Income inequality has been trending upward in many societies. But what exactly is wrong with it? Here, we look at various answers that can be given to this question and address the challenges to those answers. Our aim is to help provide a better understanding of the moral arguments for objecting to inequality.
Poverty, priority for the worst off, and inequality
Many objections people make to inequality are best understood as objections to poverty. The reason given to transfer money from the rich to the poor is simply to end poverty. If the resources to end poverty could be gotten without reducing the difference between rich and poor, then inequality would not be an issue.
Economists have sometimes argued that the best rationale for transferring money from rich to poor is that doing so increases social welfare. This argument assumes that there is a decreasing marginal value of money, and so an additional pound increases welfare more for the person who is worse off than the person who is better off. But this view raises important questions of whether we can meaningfully compare welfare between people . Nor is it obvious that an additional pound for a millionaire raises welfare more than an additional pound for a billionaire.
Is there any reason to be concerned with economic inequality beyond reducing poverty, or assuming interpersonal comparability and the decreasing marginal value of money?
Objecting to inequalities causes and consequences
We disentangle and examine a set of arguments that call out the ways that a particular inequality can be morally called into question because of its causes or consequences. For example, if economic inequality is the end result of an unjust process then that provides an ethical reason to care about it. Or if economic inequality has the consequence of undermining democratic institutions, the rule of law, or equality of opportunity between children growing up in better-off and worse-off families, that can yield a reason to reduce inequality.
This analysis can be seen as generating both an agenda for empirical research as well as specific policy proposals. Paying attention to the reasons we have for objecting to an inequality can provide guidance on looking at policies since we will need to consider which policies best address our concerns.