Inequality

Inequality is baked into the nature of reality. There’s no escaping it anywhere or anytime. Cosmology holds that the universe began in a state of perfect equality but then following the period of rapid expansion (inflation), inequality appeared in the form of clusters of matter (stars and galaxies) and empty space. The primary force that caused that clumping, physicists contend, was gravity. The weakest of all the four forces, gravity molded the universe into the form it has: clumps and voids.

Equality would have implied a structureless universe. Physicists believe that in the far distant future, the universe will end in a heat death. Then everything will be back to the undifferentiated state of pure equality.

On a much smaller scale and in a different domain, we find the same story of increasing inequality. The first single-celled organisms were all the same. Multicellular organisms have greater diversity. The variety of life forms on earth kept increasing through biological evolution.

Diversity and equality are rival properties. The more you have of the one, the less you have of the other. Naturally this is true of the human world since, being part of the universe, we are not exempt from the fundamental laws of the universe.

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I believe that it is part of our human nature that we have a preference for equality to some degree. Perhaps it has something to do with the perfectly human emotion of envy. I know that from introspection. I used to envy the more wealthy their wealth, the more beautiful their looks, etc. Fortunately, I have overcome that infantile emotion to a large extent.

Interestingly it was a concern with inequality that directed me to study economics. The question I wanted the answer to was simple: why are some parts of the world rich and others poor? I had come to conclude that people are pretty much the same across the world. But then why the divergence in material prosperity?

I began with wealth inequality. But with time, I learned that wealth was only part of the matter. There were other dimensions related to wealth but not congruent to it. Those were income, consumption, and finally, well-being or flourishing.

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Wealth is whatever we find useful and therefore value. A wealthy person is one who has a lot of wealth. Wealth is what you own. It’s a stock of stuff. Income, in contrast, is a flow. It’s measured over specific periods of time, such as a month or a year. Thus someone could be wealthy (have $1 million in assets) and have an income of $120k per year.

Consumption is what one spends over a specific period. Thus one could be spending $5k a month while having an income of $10k a month. Then his wealth grows by $60k a year.

Point to note that though wealth, income and consumption are related, they are not rigidly linked. You can have a variety of mixes of the three. For instance, you could have high wealth, zero income and high consumption. Or have low wealth, high income, and high consumption. Etc.

It’s good to have high levels of the three but those are not the important metrics. The important thing is well-being or life satisfaction or happiness or contentment. A happy person who is not very wealthy is better off than a wealthy person who is unhappy.

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Humans are the only animals who have wealth. This is understandable since wealth is, to a large degree in the modern world, a human creation.

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Let me digress a bit here. As far as I can I like to precisely define words I use. Vocabulary is important if you’re interested in reasoning about the world of concepts. I believe that learning a subject boils down to building a rich vocabulary in it. Words create the superstructure that any domain of knowledge essentially is.

A rich vocabulary has great utility too: it allows one to reason oneself out of false or prejudicial ideas.

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Anyway, by nature I like words. Unfortunately I am reasonably competent only in English, which is not even my mother tongue. I like to make distinctions that may not move others.

Consider these two words: jail and prison. Though they are used interchangeably, they don’t mean the same. Jail is where people are temporarily confined but they may not be convicted of a crime; prison is where people who have been found guilty of crimes are confined.

This distinction between jail and prison is not really consequential. One can live perfectly satisfactory lives without making that distinction.

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I learned to distinguish between the words complex and complicated. A thing can be complicated but not complex. A commercial jetliner is very complicated, what with its hundreds of thousands of components. But given time, resources, and the instructions on how to build a 747, it can be built. The 747 is terribly complicated but it can be fully specified, and therefore is not complex.

The economy of even a modestly sized modern country is not just a complicated thing but it is complex. It is beyond human comprehension. It is not possible to fully specify the workings of an economy. Trying to do so is an impossible task that only ends up in tears (though not for the one’s attempting it.)

A 747 is a machine, and though extremely complicated, it is not complex. In contrast to that, a cat is an organism, and therefore complex. You can build a 747 but you cannot build a cat. Cats grow. So also, economies are organisms and not machines. Treating economies as machines leads to avoidable misery.

Respecting the distinction between machines and organisms is immensely consequential.

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I notice my digression is taking up too much space. But allow me to continue. I hate it when people use the words “power” and “energy” to mean the same thing. They are related but distinct. Somewhat like wealth and income, energy is a stock while power is a flow.

The units are watts for power. Power delivered (or consumed) over some specified amount of time (say, hour) is energy, measured in watt-hours. A 100-wall bulb consumes 100 watt-hour of energy.

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I have gone over the word-limit for today. I will continue this later.

PS: Here’s the followup to this post — Well-being.