This paper addresses the tiresome canard that inequality has risen in the “past few decades”, code for since Reagan lol. How should we measure poverty? Is poverty only relative and not an easily defined term? Is poverty really the cause of crime?
In the first part of The State by Franz Oppenheimer he states, "All teachers of natural law, etc., have unanimously declared that the differentiation into income-receiving classes and propertyless classes can only take place when all fertile lands have been occupied. For so long as man has ample opportunity to take up unoccupied land, “no one,” says Turgot, “would think of entering the service of another;” we may add, “at least for wages, which are not apt to be higher than the earnings of an independent peasant working an unmortgaged and sufficiently large property;” while mortgaging is not possible as long as land is yet free for the working or taking, as free as air and water. Matter that is obtainable for the taking has no value that enables it to be pledged, since no one loans on things that can be had for nothing.
The philosophers of natural law, then, assumed that complete occupancy of the ground must have occurred quite early, because of the natural increase of an originally small population. They were under the impression that at their time, in the eighteenth century, it had taken place many centuries previous, and they naïvely deduced the existing class aggroupment from the assumed conditions of that long-past point of time. It never entered their heads to work out their problem; and with few exceptions their error has been copied by sociologists, historians and economists. It is only quite recently that my figures were worked out, and they are truly astounding.∗"
Is it, then, the case that only with the presence of a state does poverty cause crime? In other words, poverty and inequality are cause solely by politics in our society and not from economic factors. I’m beginning to think, furthermore, that environmental regulations by the state play a huge part in this problem.
Inequality does not matter as long as the standard of living is increasing for everyone. Besides, the statistics often cited for following income do the job very poorly as I have explained in my blog.
It can lead to people becoming hostile to liberal economic policies if their living conditions really are deterrioating which is a bad thing. I haven’t done a lot of research on the issue so I can’t comment more on especially on why income gaps are increasing and they aren’t meeting productivity.
Tony I’ve been meaning to comment on your blog since I looked around it the other day. I’ll do that soon.
If people think that economic liberty causes economic problems, then they’ll tend to oppose it regardless of how well things are going. If things are going well for them, they won’t think it’s because of economic liberalism.
I think this ignores the division of labor. Even in ancient times, some people were better at farming than others, or simply had better luck than others. The accumulation of farmland into great estates is the direct result of this.
“I think this ignores the division of labor. Even in ancient times, some people were better at farming than others, or simply had better luck than others. The accumulation of farmland into great estates is the direct result of this.”
Yes that’s true, but those great estates never encompassed entire countries. It’s political force that occupies much land, not homesteading or settling by actual people.
I don’t have a lot of patience for these kinds of studies anymore, so I just skimmed the paper. Inequality matters because it is a useful tool for pedagogues. Other than that, it does not matter, of course. Rothbard pretty much obliterated the whole inequality thing with his essay Egalitarianism As a Revolt Against Nature. If you haven’t read it, please do.
I agree with the author’s conclusion (inequality doesn’t matter) but I don’t agree with how the conclusion was arrived at.
Most importantly, I think people need to understand that all the hot air blown on arguing income inequality is a bunch of smoke and mirrors to avoid talking about the root of inequality - privilege. The modern monarchs have pulled off the devil’s greatest trick; they have convinced the world they do not exist. It’s astounding how willfully obtuse even very smart people can be about this kind of thing. Look at the British monarch… on paper, she literally controls everything but then people go right on saying her power is “purely ceremonial.” If it’s so ceremonial, why does she need to go on having it? Why not just formally sign everything over to “the people of Britain” and be done with it? When you dig just under the surface of European royalty and nobility, you will find a whole rat’s nest of long-standing entitlements and privilege that have been formally altered many times but which retain all the essential accoutrements of power. The Elites in the United States are no different… many of them are intermarried with the Old World Elites anyway, but even those that aren’t intermarried still essentially operate de facto family titles through ownership of private businesses and properties upon which are conferred astounding legal privileges ranging from regulatory favors to outright monopoly.
So, all this blabber about “inequality” is all a diversion in the first place. Rather than talking about the inequality of legal privileges enjoyed by the owners of private electric companies which enjoy legal advantages conferring upon them monopoly status or the legal privileges of high-ranking bureaucrats and the bureaucracies they operate which confer benefits and privileges upon their family, friends and relatives, we’re debating whether the upper middle class should pay a higher percentage of their income than the lower middle class and poor. It’s a three-ring circus and the ringmaster is hiding in the shadows, calling all the shots and keeping the people’s attention on everything in the world but himself.
Crime (theft) is the result of an economic calculation. “Will I be better off stealing or working?” High wages deter theft because the alternative to crime becomes more appealing. If wages swamp any possible gains from theft, theft will become very rare. If wages are small compared to gains from theft, theft will be more common.
I don’t think increased income inequality will make theft much more profitable. But, I believe a free market will make working more profitable.
So, I think it is reasonable that a free market will reduce crime even if it increases income inequality (which is debatable).