The issue is that income/wealth compounds over time. If people in the bottom 40% have very little to invest, they have nothing that compounds. They dont even have an opportunity to risk anything, or make a better decision.
The prices of the essentials are largely out of any individual's control. So any lack of ability to save / invest beyond spending on those is also out of their control. It's a vicious cycle, where excess wealth compounds, and income needed to exist dries up.
Also the rich often see a larger return to their investments than poor people, so having wealth seems to aide in your ability to make more money. Exactly the sort of thing that you implied was unjust.
And your other points about mobility I agree with and are addressed in notes on the site.
What is the issue with wealth compounding? The bottom 40% have a very high value asset -- their agency and actions in the real world. (Working, starting a business (however small), self sufficiency et al.).
The prices of true essentials are exceedingly small. Essential is something like sharing a room with someone, eating rice beans frozen veg mix (ie very inexpensively), wearing clothes from thrift stores, exercising outside and using a library card, medicaid. Everything beyond that is, technically, optional.
Having wealth aiding the overall return doesn't negate my point. Using wealth to get an unjust return does. An example of a better return would be hiring a financial advisor that (somehow) creates better returns using smarter allocations. An example of an unjust return would be creating a monopoly, buying a politician, or extracting profits from unpriced externalities (pollution and bailouts to name a couple). (These do happen in the USA, and I'm all for ending them!)
There's nothing unjust about someone getting more returns on more invested, this will naturally lead to a widening wealth gap over time. It's an inherent property of existence that more invested yields more return yields yet more invested (accelerating).
I do, however, like Scott Galloway's point that we need to find new ways to get the rich to spend their money, we need the poor to start 10000 businesses that gratify the rich and extract their money. Right now they're mostly accumulating it and bidding up investible assets (eg look athe P/E multiple of the S&P 500) .
You can configure what you believe to be the correct price of essentials on the site. The defaults are BLS group average spending data.
"There's nothing unjust about someone getting more returns on more invested, this will naturally lead to a widening wealth gap over time. It's an inherent property of existence that more invested yields more return yields yet more invested (accelerating)."
Do you see how there is nothing stopping insane accumulation of wealth/power? (assuming returns continue to accelerate in this manner?)
There's nothing wrong with the accumulation of wealth. I fully agree that Citizens united (not capitalism) has created a distortion and corrupting force in the market place.
It's not the wealth that is evil/wrong/unjust/immoral. It's the use of it to corrupt power.
But there's evidence that just having that inequality (not an absolute amount of wealth, but vastly more wealth than normal people) does, indeed, distort human perception and mindset in a way that leads to...well, where we are today.
Wealth is power, you're too narrowly focusing on specific applications of this power (like your mention of Citizens United) but if that wasn't a thing there'd be innumerous other ways for wealth to be leveraged as power.
Power accumulation is inherently unjust and immoral, it corrupts, the utopic benevolent benefactor is extremely rare in real life because power accumulation begets power, those who have it do not want to lose it.
Also wealth accumulation is inherently unjust even in your framework of meritocracy, its accumulation and compounding nature is not meritocratic.
Most new businesses fail. Then the poor are even deeper in the debt hole.
Some people can/should start businesses, but a lot of people are just not entrepreneurs - I include myself in that group. I realize that there must be ways to extract money from this economy - lots of people are doing it - but I don't think any of my ideas would end up doing that (they're generally too niche), more likely I'd end up losing a bunch of money trying to do that.
You're making a lot of assumptions of what I meant.
Gen-z seems to get this well, a lot of them are starting micro businesses where with very little capital besides their own labor and computer/phone they already own.
Getting a side hustle to $2000 a month can be the difference between trajectory to bankruptcy to trajectory to millionaire.
It's in that environment they're learning the skills that take them to the next level, when leverage/debt is something their equipped to dabble in.
For your case, if you do want to be an entrepreneur, perhaps read the book $100 startup? Its 14 years old at this point...
Housing and healthcare are both mentioned and covered.
> sharing a room with someone
> medicaid
in the top 10 CoL metros one can share a room with another person for about $600 a month.
I note that on your links the poverty wage is pretty close to the minimum wage. I'd contend that since contraceptives are widely available, including abortion in many places (or charities helping people get them in other states), we should expect the bottom quintile to not be adding to their expenses.
You should try stepping out of that academic ivory tower occasionally and visit a run down bar/pub in a working-class town and talk to the people who make up most of the population.
The issue is that income/wealth compounds over time. If people in the bottom 40% have very little to invest, they have nothing that compounds. They dont even have an opportunity to risk anything, or make a better decision.
The prices of the essentials are largely out of any individual's control. So any lack of ability to save / invest beyond spending on those is also out of their control. It's a vicious cycle, where excess wealth compounds, and income needed to exist dries up.
Also the rich often see a larger return to their investments than poor people, so having wealth seems to aide in your ability to make more money. Exactly the sort of thing that you implied was unjust.
And your other points about mobility I agree with and are addressed in notes on the site.