Epp and Borghetto have solved for the equilibrium…

And most of you won’t like it:

This article investigates the effects of economic inequality on legislative agendas. It considers two competing hypotheses: (1) that policymakers will act to counter rising inequality by renewing their focus on redistributive social policies, and (2) that rising inequality makes legislative agendas especially vulnerable to the influence of economic elites, and that these elites will attempt to keep redistributive social policies off the agenda. Empirical tests, which are designed to arbitrate between these hypotheses, use data on public laws and parliamentary bills introduced in the legislatures of nine European countries between 1941 and 2014. The evidence is supportive of the second hypothesis: as inequality becomes more acute, European legislative agendas become systematically less diverse and this narrowing of attention is driven by a migration away from social safety-net issues toward issues relating to law enforcement, immigration, and national defense.

Here is the paper, via the excellent Matt Grossman.

Comments

Simple translation: the Right is more powerful than the Left. Follow the money.

Isn't the translation even simpler - me against my brother, my brother and I against my cousin, my cousin and I against the world.

Ethnically homogeneous states feed on themselves with the politicians pitting the poor against the rich. Once the elites realize they can import all the cheap nannies they like *and* pay lower taxes, they do so. So it is the indigenous population against the immigrants.

Interesting, more of a road to oligarchy than a road to serfdom?

But the sample size is both small and limited, nine European countries. Venezuela went the opposite direction, and Latin American countries in general seem to pendulum back and forth, although I don't know if their pendulums are correlated with the inequality.

Presumably it was a massive amount of work to analyze all that legislation, that limited them to nine countries.

When the left is in power, we tilt to one set of windmills like social justice, gay marriage, marijuana legalization and leave bigger problems unfixed. When the right is in power, we tilt to another set of windmills like kneeling football players, transgender bathroom bans, and illegal immigration and leave bigger, important problems unfixed. So the cycle continues and those who just want a piece of the dream are left in the dust.

I appreciate the demonstrated even handedness in the portrayal, but a few points are maybe worth noting.

Throwing a million people in prison for something that hurts no one but degrades economic potential by placing those people on all manner of de facto blacklistsand greylists -- all the while shovelling billions of dollars into the hands of non-taxpaying criminals -- is a big problem, but one which can be readily addressed.

Forbidding 10+ million homosexual Americans from specifying who will have rights to assist in their medical decisions, or benefit from insurance contributions that they have paid into like everyone else, is a big deal, but one which has already been mostly addressed.

As for who pees where or whether sports stars should be mandated to publicly express patriotism, I'm not sure how anyone got the idea that it is the business of the government to have more than a preference on the matter.

Regardless of one's positions on the above matters, the specific issues should be defended as strongly separable from financial matters such as suitable taxation and regulation for economic growth purposes, or political demands for redistribution and assistance accessing opportunity and/or their effects on the economy. Because black/white thinking, and also groupthink, are not conducive to good policy which benefits all.

How many times do you need to be told the same shit to learn that that the state is our enemy?

I think the point was actually that monied interests specifically set about to manipulate the agenda away from social demands and more so toward potentially repressive activities by police (or similar).

The theoretical proposition is that it is corruption-prone elites that underlie the problem, and not the state per se. For which reason suitable structures (within/for the state) are needed to reduce the extent of such influence.

For example, campaign contribution limits would tend to improve the overall ability of the state, and electorates, to be effective in withstanding manipulative communications (or in other cases forms of bribery) which serve the interests of some elite at an overall cost to the economy.

How can anyone be surprised by this? It's not a question of liking it or not. It's a question of being willing to accept it as fact.

No rational person observing the behavior of the US government, and especially but not solely the Republican Party, could believe otherwise.

'in the legislatures of nine European countries between 1941 and 2014'

1941 is a profoundly strange starting point when looking at Europe, but one assumes that it was picked for a reason that has nothing to do with getting a desired result.

What a good point.

I suppose we could count how many independent legislatures there were in Europe in 1941. UK, Eire, Sweden, Portugal, Spain, Switzerland, um, um, um ..... Hungary, maybe? Romania? Bulgaria? Not a helluva lot anyway.

I take it that the legislatures in Germany and Italy mattered not a button. I don't suppose the legislatures in Portugal and Spain had much power either.

And then after the war Romania and Bulgaria didn't have independent legislatures and the Iberian countries continued as dictatorships for decades. And eventually many legislatures were on the receiving end of instructions from Brussels.

How on earth did they conjure up a useful continuing record for nine countries?

If they're migrating *away* from social safety-net issues as inequality becomes more acute, isn't the more interesting finding here that their previous focus on social safety-net issues led to rising inequality? If indeed this paper is correct that the policies of the left were failing to produce the outcomes being sought, it seems reasonable and hardly unexpected that policy would move to the right.

You're assuming that no other factors can affect inequality. But business decisions (offshoring), changing industry concentration (away from farming/manufacturing), and increasingly concentrated industries (profit margins at the expense of wage growth), can all affect the dynamic independent of social safety net legislation.

The fact of an observation does not imply that one's preferred explanation is correct.

For example, if inequality rises, it is possible that inequality-reducing policies did NOT cause the increase.

Paradoxically, a high level of inequality correlates with a high level of financial and economic instability and a low rate of economic growth, which hurt the economic elites who promote policies that reinforce rather than mitigate inequality. Economic elites aren't economic elites because they are stupid, though, believing as they do that central banks will come to their rescue in every financial crisis, preventing asset prices from collapsing and then inflating asset prices back to the level before the crisis, restoring both the wealth of the economic elites and inequality. Even Mr. Inequality himself, Thomas Piketty, believes that to be the case (he says so in his book). For those who don't know history, the Fed did not intervene in the 1929 financial crisis, asset prices and inequality collapsed, and inequality remained low until the 1980s when it began its rise to peak in 2008 (at roughly the same level as in 1929 before the financial collapse). In the 2008 financial crisis, the Fed intervened, stopped the collapse of asset prices, and then inflated asset prices back to their original level in 2008. In this populist age, will central banks always intervene and save the economic elites from themselves?

Hmmm...maybe since there's such a renewed concern about originalism as a way of governance, perhaps citizens can finally have the production rights they started out with, returned to them.

Author Walter Scheidel's "The Great Leveler" notes economies default to inequality. In the U.S., the share of income of the bottom 95% has fallen considerably since 1980.

a. Inequality increases as the wealth of a country increases.

b. There seems to be a ceiling to redistribution people seem to be willing to accept as fair.

c. Europe hit that ceiling early in that time period.

"Inequality increases as the wealth of a country increases."

Not true from 1945-1980.

Due to redistribution. Looks like they hit the ceiling in 1980 then.

Hmmmm....I wonder what changed in 1980....

While a lot of work went into this paper, in the end the analysis revolves around whether variables X and Y are positively or negatively related. The paper finds a negative relationship - and this is consistent with one of their two hypotheses. However, it is consistent with hundreds (thousands?) of other hypotheses as well. Add in the small sample size, and I can't tell what to make out of their statistical analysis. Why not just report the data as an exploratory study and leave out the statistical significance nonsense - this looks like a classic case of mistaking statistical significance as support for a particular hypothesis.

Shouldn’t libertarian readers rejoice at this finding? You get both massive immigration and lower taxes. What more do libertarians really want? Competitive markets? Please.

I guess it depends on what kind of libertarian you are. If you were the kind who hoped that the invisible hand would indeed bring prosperity to all, and obviate the need for redistribution, you might be depressed.

Of course if you were just a "what's mine is mine" libertarian it is all good.

Aren't redistributive programs more likely to have been put into place in the 1941-1970 period than later? Redistributive legislation seems generally like a one and done deal - it tends to persist over time (Medicaid etc), and doesn't need to be continually re-enacted by legislatures.

Since the earlier period would tend to be the one with less measured inequality and the later period the one with more inequality, does that suggest that this finding could just be an artifact?

"the legislatures of nine European countries between 1941 and 2014"

"European legislative agendas become systematically ... toward issues relating to law enforcement, immigration, ..."

Golly, I wonder why that might be?

YEah.

The evidence is supportive of the second hypothesis: as inequality becomes more acute, European legislative agendas become systematically less diverse and this narrowing of attention is driven by a migration away from social safety-net issues toward issues relating to law enforcement, immigration, and national defense.

Also, maybe Europe hit peak Social Safety Net, and thus stopped focusing on making more of it ... and more on dealing with the consequences of having a really nice one combined with a recent flood of what rounds to unrestricted and pretty much [as far as I can tell from across the pond] unassimilating immigration?

It takes a special kind of deliberate blindness to imagine that the pure cause of such policy shifts is "inequality".

What is the self-interest of the political class? They need to talk about the game, but if they solved poverty they would lose leadership status. That is also why the family income statistics don't include transfer payments, food stamps, etc.

Law enforcement? Immigration? National defense? Those agendas are not driven by the elite. They are driven by populists and grass root movements. Based on my broad understanding right vs. left politics, we would expect these policy agendas when there is a perceived threat or a time of scarcity. It is in times of plenty that we get populists who are willing to share the wealth. What I see in this analysis is that the populace drives politics.

Shouldn't everyone not like it? One group because it is a reality they wish to ignore, the other because it is a reality they recognize but abhor?

There is nothing surprising here.

In America the rich and powerful get what they want way more often than the rest of us.

Here's a conversation about it: https://www.washingtonpost.com/news/posteverything/wp/2018/01/23/democracy-in-america-an-interview-with-authors-ben-page-and-martin-gilens/?utm_term=.c6e6582b58bc

I've read other studies that say the same thing: ordinary citizens and their concerns do not matter. The rich and powerful get their way. In America.

The rich and powerful get their way everywhere and in all eras of history. If they get way out of line they get revolutioned. Give me one example otherwise.

The Gilens/Page study is flawed, and even taken at face value, it merely says that in the 10% of cases where the rich and middle class disagree (there are no significant differences between the rich and the middle class in 90% of policies), they win in roughly equal amounts. In short, there is no oligarchy running the show much as the populist left and right would like people to believe: https://www.vox.com/2016/5/9/11502464/gilens-page-oligarchy-study

Most of the empirical data on the U.S. Congress in fact supports the notion that money tends to follow power, not vice-versa.

So, they only found that states with higher inequality typically have policies less focused on lowering inequality. The casuation link they claim is rather unconvincing: it assumes that the political process can be controlled by rational forces. I usually think that the degree of impact that socioeconomic factors have regarding the choice of policy tends to be very low. This is evident by the fact that countries with widely similar socioeconomic indicators porsue wildly different policies, just look at Brazil, Iran, Romania, Venezuela and China.

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