Inequality in consumption used to be a matter of acreage. Throughout most of history, economic value was chiefly found in land or personal property. The divide between the rich and the poor was therefore between those who owned property and those who did not.
But the age of technology has changed that. “A billionaire and a member of the middle class have relatively equal portals to the wonders of the internet,” says John O. McGinnis, “certainly far more equal access than the rich and the rest of society would have had to the material goods that defined wealth in centuries past.” Nowadays, if we want to reduce inequality we need to focus on redistributing the benefits of ideas and innovations:
Understanding how technological progress reduces inequality of consumption can help us redirect government policy to reduce inequality further still. Public policy aimed at reducing inequality should focus not on direct transfers of wealth, but on improving education and increasing innovation. Innovation creates more ideas that all can benefit from in common; education, meanwhile, allows wider and fuller enjoyment of these ideas, and is itself a spur to innovation.
Education not only helps people increase their incomes by enabling them to better integrate technology on the job, but also improves their consumption by helping them better deploy technology at home. For example, the internet provides an inexpensive mechanism for accessing myriad sources of enjoyment — from finding products that suit one’s interests, to playing games, to improving one’s understanding of the matters one believes to be most important to the good life. Samuel Johnson once said, regarding travel, that a man must carry knowledge with him if he is to bring knowledge home. The same is true of surfing the web: Those with more knowledge can enjoy it more abundantly. In today’s world, the advantages of education are as important as income to raising a person’s consumption levels.