Prof. Antony Davies: 5 Myths About Inequality 

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My new favorite quote ... "Equality does not mean we are all happy, we can all be equally unhappy together."

This needs to be taught in every single school in the globe

Wow, after Milton Friedman and Thomas Sowell, Prof. Davies is perhaps the clearest explainer of the social implications of economic principles I've come across in my life. Very engaging presentation style. He has certainly gained a subscriber in me.

This lecture should be mandatory for high school seniors - bless you

"The evening news has become a litany of all the things that aren't true about your life." LMAAAOOOOOOOO

Reading through some of the comments and replies, I see two groups of people: those who understand the principle of adding value to create wealth, and those who think the world owes them a living.

How can almost 3,000 people click thumbs down on this? It's clear, it's logical, and it reflects reality; in the workplace, in interactions between people, companies, and governments! How much simpler does it have to be? As far as I'm concerned, this video should be MANDATORY VIEWING for EVERY INCOMING FRESHMAN TO COLLEGE IN AMERICA!

My mom would tell me and my siblings, "it's not equal, but it's fair" I loved this video, it factually uplifted me.

Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for a life time. But if the man wont eat fish you are wasting your time and effort. The truth is like that too.

This shouldn't be taught in college... This should be a mandatory high school course.

What this graph also points out is that the 2008 crash, for the lowest parts of the economy set people back 20 years, notice the bar for 2010 in the lowest 3 categories is the same as the the 1990 bar.

No TedTalk video has ever provided such a valuable and logically-sound message. Bravo-Zulu!

Equality of opportunity, not outcome, every country that tried the latter has been destroyed.

Equality: build a taller fence and make them buy a ticket like everyone else.

Aha! So we're getting fewer freezers over time. I knew that the we were spiralling down!

On wondering why fewer households have freezers, it struck me: freezers are for storing foodstuffs long-term, as well as frozen "quick meals" full of preservatives (i.e. frozen TV dinners). The latter is being replaced by dining out and a desire to avoid preservatives for healthy eating, both of which are more expensive. The former is only useful as a cost saving measure in the event of famine where you fear you can't get the food you need affordably; if you believe you can, you don't really need a freezer. So interestingly, the decrease in freezer ownership may be a further indication of increased prosperity, same as the other metrics. You'd want actual surveys of households to confirm this, of course, but it's a theory that may be worth studying further.

Equality: The short kid accepts that he's short and brings two boxes without demanding the tall kids box.........better yet, they reimburse the baseball team for the entertainment value they're providing by purchasing a ticket......

Every "Democratic Socialist" needs to see this.

Moral: Don't watch the news.

9:27 If I had 50.000 bucks in the bank I definitely would not raise my hand. Never ever would I do this.

Two of my friends are multimillionaires They invested in stocks and real estate Myself I spent my money on hot cars and hot women Okay now I get it!

This should be shown in schools Edit: If it not already is

The dramatic improvement in world living conditions is also featured in a bestselling book called "Factfulness" by Hans Rosling. As Prof. Davies mentions, the news and people in general tend to focus on non-representative events and stories that make people believe they are much worse off. The fact is that humanity has never had it so good. Countless luxuries of the past are now affordable to nearly everyone. While there will always be things to improve on, hopefully more people will appreciate how good we have it now.

For years I was made to feel like I was taking from society. The amount of tax I have paid is evidence I have not. This video just reinforces it.

This is what an actual good teacher looks like. So interesting that you watch him in your free time. Everybody talks about how hard teachers have it and how they're heroes and on and on, but so few of them are actually any good. Good job.

3) "Don't confuse poverty with inequality - poverty is the problem" is a good point. Except when he takes the notion of "people are in different stages of their careers" route with it. This is a fine theoretical model, but it exists outside the context of generational wealth. So there are many people starting their careers at the bottom, but a lot of those people at the top are starting there. It isn't safe to assume that just because you start at the high end that you don't do anything but slack your whole life because you "have enough". The person who starts at the top might continue to try to improve their standing, just like any motivated person would do. In a world of finite resources, when successive generations of people start at the top and keep climbing the ladder of resource accumulation, this is where the problem arises: there simply isn't enough for the vast majority of people at the bottom who didn't start at the top or even in a high place. And that number of people contending with the desperation of scarcity, the people at the bottom, grows with each generation. It's misleading (although logistically reasonable) to treat "over $200,000" as though it were just another stationary bracket, when the fact is that it's the only category that is not a finite range of income, and to see an over [$_] category grow doesn't provide enough details about how much it grows to offer very meaningful data. Also the remark that "people say" profit = plunder is a strawman fallacy. I'm sure people say that, but they're extreme radicals, and the implicit assumption that 'reggo' people en masse assume this to be the case is polarizing and does little to lay the groundwork for a rational conversation between the overwhelming majority of Americans whose economic views are surprisingly commensurate with one another, despite all the media hype to the contrary. ...tangentially, the same goes for the people throwing shade at this channel without any concrete arguments to support their insults and assumptions. It seems like the neoliberal capitalists are still fighting the Cold War against shadows and dreams in the dead of night, and the somnambulent Gen Xers root around in the fridge and get caught in their drunk dad's post-traumatic nightterrors, wake up, yell "I hate you dad!" and scamper back up the stairs to hide. The family needs some counseling.

#1 0:10 Profit = Plunder #2 5:18 Equality #3 7:00 We Understand #4 11:15 Middle Class #5 13:50 Worse Off

And still the wife complains about owning a vacuum cleaner. I'm desperate!

The inequality argument is valid in as much as the productivity gains have all gone to the top w/ CEO pay now well over 300X's the average worker pay. It has been hoarded by mgmt. not shared w/ employees.

So, about the inequality thing. The key aspect is a system must have some sort of social mobility in place, so the poor (or just starting) can move forward with better income as time progresses.

Amazing lecture, one of the most important concepts one can ever learn in one's life.

"People on the far right" AGHHH....! Anyone with good common sense ideas is perceived as being "far right" even the likes of Thomas Sowell and Milton Friedman!

The only two things that is wrong is that there are *many* ways of plunder (eg. to lie straight to people's face), and then there is *dynastic* wealth which through tuition causes inequality of opportunity.

And all that under “evil capitalism”

God Bless You, all involved in making this money. First time I've seen any of your videos, and you all have earned my sub and notification button slap. Keep up the good work.

Take the first "diagram", guy provides goods and services to society, gets dollars, buys goods and services from society. Hence the money circulates and everyone willing to work gets a share. Everything works. However, what can happen here is that the amount of money society invests in said goods and services ends up being disproportionately larger than what gets circulated back. Large amounts of money don't get circulated back into the economy but instead end up stored in off-shore financial institutions for example. Individuals and groups begin to accumulate wealth to the point where their power is greater than that of any government. While at the same time they do not answer to the public in any way, shape or form like governments are supposed to, nor are they necessarily qualified to lead. Is that something that happens?

I am shaking my head that we now have to teach at the university level how free markets operate. Shocking.

He does an excellent job of explaining all these things, I love this guy, he's doing a great job of explaining what seems to be obvious but so many others have a difficult time explaining...like politicians for example.

I would have liked to ask, if profits are always good. Example; there was a large Rx company that recently had some major push back after raising the price of Epi-pens by some huge percent, or in the case of companies making massive profits, (Walmart, Amazon) but their employees are getting government assistance. Seems to me there is more to the story than what was told here, and I would really like to hear that talked about.

We seem to be ignoring the barrier to entry in most of these industries (since few possess the capital regardless of ability), the effect of oligopolies, and the ways in which businesses prevent competition. Oakley sunglasses is a good example. They created a product people liked, but because they wouldn't sell their company to Luxotica, who owned most of the stores they would be sold at, they refused to sell them anywhere... which harmed their ability to sell their glasses so much, that they were forced to sell out anyway... and for much less than Luxotica's original offer. Isn't competition vital to a free market? Doesn't such actions harm competition? What if I had a great idea for a pair of glasses but didn't have the capital due to working for wages? How could I get started? If I did have the capital, how could I compete against such a large corporation? Wouldn't they be able to keep me from entering the market or crush my business in the same way? As for Steve Jobs, yes, people like the phones he makes, but lets not pretend this does only good. Much of the labor is outsourced to Asia, where they work in unsafe sweatshop conditions for, at best, $1.85 an hour. At one factory, conditions were so bad and they were jumping off the roof to kill themselves so often, they had to put a giant net up around the building. You say that profit means society owes them more.... what about the workers that make all the phones, without which the business could not operate? Are they not adding value? Considering one single person made $8 billion dollars, and millions of workers can barely meet living expenses, and are so miserable they are committing mass suicide, at what point can we admit this is exploitative? Labor is an expense like anything else, and reducing the cost of labor increases profits. Is this "good?" Or, is it not some benevolent force and there is a great deal of nuance being left out of the conversation? In your example of inequality, at what point will these workers get to a point where they make $70k a year? Can't we acknowledge at a certain point low wages prevent some from accumulating capital? Why can't we admit the obvious, that there is a conflicting interest that rewards exploitation? Would you be able to tell me with a straight face that a CEO deserves 300 times more than their average employee? Are they adding 300 times more of value to society than anyone else? I agree socialism and communism are terrible ideas, and I agree capitalism is the most successful system we have ever tried. I'm FOR capitalism and free markets. However, I can admit it has a lot of problems. I can look at it realistically and not in a delusional way where I ignore all of the bad. Why do we have to treat it as if it were some type of religion that is unable to be questioned, and anyone who does is a "dirty commie" (the equivalent of a heretic)? At what point does an ideology we are defending diverge with reality? It's not that anything he said was false, but that there is a lot being left out of the conversation. What ever happened to nuance, and presenting a subject objectively, covering the good and the bad? How can we address the issues we have if we can't discuss them rationally? Anyone who just blindly accepts this without thinking is just as ignorant as those clamoring for socialism and communism. If no amount of economic inequality is naive, because it removes incentive and harms production.... isn't no limit on economic inequality every bit as naive? Isn't there a point at which consolidation of wealth erodes the consumer base the market depends upon? Sure, we live more comfortably, but we are ignoring the fact that 73% of Americans are in debt until the day they die, with the average amount left over being over $56K... doesn't this prevent most from accumulating capital? Doesn't it inevitably reach a point where consolidation harms competition, which a free market needs to function properly? If communism's failing is not accounting for an aspect of human nature, incentive, couldn't we critique our own system for not accounting for mankind's insatiable appetite for more? We live in a finite world, yet we have systems that require continuous growth to function properly.... does anyone not see the problem with this? It will last longer, and yield superior results, but it is eventually doomed to fail.

I wish I was more smarter than others.

A major problem with looking at household income is that people are now forced to share housing, and having both husband and wife working etc. So while the household income has increased, individually it has actually declined.

It has always baffled me that the people that want to set the prices that people should receive for a specific good or service do not even fathom what a hard days work looks like and these same people think that a burger flipper should get the same compensation as the one that invested all the capital, time and energy into creating a business that the burger flipper can work.

Is there any way to like something more than once? Finally an academic making sense!

Thomas Sowell's warned against using household income data. It doesn't take into account the number of people living in a household or the number of working individuals in a household, and these are things that change over time just as much as anything else being measured. Sowell said that if you want better data, free of any political biases, look at per capita income, not per household income. Maybe the per household income is going up, but its because giant Catholic families are deciding to live together. The quality of life hasn't necessarily changed, but the data will see an increase in per household income

18:07 - Best line: "Oddly, the evening news has become a litany of all the things that aren't true about your life."

I learnt this simple thing about consumerism this past two years. I wrote a list of things I bought out of habit and boredom or trends. I stopped. I've become financially better off and only bought things that are an investment.

The best video on capitalism I have ever seen.

I like the way that he uses a range of $30,000 and $70,000 as if this is where our focus should be. I have gone from less then $30,000 to just over $70,000 and it makes a big difference for sure but I'm pretty sure if more then half of the wealth created want going to folks like top CEOs making grotesquely more then the people in this range the range we are looking at could be perhaps $45,000 to $90,000 with the top still being very wealthy by comparison but paying a bit better wages to the people who actually do the work and a fair share of taxes as well. I have managed people before and I understand that it is also a lot of work and takes a certain skill set to understand the financial side of things the industry at hand and how to deal effectively with people etc and the higher up in an organisation you are the more knowledge and skill is needed to a degree and am fine with these skills being rewarded extra for this. I read that in 1965 the average CEO of a large firm made 20 times the average workers pay and that to me like a fair reward heck for the largest companies where the CEOs have done exceptionally well and the workers are taken care of and there is healthy profit for stockholders then lets give them 25 times. 25 times of a healthy fair wage for the average employee. Guess what its now somewhere around 300 times for those at top companies. I don't care what kind of superstar you think you are you are not worth 300 times the average Joe and no you do not deserve a huge tax cut while the feds cry poor when it comes to maintaining social programs but somehow have endless cash for a bloated military budget. And don't try to paint me a communist because as far as I know America in the 1950s and 1960s when things were more equitable and Union representation was at an all time high was in a cold war with the commies. There are good things and bad in a free market and with social programs provided collectively through government both and arguments speaking to the extremes of the spectrum don't help society find a solid practical middle ground. I am for some degree of social democracy where any tax money collected is spent as carefully and prudently as possible on practical programs with measurable results that have maximum benefit for the money spent.

The three kids on same sized boxes actually had unequal opportunity. The oldest kid waited much longer to see the game, and was only given the same box as the toddler who has been afforded the opportunity much earlier in life.

@learnliberty the video and audio are no longer synced. I'd like show this to my highschoolers, but the visuals no longer line up with what he's saying. Can you fix this?

3:30: "When obtained in a free market environment..." There's the rub. Get rid of monopolies and oligopolies, many of which are enforced by government (patents, anyeone?) and then the simple example works. His second example of ethanol is an example of "regulatory capture". The very fact that that term exists is pretty good evidence that we don't quite have free markets or equality of opportunity.

This was very eye opening. Thank you for this.

Your video's need to be shown in every high school in America. EXCELLENT job my friend.

The 3:30ish to 3:40ish bit just blew my mind. Excellent point and excellent lecture in general. Thank you!

This is a fantastic set of explanations. Thank you.

I believe that appliances have gotten cheaper in cost and cheaper in quality.

The corporations and business owners have woken up and realized that they are powerless without a large pool of cheap labor.

There should be a way to make every person in the USA to listen to Prof Davies

The slide at 11:15 under Myth #4 is not accurately adjusted for inflation and cost of living in that time versus now. It's representing approximately 1/4th what it should be to afford the same things now that the middle class could then. It is a flawed metric without the actual lifestyle being taken into account. Housing, automobiles, dinners out, vacations, etc. The graph is moving left so the "wealthier" classes are in fact poorer than those in that class the decades before. Talk to those making $50-75k and see if they have financial concerns or if they have debt. The middle class has in fact shrunk because those they deem as middle class cannot afford what previous generations of middle class could. They are not poor, but they are not able to make purchases or contribute to the economy in the same way. The slide showing salary inequality is essentially the same situation the class baselines are in. it is shifting and it should be accounting for it taking much much more money to be in a certain class.

Very well done! This should be viewed by everyone! It would help our society, and our country. Thank you!!!

The problem with "equality of opportunity" is that it's not equal. It's can't be. Opportunity is not infinite. If the boxes in the example at 5:40 were money, opportunity would mean nothing in the end, because money is not infinite. To follow the analogy, the boxes are limited in quantity. Therefore, if there is only 3 boxes, and you can't get more, then the optimal result is to have "equity", so everyone can see the game.

My biggest problem with this video or comments below is that everyone is assuming that rich is rich because he provide something important or needed to society. That was case maybe century ago, real wealth now is not created by good services or by fullfiling people needs but by fiddling with numbers in computer. Banks can create money from thin air and "traders" are buying and selling orange juice or any other commodity and making profit on it without adding any value.

This is a very enlightened lecture. He is hitting the nail on the head with regards to how the western and global economy is beneficial for all. Indeed, the neoliberal movement from the 1980s is greatly underrated. Market mechanics are beautifully simple and work for the vast majority of the economy. It is the the last word in efficiency. However, it does not work for everything. We must evaluate its success on an industry by industry basis. There are some parts of society (more specifically rather than the economy) where market mechanics do not exists. Housing, healthcare, utilities are among a few where the relationship between the provider and consumer are very different. Firstly, they are basic necessities therefore there is no negotiating position for the consumer over price. We all need shelter and some may need healthcare to live. We accept any price available to us as s result. We cannot turn it down in the same way we can turn down a phone or car if we feel the product/service is not worth the money. In that situation, we the market have the power but not in one where we have no choice. I personally would go as far as to say it is immoral to capitalise on basic necessities. The market does need to be challenged but we must go about the debate appreciating the fact that the market is nothing short of brilliant for so many things. Our economies will continue to grow because of it so long as clueless brokers and bankers are regulated to some extent. Preserve what works, revise what doesn’t.

Middle Class is not the same as Median Income.

You can't just look at a certain demographic, and ASSUME why they are in the position that they are in. That literally leads to racism, sexism and all kinds of discrimination. Great video

They are far from mythical. If Ayn Rand's ideas were so empowering, why then did she require the help of both Social Security and Medicare later in life?

I agree wholeheartedly with what was said here but I would like to point out a couple of things. First of all, if we are just looking at the number of people in the various income brackets the trend is toward more people moving toward the wealthier end of the spectrum. What the chart didn't show was the fact that there are a small number of super wealthy individuals within that highest income bracket (the highest bracket was $200,000 and up) who have more money than everyone else combined. I would say that's fine as long as everyone is trending up and poverty is trending down. But unfortunately, because of the way our campaign finance laws work, that concentration of wealth translates into a concentration of power. In other words, the super wealthy use their money to co opt the power of government to do their bidding and allow them to circumvent laws against anticompetitive practices. They have also consolidated the corporate media which they also use as a tool for controlling government. Conservatives really need to wake up to this because while we are all getting richer we are losing our freedom. I am not advocating for "tax the rich" and other socialist schemes. I am advocating for campaign finance reform plus the strengthening and enforcement of anti-monopoly laws. Because I am NOT ok with a handful of financial and political elites running the country.

I'm no whining liberal/ socialist (by a long shot, believe me!) but if we are talking about inequality (and such like) and using i-phones as an example it's remiss not to factor in the inequality of the workers that make them. Foxconn in China are highly exploitative and certainly don't resemble anything 'equal.' It's the fact that Jobs got his i-phones made in this way that allowed him to make so much extra money, not that he was providing a service and goods that were 'worth' the profit. Do you see my point? Maybe I'm missing something here, and I'm honestly not getting preachy, just pointing out what I perceive to be a fact.

Great video! Just a note about something overlooked, though. While it's true that people are richer than ever, certain integral elements of a healthy life are missing which people had in abundance during previous generations. Home ownership, for example, takes far greater labor for my generation than my grandparents' generation, despite the fact that most of the land in the US is unused and there are several times more vacant homes than homeless people. This is largely due to government restrictions and our corrupt banking system, though, and not due to successful people or free markets as Communists and Socialists like to tell people.

I watched this video a year ago, and I can say that 3:01 has radically changed my view on money and exchange.

Absolutely great lecture. I can see your efforts

I really enjoy your videos, extremely informative and eye-opening as well. Please keep them coming.

Steve Jobs' wealth didn't come taking in profits from sales, but from his stock ownership in Apple, and people bid that up. The stock price and the profits are related, but not parallel, as we saw with Amazon's amazing stock growth while they had almost no profits for most years.

Great lecture, thank you. Just one thing with the boxes and the kids.. How it is often used by certain people to show wat equality means is inaccurate and misleading in my opinion. Equality of opportunity doesn't mean that someone GIVES one box to everyone, it means that boxes are available, but people have to take them by themselves. Equality of opportunity in that sense means that our responsibility as a society is to make sure we have enough boxes for everyone and to make sure that everyone have the means to take them by themselves, not to give them the boxes and ask nothing in return.

The first examples are incredibly unfair representations of a fallacious assumption. The Steve Jobs example assumes that Steve Jobs was solely or mostly responsible for the creation and distribution of Ithings, which is simply not true. Conversely, the analogy would still hold up if you can assume that every person that created the Ithings and paid for the Ithings was compensated fairly for their work, which is not a given. In fact, it is demonstrably untrue that every worker was compensated fairly for their work, which is why Apple's suppliers had to put suicide nets outside of their factories. It is important to recognize that analogies like these always require the assumption of a simple economy with very few external, non-logical factors. The real world is nowhere near so pretty. Many of the below comments also comment on the fact that once the inequality gets severe enough that SOME actors will choose to use their power to game the system to their advantage. So far, no economic system has managed to perfectly remove this outcome. The game will always stratify towards a few owning most of the wealth creation. This is not inherently wrong, but it usually results in a lack of desirable outcomes for everyone else.

Every year we have to put more and more common sense topics into cartoons. At this rate, we'll have to explain to lefties how to drink water by 2030. We're truly moving towards Idiocracy.

I wrote a response paragraph last semester on this exact topic and I wish I had cited this guy then

His lecture is almost at good as the TED talks by Hans Rosling. I love both of these presenters.

Actually, those who support equal opportunity can also support equal outcomes in the voluntary sense---by choosing to freely give to the poor while freely encouraging others to choose likewise. But, yes, not in the political sense.

Scrooge didn't become philanthropist because a tax man came to his door, he did through the self realisation of his own greed.

Thank you for your contribution.

Well said! Great visual examples 👌

If only the system didn't have protectionism created by those that can afford to lobby government for economic favors.

*Thanks for clarifying the 'Give Back' myth. It always bothered me to hear the phrase: 'give back'.* No one gave me anything. And I'm not giving back anything because 'giving back' implies that I took something illegally (or at least, immorally). So, the term 'give back' is wrong & always has been wrong!

Best quote of the video: "We can all be equally miserable". It should be stated that there has been a time in American History when a class of people had both equal opportunity and equal outcomes. They were called slaves. They all had the same opportunity: None. They all had the same outcome: Death as a slave, owning nothing, unless they chose to escape and succeeded, or were alive to see the laws permitting slavery abolished.

“Commensurate.” The average annual salary of a firefighter is $47,000. Judge Judy makes $47 million per season of her show. By this math, the contribution that Judge Judy gives to society is that of 1000 firefighters.

Professor, I completely agree with your argument and presentation. However, I think the folks that disagree and think profit and plunder are the same will not use iPhone example. They go to cite medicine, insurance, university and energy as examples where Profit is evil. Would you still use the same logic on those examples? For example, the necessities of life.

He needs to talk about rent-seeking. Much of the profit earned in American society today is rent-seeking activities that don't provide anything to society, but siphon off a portion for a middle man that through the power of law or ownership charges for something that should be free. Crony capitalism is a big portion of this, but even things we consider legitimate like copyright and patent law are actually rent-seeking activities where the person benefiting from them is actually providing no additional value to society to justify the costs they are creating by leveraging these things. This is the primary reason why the US is such and expensive country, and it's economy is relatively unproductive in terms of producing real goods and services.

It’s incredible the number of college professors who don’t know or understand this information

Money can't change world, but resources can.👍👍👍

This is so well worded and all around beautifully presented. Thank you.

Reading the comments from socialist is like grinding my eyes on sandpaper

The household income is nonsense when we bring in the fact that households used to be multigenerational, now it is seen as being poor if you share a home. Too many people are trying to live like they are in a bracket or two above their income.

Oh thank you I could not bring it as well as prof. Antony Davies. My heartfelt thanks.

Regardless of whether you agree or disagree with what he's saying, it's still accurate. This is just common sense and it's a shame that it has to be taught to anyone. This video is just explaining how the economy works, and there shouldn't be anything controversial in any of this. The fact that there is shows that most people graduate high school economically illiterate and so believe the sky is falling when really in developed industrialized countries things are better than they've ever been, all the while not realizing that what we call poverty in the developed world would be considered being unimaginably rich just a century ago. One of the things this guy is saying is that instead of worrying about inequality, worry about poverty instead as there's a million ways people can be unequal besides money: looks, athletic ability, academic ability, and a million others. Look, if you are born in any western developed country, regardless of your income you are already in the 1% of income when compared to the average person in the developing world, so welcome to the club.

We can be equally miserable, true dat!! xD

They will NEVER get me to believe Merit shouldn’t count when it comes to hiring or acceptance in colleges.

Thank you very much for this video.