18 comments

• 

  GilM

  2 years ago

  Will,
  
  This is a very good post.
  
  I've made these arguments before, and have never successfully had an egalitarian liberal change his mind about whether attempting to increase equality through the political process was the best way to achieve his purported goals.
  
  I think that the truth is that they care more about equality than about their purported goals, or logic.
  
  I suspect it's a value they acquired in kindergarten, or earlier, and have a very difficult time examining rationally.
  reply
• 

  Kyle

  2 years ago

  That is an excellent point made by Schmidtz.
  
  So let's redistribute income via luxury taxes / progressive consumption taxes instead.
  
  Then we get even more captial investment and reduce the positional happiness issues.
  reply
• 

  Glen

  2 years ago

  When you ask why economists care about income inequality, do you mean "care" in the narrow sense of "think it's a problem"? Because there's a very obvious sense in which economists, qua economists, would care about income inequality: it's an economic phenomenon whose extent we can potentially explain theoretically and empirically, quite apart from whether we approve or disapprove of it.
  reply
• 

  Will Wilkinson

  2 years ago

  Glen, Yeah, in the narrow sense. Why do they worry about it, is what I meant. It's clearly something worth understanding.
  reply
• 

  T.

  2 years ago

  I think it's something as an economist that you have to end up obsessed with simply because so much of the population is. If you believe in it, you have to prove it can work because so many people obsess over it. If you don't believe in it, you constantly have to debunk it because so much of the population is obsessed with it.
  reply
• 

  Dirk

  2 years ago

  It remains a mystery to me how people can not be upset by gross inequality. I don't care if you're conservative or liberal, libertarian or statist, how can your blood not boil when you are presented with huge differences in income? Is there some gene missing? Is this like being color blind? I am not trolling; I honestly don't understand how people can be relaxed knowing that others make so much more money than them.
  reply
• 

  Will Wilkinson

  2 years ago

  Dirk, Really? Why fixate on money? Why not people who are better looking, more athletic, or something?
  
  I think some people just wrongly assume that wealth is a pie of fized size, and if some people have a bigger slice, then that's just unfair. But if you understand that there's no pie, and that economic activity is a positive sum and not a zero-sum game, inequality just stops bothering you. If somebody has a bigger share than me, chances are they have made me better off, not worse off.
  reply
• 

  Kyle

  2 years ago

  >>If somebody has a bigger share than me, chances are they have made me better off, not worse off.
  reply
• 

  Kyle

  2 years ago

  "If somebody has a bigger share than me, chances are they have made me better off, not worse off."
  
  So what?
  
  Are you completely unwilling to acknowledge that the proximate wealth, attractiveness, ability of another person may influence your level of contentment?
  
  What drives you to earn if not dissatisfaction with your current level of consumption relative to others' you observe?
  
  Likewise, do you not pity the retarded or the hideous or the poor?
  
  I am with Dirk - must be something genetic.
  
  It isn't about justice or fairness except for those seeking justification for change. It is just unfortunate that certain people have to spend their limited time alive in the presence of joy that they cannot know due to circumstance outside their control.
  
  As a sometimes economist, I am well aware of the positive sum nature of markets and even think that income equality is a neccessary feature of growing economies. And yet I am still bothered by the plight of the less fortunate.
  reply
• 

  Will Wilkinson

  2 years ago

  "Are you completely unwilling to acknowledge that the proximate wealth, attractiveness, ability of another person may influence your level of contentment?"
  
  No.
  
  "What drives you to earn if not dissatisfaction with your current level of consumption relative to others’ you observe?"
  
  Having goas that require money to achieve.
  
  "Likewise, do you not pity the retarded or the hideous or the poor?"
  
  Of course.
  
  "As a sometimes economist, I am well aware of the positive sum nature of markets and even think that income equality is a neccessary feature of growing economies. And yet I am still bothered by the plight of the less fortunate."
  
  Being less fortunate than some: not a plight. Not having enough: plight.
  reply
• 

  Kyle

  2 years ago

  "Being less fortunate than some: not a plight. Not having enough: plight."
  
  I am afraid I am too dense to recognize the distinction.
  
  I don't want to drag you into a debate about something you have probably discussed ad nauseum. So just direct me via email to one of your past posts where you lay out this idea in more detail.
  
  Specifically - what do you mean by "enough" and is the conception of "enough" a pliable cultural concept or an absolute measure of what is neccessary for survival.
  
  Thanks, Will.
  reply
• 

  joe o

  2 years ago

  The years 1945-1970 with low inequality in America had real good productivity. Inequality doesn't have to cause a massive productivity hit.
  
  Schmidtz is off on the corn metaphor. Most seed corn is hybridized which means it is a bad idea for Joe Rich to replant the corn he gets from his fields.
  reply
• 

  sourcreamus

  2 years ago

  This is one of the best posts I have ever read.
  I don't think those who are not upset over inequality are missing a gene, they have just made a rational choice. Envying those who are better off and coveting their possesions will never make you happy. They are much more likely to make you unhappy.
  If I am at a restaurant enjoying a hamburger, does the fact that the guy at the next table is eating filet mignon make my hamburger taste worse?
  reply
• 

  Will Wilkinson

  2 years ago

  Kyle, You recognize the distinction. Imagaine you have more in the bank than me. Will you sympathize with my plight? No, because I have had sufficient material resources to develop my basic capacities, and I have enough to enact my plans. The fact that you or anyone else may have more than me is external and irrelevant to my chane of having a good life.
  
  I think "enough" is somewhat relative, but mostly absolute.
  reply
• 

  Tom

  2 years ago

  "...let me say that I don’t really understand why economists care about income inequality qua economists."
  
  A reading of the history of economic thought indicates that the origins of economics seemed to root its concern in inequality.
  
  When Axel Leijonhufvud traced the endevors of macroeconomists, his starting point was Irving Fisher and Knut Wicksell where Axel mentions that Fisher and Wicksell were both deeply concerned with distributive justice.
  
  However, I don't think this is the answer you were wanting. I think your real question is *should* economists be concerned about (income) inequality? For that, I think economists should read more moral philosophy and be required to read Lionel Robbin's article on the fallacy of comparing utilities.
  reply
• 

  Jadagul

  2 years ago

  I find Kyle and Dirk interesting, because I'm exactly the opposite. I can't for the life of me figure out why anyone cares about inequality qua (if Will gets to use it, so do I) inequality. I can see being concerned about inequality if you think it leads to some other bad outcome--as perhaps in Brazil, where the structure of wealth ownership is inhibiting development and growth. But I don't understand what makes inequality ipso facto bad.
  reply
• 

  Sam

  2 years ago

  I think some better reasons to be concerned about inequality would include its potential health and social consequences. Rates of murder and other violent crime, for instance, track a nation' level of inequality (not it's wealth). The same goes for various measures of health and social capital.
  
  
  Correlation needn't imply direct causation, obviously, but some of the patterns are striking, to say the least. Richard Wilkinson's book 'The Impact of Inequality' is a good review of this literature from an epidemiological standpoint.
  reply
• 

  asg

  2 years ago

  Well, it's important to distinguish between instrumental and intrinsic value. It's easy to think of situations where equality might have some instrumental value, but Will (and Krugman, presumably) are talking about intrinsic value.
  reply