Unjustified Inequality Explained

Photo by Gilly Stewart on Unsplash

Many people believe that some level of inequality is justified, arguing that roles requiring higher levels of education and responsibility, like a doctor, should command higher pay than jobs like a janitor. But what constitutes unjustified inequality?

To delve into this, it’s crucial to understand the concept of a debt-based currency, which is the system most countries use today. In this system, the government borrows money from its citizens or foreign entities and pays interest on these debts. This isn’t inherently problematic, but issues arise when examining the flow of money within the economy.

Governments borrow money to fund necessary projects like highways and infrastructure. While this is generally accepted, the persistent increase in debt raises concerns about unjustified inequality. The primary issue lies in the distribution of money, particularly how it flows from the top earners to the lower earners and how money enters the economy. Large corporations often maximize profits and minimize tax liabilities, focusing heavily on increasing shareholder wealth—a mindset ingrained in many corporate leaders’ mandates.

This approach creates barriers to wealth for ordinary people. For instance, entering the stock market and earning significant returns requires substantial initial capital, which most people never accumulate. While the stock market is often seen as a wealth indicator, it is not the actual creator of wealth. True wealth generation comes from the labor force and those managing it. Unfortunately, the current system prioritizes high earnings at the top while paying minimal wages at the bottom to supposedly boost productivity and cash flow.

So, how can we address these issues?

Changing the entire system of debt-based currencies isn’t straightforward. Cryptocurrencies like Bitcoin and stablecoins like Tether present their own set of challenges and are not immediate solutions.

I propose a dynamic system, governed by objective and factual rules, that could regulate economic flow more equitably. One idea is to implement a system where money is ‘printed’ and distributed equally among all individuals, regardless of their wealth. This approach would inject new money at the consumer level, potentially revitalizing small businesses and local economies. For example, an extra $20 might not mean much to some, but it could significantly help others afford basic necessities.

However, caution is necessary. Examples like Zimbabwe and Venezuela show that excessive money printing without economic backing leads to hyperinflation and economic collapse. A modest and controlled approach is essential to prevent such outcomes.

The challenge lies in overcoming the political popularity contests where promises of more money can sway votes irrespective of the economic realities. This issue is particularly acute in regions like Africa, where educational systems may not provide sufficient understanding of these complex economic dynamics.

In summary, addressing unjustified inequality requires a thoughtful redesign of how money flows within our economies, ensuring that the system benefits everyone, not just those at the top.