Why is Wealth so Badly Distributed?

TL;DR. Wealth is not distributed; therefore the question whether or not wealth is badly distributed cannot be answered without knowing the process that led to the distribution that was obtained.

In what sense is wealth distributed? Is there some stock of wealth that a society has that gets distributed to the people of that society, and if so, is there someone in charge of doing the distribution, and if so, is that person doing a bad job?

What if wealth is not distributed by someone any more than height is distributed among people? We do recognize that there is a “height distribution” in any population, which in technical terms is called a “normal” distribution, but that does not imply that there is someone who goes about distributing height. Certainly some end up tall and others short but height is not “badly” distributed merely because everyone does not end up exactly having the same height (or weight or looks or intelligence or whathaveyou.)

Be that as it may, can we demand that everyone should have the same wealth? If yes, then is it possible to fix the system so that everyone has the same wealth? Clearly that’s possible: you figure out the total wealth of a collective, then do the arithmetic to get the average wealth, and then make appropriate redistribution to get everyone the same amount of wealth.

What would that entail? It would entail force and coercion. Is that morally and ethically justified? Perhaps. Would it have any unintended consequences — such as the breakout of violence, and a spanner in the machinery that creates wealth? Can the attempt to fix the various problems of inequality be a case of a cure that is worse than the disease?

Should we worry about wealth inequality and not bother to ask why inequality exists in the first place? Is there something in the nature of the world that inequality exists, not just in wealth but in every other dimension you care to name?

What should be the scope of the sphere of “equalization” of wealth (or whatever one cares about)? Should it be regional, national or international? Almost certainly all of us are wealthier than the average human. Are we morally obliged to transfer our above-average wealth to those who have below-average wealth if we care about “badly distributed” wealth and don’t wish to be labeled as hypocrites?

The top 1-percent of wealthy Americans have more wealth than the average American, and Americans are in the top 5 percent of the global wealth distribution. Should wealth be equalized among everyone in the world or just among Americans? Why should concern for the distribution of wealth stop at national borders?

The question “why is wealth so badly distributed” requires us to answer all sorts of questions, the answers to which amount to answering the original question. One of those questions is this: what is the process through which the distribution of wealth happens? Is that process fair, and if it is, then should the distribution that obtains be considered fair?

Jeff Bezos has a huge amount of wealth compared to which I have practically nothing. I could resent this great wealth disparity between Bezos and I. But wait a minute: I did not create the billions of dollars of wealth that Bezos created through his intelligence, effort, luck and cunning. A whole host of factors allowed him to create a truckload of wealth that benefited millions of people, and he got to control a small portion of the wealth his company created. He has a right to his personal wealth provided the process that he used was fair and square.

Perhaps there is no fixed stock of wealth. Perhaps what actually happens is wealth gets continually created (and destroyed) and some people are better than others in creating wealth, and these creators of wealth sometimes (not always) are able to capture a small part of the wealth they create and end up wealthier than those who are not as good at creating wealth.

I am not very good at creating wealth but I am really grateful that there are so many people in the world who create so much wealth for all of us.