Is there An Upside To Inequality? Definitely, James Sherk says, if it has risen for the right reasons:
According to a study by the National Bureau of Economic Research, much of the increased inequality in the past generation — including almost all the gains among top earners — occurred because companies upped their use of performance pay. That is, inequality has risen for a good reason: The economy is increasingly rewarding hard work.Of itself, inequality is neither positive nor negative. What matters is why incomes are unequal. In a class-based society where a few families control wealth through inheritance or coercive means, rising inequality does indeed cause harm. Higher inequality, in 17th century England or in Saudi Arabia today, means increased hardship for most workers.
However, in a society where most wealth is earned, some greater inequality can benefit most citizens. Consider Google Inc. founders Larry Page and Sergey Brin, who each worth $16 billion, thanks to their stake in the search giant. Their success has made America a demonstrably less equal country—who wouldn’t want to swap paychecks with them?—yet most people are better off for it. Google’s services allow tens of millions of Americans to find what they want fast on the Internet and use a quality e-mail service free of charge. Page and Brin got rich, and thus increased inequality, by improving the lives of others.