Equality

With the elections just around the corner, the politicians and aspiring politicians are again at their favorite pastime: dividing and distributing other peoples' money. And one of the key themes again this time around is financial inequality, or how money should be moved from the top to the bottom. An interesting thing to think about here is what exactly the problem is and what do we want to solve. Gini coefficients have begun popping up in more international publications, but I can't really recall a single Finnish article mentioning them. Anyway, the basic idea is that a coefficient of 1 implies that 1 person gets all of the income and 0 means that every gets the same amount. With this metric, the inequality in certain regions has increased, but on a global level we've become more equal.

But which is more important: that we all earn the same amount or that the people worst off are supported enough that they are able to survive. I of course have my own strong biases and tend to feel that equal opportunities always beat equal outcomes, i.e. meritocracy is the way to go as long as everyone gets to jump from the same baseline. So in this regard I don't necessarily see high equality as something that is absolutely valuable, as long as everyone is kept in the same boat and not thrown out.

Related to this, another interesting aspect in this is that according to the Economist's recent article, in the US the inequality in the bottom 99% hasn't increased since 1993. This in essence means that what is happening is that the rich are getting richer, but at the same time the poor are also getting richer, although slightly slower. If we also think about the longer term trends, overall the world seems to be slowly becoming a fairer place, as a very significant portion of today's wealthy elite has in fact made their own fortune. And that, in my opinion, is a lot fairer than being wealthy because of the fact that you just happened to have been born into nobility or royalty. What more, the wealthiest people then tend to eventually give most of their money back to society in the form of charitable donations or in other cases by becoming angel investors and pouring their money into high-risk ventures which might otherwise not happen.

So, the name of the game isn't to optimize the Gini coefficient to 0. What more, there is even hardly any solid facts one way or another as to whether equality is that important. And as previously stated, I understand the welfare state as a system which inherently does not take a stance on anything else but ensuring the welfare of the citizens. But welfare shouldn't necessarily be defined to include everything and the kitchen sink, but instead enough to allow a person who has stumbled to still continue living, despite health issues or sudden changes in employment status, or similar situations.