Question

Why is there growing inequality of wealth, and why should we be concerned? What are the adverse consequences of growing inequalities (as related to cash versus in-kind transfers)?

Answer 1

The reasons for income inequality are:

1. Capitalist economy: In this system investments are made by a few people which leads to profit accumulation for the few, which increases wealth year on year for a few people

2. Policies favouring a few: The bailout policies or investment opportunities favour a few which deprives opportunity for all.
The growth in income inequality is a reason or concern as it leads to accumulation of money, resources and power with a few people which leads to increase exploitation of poor and also reduces harmony in the society and the governance would be controlled by these few people

Consequences include:
1. Exploitation of poor as the resources would be in the hands of poor
2. Raise in crime rates
3. Deprivation of justice to poor
4. Reduced opportunity for poor
5. In kind transfers would not be able to equate the wealth difference as it would not involve transfer of cash