NPR ran a 5 minute segment this morning in which Steve Inskeep asked two economic professionals if inequality is really a problem. I thought the answers were interesting and it creates a fairly reasonable jumping off point to start a discussion. It plays pretty well with the opportunity discussion we're having in another thread.
http://www.npr.org/2011/11/29/142883...lth-inequality
I listened to the discussion and also thought it was good. I tend to agree that the wage stagnation of the middle class and poor is a greater problem then the so called Income Inequality.
In my own simplistic way I've always assumed that inequality is in the nature of things, since some people are clearly born with greater gifts and talents than others. In that way, life really is not fair. At an early age I came to understand that my lack of natural physical ability meant that I would never be a highly paid professional athlete. I also came to understand that I have very little musical talent, and that I am somewhat deficient in higher math. As I have grown older I also realized that certain people have a knack at making money that I lack, and that their ability to earn money seems unrelated to intelligence. That also seems unfair. Why should people who are less intelligent than me make more money than I do? The obvious reply is “why not?”
So long as the financially successful obey the law and refrain from defrauding people, why shouldn’t they make as much money as their ability allows? Arguing against income inequality seems akin to arguing that NBA players should wear ankle weights to reduce the national vertical jump inequality, or that talented musicians should not be allowed to play difficult musical scores because musical skill has been declining over the last ten years, resulting in growing musical inequality. In a word, what’s desirable about income equality, and why is it different than these other forced-equalization ideas?
My guess is that some people oppose income inequality because they think any system that allows the rich to get richer while the poor get not exactly poorer, since their incomes also increased, but at a slower rate, so, let’s say– not significantly richer, is inherently unfair. The unspoken assumption of the “equalization proponents” seems to be that the growing income of the rich is somehow causing the poor to be poorer. The usual solution that is recommended to fix this inequality is some form of income redistribution by taxation. But my question is– what’s right about taking money by force from someone who earned it, in order to give that money to someone who did not earn it?
"Things should be made as simple as possible, but not one bit simpler." ~ Albert Einstein
If you're going to have a small pool of people with a large amount of money and a large pool of people with little to no money, what kind of economy are going to have? The only examples I can think of are third world nations.
India and China are exceptions but I think that is primarily driven by US middle class spending. And only temporary. Like Japan.
Maybe this is just the natural progression of capitalism? Maybe it's just like playing Monopoly - eventually one person has all the money and the game ends.
Great discussion, Gregg. Thank you for the link.
I am also not a champion of "income equality" as such. I work very, very hard to make a good income. And I know far too many people who are unwilling to do the hard work of developing their minds, challenging their limitations, and just plain doing what it takes to make more money -- why should I feel as though the playing field should be leveled?
Where I DO take issue is with the power that comes with extreme wealth, especially political power. There are those among us to whom a greater and greater income is an obsession, a drug. To allow that element of society to influence public policy, to skew laws and regulations in their favor (even to the detriment of public health, public safety, the nation's economic health, and the environment) is not something I can take laying down.
I also think that people who devote their lives to making more and more and more money, accumulating possessions, enormous homes, multiple pollutant-spewing vehicles, consuming resources as though the planet were their personal well.......such people make me queasy. But that's not an issue of income equality - that's just a certain personality type I personally find ugly. This addiction to wealth is fascinating, in the way that a professional eating contest is strangely fascinating, as someone tries to convince the world that they NEED a 10,000sf dwelling for two human beings, and that that's perfectly normal human behavior.
In a perfect world, those with more would be driven by an inner compulsion to help elevate those with less, not with handouts but with education, motivation, inspiration. Seems as though it would make for a world that's much more fun and fulfilling. But alas, that doesn't seem to be how most of the species is wired.
But should we pool all of our resources and create income equality for all, regardless of (as Alan so aptly puts it) our gifts, and our willingness to work? I don't think so, personally. But it does make for an interesting conversation.
for me, it's not so much "income equality" as "living wage" and adequate safety nets to provide a basic quality of life for all.
great link, gregg, although it didn't go quite far enough in explaining solutions.
Education is great, but in the city schools the kids are so far behind before hitting even preschool, I have no idea how you can make it up. If you are struggling to not get evicted, dodge drug dealers, and scramble to get enough to eat how can you prepare kids for school? Contrast that with my grandchildren who grow up with no TV, tons of books and adults to talk to them about colors, numbers, animals, geography etc almost from birth.
Pooling all of our money also may make some people who would normally be high achievers into middle achievers if they cannot see the fruits of their labor. Sometimes I have to go to a government agency (DMV sticks out) and the absolute slow pace and attitude of the workers is appalling- if there is not need to achieve (ie. you will get paid, get raises and have job security regardless of your performance) many lose their momentum.
Boy, I am sure getting tired of this game of shove the liberals into defending something they NEVER asked for or expected. NO ONE is asking to put all money into a pool and redistribute it equally. No one! And until people stand up and demand the right stops doing this, we will never be able to have a serious discussion about the real problems facing our country. People aren't equal. Abilities and ambitions are not equal. No one ever said they were!
Your aw shucks, I'm just a hard working fellow who thinks hard work should be rewarded, doesn't make everyone else in the opposite position. Where is this phantom group who doesn't think hard work should be rewarded? Who are these people who want to redistribute all wealth equally? I really want to know. Who are they? Where are they? I sure wish liberals/moderates would quit going on the defense over these phony 'goals' the right keeps saying we have. But I suppose if they keep us busy over here, we won't see what they are doing over there, which is fast tracking the nations wealth to the top 1% at the expense of the middle class.
Wanting real safety nets for our most vulnerable is NOT EQUAL OUTCOME. Wanting a strong middle class is NOT equal outcome.
I think a lot of the "liberal" argument is not restricting how high one can fly but how far they can fall. Entitlements (the ones for the poor, anyway) try to set a floor as to how low one can go.Originally Posted by peggy
We could set the floor in country as low as many other countries do and allow millions of people to basically starve in the dirt dying from disease and not having access to many of the things we take for granted. Do we want to go there?
Quite frankly I've never heard ANYONE argue for that position on absolute terms. Yes we should have complete 100% wage equality, nope never heard anyone argue it (ok maybe someone in some book argues it somewhere (not Marx), but I don't mean that, I mean anyone I've ever met). And being against that sort of absolute isn't even about phantoms like "deserving" and "not deserving", it is just about the price function.Who are these people who want to redistribute all wealth equally? I really want to know. Who are they? Where are they?
Now worrying about conditions getting worse and worse for the middle class and the poor, well yea. Getting worse? I do believe so. Like for instance: try to afford health insurance without having an employer provide it, it's not just that this costs money, so does everything and where is the expectation that things be free anyway, it's that the cost keep growing and growing far above the rate of inflation. Try to get college classes when they are all being cut back etc..
Also worrying about elite capture of our politicians. This is so obviously going on that I just don't know what to say. And at a certain point it becomes self-reinforcing and we have definitely reached that point IMO. This is the spiral at that point: the rich get richer, they use the money to buy out the politicians, the bought and paid for politicians transfer more wealth to the rich, the rich get richer, they use more money to buy out politicians. Etc. That is the situation now.
Also to what extent does wealth inequality INTERFERE with the ability to solve fundemental problems (by elite capture sure, if BP and Exxon capture our politicians what chance is there for making policy to get off fossil fuels for instance - this is a major major problem we have today, but also by other mechanisms as well). Like can you really have this level of wealth inequality in a functioning STEADY STATE economy? That is a serious question. If the only way to sustain an economy like this is infinite growth, well it seems we have a major problem. Now various government programs at this point are also assuming an economy of infinite growth. So .... both much of the existing government programs AND income inequality can both be problematic if the growth economy is to end.
Trees don't grow on money
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