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Income Inequality is Unavoidable

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For the poor always ye have with you; but me ye have not always.

John 12:8 – King James Version

Income inequality can never, ever be eliminated from society. No matter how hard we try, it simply can’t be done. Here’s why.

Income does not fall along a “normal” (bell curve) distribution. It follows a power law distribution. This is necessarily and always the case. It’s an unavoidable law of nature. To understand why, let’s review the six factors that bring about the rise of a power law distribution. From my original post:

  1. A competitive event.
  2. The population of competitors is unequal
  3. The inequality is distributed along something resembling a normal distribution.
  4. Winners from any given round of competition keep their winnings.
  5. The winnings form any round confer an advantage in subsequent rounds.
  6. Competition is iterated over multiple rounds.

Let’s take each one of these in order.

A Competitive Event

Income is and always will be competitive. This will not and cannot ever change. You can pass all the laws you want. People will find a way around them. They always have. They always will. People have an ingrained drive to compete with each other. We must compete with each other. Evolution demands it. The organism that does not compete will eventually lose out to the organisms that do. Eventually those who don’t compete will be bred out of existence. Only those whose ancestors competed will be left.

The population of competitors is unequal

Human beings – like all other organisms – are inherently unequal. Whatever our status in the eyes of God, here in this realm we are not identical. Take a look at any individual field – or even any individual job description. Among the people who perform that job, some will be better than others. Some will perform it worse. It’s that simple.

But pretend for a moment that they are actually equal in their actual job tasks. Somebody will eventually figure out a way to extract an inequality in some other way. Sleeping their way to the top. Brown nosing the boss. Playing off of connections to get better pay. The source of the inequality doesn’t matter. It only matters that it exists.

And this is just within one job. Spread that out over multiple jobs, over multiple fields… it doesn’t take a genius to see that the competition is inherently unequal.

 

The inequality is distributed along something resembling a normal distribution.

We know this to be generally true for most ways in which individual human beings are unequal. Height is distributed along a bell curve. IQ is distributed along a bell curve. Strength – or at least, potential strength – is distributed along a bell curve. And so on. It may not be the case that every conceivable competitive advantage is distributed along a bell curve, but in general that’s going to be the shape of things.

Winners from any given round of competition keep their winnings.

Once again, you will never, ever be able to take all of the winnings from all of the winners. You can try. Somebody, somewhere will always find a way around it. When you have a competitive event (see above) and stakes are high and you have a lot of competitors, somebody will try to cheat.

The winnings form any round confer an advantage in subsequent rounds.

It takes money to make money. Better income in year A will most likely lead to better income in year B – probably even better than year A was. In the long term, these advantages add up fast. Better income pays for better nutrition, better tools, better education, better connections. In short, better everything. This is big for an individual. On the multigenerational front, its effect is staggering. Your better income pays for your child’s better education, better connections, etc. Which pays for your grandchild’s even better… well, everything.

Competition is iterated over multiple rounds.

Pick your definition of round: hours, days, weeks, months, years. Generations. The competition is iterated forever.

Income Inequality is here to stay.

Income inequality is here to stay. It will never leave us. So… if we can’t eliminate income inequality, what can we do? That is a much more interesting question, but it will have to be the topic of future blog posts.