It's a favorite hobbyhorse of mine that inequality is the symptom of our economic problem, not the problem itself. I don't think America is anywhere near the level of class resentment required for a destabilized polity, and the increasing economic segregation of our communities and Hollywoodization of our culture ensure that any such crisis point remains quite far off. The inequality numbers unsettle because they suggest our economy is increasingly rewarding the wealthy, possibly at the expense of the lower and middle classes. They certainly show that the lower and middle classes are not enjoying the same pace of economic growth as they did in the last generation, or as their high-income counterparts do now. All of which is a long way of saying that Julian Sanchez actually gets this right:
Next you've got the view that I suspect most self-described egalitarians actually hold, which (again borrowing from Rawls) we'll call the Maximin View. Here again, what actually matters is the absolute level of well-being of the badly off. The only difference is that the obligation here has no upper-boundary; there's no cutoff point past which we're relieved of a duty to better the lot of those at the bottom of the distribution. Now, this will sometimes look like a concern with inequality per se, but the concern with inequality here is actually epiphenomenal. In other words, on this view, if some people have enormously more wealth or resources than others, the core problem is not that some have more as such. Rather, the disparity is taken as evidence that we could be doing a great deal more to improve the condition of the worst off (through redistribution), and are failing to do so. The apparent disapproval of "inequality" here is really more akin to the outrage a creditor might feel at learning that I am spending my time sailing about on my yacht even while I'm delinquent on my loan. The problem is not that there's something wrong with my sailing on a yacht, but that the yacht is pretty solid proof that I'm shirking my debt. In short, inequality is not the problem, but the symptom of a (conceptually distinct) problem.
It's hard to argue that America has reached a place of economic perfection, or even contentment, when 37 million are impoverished, 47 million are uninsured, and untold millions above that have trouble paying their bills and affording college for their kids. As a country, we have the money to ease many of those burdens, to provide universal health care, to pay better wages, to ensure low-wage workers reach a level wherein they can at least provide for their families and give their children a chance. But it's hard to make that happen when, in 2004, the top one percent got 53 cents of every dollar in wage gains. Moderate inequality doesn't bother me. But slow growth, and increasing economic anxiety, and reduced bargaining power, and deep entitlement cuts among the poor do. What the inequality numbers show is that their pain comes amidst a moment of plenty, and can thus, with sufficient political will, be somewhat ameliorated.
