In option 1, the pie is growing for all, but for the rich faster than for the rest. In option 2, all of us are poorer, but we are more equal.
I would prefer option 1, while I believe many on the left would prefer option 2 given the proposals to enact socialism and seize property from those who have it.
If the choice were between no growth + equality and growth + no equality I too would choose growth. However, the period of the fastest economic growth in the US (1940-1950s) featured much higher taxes, much lower ratios between the highest and lowest paid, and much more economic equality. The idea that equality and growth are incompatible is unsupported dogma.
This is a much parroted line, but it needs to be pointed out just how exceptional of a time period the 1940s-1950s were in the history of the world. The US at this time was literally the only functioning industrialized economy left on earth. All of Europe, Russia, and Japan were left in ruins. China hadn't even remotely begun to industrialize. Southeast Asia, Africa, and Latin America's GDPs were totally negligible. If you wanted to buy anything beyond raw materials, it came from the US.
We live in a fundamentally different world now, where we must compete in a fully globalized economy. The US has succeeded at competing in high paid, high technology sectors, which by their nature have contributed to the inequality of incomes we now see.
Except for Australia, as manufacturing in Australia was still a thing then. And there were a few other developed nations that survived the war with their economies reasonably intact.
The USA wasn't a total global monopoly. Nor was international trade as common as it is now .
So far as I can tell, the overwhelming drive from most people who hold a view on this, is that they want to be better off personally, they want those they care about to be better off, and ideally they'd like just about everyone to be better off who isn't already living a luxurious life, as long as that doesn't come at the cost of harming those they care about.
Option 1 is not happening - the pie isn't growing for all.
Not just economically. Civil rights taken away, freedom of movement taken away, xenophobic/racist commentary on the rise for now (not just online), children can't afford housing like their parents, work is less reliable, the hours when having to work multiple "gig" jobs are long, more people have to live in crappy shared housing, higher education is getting less affordable, you can't go anywhere without a feeling that both the state and economically powerful entities like your bank, politicians and health insurance are assessing your every action to decide how much to individually reward or punish you in the long run; that sort of thing is a shrinking of the pie as well. Even if you have lots of mobile phones and great internet, that doesn't mean life is unequivocally wealthier.
So, according to my theory, people see that whatever the "rich" are getting, it is coming at the cost of harming those they care about at the moment, so it's unacceptable. But they don't want anyone to be poorer, so they don't want option 2.
I figure if we’re just going to make up random scenarios out of thin air to support our arguments we should definitely include one with ponies.
Growth comes from economic freedom, and economic freedom rewards people who create value. The only way to have the 1% not change and everyone else go up 5% would be crushing controls and oppression of the top 1%, but that lack of economic freedom would make the more general growth impossible. You would just get flight of capital and brain drain to a more economically free country.
People are inherently unequal in drive, intelligence, patience, work ethic, everything. The more economic freedom there is, the more unequal outcomes will be. The less economic freedom there is, the less unequal outcomes could potentially be, but there will be no growth or prosperity. So it seems the two choices are that we can have growth, but some people will gain more than others, or we can stagnate or shrink. I think it's magical thinking that we can just tax the successful into Oblivion and they will just keep working hard and nothing will go wrong.
Is there a viable and realistic non-socialist strategy being proposed for helping in those sorts of situations?
No. The capitalist solution is to become rich enough to participate in the market, or else be denied that opportunity.
Equality of opportunity and access to resources beyond what the control of capital can provide is an inherently socialist concept.