What are we talking about when we talk about inequality?
This is one of those examples of a term which gets thrown around in the modern media space over and over again without anyone bothering to define it. It’s analogous to when we talk about “health care costs”. What do we mean by that? Do we mean the amount of money Americans are spending on health insurance premiums per capita? Do we mean the amount of money taxpayers are spending on reimbursing insurers, hospitals, and drug companies for health care services and products? Do we mean the portion of the economy taken up by such costs, both out of pocket and paid for through government borrowing? Or do we mean any of the amounts above as compared to what the Congressional Budget Office prognosticators predicted the amounts would be? The media is happy to use the term interchangeably for all those things, with the result being that health care costs are going up, down, and sideways all at the same time.
So it is with inequality, which is, like Hansel, so hot right now. The assumption I take from the depiction of Thomas Piketty’s book – the radicalism of which David Harsanyi details today – is that we are talking about income inequality in the aggregate. There are lots of people, you see, and there are a ton of them who make very little money, and there is a smaller amount who make slightly more money, and then there is an even smaller amount who make slightly more than them, and then there is a very tiny amount who make a good bit more than them, and then there is an even tinier amount who have the ability to swim in vast vaults of golden coins while dressed in their smoking jackets.