Invaluable Socialist Logic - Inequality

Link to the second part of Socialist (lack of) Logic.

Socialists' main concern normally is equality, or rather its opposite; inequality. To them, it's the most horrible feature of capitalist societies, and they regularly use studies like The Spirit Level to get their points across; more equal societies are better societes (Also where analogies to Scandinavia are plentiful). They also heavily rely on the measure called GINI coefficient, which shows income distribution/equality throughout a country (0 = everyone has the same income, 100 = one person has all the income; most western countries have GINIs between 20-40)

Anyway, let's have a look at how perverse the effects of equality might turn out.

Let's say we have a country consisting of 100 people. They're all poor, with very little means to get around, living below the PPP $1,25/day (Extreme Poverty Line), with all the bad stuff associated with poverty: disease, low life expectancy, high child mortalities, undernurished etc., etc. Quite bad. On the other hand, however, because they're all more or less equally poor, this country is gonna score very low on GINI, say 5-10.

Now, let's introduce something else. For different reasons, say capitalism or globalisation, 10 of these people start selling their crops abroad, invent some machinery that's terribly useful for foreign people etc. For whatever reason, these 10 people are now a lot wealthier, makes substantially more money, build nice houses for themselves and whatnot. If we ignore spillover effects that socialists generally criticize capitalism for not having, what's going to happen with the GINI indicator? It will soar. Completely fly through the roof. We'd be talking numbers of 60, 70, 80. A riddiculous increase in inequality.

According to the socialist interpretation of GINI, this new country is a horrible place. Inequality, some rich people are extremely wealthy while others are on the brink of starvation. But what has actually changed? Capitalism lifted 10% of the population out of poverty, increasing the standard of living for 10 people - while the rest are still at their previous level. According to Socialist ideals, this country went from equal (and bad) to unequal (and worse), even though only 90 people instead of 100 are in extreme poverty. For all intend and purposes, 90 people starving rather than 100 people starving is an improvement, regardless of what the GINI says.

Since capitalism and globalisation is doing just that, why stop it?

My point here: focus on equality, income distribution or the GINI-coefficient is misleading. It doesn't tell the story and is rather useless to explain lives in different countries. Socialists should stop using it as an argument to why capitalism is bad. Especially when capitalism  over the last 20 years has lifted a billion people out of poverty.