Just a reminder. I first published this in 2006 under a my old SignalHealth label and again here in 2011. It seems to get more current every day. Certainly, there are a lot of tax “plans” being floated that confirm one of the self-reinforcing loops depicted (influencing changes in public policy to the advantage of the already advantaged).
Inequality is both effect and cause.
Inequality of income and resources is indeed a significant, even profound social, political and economic problem. But this did not just happen suddenly and, by itself, it’s not enough to explain the current unrest. That’s more because a large proportion of the public has come to the conclusion (rightly, I think) that the game is rigged.
Here’s an alternative, systems picture of what’s happening and has been happening for several decades. It’s the self-reinforcing nature of the current system and its inequalities. This shows three examples of “the rich getting richer,” one in the public sector, one in the private sector, and one private/public combination. (Note that I did this a few years back on an earlier version of a sister site.)
Other self-reinforcing loops might well be added, such as the ownership of the media and its messaging. Implicitly, it’s part of “buying influence.”
The key points is that this unhealthy system is self-reinforcing and that fixing it must occur in multiple interrelated domains. It ripples through politics, government, education, finance, and business. Perhaps it would be better to assume that, until proven otherwise, any major component of our economy works this way.
Increasing taxes on very high income individuals would contribute, but it’s far from enough. These self-reinforcing loops need to be reversed, or at least be counter-balanced.