Income inequality?

Question

Is income inequality more prevalent in a capitalist or socialist country? Please also explain your answer. Thank you!

Answer 1

There are very few  truly socialist countries and we do not have reliable income data for most of them. What is true is that most poor countries have much more income inequality than rich ones and China is a poor country. Cuba's income inequality index is said to be low, but I am not sure we really know.

http://www.visualizingeconomics.com/cate...

The US is an outlier in that we have more inequality in recent years than other rich nations.

Edit The inequality in Russia increased after  they abandoned  Communism in the late 80's  and using their numbers from the early 90's  is not a measure of inequality under socialism.

Answer 2

Income EQUALITY is supposed to be more prevalent in a socialist society by definition.  That was the whole purpose behind starting up socialist societies.  

In reality, it hasn't ever really worked like that too well.  Rich people, or at least some group of people, will always figure out ways to preserve their wealth, regardless of what type of government they live under.

Answer 3

In capitalism.

Some socialists define capitalism in terms of unequal income, and socialism in terms of comparable income for comparable labor, e.g. Ben Tucker:

"Socialism is the belief that the next important step in progress is a change in man’s environment of an economic character that shall include the abolition of every privilege whereby the holder of wealth acquires an anti-social power to compel tribute." - Ben Tucker

http://fair-use.org/benjamin-tucker/inst...

"... what really excites their anger is not the fact that labor is bought and sold, but the fact that one class of men are dependent for their living upon the sale of their labor, while another class of men are relieved of the necessity of labor by being legally privileged to sell something that is not labor, and that, but for the privilege, would be enjoyed by all gratuitously. And to such a state of things I am as much opposed as any one. But the minute you remove privilege, the class that now enjoy it will be forced to sell their labor, and then, when there will be nothing but labor with which to buy labor, the distinction between wage-payers and wage-receivers will be wiped out, and every man will be a laborer exchanging with fellow-laborers."

http://fair-use.org/benjamin-tucker/inst...

The latter quote also refers to some of the differences, even oppositions, between the different means which different socialists have proposed. Historically, supporters of socialism have varied from opponents of the state (like Proudhon or Bakunin) to supporters of it (like Engels), as well as from supporters of completely free markets (like Proudhon or Tucker) to supporters of planned economies (like Marx) to supporters of free access to common means of production (like Kropotkin).

http://porkupineblog.blogspot.com/2006/0...

Now things get complicated because some people (e.g. Marxists and Misesians, taking opposite sides) have identified centrally planned economies with "socialism" and free-market economies with "capitalism." Anarchism and similar ideas would be a third category, "syndicalism," in the Misesian classification.

To introduce government intervention tends to increase income inequality.

Answer 4

It depends on whether you are asking about theoretical or actual.  In a socialist country there is supposed to be equal division, However, what that turns into is the population of the country is generally far poorer that those that are in power.  Think early 90's soviet union.  The people could barely get bread while the government officials, and those people that the government allowed to get wealthy ate as well as any wealthy person anywhere else in the world.

In a capitalist country, those that invest their monies well will profit and become very wealthy, and those that are lazy or unable to work will become very poor and die.  However, this isnt the case becuase of charity and compassion.   Think about the US system.  There are very wealthy individuals that took risk with their monies; there are those that work for those people and get paid (middle class) and there are those that live in shelters, sometimes because of circumstance, sometimes because of choice.  

My arguement would be that the inequality would be more prevalent in a socialist economy, because of the lack of a middle class.