But they won't stay the same. A rising market floats all ships, etc., so if income is doubled, then goods and services have to pay those higher wages, and the costs go up.
A person in an economy is better off making twice the average income than a person making less than half the average income, on a peer-to-peer basis.
For example, we bought our first house in a low-income area, and elected to commute to a high-income area to work. We got more house and less taxes for our money, and in a few years were able to save enough to get the house we really wanted. If the average income in a system is halved, then higher prices are not supported.
In our case it had nothing to do with peer rivalry-It was a sound economic strategy that paid off.
I think that you sort of missed the point of this exercise...
Actually, Neal Boortz talked about this sort of study (it may have been the same one, for all I know) some weeks ago.
This whole thing is more about class warfare and envy than anything else. And that many people would rather see others fail, even if it winds up costing them in both the sort and long term!
Mark
Exactly. Because the price of goods is related to the amount of money chasing those goods, under the first option prices would stabilize to a point where you would enjoy a much greater standard of living than under the second. While your nominal income is greater in the second option, your real income is greater in the first.