I think the relationship isn't linear. Too much equality and there is no reason to go above and beyond, to innovate or to take risks. To much inequality, and we find the same result. Enough inequality to reward those who do more (with some understanding that there is elements of luck), but not so much inequality that people have to be lucky to succeed, if it is possible at all.

I feel this is similar to a game design issue.

You want a game in which early levels are easy enough that it won't take too much skill to get through. [Basics of society, access to housing, clean water, health care..]

As you get to higher levels, there will be challenges that some players can't get through [amassing enough money to buy a yacht], but that's OK.

Some players have cheat codes not available to other players [laws to help special interests] because they have an in with the game designers [government], and that's OK too as long as it doesn't go too far.

It's not a big deal if the most skilled players can get to really high levels - that's not the issue.

It's when the most skilled players make the game unplayable by the average player that you have a problem.

I think your example is too simplistic. There are more dimensions to equality than just wealth or money. People could be socially rewarded but still be on very similar wealth levels. There are some people actually persuing this as a life goal, it‘s called earning to give and comes from the effective altruism movement. They try to get into a really well paying position but give most of the earnings (like 50%+) to effective charities. It‘s not always about money for yourself but being able to work for something you believe in and a recognition of your efforts. How else would you explain suicide bombers and soldiers giving their life in unprofitable ways?

> a rich but unequal society - it's much more peaceful.

That's not true. Violence is caused by inequality. Areas where everyone's equally poor are about as peaceful as areas where everyone's equally rich. It's dramatic inequality that causes violence. This is true no matter whether you look at neighborhood level, city level, national level etc.

Do you have any sources for this? I don’t see how it can possibly be true.

For one thing I don’t see how you can define areas where everyone is poor. Even looking at a place like North Korea, the top government officials are very well off compared to the average person.

In general, poorer countries are much less safe than richer ones. Poorer neighborhoods are much less safe than richer ones. I can see the point that even in those cases it’s often related to inequality, e.g. theres gang related violence because gang leaders are much richer than the average person in the area. But that’s a tautology, because there’s nowhere that has absolutely no inequality.

Great paper by the way.

If you look at the graph on page 8, you can see obvious clustering of poor countries vs other countries. This study does not compare the overall wealth of the countries against crime.

The reason that is important, is that in a rich country, even poor people have many options. In a poor country like Venezuela, they don't. As a result, even if they had the same Gini coefficient, the crime would look much different.

So when you take that into account (which is what I tried to do in my statement, but probably could have worded better), then being in a "rich but unequal" society is much better than a poor country of either high or low inequality. I think the high clustering of OECD countries demonstrates this.

Did not read the paper linked to by sibling but there are diminishing returns to wealth for a person. So unequality might be perceived as more severe in low income countries than richer countries when the basic needs are met.

Violence doesn't have much to do with inequality. They might be weakly correlated, but you'd have to go far beyond that to establish causality.