Inequality Isn’t Always a Bad Thing

In recent decades, economic inequality in the U.S. and other developed nations has hit levels not seen since the 1920s. Such inequality exacerbates social problems, amplifying health issues among the poor, reducing economic mobility and weakening democracy, research tells us. Inequality even eats away at basic human cooperation, undermining the trust that supports social life.

But some of this research has been rather unrealistic — assuming, for example, that people are identical in all respects aside from wealth. In reality, people differ in many ways, including in productivity and in ability to contribute to a group’s goals. How might these characteristics affect the interplay of inequality and cooperation? Recent experiments find some surprises. Yes, too much inequality is socially corrosive. Yet too little can also be a problem: When some people are more productive for the benefit of the group than others, moderate inequality can actually help further cooperation.