I have read some articles recently where income inequality was marked as a cause of a lot of different harms to society. Most if these were some sort of propaganda to support wealth redistribution and other joys of big government. (I will not post links for those as they were in my native language) But it made me thinking and I did a bit further research and found this video which makes sense to me (apart from the end suggestions of what should be done) :
My question is what would free society do? Is the trend in free society to widen the gap between poor and rich ar narrow it? and why?
Thank you for your responses or relevant links.
PS: please excuse me if I posted this in the wrong area. I am new to the forum although I read a lot from mises.org and find it really amazing i never really wanted to become active in this area. Well it changed.
No one knows for sure. What we do know is that a free market will raise the general level of wealth for all people. The gap between rich and poor may widen, may narrow, but the poor will enjoy an increasing standard of living regardless. I think Rothbard put it best on this one when he pointed out it was ridiculous to complain about someone having 5 yachts when you only had 1. It’s a little pissy in tone, but it does get to the heart of the matter, and this is an improving standard of living across the board for all people requires a free market, and only in a free market would you get people making that complaint about 1 vs 5 yachts.
You’re never going to get rid of jealousy or other traits of humanity unless they eventually get bred out of us by some mechanism. So as long as people are jealous and greedy and stupid, they will occassionally let their actions be motivated by jealousy and greed to do something stupid, like steal or hurt other people and/or their property, either on their own or using the government. So income inequality to the extent that it gives rise to these feelings and actions is irrelevant; if people aren’t jealous of your wealth, it’ll be your wife or husband, or your hair or skin, or level of fitness, whatever. They’ll think you got to where you are because you are white, or black, asian. Neither the government nor the market has yet come up with a way to cure the human condition.
False. Income inequality in itself never hurt anyone. Doesn’t matter how much money Scrooge McDuck has in his vaults, no one is being hurt by it. If anything, his miserly ways are benefitting the rest of us!
However, gross economic inequality (think high-rise condos next to oceans of homeless people living in makeshift shelters, a sight commonly seen in many places around the world) is created by the State. In fact, the State is not an equalizer. If it were, North Korea would be the most equal place on Earth.
The whole argument is to provide a justification as to why one group getting some form of public assistance can say they are not welfare bums. The reality is that the poor in the USA and Canada in particular have access to more and better products and services than even the President of the USA had in 1955.
The study you linked, while showing a good correlation and did well at showing its own data relevant, didn’t deal with the “causality” problem very well. It didn’t deal with the factors which would usually result in a more equal society, which is characterized specifically by a less competitive and more empathetic culture, or in Japan’s case a generally very disciplined and hard-working culture.
It’s also bullcrap that there are many people in the U.S who are having physical problems caused by stress which, in turn, is caused by wondering whether or not they’re good enough or competitive enough. How many times has that actually happened to you in such a way which can be removed by equalizing income? Perhaps there’s something to do with working conditions there, but the equal society could have very crappy working conditions. Champion in the video is saying it doesn’t matter how you get there as long as you get there, so as long as no one has an income that’s 4 times as much as everyone else’s you can treat your employees as poorly as you yourself decide to, which isn’t going to make them negatively stressed at all. And in the U.S the reason why people commit crimes is definitely because they’re being looked down on and for reasons of income, rather than that they’re actually struggling because of their own life choices or their upbringing. There’s no mention of how the U.S is the most racially diverse nation in the West, or how this was affected by the drug wars and the welfare state. Instead it’s believed that you can just aggregate cultures and it’ll make everything okay.
So the reasons that they actually provided are pretty poor, especially because in Japan there’s a HUGE pressure to succeed in anything that you’re doing as well as a whole lot of stress about the fact that it’s very hard to be open with others (by and large) in Japan because of the strict rules of etiquette there.
So let’s look at this logically and in an a priori manner.
How does inequality affect people’s lives?
How might men react to these affects?
What will this, in turn change?
What sorts of people will be predisposed to what courses of action?
What results would indicate that any of these things was happening?
Based upon our conclusions what does data indicate about which one of these things has happened?
And then possibly, If the data doesn’t seem to suggest any of this, is there something that we overlooked or is it some large combination of these things?
This study doesn’t do this, it first collects data and then tries to support it with weak claims which justify the data which is inherently biased by the data which is useless in the social sciences because there’s any number of figures you could trace!
You could slap Mises’ “Theory and History” right over the face of that video and the pixels would have shriveled up and died because of how utterly inconclusive the study being shown on them was. If the reasons given weren’t so weak then this might be a very good study, but as it is now, right or wrong… IT’S NOT.
This is what’s so maddening about historicism and positivism, you can spend millions looking at utterly useless figures and making irrelevant conclusions and you’re no further to an answer than when you began.
I’m at work and can’t watch the video from the OP, however I’m guessing it’s Richard Wilkinson’s TED talk about his arguments from The Spirit Level? If so, here’s a good deal of information regarding that book and the quality of the research in it. Specifically, check out some of the links on the right column:
I see I have a lot to read now If there are great differences between standart of living of people within the same area there will be bigger tention. That is what I can agree with. What I do not agree is that there need to be state intervention to fix this. I understand it is just another study, but seemed interesting as it shows some locations where the differences between poor and rich are higher, people are more willing to donate to charity:
I should have paid more attention to statistics and probability when I was in school. Lot of the studies just does not seem right according to my senses, but do not know why
But the main point I take from this is that I need to really practice on my apriori approach to stuff.
I’m sorry to bug you in your thread while you are seeking answers, so I feel guilty at switching the ‘burden of proof’ here…but…could you explain to me why you might think the income inequality agenda exists? I’ve seen the TED video before, and to me it just struck out as complete non-sequitar after complete non-sequitar.
This has always confused me. I think I’ve written previously about this before, in fact, I think I’ll just grep what I have from before…
I am reading someone staunchly attacking capitalism. Then, in the middle of the paper is usually a small diatribe about income inequality, how big it is, how it’s getting bigger, and there is always a ominous overbearing tome.
Imagine you are someone who is a frequent attender of horror movies. However, nearly EVERY horror movie you’ve seen, usually incorporates a guy with a newspaper on top of his head. WHENEVER this guy appears, the rest of the audience goes into a sullen, fear-like trance. However, you, obviously, remain fairly confused on the whole matter. So, there’s a guy with a newspaper on his head? Why does he show up in every horror movie I’ve been watching? What is the deal with this? Is there something I’m not getting here? This is beginning to become a pattern…
THE SAME THING HAPPENS TO ME WHEN I SEE INCOME INEQUALITY STATISTICS. They are the “Guy with a newspaper on his head” that appears in every capitalist “horror show” diatribe I’ve read. What. Is. The. Deal? So some people make a lot of money…and?
Even videos like that TED video you showed…don’t really start at square one I think. There really is this under-riding tone of “O.k., everyone in this audience knows income inequality is bad, so let’s justify it.”
How can society be harmed? Society isn’t an individual. Is the phrase “cause harm to society” supposed to stand in for “cause harm to multiple/many individuals”? If so, why not just use that phrase?
But that misses the point; everyone is not equally dirt poor, even in DPRK. There seem to be two metrics of inequality that the leftists are concerned about. One metric is the size of the upper echelon of society. However small our upper crust, it’s a hell of a lot larger by percentage of the population than in DPRK. Another metric is the ratio between the “income” or “wealth” or “resources” commanded by the upper crust as individuals or as a group and the income of the poor. Again, however big this ratio is here, it is much larger in DPRK where the people are living in the lowest ranks of 3rd world poverty while the upper crust in DPRK enjoys luxuries no different from those enjoyed by the upper crust anywhere else on the planet.
This, in itself, is not a disproof of communism but it is one of a constellation of datapoints that show that the empirical evidence does indeed correlate with the a priori facts. The State does not solve inequality - more State results in more inequality, not the other way around. When you measure the sides of a right-triangle with a ruler, they really do add up to c2 = a2 + b2. Imagine that!
If there are great differences between standart of living of people within the same area there will be bigger tention. That is what I can agree with. What I do not agree is that there need to be state intervention to fix this. I understand it is just another study, but seemed interesting as it shows some locations where the differences between poor and rich are higher, people are more willing to donate to charity:
