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Comment by joseflavio | Hacker News Reader

IMO, there is some kind of correlation between efficiency in the economy and the inequality in the society. I believe that it is part of the government job to reduce the inequality... but the devil is on the details on how to do it.

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Wouldn't inequality make efficiency worse? On an individual level, it would seem that poverty makes your life less efficient -- you end up treating your own time as less valuable, and so you do less productive things, such washing out your paper towels to reuse them, using more energy and water in the process than was used to manufacture them in the first place. When if you had more income, you could, hypothetically, do more productive things? Or would you just around watching Netflix more?

Poverty != inequality, provided poverty refers to a fixed material standard of living (which is how you seem to be using it, since you are referring to specific material goods).

To illustrate the point, consider India and the US. India has little inequality but lots of poverty (if we take the 5'th percentile of the US as the poverty line, then 95% of India is poor). The US has lots of inequality but little poverty.

http://economix.blogs.nytimes.com/2011/01/31/the-haves-and-t...

Does that graph take into account PPP at all? It doesn't sound like it from the description in the article.

From the article: "...the chart adjusts for the cost of living in different countries, so we are looking at consistent living standards worldwide."

Poverty is inefficient, sure. But inequality is also inefficient. Paying someone to work private security for example. There are better uses for human labor.

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