Why don’t people care more about economic inequality?

by on April 21, 2017 at 7:55 am in Economics, Philosophy, Political Science | Permalink

That is the topic of my latest Bloomberg column, here is one bit:

One possibility is that a lot of talk about inequality gives the audience the impression that it is inevitable, and thereby renders potential remedies less urgent. Another speculation is that human beings are constantly evaluating the status of others. To the extent analysts reiterate that some group of citizens doesn’t have as much, maybe they’re actually reminding us that those citizens hold a lower social status. Perhaps subconsciously, we then respond by thinking those citizens deserve less, or by downgrading the urgency of their needs.

Another possibility is that talk about economic inequality increases political polarization, which lowers the chance of effective action. Or that criticizing American society may cause us to feel less virtuous, which in turn may cause us to act with less virtue. Perhaps if critics of inequality praised this nation more for what is has done to redress inequality, rather than criticizing it for the gaps, that might cement a self-image of Americans who are capable of tackling this problem, and thus spur interest in additional progress. That mechanism shouldn’t sound so strange to anyone who has tried to raise children.

When I bring up such points in dialogue, I’ve found that a lot of my fellow academicians retreat to the moral platitude that the “good guys” simply need to fight harder against the special interest groups. Maybe so, or maybe that response is just another way of digging in deeper to what so far has been a losing battle. The reality is that income inequality has gone up a great deal since the early 1980s, and we haven’t done so much to reverse the basic trend. The potentially egalitarian effects of  tax increases under the past two Democratic presidents and Obamacare have been outweighed by globalization, which benefits most those individuals who can access global markets, and by increases in the returns to highly skilled labor. The reality is that government expenditures have not become radically more poverty-reducing over the last few decades, although we do send more resources to the elderly.

Do read the whole thing, the various biting comments about other academics are in other parts of the piece.

1 rayward April 21, 2017 at 8:12 am

Cowen’s post is good. I will add three points. One, inequality is a good thing (incentives and all that) until it’s a bad thing (financial and economic instability and all that), but the dividing line between a good thing and a bad thing is very difficult to discern, at least until a financial crisis or other adverse event make it apparent. Two, even knowing the dividing line doesn’t inform us how to mitigate inequality, to reduce it to the level where it’s a good thing and not a bad thing, without unintended (and negative) consequences that might make matters worse not better. Three, excessive inequality, like all imbalances in a capitalist economy, are self-correcting, absent intervention by governments and central banks, although the self-correction can be very painful. Cowen seems to believe we are on a path to a self-correction, a Great Reset, the end result being a return to faster economic growth and shared prosperity. At least until we return to another cycle of excessive inequality and another Great Reset. We are doomed to repeat the cycle because, well, that’s why it’s called a cycle.

2 Roger Sweeny April 21, 2017 at 8:38 am

Three, excessive inequality, like all imbalances in a capitalist economy, are self-correcting

Why would that be so? Some people are smarter. Some people work harder. Some people last longer on the marshmallow test. Smart, hard-working parents who defer gratification then model their behavior for their children–who grow up the same way and then marry the same kind of people. Who then have children and start the cycle anew. Several generations of meritocracy would seem to increase inequality.

Especially given Dan Seligman’s theory. One of the perquisites of success is that you are more desirable as a mate and can choose a more physically attractive mate. After a while, successful people are not only smarter, harder working, etc., they are also prettier. Which makes them even more desirable as mates.
it’s endogamy squared. For some anecdotal evidence, watch Jerry Springer. Man, are they ugly.

3 MMK April 21, 2017 at 8:49 am

Until the poor uglies massacre the rich pretties.

4 Alain April 21, 2017 at 11:06 am

Or the rich pretties make devices to placate the poor uglies and then obliterate them and the allies with viruses/robots.

Sounds good to me.

5 Dude Man April 21, 2017 at 1:44 pm

Generally, when you start advocating massacres, you’ve gone too far.

6 kevin April 21, 2017 at 12:18 pm

While you’re quite right that, “excessive imbalances are self correcting” requires some minor assumptions, your rebuttal is full of even more elaborate assumptions. Among them:

1.Luck plays little to no factor in success. Only smarts, hard work, limited hyperbolic discounting, and beauty matter
2.These factors are highly correlated. (or one of them matters much more then the others)
3.These factors are mostly only available passed on from parents to children. One can not just willfully make themselves more beautiful, hard working, or smarter, absent outside forces

7 Roger Sweeny April 22, 2017 at 10:20 am

Hey, it was an eight line post. A simplified model 🙂 Things are, of course, more complicated. However,

1. Luck is “when preparation meets opportunity”–both of which are more likely for people who are smart, hard-working, able to defer gratification, good looking, and from a family with the same characteristics.

2. I think is true that “These factors are highly correlated” and (partly because the model says so) are becoming more so.

3. To some extent, the factors are “available” by other methods than “passed on from parents to children.” But unless the effectiveness of those other methods is negatively correlated with the effectiveness of “passed on from parents to children,” increase in inequality still happens.

8 Lanigram April 21, 2017 at 4:51 pm

“Some people are smarter…work harder…marshmellow test…,”

You fall prey to the “Fundamental Attribution Error”, a common bias especialy appealing to wealthy people. You have been fooled by randomness and you are predictably irrational.

9 Roger Sweeny April 22, 2017 at 10:21 am

And I’m ugly, too.

10 rayward April 21, 2017 at 8:59 am

Cowen does not tell the readers of his book what he means by the Great Reset, other than to say it will make many uncomfortable. And in his many interviews about the book he is never asked directly and he never volunteers an explanation. Cowen is a student of the Austrian School for those who don’t know, and a believer in the cyclical view of history (that’s in his book). One need only look at history to discern what Cowen means by the Great Reset. Of course, he would be a fool if he were to actually promote the self-correction to which I refer in my comment, for he would be accused of promoting “depression economics”, as have several of his colleagues. To be clear, Cowen does not say that excessive inequality will “cause” the Great Reset. How could he? Instead, he attributes it to “complacency”. It’s a nice Straussian touch.

11 Karpov April 21, 2017 at 9:59 am

well, this piece on “Why don’t people care more about economic inequality?” is mushy and dispensable IMO. It’s just a classic Marxist take on a non-problem in economics; at best, human inequality is a highly subjective philosophical issue.
Cowen perhaps fits in with the Chicago School, but I see no evidence of being an Austrian.

12 kevin April 21, 2017 at 12:20 pm

human inequality is not subjective. It can be measured objectively using the gini coefficient

13 Troll Me April 21, 2017 at 12:21 pm

It’s confusing and wishy washy to think that it’s possible for one person to have twice as much as the other despite similar efforts.

There must be some school of thought that can divert attention from the issue while maligning all those who speak of the situation.

Question: Do you even know what the word “Marxist” means?

Ignoramus.

14 EmanuelNoriega April 21, 2017 at 1:33 pm

What is the economic theory of revolution?

15 Rich Berger April 21, 2017 at 8:15 am

Perhaps most people don’t have the finely honed sense of outrage and envy of the average soi-disant progressive.

16 Dick the Butcher April 21, 2017 at 8:22 am

Also, perhaps most people are living their lives and do not expend inordinate amounts of energy and time contemplating their navels.

17 mulp April 21, 2017 at 11:41 am

Well, the people who are most effected by economic inequality have high income lobbyists going to Congress to get welfare in one form or another funded in ever increasing quantities, mostly by debt, to ensure they have sufficient paying customers to have profitable growth.

But conservatives are throwing monkey wrenches into the formula of government debt funding the consumption by the poor based on conservative free lunch ideology holding that consumers have money to spend determined solely by the wealth of the 1%, not based on cash they get from working or welfare.

Ie, there are those in the freedom caucus, and separately in Ryan’s camp, that eliminating Social Security and Medicare would have positive impact on GDP growth because those over 65 would increase their shopping and pay for more health care and buy bigger houses by spending their massive savings, or would get much bigger gifts from their kids and grand kids.

But AARP has plenty of corporate money coming in through its advertisers to fund a big lobbying program to not only protect, but to expand, the money the Federal government generously gives their customers every month.

18 OldCurmudgeon April 21, 2017 at 10:46 am

That’s essentially my gut reaction…most people consider most income inequality to be fair and just.

19 Moo cow April 21, 2017 at 11:20 am

Idk about that. 67% of Americans believe income inequality is a problem that needs to be addressed now.

https://www.nytimes.com/interactive/2015/06/03/business/income-inequality-workers-rights-international

20 Moo cow April 21, 2017 at 11:24 am
21 Effem April 21, 2017 at 12:01 pm

Most people consider inequality arising from hard work (steve jobs) is fair; and inequality arising from manipulating the system (bankers who were bailed out) is not fair. The diagnosis is easy – our economy has plenty of both. What to do about it is hard.

22 Bethany April 21, 2017 at 8:17 am

Thank you for being the clearest voice that inequal does not necessarily mean unfair. People want to believe in a meritocracy. You work harder/better/smarter, you make more. Conservatives look at people collecting welfare and see a broken meritocracy. Democrats look at corporate executive compensation and see a broken meritocracy. Students look at a talented adjunct professor and see a broken meritocracy.

Democrats look at conservatives and call them racists. Conservatives look at democrats and call them socialists. Tenured professors look at adjuncts and call them… well I don’t know… not sufficiently prestigious? But the same value runs through each. It’s just that that value isn’t named “inequality”

23 mulp April 21, 2017 at 11:50 am

If you are a business, do you see a customer with much less money but greater need for your goods and services to be good for your business?

Would you want only rich customers who have no, or little need for your goods and services?

Given incomes and assets of individuals are much higher in dense metro areas than in rural areas, as a business, you think rural areas are great places to get high profit growth, or would advocate abandoning those Trumpland areas, especially given the rural areas are propped up by Federal welfare that tries to reduce economic inequality?

Ie, isn’t increased poverty in the Rust Belt and rural Trumpland a great thing for corporate America and small businesses alike?

24 Boris_Badenoff April 21, 2017 at 5:51 pm

So you say, violate the individuals’ property rights to make the business climate more optimal?

Frankly, that’s just stupid. Businesses evolve to serve different customer bases. There is no evidence at all that evening up wealth among potential customers has any real effect at all. Besides, all else being equal, if you took the world’s wealth today & dived it equally among all people, in ten years’ time it would be back to 90% of the way it began.

25 Dzhaughn April 21, 2017 at 12:47 pm

I’d go further. Not only does “inequality” fail to imply “unfairness,” but “reduces inequality” fails to imply “greater fairness.”

26 EmanuelNoriega April 21, 2017 at 1:38 pm

The only way to have a meritocracy is to pay the would be revolutionaries to engage in complacency. While they are distracted from violence the meritcorats can work towards excellence. I think the thing that Cowen is really saying is that society should be divided into two classes: (1) Complacent consumers and (2) protected academic who engage in meritocracy.

27 Bethany April 21, 2017 at 4:38 pm

I would love to have Tyler follow me around for a week and offer serendipitously mundane explanations to my life’s problems.

28 The Other Jim April 21, 2017 at 8:23 am

>Why don’t people care more about economic inequality?

Because, for the 75th time, sane people are fine with the idea that a surgeon makes a great deal more than someone who plays video games all day.

Your counter-complaints that say “but inequality is especially bad in the US, because here even a lowly accountant can make a lot more than someone who plays video games all day!” are entirely underwhelming.

Indeed, the only people who bring this “topic” up are Dems pushing tax hikes and bored professors trying to get published in Bloomberg.

29 Karpov April 21, 2017 at 10:11 am

yes, this Marxist fixation on economic inequality thrives despite objective analysis.

Abject poverty is the natural state of all human beings born on this planet. The economic focus should be upon what economic mechanism has managed to bring so many humans out of poverty in recent centuries.

30 Ray Lopez April 21, 2017 at 10:44 am

If you believe Piketty’s thesis, inequality in times of peace is inevitable. It’s like complaining about global warming or the traffic: it won’t change a thing.

Full disclaimer: my family is in the 1%, minimum net worth USD 9M. DC real estate. Thanks for paying your taxes US residents.

31 The Other Jim April 21, 2017 at 11:18 am

Some of us actually believe in the value of hard work Ray. I earn wall over $50K per year as a team Manager at the call center here in Akron, probably more than you could make if you ever actually worked.

32 Ray Lopez April 21, 2017 at 2:03 pm

Hey The Other Jim–I am proud to be an American because of people like you: hard working average middle Americans who pay their taxes and make a decent living. Keep it up. During my peak years, lasting about a decade, I saved $500k and at my peak was making $150k/yr. But I found out it pays better to earn your money the old-fashioned way: to inherit it. Not just from my parents, begging for gifts, but last year I rescued my going senile Greek uncle’s sizable estate from a predatory domestic helper (who got a good portion of it before I showed up)–and kept it myself. Average is over.

33 Ray Lopez April 21, 2017 at 2:05 pm

@The Other Jim – PS–forgot to add, you’ll be made redundant and your call center will be outsourced to the Philippines, where I live much of the year, and the work will be done by night owls who stay awake taking methamphetamines (shabu shabu ) to stay awake. Their English accent is surprisingly American.

34 NatashaRostova April 21, 2017 at 3:02 pm

Is this why your much younger girlfriend likes you? Or is it the raw masculine charisma?

35 Gerber Baby April 21, 2017 at 10:47 am

-1

The inequality people care about isn’t the inequality between someone who works and someone who plays video games all day. Mostly, it’s about the inequality between those who work and those in the “1%” of managers, who are very overpaid relative to international norms. Our CEOs make way more than CEOs of similarly profitable companies in Europe and Japan. If the “free market” worked like libertardians say it does, you’d have those European and Japanese CEOs immigrating to America to participate in the totally meritocratic and non-corrupt competition to be a CEO, much as Mexicans come over to compete with the American working class.

That said, it is true that, in addition to “the 1%,” the upper middle class(surgeons and doctors and the like) is also overpaid relative to international norms. But they don’t realize this.

36 A Definite Beta Guy April 21, 2017 at 12:25 pm

That markets don’t operate perfectly doesn’t mean the government will work better. Emergent processes will do a better job if you give them some time to actually operate.

37 NatashaRostova April 21, 2017 at 4:07 pm

As far as I can tell you’d have to do some sort of synth control or matching algorithm to find firms in other countries that match US firms on key economic covariates (e.g. size, sector, growth etc).

I’m not familiar with this lit, so perhaps it happens, but comparing mean CEO pay across country and making inference is lazy and more suited towards rhetoric than economic understanding. Although forgive me if you study this field and know more than me. Probably it is true that if you properly control US CEOs still get paid more (I’m just guessing), but I bet the magnitude shrinks. That would of course open up new questions.

38 Thomas April 21, 2017 at 10:15 pm

The people who care about inequality are either ideological socialists or permanent 5th quintile layabouts.

39 mulp April 21, 2017 at 11:53 am

“Because, for the 75th time, sane people are fine with the idea that a surgeon makes a great deal more than someone who plays video games all day.”

That’s why they voted for Trump?

Wasn’t his message that “you have been screwed and been made poor”, ie, economic inequality has grown rapidly?

40 Lanigram April 21, 2017 at 5:01 pm

Mulp,

Never underestimate the power of denial.

41 Willitts April 21, 2017 at 8:27 am

We LIKE inequality. Our meritocratic mind views inequality as just results. “Inequality” is merely a dysphemism and political contrivance of the left. “Everybody hates the rich, until they become one.” Inequality ONLY becomes pejorative when people see the game as unfair.

The poor live vicariously through the rich, and the prospect of great reward gives us hope. Most people dream not only of wealth through success, but also windfall gains (lottery, lawsuit, inheritance, striking gold, marrying the prince).

The “bad” unequals are usually the class of fortunate people above your own level. A lot of the sympathy for those down the ladder is virtue signalling with little to no action.

Exclusivity is a desirable quality in its own right, not merely for club goods (country club) but for purely private goods. A “steak dinner” used to be the quintessential extravagance for the rich. Now, steak is so cheap some people cook it for their dogs. So now the rich have found newer and rarer extravagances.

42 Ricardo April 21, 2017 at 10:41 am

Your last paragraph is somewhat contradicted by the fact that America’s current rich-guy President feels obliged to play up his love of fast food. Too much love of exclusivity is widely regarded as pretentious and unseemly in American culture.

43 Art Devo April 21, 2017 at 1:51 pm

Does no one remember how much Clinton 1’s PR team played up his love for EggMcMuffins?

44 NatashaRostova April 21, 2017 at 3:46 pm

I was only around 5, and was only reading a few political blogs at the time. They were mostly theoretical though, and ignored the PR stuff.

45 Art Devo April 21, 2017 at 5:08 pm

So you are saying that it made a lasting impression on you?

46 Anon7 April 21, 2017 at 6:02 pm

George Hebert Walker Bush claimed to love pork rinds and during the Republican primaries was able to claim that he wasn’t nearly as blue-blooded as “Pierre” (not every-man “Pete”) S. du Pont (de Nemours) IV.

47 mulp April 21, 2017 at 12:00 pm

“A “steak dinner” used to be the quintessential extravagance for the rich”

Wrong. The luxury was some sort of fowl, but generally a fat duck or chicken that wasn’t too old.

Today it’s the food of the masses three centuries ago that are exotic. Eg, lobster, crabs. Cod. Grass fed beef, bison, elk.

48 Lanigram April 21, 2017 at 5:08 pm

“…steak is so cheap…”

Bullpucky, npi, beef is expensive. My family eats mostly chicken and pork – beef is a rarity. Fish is also expensive – we eat tilapia ( yuck! Tastes like sh#t!!!) at times.

I wish I could afford a little smoked trout from Whole Foods, but I suppose I’ll survive.

Do economists, financial dinks, and politicians ever actually shop for food?

49 Thomas April 21, 2017 at 10:17 pm

You are low income and shop at whole foods.

50 Lanigram April 22, 2017 at 10:45 am

No, I have never shopped at Whole Foods but I did walk through one once to see what the fuss was all about – lots of hot women in yoga pants. Rich guys can buy hot women who buy food in Whole Foods.

I was actually poking fun at Tyler’s revelation that his daily breakfast included smoked trout from Whole Foods! 🙂

51 Matt April 21, 2017 at 8:28 am

The reason people have a hard time getting that upset about wealth inequality is that wealth and the benefits of it mean such an individual meaning to different people! Taking someone from inner city Chicago or rural Alabama and wealth means Limos, fancy clothes and Beyonce concerts or pickup trucks, bass boats and hunting lodges. Neither of think that Bill Gates’ life jet setting around to do-gooder conferences looks all that appealing. Paul Krugman, the Occupy movement and the rest of the statist left are unable to accept the fact and full implications of human diversity no matter what they preach.

52 Bill April 21, 2017 at 8:30 am

People probably care more about the causes of inequality than inequality itself.

Particularly if you have children or grandchildren and are uncertain of their future.

53 Lanigram April 21, 2017 at 5:14 pm

Yes, especially when the elite cluster in expensive neighborhoods and send their kids to richly funded schools – the new aristocracy. The adults may have advanced on merit but their progeny start the race with the gift of a big lead. Even deplorables can see the unfairness of the distribution of a supposed public good like a public education.

54 Thomas April 21, 2017 at 10:18 pm

Won’t some please think about 30 year old Brooklyn artists who draw awful pictures for 10 hours per week and deserve 200k per year from the NEA?!?!?!?!?!?!?!?!?!?!?!?

55 derek April 21, 2017 at 8:34 am

Maybe the story here isn’t about inequality but about the cloistered ‘intellectuals’ who inhabit the hallowed halls of academia.

56 Art Devo April 21, 2017 at 1:42 pm

Tyler’s world: academia and the world of would be revolutionaries who want to destroy everything behind the gilded walls.

57 BenK April 21, 2017 at 8:57 am

Perhaps because all status is local.

Further, ‘economic’ isn’t the only kind of status that matters.

If we integrate these two statements, there are many small hierarchies here and there; the video gamer (e-sports type)
is competing against other gamers, and not all of them, just the ones in his niche game. The surgeon is actually
competing against other surgeons of his specialty; but also against the other hospital employees and some people
in his neighborhood, each one on a different footing. Further, he isn’t always competing! Sometimes cooperating,
sometimes helping. He may feel a twinge about a patient who makes 10x more money than he does, but it is a
different twinge than about the surgeon who just published a major paper, or the one that became chief of the
department,…

Once again, let’s go to Arnold Kling for commentary… and not the SJW types, who are playing their own status games.

58 Jeff R April 21, 2017 at 8:58 am

My optimistic take is that the people who pay attention to the issue are smart enough to figure out why inequality is on the rise: decline in the domestic demand for unskilled and skilled labor. The factories in town shrinking their payrolls 40 or 50% from thirty years ago might suck, but that doesn’t make you want to steal Tom The Shift Manager’s car. It’s not his fault, and you’d do the same thing if you were in his position.

Many poor people are also aware that there’s a strong arrow of causation between their current socioeconomic condition and the choices they made in life.

59 mulp April 21, 2017 at 12:05 pm

Your mean like choosing to be born black, or in West Virginia to a coal miner? Vs. choosing to be born to Fred Trump or Mitt Romney?

60 Troll Me April 21, 2017 at 12:28 pm

Choosing to be born without a quarter million college fund is the real reason they “deserve” it.

Most poor people would explain their situation as a function of lack of choice and things going wrong. Maybe a little more personal responsibility will help? Their capital accumulation towards success will surely be helped if they are required to liquidate all capital before obtaining any form of support whatsoever.

61 Dain April 21, 2017 at 1:49 pm

It does seem odd that most of the arguments of the “you get what you work for” type seem to come from the less wealthy, in my experience. Not homeless or dirt broke, mind you, but lower-middle class and working class. It’s an opinion I run into in the Central Valley. The opposite argument is usually fleshed out with statistics and references to Bernie Sanders et al. and are uttered by upper-middle class and educated folks. Not the 1%, mind you. It’s an opinion I run into in the Bay Area.

62 Sandia April 21, 2017 at 9:04 am

Well I think the last election proved that inequality is a loser politically. Academics posturing about inequality must be highy irritating to people who think their jobs have been outsourced by policies supported by those same academics.

63 mulp April 21, 2017 at 12:12 pm

Are you arguing Trump campaigned against too much economic equality, and was selling voters on a promise to increase economic inequality?

Trump in North Carolina, July 5: And I used that term initially when I was running in the Republican primaries and I was the first to use it. Then all of a sudden it became a hot term. Everybody was using the word, “rigged, rigged, rigged.” But if you remember, I’d win Louisiana and I’d find out I’d be getting enough delegates, what happens? And places like Colorado which were so good to me, but all of a sudden we find out that they don’t have the vote. And other things. OK. I used the word great. And frankly I’ll be honest. If I didn’t win in landslides I wouldn’t be standing up here. You’d be watching some politician who would lose to Hillary Clinton. OK? Believe me. Believe me.

I started winning — I learned about rigged very fast. I learned. But I used the term “rigged.” Then all of a sudden Bernie started using it and other people and now everyone talks about “rigged” but I’m gonna keep using it because I was the one that brought it up and I’m the one, and I asked a couple of political pros, “Did you ever hear the word rigged, it’s a rigged everything?” And they really — it hasn’t been a thing used, I guess it has to be somewhere along the line, but it hasn’t.

Trump, June 7: After years of disappointment, there is one thing we all have learned — we can’t fix the rigged system by relying on very, and I mean this so, so strongly, on the very people who rigged it, and they rigged it, and do not ever think anything differently. We can’t solve our problems by counting on the politicians who created our problems.

Trump, June 22: We’ll will never be able to fix a rigged system by counting on the same people who have rigged it in the first place. The insiders wrote the rules of the game to keep themselves in power and in the money. That’s why we’re asking Bernie Sanders’ voters to join our movement: so together we can fix the system for all Americans. So important. This includes fixing all of our many disastrous trade deals. … Because it’s not just the political system that’s rigged, it’s the whole economy. It’s rigged by big donors who want to keep wages down. It’s rigged by big businesses who want to leave our country, fire our workers, and sell their products back into the United States with absolutely no consequences for them. It’s rigged by bureaucrats who are trapping kids in failing schools. It’s rigged against you, the American people.

64 Troll Me April 21, 2017 at 12:29 pm

So working class white Americans pissed off at globalist billionaires was not relevant?

65 Thomas April 21, 2017 at 10:20 pm

That was racism, clown, don’t you remember?

66 Troll Me April 22, 2017 at 4:59 am

Too bad for all the racism, or they might have an easier time having their economic interests represented better.

And … you’re the one who made it about racism.

67 ¯\_(ツ)_/¯ April 21, 2017 at 9:05 am

I prefer to talk about “homelessness” rather than “inequality” because the first is more unambiguously a problem, and less defensible as just deserts.

68 Dzhaughn April 21, 2017 at 1:04 pm

Good thinking. There is a political support for steps that either (1) lead homeless persons to a self-support positions or (2) chase homeless persons out of the neighborhood. The problem is the tendency to stop at making the homeless a bit more comfortable. Or even to stop at the point of berating others for failing to do this.

69 Bob from Ohio April 21, 2017 at 1:20 pm

“less defensible as just deserts.”

Most homeless people, despite liberal propaganda, are male substance abusers and released criminals.

They terrorize decent people minding their own business by aggressive panhandling.

70 Axa April 21, 2017 at 9:14 am

I think people agrees that children are not accountable for their parent’s failures. That’s the spirit behind public education. Most people agree inequality is a problem if a child is hungry, sick or energy poor. Disagreement arises when someone wants to borrow this idea for adult environments, like academia.

The only thing I’d change is the approach to sports and children. It’s good if 1 out of 10K children becomes a pro player, but society wins more if the other 9,999 children also like doing sports. The rest will be professors, truck drivers or whatever, but healthy and happy individuals are good for society. Public education should work for 10K instead of 1 superstar. People thinks that if minorities have also superstars (music, sports, etc) inequality is solved. That may be good for cultural pride but does nothing for being hungry, sick or poor.

71 Troll Me April 21, 2017 at 12:34 pm

It’s not about super stars.

It’s about role models.

Like, having met someone that you can identify with who started a business, entered into a profession, or became active in the community in some way that benefitted them personally as well as the community.

It means that it’s not an abstract concept when someone suggests “you could start a business” or “you could be a doctor or lawyer”. When doctors and lawyers are jobs held by parents or friends of parents, and not just gatekeepers who you mostly can’t afford to interact with, then kids will see that more things are possible.

When you believe something is possibly, it is more likely that you will try to do it than when you do not believe it is possible.

When thinking of role models, forget about 50 cent, Michael Jordan or even Obama. Think of people with mundane respectable and well-paid jobs. Local musicians and artists. Local politicians. Stuff that they can very realistically aspire to if they want.

72 Dale April 21, 2017 at 9:14 am

I did not find this column enlightening – I agree with derek that it says more about the author (and readers) than anything else. i have two big complaints about the column. First, “most Americans” is ill-defined. From the comments, it is apparent that most economists (or most readers of this blog) don’t care much about inequality. But if you are holding most of the rewards, it is probably not a high priority to change the system. Second, it is true that some of the polls cited in the column do survey “most Americans” (rather, a somewhat random sample of them) but the polls only reveal that people don’t like most of the “solutions” to the problem, not that they find the problem less important. As a rallying cry, “inequality” probably is not effective because all of the “cures” are worse than the disease. But that does not mean the disease is not a problem, only that it is hard to cure.

This reminds me of the “debate” about flat taxes. Our tax system is a mess – almost everyone agrees about that, but little gets done about it. Most of the solutions don’t generate much support (and they do generate focused opposition, rent protection). But the only simple alternative people can come up with is a “flat tax” – often this is taken to mean a flat $ level of taxes. Even a flat % of income shows real lack of imagination. Surely, we can come up with a simple tax scheme that is not regressive but greatly simplifies the mess we have. But, by proposing a clearly regressive alternative, we can then declare that most people do not support changing the system. Then we can conclude that most Americans do not really care that much about tax reform. Then we might even be able to conclude that most people do not care that much about inequality.

Personally, I believe most Americans do care about inequality. Rephrasing it as they care about “unfairness” rather than “inequality” is merely a subterfuge. It lets you off the hook of having to talk about inequality. I suspect (go ahead, accuse me of mood affiliation or something like that) most Americans do not think our current inequality is based on “fair” rewards. Of course, the winners think it is all fair. But most Americans are not in the 1% and I don’t think they really believe that the 1% earned their rewards solely (or primarily) because of merit. But we don’t ask them hard questions like that – because if we only ask vague questions about whether they object to people (such as surgeons) earning more than others, then we can conclude – as the column does – that people really don’t care that much about inequality. Ask them what you want to hear, and then they won’t surprise you with their answers.

73 ¯\_(ツ)_/¯ April 21, 2017 at 9:23 am

“Personally, I believe most Americans do care about inequality.”

Trump’s campaign was an “inequality” campaign, not using the word, because it belonged to the other side.

So invent tortured things like “front row kids.”

74 Anon_senpai April 21, 2017 at 9:40 am

Agreed. Both sides frame their discussions of inequality in terms of unfairness.

The Trump Right:
Middle America is losing jobs to immigrants and globalisation. This is unfair and should be stopped.

The Left:
Women and People of Color are discriminated against in the workplace. This has led to wage inequality and should be stopped.

75 Dain April 21, 2017 at 1:52 pm

+ 1

76 Troll Me April 21, 2017 at 12:38 pm

Economists do not hold rewards.

They hold the power to tell people who hold rewards what a suboptimal and socially disastrous job they are doing with those powers to distribute rewards. Or sometimes a half a thumbs up.

77 Anonguy April 21, 2017 at 9:23 am

Academics can be a bitter and envious bunch. Imagine dedicating your life to an obscure or abstract subject, being paid substantially less than your private sector friends. Then, you must go to that dinner party at your wife’s rich doctor friend’s large house, and when he asks you what you do, you try to explain to him that you study Afghan oral tradition. Then he asks you how interesting it must be travel there and you awkwardly reply that you have actually never been to Afghanistan but that you are trying to arrange a trip soon.

You are not even safe among the proles. When you sit down at a bar to have a drink and the intoxicated construction worker sitting next to you asks you what you do, you reply in your typical patronizing tone that you use with your students, only to find yourself humiliated once again. “So what do you do for a living?” you ask, confident that you have finally found a prole that you can one-up. “I actually work for a living,” he laughs. “I work but the government takes my money and gives it to people like you.”

Humiliated, you return home. A note is on the table from your wife. She has gone to pick up left overs from the doctor’s house and will be visiting him for awhile. “Those damn doctors. They make too much money,” you think to yourself. “America should be more like Europe. We need to fight inequality.” Bitter, you open a bottle of wine and a Paul Krugman column. Your career affords substantial free time to dedicate yourself to a cause. It is time to take a stand.

78 Axa April 21, 2017 at 9:47 am

You’re talking about a 50 year old doctor and professor. I doubt a 25 year old guy still in medical school fits your narrative 😉

79 Ricardo April 21, 2017 at 11:21 am

There is a distinction between tenured and untenured faculty. Untenured faculty are the equivalents of med school residents and, like their counterparts, are overworked, underpaid and often miserable. Once tenured, you won’t make as much as a heart surgeon but you will have a very stable middle class income and maybe even a big, fat pension and don’t have to worry about malpractice insurance premiums. And you can probably get a grant to make that trip to Afghanistan.

80 Lanigram April 21, 2017 at 5:26 pm

Tenured male profs get the hot female grad students. In the bad old days they could sexually harass them – nothing like the power differential between a 45 yo prof and an 18 yo – but legal – female undergrad. Nowadays, they marry them.

81 Krug & Krug April 21, 2017 at 12:03 pm

Clever

82 Troll Me April 21, 2017 at 12:42 pm

Insecure people easily assume that others are more insecure than they are.

83 Thomas April 22, 2017 at 1:11 am

Masters in bs

84 Todd Ramsey April 21, 2017 at 9:29 am

The whole premise is wrong. People care way too much about economic inequality. We should care more about raising the wealth and incomes of the least fortunate, and less about how wealthy the most fortunate become.

Furthermore, the idea that globalization disproportionately benefits the rich is wrong. Try shopping at Wal-Mart, where the poor are consuming goods, manufactured abroad, that were simply not available to them 40 years ago.

85 ¯\_(ツ)_/¯ April 21, 2017 at 9:41 am

Inequality has different meanings for different people. Economists treat it is a measure with a correlation to a number of bad things. It is a signal of wrongness.

http://www.economist.com/blogs/economist-explains/2015/06/economist-explains-11

But that’s pretty esoteric. Most people on this page don’t engage at that level. They tell stupid stories about video games and bar encounters.

So of course it gets no traction.

86 Alain April 21, 2017 at 11:14 am

Explain how some random and arbitrary formula and expected value is more “correct” than each and every person on the planet voting their personal preferences with their most valuable commodity.

I’ll wait for your predictably horrible answer.

87 Anonymous April 21, 2017 at 11:29 am

I see a parallel. Some people don’t like the Gini Coefficient. Some people don’t like BMI as a measure of overweight.

Neither measure is perfect, but neither imperfection in measurement changes the world, what is measured.

There is an obesity problem.

“Explain how some random and arbitrary formula and expected value is more “correct” than each and every person on the planet [eating] their personal preferences with their most valuable commodity.

I’ll wait for your predictably horrible answer.”

88 Art Devo April 21, 2017 at 1:49 pm

Do you believe that “truth” is the most popular description?

Also do you have a blog? I think your opinions should be more popular.

89 OldCurmudgeon April 21, 2017 at 10:49 am

And even if we should care about “economic inequality,” we measure it wrong. Consumption (vs income or wealth) inequality is the only concept that conceivably matters.

90 Alain April 21, 2017 at 11:14 am

+1

This guy gets it.

91 Art Deco April 21, 2017 at 11:21 am

I don’t believe public safety is properly reflected in private consumption figures. The most glaring sort of inequality you see in a metropolitan environment is manifest in jagged maldistribution of certain public goods. In Harlem, pre-deBlasio, the homicide rate was just north of 8 per 100,000. In central Rochester, it was 35 per 100,000. We could be doing a lot better in this one respect, but the sort of people who fuss about ‘inequality’ do not care about this; they bleat about ‘mass incarceration’ instead.

92 Ricardo April 21, 2017 at 1:49 pm

Consumption is virtually impossible to measure at the highest levels. Fortune 500 CEOs often get to use corporate jets for personal use and, say, George Soros might funnel money toward causes you disagree with but through a network of organizations and trusts.

93 OldCurmudgeon April 24, 2017 at 11:07 am

“Consumption is virtually impossible to measure at the highest levels.”

It’s a fair point, though I suspect that “income” is similarly difficult to measure at those levels; whatever AGI they report to the government probably doesn’t bear much relation to their true/economic income.

94 Floccina April 21, 2017 at 10:52 am

I agree, and there have always been restaurant and other low wage service workers, they perhaps benefit the most from trade. Those few hurt are the 10% of manufacturing workers who used to make considerably more than the service workers but now can’t. Even they though used to have to do tough hard work in hot factories and factories seemed have a lot more bullying than service work.

95 Troll Me April 21, 2017 at 12:45 pm

Concepts such as real wages and price indices exist to avoid potential frauds along the lines of trying to convince workers that they are better off if one class of goods they consume declines in price, while in fact their overall basic costs rise.

96 A Definite Beta Guy April 21, 2017 at 9:31 am

Not sure I even buy the premise: who says we don’t care about inequality? Bernie Sanders ran an entire campaign on it, and very well could have been President had he knocked Hillary out of the primary. He was a far sight away, but young voters really liked Bernie: we’ll see what the Dems look like in 10 years, but something tells me it’ll look a lot more like Sadners-Peronism and a lot less like Third Way.

Maybe the studies show something different….but those studies aren’t in the water supply, so to speak. My priors suggest a lot of Americans care a lot about inequality. Min Wage movements are gaining steam across the country and upper MTRs are increasing, so there’s political consequences, too. This obviously isn’t the 2001-2003 environment anymore.

97 Edward Pierce April 21, 2017 at 10:41 am

We have us a winner. Almost everyone I know who identifies as left-of-center cares deeply about inequality — enough to vote for more taxes on the middle class and rich, increases in the minimum wage, other wealth transfers. Nevermind those who felt the Bern, Hillary’s campaign was explicit about its desire to reduce inequality (for whatever it was worth).

What’s disconcerting is that the notion of “inequality” seems to have transformed in recent years from implying equality of opportunity, to a more insidious and pervasive desire for equality of outcome; an iphone in every dock! The left, of course, believe this would be a free lunch. There is surely enough cash tucked away in the bejeweled sock drawers of greedy billionaires to support a Mazda 3 for every man, woman, and child who needs one. All without compromising the integrity of our roaring economy (Thanks Obama!). In point of fact, this massive injection of wealth into the hands of the downtrodden would be *beneficial* to the economy, since it would no longer be languishing next to gold laced moth balls and instead circulating through the real economy. If everyone loses their job, it’s not because we’ve strangled the economy; it’s because the robots took them.

To be quite honest, transfers are the “cost of doing capitalist business” — certainly some markets will tend more towards monopoly than others, and phenomena like creative destruction will leave many in the lurch (even if it raises the “status” of their children or however Prof. Cowen would prefer to couch it). If only to prevent outright violent revolt by those who have lost out on a particular round of economic progress, a reduction in inequality is necessary. That’s not a very compelling argument from an emotional standpoint though. I’ve certainly never seen anyone left of center truck with that argument. No, if you’re on the left, any inequality is bad. If you’re on the right, any attempts to reduce it are pure socialism. Worse, even if we could agree that a modicum of inequality is the right amount: how you steer the economy to maintain a level of inequality within that goldilocks band (not too much, not too little), I don’t know.

98 Troll Me April 21, 2017 at 12:46 pm

No one thinks it’s a free lunch.

It’s just that some people think no one can eat 10,000 lunches a day.

99 Edward Pierce April 21, 2017 at 1:04 pm

Yes, but what business is that of yours?

100 mulp April 21, 2017 at 12:22 pm

Trump claimed that Bernie was simply stealing Trump’s message.

Trump in North Carolina, July 5: And I used that term initially when I was running in the Republican primaries and I was the first to use it. Then all of a sudden it became a hot term. Everybody was using the word, “rigged, rigged, rigged.” But if you remember, I’d win Louisiana and I’d find out I’d be getting enough delegates, what happens? And places like Colorado which were so good to me, but all of a sudden we find out that they don’t have the vote. And other things. OK. I used the word great. And frankly I’ll be honest. If I didn’t win in landslides I wouldn’t be standing up here. You’d be watching some politician who would lose to Hillary Clinton. OK? Believe me. Believe me.

I started winning — I learned about rigged very fast. I learned. But I used the term “rigged.” Then all of a sudden Bernie started using it and other people and now everyone talks about “rigged” but I’m gonna keep using it because I was the one that brought it up and I’m the one, and I asked a couple of political pros, “Did you ever hear the word rigged, it’s a rigged everything?” And they really — it hasn’t been a thing used, I guess it has to be somewhere along the line, but it hasn’t.

101 prior_test2 April 21, 2017 at 9:37 am

‘I’ve found that a lot of my fellow academicians retreat to the moral platitude that the “good guys” simply need to fight harder against the special interest groups. Maybe so, or maybe that response is just another way of digging in deeper to what so far has been a losing battle. The reality is that income inequality has gone up a great deal since the early 1980s, and we haven’t done so much to reverse the basic trend.’

Mission accomplished, so at least one could imagine chairman and general director Cowen writing such in one of his less reflective, though thoroughly complacent, moments.

Because this is not about academics, this about the sort of people in charge of public policy institutes that receive the long running largesse of the GMU Foundation writing that basically, the rich getting richer is just fine.

102 Bjartur April 21, 2017 at 10:07 am

People don’t care about outcome inequality because there is nothing wrong with outcome inequality. In fact there’s an outcome equality heuristic that we all learn well before we leave grade school: outcome equality only occurs when people are treated unfairly.

103 mulp April 21, 2017 at 12:25 pm

Trump loves economic inequality and welcomes the working poor with open arms to Mar a Lago just as enthusiastically as a billionaire?

104 Troll Me April 21, 2017 at 12:50 pm

The unfairness of perfectly distributed outcomes in a situation where people make different independent efforts does not therefore imply that any outcome inequality is OK.

Having identified one extreme as absurd does not imply the truth of its opposite. The mere observation of black is not proof that the answer is white.

105 Albigensian April 21, 2017 at 10:09 am

The politics of inequality (in income and/or wealth) appears to be an attempt to expand anti-poverty politics, so that a politics of inequality can continue even if actual poverty is essentially eliminated. I’d guess that many Americans are fine with inequality just so long as those at the bottom are able to obtain housing, adequate food and medical care, etc.

Further, the politics of inequality implies that I am somehow made poorer if my middle-class neighbor sells his residence to a rich family, yet most of us can see that that’s just not so, as I do not have less just because my neighbor has more.

And the politics of inequality continues the practice of the war on poverty’s focus on outcomes by disregarding the choices that contributed toward those outcomes. For example, I may have more wealth than you not because I’ve earned more but because I’ve chosen to save more and you’ve chosen to spend more. The point isn’t that saving is always better than spending but that my now having more wealth doesn’t (or shouldn’t) give you license to “redistribute” my wealth just because you chose to spend your income while I chose to save mine.

Finally, the politics of inequality retains some of the mean spirit behind the creation of the proportionality rule in sports participation as a safe harbor against Title IX lawsuits in that it’s often easier to achieve equality by cutting others down rather than by building some up.How, exactly, do female athletes benefit when a male team is cut to achieve proportionality?

And then there’s Kurt Vonnegut’s classic take on forced equality of outcome:

“THE YEAR WAS 2081, and everybody was finally equal. They weren’t only equal
before God and the law. They were equal every which way. Nobody was smarter
than anybody else. Nobody was better looking than anybody else. Nobody was
stronger or quicker than anybody else. All this equality was due to the
211th, 212th, and 213th Amendments to the Constitution, and to the unceasing
vigilance of agents of the United States Handicapper General. ”

http://www.tnellen.com/westside/harrison.pdf

106 Troll Me April 21, 2017 at 12:51 pm

You are poorer if poor people stay poor instead of accessing opportunities which enable them to be productive and rich.

Everyone loses when others cannot reach their potential.

107 Thomas April 22, 2017 at 9:16 am

“No one thinks it’s a free lunch.” -dishonest hack Nate, contradicting himself.

108 Troll Me April 26, 2017 at 2:40 am

Na, I’m just that special kind of loser that gets off on insulting people I’ve never met before and who have no bearing on my life.

109 Hazel Meade April 21, 2017 at 10:21 am

As you pointed out last week most people *aren’t* concerned with inequality, they are concerned with unfairness, which cannot be conflated with inequality per se. Inequity is considered fair if the inequity appears to be the result of just earnings.
People care if the inequity is the result of some unfair rules or does seem merited by the actual different in effort.

For instance people feel that Mark Zuckerberg being a multi-billionaire seems “unfair” because it’s hard to imagine that anyone could merit that much wealth. But they don’t feel it’s unfair that a family of doctors makes $400K a year and has a huge house, because the services doctors provide are very valuable, and they work long hours, and they spend a lot of time in medical school. They generally don’t think it’s unfair to get rich if you make a good product and sell it in a free market. They think it’s unfair if you have the rules rigged in your favor in some way – i.e. via government corruption. And they feel it is unfair if some people can afford to put their kids through elite schools and use social connections to get them jobs and others can’t.

Point is that it’s not inequality of wealth itself, but inequity of the rules or the system that people feel is unfair. Inequity is fine if unequal wealth is obtained through fair rules.

110 Art Deco April 21, 2017 at 11:23 am

I don’t give a rip about Mark Zuckerberg’s house. I just wish the tech billionaires would quit promoting bad causes.

111 A Definite Beta Guy April 21, 2017 at 12:08 pm

I care a lot more about the doctors than Zuckerberg, actually. Doctors are a group insulated from competition. Based on anecdotal evidence, they are many times astoundingly ignorant. Their wages may be entirely unearned.

Zuckerberg unquestionably delivered a superior product. I guess you can complain about his privacy practices.

112 Hazel Meade April 21, 2017 at 2:09 pm

This is a fair comment, but something that only pretty educated people would understand. I’m speaking in terms of what the general public tends to believe. If the public were more educated about market economics and licensing that could change perceptions of fairness.
Still my point is that what people think is fair depends on how they perceive the rules. Right now, not very many percieve licensing laws to be ‘unfair’.

113 Art Deco April 21, 2017 at 4:13 pm

Clown nose on or clown nose off?

Latter-day medical practitioners are swamped with paperwork and pestered by bean counters. They actually have real skills and are generally compensated consequent to arms-length transactions, so I’m not seeing where the thievery is.

114 Hazel Meade April 21, 2017 at 4:42 pm

They get paid somewhat more due to licensing laws than they otherwise would, but yes, this probably isn’t the most egregious example of the rules being rigged. If you want to look for the real dirt, it’s in your local city council, zoning and construction permitting.

115 Art Devo April 21, 2017 at 1:59 pm

Do you care about the bizarre personality that heavy social media produces in its users?

116 Egalitarian April 21, 2017 at 10:26 am

I can’t speak for other egalitarians, but my own concerns about inequality have everything to do with luck and unfairness. One way to frame the problem of distributive justice is: what is it about individual X and individual Y that justifies their different claims on the social product? It seems to me that whatever response we provide (call it “property Z”), prompts the following observation: the fact that individual X is characterized by property Z, and individual Y is not, is the consequence of a causal process set in motion before either individual X or individual Y existed. In what way, then, is property Z a morally legitimate basis for differentiating claims on the social product between individual X and individual Y? I would argue that it isn’t. This means that individuals have (morally) equal claims on the social product. Note that what I mean by the “social product” is very broad–X suffering a larger disutility of labor than Y, for example, would mean that X could claim a larger share of output to compensate for it, so this does not mean the ideal is “enslave the most productive”.

A separate consideration is how to maximize the size of the social product (efficiency), and policies intended to produce more equal claims will typically compromise efficiency. Hence, we have the usual trade-off, and reasonable people can disagree about where the optimum lies on that frontier (I personally am inclined to tolerate a lot of inequality for the sake of greater efficiency).

Equality is not the only goal, or the most important goal, and a lot of inequality may be justified. But the reason why I care about it at all is for the reasons given above. The fact that “people” don’t care about it according to some surveys of varying quality is not really relevant. Moreover, if “people” really are concerned about bad luck and unfairness, then in principle they might be persuadable about whether inequality in general is a symptom of unfairness or bad luck.

(FWIW–I understand the libertarian view that there is no social product for anyone to decide how to distribute, but I would prefer to reframe this claim as property Z being entitlement a la Nozick due to historically legitimate transactions. My counterclaim would be that such transactions were made possible by (ultimate) factors beyond anyone’s control. This doesn’t mean that policy is free to interfere in each and every transaction, like in the Wilt Chamberlain example, but simply that for such transactions to be legitimate, they should occur within a system of progressive taxes and transfers.)

117 Hazel Meade April 21, 2017 at 12:03 pm

I think many people are ok with tolerating a certain amount of inequality due to luck – they don’t mind it if someone else wins the lottery. They just want the random distributions to be uniform. They want everyone to have an equal chance to enter and win the lottery.

So inequity that is due to someone having the luck of meeting Mark Zuckerberg at a Starbucks and being offered a job is ok. But inequity due to having parents who know Mark Zuckerberg is not. Not everyone has an equal chance of having parents that know Mark Zuckerberg. But (assuming the Starbucks ins’t some super-exclusive place that only rich people can get into), the chance of having him randomly meet them in a Starbucks is more or less uniform.

118 Egalitarian April 21, 2017 at 4:08 pm

Whatever randomness there is stems from imperfect information. With perfect information, there is no randomness, and thus any inequality is is ex ante as well as ex post. I think you’re right about common opinion, but I suspect that that is because most people haven’t thought too far beyond the everyday notion of luck to the more fundamental arbitrariness of everything.

119 Troll Me April 21, 2017 at 12:54 pm

” policies intended to produce more equal claims will typically compromise efficiency”

This is dogma. Helping poor people to access more opportunity improves efficiency.

120 Anon7 April 21, 2017 at 1:51 pm

“This is dogma. Helping poor people to access more opportunity improves efficiency.”

There are diminishing marginal returns to doing that. We already see that in college education. No amount of improvement in K-12 education is going to result in a substantial increase in the dismal college graduation rates for non-selective colleges unless we dilute standards (as we have in K-12 education) so that people will be awarded degrees merely for breathing.

121 Troll Me April 21, 2017 at 8:04 pm

I like how the German system has multiple pathways to good career prospects without such an exclusive focus on academics. It also seems to have done very well for the overall competitiveness of their industrial output.

122 Egalitarian April 21, 2017 at 3:55 pm

If we’re maximally efficient, and maximally equal subject to efficiency, then any remaining inequality would be reduced at the expense of efficiency. That’s more what I had in mind. Of course we’re not either of those things, so there may be win-wins, but at some point we run up against a limit.

123 Thomas April 22, 2017 at 9:18 am

“This is dogma” yes, basic supply and demand.

“Helping poor people… improves efficiency.”

More free lunch socialism from Nate

124 Anon7 April 21, 2017 at 1:38 pm

You still haven’t justified why people have “equal moral claims” on the social product absent property Z. Merely asserting equality as the default position does not make it so, which is what egalitarians tend to assume rather than prove (e.g., let’s create a veil of ignorance with precisely the conditions and assumptions that will guarantee the outcome that egalitarians prefer).

125 Egalitarian April 21, 2017 at 4:03 pm

The way I framed the question is: what property Z justifies the different claims of individuals X and Y? If the answer is that there is no such property, then the different claims are not justified. You would be right to complain that my framing implies equality as justified by default. Here is an alternative framing: what property Q justifies the claim of individual X? If we’ve established that no differential properties Z figure in such a justification, all that remains are properties that apply equally to all individuals. Hence, equality is optimal.

126 Anon7 April 21, 2017 at 5:47 pm

Take the example of luck. Even if someone got lucky in the genetic lottery and has a higher IQ and that trait is not “morally deserved” (defined as doing something that would “deserve” it, which, for the sake of argument, being born does not qualify), it does not follow that anyone else “deserves” to benefit at all from that person’s higher IQ. Indeed, if the person who got lucky does not “deserve” to benefit from his luck, other people are even less morally deserving to benefit from it since they did even less. Nozick’s entitlement argument would, of course, bar that possibility, but even absent such a bar, you have not provided an affirmative moral claim for something like progressive taxation that would justify giving to others any of the “social product” produced by the person with the higher IQ.

127 Egalitarian April 21, 2017 at 6:38 pm

To be clear, I’m not saying that I have a claim on your *ability* to contribute to the social product.

I’m saying that we have a set of institutions and policies that structure the conditions under which you use your abilities to contribute to the social product as you see fit, and that those conditions ought to foster more rather than less equal claims on the resulting product, ceteris paribus. This is different from saying I have the right to make you use your high IQ to produce stuff for me consume. If you decide to use your high IQ to entertain yourself, rather than to make valuable things for others to consume in exchange for money, that’s your call.

We also want these institutions and policies to be efficient, in that under them people are incentivized to maximize the social product. If lots of people like you decide to use their high IQs to entertain themselves, then that’s their right, but it means we have a policy failure. If what it takes to get you to produce more valuable stuff is to reward you for doing so, then that’s what we ought to do. But to the extent that it is possible to design a system in which productive people have incentives to *choose* to produce, while claims on the resulting product are broadly shared, we ought to adopt such a system. That’s the claim.

128 Egalitarian April 21, 2017 at 6:46 pm

Here is my intuition about desert: If the law says the government will take 25% of the proceeds of any sale, and I sell something to you for $10, then what I deserve is $7.50. I don’t deserve $10, because the price I agreed to is endogenous to the governing policies and institutions. If the policy causes me to decide not to participate in the transaction, that’s a loss to society, and that ought to be considered carefully when designing such policies. But I don’t deserve $10 when I only agreed to the $10 under a system where I only get to keep $7.50. If you feel you deserve more for producing something than what is possible given demand and government policy, then you don’t have to produce it. But desert claims don’t really arise meaningfully when talking about the basic structure of society in my view, only when talking about transactions that take place within the basic structure.

129 Anon7 April 21, 2017 at 8:11 pm

You have not justified why the mob is entitled to design the structure to favor as much equality as they can manage, which is simply an indirect way of achieving nearly the same result as a more direct claim to people’s abilities.

130 Egalitarian April 22, 2017 at 10:00 am

There will always be institutions and policies that structure the terms of social relations. The question is what form they should take. You say I assume the mob gets to decide, but I’m not assuming that. I’m expressing my view of what characterizes optimal institutions and policies. Institutions and policies which foster productive activity, while sharing its fruits broadly, are what I’m looking for. I’m an egalitarian in that I think this second piece is important in addition to the first. There is no “natural” configuration which my proposal represents a deviation from. Even in a Nozickian regime, we have to decide who is entitled to what at the outset. My claim is that capitalistic acts between consenting adults are A-OK, as long as they occur within a framework of rules that is designed to balance efficiency and equity.

131 DanC April 21, 2017 at 10:27 am

The battle against inequality, as argued by most politicians, is unfair. I think many people when they hear a politician preach that we must reduce inequality hear plans like affirmative action. And affirmative action, as practiced in this country, is hardly a fight against inequality. For example rather then lifting up poor minorities it selects out elites from that group for special treatment. Politicians rarely want to reduce inequality as much as they seek to gain some advantage for a group they seek to represent.

Plus equality of opportunity is not he same as equality of result. Government plans to achieve the latter rarely appear fair.

I think Tyler is too quick to skip over the issue of factor price equalization as it relates to wages and international trade. What works for the betterment of the world may not work for the betterment of all sectors of the American work force.

132 Floccina April 21, 2017 at 10:28 am

The economy has been growing but you claim that the lower half of earners are not getting much more, so who is consuming the new goods and services produced? Are the top 20% consuming a lot more?

133 mulp April 21, 2017 at 12:29 pm

Donald Trump and Warren Buffett ate only one burger and fries per day 60 years ago when they weren’t millionaires, but today as billionaires they buy a minimum of 1000 burgers and fries every day?

134 Plamus April 21, 2017 at 1:33 pm

Was this meant to be an informative comment?

135 Ray Lopez April 21, 2017 at 10:50 am

Another reason young people protest inequality: it’s the trendy thing to do, a chance to meet new people. Look at the stunner next to the shirtless loser in the Bloomberg article photo. The photographer took the shot with her in mind, and the loser contrasts and enhances her beauty. It’s the same reason beautiful girls sometimes have ugly friends or a beauty mole.

136 ¯\_(ツ)_/¯ April 21, 2017 at 10:59 am

Inequality is huge on both sides of the political divide, but people will play games and pretend not. They will pretend that “inequality” is something the left does, and “resentment” of “elites” is something else entirely.

So to answer your question Tyler, inequality is huge, but don’t call it that, for some listeners.

137 Bob from Ohio April 21, 2017 at 1:27 pm

““resentment” of “elites” is something else entirely.”

Its not “pretending”, it is different. Those on the right that resent [so called] elites are not at all resentful of their wealth, but resent being looked down at by the merely credentialed..

Who on the right side resents Trump for his wealth?

138 ¯\_(ツ)_/¯ April 21, 2017 at 1:47 pm

That’s a game of pretend. We know that the rich and the institutionally elite are the same people. Jared Kushner went to Harvard.

139 Anon7 April 21, 2017 at 4:17 pm

They have status (whether it is the product of formal credentials or being part of the “cool” crowd), which cannot be resolved into mere economics. People may be content with economic inequality but not status inequality. That is Aristotle 101.

140 ¯\_(ツ)_/¯ April 21, 2017 at 4:24 pm

And what, we pretend that no one with wealth knows how to turn that into status?

Say a New York property developer?

This continues to be a game of “guys I give status deserve it.” “And guys who get status outside my value network do not.”

141 Anon7 April 21, 2017 at 5:05 pm

Crass economic reductionism can’t explain everything.

142 Ricardo April 21, 2017 at 2:09 pm

A lot of liberal tech people and celebrities don’t have credentials worth mentioning. The original point stands: conservative resentment against elites doesn’t make sense except as a complaint about how some people use wealth and personal influence to unfairly influence public opinion in a certain direction.

143 Art Deco April 21, 2017 at 11:02 am

Why don’t people care more about economic inequality?

Because the vast majority of people are concerned with things palpable to them and over which they have influence. “Inequality” is not one of those things. For most, civic engagement consists of reacting against those whose (perceived or real) malfeasance, misfeasance, and nonfeasance has made them look asinine or has disrupted the palpable environment in some way.

You’re really asking why attentive publics or select cadres do not ‘care’ enough about ‘inequality’ to make something happen. Part of the reason is that nothing much happens in our political life. We have sclerotic institutions who produce policy no one has the incentive to devote the effort to try to change much. In any case, the attentive publics and cadres are professional-managerial types who are doing passably well financially (although professors can kvetch quite a bit about their situation if you get them going).

144 mulp April 21, 2017 at 12:35 pm

Workers being fired because the store they are working in is closing do not connect that with rising inequality that means falling revenue at the store.

The Walmart worker whose hours are cut doesn’t connect it to the rising inequality that drives customers away from Walmart to Dollar General, even when the Walmart worker has started shopping at Dollar General because it sells smaller packages to get the price down to a dollar.

145 Clay April 21, 2017 at 11:29 am

Haven’t you already answered this in your books and postings on economic segregation? If one from a higher class doesn’t have to feel discomfort from being around the less fortunate, then why would they care? And if one from the lower class looks around and sees only people like themselves, then how do they even know what to complain about?

146 FYI April 21, 2017 at 11:32 am

I find it amazing how people accept to compartmentalize inequality to economics in this kind of discussion. The thing is, inequality is inevitable in life. Tall, short, pretty, ugly, healthy, sick. We see and taste inequality everywhere, from the weather to animals. If we were not to “accept” inequality we would go mad.

147 Scoop April 21, 2017 at 11:44 am

People don’t resent what they believe to be just inequality, as when those who improve the world (Google guys) or entertain the world get rich.

But you’re blind if you don’t see rapidly growing resentment of most inequality after watching the last election.
The worst candidate in history got elected on a platform of fixing a system that’s rigged against normal Americans. Were Trump a good candidate who got fair coverage after the primaries, he wins 60-65 of the vote. Little resentment indeed!

148 Hazel Meade April 21, 2017 at 12:23 pm

Pfft. Trump’s election was not about inequality at all. It was more about the white working class protecting their privileged status vis a vis immigrants and other groups. Working class union guys enjoy government enforced economic privileges enabled by the NLRA, trade barriers, immigration barriers. They’re terrified that those are going to go away. They’re effectively voting to force people to grant or restore privileges they think they are entitled to as “Americans”.

149 ¯\_(ツ)_/¯ April 21, 2017 at 1:50 pm

It’s a twisted form of inequality complaint, that’s for sure. It rails against “elites” while installing offspring of billionaires, Harvard grads, Goldman alum.

Played.

150 Scoop April 21, 2017 at 2:01 pm

That is, in many ways, a vote on inequality. Others are getting rich, not by doing anything productive but by importing cheaper labor to undercut me. Meanwhile, inequality is increasing because I’m effectively getting poorer despite the fact that I’m either doing the same work or I could be (if my job hadn’t been sent off shore or given to H1B slave labor that I helped train).

It’s not entirely an inequality vote, but that’s part of it.

(Also, we all enjoy government enforced economic privileges. I’m very happy that stronger or better armed people can’t just take my stuff because the government locks people up for that. It’s natural for people to get upset when they lose protections.)

151 Hazel Meade April 21, 2017 at 4:37 pm

Others are getting rich, by hiring people who are willing to work for less. SO UNFAIR!!!
I’m entitled to a job! Waaaa! Being an AMERICAN makes be better than other people. They should give me a job with generous benefits, overtime rules, vacation time, health insurance and dental coverage, because I’m an AMERICAN and I DESERVE IT! Unlike thsoe brown people in other countries. Greatest country in the world!! USA!! USA!!!

152 Thomas April 22, 2017 at 9:33 am

Sheer ignorance. It isn’t about “deserve” and no one who knows anything thinks it is. Immigration isn’t the most efficient method of helping the global poor, it’s the most efficient method of electing Democrats. They don’t care about poor brown people enough to help them at the DNCs expense. Jobs aren’t any more deserved to Americans than your personal property is to you. Poor whites arent willing to help poor brown people at their own expense. They are moral equivalents.

“Durr white murican Hazel deserves her property more than brown people. Raceist!”

153 Lanigram April 21, 2017 at 5:42 pm

Hazel,

“Working class union guys enjoy government enforced economic privileges enabled by the NLRA, trade barriers, immigration barrier.”

Private sector union membership has been declining and represents only a minority of private sector workers. I am surprised you don’t know that. The blue-collar white union guy went the way of the dodo.

154 Hazel Meade April 23, 2017 at 10:31 pm

True, but it’s the same demographic that helped Trump swing Michigan and Pennsylvania. Unemployed former union guys. This whole white working class thing is code for “white working class in certain rust-belt states which just so happen to be the bastion of the former labor movement”. Plus southern racists.

155 Edgar April 21, 2017 at 12:00 pm

People care a lot about economic inequality and that is exactly what got Trump elected. It takes a complete failure of imagination to think that Trump’s pro-growth, pro-US, policies are not in every way superior solutions to economic inequality than the failed platitudes and government meddling peddled by Bernie, Barry, and Hillary.

156 Hazel Meade April 21, 2017 at 2:04 pm

Trump fully intends to “meddle” in immigration and trade. I’m not exactly seeing a net reduction in regulation yet. More meddling in the form of “Buy American” mandates, and less meddling in the form of carbon emissions limits.

157 Troll Me April 21, 2017 at 12:25 pm

They need a law that banks must always be required to change mortgage payment rates with zero notice, to ensure maximum performance of the market .

You read it right! Interest rate controls must be abandoned in the name of market efficiency!

Sure, some thousands or millions of homeowners might be forced out of their homes. But what of it! Renters have been experiencing this for eons, and no one ever thought that was a problem did they? (Not true. But somehow for many economists, this logic applies to poor renters but not wealthy homeowners. If wealthy homeowners are forced from their homes, the economy will collapse. If poor renters are forced from their homes, this is good for the economy. Bullshit.)

158 Cooper April 21, 2017 at 4:07 pm

Long term rent contracts exist.

Variable interest rate mortgages exist.

159 Anon7 April 21, 2017 at 4:27 pm

Without government subsidies, fixed rate mortgages would be more expensive and thus rarer. So, yes, it would be more efficient to eliminate those subsidies (along with the home mortgage interest deduction). What’s BS is your constant caterwauling.

160 Troll Me April 26, 2017 at 2:42 am

To your credit, it had to get absurd before someone called BS.

I still think it’s BS that it’s the biggest crisis in the history of the planet if doubling the interest rate will put a bunch of home owners on the streets, but no one gives a shit if lack of rent control means your landlord can put you on the street any time they want.

161 Troll Me April 26, 2017 at 2:43 am

The inability to express disagreement without insulting the fellow interlocutor? Not so impressive. I bet you felt powerful when you beat your kids.

162 Dzhaughn April 21, 2017 at 1:08 pm

The resistance to inequality stems from the tendency of the remedies to increase the power of the elite technocratic class. This is amplified by a recent tendency to address the problem not by helping the poorest, but rather transfers to a much broader demographic.

163 Bob from Ohio April 21, 2017 at 1:30 pm

People actually like rich people except for a few categories [such as bankers] and do not care if they have nice things.

164 Donald Pretari April 21, 2017 at 2:13 pm

Inequality often enters discussions about other issues. A couple of working class friends were telling me about a case in which a person we know was found not guilty of murder even though most people are certain he did it. They attributed his acquittal to his being wealthy and getting excellent legal representation. They did not think they would have gotten off had they been the accused. So, they didn’t think it was fair and did show that inequality is alive and well. But what can they do about it? Like many of us, we just try as best we can to avoid the legal system.

In the long run, people finding the legal system highly unequal might lead to some changes in our system, but, as long as people are much wealthier than others even after serious taxation, it’s not clear it would solve the legal inequality. The issue of inequality is embedded in too many disparate issues to be clearly defined by one aspect of its appearance.

165 spencer April 21, 2017 at 2:16 pm

I’ve been impressed by the polls that most people in the US expect to become wealthy– even if it is a completely unrealistic expectation– and that is a major reason why inequality never becomes a winning political issue.

166 carlospln April 23, 2017 at 1:29 am

Yes, & this is why the opioid epidemic is a non-problem.

167 Paul April 21, 2017 at 2:17 pm

People care about following rules. If someone didn’t cheat and the rules are perceived as reasonably fair, if they become rich that’s OK.

In this world a native born American who is upset about their personal income inequality relative to billionaires should get out more. Like, to Somalia, or to one of many other places that come to mind.

168 Cooper April 21, 2017 at 2:47 pm

People care about inequality but they want the solution to inequality to include something that makes them personally better off.

Democrats talk about raising taxes on the rich and giving more welfare benefits to the poor. That’s not a winning political coalition.

They need to talk about raising taxes on the rich and cutting taxes for the middle class.

Imagine if someone ran on a platform of putting a 50% surcharge on incomes over $1million and eliminating the 25% tax bracket for middle income people. You’d have to fiddle with the exact figures to make it revenue neutral but the net effect would be shifting the burden of government away from the middle class and towards the “super rich”.

You could actually build a winning coalition to do this. You can’t build a coalition around more benefits because middle income people will rightly see that the benefits are going to *someone else* and not them.

Look at Obamacare. The bottom 20% of society got a benefit, everyone else was worse off. The bottom 20% compromise barely 10% of voters (probably less in most places). Why did they think this would be a winning political formula?

169 Thomas Sewell April 21, 2017 at 9:00 pm

And then your policy either disrupts the economy horribly or else just creates a new accounting sub-industry avoiding those taxes and wastes resources that way. Either way, your policy again screws over the middle class AND in addition the rich and the poor.

How about instead of considering people’s voluntary transactions which improve their lives to be something for pandering politicians to play with as if they are toys, we move towards allowing people to trade with each other in order to improve their lives without ongoing interference and forbiddance?

I know, too much to ask in this day and age…

170 Lanigram April 21, 2017 at 5:50 pm

“The Hamptons is not a defensible position…someday people are going to come for you.” Economist Mark Blyth on AthensLive:

https://m.youtube.com/watch?v=Zzl4B3mrKQE

171 blah April 21, 2017 at 9:31 pm

The US is full of people who find “inequality” fair to a large extent, but would like to do something about poverty, and I agree with them.

So it is troublesome that a lot of people who purportedly want to address poverty keep making inequality the focal point of their campaigns.

And this might be precisely because talking “inequality” is more polarizing than talking poverty, because:

1. It allows people like Cowen’s fellow academicians to feel morally superior (and not just “morally good”) and make it a “good vs bad” fight.

2. Talking of “inequality” comes with connotations that those who are doing well economically did not deserve it; this allows for tapping into a hatred that talking of poverty would not.

3. Perhaps unlike the republican base, the republican establishment and assorted followers of Buckley over-libertarianized, and were therefore happy to have poverty and inequality put in the same basket (they wanted the Government to do nothing about either).

4. Talking of economic inequality is a way to perpetuate other forms of inequality: as Hanson says, and I copy-paste his conclusion from economic inequality being considered more seriously than other forms of inequality: “A world that disapproves of most all superiority displays could be one with a distaste for overt inequality, and sympathy for the less fortunate. In contrast, a world that disapproves of only some superiority displays while relishing others looks more like a world where folks with some types of excellence have won a battle to be seen as higher status than folks with other types of excellence.”

172 jorod April 21, 2017 at 11:49 pm

Good intentions do not necessarily produce good results. The government manufactures poor people. More and more women are married to the government.

173 blah April 22, 2017 at 12:06 am

I agree, but my point was more along the lines of: even the intentions are not as good as they might appear.

174 jorod April 21, 2017 at 11:47 pm

Inequalities are not necessarily inequities.

175 The_original_Jim April 22, 2017 at 1:42 am

The question is too vague, needs an analytic philosopher to rephrase it.

My 2 cents: Samuel Stouffer wrote a book based on survey data from US G.I.s after WW2. You know, there is a lot of inequality in the military. Why wouldn’t the average grunt resent to brass with all their so-called “unequal benefits”? But in general, they didn’t. Because their “reference group” was not officers or even members of the military. It was “guys like me”. Who were by definition equal and so should be treated that way. Preferential treatment, that they resented. They didn’t care much what other soldiers general got, they cared about what “guys like me” got.

My hunch: Most people tend to be self-centered most of the time. They, me for example, don’t care how rich Bill Gate, Warren Buffet, President Trump, Mark Zuckerberg, even Ray Lopez, are. They care about what they personally have, compared to “people like me”.

The definition of “people like me” is, obviously, subject to change as circumstances or even perceptions change.

Now there will be exceptions, people with excessively high self-esteem (or narcissism). They “strongly agree” believe that they are just as good as “other people” (one of the 10 items from the Rosenberg SE scale), and so they deserve what those “other people” have. And their definition of “other people” is highly inclusive.

Also, there are a few Americans who think that everyone should be about equal (outcome-equal), but to the best of my recollection, they have always been a shunned minority.

The question then is really, how much inequality and what kind of inequality? Is it highly associated with salient social indicators? How badly off are the folks at the bottom (rather than how great do the top have it?)

Or, if you really care spo much about inequality, how much are you willing to pay (or, to give up, or to forego) to eliminate it?

176 andy April 22, 2017 at 2:42 am

The reality is that income inequality has gone up a great deal since the early 1980s, and we haven’t done so much to reverse the basic trend

It hasn’t: http://politicalcalculations.blogspot.cz/2013/12/the-major-trends-in-us-income.html#.WPr7G8mkKRs

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178 ad April 22, 2017 at 4:26 pm

Why don’t people care more about economic inequality?

Unfair and unequal are not the same thing.

Man makes a million dollars – good for him.
Man inherits a million dollars – lucky for him.
Man steals a million dollars – he’s a thief.

People don’t have to think of the last of these in the same way as the first.

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