Pondering inequality


I think we're all aware of how the poverty debate has changed in recent decades, yes? That it's relative poverty (or inequality, to give it its proper name) which is the true horror, not poverty itself. That the world would be a better place if we were all more equal, even if we were all poorer?

I don't agree here, of course: there's far too much real and absolute poverty around the world for us to be ready to slip and slide on the wealth creation which alone can alleviate it. But I've been wondering is there was any simple or single point that could be used to enlighten those who worry about relative poverty. I've found one snippet that, well, perhaps you can help me refine it, see if it can be turned into something useful.

The usual measure of inequality (ie, a close analogue of relative poverty) is the Gini. Don't worry about what it is. The Gini for the UK now, based upon market incomes (ie, before we do the tax and redistribution bit) is around 0.5. That's higher than the US by the way, although it's lower than many developing countries. From Angus Maddison's research into economic history we can also see that the Gini for the UK just prior to the industrial revolution was also around 0.5. Which means that if it is relative poverty, inequality, which is actually the problem then we've the same poverty that we had before the Industrial Revolution.

But that's simply absurd, to state that poverty today is just as it was in 1750. No one could with a straight face actually argue that the standard of living of the poor then and the poor today is in any real sense comparable.

So how do we make the absurdity of the concentration upon relative poverty visible to people? Any ideas?