The Instigator
craguilar
Pro (for)
Winning
6 Points
The Contender
goldman
Con (against)
Losing
0 Points

Income inequality is not a bad thing

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Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
craguilar
Voting Style: Open Point System: 7 Point
Started: 2/19/2013 Category: Politics
Updated: 3 years ago Status: Post Voting Period
Viewed: 12,730 times Debate No: 30410
Debate Rounds (4)
Comments (0)
Votes (2)

 

craguilar

Pro

This is my first debate so please bear with me.

The resolution is that income inequality is an essential feature of a free society. I am arguing for it.

Definitions:

Income inequality: disparities in the distribution of economic resources among individuals in a society.

Free society: a type of society in which individuals act voluntarily and are free to pursue their own goals in a legal framework that protects each and every individual's rights.

Essential: inherent or indispensable. In this context I mean that you can't have a free society without income inequality. Both stay or both go.


Round 1 should be to accept and clarify the resolution and terms.
Round 2 is for arguments
Round 3 is for rebuttals
Round 4 is for summation (no new arguments.)
goldman

Con

I accept the debate. I believe that income inequality is a bad thing. It brings about a number of serious problems not only for a society but for many people. Moreover, it deprives of the vitality and challenging spirit among the people in a society. For example, the United States and Japan face unprecedented social and economic predicaments caused by the income inequality these days. Therefore, I want to argue the topic from the Con side.
Debate Round No. 1
craguilar

Pro

Thank you goldman for accepting this debate. I believe income inequality itself is not a bad thing; on the contrary, it's an essential feature of a free society. My arguments are the following:

1.) Income inequality does not imply injustice or wrongdoing

We all know the fable of the Grasshopper and the Ant. The grasshopper spends all his summer partying while the ant toils to store up for winter. The result is income inequality and one starving insect. But there is no injustice. Nothing the ant did caused the grasshopper's demise. The grasshopper's rights were never trampled on. He was free to use his time as he pleased and so he did. As did the ant. That they fared differently during winter is a direct result of the free and voluntary decisions they made during the summer. So it is in a free society. People are different in many ways —in their values, their work ethic, their talent, their choices, etc. Why is it that we expect them to get the same results?

Let's think about how income inequality happens. A guy like Steve Jobs becomes fabulously wealthy by inventing and marketing devices many people want to buy. If people buy iphones and ipads, it's not because Apple goons put a gun to their faces but because they chose to buy them. In their eyes the value of the devices was greater than the value of the dollars they paid for them. Otherwise, the transactions would not take place. Meanwhile, poor immigrants were entering the United States from Mexico in search of employment. The immigrants were also making choices about improving their lives through free and voluntary exchange in the U.S., but in the process they increased income inequality, just like Jobs did. Both the entrepeneur and the hard-working immigrants are engaging in perfectly reasonable, legal, ethical behavior that increases the economic output of society (there is no fixed pie!) yet "worsens" that statistical abstraction that is the distribution of the national income.

It is precisely this term —"distribution of national income"— that causes confusion. What I've written is pretty obvious and intuitive yet many people miss it due to the macro fallacy implicit in this term. It conjures up images of mommy divvying up a cake ("national income") into slices and dishing them out to her equally deserving children. But there is no "national income", and there is no one distributing it. What we call the national income is the statistical sum of millions of individual incomes, determined by no single authority but by millions of free and voluntary transactions. It's an impersonal, spontaneous process. Since it's not designed, it can be neither just nor unjust.

2.) Income inequality is a poor indicator of personal happiness or social welfare

The most used measure of income inequality is the Gini coefficient, a number between 0 and 1, where 0 corresponds with perfect equality and 1 corresponds with perfect inequality (one person having all the income.) Afghanistan and Ethiopia are pretty egalitarian countries with a Gini close to 30, while the U.S. is relatively unequal with a Gini of 45. Chile has a Gini of 52. Now you can take my word for it or look it up, but there is no comparison between the quality of life in the U.S. and Chile versus Ethiopia and Afghanistan. Chile has a life expectancy of 78.9 years; Ethiopia, 58.7. Cuba has an enviable Gini of 38 but it's Cubans trying to get into the United States, not the other way around.

There's another reason why income is a poor indicator of welfare, and that is how much happiness money really buys. Studies show, not much.[1] Above a certain amount of income, the law of decreasing marginal returns kicks in. A mega-rich person can buy a Bentley, which is about as useful as a Hyundai Elantra, the type of car 70% of the people living under the poverty line in the U.S. own. There used to be a time when only the rich could afford refrigerators, air conditioning and TVs —things that can really improve a person's standard of living—, but that time is long gone. Capitalism and mass production have made all of these things affordable to the lower classes. Therefore, while a rich person can gain a certain additional utility by getting the latest 60-inch 3D LED screen, it's not as much utility as a working class person gets from buying a 32-inch LCD. The leap from no TV to 32-inch flat screen is greater in terms of utility than from 32-inch to 60-inch wonder. And it is consumption, not income, which determines material well-being. Savings are merely deferred consumption. Rich people tend to save more of their income, therefore they convert to utility a smaller portion of it. Thus the income gap is larger than the material well-being, utility or "satisfaction" gap.

Another aspect which the income inequality statistics don't catch is how income changes for individuals through their lifespan. The big assumption is that the 1% is the same people, always on top. That's simply not the case. [2] Many people start out as teenagers working minimum wage jobs (bottom 10%) but then as they grow older, more educated and more experienced they climb to higher levels of income, a few times perhaps even reaching the famed 1%. And these fat cats don't always stay on top. Sometimes they come tumbling down, like they did disproportionately after the 2008 financial crisis. The point is that people smooth out their consumption based on past, present and expected future income.[3] Therefore, differences in income in any one given year don't translate to great differences in consumption throughout a lifetime.

3.) The alternative to market-based distribution of income is coercion, which is incompatible with a free society

" And the trees are all kept equal, by hatchet, axe and saw."[4] That's the final verse of the Rush song "The Trees." It's true. You can reduce income inequality by forcing society back to the Stone Age, when everyone had the same (nothing.) You can confiscate from the productive and give to the unproductive but doing so necessarily implies coercion for a cause having nothing to do with justice or individual rights. As F.A. Hayek put it: "There is all the difference in the world between treating people equally and trying to make them equal." The forest King could've forced the ant to give some of his supplies to the grasshopper, but doing so would not have been just or charitable (charity is voluntary.) Systematically forcing ants to provide for idle grasshoppers would actually make both ants and grasshoppers less likely to work, given that the system severed the link between effort and reward. Economic output is reduced by redistribution, not only by changing incentives, but also because the redistributing government apparatus requires funding. Dead weight. So it is that income inequality is often reduced not by making the poor richer, but by making the rich poorer and the poor poorer, only relatively less so. How is this desirable?

[1] http://www.princeton.edu...
[2] http://www.americanexperiment.org...
[3] http://en.wikipedia.org...
[4] http://www.sing365.com...
goldman

Con

I believe income inequality is unacceptable and harmful for a society.
My arguments are the following.

1. Income inequality produces a bad effects on a society and human life among the general public.
The most serious problem is that a poor family or low- income family can not get not only a healthy foods but a medical treatment. This brings about a devastating effects on the future generation of a society.
For example, in 2007, ``the United States had the fourth highest rate of income inequality of all OECD countries.``(Why is income inequality bad?, June 26,2011,http://faireconomy.org...)
There are a number of cases.(http://faireconomy.org...)
(1) People in more unequal societies live shorter lives. The United States is number 50 out of 222 in the world in terms of life expectancy.
(2) People in more unequal societies are more likely to experiance mental illness. In 2003, 17-29 percent of Americans suffered with mental illness.
(3) More children die in infancy in unequal societies. The U.S. is number 176 of all 222 countries.
(4) Obesity is more common in unequal societies. Obesity rates in the United States are the highest of all OECD countries.
(5) Children in more unequal societies do worse in school. Out of 34 OECD countries, the U.S. is 14th in reading skills, 17th in science and 25th in math.
Therefore, effective action must be taken before it is getting even worse.

2. Income inequality leads to the decrease the number of the middle class which is a core foundation of a national economy. For example, in the United States the middle class has been playing an important role in increasing and sustaining stable domestic demand. This has contributed to stimulating the private investment among many companies.
``Historically, the backbone of the U.S. economy, the eroding middle class has created an anemic economy, Berkeley labor economist Robert Reich recently wrote. He emphasized that the spending of the richest people alone is not enough to lead to `a virtuous cycle of more jobs and higher living standards.` ``( http://www.huffingtonpost.... com.)

3. Income inequality is undemocratic and is not compatible with the basic democratic values.
Some of the rich people in the U.S. get their higher social status and reputation by hard work, talent and creative spirit. However, other group of wealthy people take a different route.
Robert Creamer says that ``some of our most powerful citizens came to that station not because of their merit, but because they got it the `old fashion way`- they inherited it. That is directly contrary to our shared belief in a more democratic society- where power and opportunity are broadly shared- where no one`s power or station in life are determined by accident of birth.``( Why growing income inequality is bad for America, http://www.huffingtonpost.com....)

From above arguments, I believe that income inequality is a bad thing and unacceptable for a society.
Debate Round No. 2
craguilar

Pro

What follows is a rebuttal of Con's arguments.

Con argues that income inequality has harmful effects on society, and among these he lists: low life expectancy, mental illness, obesity, dead children, and low academic achievement. Some of these things are unrelated to the distribution of income (mental illness is mostly genetic [1]; obesity is at least partially genetic [2]; academic achievement is the result of a failing public school system [3]), while others are a consequence of poverty. It is important that we distinguish between poverty and income inequality, because these are not the same problem. Some countries have high income inequality and low poverty rates (United States, Gini 45; poverty rate 16%) while others have low income inequality and high levels of poverty (Ethiopia, Gini 30; poverty rate 29%.) Also note that poverty is defined differently in different countries, so that the "poor" in the United States are nothing like the poor in Ethiopia. The American "poor" is made up of people who own all the basic appliances (refrigerator, microwave oven, TV) and 70% own at least one car, while the poor in Ethiopia don't have access to electricity or potable water.

Poverty indeed has a positive correlation to infant mortality, low life expectancy and many other ills. But there is no correlation between poverty and income inequality. I searched for such evidence in the links provided by Con but found only the main page of an advocacy organization called United for a Fair Economy.

In fact, according to this study published in Bonn, Germany, globalization simultaneously increases income inequality AND reduces poverty [3]. This can be observed most evidently in China, a country which has enjoyed tremendous growth in the past 30 years, pulling hundreds of millions out of poverty, yet at the same time has seen income inequality skyrocket [4]. Another study shows that "empirically, baseline estimations and a sensitivity analysis show that income inequality is positively, and most of the time significantly, associated with economic growth." [5] Con's case is blaming poverty's harmful effects on income inequality, yet he has presented no evidence tying poverty with income inequality. On the other hand, I have provided evidence that shows that higher income inequality is positively correlated with economic growth and negatively correlated with poverty.

As for Robert Reich's opinion about the importance of the middle class, I don't think it's relevant to our discussion. The stratification of society in classes (lower, middle, upper) is a political artifice with little economic meaning. The "middle class" can be defined as narrowly or a widely as one wishes. If the distribution of income in a society widens (the bell curve flattens), then fixed lower and upper limits of income necessarily will indicate that the middle class is shrinking, but only because some people have moved below or above these arbitrary limits. One could just as easily widen the range of incomes that define the middle class and get a "growing" middle class. I think it's much more important to see if the bell curve is moving to the right or to the left —that is, whether the median income is rising or falling.

Finally, Con argues that income inequality is undemocratic. Con defines democracy as "power and opportunity broadly shared, where no one's power or station in life are determined by accident of birth." I don't think this is the standard definition of democracy, but for the sake of argument let's say it's correct. His argument is still irrelevant to the resolution that income inequality is an essential feature of a free society. In a free society, some people make a lot of money without "deserving" it, sometimes by an accident of birth and sometimes because they won the lottery. Democracy has nothing to do with it.


[1] http://www.minddisorders.com...
[2] http://ajcn.nutrition.org...;
[3] http://ftp.iza.org...
[4] http://www.aljazeera.com...;
[5] http://onlinelibrary.wiley.com...;
goldman

Con

I challenge to rebutt the arguments for round 2 by Pro.

1. Pro says in his first argument that ``so it is in a free society. People are different in many ways- in their values, their work ethic, their talent, their choices, etc. Why is it that we expect them to get the same results ? ``
I believe the important thing is that a free society is a society, in which a social justice is difficult to maintain.
We understand that we live in a free and capitalistic society, in which we can find a fierce competition among people to get higher wages and higher social status. As a result, a winner and a loser emerge and the income inequality takes place. However, this is not a reasonable and acceptable for creating a sound, peaceful, democratic and socially justified society.
Pro expresses his opinion about immigrants. For example, the United States accepts many immigrants from all over the world. He says that ``both the entrepreneur and the hard- working immigrants are engaging in perfectly reasonable, legal, ethical behaviour that increases the economic output of society.``
It is true that they have been contributing to the vitality and competitiveness of American economy for many years.
However, we must keep in mind that some of the immigrants can not suceed in attaining their American Dreams.
Low-skilled, less educated immigrants must accept unreasonable labor conditions and low-wages.
Therefore, this situation produces income inequality. Moreover, it triggers social unrest and anti-social movements which we have seen in many big cities in the world recently.
For example, Occupy Movement is fresh in our memory. The slogan was ``We are the 99percent.``

As Pro says, ``individual incomes, determined by no single authority but by millions of free and voluntary transactions.`` This is a destiny of a free society. Income gap between the rich and the poor is widening.
This is socially bad and detrimental to the welfare of many people.
Therefore, the authority like the government must offer a livelihood protection to help the poor people who are urgently seeking for economic and financial aid.

2. Pro argues in his second argument that ``there used to be a time when only the rich could afford refrigerators, air conditioning and TVs- things that can really improve a person`s standard of living-, but that time is long gone.
Capitalism and mass production have made all of these things affordable to the lower classes.``
It seems this opinion is wrong. For example, these days the lower classes in America receive less wages and unstable employment opportunity. Many of them are part-time workers or the unemployed.
Therefore, they are compelled to spend less and unfortunately their propensity to saving is very low.
So, they can not afford expensive goods which the rich people can get.

Moreover, Pro points out that ``it is consumption, not income, which determines material well-being.``
In my opinion, higher and stable income is basically indispensable for material well-being.
They are foundation for stable consumption.

3. Pro points out in his third argument that income inequality often makes the rich poorer and the poor poorer.
When this situation takes place, the rich face a less serious situation than the poor.
The reason is that the rich tend to have more savings and other financial assets like land or real estate. On the other hand the poor have less savings. If serious recession or financial crisis might happen, the life of many poor people would be broken down. The poor is seriously damaged mentally and physically.
For example, in the U.S. ``from 1980 to 2010, income inequality increased. The top 20percent of earners in the U.S. in 2010 earned almost 50percent of the total income while the bottom 15percent earned less than 4percent.``(http://www.businessdictionary.com....)

The important thing is that income inequality is bad for a society. We must keep in mind that a free society has a potentiality that economic and social disparity between the rich and the poor emerge.
Debate Round No. 3
craguilar

Pro

I thank Con for accepting this debate and engaging the arguments in good faith. It's refreshing to be able to debate these topics without the usual rancor and ad hominem attacks.

The resolution is that income inequality is an essential feature of a free society. Con does not disagree, as he writes: "We understand that we live in a free and capitalistic society, in which we can find a fierce competition among people to get higher wages and higher social status. As a result, a winner and a loser emerge and the income inequality takes place. However, this is not a reasonable and acceptable for creating a sound, peaceful, democratic and socially justified society." While I differ in his zero-sum, winners and losers characterization of a free society, he is clearly stating that income inequality is inextricable from it, therefore agreeing to the resolution.

As for the secondary claim that income inequality is bad, Con listed several social problems which he attributes to income inequality, but which I have provided evidence that they are either unrelated to income, or directly related to poverty, which in open, globalized economies is inversely correlated to income inequality. That is to say, greater economic freedom leads to greater income inequality but also lower levels of poverty.

Imagine a society of two people, Jack and Jill. Jack makes $200 while Jill makes $100. People focused on the distribution of income would think it preferable that Jack made $100 while Jill made $80, making both persons poorer but materially more equal. This makes no sense to me. The choice we face is clear: our aim can be either reducing poverty or equalizing outcomes, but not both.
goldman

Con

I challenge to express my opinion regarding to the arguments by Pro for Round 4.
Pro says that ``in open, globalized economies is inversely correlated to income inequality. That is to say, greater economic freedom leads to greater income inequality but also lower levels of poverty.``
We must recognize that today a national economy of the developed countries is closely linked to the global economy.
I think this is very important problem. Pro points out the relationship about economic freedom and a lower levels of poverty. In my opinion the globalization of a economy contributes to eradicating a higher levels of poverty.

The degree of poverty level is different from one country to another country.
For example, China is enjoying a lower levels of poverty compared with some of the African countries by being integrated into the globalized economy.
However, many American people are suffering from a higher levels of poverty these days. Many U.S. companies have been relocating their production facilities to lower-waged countries like China and India. Therefore, many people have been deprived of their jobs and some of them have been urged to accept lower wages or part-time jobs.
This situation is harmful for their life.
In particular, many U.S. managers are only interested in seeking for the short-term profit making.
They have scant symphasy for the workers.

On the other hand, ``Europe places more restraints on executive compensation, so its corporate leaders don`t receive the outsized packages than their American counterparts do.(Global income inequality: Where the U.S. rank, by Tami Luhby, http://money.cnn.com....) And ``what`s unique to the United States is the relative lack of government support compared to Europe and Canada. Other countries provide more public services, including health insurance, higher education, daycare and pensions. And these benefits are provided on a more universal basis, rather than being dependent on one`s income level, as in the United States.``(http://money.cnn.com....)

Recent budget cut(Feburuary, 2013) leads to acceralate income disparity between the rich and the poor further.
Other factor play a role in widening the economic divide in America. The labor unions are losing their counter-vailing power toward the management. The important thing is that ``the decline of the U.S. unions as one cause behind falling middle-class income.``(http://money.cnn.com....) This leads clearly to widen the income inequality between the rich and the low-income workers.

Income inequality is more serious in America than that of Europe. It seems that they come from the difference of social values. Europe places higher value on the welfare of the general public but the U.S. does not.
It seems to me that in this globalized, free and capitalist society equalizing outcomes is very difficult to realize.

I could learn a lot about income inequality in this debate.
I thank Pro for the enlightening debate.
Debate Round No. 4
No comments have been posted on this debate.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by F-16_Fighting_Falcon 3 years ago
F-16_Fighting_Falcon
craguilargoldmanTied
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Total points awarded:30 
Reasons for voting decision: Neither side was convincing enough to sway me towards their arguments; I originally agreed with Con and still do. Based on debate skill, Pro had much better rhetoric, and persuasive style of writing. The analogy with the Ant and the Grasshopper was very well executed and extrapolating it to the income inquality of a country was well done. Con also never countered that in a free economy, we can't regulate income and essentially cut each tree down to size. Con's primary focus was on the harms of income inequality where he focused mostly on the bad things that happen but Pro adequately rebutted them as being irrelevant. The vivid analogies and the good debate style gives Pro the points. A bit of confusion though: the title of debate "II is not a bad thing" seems to be what the argument was about yet the resolution is defined as "II is essential." I didn't see any good arguments from Pro as to why it was absolutely "essential." But in any case, Pro debated better, no question about it.
Vote Placed by TrasguTravieso 3 years ago
TrasguTravieso
craguilargoldmanTied
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Total points awarded:30 
Reasons for voting decision: Pro successfully convinced me that some degree of income inequality is inevitable in a free society and even a matter of justice. Con convincingly showed that a large degree of income inequality brings more harm than good. I am awarding Pro arguments because the proposition does not specify the degree of income inequality, but merely postulates that it is essential to a free society. Good debate on both sides, I quite enjoyed it.