Friday, June 8, 2018

The Arithmetic of Income Inequality

The subject of income inequality will either quickly ignite a conversation into one explosive debate or dampen a heretofore pleasant discussion into an awkward moment that only changing the subject can mollify.  It is at once a political catalyst and a social mode killer. 

Equality or its opposite - inequality - connotes value, so there must be a way to look at this from the basic concept of arithmetic. What better way to view it from the eyes of someone or something other than from those among us already infected with biases and preconception on the subject. A young child or perhaps an extra-terrestrial alien may see it differently - one with a rudimentary understanding or from one so completely out of this world. 

The child or ET must first deal with arithmetic symbols. Let's keep in mind these symbols can be no different from hieroglyphics when they first encounter them. ET, the intergalactic traveler, is required from among its tasks to submit a report to its home planet. The laws of physics are the same where it came from but their mathematics are different, or at least configured differently - we surmise. The socioeconomic system of ET's home planet must be totally different as well because if they had advanced to a point where they can afford inter-galactic travel from many light years away, there's must be operating at a level only dreamers of a perfect world can conceive. ET, his mission aside, is stricken by the same curiosity a child may have. Its report can feasibly be free of any adulteration from biases and preconceived notions; after all, his knowledge would be as fresh and youthful as those of the child. ET thus began to write its report at the child level but in the form of thought-analysis that the inhabitants of its planetary system can put in context even if their intelligence is several rungs above the average earthling.

Part of the ET report went as follows:

"Let me begin by explaining how their mathematics work. It is very basic to say the least, though not totally strange, and it is at a level I describe as at the ground floor of our multi-level-hyper-mathematics. 

1) The = sign is sort of symbol for a two-way street:

A=B will mean that in a 2-way street  A and B can be on either side of the = sign and they will be the same and of equal value.

2) The minus sign - symbolizes a one way street. In A-B, something from A is taken away in the form or value of B and what remains is C, hence A-B = C; where the 2-way street says that C, to the right, is what remains when A is reduced by a certain value B. 


3) The plus sign +, where a vertical line crosses a horizontal line at a perfect vertical shows the merging of A and B at a junction, hence A+B=C, where again the = sign or 2-way street appears and this time C is the combined value of A and B, and vice versa.

4) Imagine the plus sign, +, skewed to look like a starburst, as in X. So A and B meets at an intersection and their combined value spreads out like so, as in an explosion X. A X B = C. The 2-way street  now shows C possessing a value much greater than just combining A and B. C is now A with a value  several times the amount in B, or vice versa, so that B is also increased at the rate of the value that is in A. If A is 3 and B is 2, then C is twice as A, or thrice as B.  

5) Now for the ÷ symbol that is also expressed as a right leaning slant /. Notice it is half the starburst symbol X. In A ÷ B =C, or A/B =C, A is split the number of times that is in the value of B so that C is so much less compared to A; that is, the 2-way street now says that C is the same as being a smaller part of A. In other words, C is just a slice of the whole pie A dictated by the value of B. A child understands that.



Here is a first pass on how a handful of economic systems I have observed work using their mathematics.


a. )The child I mentioned earlier went to play  one day with three other children. He had twenty marbles to play with but the other three did not have any so all four played with the marbles. When they were done playing the other three took fifteen of the marbles, five for each of them and five were left over for the child who brought the twenty originally. The child went home wondering what just happened but accepting that all four children now each have five marbles and perhaps that was a fair thing. What just happened is what the earthlings define as socialism. Ideally it means, if implemented properly, that every earthling has the same number of marbles.


b.)The other scenario is that the child collected all the twenty marbles when the play was over and went home. Later that day, one of the parents (of the other three) showed up at the child's home. The visiting parent announced that he represented the other set of parents and their children to demand that seventeen of the marbles be given up by the child who had the twenty. His demands must be met or else. He took the seventeen marbles, leaving the child with three and distributed nine to the other three children (each got three marbles) and the remaining eight were kept as reserve property, which is now under the control of a committee. What just transpired is called communism. Again, if implemented properly according to those who subscribe to that system, each has the same number of marbles while much is stored in reserve and regulated by those in charge of the welfare of the entire group.  


c.) In the third scenario the child came with twenty marbles. He explained a game that they will all play. The idea is for each of them to strive as best they could and gain points in the process. At the end of the game, the child who did well by having the most number of points get to keep ten marbles, five to the next who had the second highest points, then three and then two. This is what the earthlings call the free market system, which I need to investigate a bit further. I heard another description of it but I am still wondering how the first child got the twenty marbles in the first place. How the child came to have them is puzzling but I am told the other name for that scenario was capitalism.


I will have more to report but for the time being these are what seems like the prevailing scenarios using their arithmetic to define their socio-economic-political systems.


ET's messages go out as quickly as it generates them, aware that it will be a few years before the home planet gets them and another few more years before ET gets a reply. Meanwhile, he found out a little bit more so he sent a:


P.S. I now learned that the child gets an allowance from one of the parents. The child spent some of it to buy the marbles. Then I found out that the parent gets money for doing a job. The money earned is from some sort of point system, similar to the third  scenario I described earlier. That for now is how I understand how capitalism works. More to come later.


ET has much to learn and I will publish some of its future reports as soon as they are generated. ET will find out how earthlings manage to apply the various socioeconomic systems in their various spectral hues and shades. It does not even have any idea yet why and how taxes play a role in all of these.


















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