I was at Gene Callahan's and saw something in his sidebar that I had to read. I went with the same title.
Inequality matters because (1.) capital endures through time, as dkuehn says; and (2.) accumulation requires a source. If wealth accumulates by a skimming that creates poverty, then accumulation destroys the environment it needs to survive, and ultimately destroys itself. Civilizations die by suicide, as Toynbee said.
I read an old paperback by Heilbroner long ago. In it he said he didn't expect capitalism to last another N years. That's the problem. That's the reason inequality matters. Capitalism is not sustainable because a growing inequality changes the economic environment.
It has nothing to do with fairness or ethical significance.
4 comments:
My remarks above come from a comment I left on dkuehn's post. He responded: So what was the N?
I don't trust memory on things like that, so I looked it up.
50 years, give or take.
Heilbroner's book came out in 1976.
Sustainability matters but more because it might not collapse. If we knew the wheels were coming off next year or in five years it would be a lot easier to muster a sense or urgency to deal with it.
If nothing else, 2008 demonstrated that the system can be very robust in self-preservation. Crisis doesn't necessarily mean collapse and the yacht economy could persist, worsen, lumber along for generations periodically ratcheting up to new plateaus of misery with each "new normal" worse than the one before.
N is indefinite and the prospect of N=200 is in many ways scarier than the prospect of N=1.
Geerussell: "the yacht economy could persist, worsen, lumber along for generations periodically ratcheting up to new plateaus of misery with each "new normal" worse than the one before."
Yup. You are describing a business cycle, the big one, the downhill side of it.
... the cycle of civilization, to be clear.
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