There wouldn’t be an incentive, after a certain amount of income, to work hard. Technological innovation would slow down, which would result in slower economic growth. Educational attainment would go down because you would get paid the same whether you had the education or not. If you were a highly skilled worker that had a significant amount of education, but you were making the same as if you were working a low skilled, no education job, you wouldn’t have an incentive to work as hard as someone working the low skilled job. And why would you? For the greater good? That’s unlikely.
Also, if everyone was making the same amount, tax revenue would go down and as a result, incomes would go down. Prices would go up to match the income people were making, just as it does now.
Does globalization cause income inequality?
In developed countries, yes. In developing countries, possibly not.
“There was a steady increase in global income inequality Gini score from 1820 to 2002, with a significant increase between 1980 and 2002. This trend appears to have peaked and begun a reversal with rapid economic growth in emerging economies, particularly in the large populations of BRIC countries.” (Source)
So again, we come back to incomes rising overall in the poorer countries, and going down in the wealthier countries, which sounds like redistribution of wealth to me. The wealth IS going down to the poor but not in the U.S., it’s happening all over the global, on a wider scope than just 1 country.
Should everybody earn an award for participation?
Is it ok morally if there are some winners and some losers in life? Is it ok if there are some winners and some losers in an economy then?
As far as participation trophies go, there’s a term for that in psychology: the overjustification effect. People are less happy when they are given something like a trophy or money for something they enjoy doing.
Does everybody deserve an equal amount of money? Even if it makes everyone poorer in the end when prices reach equilibrium?
I argue that a perfectly egalitarian society is less desirable than an unequal one. Of course, I would love to live in a world where everybody wins. But there isn’t a perfect solution where everybody wins and everybody’s rich.