How Should Economic Value be Distributed?

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Whenever a society asks a question about what should be, the question obviously implies certain trade-offs and value judgments. Logically, these judgments should be based on a society’s highest priorities and purpose. When rules and institutions are not aligned with a population’s highest priorities and purpose as expressed by a majority vote of that population, then that population will be constantly plagued with conflict, which will constantly erode—and ultimately destroy—a large portion of the value flowing through that population.

Inequitable Economies Are Unsustainable Economies. To answer the headline question, we must acknowledge a fundamental principle in human nature and Political Economy: Large human populations will not tolerate or embrace any socioeconomic system that does not allow them to create and distribute value equitably. This means that value must be distributed equitably from the perspective of a majority of people in a population; otherwise, the system is socially and economically unsustainable.

What Does “Equity” Mean? The concept of “equity” has been an integral feature of the U.S. legal system from its founding. American courts of equity are based on the centuries-old English Court of Chancery, which today is a division of the British High Court of Justice. The dictionary definition of “equity” encompasses the principles of fairness, impartiality, justice, proportionality, and egalitarianism. Most civil matters associated with corporations, family law, and bankruptcies in the United States are adjudicated in courts of equity, which are distinct from courts of law. In courts of equity, the judge is required to exercise significant discretion over each case because the amalgamation of legal contracts, financial and material assets, and a wide spectrum of human activities often collectively result in a highly complex situation that cannot be reduced and codified into concise laws.

What Does “Equality” Mean? Although these words are often used interchangeably and confused with one another, the concept of “equality” is very different from the concept of “equity.” The dictionary definition of “equality” encompasses concepts like “quantity” and “uniformity,” which are more precisely understood as mathematical principles rather than philosophical principles. A mathematical equation like 9 + 1 = 10 is true because the quantities on both sides of the equal sign are perfectly equal by definition. No matter how complex the equation, both sides must be equal, otherwise the equation is logically false. Thus, the equation also has uniformity as the quantity of both sides must be perfectly identical for it to represent something that is logically true. This is the essence of the principle of equality. So, we can see that equality is fundamentally about counting and measuring things to achieve perfect uniformity.

Proportionality is the Bridge Between Equality and Equity. Virtually everybody can embrace the concept of equality in essence without expecting equality in quantity. For example, all humans are equally human even though they don’t all have equal body weight. All racial and ethnic groups can be given equal voting rights without expecting all groups to cast an equal number of votes in an election. Men and women can enjoy equality under the law without expecting them to have an equal number of chromosomes. The equal essence of things without having an equal quantity of things exists all around us without diminishing our sense of justice. This is because the human mind unconsciously equates justice with proportionality, not equality.

Policies & Systems that Emphasize Proportionality Create Equity and Unite Humanity. Understanding the distinction between equality and proportionality is the key to building sustainable economies, fair and just societies, and uniting humans across the ideological and socioeconomic spectra. Policies that invoke a spirit of equality to protect the essence of humanity (life, liberty, pursuit of happiness, etc.) while creating a strong systemic bias in favor of small- to medium-sized stakeholders is how governments and cryptocurrency projects can achieve balance between equality and proportionality within an economy and throughout every capitalistic society. This equality-proportionality balance is what creates equity in all human relationships and transactions, which is the most sustainable way to build blockchain platforms, human economies and societies.

Gini’s Ecosystem is Built on Equity and Proportionality. No fiat or crypto economy is sustainable if it is not built with specific mechanisms that reinforce and protect the integrity of these principles. That’s why the principles of equity and proportionality are the foundations upon which the Gini blockchain and monetary systems are built.

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