Saturday, April 18, 2009

More inequality thinking...

Lane Kenworth continues his superb series on addressing inequality (and diffusing what I believe to be dangerous political and social side-effects it causes), and really hits home with this suggestion.

Imagine an America in which high-quality public services raise the consumption floor to a high level: most citizens can put their kids in high-quality child care followed by good public schooling and affordable access to a good college; they have access to good health care throughout life; they can get to or near work on clean and efficient public transportation or roads with limited congestion; they enjoy clean and safe neighborhoods, parks, roads, museums, libraries, and other public spaces; they have low-cost access to information, communication, and entertainment via reliable high-speed broadband; they have four weeks of paid vacation each year, an additional week or so of paid sickness leave, and a year of paid family leave to care for a child or other needy relative. Even if the degree of income inequality were no less than today and we still had CEOs, financiers, and entertainers raking in tens or hundreds of millions of dollars in a single year, that society would be markedly less unequal than our current one.
It’s worth emphasizing that markets too boost the consumption floor. New technologies and consumer products—indoor plumbing, cars, air conditioning, cell phones, ipods, and many others—have eventually become affordable for even the least well-off, and in doing so they reduce inequality of living standards. But markets haven’t, and likely won’t, bring us affordability coupled with high quality in health care, education, child care, safety, and mass ground transportation. In these and other areas, government is needed.
The United States provides less in the way of public services than many other rich countries, but we nevertheless have a rich history here, from universal elementary and secondary education to the interstate highway system to the internet. There’s a legacy to build on, and good reason to do so. [More][More] 
We can remain true to our belief in individual responsibility and still provide good schools, just like we do roads. We can allow extreme salaries while not making health care a Faustian bargain with an employer.

In fact, the real danger for those who refuse to contemplate any approach other than winner-take-all is as they win, they are more at risk in our political system, since their numbers become so very small as wealth concentrates.  The political voltage demonstrated by the outrage over CEO salaries and bonuses have resulted in draconian measures that could have been avoided by minimal restraint and/or redistributive taxation. Lacking those efforts, we will instead lose much of an entire financial sector that arguably could be saved simply because they are unsympathetic figures.

Too much extreme wealth has also been acquired by the active partnership of government via lobbying for tax breaks, contracts, or simply soliciting government spending. Indeed, for every example of wealth properly earned (Google) we can usually find a beneficiary of government money (Halliburton).  The assumption of justified rich folks is a suspect as the questionable portrayal of the deserving poor.

I think many at the top know this and realize especially now how daily revelations about how this wealth was amassed is a potential landmine.  Which leads to my fear - that to protect the right to enormous inequality, the first target of the rich will be democracy.


Anonymous said...


I agree that income inequality is a problem (btw were you including medical benefits?), however, the solutions are equally problematic. The fear I have is that we as a society do not have the social capital (unlike your beloved Denmark) or abilty to make large bureaucratic institutions work well, especially without market discipline (see: the public school system.) Even those in the private sector have these problems as in the case of GM, but at least they can (theoretically?)fail if they are not effective. Look at the rent-seeking done by special-interests looking to use the current crisis, where the money. I dislike the farm program as well, but that would be the type of policy we would get for the nation as a whole, not the idyllic world your writer describes. We also need to be careful about forcing others to sacrifice to meet our moral wants. Point is, that if we are to redistribute wealth, we need to damn sure be effective with the money, keep as much individual choice as possible, and keep as many of the incentives for hard work and creativity from capitalism as possible.

Andy Miller

P.S. The "tea bagging" comment was beneath you.

John Phipps said...


You add to the list of things not to do, and the call for inaction. Our ability to see faults in every corrective action is the prevailing sentiment, which is why inequality presents such a intractable puzzle.

I am open to what measures you think will work.

I remain convinced we have passed a culturally tolerable level of inequality, and I am willing to deploy some imperfect tools to at least obtain some empirical data to aid in the solution.

Re: your PS. Like more than a few other bloggers, I was unaware of the multiple meanings of the word. It has caused considerable ribald amusement in the blogosphere. My policy for significant corrections is to strike through and replace, noting the reason. This practice has been unofficially adopted by bloggers because unlike print, we could remove and deny our mistakes. I acknowledge the distasteful reference, but perhaps others can profit from my embarrassment, just as I did from some blogs I read.

Anonymous said...


I think the trick is to try to achieve liberal ends through libertarian means. This means school vouchers, payment towards medical savings accounts, and other direct payments rather than the proposed complex command and control ideas from the 30's and 50's. The main two points of my post is that if we are to lay a moral claim to other's money, we must be really effective with it, and that effectiveness and changes to personal incentives should enter the calculations when it comes to whether we or what degree we "share the wealth."

Andy Miller

P.S. The explanation for the retraction did'nt show remorse for something so offensive, so I took it as a backhanded way of doing it. Sorry for the confusion.