Most countries on planet Earth are affected by social inequality. Despite the free and fast movement of capital throughout the world, the reduction of investment cycle time most countries remain behind a huge fun cruise ship.

What are the reasons for such inequality? Why investment flows around these places as plague-stricken cities in the Middle Ages?

Unfair equality

Socialism destroys incentives to vigorous economic activity due to a more equal distribution of income. You can invest time in human capital, work hard, but you will receive from the distributor as much as a parasite who burns his life nearby.

You will be given a Sutulov order, they will write about you in newspapers, show on TV, but most people will treat your labor feats indifferently, others will gloat, others will make fun.

Moreover, the presence of connections, cronyism brings a person closer to the distributor of benefits and opens the door to a successful life. The stimulus to grow into bonds instead of investing in human capital created in the socialist countries a destructive vicious circle that destroys people's interest in investing in the economy.

After the collapse of the USSR, the end of Chavism in Latin America, destructive circles in many post-socialist countries continued to operate. Thanks to socialist planned economies, the concentration of the means of production left a large number of large enterprises after the collapse of the socialist camp.

They managed to capture the mafia groups, which also created vicious circles between political power and economic opportunities. Thus, by investing funds obtained from seized assets in the absorption of political space, they were able to isolate civil society in their countries from participating in democratic elections.

Thus, unfair equality due to the paralysis of democratic institutions in many post-socialist countries, has led to inequality of wealth and the polarization of societies in the poor and the rich.

The essence of unfair inequality

The essence of unfair inequality is inequality of opportunity. When parents can not give because of poverty sufficient education for children. As a result, they are limited in the possibility of choosing a well-paid job, do not have collateral to obtain a bank loan to start their own business. Unfair inequalities lead to the fact that even the talented children of low-income parents cannot break through to knowledge and earn capital.

The whole society suffers from unfair inequality. The fact is that if God kissed a child from a wealthy family, then financial opportunities are imposed on talent and society receives a high return incomparable with investments in human capital. An example would be modern IT companies and social networks.

But if a talented child from a low-income family could not realize their potential because of poverty, society loses unfulfilled pieces with capitalizations of billions of dollars. Talent is an accident, it does not analyze social status and property status. If the developed countries try to give everyone a chance through various educational programs, the developing ones do not even try to pose such a problem.

Unfair inequality in developed countries

Developed countries are developed because they have social elevators, a lot of money is invested in education, talented children from poor families receive educational loans, grants, support for schools, colleges and universities.

But statistics inexorably shows the pattern: predominantly the children of rich parents receive the best education and become, as a rule, rich. But what about all the social programs to combat unjust inequality?

In his book “In Search of Growth,” William Easterly answered this question. This is the issue of compliance.The rich communicate with the rich, the poor with the poor, doctors with doctors, engineers with engineers, creating closed social connections. They lodge in some micro-districts, adopt each other's experience and technologies, which gives the maximum benefit to the whole society in the form of returns. When the effect of such social connections creates an environment that produces ideas, a Mandelbrot distribution arises.

Many people create their success, pursuing selfish interests, repeating the same technological methods as a fractal, but overcrowding of people of one specialty, as well as borderline ones, creates a splash effect when a new idea arises. Having fallen on fertile soil, it quickly turns into an advanced technology, and because of the crowding of specialists, it is quickly absorbed by the whole community. No time for the community to master the new technology is a new explosion. So compliance produces technology growth exponentially.

But compliance leads to the reproduction of poverty in the relevant social groups. Therefore, the main task is to create social mechanisms to overcome poverty. Thanks to the growing trust in developed societies, the economy of exchange has the opportunity to weaken the boundaries of communities, this will allow more and more new people to be drawn into the middle class.

Unfair inequality in developing countries

In developing countries, as a rule, there are multiple social partitions. The seizure of political space by various mafia groups leads to the immediate blocking of democratic procedures, so that in no case can opposition forces reach the government through elections. The group that seizes power blocks social elevators and creates capitalism for its own.

Under these conditions, talented children generally cannot make their way in life and are looking for conformity, as a rule, abroad in developing countries. Blocked social elevators reproduce unfair inequality. Lack of incentives to invest in human capital leads inevitably to weak economic growth.

Blocking democratic procedures through electoral fraud, clearing the political space of the opposition, cutting off social elevators, eliminates competition in power.

This leads to the degradation of political, social life and economic stagnation. The most annoying thing is that people are irretrievably losing their precious resource - time.
Unfair inequality is a social evil that needs to be eliminated ...