3 ms·
I feel that this discussion about income inequality doesn't do us any good mostly because both sides are kinda right but they fail to realize that and just try
by ignasl 11y ago
I feel that this discussion about income inequality doesn't do us any good mostly because both sides are kinda right but they fail to realize that and just try to promote their own agenda. Economy seems simple but in reality there are millions of variables. Is the income inequality a real problem depends on a lot of those variables and possible solution depends on them too. Education of population, infrastructure built, society culture, human nature, society homogeneity, corruption, political system, dominant industries, social mobility, tax rates, efficiency in using tax revenue, various incentives etc. Everything matters and if you want to implement some policy you need to take into account as much as you can before deciding what is the best policy. Like a chess player calculates multiple steps in the future so should economists.
For example in some dirt poor country with bad education and huge corruption the higher income inequality will result in even lower total pie while in silicon valley (where Graham comes from) increased income inequality just makes pie bigger to everyone (and that's why Graham argument is what it is). The problem is that everyone choose to see what they want to see and then argue about different thing than the other side.
I understand that some John "The programmer and self labeled savior of the poor" thinks he is very smart economist and argues that if someone has too much and then someone has too little lets just take from rich and give it to the poor. But real world is much more complex. And before we even start discussing what we should do about income inequality we should first agree on what exactly we are arguing about. What is income? What is inequality? What is fair share of taxes? What is wealth? What is capital? Even what is the economy and how it works! How one or another policy will affect various economic activities? Analysis must be much broader than simply stating your opinion that being rich are bad (or good).