Week 4: Crossing the divide

During the previous week, we looked at urbanization; the good and the bad. What did we find out? A large divide occurs between the rich and the poor, and this gap is greater in cities than elsewhere. Why? As more people flock from rural to urban areas, they compete with those already residing in cities for jobs. With high demand for a single job, the value decreases; the employer on the other hand continues to make profit and grows richer. This creates a social stratification whereby there is a minority upper class (the owners of the means), the fairly large middle class, and the majority lower class. This inequality is one reason why people turned out en masse last September to protest against Wall Street. The movement was dubbed Occupy Wall Street. These individuals occupied Wall street so as not to occupy the same position on the social ladder for the rest of their lives.

Inequality is not necessarily bad (remember we have unequal intelligence levels), for if everyone was equally rich, who would pave the roads or manufacture cars? Mobility(or immobility) is the problem; people cannot go from rag to riches, if I may. In an NPR article, Mr. Cowen states that people produce offspring whose success in the future depends on their parents'. Based on this thinking one can explain why inequality results in a triangle that tapers as you move up. The employer mentioned in the previous paragraph is less likely to produce more offspring (as determined in other studies) than his/her lower employees. Therefore, the individual at the tip of the triangle produces one person like him/herself while each of the individuals at the bottom wrung produce three more.

If a Gini index (which we also looked at) of 0 is to be achieved, society would not function; therefore, our attention should be focused on making it easier for the lower class to make ends meet through reduced taxes and subsidies, and making upward mobility on the social ladder possible periodically. If you find a society where Socialism has been very successful, then a Gini index of zero might be achievable.

P.s. In a comment I made last week on the influence of media, I mentioned that media (movies in particular)dictate what direction we are headed. The masks used to protest in the movie "V for Vendetta" were the ones used by the protesters on Wall Street. Note the picture.

-O.I.