Plague of Inequality INTRODUCTION Seeking Optimal Inequality
- MetaEconGary
- Jul 5
- 7 min read
Updated: Jul 30
Have now completed the Review of the Plague of Inequality book by Williams (2024), a Princeton University Press book. Have posted the Review by Chapter. The framework of Dual Interest Theory (DIT) in Metaeconomics is used to make sense of the claims. What think?
Review of Williams, David Lay. The Greatest of All Plagues: How Economic Inequality Shaped Political Thought from Plato to Marx. Princeton, NJ: Princeton University Press, 2024.
Essence of the Review: Help from ChapGPT 4o.
You said:
Hey, do an integration of the Blog at https://www.metaeconomics.info/blog with the specific matter of the Plague of Inequality addressed at https://www.metaeconomics.info/post/avoiding-extreme-inequality
ChatGPT said:
I found the Metaeconomics Blog post titled “Avoiding Extreme Inequality” where the concept of the “Plague of Inequality” is addressed in detail within its multi‑chapter structure Metaeconomics. Here’s a refined summary of its canonical perspective—especially how extreme inequality destabilizes societies and undermines economic efficiency:
🦠 The “Plague of Inequality” — Canonical Metaeconomic Insights
The Blog frames extreme inequality as a serial plague across history, invoking classical thinkers—Plato, Hobbes, Rousseau, Adam Smith, John Stuart Mill—and culminating with modern analyses (including Williams’ 2024 exposition as reflected by Lynne’s blog structure) Metaeconomics.
1. Classical Roots: From Plato to Rousseau
Plato warned that extreme disparities spark civil discord and societal breakdown—labelled the "greatest plague."
Rousseau portrayed how widening inequality corrodes civic equality and social trust, sowing seeds of political instability arXiv+1arXiv+1.
2. Moral Economy & Political Legitimacy
Hobbes and Rousseau highlighted how excessive wealth undermines the social contract and citizen trust. Legitimacy erodes when political power is captured by elites.
Adam Smith, while advocating markets, criticized how elite rent‑seeking suppresses wages, corrupts moral norms, and distorts fair markets—threatening capitalist stability Metaeconomics.
3. Mills & Systemic Disequilibrium
John Stuart Mill identified that concentrated wealth erodes civic participation, degrades public utility, and deepens political inequality.
Williams (2024), echoed in the Blog’s structure (e.g. “Plague Chapter Six: Mill – The Widening Breach”), argues that extreme inequality incapacitates democratic self‑governance arXiv+1arXiv+1.
4. Metaeconomic Core: Dual Interest Theory (DIT)
Metaeconomic critique of conventional “Single Interest Theory” asserts that modern economics ignores ethics and empathy—a vital corrective represented by Dual Interest Theory. DIT posits a distinct other-interest (ethical, empathy-based) that tempers the self-interest of classical Homo economicus Metaeconomics+1Metaeconomics+1.
Empathy-based shared interests counteract the arrogance of wealth concentration. Together, self‑interest and other‑interest must balance to foster efficiency, social cohesion, and human well‑being Metaeconomics.
🔄 Inequality’s Destabilizing & Inefficient Effects
• Eroded Aggregate Demand
Wealth concentration concentrates spending among the affluent, who save more and consume less proportionally—while low- and middle-income groups borrow to sustain consumption. Thus, imbalance leads to fragile credit cycles and dampened sustainable economic demand Metaeconomics.
• Misallocation of Human Capital
Limited access to education and opportunity curtails innovation and productivity. Large portions of human potential remain underutilized, reducing both equity and economic efficiency arXiv+1arXiv+1.
• Political Capture & Rent-Seeking
Wealthy elites use influence to skew policies toward capital returns—undermining democratic equality, redirecting public investments, and entrenching power structures that deter competition and innovation Metaeconomics.
• Collapse of Civic Trust & Social Cohesion
Inequality fragments communal bonds. Loss of trust fuels polarization and institutional erosion—raising the risk of political crises, violence, and democratic failure. These outcomes further disrupt economic stability and performance Metaeconomics.
✅ Summary Table
Thinker/Framework | Core Insight | Mechanism of Harm |
Plato & Rousseau | Inequality causes social rupture | Civil unrest, weakened civic equality |
Hobbes & Rousseau | Wealth undermines legitimacy & trust | Political instability |
Adam Smith | Elite collusion corrodes moral norms & markets | Wage suppression, market distortion |
John Stuart Mill | Concentrated wealth diminishes public utility | Political exclusion, civic disengagement |
Modern Metaeconomics (DIT) | Self-interest must be balanced by empathy-oriented ethic | Loss of efficiency, social distrust, fragile systems |
🎯 Key Takeaways
Metaeconomics presents the “Plague of Inequality” not as metaphor but as a systemic dynamic—where extreme disparity is both morally corrosive and economically inefficient. By ignoring the other-interest, classical models (and extreme market regimes) marginalize ethics and empathy, allowing unchecked self-interest to generate demand shortfalls, misallocation of human capital, political capture, and social instability.
Williams’ 2024 synthesis—reflected in the Blog’s structured chapters—aligns with longstanding canonical thought: extreme inequality destabilizes institutions, corrupts politics, and undermines efficiency and collective well‑being.
So, intriguingly, ChatGPT ignored the Chapters about the New Testament and about Karl Marx. We might suppose religion and communism are off the table for discussion? Anyway, Williams (2024) does read and give an overview of the New Testament while pointing how extreme inequality is seen as an extremely serious economic and social, and political problem. In fact, Williams (2024) claims Jesus was crucified --- between two other robbers being crucified by the wealthy --- and brother James was stoned to death, primarily because each challenged the rich to do something about the extreme inequality of the day. And, on Marx, well, the problem of extreme inequality was what drove Marx to recommend a whole different kind of property system, a system that gave ordinary people more economic power as Marx saw it.
The Review here covers all 7-Chapters, not just the 5-Chapters considered by ChatGPT. If you want to skip the Introduction below, which is a bit technical as it explains how Dual Interest Theory (DIT) helps make sense it all, here are the links (you can always come back for the technical economics):
Introduction
The Review of Williams (2024) is guided by DIT (Dual Interest Theory) in Metaeconomics, as represented in Figures 1 and 2 (versions of which are also used in Lynne 2025). The Review uses DIT to make better sense of Williams (2024). DIT points to the need to seek Optimal Inequality. The Review is also, then, in effect a search for empirical evidence for DIT in the conversation and stories weaved in Williams (2024), as well as in clarifying the claims made by the Greatest Thinkers, in support of DIT. Keep in mind the notion of Single Interest Theory (SIT) of mainstream Microeconomics sees only the Econ on path 0G, while DIT sees the Human on path 0Z. The Econ has no concern for the economic & social problems caused by Extreme Inequality.
In general, in DIT terms, the Plague of Extreme Inequality arises from the arrogance of self-interest only --- only the Incentive matters as SIT claims --- on path 0G in Figure 1, which is made ever worse as path 0G of the Econs moves closer to the vertical axis. That is, Extreme Inequality reflects a situation where not enough empathy-based Ethic is in play, said Ethic represented on some shared other-interest path 0M. Optimal Inequality arises on some path 0Z of the Humans --- balanced Humans --- where the empathy-based ethic about reasoned inequality in good balance with adequate incentive is resolved. Incentive & Ethic need to be in good balance on path 0Z, which is the claim of DIT.
Figures 1 and 2 are from Lynne (2025).
Notice that economic efficiency is impossible without addressing inequality, as in the Ethic of the reasonable inequality on path 0M needs to temper the Incentive for ignoring it on path 0G. The Plague of Inequality is ever more severe as path 0G shifts toward the vertical axis. The Plague can be dampened, tempered only with good balance in Incentive & Ethic on path 0Z. The Great Enrichment --- everyone having a piece of the economic action in a stable society arises on path 0Z, reaching point Bo in Figure 2 (see Lynne 2025).
As made clear in Lynne (2025), the Innovism pointed to by McCloskey in the 7-books on what led to the Great Enrichment since 1780 also needed attention to Optimal Inequality. Extreme Inequality on the way to the Plague of Inequality, if it had not been tempered, could never have led to the Great Enrichment giving an increase in GDP(income)/capita/day from $3 in 1780 to $36 in 2023 (and to $224 in the US).
Methodological framing here is to: 1) use DIT to help make better sense of empirical claims accorded to each of the thinkers by Williams (2024), seeing the content of conversation as empirical, and 2) use the empirical evidence on the effects of extreme inequality going all the way back to observations and claims by Plato, and Socrates, to test DIT, and 3) seek support (or not) for the notion of Optimal Inequality to which DIT points as essential for a truly stable, humane --- and efficient --- economic & social system.
The same methodology was used in the review of the 7-books by McCloskey all focused on explaining what actually led to Innovism (coined by McCloskey) on the way to helping ordinary people move out of poverty and up the income and wealth ladder (see Lynne 2025). An overview is provided here in the Blog. It is argued in the Lynne (2025) review that optimal inequality is key to Innovism. The following confirms that DIT not only helps make better sense of the key role of optimal inequality, but that the contentions by great thinkers going back to Socrates saw it the same way. All are MetaEcon.
Williams (2024) looks to the concerns about Extreme Inequality of some of the best and greatest thinkers that every Traveled on the Spaceship Earth. Williams (2024) includes Plato reflecting Socrates; Jesus (along with Paul, and brother James); Thomas Hobbes; Jean-Jacque Rousseau; Adam Smith; John Stuart Mill; and Karl Marx.
What think? Could The Metaeconomic Order work to solve the age old problem of extreme inequality? Also see the Substack about The Metaeconomic Order.
References
Lynne, G.D. Metaeconomics: Tempering Excessive Greed. Palgrave Advances in Behavioral Economics, John Tomer, ed. New York: Palgrave Macmillan, 2020 ( https://tinyurl.com/yxagxtuf )
Lynne, Gary D. “Cargo-Cult Economics to Metaeconomics: Toward a Humanomics with a Theory.” Review of Behavioral Economics 12, 3 (May 2025): 257-289. http://dx.doi.org/10.1561/105.00000212 See now publishers - Cargo-Cult Economics to Metaeconomics: Toward a Humanomics with a Theory https://www.nowpublishers.com/article/Details/RBE-0212
Williams, David Lay. The Greatest of All Plagues: How Economic Inequality Shaped Political Thought from Plato to Marx. Princeton, NJ: Princeton University Press, 2024.
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