I'd like to know why the unequal distribution of wealth is a bad thing. This seems to be a major premise from those on the left, but it's like you just assume it's a bad thing without every really providing evidence or justifying the premise.
This is a great question.
Unequal distribution is absolutely fine
until you reach a point where the bottom half has insufficient income to consume. Your workers are also consumers. Put another way: one person's spending is another person's income. The economy cannot survive unless enough people in the lower half can buy things (either through higher wages/more benefits or after-market policies that lower the cost of living or make poor consumers more solvent). During the postwar years, there were all these policies designed to include the middle class in economic growth - more of the total pie went to demand centered policies and investment in the public sector. And when the middle class has money, the capitalist has to innovate and add jobs in order to capture that money. That's what capital does - it goes wherever consumers have money and it grows that economy to get at that money. And when consumers don't have money, the opposite happens - the capitalist has to shed jobs because he can't sell anything.
You will recall Reagan's famous quip about the soviet union when he pointed out that workers didn't make enough to buy things and live a good life. Reagan benefited deeply by pointing at the postwar Keynesian model where there was a strategic compression of income and Washington concerned itself with full employment.
After Reagan said that, of course, he undermined the conditions for high wages so he could free capital to go in search of high returns (through lower labor costs in the 3rd world). He also dismantled many of the other programs and policies that made the middle class solvent. This is when trade was aggressively liberalized and America sent its manufacturing base (mostly) to China. American labor markets (consumers) had to compete with sweatshop labor markets - which drove down wages and consumer demand. This is precisely when American households began to borrow at unprecedented rates. Research household debt starting in the 80s. Washington replaced the high wages and the middle class programs of the postwar years with credit cards and the suicidal expansion of consumer debt. It got so bad that we eventually hawked our homes, the last thing left of any value.
The problem is really twofold. When the bottom half lacks the solvency to consume, we see the toxic expansion of consumer debt. But there are also problems on top when too much capital collects and has no investment outlet in the real economy. That is, when there are no investment opportunities in the real economy (because the consumer has been choked by austerity to make room for more tax cuts), then... surplus capital needs to find
something else to invest in - so it pressures Wall Street to come up with higher returns some other way. Enter casino capitalism... ponzi derivative markets and the dangerous expansion of risk.
The US has overplayed two models in the past 50 years,
Keynesianism, if overcooked, becomes crude and leads to terrible inflation.
Supply side economics and neoliberalism, if overcooked, leads to toxic levels of consumer debt at the bottom, and an over abundance of risk on top.
Point is: it's just as dangerous when crude Keynesianism overcooks demand as it is when Reaganomics leaves too much surplus on top with insufficient spending money down low...
