Kevin Drum attempts to answer my question about income inequality. He fails. He tries out a few hypotheses about the mechanism underlying ineuality in income growth and … he is unceremoniously dissected by Russ Roberts, a real economist. After flicking over each of Drum’s ideas, Russ says:
The real problem with these theories of inequality is that they fail to see that the income distribution is an emergent phenomenon rather than under someone’s nefarious control.
That’s part of what I was rather longwindedly getting at in my last inequality post. The statist liberal pundits seem to be so weak on microfoundations that they end up offering simply baffling Underpants Gnome explanations. Russ quotes this nice bit from Warren Meyer of Coyote Blog:
What’s bizarre about all of these statements is it treats wealth, and in this case specifically income growth, like a phenomena that is independent of individuals and their actions. They treat income growth like it is a natural spring bubbling up from the ground, and a few piggy people have staked out places by the well and take all the water before the rest of us can get any.
The mysterious world of numinous unmoored macro forces that are somehow rigged to benefit just the rich is a world of magic and wonder. Good thing we don’t live there.