Resource inequality and thus wealth inequality is rather bad because one person is generally unable to allocate resources efficiently after a certain point of excess. Resource inequality leads to inefficient resource allocation.
It's easy to see that with an unbounded amount of wealth, a single actor can keep a market irrational for an unbounded amount of time. Even with realistic (finite) amounts of wealth, this actor can keep a market irrational longer than you can remain solvent.
In general, markets can only work when people are averse to the loss of money, thereby introducing a feedback mechanism. And people are only averse to the loss of money when that has material consequences for their well-being. For the ultra-wealthy today, the marginal value of every additional dollar (or million dollars) is essentially zero, so the self-balancing properties of markets are prevented from doing their job properly, namely the efficient allocation of resources.
Your statement is a general misunderstanding of how markets work. The role of the market is not to be self balanced but to facilitate trade. Markets are voluntary exchanges between individuals and organizations. Markets work because people are ultimately the best at deciding their needs and wants during a specific time.
No, it's not strictly voluntary, because the existence of a market sets a price for a product, and materially differing from that price either puts you at a disadvantage (deprives you of voluntary trading partners) or creates opportunities for arbitrage (disadvantaging those who would otherwise voluntarily trade exclusively with you). And if your competitor has a massive pre-existing wealth advantage, they'll happily eat the loss and undercut you until you're out of business. This produces worse outcomes in the long run.
I’m constantly amazed at the socialist argument that forcibly taking the labor of some people to benefit other people is considered “efficient”
Also...
The idea that wealth hoarding inherently leads to inequality is flawed. If by “wealth” you mean capital, then unused capital doesn't distort markets or hinder wealth creation. If you're referring to wealth hoarding in the form of monopolies, it's important to note that monopolies tend to fail in truly free markets. Without innovation, they can't sustain themselves—unless they rely on government coercion to maintain control.
Government coercion is the primary force that inhibits both wealth creation and healthy competition. Overregulated markets and protectionist policies stifle innovation and prevent new players from entering the market. The most corrupt governments and corporations benefit from these systems because they reinforce existing power structures and shield them from competition.
> I’m constantly amazed at the socialist argument that forcibly taking the labor of some people to benefit other people is considered “efficient”
That is also the stance of the capitalists. Have you heard of welfare? Now, have you heard about a successful capitalist society without some form of welfare?
In the absence of a strong government to create rules, companies and individuals will fill the power vacuum (e.g. the east India company). "free markets" are just as much of a fantasy as "Communist utopia".
2. Redistribution is less inefficient than the alternative
Without sufficiently redistributave policy, the alternatives arise. The French revolution and various communist revolutions throughout the world over the 20th century are the alternative to a populace that thinks inequality is too high.
I feel like people who espouse this sort of view often wildly over estimate their chance of not ending up with a pointy stick through an important organ.
We don't do that because we don't like seeing women and children get their brains beaten out with a large rock over a rabbit haunch that the bigger ape wanted.
Because of the intermingling of law and wealth. If you don’t intermediate, then justice becomes the will of the wealthiest, and the market stagnates. The only way that evolution works is if it is the highest and only law, so we would be warring individuals killing each other for resources on the daily.
As soon as you add social organization, you disrupt evolution inside that social unit: it then becomes one social unit vs others…. We’ve already been down that road, and now we live in large, relatively stable social units we call nations.
Anything inside a social unit is subject to the monopoly of coercion that the unit possesses over its members. Evolution is short-circuited by the presence of external existential forces.
Making evolution work inside a social unit is equivalent to dissolving it.
What does that look like, practically, considering how many rich people were born into an abundance of resources? Their survival is not a measure of fitness.
