Is Inequality necessary for a functional society/economy?

Most economist try to fight the inequality in the world, however, if such inequality didn’t exist or was “solved” (since it’s referred as global problem), there will be no trade, no business, no employment, no demand, no supply and finally no economy. Mentioned inequality is the main reason for all transactions or exchange to exist.

Let’s begin with what means inequality, according to the Cambridge Dictionary:

- Inequality is:

1. “a situation in which money opportunities are not shared equally between different groups in society”

2. “a lack of equality or fair treatment in the sharing of wealth or opportunities”

If the same opportunities are shared equally between groups in society, will there be any type of need to enter in a transaction or exchange? and consequently the existence of an economy? If all men had the same opportunities, meaning all men will not have needs as they are all fulfill and there is no need for goods or money. Such needs, that move the men to go and find a job to acquire money and with acquired money gather the goods that subsequently will satisfy the need that initially make the men enter in a transaction in which he will work in exchange for money. The other transaction or exchange that will not exist will be the exchange of such desired good as it will not be need, as all men have the same opportunity to acquire that good, meaning that the seller or the provider of that good will not have the need to go out and sell such good, as all his needs are fulfilled. This chain will continue creating a society that produce for self-consumption, but, those not need to exchange, which means a society that it’s economy would die.

On a society with inequality we see that men and countries interact in exchange for goods and service as they both have something that they are willing to exchange. An example of this could the sweatshops, on which a foreign companies decides to take its production to another country, where the work force is cheaper. If both countries and its population had the same opportunities there was no need for the company to take its business there, nor the individual to work for such company, because all other companies will offer the same wages. Another basic example would be the two farmers, where one grows corn and the other one raises chickens. However, in a utopic world where both farmers have equal number of goods and/or opportunities, mining that both farmers have corn and chicken, consequently these two farmers will have no need to exchange with each other and therefore there is no economy.

“Consider someone dying of thirst in the desert. Someone who owns the only available water in the vicinity offers him a cupful, if he agrees to surrender all his assets in return”

- Famous philosophical example, by Hastings Rashdall

This will be an extreme example and we understand the this is not fare. However, do to the existence of this inequality is that they enter in an exchange.

Inequality is needed in our society/economy as it is the factor that allows or motivates the individual to enter in an exchange. Man first have to understand that we are not all equal as we are all different and own different capabilities, with such capabilities we interact in the economy and subsequently with each other.