Is Income Inequality Really a Problem?

[Alan]

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.

Well, since yours is the first post in this thread to mention liberals, I'm assuming you've shoved yourself into the fray.

By the way, income redistribution is not a liberal trait, but rather a progressive one. To my chagrin, progressives have, IMHO, stolen and debased the term liberal from it's roots in libertarianism. A classic liberal believes in equality, the rule of law, the security of private property, the freedom to make individual contracts and limited government.

Progressives have ruined the term.

[bae]

"Is Income Inequality Really a Problem?"

It depends. On the nature of wealth, income, and the limits of resources.

If there are two men stuck on a 200 square mile island full of fruit trees, salmon swimming up the rivers, hundreds of deer, and that sort of thing, then if one man has an "income" of two apples while the other fellow has only one, I don't see a problem

If the two men are stuck on a 1 acre island, and there's just enough apples to feed them both, and one fellow gathers twice the apples as the other, there may be issues.

If the two men are on a larger island, and one man gathers apples, and the other plants and tends orchards and harvests 10x the apples, I don't see a problem. If the orchard fan decides to claim the land the other fellow is gathering his apples from, then issues arise. Or if the apple-gatherer decides to gather his apples from the orchardist's well-tended trees instead of from the wild, again, a potential problem.

You have to look at the whole system.

In many cases, wealth and income are not zero-sum. In some cases, they are. In some cases, income is the result of fraud or theft of the work or resources of others. In other cases, not.

[Gregg]

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!

One thing that struck me listening to the interview in the car this morning was how Steve Inskeep seemed to be carefully avoiding sticking "liberal" or "conservative" tags on the questions he was asking. This in no way needs to be a partisan issue. Its wrong to think of Democrats as champions of the poor and downtrodden and Republicans as the shield of the aristocracy. The DNC doesn't seem to have any problem selling out $35,000 per head meet & greets. According to Rasmussen reports 34.3% of Americans consider themselves to be Republicans. Even if I just concede the whole 1% as Republican (they're not) that leaves around 104 million Republicans at some lower economic level. It seems like it would be a lot more productive to shed the labeling and examine the real issues.

[puglogic]

I don't see this as a partisan issue at all, so I'm a little confused by that tack.

I do like the thought that together (as a society, not as SLN) we could find a way to solve the challenge: How can we build a society where everyone who's willing to contribute can make enough to have (what they consider) a great life, where no one has to go without life's basic needs, and where -- if one chooses -- one can think/plan/work/sacrifice their way to a higher income, without needing to damage the lives of others in the process?

I'm not even sure there IS an answer that makes all of that happen, but it sure would be nice if there were.

[Yossarian]

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.

Can you have a double strawman? No one is contending the anyone was contending that money be redistributed equally. But that doesn't mean people aren't looking at the disparity and wanting to redistribute some, to spread the wealth around so to speak. As I've said previously the more important issue is ensuring certain minimum standards and opportunities for middle/lower incomes rather than guaranteeing a certain relative position vis a vis the top levels.

[bae]

I'm not even sure there IS an answer that makes all of that happen, but it sure would be nice if there were.

I'm not sure there is, at this point in time either.

I look at it as a systems engineering problem.

Given the current population, the natural resources available, and the demands the lifestyle of the population places on those resources, there are some clear problems.

In the old days, you could stump off into the frontier, homestead some land, claim some resources for your own by mingling your labor with the resource and the land, and make a living.

Today, a new infant is born into a world in which, for all practical purposes, all land and resources are already claimed by somebody else. All that child has, to begin with, is his labor and intellect. And he is not in a very favorable bargaining position to sell his labor.

One problem I see is that we as a society allow people to put to detrimental use shared resources, like air, water, topsoil, forests, and land. This may have been acceptable when our population was small, and those resources were "unlimited", but the resources seem to be straining to handle our current demands.

I'm not sure how you dig yourself out of that hole politely. Libertarian theorists argue for private ownership of all such resources as the best way of protecting and distributing resources, other cultures have had some success with jointly-owned resources being managed by the society for the long-term benefit of all.

I've spent a lot of time the past dozen years being involved in water rights allocation issues, and critical areas legislation to protect wetlands, habitat, aquifer recharge areas, and so on. And what I've learned is...there's no easy answer, given our current society and our layers of history, legislation, and bureaucracy.

One disturbing but interesting examination of the problem is Derek Jensen's Endgame 1 & 2. Also Jared Diamond's Collapse.

[Gregg]

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.

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?

I like the idea of setting the floor. Not that its exactly easy to determine where that should be given the number of variables in a complex society, but it seems like a worthwhile outcome to shoot for. We should be able to determine some compassionate level at which we can insure all of our citizens have decent food, clean water, a reasonable shelter with heat in winter, decent clothing, access to both healthcare and education and, dare I say it, the opportunity to pull themselves up from that floor should they desire to do so. I do not recall any mainstream candidate, or for that matter any reasonable voter, ever saying we should not provide that for anyone less fortunate than most of us in this society. We can do that without any kind of paradigm shift from the way we currently operate. What we will HAVE to do to make it work is make sure we don't (as creaker so aptly said) restrict how high anyone can fly above that floor.

[San Onofre Guy]

Nine Nine Nine

Sorry I couldn't help myself. We have not heard that refrain for a while and I don't think we will!

[jp1]

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.

I agree with you about kids and school. I remember starting kindergarten and being stunned that roughly half the kids didn't know how to read. I'd been taught to read by my mother well before I ever saw the inside of a classroom and couldn't imagine how these kids hadn't had the same experience.

Planet Money had a show a while back where they discussed various programs to help adults develop the basic skills to succeed and found that they basically didn't do anything to improve these people's likelihood of success. The conclusion that the economists studying this had come to is that the necessary social skills to succeed in our work world are obtained at a very young age and that programs like Head Start are incredibly useful at this. Basically the window in the human mind where these skills, like cooperation, negotiation, etc, is only open for a small period of time when we are quite young. The money spent on such programs for little kids will be paid back to the economy at large many many times over, in the form of better productivity, more taxes paid because of higher earnings, etc,, yet these are exactly the programs constantly at threat of budget cuts.

Another Planet Money podcast had on some people who found that in China the cheapest way to improve children's school performance was as simple as getting every kid that needs them glasses. After all, if you can't see the chalkboard you can't learn much. I learned that I needed glasses in 3rd grade when the school nurse did quick eye exams on everyone in my class and sent notes home with the kids like me that failed the exam. A few weeks later several of us had glasses. I'd be curious if this type of basic vision test is still widely done to identify students that need help. And also whether there is money available to struggling parents to help with eye exam and glasses costs for their kids if needed. What a shame if a couple hundred dollars of assistance could be all that's standing between a young student doing well at school and one that falls behind because he doesn't get such a simple thing as a needed pair of glasses to be able to see well.

[bae]

Planet Money had a show a while back where they discussed various programs to help adults develop the basic skills to succeed and found that they basically didn't do anything to improve these people's likelihood of success. The conclusion that the economists studying this had come to is that the necessary social skills to succeed in our work world are obtained at a very young age and that programs like Head Start are incredibly useful at this. Basically the window in the human mind where these skills, like cooperation, negotiation, etc, is only open for a small period of time when we are quite young. The money spent on such programs for little kids will be paid back to the economy at large many many times over, in the form of better productivity, more taxes paid because of higher earnings, etc,, yet these are exactly the programs constantly at threat of budget cuts.

The results from the Perry Preschool Project present pretty compelling evidence for the important of early childhood education.

http://en.wikipedia.org/wiki/HighScope