Why The Rich Should Care About Inequality

by Stuart Shapiro

Nobel Laureate Joseph Stiglitz has expanded his discussion of why extreme income inequality is bad for a society to explain why this matters to those on the “winners” side of the ledger:

There are good reasons why plutocrats should care about inequality anyway—even if they’re thinking only about themselves. The rich do not exist in a vacuum. They need a functioning society around them to sustain their position. Widely unequal societies do not function efficiently and their economies are neither stable nor sustainable. The evidence from history and from around the modern world is unequivocal: there comes a point when inequality spirals into economic dysfunction for the whole society, and when it does, even the rich pay a steep price.

I think the Bill Gates’ and Warren Buffets of the world understand this.  The Shelden Adelsons and the Donald Trumps (and probably the Mitt Romneys)?  Not so much.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.