version is acceptable. [[User:Sam Spade|Sam Spade Arb Com election]] 20:05, 1 Dec 2004 (UTC)

I agree with the compromise we have now. By the way, my point about social darwinism is that it isn't the only thing that can result in social inequality. -- Mihnea Tudoreanu 10:54, 9 Jan 2005 (UTC)

[edit] Unemployment

Keynesian economics actually aims for full employment (barring transitional unemployment). Keynes himself disputed the assumption in classical economics that, if free from state intervention and organised labour, capitalism tends towards full employment, and argued that government action was needed to prevent unemployment. Keynesians, in the UK at least, considered unemployment to be an "evil" that needed to be combatted. The main Nazi economist, Schacht, didn't consider unemployment to be an important factor in economic considerations. Politically, the Nazis felt that unemployment presented a threat to their hold on power since the unemployed were potentially disruptive, but they didn't believe it was a factor in the health of the economy. They were social Darwinists, believing that inequality was natural and justified.

[edit] US$24000 is the top 1%

I disagree that making US$24000/year makes one among the richest 1% of the world. I make $30000, and that isn't a lot.

I'd like to see a source on that wacky factoid myself. it does my ego pretty good tho ;) [[User:Sam Spade|Sam Spade Wants you to vote!]] 22:34, 17 Dec 2004 (UTC)

I agree, this "fact" tends to show up on those lists of other "facts" that are emailed incessantly around the internet with no attribution. That having been said, there are an awful lot of poor people in the world, and it may very well be true. Even if it is true, I don't think it should be included since it does not take into account the various costs of living worldwide. (e.g. pulling down $24k in the US is not the same as pulling down $24k in Mexico) --CVaneg 08:38, 27 Mar 2005 (UTC)
I read that cows in Europe make more money (through subsidizing) than the average wage in some African countries. Wouter Lievens 08:52, 28 Mar 2005 (UTC)
I've thought about it and I think this section should be removed for the following reasons:
  1. It's not attributed, so who knows where the data comes from?
  2. The $24k figure is not said to be before or after taxes, which would make quite a difference in comparing relative wealth, especially when you're looking at countries that are heavily socialized.
  3. Income in general does not necessarily have a bearing on the cost or quality of living in an area.
Any objections to its removal? --CVaneg 07:08, 29 Mar 2005 (UTC)

I likewise cannot find any reputable source for the stat. At the same time, I suspect it's a market rate stat (as opposed to a PPP rate stat), which is horribly misleading in the context given. Simple example: haircuts in India are dirt cheap... PPP makes a much better adjustment for that fact that market rates. PPP tends to work for person-to-person comparisons and ranking. In light of all of this, I'll rm the stat and see what happens. Feco 18:55, 23 Jun 2005 (UTC)

As I mentioned in my own comment below, this stat simply contradicts the per capita income wiki, which lists the U.S. GDP per capita to be $37,800 (cited from the CIA World Fact Book). The top 1% of the nation certainly cannot make LESS than the national average! Subversive 4 July 2005 04:25 (UTC)

Actually, they're talking about the top 1% of the world, not of the USA - although of course this doesn't mean that stat is correct. 70.106.109.232 18:27, 25 August 2006 (UTC)
Claimed statistics such as this have no well-founded basis whatsoever. What can possibly be a claimed source for them? The required data for such comparisons (e.g. The richest 2% of Americans own X per cent of the national wealth) simply cannot be obtained, because of privacy. That is, it is not possible to obtain data on anything other than publicly-held companies. This vitiates any attempt to evaluate wealth on a large scale basis. I have had this discussion for quite a while with economists; if anyone can suggest a source for such claimed facts (which appear in countless papers by economists, sociologists, etc) I would appreciate hearing it. 66.108.4.183 14:14, 10 September 2006 (UTC) Allen Roth

[edit] Headline text

[edit] Wikipedia is not a communist mouthpeice 2

Holy POV, what did you do to the article? I spent about 1/2 an hr fixing it instead of reverting. Next time discuss your extreme edits ahead of time, thank you. Example (talk · contribs) 08:50, 1 Feb 2005 (UTC)

[edit] Economic inequality

I agree with the previous suggestion to rename this article more appropriately. There are plenty of types of social inequality, but this one is only about economic inequality. "Wealth" inequality to me only includes inequality of assets, but of course we wish to discuss income inequality here, as well. So, "economic inequality" it is. -- Beland 20:56, 5 Mar 2005 (UTC)

[edit] POV and accuracy

Economic inequality may be considered by some economists disproportionate to societal advancement; for example, feudalist societies are usually considered to have had higher levels of economic inequality than advanced democracies. A few economists purport that the increasing inequality within the United States represents national decline, and that if this process is not reversed, Europe will supplant it as world leader.

Hrm. If you consider increases in economic income and material standard of living progress, then China is making rapid progress but also rapidly increasing inequality. It's also becoming more capitalistic, which I suppose could be advancement or decline, depending on whether or not you like capitalism. There is a twisty mass of definitions and value judgements here; I think the best way to untangle this knot is just to start from scratch, with a purely factual summary of Inequality Through The Ages. Come to think of it, the politics/ethics section is where the discussion about various value judgements need to be, so I think that might be the best place for "perspectives on historical trends in inequality". But first I think we need to know what those trends actually are, so we can evaluate our prose for POV and understand the various trend analyses. -- Beland 22:03, 5 Mar 2005 (UTC)

Currently searching for data...

This chart (linked from http://www.unc.edu/~nielsen/soci209/s2/s2.htm a lecture on inequality) claims that among contemporary countries, both low and high income per capita correlate with lower inequality (by Gini index), but moderate income per capita correlates with higher income per capita. But the trendline is narrower than the variance, so I'm not sure that's a solid statistical conclusion. Moreover, it's non-historical. -- Beland 22:28, 5 Mar 2005 (UTC)

This chart shows perhaps a similar trend with historic trajectories among various Western nations since the 1600s.

This chart shows the "great U-turn" in the United States Gini coefficient. Check out the lecture link posted above; there are more interesting things there. And certainly from other sources, I'm sure. -- Beland 07:36, 6 Mar 2005 (UTC)

[edit] Inequality among nations

I couldn't really find any sources for what the article refers to as the "factor of 32 problem", is this a real term that is currently in use? --CVaneg 07:11, 29 Mar 2005 (UTC)

[edit] Global inequality among individuals

"The gap between the world's rich and poor is as follows: The richest 1% of people (with average income of US$24,000) earn more than the poorest 60% of households combined."

Do you mean to say America's rich and not "the world's rich"? If not, I would like to know where this statistic came from (or even if so, stats sources should always be cited). But, I'm certain this is figure is way off. The per capita income wiki lists U.S. per capita income to be $37,800. The top 1% of income cannot be below the average income ;x.

"Economic inequality is generally considered to be exponential as one traverses the strata of national and world societies from top-to-bottom."

I get the gist of this, but this sentence is so vague it makes almost no sense at all. || Subversive 10:55, 23 Apr 2005 (UTC)

[edit] Sources

I added two sources: an article by Milanovic, and data from the UN Human Development Report 2004. The latter supports a statement of "a factor of almost 21" problem. I still have to verify that the way I stated these sources was right, (I will do this later).

On the statement about the three richest people in the world, I found at least two sources: "The three richest people in the world have assets that exceed the combined gross domestic product of the 48 least developed countries." [1] and "The world's top three billionaires alone possess more assets than the combined Gross National Product of all the least developed countries and their combined population of 600 million people." [2]. The original statement seems to come from a nonexistent page [3], and is quoted, for example, by [4]. But based on data from List of countries by GDP (PPP) and List of billionaires, I wasn't able to corroborate this information with my own calculations. Can anyone verify if I am right? Another Wikipedian 01:08, 25 May 2005 (UTC)

I could corroborate the following statement based on the above-mentioned data from Wikipedia: "As of May 2005, the three richest people in the world have assets that exceed the combined gross domestic product of the 47 countries with the least GDP." Another Wikipedian 06:02, 28 May 2005 (UTC)

[edit] Gender and Race

There are lists of possible contributors to gender and racial inequality, yet there are no facts supporting the supposition that gender and racial inequality even exists (a statement that severely lacks specificity, albeit very true in some senses--the parameters of which need to be articulated).

Also, the Equality of Opportunity vs. Equality of Outcome debate ought to be noted in the very beginning of this article, to further define what equality really means.

On a side note: this entire article is unorganized. It ought to be gutted and redone from scratch IMHO. Subversive 4 July 2005 04:47 (UTC)

[edit] Dispute tags et al

Is is necessary to keep the NPOV and factual accuracy tags? I see no blatant NPOV problems and the facts seem to be are referenced.

The causes of individual inequality should be fleshed out and clarified a lot. I'd take out the dispute tags and the sect-stubs and add an article-wide expansion request tag here.

Some graphs would help illustrate the topics. A comparison of three or four Lorenz curve graphs or the like for several representative countries would be perfect.

Once this is done, the article could very well be divided in two (one for individual inequality, one for inequality among nations). Social inequality should not redirect to either of both, of course (but it could link to the individual inequality article).

The discussion about economic policies (not ideologies) should have a place. Ideological discussions too, if clearly attributed to someone's opinion. The topic is highly flammable but I'm sure it can be handled with care...

--Pablo D. Flores 8 July 2005 15:20 (UTC)

Division into separate articles is definitely necessary, I think. And feel free to change the tags as you suggest. Rd232 06:54, 2 August 2005 (UTC)
Individual inequality should mention theories, like Rawls' Theory of Justice, I think, not just practical issues. Rd232 06:56, 2 August 2005 (UTC)

[edit] Improvement drive

A related topic, Grameen Bank, has been nominated on Wikipedia:This week's improvement drive. Contribute your expertise and vote for Grameen Bank on Wikipedia:This week's improvement drive!--Fenice 06:46, 10 August 2005 (UTC)

[edit] Effects of Inequality

I made some changes to the effects of inequality section to try to a) add some sources, and b) add info on what some people think the actual effects of inequality are. That Gini/life expectancy paper is primarily methodological and belongs in the references section, I think. Afelton 20:30, 30 September 2005 (UTC)

[edit] Economic value is not social value

I reverted this edit because this is an article about economic inequality. Economic value and inequality is not the same as social value and inequality.

"Economic inequality may also reduce the total value of wealth"

The "(economic) value of wealth" is redundant. The economic value of a dollar is a dollar. The social value of a dollar might depend on where it is spent, but this article is not about social inequality, its about economic inequality.

"for example, a house may have less value when used by a single millionaire as a summer house than it would if used by a homeless family of five."

Probably not. All things being equal the house would not sell for less if sold by the single millionaire. Again, the social value might be higher for a homeless family of five, but again, this article is not about social inequality, its about economic inequality.

"Applying the language of the law of diminishing returns to wealth generally, it could be said that the marginal value of wealth is lowest among the wealthiest."

Again the marginal value of a dollar is a dollar. (maybe not exactly, but you know what I mean.) The marginal social value of wealth is perhaps low among the wealthiest but again, this article is not about social inequality, its about economic inequality. 69.143.43.101 01:17, 20 October 2005 (UTC)

The section of the article under question is titled "Good or Bad?" and discusses arguments for and against economic inequality. If my addition was off-topic, then that entire section is off-topic. Considering the sentence immediately previous to my addition concerned "political inequality", singling out "social inequality" (which I don't think is quite the right phrase, but nevermind) is simply inconsistent. Thus, I will replace the removed segment shortly unless you renew your objection here.
Also, the marginal value of a dollar is most certainly not a dollar - at least not the way you mean it. Some people will exchange more for a dollar than other people -- and what they will exchange will certainly depend on how many dollars they have. Of course, presumably anyone would be willing to exchange one dollar for another, but that is true of everything; it does not mean there is no such thing as marginal value.
Aphasia 20:06, 20 October 2005 (UTC)

I do renew my objection, although I may not have been clear. The point is, we are talking about economic inequality, and that means dollar inequality. I am not arguing against marginal value, its just that marginal value must deal with two quantities. The marginal value of x must be measured in something other than x. The marginal dollar-value of my 5th hamburger is lower than the dollar-value of my first hamburger. That means I will buy the first one at a higher dollar-price than the 5th one. But I will never trade a burger for more or less than a burger. The burger-value of a hamburger is one hamburger. This article is about economic inequality - that means dollar inequalities among different people. We should at least be clear about this point. Which means that when I wrote "good or bad" I was introducing a second concept of value - and I agree that is objectionable. I object to your introducing a stealth "value" and I object to myself doing the same. Can we fix this without leaving a mind-numbingly dry article? PAR 21:36, 21 October 2005 (UTC)

Ok - I've thought about this some more. We want to do is get rid of the neutrality objection, right?. Anyone coming here hoping to have their value system reinforced should be disappointed. Anyone coming here to find out information on how different value systems judge economic (i.e. dollar) inequality among people should find this article informative. We should therefore not use statements like "a house may have less value when used by a single millionaire as a summer house than it would if used by a homeless family of five." Maybe it should better read: "In the context of the value system of the left, a house..." and then have a similar statement on the right. I think this section can impart this kind of information without ever implying a particular value system to be superior or absolute. PAR 05:47, 22 October 2005 (UTC)

You're equating economic value to monetary value, which doesn't exactly work. That's irrelevant though. The article is not about economic value, it is about economic inequality. This can include value effects of economic inequality other than its effect on economic value. Also, the use here of "value" has nothing to do with a left/right value system either. The argument here relates back to diminishing returns to marginal utility, a solid economic principle not a supposed "left value system," which would be very hard to define and would likely lead to more complications in the articles NPOV status if attempted.--Bkwillwm 21:36, 22 October 2005 (UTC)

PLEASE! Don't revert until you understand what I am saying. I try to read your objections carefully, please do me the same favor.

  • I am NOT denying the concept of marginal value.
  • I am NOT saying that the concept of marginal value is a concept of the political left.
  • I AM saying that the idea of marginal value or marginal utility requires TWO measures of "value" or "utility". The marginal dollar-value of ten dollars is ten dollars. Period. I may not "need" my tenth dollar as much as I need the first, but "need" is just that second value system that is required in order to define marginal value. My body doesn't need dollars, it needs food, and food-value is not the same as dollar-value. Thus the diminishing food-value (to me) of the tenth dollar. On a full stomach, the tenth dollar does not have the same food value as the first. I have not denied marginal value. I have not associated it with the political left.

NOW READ THE STATEMENT: "Economic inequality may also reduce the total value of wealth". In what value system? If "wealth" is measured in dollars and "value" is measured in dollars, then the above statement is obviously and ridiculously false. You cannot reduce the dollar value of ten dollars. Ever. No matter what measure of value you use, if you use the same measuring system for "value" and "wealth", then the above statement is obviously and ridiculously false. You have to have two systems. In the above sentence, I am assuming "wealth" is measured in dollars, lets say. Then what system is "value" measured in? A value system which values a large home being occupied by a homeless family of five, rather than a millionaire is a value system usually associated with the left. Thats all I'm saying, and I think that's neutral. If you have a system of value that says the millionaire is preferable, since rich people are better than the poor, then you have an aristocratic or elitist value system.

I object to the added sentences because they speak as if there were some universally accepted second system of value which is never defined nor questioned. In the statement "Economic inequality may also reduce the total value of wealth" we have to define what is meant by "value" and explain that it is one of many possible value systems. Thats the whole point of this section. Not to decide whether economic inequality is "good or bad" according to some value system that we assume or impose, but to describe what particular value systems have to say about economic inequality. PAR 16:09, 23 October 2005 (UTC)

I restored the text with some modifications to clarify some of the issues that you have with this section of the text. The use of the terms "wealth" and "value" were a little bit off in the original text. I replaced these terms with those related to utility. Utility is a standard part of economic theory. True, it would nice if we had some way to measure utility exactly, but we don't. Nevertheless, economists discuss utility all the time, so it can be included fairly here.
Also, your arguments about "left value" is still not relevant. While a person on the left is more likely to bring up this issue, the statements here have nothing to do with so called "left values." A person who already has a house will get less utility from a new house than a person without a house at all. This is because of diminishing marginal utility, not a left value system.--Bkwillwm 23:13, 23 October 2005 (UTC)

Please stop reverting without discussion.

  • "A person who already has a house will get less utility from a new house than a person without a house at all." I have no argument with that statement.
  • "This implies a society with a more inequality would have less total utility than a more equal society with the same level of total wealth." DOES NOT FOLLOW - The total utility of a system is not equal to the sum of the utilities going to each individual. A poor person who successfully steals money from the millionaire derives a lot of utility from the extra cash, more than the millionaire loses. This does not imply that the utility to a society increases as the result of the theft. There are other social costs involved with theft, and there may be other social costs involved with a homeless family of five in the millionaire's house, depending on your value system. The utility of a big house to a homeless family is larger TO THAT FAMILY than it is to the millionaire, no dispute, but the idea that the utility to the homeless family equates to utility to society does not necessarily follow. To say that it does requires the introduction of some other value system, which needs to be identified as such. The same goes for anyone who says the utility to society is NOT increased by having a homeless family of five live in the house. This too requires a separate value system that needs to be identified. For example, how much net value to society is housing a homeless family that is jobless, no skills etc. versus a millionaire brain surgeon? Anybody who says they know the answer is assuming a value system, and is assuming a POV.

We want to get rid of the neutrality dispute. THIS SECTION SHOULD NOT BE USED TO PROVE THAT ECONOMIC INEQUALITY IS GOOD OR BAD. To do so requires a particular set of values. ALWAYS. We should use this section to explain different value systems, and whether and why they see economic inequality as good or bad. The section that I have removed did not do this. It was an attempt to prove that economic inequality is bad, and this is not an absolute truth, it is not an NPOV. PAR 02:34, 24 October 2005 (UTC)

OK, I won't add text related to this until there is some more resolution. Although my last edit wasn't exactly a revert. If you agree with poorer people getting greater marginal utility, at least put in something about that. Usually utility to society is viewed as the total utility of all individuals (both in Utilitarianism and in most contemporary economic theory, which is heavily influenced by utilitarianism). It is NPOV to state that because of diminishing marginal utility the more the economic inequality in a society, the less total utility. Arguments made about the relative merits of distributions of utility would be POV, but that's not whats in the text. Perhaps the argument could be made in terms of utility and then interpreted from various perspectives? Also, could you offer alternative, NPOV text discussing the topic?--Bkwillwm 03:07, 24 October 2005 (UTC)
Add in... this is not an attempt to prove that inequality is "bad." Inequality has a number of effects that could be said to be good or bad. I, at least, am just trying to put in one of the effects. Most people would probably see a decline in utility as a negative effect, but my text didn't make an argument that this was so. Likewise, inequality can have some positive effects such as providing incentives for people to work. To "prove" that inequality is bad, one would have to weigh all of these effects and other moral issues. No one is trying to do that here.--Bkwillwm 03:25, 24 October 2005 (UTC)

"It is NPOV to state that because of diminishing marginal utility the more the economic inequality in a society, the less total utility". Yes but we need to make it clear that the total utility is not necessarily the same as utility to the society as a whole. The significance of this total utility is what is at issue here. The left would say it has significance, the right would disagree.

Ok - this is not what I would put in the article, it refers to the above discussion, but it is a perhaps preliminary way of saying it.

An egalitarian value system would believe that the value to society is equal to the sum of the marginal values going to each individual, because it leads inexorably to the conclusion that the optimum society is one in which all economic goods are distributed equally.
On the other hand, a meritocratic value system would believe that the value accruing to an individual has value to society only to the extent to which that individual is making valuable contributions to that society. In this value system, the idea that the value to society is equal to the sum of the marginal values going to each individual is not true.

By way of explanation of the second paragraph:

In other words if the homeless family is poor because society does not value their contributions (which is why they are poor) and the millionaire is rich because his/her contributions are valued highly by some other member(s) of society, then the marginal value to society of the millionaire living in the house is greater than that of the homeless family living there, even though the marginal value to the family would be greater than to the millionaire.

Regarding Utilitarianism see also Pareto optimal for another take on "optimization of society". PAR 16:16, 24 October 2005 (UTC)

It seems like we're in agreement about the general idea that inequality (ceteris parabus)leads to less total utility (as a sum of individuals' utility), correct? The issue is how this should be interpreted.

Yes, total agreement.PAR 04:44, 25 October 2005 (UTC)

I don't think this section of the article should go into too much detail about philosophical systems and their take on inequality in general (although the article should probably have such a section). Perhaps a text at the end of what I put up should read something along the lines:

"However, it does not follow that imposing a more egalitarian system would increase utility. Redistribution of wealth could lead to less incentive to produce and thus less total utility. Philosopical systems also take different stances on the relevance of utility. Libertarianism as seen in the works of Robert Nozick and Ayn Rand would generally oppose any government interference on moral grounds while egalitarians would advocate an equal distribution of wealth usually without regard to utility."
  • I don't understand the meaning of "utility" in the above paragraph. Is it the sum of the individual utilities or is it "social utility", i.e. utility accrued to the society as a whole
  • If egalitarians want equal distribution without regard to utility, why do they argue that total individual utility equals social utility? (or do they?).
  • There is also the pragmatic rather than moralistic libertarianism which says that in an economically "free" society, social utility tends to be maximized naturally by the free market. As with the case of the homeless family, the very fact that they cannot afford to buy the milliionaires house is proof that their moving in and moving the millionaire out would entail negative social utility. (Of course in the real world, this is arguable at best.)PAR 04:44, 25 October 2005 (UTC)
  • I meant the sum of individuals' utility rather than society's utility. Usually utility is viewed as the sum of individuals' utility, however, this doesn't mean that higher aggregated utility is the same as society being better off (or higher utility of society), which requires a value system for gauging how society benefits. I agree that it makes sense to distinguish between these.
  • In most egalitarian writings I've seen, the argument for equality is based on a moral belief in economic equality being good rather than an argument for higher utility. Perhaps an egalitarian has used this argument, but I'm pretty sure it's not central to egalitarianism.
  • True, the pragmatic libertarian argument should be included too. Although, this argument works for other groups besides libertarians since many people would agree that incentives cause higher production and thus higher utility.--Bkwillwm 00:52, 26 October 2005 (UTC)

If I had my way I would not go any more in depth than "Philosopical systems take different stances on the relevance of individuals' total utility." Instead, I'd argument different philosophical perspectives on unequality in general. A more in depth discussion philosophical would clutter the section a little bit, but if its neccesary, so be it.--Bkwillwm 17:49, 24 October 2005 (UTC)

I agree, lets not write too tangled a paragraph. I'm not sure I'm summarizing this right, but you say that the concept of the sum total of individual utilities is important. I am suspicious that it is only important to an egalitarian, who can use it to "prove" the "goodness" of redistribution. That's why, if we include it, I want to make it very clear that this sum total is not necessarily something that needs to be maximised, and that saying or implying that its something that is desireable to maximize implies a set of values, a POV. PAR 04:44, 25 October 2005 (UTC)

Fair enough. I agree with pretty much all you said except that summed utility would only be important to egalitarians. I think the ideas of utility and summed utility is important to many people to some existant. However, the conclusion that moving to equality increases summed utility is not neccesarily (and probably not) true. Also, I agree that interpreting summed utility requires a value system. So, here's another attempt at an interpretation section to follow what I had intially:

"Given this argument, if there are two societies with all other factors being the same, the one with less inequality would have more aggregated utility. However, it does not follow that making a society more equal increases utility. For instance, reducing inequality through redistribution may lead to less incentive for production and thus less utility. Different value systems also have different perspectives on the use of utility in making moral judgments. For example, Marxists, Kantians, and certain libertarians (such as Nozick) all believe utility to be irrelevant as a moral standard or at least not as important as others such as natural rights."

Let me know what you think.--Bkwillwm 00:52, 26 October 2005 (UTC)

Yes, I think thats excellent. I couldn't resist rewording like:
"From a utility standpoint, if there are two societies, all other factors being the same, the one with less inequality would have more aggregated utility. For example, a homeless family of five will derive more utility from a new house than would a millionaire with five other homes. However, it does not necessarily follow that making a society more equal increases the net social utility. For instance, reducing inequality through redistribution may lead to less incentive for production and thus less social utility, at least from the point of view of the economic right. Different value systems also have different perspectives on the use of utility in making moral judgments. For example, Marxists, Kantians, and certain libertarians (such as Nozick) all believe utility to be irrelevant as a moral standard or at least not as important as natural rights." PAR 02:48, 26 October 2005 (UTC)

I went ahead and posted a paragraph on the topic since we pretty much seem to have reached a consensus. I took what I had originally and mixed it with what you just wrote. I reinserted the such as before natural rights, but that's about the only change I made to what you just posted since I think this makes the sentence a bit more accurate since Marxists don't neccesarily advocate natural rights. Of course, feel free to edit what I posted.--Bkwillwm 20:00, 26 October 2005 (UTC)

[edit] Merge with wage gap

The wage gap article should probably live here, or at least wherever intranational inequality ends up. Intangir 15:44, 29 November 2005 (UTC)

- I agree. Probobly somewhere under the 'discrimination' of the effects part. - Kodemizer, December 1 2005 I now disagree... Bkwillwm is right, different things. Also, this article is starting to get long, so we should not merge unless its a clear-cut case. -- kodemizer, december 2nd

I disagree. The wage gap article describes differences in income among workers producing the same output. This is a different concept than inequality in the distribution of income and wealth, which is the primary subject of this article. Merging the two will only create confusion. Although, both articles should mention each other and differentiate the two concepts.--Bkwillwm 22:08, 1 December 2005 (UTC)

I disagree too. The wage gap is basically an effect of inequality, the difference in what people earn. Inequality solely refers to the distribution of money in a society. I agree that they are linked though and they each deserve a reference to eaech other. Moreover they are large articles, not a reason in its own but merging it would create a huge article.In my opinion :-) --83.105.37.24 15:18, 8 December 2005 (UTC)

Dissagree wage is only one form of economics and wealth (or poverty) --140.142.168.134 02:05, 3 February 2006 (UTC)

I'm going to remove the merge template unless someone objects. It seems consensus is against merging.--Bkwillwm 12:39, 3 February 2006 (UTC)

[edit] POV and verifiablity

The following section seems suspect:

A criticism of this point of view would be that it fails to differentiate between wealth and income. It also makes predictions about behaviour (hoarding of accumulated wealth) that are not supported by historical evidence. It further indicates that redistribution is a necessary measure to counteract the unproven assertion. Without any historical evidence that hoarding is a real phenomenon, and that it is harmful (See Adam Smith's criticism of merchantilism ), talk of redistribution is fraught with many negative externalties. It is however a good example of the illogical thinking that tends to typify much of modern populism.

I am not sure about whether there's historical evidence of hoarding. I think there should be some support for the claim other than an 18th century economist's critique of merchantilism. The criticism seems disengenious as well, the point of view being criticized seems to discuss saving, not just hoarding. The last sentence is just POV. I'm going to take it out. Also, the criticism mentions problems with redistribution. This is a standard response to all the negative aspects of inequality. Perhaps there should be a "Responding to inequality" section, which discusses possible actions in response to inequality and their consequences.--Bkwillwm 20:19, 2 December 2005 (UTC)

  • Yeah, I was thinking about a section called "responding to inequality" or something of that nature. If you want to go ahead and create it you have my support. We could include bits about income tax and subsidizing things such as education and health care... However, I eventually wanted to put things like taxes under a "mitigating factors" section of the causes. We could include a discussion of taxes in both sections I guesse. -kodemizer, decenmber 2nd 2005 PS. Thanks for you contributions..

[edit] Economics and effects of inequality

Hi there Bkwillwm. Thanks for all your effort on this article! However, I have to disagree with your edit concerning the "incentives" and "untility" sections. I put them under one section entitled "economic efficiency" because well, both arguments are subsets of economic efficiency considerations, although very different parts of economic efficiency. I also wanted to keep them together under one section so we could include a brief intro relating them to eachother. Perhaps my intro wasn't as well penned as it should have been, but I think it would really help to have them together under an "economic efficiency" section. <--(i've changed my mind, your edit was good)

Hmm perhaps Utility Maximization should be renamed Distributive Efficiency since that is really what we are talking about.. of course, there isnt even a Distributive Efficiency article. Perhapps creating it is another project... Cheers! -- Kodemizer, december 2nd, 2005

That seemed like a good idea, so I started a Distributive efficiency article. Edits are welcome, of course. BTW, spinning off international inequality and gender gap seems like good ideas.--Bkwillwm 22:28, 3 December 2005 (UTC)

[edit] Let's split this article

I think it would be a good idea to split this article into two seperate articles. The first being inequality within society. The other being international inequality amongnst different countries. They are really two very different things with different causes, effects, everything.. Inequality among individuals should still be called "economic inequality", but i'm not sure what to call the inequality among nations article... perhaps "Economic inequality (inter-national)"  ?? within that article we could talk about the digital divide, the brain drain, etc. thoughts? ---Kodemizer, december 2nd, 2005

I've now done this. international inequality has been spun-off, with a link to it in the opening paragraph. --Kodemizer, december 7th

[edit] merge out section on gender

We should merge causes -> descrimination -> gender with the article on gender gap..This deals with subject matter than has more to do with the gender gap than with general economic inequality per se.. The economic inequality peice should still have a short description, but the main peice should live at gender gap.. thoughts? ---Kodemizer, december 2, 2005

I've now done this.. I've rewriten gender gap with the information previously in this article.. what was gender gap in turn was renamed to gender differences -- kodemizer, december 3rd, 2005

Gender gap would be better suited within the article Income disparity. I've made a request for merger.--sansvoix 03:58, 12 December 2005 (UTC)

[edit] patterns of inequality

I was just struck with a thought! Perhaps we need a new section called "patterns of inequality", that is on an equal level with causes, effects, etc. Within this we could discuss race, gender, inter-countries disparities etc. Thoughts?

---Kodemizer december 2, 2005

In Income disparity, it is open to adress the economic inequalities you mention!--sansvoix 04:01, 12 December 2005 (UTC)

[edit] Moving material to International inequality

I began moving the appropriate material from this article to International inequality. I urge the Wikipedians who added links to "See also" and "External Links" to move the appropriate ones to the new international article. Another Wikipedian 05:10, 8 January 2006 (UTC).

I put the image back on to this page. The image you moved shows the inequality as measured by the Gini coefficient for varios countries around the world. This is a measure of the inequality within each country (the topic of this article), not between countries (the subject of the international inequality article). Likewise, the papers in the reference section should not have all been moved. Some of the references in that section refer to citations in this article and not International Inequality (including some citations I put in, ie Barro).--Bkwillwm 05:43, 8 January 2006 (UTC)
I agree that the image shouldn't have been moved, my mistake. However, the following links were added for the first time by me, and they referred to what now is called "International inequality".
Papers
Milanovic, Branko (World Bank), True world income distribution, 1988 and 1993: first calculation based on household surveys alone, The Economic Journal, Volume 112 Issue 476 Page 51 - January 2002. Article: [4]. Actual report on which the article is based: [5]. News coverage: [6] and [7].
Cole, Matthew A. and Neumayer, Eric. The pitfalls of convergence analysis: is the income gap really widening? Applied Economics Letters, 2003, vol. 10, issue 6, pages 355-357 [8]
Quah, Danny (1997), "Empirics for growth and distribution: stratification, polarization and convergence clubs", London School of Economics and Political Science, Center for Economic Performance Discussion Paper No. 324, pp. 1-29. [9]
External links
(Shoud be moved???) * The UC Atlas of Global Inequality explores some aspects of inequality using online, downloadable maps and graphics.
(Should be moved???) * Poverty Facts and Stats is a well-documented source of comparisons.
So, I will move only "my" original references and Poverty Facts and Stats, since these references only deal with world inequality. Another Wikipedian 07:23, 8 January 2006 (UTC)


[edit] Hello! I am new to this topic, but have a fundamental question

I have been studying the history of wealth distribution in the United States and noticed a problem with the information that is coming from the Census bureau. The data shows a pretty abysmal distribution of wealth, not getting better over time. The problem is that I could not see an positive impact that I had expected. I would have expected as a positive impact caused by the start of 401K's in 1981. They are now up to 2 Trillion dollars, but yet the distribution has not measurably improved.

Another article that I found said that 401K's are not included in the wealth contribution.

Any ideas?

Patrick Robinson

PatrickTRobinson@comcast.net

—The preceding informally signed comment was added by Patrick T Robinson

Are you being facetious? You must know nothing is wrong with data showing that 401Ks did not reduce inequality in the US. Their purpose has not been to reduce inequality. Their purpose is to transfer risk and the cost of pensions from employers to employees. What is it that you are interested in? Blanche Poubelle. —Preceding unsigned comment added by 71.224.175.165 (talk) 20:37, 18 September 2007 (UTC)

[edit] Section Titles

(cur) (last) 22:01, May 4, 2006 Bkwillwm (restore heading changes, see Wikipedia:Manual of Style (headings) for capitalization guidelines)

(cur) (last) 21:29, May 4, 2006 AntelopeInSearchOfTruth (→Perspectives regarding economic inequality - Nouns in a title are capitalized / Perspectives represented in this section should not be reduced to political movements.)

While I defer to Bkwillwm regarding the capitalization guidelines ;).... his supplied rationale does not address my comments regarding how the first few sub-sections are named.

In other words, the overall section title is "Perspectives regarding economic inequality", not "Political movement stances regarding economic inequality". And I think that's the way it should be, perspectives can be shared across political movements so they make better sense as a broader category.

As such, immediate sub-sections titles within that section should first regard the stance or outlook. Then perhaps political movements could be categorized under subsequent divisions of *those* sub-sections. But, just because a political movement holds that stance, does not mean they necessarily characterize the whole stance.

To put it another way, characterizing a perspective regarding economic inequality as Marxist or whatever, makes it look like only Marxists hold that view so if you hold that view, you are Marxist. When, in fact, being Marxist is not a requirement to agree with that perspective. Characterizing the perspective as Marxist is biased.

Perhaps there is a reason I am unaware of that justifies this apparent inconsistency, but if there is not, I am thinking to revising those couple of sub-section titles back so they are consistent with the organization scheme implied by the section title.

(and a minor point that will likely be rendered moot: Libertarianism is not the same as Liberalism.)

(Antelope In Search Of Truth 19:12, 5 May 2006 (UTC))

You make several good points. I'm fine with the most of the changes you made except the subsection headline that said "Government interference causes inequality." While that may be an argument, it's not the primary argument of the section. In fact, I don't think the section atributes that argument to anyone. Also, the section, under the alternative title of, "Liberalism" deals with more than just libertarianism, there's a discussion of Rawls too. Basically, I think you're on the right track, just make sure your headline changes represent their respective section's content.--Bkwillwm 19:41, 5 May 2006 (UTC)
"Government interference causes inequality...... In fact, I don't think the section atributes that argument to anyone."
Firstly, and least importantly, I think it was intervention, not interference, but -shrugs- same difference for our discussion.  ;)
Ah..... upon reexamination, I was looking at this statement as the basis for the sub-section title, "However, Nozick recognized that some modern economic inequalities were the result of forceful taking of property, and a certain amount of redistribution would be justified to compensate for this force but not because of the inequalities themselves" But that does kind of leave Rawls out.  :(
But the overall point Nozick is making regards Government actions and/or redistribution of wealth. So maybe something like, "Government intervention & economic inequality"
Looking at what Rawls said again, he seems to be talking about the basis for redistribution/distribution of wealth, so we could shift his comments up with the content in the section currently under "Marxism", since it talks about much the same thing, and rename it something like, "Thoughts regarding the basis for redistribution of wealth".
Those are just a few ideas...... I'll sleep on it.  ;)
(Antelope In Search Of Truth 05:29, 6 May 2006 (UTC))

[edit] Peer review request

Editors interested in this topic might like to take part in peer review on a new version of Global justice I've been working on. Cheers, --Sam Clark 11:25, 28 July 2006 (UTC)

[edit] Suggested sources

For those who are interested in contributing to this article, here are some free information sources:

[edit] inequality not primary concern

Hello - I re-removed the sentence which read:

"A critique of this argument is that it ignores the inequality that exists before the transaction takes place. However, even granting this, each market transaction should in theory benefit both parties."

I removed the second sentence because its redundant (given the new additions), but it's the first sentence which particularly bothers me. I would like to restate the critique it in a clearer fashion, but I don't understand it. It needs to say why the inequality which might exist before the transaction occurs is important. And it needs to say it in a way that does not simply assume that inequality is a primary concern. I mean, it sounds like the critique is simply saying that the problem with the argument is that it does not make inequality the primary concern, which is, of course, true, but thats the point of the whole section. As it stands, the critique is not very useful, it needs to be improved. PAR 05:14, 14 November 2006 (UTC)

[edit] "Richest 2% own 'half the wealth'"

According to a study: http://news.bbc.co.uk/2/hi/business/6211250.stm function msikma(user:UserPage, talk:TalkPage):Void 13:22, 6 December 2006 (UTC)

[edit] Mitigating factors

I removed the citation tag in the mitigating factors section, and replaced it with a reference. A more technical statement of that sentence would be "the laissez-faire equilibrium distribution of wealth is not a concentration of all wealth in the hands of a single individual". It is difficult to find a reference which states this explicitly, sort of like finding a reference which states explicitly that the average temperature of the earth is not 200 degrees below zero. Try googling "laissez-faire equilibrium" and you will never find it referring to a situation in which one person owns everything.

The reference I added is rather technical, and the closest it comes to explicitly describing wealth distribution for the laissez-faire equilibrium is

"The net effect of an increase in initial wealth on the relative income of agent i is given by ρ(l). As long as the laissez-faire equilibrium is one of positive growth, it is straightforward to show that 0 < ρ(l) < 1."

The case where ρ(l)=1 would correspond to total concentration of wealth. PAR 08:28, 14 December 2006 (UTC)

Thanks for providing the citation. I think this section of the paper is particularly relevant to what you're trying to argue: "Wealthier agents have a lower marginal utility of wealth. They therefore choose to work less and to enjoy more leisure, and given their relative capital endowments, this generates an equilibrium income distribution." I think is a little more persuasive than the argument that a wealthy person has to hire people to protect his property and that this leads to an wealth distribution equilibrium. Maybe this should be worked in too? Thanks again for getting the citation.--Bkwillwm 02:46, 16 December 2006 (UTC)

Yes, I thought it was an interesting article too. It makes sense to me that one of the effects of decreased marginal utility of wealth (DMUOW) is that the rich spend more money on leisure activities, which effectively works to decrease economic inequality. But the DMUOW also means that in general they spend it on all sorts of other non-basic things besides leisure, including management and protection of their property, etc, all of which work to decrease economic inequality. The important point is that the decrease in economic inequality exists, but only goes so far (i.e. only as far as the "equilibrium laissez-faire distribution" which is not a complete equality). We should be able to figure out how to word it very briefly without getting too technical. PAR 04:40, 16 December 2006 (UTC)

[edit] Benefits of Economic Inequality

This article doesn't go into the benefits of economic inequality much. It seems to portray inequality mostly as a negative. But in the context of developed countries, some people see economic inequality as actively beneficial, such as Paul Graham [5] (to be more precise, he claims that schemes for reducing inequality are harmful). I think one could find more references for this viewpoint. I'm not sure how much of a minority view this is; however, this article does seem somewhat POV. Thoughts? - Connelly (talk) 01:02, 12 January 2008 (UTC)

This article should be as non POV as possible, which means that it should at least be careful about approaching the subject from a judgemental point of view, pro or con. I have not read this article for a while, but if you can point out what you think are non-POV aspects of the article, then they should be fixed. With regard to the Graham website, I am not sure if it qualifies as a reference. If Graham has published in peer-reviewed journals on the subject, then these reference would be best. If he has credentials in the field and has written a book, that would be good too. If thats the case, by all means, enter the information into the article in an appropriate place. Finally, to state (as Graham does?) that inequality is "beneficial" is a POV statement, in that it makes a value judgement about inequality, and would be just as bad as stating that inequality is "harmful". The next best thing, I guess, is to at least try to balance the article between the "beneficial" and "harmful" aspects of inequality. PAR (talk) 08:28, 12 January 2008 (UTC)


[edit] Where is this place?

A major cause of economic inequality within modern market economies is the determination of wages by the market, provided, that this market is a free market ruled only by the law of supply and demand. In this view, inequality is caused by the differences in the supply and demand for different types of work.

The above is written as if there are actually modern market economies that are free and ruled only by the law of supply and demand. This is, of course, demonstrably false. I'm not arguing that a market economy could create inequalities, nor that the market-driven portions of mixed economies isn't actually causing inequalities. Rather, I'm saying no where in the world is there a truly free market, free of government influence (at least) or attempted control. —Preceding unsigned comment added by JackieRipper (talk • contribs) 18:39, 28 March 2008 (UTC)

[edit] The neutrality of this article is disputed.

I see no justification for this tag. Could whomever posted this tag please provide some context.

--kodemizer —Preceding unsigned comment added by Kodemizer (talk • contribs) 19:08, 8 June 2008 (UTC)