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Too much inequality kills the work ethic
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Capitalism relies on inequality. Pay disparities steer resources to where they would be most productively employed. Inequality spurs economic growth by providing incentives for people to accumulate human capital and become more productive. It pulls the best and brightest into the most lucrative lines of work, where the most profitable companies hire them.

Yet the increasingly outsize rewards accruing to the nation’s elite threaten to gum up this incentive mechanism. If only a very lucky few can aspire to a big reward, most workers are likely to conclude that it is not worth the effort to try. The odds are not on their side. Inequality has been found to turn people off. Ultimately, the question is this: How much inequality is necessary?


http://www.nytimes.com/2010/12/26/business/26excerpt.html
Filed under: Capitalism Economy Equality Greed Labour Pay Taxes Wages Work
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