The only way you can have upward mobility is if there's somewhere to be upwardly mobile to.While this is a reasonable response on Henderson's part, thinking about inequality in terms of income can get confusing. Instead, consider: Is "somewhere" predefined, so that no further entry is possible? Do existing definitions as to how people arrive at "somewhere" reflect realities that are scarce by their actual nature...or not? The biggest problem for framing inequality through income, is that it tells us little about one's actual attempts to interact with the marketplace over time. Dogmatic resource use definitions and preset time use expectations (on consumption terms) are what really stand in the way of upward mobility. Inequality is indeed a serious issue which needs to be addressed, but not for the reasons that are often provided.
Income as presently structured (i.e. freestanding single institutional models for each economic "purpose"), is a residual of multiple coordination strategies which take place among existing patterns of economic flows. Profits are utilized by both public and private interests in order to make income flows occur. However, what matters for choice sets beyond a basic level, is whether resulting (individual) incomes are capable of interacting with resources profitably. In a national or international setting - because of economies of scale - lower income levels don't always get the chance to interact profitably with resources.
What kinds of inequalities impact basic life needs? The first question one could ask when something is highly valued is, how central is this product to one's consumption needs? Diamonds provide a good example, in that their monetary valuation certainly exceeds production costs. Fortunately, diamonds are not a central concern for anyone's budget. In spite of high valuation ("overpriced" for a "perpetual" market?), they don't pose a hardship for the buyer - unless of course it's hardship (!) of a voluntary nature.
Hence while diamonds make some individuals quite rich, this does not happen through aggregate time "theft", so to speak. Whereas, skills sets that are arbitrarily limited for basic consumption needs, impose inequalities at basic levels, in aggregate time use. This is particularly true in the case of healthcare. To be fair, healthcare is not alone in time theft practice, as arbitrary restrictions on housing definition impose time "theft" in consumption terms, for example. While no one is a "slave" to a mortgage, there is still a certain all or nothing aspect to today's housing which limits one' mobility and choice sets. I'm not using time theft as example in order to anger anyone, only to illustrate how it relates to recent discussions re property theft and taxation theft.
Several times I have argued against further redistribution efforts in the current national model, because of the degree to which the model further exacerbates the problem. For one thing, time "theft" patterns among some higher income groups are not well understood, so redistribution tends to exacerbate them.
Indeed some of those patterns are set up so that some high income recipients are actually "victimized" by the pattern of high education costs and then afterward, overhead costs of doing business. This is why not many people want to become physicians today - and then their income is taxed again even though government has already profited from (their) entire process of gaining economic access. Does anyone imagine that further taxation on high income would actually make its way to the poor? Hardly, because the first stop is Washington, and whatever is left is apportioned to the elites who fashion the patterns and details along the way. At some point, redistribution loses its effectiveness, particularly when government is too involved with the services marketplace. So the redistribution "solution" among the political left, comes up short.
So far - however - the political right is also too caught in the same patterns that thwart a free marketplace in services. Even though concerns are being voiced regarding the inaction of the supply side to generate new growth, who is there to respond to them? How does someone in power give voice to the missing marketplace that they don't even want?
The only voices that can be raised in this regard are the individuals who - given the chance - would take the multitude of resource and knowledge options that exist and fashion them in new ways But this simply cannot happen across the entire economic landscape, because it threatens too many entrenched interests. Hence framing matters. Those who seek to innovate new ways to survive, need exploratory environments which do not threaten entrenched interests.
Even though it is not in the short term interests of the present supply side for this to happen, it is in their long term interests. Why so? If they allow today's sluggish growth to remain unchanged, ultimately more power is given to the government in their stead. Free markets remain viable by maintaining the capacity for inclusive growth. That is, if the supply side does not allow production reform (which means challenging government in a productive way), the left wins the battle for more redistribution even though it is shown not to work.
Unfortunately, it is not as simple for the government to generate a fuller labor market equilibrium, as it would be for the private marketplace, and eventual breakdown in government would also lead to eventual breakdown in supply side status quo. An alternative marketplace could therefore reinforce the existing marketplace in the medium run, in ways that government cannot. Key to this process is envisioning services formation through inclusive monetary terms, instead of limited fiscal terms.
Maintaining strong service formations indefinitely by fiscal means is not feasible, in large part because fiscal operations need the green light of private interests - which have already pulled back on growth. People end up paying twice for services that they could more efficiently generate themselves - what's more - only have to pay for, once.
And inequality really comes down to access to existing assets to services equilibrium. (i.e. if it doesn't exist it needs to be imagined...) Of course the primary problem here, is that the missing component of the marketplace exists in areas that are heavily influenced by government - hence a general reluctance to production reform which could further stimulate the economy. It is this coalition of government with healthcare and education, along with the assets structure which reinforces this equilibrium, which accounts for a considerable amount of inequality in the present.
Given the nature of "normal" income as described above: how, then, would it possible to compensate time use income equally in resource arbitrage? Equally compensated income is internally driven for diverse local goals, and can be thought of as a starting gate. One might think of (agreed upon compensated) time use sets as the money provided by the bank in a "Monopoly" game. Like the game, a local business "umbrella" would comprise a freestanding local institution for multiple purposes. Remember the game? Everyone is distributed the same (initially equal) bank money.
While that is quite simplistic, it gives an idea re the process. The concept of course is to spread more of the liquid investment components among all participants, so that negative monetary externalization (prisons, etc.) can be diminished. Even as some individuals would mostly maintain asset formations reflecting "starting" income (say, a 40 hour "work week" of matched services time use), a portion of local asset equilibrium would (respectfully) reflect this basic time use choice, without appearing as though a neglected "loser" landscape. Key in all this is recognizing preferred time use choices, and adapting production potential so as to match them more closely.
In other words, the limited nature of time becomes a central or focal point, by which to make decisions regarding both production and services which locally support one another. This is the coordination advantage that economies do not have in the present, which results in constant fiscal and monetary battles. Hence in a direct time arbitrage scenario, compensated time use provides a central and direct starting point for further production and services flows.
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