Wealth inequality has been getting increasingly topical over the years. Despite the fact that corporate media has published hundreds of articles on the subject, very few attempts have been made to go into the actual mechanics of this phenomenon and try to explain the theory behind it. We attempt to humbly fill the gaps and provide a broader context for the issue.
There is an old joke saying that, instead of helping the poor, socialists and communists have always been fighting the rich. Such jokes might be funny, but there is also a reality that spawns form theory: you can’t have poor if you don’t have rich. And vice versa.
“Rich” and “poor” are the terms used to compare people to each other in terms of wealth. If everyone is rich in any given society – no-one is.
When difference in wealth between people grows significantly, it transforms into power. If a millionaire, for instance, doesn’t want to clean his toilets, he can hire people with lower socio-economic status to do it for him. He can exercise the power of his wealth over poorer people and make them do what he wants. However, if that millionaire lives in a hypothetical town where everyone is a millionaire, he wouldn’t be able to hire anyone to do such job, because everyone would have the same amount of power, so he would have to either clean his toilets himself or bring people from poorer regions and pay them to do it.
As the difference in wealth increases, so does the power of rich over poor. A billionaire living in a relatively poor country can bend the entire society by bribing/lobbying politicians and lawmakers, changing the legislative system and introducing laws and regulations that would benefit his businesses and himself at the expense of ordinary people. The same principle applies to large and wealthy corporations. Excessively rich entities that are situated in relatively poor societies can easily get away with any crime as they have the capacity to bribe law enforcement and buy the entire legislative apparatus.
Rumours have been circulating that David Rockefeller, who died last year, had 7 heart transplants in his lifetime, and that he received his last one when he was already over 100 years old (he died at the age of 101). If those rumours are true, then it is truly disturbing, considering that hearths (and human organs in general) are an extremely limited and valuable resource, with the transplant candidates selection process being strictly regulated (e. g. heart transplants are not given to those who are over the age of 70 and to those who have other significant health issues, because their chances of survival are too low regardless of heart condition). Every hearth transplant given to David Rockefeller is one human life that could’ve been saved legitimately. Furthermore, considering that David Rockefeller was already too old when he was supposedly receiving those heart transplants, the hearts should have been specifically selected to be highly compatible with his system (otherwise, the tissues could have been rejected by his body), which leads us to some disturbing speculations that black organ harvesting was involved in the process, which, again, would demonstrate the excess to which super-rich individuals can abuse their power.
Wealth gap, obviously, creates social segregation, which, with time, cements in culture and even in biology (rich normally want to marry and have kids with other rich people). Look at India as a prime example, where people have been separated into different castes for millennia. Such social segregation has resulted in ethnic/genetic differences between different segments of the same society, with Brahmins and Dalits (the “outcastes”, or “untouchables”) having, among other things, different skin colour. And even though such type of social hierarchy was adequate for its time, allowing Indians to create one of the most advanced World civilisations in the first millennium BC, such system lost almost all its potency towards the late Middle Ages, leaving the region defenseless against more advanced capitalist/imperial colonial powers that strove for world hegemony.
Research has been showing for decades that countries with large gaps between rich and poor are very prone to corruption and have higher levels of social tension, which, obviously, doesn’t contribute well to social stability. The countries where very rich rule over very poor experience huge (and often fatal) problems.
Needless to say, excessive socio-economic segregation handicaps fair competition. There is a very little chance of a bus driver’s kid being able to compete fairly against a child whose parents are billionaires, due to differences in schooling, tutoring, availability of information resources, and even quality of food, which has its effects on the brain development (many of these factors explain a significant portion of correlation between genetics and IQ that we observe empirically − rich people are more likely to provide safe environment, nutritious food and high quality, enriching education to their kids). The concept of free market doesn’t really work if those who compete have different starting conditions.
Speaking of free market and Capitalism itself, the concept was a huge step-up from the Feudal system, at the time. The competition was encouraged (many thinkers of Modernity, including Adam Smith, viewed human strive to compete against each other as a source of energy that can be harvested and used to move Civilisation forward, like high pressure steam from boiling water that provides kinetic energy for heavy machinery). And it was, indeed, working at the time. But, unfortunately, such things only work properly at the early stages of Capitalism. As the system progresses, those who accumulate huge wealth become so powerful they can change the game rules in their favour. We have seen how states that act against the interests of the Trans-Atlantic institutions have economic warfare waged against them, with other powers forced to illegally introduce sanctions against their own economic interests; even the conventional UN and WTO regulations don’t help − countries are just forced to fight sanction wars with no foreseeable economic benefits whatsoever, all because the decision making is influenced by the figures who play in their personal interests, with no regard for interests of everyone else.
If left uncontrolled for long, the free market tends to distribute wealth in a way that creates supermassive financial/industrial entities that act above the system, entities that change the system in whatever way they please, creating monopolies and abusing power. Hence we get all these families and industrial/financial entities such as the Rockefellers, Rothschilds, Morgans, the US military-industrial complex, and all the other players that manically try maintain their power and get richer at the expense of everyone else (e. g. starting wars to sell more weapons and get more money from investments, destroying countries and entire regions to eliminate competitors and to create cheap human labour, and such, with absolutely no regard for international law or conventional moral principles). It’s just the sad mechanics of Capitalism that begins to manifest itself after the system progresses beyond an optimal stage.
Highly unequal and, most importantly, unfair distribution of wealth is a deep systemic issue these days, in virtually all domains of our society. Facebook CEO, Mark Zuckerberg, for instance, has a networth that is equal to annual salaries of hundreds of thousands of high class programmers/software engineers. Ask yourself a question − who’s more important for Facebook, and for Humanity’s progress in general – hundreds of thousands of highly skilled programmers or one Zuckerberg? The answer is unlikely to be in Zuckerburg’s favour, especially considering that people and entities like him normally use their financial assets to gain even more power at expense of everyone else.
The disturbing thing is that economic inequality has been increasing worldwide in recent years. In the United States, for instance, people whose salaries are in the national highest 5% are seeing their wages rising almost four times as fast as the wages of regular American workers. Russia has recently seen a sharp increase in the number of excessively rich people, showing a 19.7% rise in the number of millionaires in 2017, with the total number of billionaires increasing as well, while general Russian population has been experiencing a steady decline in wealth, with average purchasing power decreasing by 11% since the Western elites launched the sanctions warfare against the country in 2014. In Australia, average wages have been growing significantly slower than the inflation rate, meaning that, despite the technical growth in earnings, Australian workers have actually been losing their purchasing power, all while the CEOs and other top executives have been enjoying the highest pay rise rates in years. Other countries show similar dynamics.
Furthermore, the official figures say that, as of January 2017, the World’s 8 most rich men had as much wealth as the poorest half of the global population! Just a few years ago the figure was 62 against 3.6 billion. Nowadays it’s eight! And those are only the official figures (we may only speculate how much super-rich families and conglomerates really own).
The systemic issue that we’ve been observing is truly global now.
Social systems with huge wealth gaps are unstable. Hence, we’ve been seeing all this instability in the world in recent years.
Of course, it’s impossible to make everyone’s wealth equal. I’m personally not a huge fan of the radical leftist ideas (some of them are just outrightly out of touch with reality, in my view). Some people will always be more talented, more cunning and more hardworking than the other, naturally (and deservedly!) obtaining more resources than their peers (needless to say, power inequality doesn’t arise from material wealth difference alone). Nobody can cancel the normal statistical distribution observed in nature, after all. Besides, a bit of healthy competition is necessary for Mankind’s survival. But it is still necessary to try to regulate the processes that lead to large wealth gaps. Large, maladaptive wealth gaps lead to systemic power abuses, which, given the capital’s globalisation and the current state of our capitalist system, can lead to a total collapse, which would be followed by disasters of biblical proportions.
I would recommend trying to cultivate knowledge and understanding of the world we live in, and try to develop the most precious resource the Humanity has − the intellectual capacity. We would all need it to deal with the challenges we would have to face soon.