In the past few years, talk about “income inequality” has leapt into the forefront of political discourse. Some say its not a problems while others say its not. Some say massive wealth redistributionist measures such as a higher minimum wages and higher taxes for high income earners are needed. Disagreements even exist to as acceptable levels of inequality in society; little consensus on its roots and the possible solutions exist.
I have never taken such talk seriously for a number of reasons. First, such talk is not really about solving any problem but about politicians rallying interest groups to win elections with promises of a fix. Secondly, proposed solutions are silent on how to empower and make those at the bottom independent and self-sustaining individuals. Lastly, some policies advocated to address this issue while having the best of intentions actually do make matters worse.
I believe the issue is as big as to the extent by which it is created by political privilege and crony capitalism. It should not be an issue if people are doing genuine and honest business but it should be an issue for people not doing so. But today, the line between where genuine market based business and crony capitalism starts and ends is murky in many cases.
Recently I have been reading The Social Organism by Oliver Lucket and Michael J. Casey. The authors contend that the emergence and of social media has parallels with evolutionary biology – which they say can be compressed down to an “algorithm of life” – as social media keeps taking on more sophisticated forms through its constant interaction with humans. Furthermore, they say that this phenomenon is nothing new and should be seen as a positive and not a negative.
The authors made a curious comparison and statement. In talking about the reach of social media and how it parallels that of nation states, they talked about the parallels between Twitter usership and the famous income inequality graph. They then talked about how the share of those who have many followers and produce the most viral content on Twitter parallels the income graph graph.
Though I realize that care must be taken in trying to draw parallels between both because a lot more is at play than meets the eye, this got me thinking and making some comparisons. I reasoned that signing up for Twitter to produce content is relatively easy once an internet connection exist. I also reasoned that ability to produce engaging content will differ with those producing viral content being a small percentage.
In the real world, artificial barriers to entry and other impediments exist which protect incumbents and to a large degree are responsible for their position. In discussions of income distribution amazingly little talk is given to the role of political privilege and crony capitalism. It should be asked how this distribution will look if somehow all these impediments were removed tomorrow (fanciful thinking). I don’t know how it would look. But something tells me even though the shape of the distribution will change, it will still be very skewed in some form or the other.
Looked at another way, in commerce – just as in many areas of life – some are better than others in what they do either through superior training and experience or even just sheer talent. Some are exceptional business people who know how to judge conditions right while others are not so good just as in the social media world its a handful of talented people who produce the most viral content.
At the end of the day, this is a very complex issue with a lot more than meets the eye and many more variables at play than can be quantified. This is why careful and level headed analysis which can never be gotten in the emotion and cliche laden world of politics is needed in discussing this issue.