In his post James Ahiakpor defends the vision that "governments should worry  
about absolute poverty rather than inequality of incomes." The arguments he uses  
are classic. Who would object to the rich getting richer when the poor get  
richer too? Simple, only sentimental researchers that play too  
much on emotions and jealous people that envy their wealthier fellow men. There  
are however more valid arguments that do justify that we pay attention to the  
problem of income inequality. At this point I would like to refer to the note by  
Branko Milanovic, "Why we all do care about inequality (but are loath to admit  
it)" [http://ssrn.com/abstract=530363]. In this short note Milanovic, who is  
chief economist of the World Bank's Development Research Group, puts forth one  
central remark: "The key point is that income of others enters our own utility  
function. And once we allow for it, inequality affects our own welfare and the  
arguments regarding irrelevance of inequality come to naught." In my opinion,  
Milanovic illustrates this view in a provocative but convincing matter. A lot of  
research on this point has also been performed by Richard Easterlin. A very  
interesting article of his in this discussion is "Will raising the incomes of  
all increase the happiness of all?" [Journal of Economic Behavior and  
Organization, Vol. 27 (1995) 35-47].  
  
Jan-Frederik Abbeloos