Day 9 — The Problems with Inequality
There’s two main problems with having a lot of inequality in society — inefficient allocation of resources and social unrest. The inefficient allocation of resources point is based off the diminishing marginal returns of money — basically the more five pounds you have the less worth the next five pounds holds to you. Giving a homeless man £10,000 pounds and giving an average middle class person £10,000 would have dramatically different levels of usefulness, and the same is broadly true for society. By giving the richest so much wealth in comparison, we’re effectively wasting its potential by giving it to people who won’t be that much happier for it. The second reason is that a lot of inequality generally tracks with a lot of social unrest and crime. When people look across to the richest in society and feel like they’ve got nothing in comparison, and see that there children will inherit that money keeping the cycle in play, they tend to be angry at the conditions and take it out through crime, materially damaging society. The gap between the rich and poor also makes theft much more necessary and desirable, again increasing crime rates.