Frank Tu

POSITION PAPER

It is economic inequality, among several other prominent social issues, that has led to a new age

of politics with the victory of Donald Trump and Brexit. It is economic inequality that frequently rallies

unions and workers against their politicians. There appears to be an increasingly pressing demand to

reduce the gap between the rich and the working class. However, it is arguable that economic inequality

might not be as detrimental to the public's interests as it is purported to be; and indeed, it could even be a

cure for itself. 

First, economic inequality could be a force to foster equality. The reason for this lies in the

distinctions between income inequality and poverty. For the starters, it is essential to clarify the definition

and the standards based on which economic inequality is discussed. Concerning this point, Carden et al.

(2017) persuasively explain the differences between Western and global standards regarding economic

statuses. The researchers argue that even the poor in wealthy countries are substantially wealthy by global

standards; and thus, the right question to ask should be "Why are Americans and Europeans so much

richer than everyone else?".

Furthermore, Carden et al. (2017) claim that the real underlying problem with economic

inequality is not the disparities in salaries, but rather the pure poverty that deprives many of access to

basic necessities such as food, clothing, and shelter. Thus, given a choice between prioritizing either

income disparities or real poverty, it is preferable to choose the latter. In light of this argument, Pinney

(2014) proposes two possible factors that have caused economic inequality, one of which is globalization.

Pinney's reasoning states that globalization has led to a much more competitive marketplace, which tends

to be in favor of workers from emerging economies; while against their wealthier counterparts. Pinney

(2014) also emphasizes that this force of globalization has successfully bettered the lives of millions of

people from developing economies. Considering the positions of both Pinney and Carden et al., it is
reasonable to hold that while economic inequality, which is partially driven by the force of globalization,

might result in income disparities between different economic strata in the Western world, such economic

inequality can ameliorate inequality on the global scale. Thus, inequality can be a cure for itself. 

With that in mind, the second point to note is, according to Western standards, economic

inequality might not be an ultimately serious social problem. In Economic Growth and Inequality: Why it

matters and what's coming next, Pinney (2014) also affirms this point, stating that a certain amount of

inequality is necessary for economic growth. According to Pinney, inequality is a byproduct of economic

development and should be considered along with improvements in living standards, simultaneously not

separately. In other words, economic equality can be comprised as long as the economic system can still

improve the living standards of the public as a whole. However, there is a certain point beyond which

inequality may backfire.

What's more, the other factor that Pinney (2014) considers to be responsible for economic

inequality is technological improvements. Artificial intelligence will drive millions of workers out of their

jobs while generating higher gains for capital owners, thereby increasing the economic gap. That said,

this technological transformation can still result in even lower the costs of essential goods and services

while freeing workers from their dangerous and dull jobs. All of these arguments have been brilliantly

discussed and supported by Pinney in his article. Through the use of statistics accompanied by a concise,

straight-to-the-point writing style, Pinney has successfully made his case with facts. Nevertheless, despite

suggesting a reconstruction of the economic system, the study still somewhat falls short of analyses

regarding the current system. 

On a similar note, Carden et al., (2017) argue that unbalanced wealth generation of the past three

centuries has, in fact, granted everyone accesses to things that were once considered luxuries for kings

and queens. Yet, Carden and his colleagues' supporting arguments do not appear to be sufficiently

convincing. The reason is, instead of further explaining their main argument from the viewpoint of the
less privileged, they chose to defend the wealthy by providing plenty of examples that might sound out-

of-touch to an educated reader from the middle class. To be specific, one of the authors' prominent

arguments is that: "preventing the rich from buying elite whiskeys could also limit elite blenders' ability

to make better whiskeys." This is a rather weak argument since it might not be of a middle-class person's

interests whether or not a blender can make topnotch whiskeys (mostly for the rich). Having said that,

Carden et al. (2017) have made an intriguing argument as to why economic inequality is not necessarily a

bad problem. According to the writers, the absence of economic inequality might lead to other pernicious

forms of competition such as rent-seeking or power-driven, compared to which economic inequality still

seems to be the lesser of two evils. 

All things considered, one can maintain that, if kept at a healthy level, economic inequality does

not necessarily cause severe harms to the lives of the majority for the time being. Then again,

precautionary measures should be taken to prevent potential spillovers. In view of these two articles, it

seems as if economic inequality can be mitigated through the enhancement of property rights, the rule of

law, and an educational environment that would direct our attention to the challenges that come with

technological advancements and globalization. Besides, it is also a responsibility of policymakers to

construct a new economic model for the upcoming years. 

In conclusion, although inequality often appears as an urgent issue that the world is now facing, it

has not yet posed a detrimental threat to the benefits of the majority thus far. Thus, excessive discussions

about economic inequality can also become a distraction, if not a scapegoat for other more prominent and

severe issues such as poverty and human rights. That said, without sufficient preparations for what will

come next, the majority of workers might be trapped in a pitfall where we will have to compete with AI

on all fronts desperately. Economic inequality, in that scenario, would become an enormous issue

globally. As Pinney (2014) points out, the challenges we are facing today are that we still lack a well-

trained workforce as well as a new direction to handle income inequality in the age of technology. To that
end, Carney et al. (2017) suggest that we should aim to create a morally and legally effective environment

that incentivizes entrepreneurship and innovation, as profit-driven goals can be an invisible hand that

improves our society as a whole, regardless of our economic status. 

References

1. Pinney, C. (2014). Economic Growth and Inequality: Why it Matters and What’s Coming Next.

High Meadows Institute: Journal of Applied Corporate.

2. Carden, A., Estelle, S., & Bradley, A. (2017). We’ll never be royals, but that doesn’t matter. The

Independent Review.