Burke and Income Inequality
Burke argues that in equality in society is not only inevitable, but it is a good thing. He believes that inequality creates a natural division of labor, which is useful in society. People inherently have different skill sets and therefore it makes sense that there is a division of labor. Therefore, Burke says that it makes sense that the educated class is in charge of the government, while the lower class, who are less educated, have jobs that are more fitting to their skill set.
I have a few problems with Burke’s argument; particularly in the fact that he does not believe the lower class should be considered for positions in government even if they are educated. There seems no way to advance in the social hierarchy in Burke’s world, which I do not agree with. However, I do believe there is a lot of truth to what Burke says about inequality being a good thing in terms of the educated leading the country, but also from an economic standpoint.
In economics, an unequal distribution of labor leads to long run growth in the future of the economy. This is based on the fact that wealthier individuals have a greater marginal propensity to save. Meaning for every dollar earned, wealthier people are more likely to save that dollar, more than a less wealthy person. When that money is saved, it goes into a bank, where that money is then loaned out in the form of loans or into stocks.
An economy’s GDP is equal to consumer spending, investment spending, government spending, and net imports. However, the investment spending, which takes the form of loans and stocks, is the main factor that increases GDP. Therefore, an increase savings in banks increases investment spending, which increases GDP. In turn the economy grows as a whole, making an unequal distribution of wealth a good thing. GDP growth not only affects the rich, but it affects the poor as well. More jobs in the future and higher wages will be felt by the entire economy when GDP increases.
Therefore, economic inequality does benefit society, and Burke certainly has a point when he argues that socially, society benefits from having the educated run the government.