Here is an analysis of Adam Smith's take on inequality. Basically Smith worried that extreme inequality created a situation in which the wealthy and their concerns were so much more visible than the poor and their priorities, that society as a whole would identify with and value the rich more than they would feel solidarity with the poor. I feel that this is an accurate description of the situation in the US and in many developing countries. The wealthy and their concerns are so dominant in public discourse, and their lifestyles so heralded by the media, that all the rest of us, even the poor themselves, focus much of our concern on things that are really priorities for the rich. We are all so busy aspiring to be part of the oppressive class that we don't look around and try to make life decent for our peers around us. An extreme case in point is how people get so worked up about the importance of abolishing the estate tax, even though the estate tax benefits over 95% of society and only takes away from the ultra-rich. But look around and you'll see this and countless other examples of the non-wealthy advocating for policies, attitudes, and other social arrangements that only benefit the rich at the expense of the poor.
I feel that a huge part of our relentless economic growth today in the US and elsewhere is driven by an equally relentless drive not to be comfortable or satisfied, but precisely to put ourselves above others, and to prevent others from rising above us. See for example the constant packaging of things as exclusive, the desire to go to exclusive schools, clubs, neighborhoods, etc. See too how the upwardly mobile seek endlessly to move physically far away from others whose economic status or skin color relegates them to a less prestigious position in society.
Furthermore, and despite the author's claim that Smith's concern about this sympathy aspect of inequality is very different from modern-day critiques of inequality, I feel that the modern-day concerns he cites are intimately linked with the issue of how inequality affects our sympathies. The author says, "When people worry about inequality today, they generally worry that it
inhibits economic growth, prevents social mobility, impairs democracy,
or runs afoul of some standard of fairness." But I feel that the perpetuation of inequality today, and many impacts like impairment of democracy and fairness, are precisely due to how inequality screws up our sense of sympathy. If we didn't so identify with the concerns of the rich, we would never allow inequality to continue in its current extreme form, and we wouldn't allow the rich to effectively enjoy a double standard in our democratic and legal systems.