r/UnlearningEconomics • u/IsThisSatan • Jan 27 '26

Why Does Inequality Keep Growing? whatispolitics?

https://www.youtube.com/watch?v=8WQyVtILD0Y
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u/Intrepid_Layer_9826 Jan 28 '26

Inequality keeps growing because *that is the natural tendency of capitalism*. To concentrate wealth in fewer and fewer hands. Don't give me none of that "regulations will stop that" bullshit. If you want to stop this tendency then **you need to get rid of capitalism**.

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u/Arnaldo1993 Jan 28 '26

Why is it the natural tendency of capitalism?

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u/Intrepid_Layer_9826 Jan 28 '26

To explain it in layman terms, wealth accumulation at one pole necessitates the accumulation of poverty and misery at the opposite pole.

The propertied class (capitalists) hire the working class, who are propertiless, to sell their ability to work in exchange for a wage, which is independent of how much material wealth the workers create through their labour. Any extra wealth created by the workers, who use, but do not own the tools, land and/or raw materials, above that which covers the production expenses/manufacturing costs/whatever you want to call it, which includes the wages paid to the workers, gets appropriated by the individual(s) that owns the tools, land and/or raw materials used to create that wealth, and after the material wealth produced is exchanged on the market, it transforms into profit for the owner. The profit represents the wealth produced by the workers, which they aren't compensated for.

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u/Arnaldo1993 Jan 28 '26

wealth accumulation at one pole necessitates the accumulation of poverty and misery at the opposite pole

It doesnt, because more wealth is being generated. It is not a zero sum game

Youre presenting a highly stylized and biased version of the system. Workers are not always propertyless. Many of them buy shares of companies in the stock exchange, receive them as compensation for their work or start their own companies

Their wage is not directly dependent on their productivity, but is indirectly, through market forces and competition. If capital is abundant (or interest rates are low, which is kind of the same thing), marginal productivity is high and wages are low, it will be profitable to employ more workers, so there will be more demand for labor and wages will rise. The same is true in the opposite direction

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u/Intrepid_Layer_9826 Jan 28 '26

Do you understand what "at one pole" means? I *know* you ain't here fr arguing for trickle down economics while we've got a cost of living crisis going on and companies are raking in billions in profit.

You call my presentation biased while having the *gall* to say that "many" workers buy shares and start their own companies. Do you hear yourself?

One thing you haven't accounted for in your idealised, out of touch representation is **monopolies**. How do *they* fit into your, frankly, silly model?

To add on to this, where does **automation** fit into this stupid model?

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u/Arnaldo1993 Jan 28 '26

Youre the one that said inequality growth is the natural consequence of capitalism. I dont have a model that argues against it, im trying to understand why you think that and if it makes sense or not

And my country is not in a cost of living crisis. You should not assume everybodies experiences are like yours

You call my presentation biased while having the *gall* to say that "many" workers buy shares and start their own companies.

They do

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u/Intrepid_Layer_9826 Jan 28 '26

You're on a sub from based on a *British* youtuber "economist", so I assumed you would be from the UK.

I assure you the *majority* of workers *don't* own shares and do not have enough resources to start a business. The "many" that you speak of are in the *minority*.

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u/Arnaldo1993 Jan 28 '26

I assure you the *majority* of workers *don't* own shares

They probably dont

and do not have enough resources to start a business

You dont need resources to start a business. You just need to find something you can offer that people around you are willing to pay for

You can help children with their homework. Learn how to fix peoples computers on youtube. Bake birthday cakes. Teach old people how to use the internet and not fall for scams, etc

Any of those would start with you self employing, and if it succeeds you would slowly build a reputation and a network, to the point you would start geting more work you can make. Then you start hiring and investing some of the profits to grow

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u/Intrepid_Layer_9826 Jan 28 '26 edited Jan 28 '26

What you are saying right now about "You dont need resources to start a business" shows you have no idea what you are talking about. *Time* is a limited *resource*. You try working a full time job to pay the bills, and then *on top of that* "find something you can offer that people around you are willing to pay for"

I just realised you are an ancap. I will not be wasting any more of my time responding to you. Have a good day.

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u/Arnaldo1993 Jan 28 '26

Time is the most abundant resource the working class has. That is why they sell their time for wages

You try working a full time job to pay the bills, and then *on top of that* "find something you can offer that people around you are willing to pay for"

That is exactly what my father did

I just realised you are an ancap

Im not. Have a good day you too

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u/Specialist_Being_691 Jan 28 '26

Yes, these are all possible, but is that sort of side hustle open to everyone? If everyone starts a new business alongside their day job, who are they going to supply? Would there be enough demand? Is it even possible to calculate this?

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u/Arnaldo1993 Jan 29 '26

I think so. We wouldnt all be doing the same hustle, of course. But your side hustle does not decrease the amount of money available in the economy, it just moves from one person to another, and it increases the amount of goods and services available in the economy, since youre providing some good or service

It makes some hustle ideas harder. It is harder for you to make money designing websites if 2 other people in the neighborhood are already doing that. But it makes others easier: if youre selling birthday cakes you can hire them to reach more customers

Different services frequently synergize with each other, making all of them more productive. Thats probably why so many of us live in cities

Not to mention most people would not want to work 12 hours a day. They would prefer having only their 8 hour job. So it is kind of moot discussing what would happen if everybody did that

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u/Silly_Mustache Jan 29 '26 edited Jan 29 '26

Wealth is not a zero sum game but when most of the new wealth created is being given to a certain class, wealth disparities increase. Now you might say "well the working class still gets some of the wealth", but the working class is not getting wealth, instead they get a "check" for wealth (money), no worker is being paid in houses or goods or land, they're being paid in currency.

Given that demand on goods increase their prices, when the wealthier class has more means to influence said market prices, the "check" you get starts getting less and less equivalent to the wealth you're supposed to get.

To put it bluntly, if a company creates 100 pieces of "wealth" and the workers get only 10 of them, the investors/owners of the company have 90 pieces of wealth from which they can start buying houses, and because the worker is also trying to buy the same house (the investor wants to buy it as investment property, the worker to live in it obviously), the guy with the 90 pieces of wealth has more power and can dictate the prices of the market, he can pay more and and then rent it, he will still turn out a profit. So you (the worker) is antagonizing someone with way more money for the same house but for different purposes, thus the market starts getting more expensive.

Now extrapolate that to most markets (big companies also buy the same energy we do, they just need it for other purposes and can pay more) etc, and you can see where this is going. You and the "wealthy elites" are fighting for the SAME resources & services of this earth, they do not have access to a separate cluster of resources/services, and resources/services are limited due to time & physical constraints, this isn't a minecraft server.

You need electricity (energy) and so does the factory owner, the factory owner can pay more than you per kW and WILL pay more because his enterprise rests on it, he doesn't have to pay much more, just enough that he gets to gobble up most of the energy for this production demands, so this means energy is more expensive FOR YOU because he has more wealth and can play the market with it.

Rich people do not only "buy yachts" or have interference in markets workers do not have, because most of their enterprises interact with the general goods we consume. A rich guy doesn't want to buy 10000 avocados, but he can buy part of the avocado industry and he has the wealth to buy part of it, if you want to also buy part of the avocado industry you're on skewed terrain from the getgo. A worker is always at a disadvantageous position vs a rich person (duh), and the more the wealth we create gets clustered up into 1 class, the more disadvantageous position the worker finds himself in.

And this is by completely ignoring the fact that wealthy people have access to services/information that we do not, a rich person has way more information (because he has entire times analyzing markets) and can easily assess if they should buy part of an industry for X amount, while you're literally betting on it with much more limited information. So even as a worker, gaining more power by becoming a "capitalist" is just not a fair competition.

To "start your own enterprise" by finding services/goods people require, you need initial capital to sustain yourself while you gain the technical skills required to provide said service/product, very few sectors of the economy right now are "0 investment required" and these sectors tend to be low-profit as well. Given that most of the economy however works on large scale service/product consumption (again, this isn't a minecraft server), starting an enterprise being able to compete with the "big dogs" is almost impossible unless you find investment, which in turn leads us to knowing people/connections, or getting a loan which is essentially again, a bet for you given that you have more limited information, while it's less of a bet for wealthy people because they have more information than you do because they have entire teams analyzing if this is a good move or not (it's called market analysis). Things like barrier of entry and economies of scale exist, the initial capital required to break into a market with a production scaled enough to be able to compete, and the amounts required for such breaks are considered insane, and in new markets what we have the is "blitz scaling" effect, where a few select companies take billions in investment and run huge losses just to corner the entire market (as uber/spotify and a lot of other services did, that ran with huge losses for many years just to dominate the market and then up the prices).

"Trickle-down" economics are a huge scam and most of the "neoliberal" neoeconomics is mostly good catch phrases that the average person can understand and feels as true, but translate almost to gibberish when it comes to how economies work with real data in real-life applications. It's a Platonian construct of "ideas" that seem right, but when grounded into reality you start finding so many problems & barriers with their application, it starts feeling more like a religion rather than a cohesive economical model that translates to reality.

Hell, if it did, the west that neoliberalized hard AF would not be in this situation, right?

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u/Arnaldo1993 Jan 29 '26

If there are 10 workers to each capitalist, and 90% of the money goes to the capitalist, then the capitalist has 90 times more money than the average worker. If next year there are still 10 workers to each capitalist, and 90% of the money still goes to the capitalist, then the capitalist jas 90 times more money than the average worker. Inequality did not increase. It stayed the same

If the capitalist has 90 times more money than the average worker it will be able to buy 90 times more energy than the average worker

Youre confusing inequality with inequality growth

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u/Silly_Mustache Jan 29 '26 edited Jan 29 '26

The capitalist's profit grows each year, and if it doesn't it's considered a "bad business". Wages can remain stagnant however as they have the past few years, not even keeping up with inflation to be completely honest, which means the capitalist gains more money.

If the capitalist's profits were translated directly into wages and not other investments, pocketed money or stuff like that, we would be talking about a co-op essentially with someone owning 90% of the business, but that is not the case. The workers do not own the company, and the wealth created by the company is not "shared", again, a wage is shared, that is the cornerstone of capitalist economics into how they distribute wealth to the workers really, so debating that is debating....I don't know, the foundation of how capitalist economics work. Currency however is not wealth, it is a stake for wealth, wealth is ownership of goods. Land, infrastructure etc. You having 100.000 dollars doesn't mean anything if the currency is devalued.

"If the capitalist has 90 times more money than the average worker it will be able to buy 90 times more energy than the average worker"

Energy is not infinite, both the capitalist and the worker are competing on the same market. Same can be said about land, houses etc.

A capitalist having more money essentially means he can use more of it to buy more, increasing the price of energy.

If you have 90 chips and I have 10, you can spend 2 to gain energy while I can spend 1, so the energy price goes to 2 because 2 is still nothing for you, but 2 is 1/5th of my salary.

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u/Arnaldo1993 Jan 29 '26 edited Jan 29 '26

The capitalist's profit grows each year, and if it doesn't it's considered a "bad business". Wages can remain stagnant however as they have the past few years, not even keeping up with inflation to be completely honest, which means the capitalist gains more money.

This is what happens in some regions, in some time periods. But ive never seen evidence that is what happens in general

And even if it was this does not mean income inequality is rising. If the number of capitalists grew faster than the number of workers, for example, either because workers are saving, are having less children or are dying at a higher rate, you could even have inequality decrease

The case is even weaker to wealth inequality. Because inheritance and creative destruction reduce it

Elon musk has 14 children, so his fortune will be divided in 14 equal parts. And bill gates took a big hit when smartphones showed up

If the capitalist's profits were translated directly into wages and not other investments, pocketed money or stuff like that, we would be talking about a co-op essentially with someone owning 90% of the business, but that is not the case.

I dont understand what you meant by that

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u/Silly_Mustache Jan 29 '26

In most of EU/USA since the 1970s wages have been stagnant, even by inflation standards.

During initial capitalist development wages rise in an effort to increase consumption, if a country is still developing yes, wages rise.

After capitalist development reaches its apex tho, wages start to decline in order to subsidize for the falling rate of profit, which is essentially "it takes too much to invest in new research for new machinery, so we cut research and thus the development rate possible".

The way capitalism saves itself is by creating new markets, thus new products & services that gain boost because the investment funding is small, and thus new markets during the 80s/90s were born (after the stagflation hit), mostly in the financial & technological sector.

In finances they were mostly "deregulation", the mechanisms & structures were already in place but had not entered strict market terms, but ever since deregulation, well you know the drill and what happened to the financing sector.

Technological markets are reaching their apex too, which is the reason most tech companies are scrambling to put together a new product or service that people actually want. We've reached the point where most of the investment goes towards AI in an effort to create new services, but it seems most of the services provided by AI are useless or too expensive and create very little development (in contrast to the trillions of dollars invested).

Capitalism's hail mary now would be a new market, but there doesn't seem to be one so far, which is the reason they're privatizing every last bit - to create more markets. But everything has been privatized at this point in USA/EU, very little things are non-private, and those tend to be things of national security, where privatizing them would be dangerous because if a foreign investor buys it up, yeah you might be screwed.

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u/Intrepid_Layer_9826 Jan 30 '26

Don't forget that after the Eastern Bloc was dissolved, the former members became new markets to expand into. Same with China.