Comments on: Response to Jonathan Chait on Inequality

By: lewisklim

lewisklim — Wed, 16 Sep 2009 21:19:50 +0000

Mr. Chait's argument about wealth-as-virtue is his most persuasive argument yet because it rests upon one unassailable and largely documented fact: the transfer of wealth to the have's from the have-not's is unprecedented in our nation's history.
I think his point is not that liberals have a huge difficulty with captains of industry(like Rush Limbaugh) tooling around in their Maybecks and fancy cigars. Rather those who defend the prosperity of the uppermost quintiles assume their wealth doesn't come at the expense of the lowermost quintiles, where, as most economists agree, real wages have flat-lined.

By: lewisklim

lewisklim — Wed, 16 Sep 2009 14:19:50 +0000

Mr. Chait's argument about wealth-as-virtue is his most persuasive argument yet because it rests upon one unassailable and largely documented fact: the transfer of wealth to the have's from the have-not's is unprecedented in our nation's history.
I think his point is not that liberals have a huge difficulty with captains of industry(like Rush Limbaugh) tooling around in theri Maybecks and fancy cigars. Rather those who defend the prosperity of the uppermost quintiles assume their wealth doesn't come at the expense of the lowermost quintiles, where, as most economists agree, real wages have flat-lined.

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By: uknowbetter

uknowbetter — Fri, 07 Aug 2009 03:56:04 +0000

Frequently what I hear from liberals is that income inequality is a problem because the dirty masses might rise up. It's like one friend said to me the other day: “I'm a liberal because I have conservative ends.” I laughed and said I'm a libertarian because I believe that is the best way to achieve liberal ends.

By: thoughts on Wilkinson’s views on income inequality | The League of Ordinary Gentlemen

Wed, 05 Aug 2009 15:38:10 +0000

[...] Wilkinson has done yeoman’s work in his recent posts regarding income inequality, and in articulating some of my own dissatisfaction with certain [...]

By: Brian Moore

Brian Moore — Tue, 04 Aug 2009 11:31:37 +0000

Will, It seems like Chait is arguing with someone other than the person who wrote your paper. Your rebuttals aren't exactly rebuttals, they're pointing out how he's misinterpreting what you're trying to say.

"I don’t sense in Chait’s piece much of a defense of of the idea that income inequality really is important. He seems to me mostly concerned to defend the permissibility of redistribution. "

Yeah -- I think he would really like to believe that you're an evil right-wing free market fundamentalist who only wants to crush the poor and minimize their suffering while you're at it. Why are you disappointing the poor guy?

By: DYSPEPSIA GENERATION » Blog Archive » Response to Jonathan Chait on Inequality

Mon, 03 Aug 2009 18:45:10 +0000

[...] Will Wilkinson is always worth reading. [...]

By: Brian O'Reilly

Brian O'Reilly — Mon, 03 Aug 2009 18:35:58 +0000

It seems to me that Jonathan Chait winds up agreeing with Will in the final sentences of his piece. He writes:

"How are a poor, inner-city kid's life chances affected," asks Wilkinson, "by the fact that some Web entrepreneur makes billions of dollars as opposed to just millions?" They're not. But if the Web entrepreneur has to pay a slightly higher tax rate so the inner-city kid can afford to attend a decent college, or so the kid's parents can see a dentist, how are the entrepreneur's life chances affected?

He's saying large disparities in income are not a problem but poor access to health care and education are and might be solved by redistribution.

By: Brian O'Reilly

Brian O'Reilly — Mon, 03 Aug 2009 18:35:58 +0000

By: Simon K

Simon K — Mon, 03 Aug 2009 18:21:08 +0000

Latin America has institutions that promote, or at least don't prevent, the accumulation of property in the hands of the rich, often at the expense of the poor, because the property rights of the poor (or what we'd consider property rights – they don't function as such there) are either not protected or inadequately protected. You can argue about whether the institutions that promote unequal distribution or the unequal distribution itself are the “deeper” problem, whatever that is, but it certainly seems to me that changing the institutions is a prerequisite for changing the distrbution in any meaningful way,

As a side-point, note that “distribution of economic resources” and “distribution of income” are very different things. In the developed world, at least, lots of people with substantial incomes own very little in the way of economic resources.

By: Thorfinn

Thorfinn — Mon, 03 Aug 2009 18:10:53 +0000

Exactly what sort of "deeper problem" does Latin America have, other than the fact that economic resources are inequitably distributed? It encourages the propertied to hijack the political system through lobbying and rent-seeking (even if the electoral outcome is democratic), while encouraging the poor to revolt. Even from a free-market point of view, these societies tend to have low levels of trust, especially in market institutions. With a poor mass base, the rich find few domestic productive uses of their money, and either purchase monopolies or stash cash elsewhere. Crime tends to be high.

I suppose one could attack crime, trust, investment, poverty, etc. all separately, but these efforts themselves tend to be hampered by the dysfunctional institutions and political organizations that inequality is found with.

But even if inequality had no causal role with these problems, if interventions (land reform as in Taiwan, Kashmir, South Korea, Japan) that reduce inequality have positive outcomes, they might be worthwhile. Many Asian successes are built on an egalitarian base negotiated on policy, and the resulting gains in growth may make redistribution a pareto improvement for all (so, even for the rich).

By: DWAnderson

DWAnderson — Mon, 03 Aug 2009 17:54:45 +0000

The response is that where inequlaity is correlated with other problems it is a symptom of other, deeper problems rather than a cause of the problems. Better to address the deeper problems that worry about the inequality, which is probably unimportant in and of itself.

By: CraigMcGillivary

CraigMcGillivary — Mon, 03 Aug 2009 17:46:11 +0000

I think a more defensible position for progressive utilitarians is that if you face a choice between to economic realities. One of which involves higher levels of GDP but concentrated in the hands of fewer people and the other slightly lower levels of GDP but less concentrated you should choose the latter. Progressives utilitarians would then have to make the case that a certain policy was more successful in these terms. Concerns about consumption vs. investment would be addressed. So as an example it is probably better for inheritance to by default go to all your children rather than just your eldest son assuming you wrote no will.

By: CraigMcGillivary

CraigMcGillivary — Mon, 03 Aug 2009 17:13:54 +0000

Are you saying that a utilitarian would have poor people write checks to rich people in order to increase production?

By: Thorfinn

Thorfinn — Mon, 03 Aug 2009 16:57:21 +0000

While inequality as such may have little negative consequences in the States, it appears problematic elsewhere. Latin America, especially Brazil, and South Africa spring to mind.

Also, achieving a degree of income equality has proved useful politically in eliminating rent distortions and encouraging good economic policies. As Rodrik showed, land reform in Taiwan was a prerequisite for far-ranging reforms. Countries which are broadly unequal seem to have a lower degree of support for market processes; because the rich dominate, markets perceived as “unfair” and even poorly functioning governments are preferred.