Can we do something about inequality?

I was born in a small European country to parents with some college education; my mom worked as a primary class teacher and my father worked as a construction supervisor — a classical setup for many children of my generation. They both worked hard to overcome Communism-induced hardship at that time and did their best to secure a happy childhood and higher education for my brother and me.

I started working early in my years and got my first formal employment as a plum harvester at the age of 16. I had to continue working during my university study in order to cover my basic needs, changing various roles in PR and journalism (therefore forgive me my “dry” factual writing style — I used to be a newsman).

In spite of a decent career in the news industry, I’ve made no fortune — not even after becoming a media entrepreneur. But as a journalist I’ve traveled a lot and met like-minded people — educated, committed, ambitious, and… struggling.

So, I wondered why talented and diligent people are so often unfairly rewarded — sometimes even sliding into financial insecurity — while ignorant, corrupt individuals, along with heirs to wealth, enjoy lavish lives and prosper as a rule?

In my own case, I created truly unique services and followed an upward career trajectory in the private sector during my youth and middle adulthood. I exercised real influence in public life, yet I have not become a millionaire, nor have I risen through government ranks.

My wife says it may be simply bad luck, nothing more. Is she right?

So, I examined my educational background, savings, relationships, and skills, comparing what I had achieved and where I stood with where my peers had arrived. Some had less experience or fewer skills than I did; others, frankly, demonstrated outright incompetence.

What they did possess, however, was access to inherited wealth, family connections, or the foresight to align themselves strategically with influential figures who facilitated their professional and financial advancement.

I did some research.

To put it short, inequality among people persists because power, resources, and rules have been organized to concentrate advantages over time, and once such arrangements stabilize, they reproduce themselves across generations. There are five decisive structural factors leading to this situation. Let’s break them down:

1. Control over violence

Groups or institutions that monopolize the right to use force can extract resources from others employing armies, police, militias, or warlords to protect their claims. Where coercive power is asymmetric, inequality follows. This dynamic predates states and continues within them today.

2. Control over rules and institutions

Laws, property regimes, tax systems, and inheritance rules are rarely neutral. They tend to reflect the interests of those who design them. When institutions lock in advantages — through land ownership, capital accumulation, or legal privilege — inequality becomes durable rather than temporary.

3. Unequal access to information and education

Knowledge functions as leverage. Literacy, technical skills, credentials, and networks determine who can navigate institutions effectively. When access to education and information is uneven, inequality compounds even in formally “open” systems and established democracies.

4. Path dependence and historical accumulation

Initial advantages matter disproportionately. Early access to land, trade routes, technology, or political favor creates feedback loops: wealth generates influence; influence reshapes rules; reshaped rules generate more wealth. This explains why inequality often tracks colonial history, conquest, or early industrialization rather than current effort alone.

5. Social legitimation of hierarchy

Inequality persists when it is normalized or morally justified — through religion, ideology, nationalism, or narratives of meritocracy. Once disparities are framed as natural, deserved, or inevitable, resistance weakens and such systems thrive. Access for newcomers or outsiders is difficult or nearly impossible.

There are also several mechanisms that explain why talent and effort are often poorly rewarded, while ignorance, corruption, or inherited privilege can be highly profitable. What are these mechanisms?

Markets

Markets reward leverage, not effort or virtue. Economic systems reward those who control assets, networks, or bottlenecks, not those who work hardest or are most competent. A talented worker selling labor competes with millions of others. An asset holder, gatekeeper, or monopolist faces little competition and extracts rents. Effort scales poorly; ownership scales infinitely.

Inheritance

Inheritance and starting position dominate outcomes. Wealth reproduces itself through inheritance, connections, and early access to capital. This creates a class of people whose income is detached from contribution. Conversely, talented individuals born without safety nets must prioritize survival over long-term optimization of their skills.

Reward systems

With few exceptions, the existing reward systems measured the wrong things. Most leaders and institutions reward compliance over creativity; visibility over substance; short-term results over long-term value; and confidence over competence. Not exactly what most ordinary people expect.

As a result, those skilled in self-promotion, manipulation, or politics outperform those focused on mastery or integrity.

Value vs. Bargain

There’s an asymmetry between value creation and value capture. Many socially essential roles — teachers, caregivers, researchers, engineers, artists — create enormous value but have weak bargaining power.

Meanwhile, intermediaries, speculators, and rent-seekers capture disproportionate rewards without producing equivalent value.

Corruption and Ethics

Corruption and manipulation of rules are, perhaps, the worst factors. Ignorants, crooks, and wealth heirs often succeed because they don’t feel constrained to exploit regulatory loopholes or convert political influence into economic gain. Usually, such individuals externalize personal costs onto society and face minimal consequences due to selective enforcement.

Systems punish rule-followers more reliably than rule-breakers when enforcement is uneven. In broken democracies and autocratic states, the injustice rate is higher than in open and educated societies.

Those with wealth or power can fail repeatedly without catastrophic consequences. Those without it cannot. Risk-taking is rewarded only when downside risks are socialized and upside gains are privatized.

An 18 century cartoon depicting the oppression of peasants by aristocrats and clergy in France. The revolution in 1789 questioned the legitimacy of the upper casts to violence and resource control.

Legitimacy

There are also some cultural myths that protect inequality. For instance, the belief that markets are meritocratic serves to legitimize unequal outcomes, even when evidence contradicts it. This myth shifts blame onto individuals rather than systems.

Choices matter

So, let’s wrap up what we know by now. Talent and hard work are necessary but insufficient conditions for success. What matters more is position: access to capital, networks, institutional power, and protection from downside risks. When reward systems are misaligned with value creation, outcomes appear unjust — because they are.

This does not mean that the effort is meaningless; it means efforts must be paired with strategic positioning in order to be rewarded. At the same time, opportunities must be broadly accessible — not reserved for a few — and hiring should be based on merit rather than loyalty.

When equality of opportunity is weak or inconsistently enforced, even genuine talent and hard work fail to translate into fair outcomes.

Human inequality is not a biological outcome nor an automatic byproduct of progress. It is the result of choices — explicit or implicit — about who controls violence, resources, and information.

Importantly, this outcome is not an anomaly or a moral failure of individuals; it is a predictable result of how modern reward systems actually function, as opposed to how we are taught they function.

Ultimately, people are the architects of the systems that determine who is rewarded and who is left behind. These reward models reflect our beliefs, expectations, and choices — about what we value, who we empower, and how we allocate resources, information, and authority.

Inequality is therefore not inevitable: the more widely wealth, knowledge, and power are shared, the smaller the gap; the more concentrated they are, the greater it becomes.

In essence, distribution is the root cause of inequality, as best illustrated by neighboring countries like Finland and Russia, which embody strikingly opposite models of allocating wealth, resources, opportunities, and power.

So, what can ordinary people like you and me do about that? Do we play any role?

Actually we do and we can.

When a critical mass of people recognizes their collective power and acts boldly, they can reshape the rules, redefine distribution priorities, and transform societies. Inequality persists not because it is natural, but because too often people do not dare to challenge it.

Although no luck determines who is rewarded within the systems that create inequality, let me tell you this: I was lucky to be born in Europe.

Here’s why. According to the latest available World Inequality Report (for 2024), Europe remains the least unequal region, with the top 10% earners making 36% of national income and the 40% middle class making 46%.

Iceland, Czechia and Slovakia are the most equal countries on the old continent.

In the overall ranking, Slovakia, Belgium, and Qatar are among the most equal countries in terms of wealth distribution. On the opposite spectrum, Brazil, Russia, and South Africa have the highest levels of wealth inequality globally.

Simply being born in a context where wealth, institutions, and opportunities are relatively accessible is itself a form of structural luck — a reminder that distribution shapes life chances long before personal effort comes into play.

This kind of luck highlights both the constraints and the possibilities: while inequality persists, ordinary people in societies with more equitable distribution still have the power to act, influence, and reshape the rules that govern rewards.

So, my wife has a point, after all. There is some luck here.