Remember one of the last times you went for listening to your favourite band or purchasing their latest album. At that moment, something bad had happened - they got relatively wealthier while you became poorer. Given you were not the only one who paid them for their performance that day, those bastards could actually become rich, while a lot more people became poorer. So the inequality gap grew bigger and, according to your reasoning, you had become relatively less well off that day. But did you? And should we do something with that band regarding them becoming closer to the top 1% (maybe we should redistribute their income among visitors of the venue?) Or, how about measuring the value of your emotional/spiritual state of mind before and after that event? Does it account for a relative/absolute well-being?
The point is, while economic stats are good at showing you the monetary part of your wealth, they are insufficient for drawing a wast conclusion on people's wealth and well-being. So is the "relative to TopN" argument.
In modern times this is not even remotely comparable where ever more people have ever more access to ever more things. But the richest of the rich have even more things. For comparison if we break this down into an anecdotes of toddler the French revolution would have been Joe having 0 toys while Jane had 10. In modern times Joe has 500 toys while Jane has 5000. By most of any metric, except in comparison to Jane, Joe has a ton of toys. And so his complaint seems more petulant than justified.
Let's put this another way. Imagine I told you that in 100 years somebody of the lowest social class would have what would be equivalent to 10 million dollars today in terms of spending power. That sounds unbelievably amazing. Would that somehow suddenly change if somebody at the top had a quadrillion dollars of spending power? Taken to extremes wealth at the top can decrease the value of wealth at the bottom (largely due to inflation), but that's not really the case to a significant degree today - people just seem upset that other people have more than them.
That depends, will surgery for a broken leg cost 20 million dollars in 100 years?
You are talking as if poverty doesn't exist any more, which it very clearly does. A startling number of people in the US live paycheck to paycheck and are at risk of extreme poverty if they lose their job or face an unexpected expense like medical care. People in Flint had to drink water that literally poisoned them. Teachers are walking out of schools because their textbooks are falling apart. On the other hand, you have Jeff Bezos who literally said in an interview that he can't think of any worthwhile use for his money other than exploring space.
You can't exactly blame people for being angry about that. "But things used to be so much worse!" isn't really a counter-argument. Why can't things continue to get better?
Did you know that in the early 20th century feed and flour bags used to come with vibrant floral designs. Know why? Since nobody could really afford to buy clothes, people would regularly fashion their own clothes out of whatever they could get - which included these large bags. Companies saw an opportunity and started creating lovely designs on them. This is a time we can hardly even imagine. Now a days even the poor can easily afford many of the things that only the most elite of society could previously. It wasn't even that long ago that a toaster was an extreme luxury. And of course they also have luxuries that those of times past could only dream of as they literally did not exist. In terms of what we have, people have more than ever today. And people want even more. And I think that's a good thing! The never ending drive for more more more is probably an evolutionary imperative which has paid rich dividends for our development as a species.
But let's hit on the Bezos thing. Some of what I said above is conflating technological progress with economic progress. After all one of the reasons many things became cheaper, or available, is not strictly because the poor have more money (though they do!) but because technology enabled things to become much cheaper, and to introduce entirely new things. Bezos is, by far, the richest person in the world. On an individual level his wealth, $135.5 billion, is hard to even imagine. But now let's imagine his level on a social level. What if we, or he, decided to just 'benevolently' share his wealth with everybody in the world. That $135.5 billion is worth a little less than $18 per person. Even at the bottom of the world, that's hardly life changing money.
However, technology does change lives. And while $135.5 billion is nothing in terms of the world, it's an enormous amount in terms of advancing space technology. Can you imagine how much the world will change once we begin to colonize other planets, or when we are able to effectively extract resources from celestial bodies, and so on? Or think of all of the tangential technological developments will inadvertently be discovered in the process of this all. The world has basically been playing on fast forward since the colonization of the new world, and space will open a door like something we can hardly even imagine. I too want things to get better and I think what Bezos is planning to do with his money is vastly more likely to, in the longrun, improve life for all of us far more than, for instance, what Gates is doing with his money.
There was an incredible period of American prosperity starting after World War 2. Good work was plentiful, wages were high, and the middle class prospered- the American dream was alive. That's slipped away from a huge segment of the population. Cost of living shoots up while real wages remain stagnant. We have cheap luxuries that previous generations couldn't dream of but that doesn't mean that many people aren't living paycheck-to-paycheck or fighting to keep their house or running up credit card debt to stay afloat. Outside of our tech bubble, Americans are struggling when they didn't before.
Meanwhile, capital compounds exponentially. People see their quality of life decrease relative to the average person while they work harder than ever, and they see the rich's quality of life increase relative to the average person while their money works for them. It's hard to live every day in that system and not think that there's a problem.
And in fact I think this could be part of the 'problem'. In 1979 a total of 0.1% of the country qualified as rich, and 12.9% as upper middle class. Those numbers have skyrocketed to 1.8% and 29.4% (!!) as of 2014. The percent of people that qualify as below middle class has decreased substantially, but those that remain there are indeed going to see the rest of society doing better than ever - and that's true.
It's what I'd like to call the 'generous king effect.' Imagine a feudal nation with a king and 100 peasants. In spite of the king's absurd wealth, the nation would feel more or less equal. But imagine one day the king feels maybe he's been wrong to hoard everything to himself, so he decides to run a competition and grant the winners vast tracts of land and wealth. Well now society feels a bit less equal with some 10% having great wealth, but things are still mostly fair.
However, our king notices the increasing discontent and so again tries to resolve society. He doesn't have as much left though but wants to still help raise up society. So now he grants the 10 even greater tracts of land with some degree of autonomy, but now also runs another competition granting 30 new individuals wealth and land comparable to what only the 10 had before. We've seen a massive improvement in society. We went from a nation where the 100 had nothing to where 10 have enormous wealth, the 30 have great wealth, and now only 60 are left with nothing. Yet ironically, society is going to be more discontent than ever as suddenly 40% of people have great wealth while the 60% have nothing. What makes those 40% so special after all!?!?
In an effort to improve the lives of the people, those that experience the upward push last become less and less content. And even though their situation is likely even better than it was when all 100 people had nothing, it's probably not going to feel that way. We obviously don't have a king. But we do have an economic system that's making these changes, and it does indeed seem to be succeeding in increasing the economic power of everybody over time, and the social response seems similar - probably driven by a media who seems to love triggering anger and discontent.
(Rhetorical questions incoming) At what point do the Bezos/Gates of the world step in to help this problem? Do they even have any kind of moral/societal/civilization-wide obligation to help tackle a worsening system that they got rich off of? Should they have this obligation? If not, who does?
It will if we don't get government out of healthcare!
If you own a company, or a TV station, or a news source, or a large number of shares in a company, your ability to influence the world is very much greater than someone who doesn't. Your relative influence over society is a zero-sum game. And your relative influence over society reduces when a small number of people get hugely rich.
There are also resources that are drawn from a fixed-size pot. Land ownership for example. If a tiny number of people assume possession of vast amounts of land, the amount left for everyone else is reduced.
It's a very good thing that people are being lifted out of poverty in the sense that they can afford food and shelter, basic sanitation and so on. But this is really the minimum we should aim for.
Access to more toys can be a good thing in many cases, though I'm not convinced it's a good measure of how well society is doing. But being able to afford more electronic items or whatever does not really eliminate the problems caused by extreme wealth inequality.
Taken to the extreme, the logical conclusion here is no one can own a company, therefore one cannot own a part of a company lest they be able to buy up the whole company, and therefore one cannot own property lest they collect it and have more than others (inequality). To your last sentence, what problems are caused by inequality that aren't simply because of envy?
That's usually a poor place to leap to.
Excellent point. Similarly, the pool of doctors is fixed in the short term, because it takes time for new doctors to go through medical school so that supply increases to meet demand.
This means in the short term, rising inequality can drive up the price of medical costs (at least the part of these costs that goes to doctors' wages).
Because they buy houses to rent back to me, they get the opportunities to invest in businesses before me, and they use their money to influence politics to ensure they hold on to their position. They push governments to privatise healthcare making me pay more for it, which they profit from, and that means I'll never have any sort of financial security. I have to live my entire life hoping I never get seriously ill. They buy laws to break the power of unions and collectives. They hoard money in offshore accounts which starves the government of tax revenues so I live in a society with underfunded police, unfixed potholes, and failing education while they* get all those things because capitalism provides those things to those who can pay.
Would that somehow suddenly change if somebody at the top had a quadrillion dollars of spending power?
If they used that wealth to influence the way society works, it would mean I live in the world they want. I don't want to do that.
* Actually I don't, because I live in a country with universal healthcare, but you might have that worry.
Pick a definition of wealth (income, or ownership, or whatever), and pick a dataset for which you can capture all in that bracket for some reasonable timeframe, and for which you can see what percent moves out. For every such dataset I've found over years of looking at this, every one backs the claim that the rich do not stay rich.
Most rich people are newly rich. Most rich families drop year over year in total wealth.
In terms of relative wealth though, comparing the average to people at the top, the 1%'s wealth has grown much faster than everyone else. It's true to say that we are all relatively less well off than we were in 2000. This is bad because wealth begets more wealth, so the inequality grows. That could lead to all sorts of problems (societal breakdown, revolution, civil war at the extremes...).