The very basics
To obtain things without spending more time on acquiring them requires efficiency. In advanced economies where there is economic freedom, efficiency is not hampered by bureaucracy, and you can obtain a lot in very little time and effort. Machines make work easier or faster to do, and specialization and trade multiply the effect of machines.
When resources divert toward their best uses, living standards rise. But in order to make resources do that, the price and profit signal are required. Changes in inventories and prices tell producers where to focus their energy, to get the most bang for the buck (the most profit).
The wisdom of markets
People tell the producers what to produce, and how much to produce, by voting with dollars. The end result is that the production of value is informed by the insight and personal perceptions of millions of consumers, rather than being driven by a committee of people who think they can “run” the economy.
In a free market system, there is some income inequality. That’s because there are differences among people. Some will be willing to work 60 hours per week to gain wealth, others will not even be willing to work 30 hours per week, and would rather spend their time surfing the waves or whatever.
Paying someone just as much money to work 30 hours and then take off surfing as you pay someone else who spends 60 hours per week diligently working toward maximizing output would not just be immoral (different work; same pay) but anti-economical.
If all pay was equal, the economy could no longer function, because risk isn’t rewarded and disparities are not addressed by the pricing mechanism.
Measuring Income Inequality
The Gini ratio is a measure of income inequality showing how, as you sum up from the lowest percentile of income up to the highest, you start accumulating income at a faster rate at higher income percentiles.
While totally equal income would result in straight-line accumulation (orange line below), actual accumulation must be concave-shaped (blue curve) in order to allow for pricing mechanisms to advance the economy.
The Gini ratio is the area of A, divided by all of the area below the orange line of total income equality. There is a sweet spot to the Gini ratio, a healthy amount of inequality which perfectly reflects the relative productiveness that is found in and among individuals.
But even though some inequality is vital to get resources allocated toward their best uses, you can also have too much inequality, such as when one man decides where $100 billion of “other peoples’ money” is going to be spent. A recent example is the taxpayer dollars spent on COVID jabs.
When just one or a few people decide where a large share of resources go, that's not a free market system anymore, and is not sustainable.
How the US is on a path to ruin
While flirting with a dangerously-low amount of income inequality back in the 1950s and 1960s (almost too much equality for price and profit signals to work), after the 1960s the USA lost economic freedom, and we’ve swung the other way, so that we now have a level of income inequality which prevents economic growth:
From 1947 to 1968, inequality was at a good level for economic growth, but it was dropping and almost reached the point where price and profit signals no longer function well. But it didn’t continue the trend and, as a result, inequality stayed at a good level until 1993, when corporate fascism (lost economic freedom) caused a huge jump in inequality.
Here is the same graph with notes in it:
After 2019, the middle-class was gutted out, and real per capita US GDP growth became impossible — because not enough economic actors were allocating resources (too much allocation by too few people). After 2019, the only way that real wealth can grow for certain individuals is by crime and genocide (“depopulation plunder”).
But that makes all years after 2019 a “zero-sum” game. Clearly, we can do better.
Those behind the Great Reset are interested in pushing the Gini ratio even higher than where it was in 2021 — the last year showing in the graph. That’s because they fantasize about being able to “run” the economy. They are not averse to crime and genocide for a “greater good” (i.e., their good).
We must do everything we can to prevent it, or the suffering due to lowered living standards will be immense.