Inequality is bad for societies. When too much money is funneled to the top, there is not enough left circulating at the bottom to create a robust economy. Not very long ago I stumbled across this chart, which indicates modern inequality is beginning to look positively feudal:
I don’t think the chart is strictly accurate. For example, most clergy are poor as church mice and the average physician salary doesn’t make it into the top 1% of earners. Neither do the lion’s share of lawyers. However, they do make it (on average) into the top 5% so I do think they qualify as vassals; it is simply that vassals are the top 5% not the top 0.75%. Most medieval merchants weren’t rich either; they would be more of today’s middle class. Sure, there were some who struck gold but most of them were comfortable at best.
However, this chart does give a fairly good visual of what happens when money is aggregated at the top. The modern uber-rich have the kind of wealth that kings and lords would have once owned, and even the wealthy (the landed gentry of the day) don’t come close to that kind of lucre.
What’s scary about feudal wealth distribution is that a rich king means there will be at least some starving peasants. Sadly, that is what is happening today. According to the Social Mobility and Child Poverty Commission, “Britain is on the brink of becoming a nation permanently divided between rich and poor … [and that] 2020 could mark a watershed between an era in which for decades there have been rising living standards shared by all and a future era where rising living standards bypass the poorest in society”. Moreover, it’s becoming clear that UK politicians should listen to the “dozens of Anglican bishops and hundreds of church leaders warning that hunger was becoming “a national crisis” … researchers in the British Medical Journal warning that the rise in food poverty has “all the signs of a public health emergency” … [and] the hospital admissions statistics showing a rise in malnutrition.”
Literally, the peasants are once again starving.
The problem of hunger among the poor is growing rapidly in America as well. As inequality has increased, so has the number of people who cannot be sure of where their next meal is coming from. The richest nation on earth (from a Gross National Product standpoint) has 1/7 of its citizens begging for food. More than 45 million Americans cannot put food on their table. Meanwhile, the wealthiest Americans are giving less and less to charities that help feed the poor but the tip-top of the rich (royalty per se) are growing stratospherically rich.
It wasn’t always like this. From 1948 to 1978 inequality was low and the economy prospered:
So, how did this 30 year economic miracle occur? America (like other countries) taxed the living bejezus out of the richest among us:
In short, the economy thrives when the government takes at least 70% of the wealth from the mega-rich and spreads that money around via social programs and government spending on things like infrastructure. The opposite of what the US and the UK are doing today.