Why we should change the fundamental way we talk about economic inequality.
Recently, some of us have been reading Thomas Piketty’s Capitol and Michael Lewis’ Flash Boys – reviews of both books forth coming – this has led to some heated discussions about the economy. Conversations of high-frequency trading and wealth inequality has us feeling like John Goodman’s character in Community. When it comes to fairness and the US economy, we’re going through some stuff at the moment.
Still this got us thinking about a video that went viral last year on a similar subject. The video is based on Dan Ariely and Michael Norton’s 2011 study in which they asked average Americans what their ideal model of wealth distribution would be. (SPOILER ALERT: It was way off.)
When talking about economic inequality, it makes more sense to talk about wealth inequality than income inequality. Think about it. A family’s wealth gives them more options from as trivial as eating out at a nice restaurant to as serious as someone in the family needing hospital care. Assets in both cases can be easily liquidated. While a family that might be doing fine on an income scale, but living paycheck-to-paycheck, their options to liquidate are limited or even non-existent.
It’s strange that when talking about economic inequality that the conversation always goes to income, never wealth. Hopefully videos like this will change that discussion.