On Economic Equality
I’ve been reading some of Paul Graham’s previous essays, and came across one that really resonated with me. In “Inequality and Risk”, Paul argues that trying to eliminate economic equality (within a singular country, not globally) automatically implies reducing overall economic growth.
An analogy I found particularly resonant is that economic inequality is akin to the potential energy used to power a water mill. To make a similar analogy, the dispartiy betwene rich and poor is much like electric potential: without any, the circuit does nothing. If we were to have economic equality, there would be no difference in pressure to drive economic growth at all. And, of course, it’s a proportional relation; to the degree that we limit economic inequality, we inherently limit the speed of our growth.
Interesting stuff, especially for a Libertarian like me.