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.