Branko Milanovic on why should we care about inequality

An important, interesting and accessible article on why we should care about inequality. Three reasons are advanced. From the article


  1. Every inequality in the treatment or position of individuals – including inequality in income and wealth – requires understanding and justification, because we are all fundamentally the same. That does not mean we should all have the same incomes because our effort and luck may vary, but we need to think about the reasons for any and every inequality.
  2. We want to study inequality and its effects on economic growth – not only on the growth of the mean, like GDP per capita, but along the entire income distribution: for the poor, the middle class and the rich. This, unlike the first reason, is a very instrumental reason: we want to find out whether inequality helps or retards economic progress.
  3. We need to look at the relationship between inequality and politics. In every political system, even a democracy, the rich tend to hold more political power. The danger is that this political power will be used to promote policies that further cement the economic power of the rich. The higher the inequality, the more likely we are to move away from democracy toward plutocracy.

The article continues to make some interesting points on nuances in understanding inequality and points to some areas of further research. Access the article at the Guardian’s inequality site. Click here.

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