A new report (from the IMF!) argues that the former inhibits the latter:
We discovered that when growth is looked at over the long term, the trade-off between efficiency and equality may not exist. In fact equality appears to be an important ingredient in promoting and sustaining growth. The difference between countries that can sustain rapid growth for many years or even decades and the many others that see growth spurts fade quickly may be the level of inequality. Countries may find that improving equality may also improve efficiency, understood as more sustainable long-run growth.
Via Politicalprof, who snarks:
It turns out that the biggest advocates of restraining wealth concentration at the top should be CAPITALISTS! The only chance CAPITALISTS have to succeed is if they have access to capital, which they don’t get in wealth-concentrated societies … So I look forward to seeing signs that say "Capitalists for the Revolution" soon!
I don't quite get the hilarity. It's perfectly clear to me – and has been perfectly clear to political theorists throughout the ages – that extreme concentration of wealth hurts economic growth and destroys political comity. Conservatism has long sought to keep this inequality in balance – between the inevitable and beneficial inequalities that come with a free market and the structural, harmful inequality that comes from one tiny segment of the society wielding such massive power over the rest. I think this recession, its causes and effects, combined with 30 years of middle-class decline and uber-class enrichment, are what has brought us to this impasse.
The Dish 