Inequality and crisis?

Posted: 15 October 2010 in Uncategorized
Tags: , ,

Derek Thompson makes the point that, if we’re willing “to entertain the idea that we’re willing to entertain the argument that extreme income inequality can lead to economic crises,” we should also entertain the possibility that “extreme efforts to combat income inequality. . .can lead to disaster.”

Sure. Absolutely. But the problem is not, as Thompson believes, that Greece and other European countries were “larding a state budget with generous promises.” It’s that they were making promises to mitigate the effects of extreme income inequality and refusing to tax the surplus to finance those promises.

So, it all goes back to the original problem, in both the United States and Europe: the growth of extreme income inequality and its myriad effects, on the economy and politics.

  1. D G Bokare says:

    Extreme economic inequality is unavoidable in capitalist economics. Greece and the USA are following this capitalist economic system. Both have monopolistic economic model, notwithstanding propagating ‘free market economy’ by all the capitalist economists including some leading Noble Laureates. In a true free market (as defined in any textbook on economics), extreme economic inequality disappears over time. But no one wants to practice free market economy as they are afraid of disappearance of industrial civilization so assiduously built during the past three centuries. The capitalist economies are now facing the threat of disappearance of industrial civilization. Nothing can be done now to reduce the extreme economic inequality unless we practice true free market economic system.

  2. […] comments on inequality and its myriad effects on economics, politics, and society (most recently, here and here), and he maintains a page on unequal representations which is a collection of graphic […]

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