On Capitalism and Inequality

“The unequal accumulation of political resources
points to an ominous possibility:

Political inequalities may be ratcheted up, so to speak,
to a level from which they cannot be ratcheted down.

The cumulative advantages in power, influence, and authority
of the more privileged strata may become so great
that .. a majority of ordinary citizens…are simply unable
…to overcome the forces of inequality arrayed against them.”

Robert Dahl

"One of the central characteristics of highly unequal societies
is that two sets of laws develop:

One set for the rich and powerful and one set for everyone else.

The more unequal societies become, the more easily they accept the unacceptable,
and with each unrebuked violation, the powerful actors at the top
...gain an ever greater sense of entitlement and an ever greater sense
that the laws that govern everyone else don’t apply to them.

As a result, their behavior becomes increasingly egregious.

Over time, citizens lose faith in government
and their own ability to thrive in what becomes a corrupt economy.

When powerful players are permitted to alter established rules at will,
capitalism ultimately collapses.

Contracts and the idea of a fair bargain become meaningless
as less powerful parties to an agreement
know their rights will not be enforced.

This uncertainty leads the small businesses,
which are so often cited as important to our economy,
to shy away from new activities that might put them at the risk
of unequal treatment.

In contrast, sustainable capitalism
requires that all participants in a contract or bargain
believe their interests will be enforced equally by the courts:

Capitalism requires that Lady Justice wear a blindfold."

Bruce Judson

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