This system optimizes for some kind of "fairness" between producers, rather than living standard for consumers.

In reality, everyone is best of if things are produced where they can be made most effectively.

If the poorest people in a country get to live a happy, healthy life with people that love in not be stressed about food or housing, that sounds like a fantastic world.

Do any countries current achieve this? Japan maybe? I have no clue.

It still matters when some people have 6+ orders of magnitude more wealth than the median person.

Because of this wealth disparity, through the legal channels of campaign contributions, they are able to have a disproportionate and therefore antidemocratic effect on government policy.

Give me a viable political system where wealth is not correlated with political power, and I will be liable to agree with you.

* Healthcare will be defined as “Primary Care Visits with approved in-network physicians”, who will also have proportionally lower pay so those who made that definition can keep more money for themselves

* Housing will be redefined to include cockroach-infested squallor, so landlords can pocket more money

* Education will have more stratas put in place at higher costs, such that “free” or “baseline” education is increasingly worthless, wages depressed, and only those of means may participate in society

All of those circle back to wealth inequality, and is why that metric won’t go away - and why the rich have a vested interest in convincing the poor that it’s everyone and everything else’s fault for their precarity.

It’s all about money. When more people have a larger share of the money, better decisions and outcomes are more likely than 1.1% of people hoarding 50% of global wealth for themselves. The math is absolutely that simple, as are the solutions (TAXES).

But, anyway - it does matter, obviously. Money are a way for the society to decide what is more important. The more money you have the more decisions in a society you make. If a few people have most of the money - they get to decide for the whole society what is actually happening.

TL;DR: high enough wealth inequality turns democracy into oligarchy. Even if it's a nice cozy oligarchy with good social - odds are it probably won't stay that way forever.

Relative equality is just as important, people get all kinds of stress related illnesses if they cannot keep up.

One example is people people putting themselves in debt in order to get a college degree.

Furthermore, the financial system works as a procyclical tool for the wealthy, since they can use debt financing as a leverage mechanism, while the poor have an insufficient credit score. This makes is easy for those with money to commandeer an outsized share of the available resources within an economy.

For example, wealthy owners using real estate and as an investment vehicle, bidding up house prices for everyone. The banks make a killing on selling mortgages while the population becomes indebted and precarity rises.

Here are some theories which I find interesting:

The Iron Law of Oligarchy https://en.m.wikipedia.org/wiki/Iron_law_of_oligarchy

Structural Demographic Theory https://peterturchin.com/structural-demographic-theory/

Elite Overproduction https://en.m.wikipedia.org/wiki/Elite_overproduction

Firm Hierarchy predicts Income https://economicsfromthetopdown.com/2022/11/19/firming-up-hi...

That's a measure of liquid wealth inequality, not income inequality.

Second, you think we need more "CEO yachts"? That's where the resources are going more and more. IIRC billionaires in UK are 5 times richer since Covid. We have many little with poor housing and food situations.

Western Capitalism directs resources to the wealthy, often those who gained wealth through past feudalism or [other?] crime.

We've spent decades saying that the US's culture was immoral for various reasons and did everything we could to import foreigners from places like that, now we're seeing the cultural shift and it turns out the ideas we had weren't as bad as we thought.

In the post-WW2 era, housing, food, and energy were cheap, which made it possible for a single wage earner (usually the husband) to support a family. All of the things that upper-middle-class families commonly outsource - cooking, cleaning, gardening, childcare, housework, driving kids around - were done by the wife. Now they are low-paid labor; before they were unpaid labor, but they still had to get done.

The existence of a market for low-productivity tasks like childcare and cleaning depends upon income inequality. These are not jobs where capital and specialization makes you more efficient; one person can do them roughly as well as another, and often times a household member is more efficient than external paid help. For a market to be profitable in these activities, the opportunity cost of one person’s time must be much greater than the wages they pay for this service, which implies wage inequality.

Two-edged swords and all that. Greater equality between sexes within a family is made up for by greater inequality between families.

With a longer perspective, the trend in the US can be seen more as a reversion to a prior state. 100 years ago the US wasn't that different than India today in terms of exploitation of poor laborers.