What This Guy Says about Inequality Will Make You Stand Up and Cheer (or Puke)

I’m tired of arguing about inequality. It’s frustrating. It’s unproductive. Nobody is really interested in the analytical arbitrariness and moral insidiousness of measuring intra-national economic inequality. Nobody is really interested in the fact that multiple mechanisms–some good, same bad, some neutral–can produce the same level of measured inequality, rendering the level of inequality, taken in isolation, completely useless as a barometer of social or economic justice. Nobody really cares. Because many different combinations of causes can produce the same level of inequality, it’s not so clear that high inequality, as such, can reliably cause anything. The consequences of inequality depend on the mechanisms driving inequality. Nobody cares.

I tend to be misunderstood when I say that this or that argument about inequality is terrible. (Poor me!) Will just doesn’t want to raise taxes on rich people! Will just doesn’t like redistribution! But I don’t really care about tax rates on rich people. If the optimal tax had higher top rates, I’d want higher top rates. And I do like redistribution, but it’s got to be effective. Everything’s in the design. “Let’s raise taxes on rich people because that’s the most efficient and fair way to fund this very effective, humane, and fair transfer scheme” is a way better argument–like, unfathomably better–than “Let’s raise taxes on rich people because inequality is too high.” I find it completely vexing that this is not obvious, but clearly it isn’t. Left-leaning folks are very attached to arguing for many of their favorite policies in terms of economic equality, despite the fact that they could argue for the same policies in terms that are at once more cogent and more broadly persuasive.

Anyway, let me just say that if someone points out that the anti-inequality argument for X is terrible, that doesn’t mean he or she opposes X. He or she might be frustrated that you’re screwing up chances of achieving X by making terrible arguments.

I’m tired of this dialectic… Inequality caused states to cut education budgets! No, the recession did. But inequality caused the recession! No, an incomprehensible combination of housing policy, banking policy, financial regulation, normal cyclical adjustments, and yadda yadda caused the recession. But inequality caused ALL THOSE THINGS. How so? It enabled rich people to co-opt every aspect of policymaking and bend it to their whims. Rich people wanted to lose billions crashing the economy? Well, they didn’t MEAN to. Lots of these policies had bipartisan support, expert and popular. Look, states could have cut things other than education/unemployment insurance/nutritional assistance/etc, but they didn’t because Republicans. So democratic bodies are screwing over the poor, and not inequality? No! The Koch Brothers made them do it! Are “inequality” and “the Koch Brothers” equivalent in your mind? Yes!

There are very smart people who think like this. I don’t know what to say to them. Doesn’t matter. I’m too tired to say it anyway and nobody cares.

Now that that’s out of my system, onto the SOTU. I’m Mr Blue at DiA.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center