Particularly the second strand reveals intense injustice of distribution in prolific resources and earnings is the cause of harsh conflict among classes and social inconsistency. The strand considers an absolute fairness of income distribution must be “realized when the social welfare then can be maximized and social friction can be minimized” (Stiglitz, 2012, p. 102). Its theory entails that economic development would be persistent with the firm equal distribution. A comparatively moderate hypothesis argues that economic inequality would alter as financial growth amends or more specifically; economic inequality would increase initially and then decrease with financial growth. This hypothesis is linked with factor movement among regions where there is inequality, which allows earnings distribution does not need to be completely balanced (Gilens, 2012, p. 203).
Income inequality has been connected to various detrimental effects in societies. For instance, it has been argued that greater income inequality causes higher levels of drug abuse, obesity, unsatisfactory learning environment, aggression and poor psychological wellbeing. A drop in social trust mediates the outcomes of income inequality. A negative outcome of income inequality on social trust would consequently give rise to numerous adverse consequences. The major argument why inequality decreases trust is that as differences among individuals are bigger, insecurity rises and belief in other individuals consequently drops. People’s view of inequality can have an effect on various situations that are linked with social trust (Week 1 Reading).
A higher observed inequality may make individuals to categorize less with people of other incomes, or form the thought that the income distribution or society by itself is unjust. In addition, inequality can cause resentment as well as suspicion of the less privileged. The view of inequality can influence