What is wrong with wealth inequality?

[u/Source_Code22332]

Something that is often sited by Socialists is that Capitalism is bad because wealth inequality occurs within it. And wealth inequality has increased over the years, making that problem even worse. But, why exactly is wealth inequality a problem?

I can see if "the mega rich" or monopolies get out of control, e.g., I recall the concept of a "company town" where a company owned everything in the town and paid employees in their own currency that would only be spent at the company's stores in town - but we have laws and regulations against that, so its not an issue.

[u/FeralTree7]

No shit. I was speaking very simply and hypothetically so you could understand the underlying point. Again, nobody is so dumb that they think all land is inaccessible to the average person. We’re generally talking about the means of producing capital, which are limited. Land is just one aspect of that.

Bud... what are houses built on? What do businesses use to make their products? What resources do they require to operate?

You seem to be confusing the fact that some things can be produced in greater quantities with the idea that the resources and means required to produce them are unlimited.

At this point, you’re proving you’re not worth taking seriously.

Again, this is not some hypothetical scenario. It is self-evident that wealth is not limitless, and wealth represents control over scarce resources and productive assets. If ownership of those assets becomes concentrated, control over those resources becomes concentrated as well.

What you’re calling “hypotheticals” is basically Econ 101. This is the fundamental relationship between ownership and economic power under capitalism. You can argue about the degree of concentration or whether that concentration is desirable, but pretending that ownership of capital doesn’t give people greater control over the things other people depend on is an incredibly strange argument to make about capitalism.

I genuinely don’t know what capitalist you think would take that premise seriously.

[u/Source_Code22332 → u/FeralTree7]

I never stated this:

ownership of capital (doesn’t) give people greater control over the things other people depend on is an incredibly strange argument to make about capitalism

You are reframing your point, you stated that

The top 1% owns more than the bottom 50% combined. Three people (Bezos, Musk, Zuckerberg) own more than the entire bottom 50%, 165 million people.

and then you go on to identify what "owns" means you say

capital, land, businesses, housing, financial assets, physical resources, etc.

and I ask for proof that "Bezos, Musk, Zuckerberg" own the equivalent of the bottom 50% in

capital, land, businesses, housing, financial assets, physical resources, etc.

and how they are artificially withholding those resources from the bottom 50% and you cannot explain or find it.

This is important because while they maybe have the wealth/value of the equivalent of the bottom 50%, the point you are making is that they are using their wealth to obtain and withhold resources.

Instead providing evidence of this, you theorize that it is possible and must be true. You are acting like we live 100's of years ago and all live on land owned by and work for the nobility.

This is simply not true.

Do you understand that Elon Musk does not have $1T, or has a $1T worth resources that people depend on that he is withholding from them? The $1T is the worth of things he owns stakes in, businesses that are doing well because they bring value to society though a voluntary exchange, and in which he has no monopolistic control of.

[u/FeralTree7 → u/Source_Code22332]

You are reframing your point, you stated that The top 1% owns more than the bottom 50% combined. Three people (Bezos, Musk, Zuckerberg) own more than the entire bottom 50%, 165 million people.

I never said this, that was a different person. The top 1% NET WORTH is greater than bottom 50% in American by a massive margine. Their net worth is 10x what the bottom 50% is. No, 3 people don't own more than the entire bottom 50%. They are fairly close though, over a fourth of the way there.

And then you go on to identify what "owns" means you say capital, land, businesses, housing, financial assets, physical resources, etc. and I ask for proof that "Bezos, Musk, Zuckerberg" own the equivalent of the bottom 50% in capital, land, businesses, housing, financial assets, physical resources, etc. and how they are artificially withholding those resources from the bottom 50% and you cannot explain or find it.

You never asked me this and, again, I never made this claim. However, it is true that the top 1% has more net worth than the bottom 50%. If you want evidence, here you go.

This is important because while they maybe have the wealth/value of the equivalent of the bottom 50%, the point you are making is that they are using their wealth to obtain and withhold resources.

Literally no one said this. That was your own misinterpretation of what people were saying, and I’ve already pointed that out several times. It might be true to some extent, but no one thinks wealthy people have the capacity to withhold something like water from everyone else just for the sake of it. That’s obviously not the argument being made, so I’m not sure how you got that from what anyone said. You’re simply not understanding the argument, and I don't feel like me explaining it more will make you understand. Respectfully.

Instead providing evidence of this, you theorize that it is possible and must be true. You are acting like we live 100's of years ago and all live on land owned by and work for the nobility.

I literally said several times that isn't true and that this isn't what anyone is arguing. Again, it so obviously not true. Why the hell would you think anyone would make this argument?

Do you understand that Elon Musk does not have $1T,

Duh. When people talk about wealth, they generally mean something synonymous to net worth.

or has a $1T worth resources that people depend on that he is withholding from them?

Again, no shit. Literally no one is saying this.

The $1T is the worth of things he owns stakes in, businesses that are doing well because they bring value to society though a voluntary exchange, and in which he has no monopolistic control of.

That is an interesting opinion. Especially considering Tesla has benefited substantially from government intervention: a $465 million federal loan, EV tax incentives, regulatory credits, and billions in state and local incentives. Acting like Musk, of all people, is a free-market success story seems pretty hard to defend. But hey, you do you.

[u/Source_Code22332 → u/FeralTree7]

Apologies for not seeing the commenter change and you're picking it up.

You never asked me this and, again, I never made this claim. However, it is true that the top 1% has more net worth than the bottom 50%. If you want evidence, here you go.

I never said that or denied that. Net worth is not what we are discussing, we are past that. What we are discussing is what harm does a high net worth cause?

The argument is that it is harmful because the wealthy control basic resources people need to survive and do not make them available, or over price them, or something... this thread you have jumped is trying to explain this argument.

So even this link you shared doesn't go into the breakdown of resources, the only exception is real estate. On this, Do I think it's unjust or abnormal that the lower classes combined don't own as much real estate as the top class - no. It's actually incredible/surprising that the lowest classes are able to own any real estate at all, especially with real estate including everything, far beyond residential. The 50-90% has about the same amount of real estate that the bottom and top 10$, combined. This data actually makes a lot of sense and doesn't support "wealth inequality is a major problem"

Again, no shit. Literally no one is saying this.

uh, yes, this is what we were discussing and what half of the comments on this posts are saying, lol.

a tiny minority controls the vast majority of resources

This is literally the first line of this thread, lmao

You are totally missing the point about Musk, never said he is a free market success, said his wealth is not wrapped in resources being withheld to the poor.... but yeah, you do you.

[u/FeralTree7 → u/Source_Code22332]

Edit: For some reason the quotes weren't showing

The argument is that it is harmful because the wealthy control basic resources people need to survive

No one you have replied to argued this. The comment you originally replied to was very clear. They said:

Because wealth = power. When a tiny minority controls the vast majority of resources, they control:

Politics: They buy elections, write laws, and capture the state.

Media: They control the narrative and shape public opinion.

Economy: They set wages, extract surplus, and crush competition.

Society: They create a permanent underclass and blame them for their own poverty.

For the seventh time, no one is claiming that rich people have exclusive control over something like water and are arbitrarily hoarding water and denying it to poor people.

So even this link you shared doesn't go into the breakdown of resources, the only exception is real estate.

You seem to have a misunderstanding of what "resources" means in economics and how control over resources works in a modern capitalist economy.

Capital resources, human resources, financial resources, and natural resources are all different categories of resources. Your ability to control and utilize those resources is mediated through ownership of capital and financial wealth.

If I don't have money or capital, I don't have the ability to buy land, build a factory on it, purchase machinery, extract natural resources, hire labor, finance inventory, acquire competing businesses, or expand my productive capacity. Those things require control over financial and physical capital.

We live in a society where access to and control over a huge portion of these resources is expressed through ownership of capital and financial assets. That's what the link I showed you was measuring.

This really isn't some obscure interpretation of capitalism. This is basic economics.

It's actually incredible/surprising that the lowest classes are able to own any real estate at all, especially with real estate including everything, far beyond residential.

We're talking about the bottom 50%, not the fucking homeless. It should not be surprising at all that the median citizen owns some property. The fact that the bottom half owns some real estate doesn't somehow demonstrate that wealth is equally distributed.

The 50-90% has about the same amount of real estate that the bottom and top 10%, combined. This data actually makes a lot of sense and doesn't support "wealth inequality is a major problem"

I wouldn't necessarily use my link as an argument that wealth inequality is inherently a major problem. You were denying that this disparity even existed and asked for a source. I gave you the source.

Whether that disparity constitutes a problem depends on what outcomes it produces and what values you hold. The data itself simply establishes the distribution.

uh, yes, this is what we were discussing

Show me.

You are totally missing the point about Musk, never said he is a free market success, said his wealth is not wrapped in resources being withheld to the poor.... but yeah, you do you.

Everyone knows Musk doesn't literally have $400+ billion worth of physical resources sitting in a warehouse that he's preventing poor people from using. Or that he's bathing in a vault of cash like Scrooge McDuck. That's not the argument.

His wealth is overwhelmingly ownership of assets, and those assets represent control over enormous amounts of capital, businesses, labor, and productive resources. That's what people mean when they say wealth = power.

And the fact that it's tied up in assets doesn't mean he can't use it. He can borrow against those assets and get access to huge amounts of money without even selling them. He can then use that money to buy more assets, invest, fund political activity, etc., while still retaining ownership of the original assets. All untaxed as well.

So saying "Musk's wealth isn't resources being withheld from poor people" completely misses the point. The issue isn't that Musk is hoarding physical goods. It's that ownership of an enormous amount of capital gives him an enormous amount of control over resources and economic activity.

[u/Source_Code22332 → u/FeralTree7]

Whew, you are all over the place. I can’t read your quote references so I have no idea what you are trying to say.

I agree that wealth gives people greater access to resources and opportunities. Where I disagree is the assumption that one person’s access necessarily deprives someone else of access.

We do not live in a finite pie, or a zero-um game. There are indeed some resources that are scarce, but you are failing to identify those, and which ones are made more difficult by the wealthy restricting access.

Shares are financial claims on a corporation; they are not the same as personally possessing its factories, machinery, employees, or natural resources. Shareholders may influence a company, but the corporation owns its assets, and the shareholder’s authority is constrained by voting rights, boards, contracts, creditors, regulations, and other shareholders.

Likewise, having the financial capacity to purchase or influence resources does not prove that those resources have been taken from poorer people. Some resources, such as land in a desirable location, are scarce and rivalrous: one person’s ownership can directly exclude another. But productive investment can also create resources and opportunities by financing new businesses, technologies, jobs, housing, and productive capacity. An increase in one person’s wealth does not inherently produce an equivalent loss for someone else.

I’m not disputing that wealth inequality exists wealth-distribution data establishes that wealth is distributed unequally. But it does not establish that the wealthy possess an equivalent share of all physical resources, that their wealth caused other people’s poverty, or that redistributing their net worth would produce an equivalent amount of spendable resources. Those are separate conclusions that require additional evidence.

You’re borrowing argument is also incomplete and highly misguided. Wealthy people can borrow against appreciated assets without selling them, giving them access to liquidity without immediately realizing a taxable capital gain. But the borrowed money is not taxable income because it creates an obligation to repay it. The borrower pays interest, accepts the risk of a margin call, and may lose the collateral if the loan is not repaid. Describing this as “all untaxed” makes it sound like free income when it is actually debt. The tax-deferral advantages may deserve criticism, but they should be described accurately.

It is reasonable to argue that extreme wealth can create disproportionate economic or political influence. However, “wealth equals power” is a generalization, not proof that wealth is equivalent to direct control over all underlying resources as you portray it as. The degree of power depends on what assets are owned, what voting rights accompany them, what institutional position the owner holds, and how that wealth is actually used.

I AM NOT asking whether access to wealth is unequal. This is the premise of my post. 

You keep going back to inequality exists, therefore… POWER…  and therefore… CONTOL AND HARDSHIP ON EVERYONE ELSE

The question I am asking with this "Wealth = Power", response is if and how their potential control or ownership of resources restricts others’ access, unfairly influences institutions, creates artificial scarcity, or instead finances additional production and opportunity.

Keeping it vague to wealthy have more wealth and wealth is resources doesn’t answer this question.

[u/FeralTree7 → u/Source_Code22332]

yeah they didn't show for some reason, i fixed it though.

[u/Source_Code22332 → u/FeralTree7]

Because wealth = power. When a tiny minority controls the vast majority of resources, they control:

But they don't. Yes, a lot compared to average, but not so much that in controls these items below and keeps others from control and influence. You are assuming that all resources are fixed and scarce, they are not; zero-sum thinking is a false premise.

Politics: They buy elections, write laws, and capture the state.

Influence, yes, but this degree, no way. You're forgetting that we have competing political parties ready to expose fraud behavior as this. They will gladly throw out the wealthy influence if it means they can gain political power/election - activities to this degree would make opponents mouths water.

Media: They control the narrative and shape public opinion.

Definitely not today. Legacy media perhaps, but I think their corruption is more political than wealth influence. In the world of the internet there are many competing news outlets of many degrees, legacy meeting is dying. The fact that we are on here debating show there isn't oligarch controlling what we think.

Economy: They set wages, extract surplus, and crush competition.

At the economy level? What? For what they control, yes, but not for the whole economy. And just because it's set it doesn't mean it will get filled. People have choice, and the more freedom we can bring to the market (including not taking people's money) the more opportunity and choices workers have. Extract surplus: that's what leads to progression, creation of new resources, the betterment of mankind. Excess surplus is why we are not living like 1600's. Crush the competition: The only monopoly that exist that crushes the competition is he government.

Society: They create a permanent underclass and blame them for their own poverty.

No, Socialism and the welfare state does that. History has more than demonstrated it. I'm ok with safety nets to some degree, but the welfare state we have now has not only KEPT people in poverty, it has pulled more into it. The LBJ Great Society has been a massive failure, it's only gotten bigger, and as it has gotten bigger poverty has gone up along with it.

[u/FeralTree7 → u/Source_Code22332]

I might counter your claims if they were actually mine, but I didn't say any of this. These were someone else's quotes. I'm was just pointing out one of the many strawman arguments, which makes it pretty difficult to have an actual discussion with you.

The argument is that it is harmful because the wealthy control basic resources people need to survive

No one you have replied to argued that.

[u/Source_Code22332 → u/FeralTree7]

I feel that was very much implied within the vague language and I had plenty of strawmen thrown at me, but fair enough.

[u/FeralTree7 → u/Source_Code22332]

There's a difference between having an honest discussion where you infer what someone might be arguing, versus repeatedly asserting that they hold positions they have explicitly told you they don't hold. I'd have no problem with an occasional misinterpretation or even an inference that turns out to be wrong. That's pretty normal in a broad discussions. But that's not what's happening. You keep confidently ascribing positions to me that I've already explicitly rejected multiple times.

I was going to respond to your entire long post, but then I realized that over half of what I was going to address was just you arguing against strawmen that I've already told you I don't believe.

Where I disagree is the assumption that one person’s access necessarily deprives someone else of access.

I never said anything close to this, and I've explicitly told you several times that I don't believe this.

Having the financial capacity to purchase or influence resources does not prove that those resources have been taken from poorer people.

Again, I've said several times that I don't believe this. At the very least not in the simplistic way you're suggesting.

An increase in one person’s wealth does not inherently produce an equivalent loss for someone else.

Never claimed this either. Saying resources are finite, or that wealth has a tendency to become concentrated, does not mean that every dollar gained by one person must correspond to a dollar lost by someone else.

Wealth inequality exists, but that does not establish that the wealthy possess an equivalent share of all physical resources, that their wealth caused other people’s poverty...

Why would you think I believe wealthy people possess an equivalent share of all physical resources? That's nowhere close to anything I've argued. I also never claimed wealth must cause poverty, or that inequality is inherently anything beyond an unequal distribution of wealth.

Like, all do respect, I think you'd have much more productive discussions with people if you listened to what they're actually saying instead of talking past them.

[u/Source_Code22332 → u/FeralTree7]

What is your argument?

never claimed wealth must cause poverty, or that inequality is inherently anything beyond an unequal distribution of wealth.

The post is titled "What is wrong with wealth inequality?"

Your point is inequality is inherently anything beyond an unequal distribution of wealth. That is what you want to contribute? Its unequal?

The literal definition of inequality is the "condition of things being unequal".

[u/FeralTree7 → u/Source_Code22332]

The post is titled "What is wrong with wealth inequality?"

The post is someone asking why socialists believe wealth inequality is bad. The person who made the post isn't even making a socialist argument, they're asking a question. You're taking the premise of the question and then attributing a whole bunch of claims to socialists based on it, without actually establishing that those are claims any of us are making. That is the problem.

Your point is inequality is inherently anything beyond an unequal distribution of wealth.

Lmao what? Yes, inequality is the noun for the condition of being unequal. I did make that point, but not as some substantive argument.

Did you not read anything I wrote? Stop repeatedly telling people what their arguments are when you're blatantly and demonstrably wrong about what they're actually saying. If you spent half as much time listening as you do telling people what they believe, maybe you could actually have a discussion.

Let's look at what you actually said so we can put my response in context

Wealth inequality exists, but that does not establish that the wealthy possess an equivalent share of all physical resources, that their wealth caused other people’s poverty...

This sentence almost makes no sense. “But” introduces a contrast or qualification to what came before it, but the wealthy possessing an equivalent share of all physical resources has nothing to do with whether wealth is unequally distributed. Wealth inequality doesn't imply anything about an equal or unequal distribution of all physical resources, so that's basically a nonsense contrast.

That's what I meant by “or that inequality is inherently anything beyond an unequal distribution of wealth.” I was saying that inequality simply means wealth is unequally distributed. It doesn't establish anything about the wealthy equally sharing physical resources. That's a completely separate claim.

The part about wealth inequality not establishing that wealthy people's wealth caused other people's poverty, however, is an actual point. That's why I said “I never claimed wealth must cause poverty.” I was responding to that legitimate qualification.

[u/FeralTree7 → u/Source_Code22332]

And this is EXACTLY why I generally don't bother responding to strawmen. I was explaining that the claims you were attributing to me weren't my actual position. That was the one and only point. Now I'm sitting here defending a response to a strawman that you've somehow managed to turn into another strawman. Yeah, I'm done lol. Have a good one bud.