One of the key problems opponents of economic liberalization everywhere point to is the growth of inequality in newly liberalized economies. Some of this is real, while some is imagined. For example, India’s gini has not changed appreciably since the reforms of 1991. At the same time, China and the U.S. have seen a considerable increase in their gini in the last 15 years.
The fact is that gross inequality is generally bad news for both the wealthy and the poor and everyone in between. The question though is whether you can a perfectly equal society. I would say that’s impossible, as witnessed by the failed experiments at doing so within the Soviet spheres of influence. So, if inequality is inevitable in society, especially with increasing economic growth, the question is what are the parameters beyond which it becomes unacceptable? The Economist addresses the issue in its current issue and I could not agree more with their take on it.
Inequality is not inherently wrong—as long as three conditions are met: first, society as a whole is getting richer; second, there is a safety net for the very poor; and third, everybody, regardless of class, race, creed or sex, has an opportunity to climb up through the system.
Comments? Agree? Disagree?