Inequality, inequality everywhere!

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That’s what the table for the Spanish La Liga looked like on 15th December 2014.

4 teams at the top with 30+ points, a few 20+, the remainder with less than 20. The two at the top are amongst the richest in the world.

Deserving careful consideration is the little matter of there being a massive 11 point difference between the 1st and 5th sides this early in the season (it’s not Christmas yet). Even the 4 point gap this early between the top two is a little disturbing to followers of Barcelona. The 9 point gap between the 1st and the 4th places is not good for “competition” either.

So the La Liga is clearly delineated into categories depending on who is how wealthy. Once the wealth is accounted for, things like team performance factor in. But even within a particular group, inequality has an effect. The 9 point difference between the first and fourth placed teams cannot be put down to just team performance. I cannot picture Sevilla being worth more than $400mn (likely closer to $250-300mn) while Real has been declared the richest with assets over $3bn. So the ~8 times greater value is expressed in the table as a 9 point lead.

Real Madrid faced Sevilla once this year, the UEFA Super Cup on the 12th of August where they won 2-0. Were you expecting any different? A team that has arguably the world’s best player, a fantastic player of a World Cup winning team, and one of the star players of the World Cup 2014. And they were able to attract players of this calibre because the club has a rich history, which was because the club had access to a large stock of wealth…

Taking this as a representation of how capitalism works, those already rich can invest further leading to increasing income which means an increased growth and stock of wealth and the cycle repeats itself. Eventually leading to a life very skewed in favor of the rich.

The point is simple really, to level the field so that everyone has access to the same opportunity, it is wealth inequality that needs to be addressed not only income inequality. Piketty concluded his “Capital in the 21st Century” correctly by calling for a wealth tax. If the remaining economists were to stop being offended at this “blasphemy”, maybe someone could actually work out the effectiveness of this policy and how to design a policy most effective for the purpose of reducing inequality.

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