Re: Inequality
Will Wilkinson raises some characteristically interesting and useful questions related to the politics of inequality in a recent post.
Will asks:
Take the group that voted for Obama and the group that voted for McCain. Calculate the Gini coefficient for each of those two groups. I’ll bet $1000 dollars that income inequality is higher in the Obama-voting group. If Matt doesn’t want to take this bet, then he needs to explain why divergence in material circumstances poses more of a political problem for Republican coalition-building than it does for the Democrats–the more economically unequal coalition.
While I haven’s seen analysis at the individual level, I’ve done analysis at the county level that indicates Will is almost certainly right about the higher level of income inequality among Democratic than Republican voters. I think the reason this indicates that inequality poses “more of a political problem for Republican coalition-building than it does for the Democrats” is, to simply greatly, that if inequality of condition causes a preference for Democratic policies, then as inequality increases, you will get more Democrats. If it’s a marker for other causes of Democratic voting, then it’s a marker for things that make more Democrats. The idea of a coalition of aristocrats and the proletariat against the petite bourgeoisie and yeoman farmers is not a new one.
Will goes on to ask:
Here’s something people haven’t been talking about. How much has the recent runup in income inequality reversed due to the financial collapse and general economic slowdown? If it turns out to be a lot, will Democrats (and Republican inequality hawks like Jim Manzi) accept that the grounds for redistribution have weakened?
There is likely to be a significant reduction in inequality if we head into a major recession. There was between 1928 and 1932, for example. Though another big decline in inequality occurred between 1932 and 1942, whereupon inequality remained at historically low levels through the 1970s. Here’s a long-term trend chart:
Inequality will presumably become less salient if almost everybody gets a lot poorer and has expectation of getting poorer still. This might be due to a reduction in the friction caused by inequality, or alternatively, that friction could stay the same or go up, but other economic problems could just be even worse. I understand that there was a little grumbling about inequality during the 1930s.
But of course using a major recession to reduce inequality is like using a major recession to reduce the price of oil – the cure is worse than the disease. I have always argued that the challenge is to continue to get good economic growth while containing extreme inequality. I have always argued against redistribution as a way to attack this problem.
Why does a person with whom I agree about so much find inequality to be much less troubling than I do? I’ve thought a lot about this, and I believe that ultimately it’s because I see the world as a much more dangerous and violent place than Will does. I think that living in an extended, law-bound, commercial society is deeply unnatural, and the product of many generations of work. Aspects of human nature are an acid that constantly undermines its foundations. Hordes of violent men are always outside the city gates ready to sack it, and those inside always threaten to turn into a mob and destroy it from within. One of many bulwarks against these threats is social cohesion, which is undermined by extreme inequality.
Income inequality over the last 15 years was much higher than consumption inequality. Of course, that’s not sustainable.
The basic economic consensus of this decade was that the working class would consume far more than they earned, while giving IOUs to the rich. Everybody would get what they wanted, so everybody would be happy.
How’s that working out for us?
— Steve Sailer · Nov 7, 04:11 AM · #
Why does a person with whom I agree about so much find inequality to be much less troubling than I do? I’ve thought a lot about this
What’s to think? People who don’t think that inequality is troubling have defective moral instincts. That’s what libertarianism looks like from the outside.
— Danny · Nov 7, 01:38 PM · #
Danny:
I didn’t mean that Will’s moral instincts are defective. I purposely painted my take in somewhat hyperbolic terms. Basically, it’s the difference (or at least a difference) in temperament between a conservative and a libertarian outlook. Having some people of each is probably better for a society than having all of one or the other.
— Jim Manzi · Nov 7, 02:08 PM · #
a difference in temperament between a conservative and a libertarian outlook
Hey, I’m on the center-left, so a pox on both of your houses… Seriously, I get being a conservative – it’s best to wait until the service pack is out before upgrading your operating system – makes perfect sense. Also, fostering traditions and loyalties is a good thing, plus whatever else Burke said. Libertarianism, on the other hand, is Asperger-ish.
I didn’t mean that Will’s moral instincts are defective
I know you didn’t.
— Danny · Nov 7, 03:26 PM · #
I think that living in an extended, law-bound, commercial society is deeply unnatural, and the product of many generations of work. Aspects of human nature are an acid that constantly undermines its foundations. Hordes of violent men are always outside the city gates ready to sack it, and those inside always threaten to turn into a mob and destroy it from within.
Sounds like a scary place.
While it is not mine, I think this worldview is shared by many. In the past the Republicans have dominated when in comes to utilizing fear to win elections, but this year was different. As these acidic aspects of human nature started to become hard realities for more Americans the bottom line turned out to be: which candidate has the discipline, temperament and focus to lead in a time when our fear is tangible, not theoretical? Here, McCain blew it and Obama killed.
— heather · Nov 7, 04:12 PM · #
Manzi’s world view is spot on.
Because it is underscored by the iron laws of evolution that are written in our blood and bone.
In the EEA tribes arose first as consanguinous kinship groups, then later as memetic kin groupings like political parties and religions.
Government is an invention designed to build a consensus metatribe.
The problem with the tribe of conservatives right now, is not economic inequality, but genetic inequality, ie the bellcurve of IQ. That is why crafted language.
For example, vouchers is crafted language for not every one can or should go to college.
But that is unacceptable to the base.
— matoko_chan · Nov 7, 04:54 PM · #
“Hordes of violent men are always outside the city gates ready to sack it, and those inside always threaten to turn into a mob and destroy it from within. “
The really effective hoards and mobs don’t self-organize. There is some discontent that is manipulated by political figures until the hoards erupt and change or destroy the curent status quo. It doesn’t have to be violent. You can see this pattern over and over thoughout human history. It is something that could happen here. In the 60s leftist were explicitly trying to bring about a revoloution. And the whole talk about elites and real americans is an attempt to by a political party to use some percived discontent to create a “mob.” They just wanted this mob to vote, not go on a starbucks burning rampage, but it’s the same principal. So, a good machiavellian knows that one big key to stability is to address discontent. Vast income disparity can be a source of discontent.
I’m thinking that our current disparity is mostly a result of a new economic paradigm based on the introduction of information technology and globalization helped along by the tax policies of the past 8 years. Look at when the trend line really started spiking. But I’m no expert. I do know that productivity has been rising at an enormous rate but that the benefits of that productivity haven’t been “spread around.” That’s probably too sophisitacted a concept to stir up a good ignorant mob, but maybe if some charasmatic figure could explain that in just the right terms….
Anyway—the income disparity aside—I do think that ordinary americans have been very badly served by the elites in at least niominal control of the economy. The tax policy, the frickin war in Iraq, the passion for deregulation serving the interests of a few, the years of ideological-sourced mismanagement…. Obama could have really stirred up some anger if he phrased things in a different way. People interested in the economic status quo should be actually thanking their lucky stars that he is—at least on the surface—as moderate as he is.
— cw · Nov 7, 06:29 PM · #
As long as there’s a chicken in every pot, relative inequality isn’t quite as bothersome. When everybody’s at least meeting a general minimum, there’s not as much uproar. But when people start coming up short on basic items – food, clothing, shelter, rights, medical care – then that’s a problem. I think it honestly doesn’t matter to most people whether Bill Gates has $5 billion or $5 trillion in the bank. It matters whether or not they have $50 to fill their gas tank this week.
Looking at the top 10% or 1% or 50% of the income level isn’t going to show you what you want to know. I’m not sure what would. Percentage of people at or near the poverty level? Percent of people who’ve had their incomes decrease more than x%? Unemployment? Some combination of the above?
— Tel · Nov 7, 06:32 PM · #
Its OK, Jim. Danny, My moral instincts ARE defective, which is of course why I think it’s okay to kill fetuses and increase the stream of foreigners who threaten the integrity of the social fabric by making funny noises and cooking pungent dinners. My opinions about inequality are just another example of my perversity and brokenness. Can you help me?
— Will Wilkinson · Nov 7, 07:15 PM · #
I know this is going to piss someone off, but this is essentially what Tom Friedman wrote in his book, in between all the lines about “flattening” and “the great convergence”.
— Joel · Nov 7, 07:50 PM · #
This is a point more libertarians and conservatives need to understand.
There is always the recourse to force to take what you want.
Ayn Rand could run her stupid mouth all day about how I’m a “looter”, but when I got tired of listening I’d just bash in her skull and take her stuff
— libarbarian · Nov 7, 07:58 PM · #
hehe.
Will’s right, time’s up guyz.
Libertarianism has got to trump socon values, or the GOP is done.
Figure out the crafted language to break it to the base however you want.
— matoko_chan · Nov 7, 08:03 PM · #
And quit being coy.
Neither Sarah Palin or Joe-the-Plumber has the IQ chops to read here.
— matoko_chan · Nov 7, 08:05 PM · #
It is hard to see how conservatives square this desire to avoid redistributive policies with their equal committment to religious virtues which in the Judeo Christian tradition are all radically redistributive! Think about the concept of the Sabbatical and Jubilee years.
— David S · Nov 7, 08:06 PM · #
That’s the respect for your opposition we know and love, Will.
— Freddie · Nov 7, 08:21 PM · #
I think cw touches on a point missed by many in this discussion. Because of growth in global trade and IT infrastructure, something like 250+ million new workers have “come on line” in the last 15 years. These new workers are distributed across the skill spectrum— from Bangladeshi shoe manufacturers to Indian finance professionals building models for investment bankers.
One result of this nation’s worth of of new workers has been the general devaluation of labor. This is exactly what micro-economics would predict— as the supply of available labor increases, the value of that labor decreases. The other side of this coin is that scarce resources have become more valuable— namely education and capital.
I would venture that the impact of these new workers has been one of the biggest drivers of growth in inequality within the US (and worldwide). That is what it is also fundamentally flawed to view this problem from a wholly US-centric frame of reference.
If you only look at the growth in inequality from the point of view of a single country, then you might conclude that we need a more progressive tax policy, or that free enterprise is discriminatory, or that property laws create entrenched and insurmountable class disparities. These conclusions would likely lead to sub-optimal decisions regarding regulation, taxation, redistribution, capital allocation, etc— especially when taken to the extreme.
However, if you take the world-centric view of the problem, and accept the fact that there is no putting this genie back in the bottle (and who would want to anyway? humanity has benefitted tremendously from it), then you can reach an entirely different set of conclusions. For one, it become immediately obvious that the most important goal should be to get as many people up that education and training curve as possible. It also leads one to conclude that, given the enormous economic leverage available to a productive enterprise today, accumulation of wealth (and resultant disparities) are probably more likely today than they were in the mid 20th century.
This is not to say that the current tax regime has not contributed to the current level of disparity— undoubtedly it has. But I would guess that the correlation of the above chart with growth in global trade is MUCH higher than it is with the top marginal income tax rate.
— maxwellthedog · Nov 7, 08:28 PM · #
Jim: “One of many bulwarks against these threats is social cohesion, which is undermined by extreme inequality.“
The most efficient cohesive is a shared normative structure and worldview. If you have that, income inequality is a lot less important — a lot less. (Note: this is (was?) the secret to America’s success, along with geography — even though our Gini index is twice that of Sweden’s.)
You hint at it, but redistributive policies should be measured not in terms of equality and inequality, but rather, in how necessary and effective they are as centripetal social forces. A study by Norman Frohlich and Joe Oppenheimer demonstrates how this actually works (From Marc Hauser’s book):
When the rules of the game are universally accessible and acceptable, income inequality becomes a secondary or tertiary concern.
— JA · Nov 7, 09:58 PM · #
JA
That was an excellent post. It feels like we are really getting somewhere here.
— cw · Nov 7, 10:27 PM · #
What “produces” voters is never going to be a one-to-one question. The logic is more dreamscape than mechanical.
If you are concerned about inequality’s effects on capitalist democratic structures, it’s worth noting that it is only one moment of the income statstics – and the others, stagnant median wages, increased income volatility, (what I believe is) larger kurtosis etc. do not bode well either.
It’s clear you two are talking past each other of the effects of inequality – Will (probably) thinks it is akin to some people being short and some being tall, with little cross effects (maybe the tall lift up the short or whatever). I can’t tell how Hobbesian you are with your concerns – if it is just a matter of the poor wanting to club the rich because they are jealous. As a lefty I tend to be worried about issues of access – to education, political structures, health care, etc. That lack of access, which can be compensated under inequality by a government, is where you can get the social self-destruction you are worried about.
I imagine you and I would agree that improving the stability of middle-class lives, regardless of the underlining distribution, has important spill-over effects – people are more open to innovation (you are less resistant to potentially losing your job if you have health insurance waiting), less reliant on government, etc., whatever else we’d disagree on related.
— rortybomb · Nov 7, 10:28 PM · #
Goodness, empirical support for part of my opinion! What’s the title of that book, JA?
— Tel · Nov 7, 10:31 PM · #
The most efficient cohesive is a shared normative structure and worldview.
But yearning for the 50s, I’m afraid, is not a policy position. Contemporary life makes broadly shared normative structures and worldviews impossible, and moreover I don’t want to imagine the practices necessary to make it possible.
— Freddie · Nov 7, 10:34 PM · #
In terms of dishonesty and moral defficiency, I’ll definitely tag Will on this statements: “Here’s something people haven’t been talking about. How much has the recent runup in income inequality reversed due to the financial collapse and general economic slowdown? If it turns out to be a lot, will Democrats (and Republican inequality hawks like Jim Manzi) accept that the grounds for redistribution have weakened?”
First, it’s dishonestly implying that Evul Demonokrats take pleasure in the economy being trashed (by the rightwing measures, please note). Second, it’s dishonestly implying that a trashed economy means that helping out those at the bottom is less urgent, than more urgent.
Frankly, peopple who make statements like Will did should be considered to be scum.
— Barry · Nov 7, 10:56 PM · #
I don’t think it is necessaryily inequality that leads to instability in a politcal system. Instead, it is change in income over the course of ones life and across generations that is more important. Look at china and Russia for example. During the middle part of the 20th century, as communist countries, income inequality was essentially zero. The only force keeping order in those societies was an oppressive state. If you look at these two countries today, the regimes are far more stable with far less coersion even though there is far far more income inequality because there is an expectation even by those at the bottom that the future will be better. Stagnation and even worse decline are the biggest threats to stability not inequality. If you look at the three greatest periods of stagnation/decline of the 20th century in America (great depression, 70s stagflation, and today’s troubles, it wasn’t the politician who promised to redistribute more wealth (barbarians looting the city?), but the pols who offered the most optimism (a new deal, morning in America, hope) that won the day.
Now you could immidiately throw Japan’s long stagnation and the continued dominance of the LDP as a counter example, but I think there may be something cultural unique that is also in play there.
Please forgive any gramatical/spelling errors as this was written on my iPhone as I wait for a plane in phoenix.
— Don · Nov 7, 10:59 PM · #
JA
Good comment – I second a link to the book, and to the quoted paper by Frohlich/Oppenheimer.
Though it is important to ‘air quote’ a lot of those empirical ethics/game theory stuff. I’m not sure if he proved inequality doesn’t matter as much as a group of college students at the University of Maryland in the early 90s didn’t care about inequality during a scripted game they played.
From the reading though – I’m not sure if it was the agreed upon standard (normative) as opposed to being able to participate in the voting of the standards that gave them their ‘satisfaction and confidence’ – the difference in being in a democracy and performing democracy. Hence access has a major role to play. (Also that ‘floor’ thing is key – does that include health care?)
Your broader point, to paraphrase Aaliyah, is that inequality aint’ nothing but a number, is very important. It’s the effects within groups that are important.
— rortybomb · Nov 7, 11:17 PM · #
CW, thanks.
And sorry guys, I meant to include a link to Hauser’s Moral Minds and Frohlich and Oppenheimer’s Choosing Justice. Since I dropped those particular balls (ahem), here’s a link to a somewhat critical review of Moral Minds by Richard Rorty in the NYTBR.
And if you’ll keep it on the hush-hush, here is a link to my notes from Hauser’s book (basically a collection of quotes culled from the text).
And Freddie, the 50’s — like Salafism — is a bad example of “a shared normative structure and worldview.” Kind of like how Al Davis is a bad example of how to own a team: they are both not very robust when “the facts on the ground” evolve.
— JA · Nov 8, 12:32 AM · #
Rortybomb: From the reading though – I’m not sure if it was the agreed upon standard (normative) as opposed to being able to participate in the voting of the standards that gave them their ‘satisfaction and confidence’ – the difference in being in a democracy and performing democracy.
Both were stable over time, but the latter — with the added effects of performative democracy and intragroup transparency (including reputation) — had additional positive features like the doubling of efforts by those on the bottom rung and total satisfaction.
— JA · Nov 8, 12:38 AM · #
JA / cw / rortybomb:
As always, great comments, thanks.
I did this post in response to Will’s, which was focused on income inequality, and it makes it seem like i think this is more dominant than many of the related issues that you are raising. The first article I ever did for National Review was on CEO pay, and here’s how it ended:
Income inequality is an issue, but not the issue.
— Jim Manzi · Nov 8, 01:56 AM · #
Jim, you were perfectly clear on the definite vs. indefinite article. Your post just sent my brain reeling into “thoughtful” mode, as opposed to the “imbibernation” which attends the other rainy Friday afternoons at the Hamilton County courthouse.
That’s why I love you, man.
— JA · Nov 8, 02:06 AM · #
“Income inequality is an issue, but not the issue.”
Yes. For me, what seems more important is controling health costs and improving access to quality education for everyone, from kindergarten to grad school. Plus not wasting money in unecessary wars. Although, I still think it is outrageous the money the CEOs get. It’s like the eramark thing in that in reality it is not that important but it serves as a potent symbol of more serious problems. It’s a symptom of something wrong in our society. The tip of the iceberg.
This little conversation has mushroomed in my mind all kinds of outrages with which to stir up angry mobs. You guys out there currently designing the new conservative party might want to get in touch. All though most of my outrages are the kind that appeal to leftists.
— cw · Nov 8, 02:51 AM · #
PS I forgot to say that maxwellthedog also had a really good comment. Figuring out what the actual cause of the inequality is necessary in order to figure out what you can do to mitigate it.
— cw · Nov 8, 03:00 AM · #
Or, as I put it on my own blog some time ago in a post entitled “The Problem of the Poor”:
Now, the question is, “why do we need to do something as a society about the poor anyhow?” Well, there is a basic problem: human beings will not voluntarily starve to death simply because there is no economic niche for them. Marie Antoinette found that out the hard way…
I laid out then some alternatives for dealing with the problem:
1. Extermination. Ick. Not to mention that the poor won’t peaceably submit to being exterminated.
2. Imprisonment. Ask California how well that project is working. ($10B prison budget, bigger than the schools budget!)
3. Welfare and television. Ick. Doesn’t add anything to the economy.
4. Put them to work. You have idle men sitting around doing nothing in a threatening manner? Find them some jobs that pay a living wage, no matter what it takes to do so, even if it requires creating such jobs from thin air doing things like e.g. picking up all that friggin’ trash on our freeways.
and then the final alternative: Do nothing, and find out that in Darwinian Libertopia, those who lack the skills to sustain themselves will not peaceably die — they will come take what they need to survive. And those of us who do have property will end up dead.
In other words, income inequality is a problem for me (someone in the top 10% of wage-earners) because I value my neck. Just ask the French and Russian aristocracies what happens when the peasants are starving. Oh wait, you can’t, because they’re all dead. So I agree with you 100% on why we should be worried about income inequality. As a student of history, my neck starts itching when I look at the current situation…
— Badtux · Nov 8, 03:30 AM · #
Inequality is more than a political problem. It produces financial crises like the one we are seeing now. The reason why is simple. The value of the economy’s assets is proportional to the economy’s output. Since this output has to be bought (otherwise it would not be produced) it is directly related to the income of the broad middle class consumer. Rising inequality means the rich (those who spend a small fraction of their income on consumption) have more money to invest relative to the value of things in which to invest.
This must mean that the market valuation of assets must rise as inequality rises. Such a process must eventually lead to a financial bubble, which when it collapsed produces a financial crisis. The spacing of major panics in the pre-New Deal era (1819, 1837, 1857, 1873, 1893, 1907, 1932-3) suggests it takes a couple of decades to build up enough of a bubble to get a full-scale crisis. The first big bubble in the post-New Deal era was the stock market bubble of 2000, which happened 19 years after the start of Reaganomics, right on schedule.
As long as high levels of inequality remain, we will get bubbles and crises. And since the authorities are doing everything possible to prevent the depression that normally follows a crisis, it is likely that the “recharge rate” will be a lot less than 20 years. That is, if the authorities are successful in staving off disaster (as I think they will be) we will be right back in this situation within a decade.
But as the 2008 election shows, this sort of economy is a bitch politically, causing problems for the party of inequality.
— Mike Alexander · Nov 8, 04:11 AM · #
Mike Alexander: Great post. The media and others really are doing an injustice to the current economic woes. The financial crisis was a direct result of the failure of consumers to continue to either spend current earnings or have confidence that any debt taken on for current spending could be paid down with future earnings. This then caused the financial crisis, which, was exacerbated by the rising value of non-productive (i.e. – speculative assets) which made everything more expensive.
The problem conservative and libertarians are going to have to contend with is that their inherent belief in individual rights (and opposition to any policies with the inherent goal of redistribution of wealth) is actually counter-intuitive to a thriving, non-volatile economy.
Take it for what it is worth – but either the government spends in place of the middle-class consumer or the middle-class consumer gets some of the wealth which has concentrated to the wealthy and GSE’s (China/Russia etc…).
Otherwise, productive assets and the demand necessary to support the billions who need to earn labor through productive labor will continue to decline.
— Brad · Nov 8, 09:39 AM · #
The fatal flaw in Republican economic policies that have greatly encouraged the latent trend to income inequality is how do you sustain an economy in which 70% of GDP is based on consumer spending when the real incomes of 80% of the country are declining. For the past seven years cheap money has allowed the 80% to carry on spending as if their incomes were still rising byt alas they are not. Whether the right wants to accept it or not we’re going to have to undergo a period of mild redistribution to get the economy moving again and to keep it moving. The era of CEO’S earning 400 times the median wage is not sustainable.
— John · Nov 10, 09:43 PM · #
You asked a very good question, and I’d like to offer an answer. Inequality doesn’t bother me personally because it doesn’t mean anything to me that someone else has more. It doesn’t change how much I personally have. But I think the lack of social cohesion for which you blame inequality is actually the result of greed. If greed is the problem and not inequality, then economic equality is not the goal we should pursue. Especially not if the pursuit of inequality results in forcing society as a whole to become poorer.
It seems to be that blaming inequality (which means blaming rich people) for other people’s greed is a lot like blaming a good-looking woman for being raped. You’re not blaming the envy of those who desire to take from others their property; you’re blaming property owners for owning property.
But I’m sure you believe that that tramp got what she had coming to her. It’s not the rapists’ fault; it’s her fault.
— JohnJ · Nov 11, 01:39 AM · #
Here’s an idea: instead of blaming the wealthy for inequality, how about blaming the poor? If they weren’t poor, there wouldn’t be as much inequality. So let’s force them to earn more to reduce inequality. It solves the problem of inequality, right?
But that idea would be as wrong and stupid as forcing the wealthy to earn less.
— JohnJ · Nov 11, 05:14 AM · #
Just an observation-
That graph is almost perfectly inversely correlated with the top income bracket’s tax rate, even to the point of seeing a little dip in inequality during the Clinton years.
Interestingly, neither tax rate nor inequality seems to have any obvious correlation to GDP growth.
— MrIncognito · Nov 12, 02:17 AM · #
JohnJ Inequality doesn’t bother me personally because it doesn’t mean anything to me that someone else has more. It doesn’t change how much I personally have.
For a given aggregate income, and position in the income distribution, the level of inequality must affect what you have.
JohnJ But I think the lack of social cohesion for which you blame inequality is actually the result of greed. If greed is the problem and not inequality, then economic equality is not the goal we should pursue. Especially not if the pursuit of equality results in forcing society as a whole to become poorer.
There is no reason to believe greed causes the decline in social cohesion associated with high levels of economic inequality. There is little evidence that more equal societies would be poorer, in fact the opposite is more likely to be the case based on our own history.
— Mike Alexander · Nov 12, 02:21 AM · #
As a 100% Chinese born and raised in Hong Kong – the place on which M. Friedman heaped so much praise for being the closest libertarian utopia he had ever dreamt of, three cheers to Jim’s observation that the world is a REALLY dangerous place, from a Chinese and Hong Kong perspective.
In my place, everything seems to be fine – gee, we have even more 30-storey-plus skyscrapers than any US city, save for NY. We have Porsches, Ferraris roaming on the streets. Feasts of shark fins AND black truffles in one shot are nothing strange. Yet we rank among the worst in the world in terms of the gini coefficient, and wage growth has always been laughable within the lower middle-class and “proletariats”.
But then why we don’t have any revolution – yet? Thanks to a very socialist public housing policy which provides shelters for roughly 30% of the population (but now being slowly dismantled to give way to…property tycoons; maybe you have heard of the name Li Ka-shing), and a not too indecent social security system (though our govt and the press have an implicit campaign of branding welfare dependents as parasites, despite a good many are elderlies and/or physically-challenged). So for the time being even the poor can still have housing and schooling, maybe even slightly better than the average slum in the US. Also we have to thank the communists who had/have been in power – their gross atrocities for decades have left a huge stain on the leftist brand (even Keynsians and Euro social dems are included) in the minds of our Chinese population, such that any Social Darwinist or “Dickens novel”-like world BEFORE (and produced) those communist revolutions have become 100% justified, in a Pavlovian manner. So basically many who can’t make their ends meet still insist on “going/dying on their own” rather than living on welfare, much against the homo economicus assumption but to the glee of our local Rights (who praise these fellows as if they are Lei Feng, the CCP poster-kid of “self-sacrifice for the sake of the nation”). And for a more extreme and rougher version, you can just look north to the PRC – communist in name only but Social Darwinist in practice, where people are indeed “going on their own” literally, by hook or by crook, grabbing anything they want by whatever means.
Thus here we are – some policies that the Friedmans would decry in horror are actually saving the day, plus the help of a Pavlovian fear of the word “LEFT” and the resulting justification of anything bearing the tag “RIGHT”. Yet when people begin to feel the bite of reality, thing may change and we can never bet on the worst of human nature – as a Chinese our nation have a long history of peasant rebellions and cannibalism in times of extreme inequalities and natural disasters, and some are casually mentioned in a few words in the official chronicles. And I don’t even need to mention why there were the more recent communist revolutions.
So for libertarians who are not unlike communists in temperament (a recklessly happy-go-lucky belief in “progress”), such bloody chapters in world history should be good reads. And it’s good to see some conservatives like Jim are now standing up, alerting everyone on the right of that real bloody world.
— Toby Chiu · Nov 12, 04:43 AM · #
JohnJ: “Interestingly, neither tax rate nor inequality seems to have any obvious correlation to GDP growth.”
Tax rate: perhaps correlated over the short term, but definitely not over the long term. (In developed countries since WWII, taxing in the ranges in which countries have been taxing.)
Inequality: some positive correlation to growth over short periods. Over long periods, both wealth and income equality correlate quite strongly with higher growth.
— Steve Roth · Nov 12, 05:30 PM · #
Toby:
Thanks for your comments. I actually lived in Hong Kong, as well as some other parts of Asia and Sub-Saharan Africa, for several years. That epxerience was influential in shaping some of my views.
— Jim Manzi · Nov 12, 06:50 PM · #