Inequality Has Been Going On Forever Summary
Education: The Key and The Barrier to Prosperity
When we think of income inequality, we may think of it as an inevitability, a way of life. We may think that the rich get rich and the poor stay poor, because that is just “the way it is.” However, this is not the case. In Pulitzer Prize winning New York Times economic journalist David Leonhardt’s article from May 2014 “Inequality Has Been Going on Forever...but That Doesn’t Mean it’s inevitable,” Leonhardt learns from French economist Thomas Piketty that income inequality occurs due to some individuals having extra capital to make more capital. Leonhardt specifies in his article that income gap in the United States can be reduced through acting on the political issues involving …show more content…
In Leonhardt’s essay, he recounts a “hypothetical village” with two farmers in an interview with Piketty. Both farmers make the same profit margins (10%) but, the second, larger farmer has nearly ten times the crop yield. The second farmer can invest his extra savings into increasing production, and therefore, his capital, while the first farmer remains stagnant due to not having money left over after paying for their living expenses. I personally agree that the ability to make enough money to have excess does help the rich become wealthier. Last summer, I met Ira Fulton, a $50 million sponsor of ASU’s engineering school. Fulton operates an investment company that utilizes excess income to purchase other businesses, and flips them for a profit. He continually earns millions of dollars in profits a year, allowing him to make investments into his own business, as well as the stock market. Despite its prominent relation with the excessively rich, Piketty’s “Large farmer” part of the hypothetical village can also apply to individuals in the lower income
When we think of income inequality, we may think of it as an inevitability, a way of life. We may think that the rich get rich and the poor stay poor, because that is just “the way it is.” However, this is not the case. In Pulitzer Prize winning New York Times economic journalist David Leonhardt’s article from May 2014 “Inequality Has Been Going on Forever...but That Doesn’t Mean it’s inevitable,” Leonhardt learns from French economist Thomas Piketty that income inequality occurs due to some individuals having extra capital to make more capital. Leonhardt specifies in his article that income gap in the United States can be reduced through acting on the political issues involving …show more content…
In Leonhardt’s essay, he recounts a “hypothetical village” with two farmers in an interview with Piketty. Both farmers make the same profit margins (10%) but, the second, larger farmer has nearly ten times the crop yield. The second farmer can invest his extra savings into increasing production, and therefore, his capital, while the first farmer remains stagnant due to not having money left over after paying for their living expenses. I personally agree that the ability to make enough money to have excess does help the rich become wealthier. Last summer, I met Ira Fulton, a $50 million sponsor of ASU’s engineering school. Fulton operates an investment company that utilizes excess income to purchase other businesses, and flips them for a profit. He continually earns millions of dollars in profits a year, allowing him to make investments into his own business, as well as the stock market. Despite its prominent relation with the excessively rich, Piketty’s “Large farmer” part of the hypothetical village can also apply to individuals in the lower income