Trade Increases Inequality

better bargaining positionIf we don’t share, we trade — for money, labor, food, rent, interest, everything. On the surface, that looks harmless. But it favors the trader in the stronger bargaining position, making him stronger still. This advantage is further increased by the use of deception, threats of violence, and a rigged currency system as part of the “bargaining” process. But even an honest trade would still increase inequality, as I’ll explain.

By “trade” I mean any voluntary exchange:

  • a sale exchanges money for goods or services;
  • barter exchanges some goods or services for others;
  • rent is money traded for use of space or equipment;
  • employment exchanges money for labor;
  • a loan is money now for more money later;
  • lobbying, or bribery, trades anything for influence.

All those trades grow inequality the same simple way, but it’s easiest to see in a sale. If some object’s value to a buyer is greater than its value to a seller, then any sale price between those two values will profit both traders – they profit equally only if the sale price is exactly halfway between those two values.

And that’s rare, for the two traders face different circumstances. One may be desperate – his rent is due, his child is sick, and he has no one else to trade with; he needs this deal desperately. He’ll accept a smaller profit, perhaps just barely enough to survive. The other trader, with money in the bank and lots of trading partners, is in no hurry about this deal; he can afford to wait for a better deal.

So the stronger trader gets the greater profit, and traders who were in unequal positions become even more unequal. In the long run, inequality grows huge, creating poverty and plutocracy.

Wealth is power; the rich get the public policies they want. Power corrupts. Our rulers grow cruel and shortsighted, and make wars and ecocide for lies and profit. We may soon be extinct by nuclear war or ecosystem collapse.  In the meantime, competition kills empathy, causing sexism, racism, and mass shootings.

Only sharing can save us. It requires a very different world, one that’s hard for us even to imagine. The first step is to get more people talking about it.


Latest modifications 2020 Apr 30, version 2.21 (original version June 2017). The leaflet version fits on two sides of 1/3 page.