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There have been many defenses of inequality, several of which are rooted in moral or religious views (as in Hinduism) or in peculiar views of human nature (as in the teachings of Aristotle). Counter to such views, it is commonly presumed today that equality is preferable to inequality but that it should be balanced against other considerations that may causally trade off with it. Standard micro-level functional arguments in favor of inequality assert that inequality enhances production either because unequal incentives or unequal power (as in a hierarchy) are needed to organize the production of beneficial goods, both personal and collective, or because the productively efficient division of labor entails inequality.
These arguments generalize to macro-level claims about the organization of society. First, equality entails reduced incentives to those who are especially productive and leads to a trade-off between equality and the efficiency of production (Rawls 1971, Okun 1975). Second, hierarchy, and therefore inequality, is virtually necessary for achieving many desirable social goals. Finally, the division of labor is generally necessary in a modern society (Smith  1976; Durkheim  1933). At the societal level at least three further trade-offs undercut support for equality. First, the political power to achieve equality entails the power to do much else, including very undesirable things such as suppression of thought and dissent. Second, equality in a single society requires autarky and risks the selective emigration of the especially productive; both of these effects are likely to be economically crippling. Finally, in many areas, those who have greater resources than others can be trailblazers who support innovations that eventually benefit almost everyone (Hayek 1960, p. 44).
Each of these relationships involves a trade-off of equality for something else: productivity, successful organization, lack of suppression, economic viability, or innovation. In each of these cases, although there might be disagreements about the scale of the trade-off of equality that a society should bear, there will probably be little disagreement that some trade-off is desirable or even necessary. Again, inequality in these arguments is functional in that it leads to greater production, prosperity, and liberty.
Gender inequality may have arisen from or been reinforced by the efficiency of a gendered division of labor, with women specialized in childbearing, childrearing, and other home-oriented activities while men specialized in fieldwork. Racial and ethnic inequality seem unlikely to have resulted from their overall efficiency. They must generally follow from normative spurning of an out-group or from taking advantage of the subordinate group by making them do subordinate jobs. The push for equality of these groups and women is commonly from normative claims for the equality of all. But equality for all typically only means that the subordinate groups’ members and women should face opportunities comparable to those of the rest of society, as unequal as those may generally be.
Major defenses of general social inequality in our time are functionally based in causal relations and have general significance beyond any idiosyncratic ethnic, gender, moral, or religious view. On these arguments there are reasons to think inequality either good or at least better than its implicit costs in an alternative.
Each of the arguments in favor of inequality in society might have a counterpart at the level of small groups or organizations; indeed, they are all expressed through actions at the micro level. However, relatively little attention has been paid to some of these effects at the micro level. The issues are especially important in macro contexts of developing economies and in micro contexts of differential power of the groups, such as those defined by gender and ethnicity, to which individuals belong and through which they are commonly identified.
Notions of inequality play a significant role in pragmatic political debates about democracy. James Madison (1751–1836), leader of the Constitutional Convention of 1787, and many others writing at the time of the drafting and adoption of the U.S. Constitution were deeply worried that democracy would lead to the expropriation of property. Given the vote, the large majority who were relatively poor in comparison to Madison, Thomas Jefferson (1743–1826), George Washington (1732–1799), and other holders of grand estates might choose to levy heavy taxes on property and block its simple inheritance. Or they might simply seize property. This is what happened in many socialist nations, except that the appropriation was done by dictatorial, not democratic governments. It is perhaps ironic that liberal democracy is now thought to be a safeguard of property and is therefore associated with substantial inequality of wealth. The central difference between the liberal democracies and the socialist autocracies is that the former have relatively weak governments while the latter have very strong governments. While a strong government does not guarantee egalitarian policies, a weak government probably does lead to inegalitarian outcomes. But, again, a potential cost of the strong government that is necessary for egalitarianism is the capacity to intervene in lives in many ways other than merely economically.
- Durkheim, Émile.  1933. The Division of Labor in Society. New York: Macmillan.
- Hayek, Friedrich A. 1960. The Constitution of Liberty. Chicago: University of Chicago Press.
- Okun, Arthur M. 1975. Equality and Efficiency: The Big Tradeoff. Washington, DC: The Brookings Institution.
- Rawls, John. 1971. A Theory of Justice. Cambridge, MA: Harvard University Press.
- Smith, Adam.  1976. An Inquiry into the Nature and Causes of the Wealth of Nations. Oxford: Clarendon Press.
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