Economic inequality in the free market system holds everyone back because of inefficiency, according to economist Samuel Bowles. Too much time, money, and effort goes into keeping the poor from gaining what the rich have.
Do you agree?
From the article:
“That’s almost certainly false,” Bowles tells SFR. “Prior to about 20 years ago, most economists thought that inequality just greased the wheels of progress. Overwhelmingly now, people who study it empirically think that it’s sand in the wheels.”
Bowles is wrong. Greater inequality is a product of having “sand in the wheels”, not in and of itself the sand. It is interesting how real wages for the poorer income earners have been falling since the 1970s, which is an era known for excessive welfare and government expenditure. Bowles is working from faulty premises, and so is coming up with faulty conclusions.