A synthesis of those views leads to the implied conclusion that we should look for an...

A synthesis of those views leads to the implied conclusion that we should look for an optimal degree of inequality. On the one hand we need to preserve the discipline and incentives of the market based system we live in; on the other hand, we need to know that some wealth and income is being maintained as protected by higher income individuals. If the emphasis of this class were different we could debate the pros and cons of each argument from the guise of the Utilitarian and Rawlsian Social Contract points of view and have a great time doing so. Here the question is different.

What are the costs to society of having a less than optimal degree of income inequality – in particular, what are the costs and benefits to society of wealth staying concentrated among the wealthy?

Expert Solution

Answer:1.Cost of society having a less than optimal degree is varied as per the section of society whose affected by the income inequality.Mostly societies is divided into rich class who are always few in numbers versus others.This inequality also have impact on person social behaviour rich class people behave differently and also how they interact with each other.Mostly it will only widen the gaps between them psychologicaly.

2.Currently most rich people on planet are those who invent or innovate something new.For example Amazon CEO Jeff Bezos or Mark Zuckerberg of facebook.Income inequality also show technological advancement and innovation in an economy.It will help in living standard of whole society.Although it means rich getting more rich and thus this gap never fills.

Rahul Sunny answered 2 years ago

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