The Philosophy of Inequality

Madison Alvarez      

June 15, 2016

Anyone who’s heard Bernie Sanders speak for over thirty seconds knows a thing or two about wealth distribution and the top one percent. But if Sanders thinks wealth is distributed too unequally, what does he think the distribution of wealth should be? And what do economists have to say on the matter? It really boils down to what distribution they consider fair, since “[m]ost important questions related to income distribution require philosophical or ideological answers, not economic ones”1. So let’s look at the philosophy behind the controversial question: What is the ideal distribution of wealth, and how far should we go to make that ideal a reality?

First, we need to understand the costs of rearranging wealth distribution. For example, the idea of the IRS as Robin Hood redistributing wealth to the poor sounds tempting. But that might mean raising taxes, and higher taxes slow overall economic growth (growth of the complete “pie” of American wealth) which is problematic because “[a] growing pie is important—perhaps even more important—for those with the smallest slices.”2 But at the same time, revenues from taxes give the poorest Americans enough wealth for necessities like food, water, and shelter. And nationwide economic growth isn’t going to help the poor if they’ve all starved to death before they can reap the benefits. So working towards the ideal wealth distribution is a balancing act between overall growth and overall equality.

In theory, we could use taxes to eliminate wealth inequality altogether, but we now know that it would come at a cost of reducing economic growth for all classes. Would it be worth it? The answer is philosophical, even when the question is put in economic terms like this:

“Which would be a better state of the world, one in which every person in America earned $25,000—enough to cover the basic necessities—or the status quo, in which some Americans are wildly rich, some are desperately poor, and the average income is somewhere around $48,000?”3

A Harvard business professor did a study to see what American’s thought of this question. Turns out we didn’t really like either of those options, but we did overwhelmingly support a third potential distribution:

Ideal4

Even though America’s wealth actually looks more like this:

Actual5

There is much to be said for that distribution of wealth most Americans consider ideal: unequal enough to incentivize hard work yet equal enough to eradicate poverty —Not too shabby. And how far should we go to make that ideal a reality? Well, looking at the disparity between our ideal and the reality of wealth distribution, the answer seems pretty clear: farther than we are going now.


  1. Charles Wheelan. Naked Economics Undressing the Dismal Science. New York, NY: W.W. Norton, 2010.
  2. Charles Wheelan. Naked Economics Undressing the Dismal Science. New York, NY: W.W. Norton, 2010.
  3. Charles Wheelan. Naked Economics Undressing the Dismal Science. New York, NY: W.W. Norton, 2010.
  4. Devilla, Joey. “Distribution That 90% of Americans Chose as Ideal.” Digital image. JoeyDevilla.dorm. March 4, 2013. Accessed June 14, 2016. http://www.joeydevilla.com/2013/03/04/viral-video-of-the-moment-wealth-inequality-in-america/.
  5. Devilla, Joey. “Actual Distribution of Wealth in the U.S.” Digital image. J  oeyDevilla.dorm. March 4, 2013. Accessed June 14, 2016. http://www.joeydevilla.com/2013/03/04/viral-video-of-the-moment-wealth-inequality-in-america/.
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