Trade Increases Inequality (leaflet)

If we don’t share, we trade. That increases inequality, by favoring the trader in the stronger bargaining position, as I’ll explain. This doesn’t depend on violence, deception, or the monetary system, though certainly those make it worse.

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 way, but it’s most obvious with a sale: If some commodity’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. But usually the sale price isn’t exactly halfway between, so the two profits are unequal. Here’s why:

The two traders may face very different circumstances. One may be desperate — his rent is due, his child is sick, and he doesn’t have anyone else to trade with; he needs this deal urgently. He will accept a smaller profit, just to survive. The other trader may be in a stronger bargaining position — he has lots of other trading partners, and money in the bank, so he’s in no hurry about this deal; he can wait to be offered greater profit. That greater profit makes him stronger still, increasing inequality, creating poverty and plutocracy. Inequality has grown enormous.

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.

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2018 June 5 version 2.12. The print version fits on two sides of 1/3 page.

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