This podcast explores the notion of income inequality. Although it’s an oft-discussed subject, it’s not always defined well or only discussed in the narrow band of the moral arguments against it. This discussion is meant to go deeper, including examining both the positive and negative aspects of inequality and its role in an economic system. Fundamentally, we’re asking the question as to whether some amount of inequality is a necessary byproduct of capitalism, or perhaps even a desirable outcome of an economic system. Therefore, we hypothesize that there may be an “optimal” amount of inequality in a society.
To explore this question, we must first examine why humans engage in economic transactions in the first place. Then, we can look to factors that either exaggerate or mitigate economic inequality. Lastly, we examine the implications – both positive and negative – of such inequality, including economic, social, and political.
We then test our hypothesis of an optimal amount of inequality by examining any correlations between inequality and happiness, having introduced measurements for each.
The conclusions are both surprising and obvious.
Key Terms Used
Externality, Gini Coefficient, Happiness Index, Monopoly, Progressive Tax, Public Good, Risk, Zero Sum Game
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