Inequality of wealth occurs when significant deviations from the average level of household income begin.

Causes of Inequality of Wealth

Many people read books about the success of businessmen who have created large companies. They diligently study their biography, education, and ways of making decisions. Trying to repeat their success and, as a rule, nothing comes out.

The statistics is implacable, 50% of companies go bankrupt within five years, and only a few more in five years. A long study of outstanding success has come to the conclusion that among other things, success is needed, a good combination of circumstances.

Education, technological knowledge, experience in business, a favorable investment environment should coincide with a successful coincidence, then a big successful business grows.

Needless to say, only a few achieve dizzying success - hence the problem of inequality of wealth.

To most people, luck does not smile, bypasses, and they cannot achieve long-term financial success.

Literally a little more than 100 years old, this problem was of little concern to anyone, but in 1917 the October revolution broke out. Mobile with weapons began to rob and kill the population of Russia, for those times a rich and wealthy country.

In most developed countries, measures to smooth out inequality of wealth began to be introduced; for this, many social projects began to unfold: health insurance, shorter working hours, pensions, limiting the omnipotence of powerful corporations in favor of small and medium businesses.

All these measures led to the creation of a powerful and numerous middle class, which lowered the inequality of wealth, led to political stability and further sustainable economic growth.

Inequality of wealth in hybrid modes

The term “hybrid regimes” was introduced by Lucan Wei, a doctor at the University of Toronto, in a study of authoritarian, competitive authoritarian regimes in which the democratization process began after the end of the Cold War and the collapse of the socialist camp.

It means using limited democratic procedures in countries of competitive authoritarianism under pressure from the international community. But these regimes in different degrees distort the political space, suppress the opposition, falsify the elections, destroy the independent media.

New authoritarian leaders are doing everything to eliminate the turnover of power and keep it for themselves as long as possible. In countries with weak legal institutions, corrupt judges and infantile citizens, power is easily used, without public control, for illicit enrichment, especially in resource economies.

The reason is rather trivial: in resource economies, with the help of security forces, it is possible without much effort and the creation of complex institutions to control the flow of income from hydrocarbons, minerals, and land rent.

After the euphoria and national upsurge caused by the creation of new states, authoritarian leaders get a blank check on the use of rental income, are quickly enriched and begin to use resources to suppress the opposition and civil society.

The more wealth is concentrated in the hands of autocrats, the greater is the premium from revolutionary changes for opposition forces. The more money autocrats spend on inflating statesmen’s security forces, various supervisory and state institutions to keep protests at a safe distance.

But there is the iron law of Leviathan: growing costs at a certain point exceed revenues, there are not enough funds to pay for swollen devices, and, with the onset of wage delays, autocracy is monolithic, unbreakable, without government coups falls into instability.

So the inequality of wealth in hybrid modes leads to instability and turnover of power.

Inequality of wealth leads to social injustice

Since enrichment under equal conditions is a completely random affair, everyone who is unlucky should be provided with a normal life: access to education and health care.After all, it is not known, maybe somewhere there lives a future genius who can invent a breakthrough technology and change people's lives for the better.

If this person due to illness without medical care, as a result of lack of access to education or simply because of the inability to pay for the Internet did not realize its potential, then in this case the whole humanity loses.

The task of society is to find a balance between meeting basic needs and creating incentives for investment in human capital through fair inequality, but I will write about it tomorrow.