Equal distribution of wealth essay (1 Viewer)

[purpleprincess]

I've got to write for and against points for it in relation to the australian economy. Anyone got any good sites that I can use for points. Also anyone got some good "for" points?

Anyways all sorts of help is appreciated.

2000 word essay

 

[Riviet]

The Biki has some points to get you started, click here and scroll down to distribution of income and wealth, there are four dotpoints, have a look through those four links.

 

[purpleprincess]

thanks without wings and riviet for letting me know about biki.

anyone know any other good places where i can get some more information? or have any quotes that i could use, or have any other good points?

 

[gnrlies]

This might sound a little crazy, but an economy with inequality is actually better for all individuals than an economy without inequality.

Now the reason is this:

Inequality is a reason for growth. The survival of the fittest, and the compettiveness of peoples careers is what drives society. We all want to be better off than our next door neighbours, and we all want to keep up with the jones'.

This is a major motivational tool in the economy. It drives students to want to do the best degrees, and it makes people work hard to get that promotion. Not because they really need the extra money, but because they value the prestige of their work and the money they get from it. Whilst not all people are motivated by this, many people are.

If everyone earnt the same income, this would dissapear. There would be no class system, and people would not strive to achieve more as there would be no incentive of doing so (assuming in an extreme case the government were to tax high earners, and give it to low earners). What would happen of course, is that the economy would grow very little, and this particular society would remain frozen at its current level of economic prosperity.

Consider another economy. One with inequality such as Australia. Australia has inequality such that we do have a class system, and people become aspirational and want to earn a higher living. Subsequently our economy thrives.

Lets compare these two economies after 50 years. The first economy is still stuck at the same level, whilst the other economy has grown, maybe many times over, such that all individuals are better off than those in "equal" economy.

It is for this reason that inequality is actually an essential part of a successfull economy.

Where it gets tricky, is where inequality grows too high. I would say that where inequality is too high, this is not desireble as the incentive effects are not present. I think inequality in australia is probably just about right.

As long as those at the bottom rung of society are growing and are prospering, it shouldn't matter that those at the top of society are growing faster and prospering more. As long as those people at the bottom have the opportunity to reach the top, inequality would help the whole economy (including those at the bottom)

 

[gibbo67]

While some inequality is necessary for the progression of the society in the short term, it may becom problematic if it becomes permanently entrenched to the extent that people are incapable of changing classes on their own merits. For example: heirs to old money will have greater access to financial capital to set up their own entrepreneurial activities; cronyism and nepotism may occur at the apex of the corporate ladder (e.g. fathers with substantial holdings in a company have the power to hire their own children and friends onto the company board when equally qualified outsiders are locked out, the old-tie connection at private schools and universities), creating somewhat of a corporate feudal system. This needn't extend to corporations; governments are also prone to cronyism when plutocray takes hold, especially around election time (notice that the wealthiest are granted the biggest tax cuts). It should also be noted that not all citizens are capable of improving their social standing for many reasons, including non-fluency in the lingua franca, disability, gender, location, level of education, social connections, genetic qualities, existing accumulated family wealth.

In addition, inequality in the system has the potential to create some other dire social costs, ranging from crime, maintenance of the prison population, disparity in the health and education systems, suburban relocation (e.g. gated communities, inner-city slums), corruption, mass industrial activitiy, rioting. At the extreme end, you only need to look at the number of revlolutions in the past 300 years, including france, russia, cuba and other socialist coups d'état as examples of where the poorest people succeeded in overthrowing the wealthy elite of their respective societies.

The compulsion to kep up with the Jones' has also lead some people astray. It is well documented that work-related stress is a big contributor towards depression and the desire to consume and live like the upper classes has plunged many into bankruptcy through excessive debt.

 

[gnrlies]

While some inequality is necessary for the progression of the society in the short term, it may becom problematic if it becomes permanently entrenched to the extent that people are incapable of changing classes on their own merits. For example: heirs to old money will have greater access to financial capital to set up their own entrepreneurial activities; cronyism and nepotism may occur at the apex of the corporate ladder (e.g. fathers with substantial holdings in a company have the power to hire their own children and friends onto the company board when equally qualified outsiders are locked out, the old-tie connection at private schools and universities), creating somewhat of a corporate feudal system. This needn't extend to corporations; governments are also prone to cronyism when plutocray takes hold, especially around election time (notice that the wealthiest are granted the biggest tax cuts). It should also be noted that not all citizens are capable of improving their social standing for many reasons, including non-fluency in the lingua franca, disability, gender, location, level of education, social connections, genetic qualities, existing accumulated family wealth.

In addition, inequality in the system has the potential to create some other dire social costs, ranging from crime, maintenance of the prison population, disparity in the health and education systems, suburban relocation (e.g. gated communities, inner-city slums), corruption, mass industrial activitiy, rioting. At the extreme end, you only need to look at the number of revlolutions in the past 300 years, including france, russia, cuba and other socialist coups d'état as examples of where the poorest people succeeded in overthrowing the wealthy elite of their respective societies.

The compulsion to kep up with the Jones' has also lead some people astray. It is well documented that work-related stress is a big contributor towards depression and the desire to consume and live like the upper classes has plunged many into bankruptcy through excessive debt.

Well yeah, extreme inequality is worse than equality. But some level of inequality is usefull. Probably like what australia has is ideal, as long as like you say everyone is given an opportunity..

 

[gibbo67]

i thought of a few things more:

Governments are also active in ensuring that the distribution of income doesn't become too skewed toward the edges of wealth and poverty. These include a number of taxation methods such as the progressive income tax system, welfare payments to the more needy including those subject to unemployment, families, elderly pensions, subsidistaion of education (especially university), estate taxes (such as the death tax on estates > $US 7m in the United States) and provision of public housing for those without property.