4 ms·

Something about the statement 'So inequality is not the problem, poverty is the problem' is wrong. I can't quite put my finger on it -- it sounds along the line

Something about the statement 'So inequality is not the problem, poverty is the problem' is wrong. I can't quite put my finger on it -- it sounds along the lines of 'So falling from the 20th floor is not the problem, hitting the sidewalk is the problem'. Can someone explain me to myself?

neilwilson 5y ago
Inequality is the water balloon argument - that for one side to go up, the other side has to go down. It's fixed amount thinking. Poverty is the water source argument - let's just have more water flow so that those that want to keep it in buckets can do so without affecting anybody's ability to drink. That's floating amount thinking. Money is a floating concept not a fixed one. The fixed amount is the amount of hours a person has in a day. Poverty is solved by distributing needs by hours and relegating money to the distribution of wants.
ssivark 5y ago
Nice analogy. I think that Tyler Cowen statement is a symptom of Procrustean thinking from someone who starts reasoning not with an understanding of how humans are, but starts “logically” from the principles of economics and how humans ought to be per the economics rule book. IMHO, (too much) inequality is fundamentally a problem because respective people’s power/influence in a market society (which we’re tending to) is proportional to their wealth — and that is intrinsically incompatible with the notion of participative democracy.
lordloki 5y ago
I don't think that's a good analogy for the statement given. I think a better analogy would be "the difference between your floor and the top floor isn't the problem, falling out the window is the problem."
dv_dt 5y ago
Inequality as some level of uneven distribution is not a problem iff that distribution keeps the lowest percentile above poverty. In the real world this doesn't happen, because not only is the distribution not bounded for minimal fairness, it has been shifting by those who have capital to further push value upwards - so it's a problem that never self corrects. Imho Cowen makes obscure arguments to inequality not being a problem because he is paid from the Koch empire (for at least a significant portion of his career w/ George Mason University) which has put in significant resources into developing multiple Economic arguments their their wealth and influence are not a problem.
ls612 5y ago
You implicitly (and are not alone in this) place negative value on the “wrong people” or even on other people in general having more, even if you are no worse off. It stems from the human brain being very perceptive of hierarchy and wanting to move up the totem pole by any means necessary.
neoburkian 5y ago
Your analogy implies that inequality creates poverty or that there is some casual relationship. This is what many people intuitively believe. It is not true. As a rule, when people try to remove inequality everybody gets poorer, not richer. Countries are more successful at reducing poverty when they focus on lifting all boats. India and China were communist countries in the mid 20th century. As a result of them abandoning that approach, we have seen the greatest poverty reduction in human history. Check the GINI coefficients of those countries, it isn't great. Ask Chinese/Indian citizens if they are wealthier now than 60 years ago and its not even a question.
- HWR_14 5y ago
  Since India was never what many would call a communist country (the communist party was outlawed less than 5 years after independence), I would question the veracity of everything else you say.

neilwilson 5y ago

Inequality is the water balloon argument - that for one side to go up, the other side has to go down. It's fixed amount thinking. Poverty is the water source argument - let's just have more water flow so that those that want to keep it in buckets can do so without affecting anybody's ability to drink. That's floating amount thinking. Money is a floating concept not a fixed one. The fixed amount is the amount of hours a person has in a day. Poverty is solved by distributing needs by hours and relegating money to the distribution of wants.

ssivark 5y ago

Nice analogy. I think that Tyler Cowen statement is a symptom of Procrustean thinking from someone who starts reasoning not with an understanding of how humans are, but starts “logically” from the principles of economics and how humans ought to be per the economics rule book. IMHO, (too much) inequality is fundamentally a problem because respective people’s power/influence in a market society (which we’re tending to) is proportional to their wealth — and that is intrinsically incompatible with the notion of participative democracy.

lordloki 5y ago

I don't think that's a good analogy for the statement given. I think a better analogy would be "the difference between your floor and the top floor isn't the problem, falling out the window is the problem."

dv_dt 5y ago

Inequality as some level of uneven distribution is not a problem iff that distribution keeps the lowest percentile above poverty. In the real world this doesn't happen, because not only is the distribution not bounded for minimal fairness, it has been shifting by those who have capital to further push value upwards - so it's a problem that never self corrects. Imho Cowen makes obscure arguments to inequality not being a problem because he is paid from the Koch empire (for at least a significant portion of his career w/ George Mason University) which has put in significant resources into developing multiple Economic arguments their their wealth and influence are not a problem.

ls612 5y ago

You implicitly (and are not alone in this) place negative value on the “wrong people” or even on other people in general having more, even if you are no worse off. It stems from the human brain being very perceptive of hierarchy and wanting to move up the totem pole by any means necessary.

neoburkian 5y ago

Your analogy implies that inequality creates poverty or that there is some casual relationship. This is what many people intuitively believe. It is not true. As a rule, when people try to remove inequality everybody gets poorer, not richer. Countries are more successful at reducing poverty when they focus on lifting all boats. India and China were communist countries in the mid 20th century. As a result of them abandoning that approach, we have seen the greatest poverty reduction in human history. Check the GINI coefficients of those countries, it isn't great. Ask Chinese/Indian citizens if they are wealthier now than 60 years ago and its not even a question.

HWR_14 5y ago
Since India was never what many would call a communist country (the communist party was outlawed less than 5 years after independence), I would question the veracity of everything else you say.