Even as a libertarian, I agree that too much inequality in a society is a bad thing. However, I find myself quite suspicious of the solutions that are generally proposed, even here on HN, which are generally of the form "Give the elite more power", usually as "give the government more centralized power".
I agree that our elites are a problem, but I find it a bit sad/amusing that so many people are so ready to solve the problem in exactly the way the elite want you to want it solved.
"Too much" inequality. Admittedly, phrased that way it's tautological, but I'm not willing to stuff a precise definition into an HN message. I'm certainly willing to tolerate more than than your average liberal or communist, but no, I don't think a society divided into plutocrats and plebians is a good idea either, as it's actually bad for the market. Indeed, one of the major reasons I'm a libertarian and not an anarchist is that I believe one of the governments main duties is monopoly busting. Anything that gets too big should be sliced into pieces, government or corporation. (And yes, again, "too big" is itself tautological, but again, HN comment.) I believe that people who are only willing to accept one side of that statement don't realize that that "too bigness" will flock to where ever it is tolerated and in the end there's not that much practical difference between "too big" corporations and "too big" government.
When you talk about inequality, you're talking about the Gini coefficient (you may prefer a different definition, but let's just use that because it's well known and simple). There is no reason to think that a Gini of, say, .7 leads to plutocrats or monopolies any more/less so than a Gini of .4.
Plutocrats derive power from their wealth. The Pluto Problem (haha, couldn't resist) is not due to society wide inequality levels, but rather to a political system which enables them to derive said power. Finally, if you look at the richest people in the US such as Gates, Buffet and the Waltons, I don't think that you'll find they have political power even remotely similar to plutocrats such as Berlusconi. Point being that, in my opinion, Plutocrats don't exist in the US. Are there rich, politically powerful people in the US? Yes. Are there people who derive immense political power solely through said wealth? I would say no. It's more likely to work the other way around (political power leads to wealth - as in the case of the Clintons and now Obama).
People may discuss examples such as Romeny et al, but he's only worth $250 million. If it only takes $250m to get political power (and does Romney even have any political power today?), then I'd see your concern!
Regarding your concern over monopolies generally, I am reminded of a wonderful Friedman response to the question 'When have you ever been wrong': "I used to believe that some anti trust activity had merit."
'Regarding your concern over monopolies generally, I am reminded of a wonderful Friedman response to the question 'When have you ever been wrong': "I used to believe that some anti trust activity had merit."'
I consider it a good and proper task for the government to ensure nothing, including itself, gets too large. That is not to say that our government today can do it. I'm not sure what to do once you pass a certain event horizon of concentrated power... well, actually, I'm pretty confident the only answer is to wait for the concentration to inevitably collapse and take some percent of society with it (historically, at times approaching 100%), but I don't know how to reliably make that safe, let alone painless. I'm not sure there is a way. I'm more interested in building robust societies that can survive disruptions than in trying to prevent them; there's pretty good mathematical reasons to believe that's simply impossible. To say this puts me out of the political mainstream would be putting it lightly.
Anyhow, it's not news to me that my preferred politics doesn't produce Utopia... I would be much happier if everybody else realized that neither do theirs.
Unfortunately I do not share your confidence that concentrated power is inherently unstable or self destructing. What evidence is there of such a claim?
Even the most extreme concentrations of power, such as North Korea, in fact contain complex webs of mutual support within them when viewed up close.
To get back to the original topic, though, I just don't see how any non-extreme (below .9 Gini) distribution of income can be considered unstable or problematic in any way. It's not as if someone is simply doling out wealth and income; this stuff is created and earned!
There are essentially three types of equality discussed in politics. Equality before the law, equality in opportunity, and equality in results (aka income/wealth equality). Equality before the law is liked by most, but few would say affirmative action wasn't just when it was enacted. Equality in opportunity is liked by most, but few people would say it's unjust to allow people to send their kids to private school. The problem I think most people have with gross wealth inequality is that it definitely leads to inequality in opportunity (by most peoples' definitions of opportunity) and some would argue even inequality in law (bankers get their congressmen buddies to bail them out).
