Trade Increases Inequality

Wealth is power, and its concentration in few hands results in terrible corruption. Inequality in our society is enormous, and it has been for 12,000 years, ever since we replaced sharing with hoarding. Let’s look at why.

If we don’t share, we must trade – for labor, food, rent, influence – for everything. Voluntary trade brings profit to both traders. How could that be a bad thing? Well, usually it brings GREATER profit to the wealthier trader, thus increasing inequality.

Let’s look at that in more detail. The principle is the same with barter or money, but it’s easier to describe with money:

A sale happens if an object’s value to a buyer is higher than its value to a seller. Then those two traders can negotiate a price anywhere between their two values. Each trader makes a profit; it’s the difference between his value and the negotiated price.

But what happens while the traders are haggling over price? If the price changes, then one profit increases and the other decreases. That’s NOT mutually beneficial.

The greater profit could go to the buyer OR the seller. For instance, it usually goes to the BUYER of farm labor, but to the SELLER of needed drugs. Generally the greater profit goes to the STRONGER trader. What does that mean?

  • Imagine, for instance, that your family is hungry, your refrigerator and wallet are both empty, and you have no one else to trade with. Then you’re desperate; you really need this trade. You’ll accept any offer that brings you even a little profit, perhaps just barely enough to survive for another day. That’s a weak bargaining position.
  • On the other hand, imagine that you have plenty of money and plenty of trading partners. Then you’re in no hurry – you can afford to wait for a better offer. That’s a strong bargaining position.

But the stronger trader is usually the RICHER trader. So trade, even when honest, increases any existing inequality, thus concentrating wealth, creating poverty and plutocracy. One’s bargaining position can also be strengthened by DISHONEST trading methods, such as lies or theft. Big companies like tobacco and oil deny the harm their products do. If you think of politics as the trading of influence, then you’ll see why our public policies favor the rich, regardless of elections.

And trade has other drawbacks besides inequality. EXTERNALITIES are side effects harmful to people other than the traders. In particular, carbon pollution is about to collapse the ecosystem and kill us all.

And PROPERTY has further drawbacks. It creates the illusion of separate lives. Competition alienates us from each other in many ways: fear, hate, greed, lies, corruption, authoritarianism, madness, random shootings, war.

All these problems – inequality, externalities, alienation – are inevitable in any system of not sharing. We must return to sharing everything. Join the movement.

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Latest revision 2021 Aug 26, version 4.10. (Original version June 2017.) The leaflet fits on two sides of a half page. The video is based on version 3.25; I’m currently working on a new video.