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Economist Tyler Cowen has some advice for what to do about America's income inequality: Get used to it. ... In the interview, the economist basically says "giv

Economist Tyler Cowen has some advice for what to do about America's income inequality: Get used to it. ... In the interview, the economist basically says "give up" because that's the way things are going. The economist attributes (mostly) this to computers. "Computers will play a larger role and people who can work with computers can make a lot." But those who aren't in the "top 15%" will be okay, since: "... But I think people who are not rich can be extremely happy. And I think the chances to be happy in this new world, with many more opportunities to be creative, to be online, to educate yourself — there'll be a lot more chances to be happy. It's not to say everyone will take them or be equipped to take them, but there will be a lot of new paths to opportunity." I do not subscribe to this wishful thinking...

loceng 13y ago
I think it's lacking in scope of what's possible in the future. If you stick to the status quo of how things are, then yeah, the future will be shit for most people. The status quo will be different in the future though.
- graeme 13y ago
  Maybe. It could always get worse though. The poor maintain their current standard of living in part thanks to laws and structures that protect this: minimum wage, food stamps, welfare, unions, Medicaid These tend to be in decline or under attack, sometimes with good reason. But there's no impetus to replace them with anything. Brazil may be our future. The low end goes very low there.
  - bernawil 13y ago
    Modern urban poverty as in Brazil is really rarely a matter of lack of resources. The poor in Brazil suffer from a poor organization rather than material poverty; people in favelas suffer the daily violence and rampant drug trade, but they don't really go hungry often.
rokusho 13y ago
Indeed, a lot of data suggests that a countries level of income equality and citizens happiness is negatively correlated. http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_inequality http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_...
- marknutter 13y ago
  But very little data exists about the happiness levels of people in a country where despite income inequality the poor have a higher living standard than they did at any other time in history, as it is in the US. If the poor are doing better than ever, and the rich are doing better than ever, what's the problem, really?
  - cschwarm 13y ago
    There is, for instance, the problem that some "goods" cannot be produced although people care very much about them, namely partners to start a family with. Unfortunately, women tend to be attracted to relatively rich men, which can result in a lower "supply" for relatively poor men if a rich man can attract several women (for instance, by using serial monogamy). It's been suggested that this leads to a larger amount of violence in poor neighborhoods (due to increased competition among men). Which leads to another problem: Being relatively poor may not be a problem, provided the level of wealth is secure. Due to the lack and inefficiency of social safety nets in the US, however, being relatively poor can always turn into being poorer still. Since being relatively poor often means living in a relatively poor neighborhood with a higher prevalence of violence, there's a good reason for feeling insecure all the time. Your son may get killed in a drive-by shooting, while your daughter may get raped. Meanwhile, you may get robbed. Even if one's situation is not as critical, it's always possible to become critical. For instance, one may simply loose one's job, and thus the means to provide for a family. Or one becomes ill. The number one reason for declaring personal bankruptcy in the US are medical bills. A large percentage of these people were health insured, by the way. These are just a few examples on the top of my head.
yummyfajitas 13y ago
I do not subscribe to this wishful thinking... This isn't wishful thinking. It's simply recognition of the fact that feeling materially superior to others is only one of many routes to happiness. If income doubles for the poor and quadruples for the rich (Cowen's postulated mechanism of increasing inequality), the poor have many new sources of happiness. For example, currently only 38% of the poor have a Playstation or XBox [1]. If the income of the poor doubles, probably every poor person could gain some happiness from video games. [1] https://explore.data.gov/Energy-and-Utilities/Residential-Energy-Consumption-Survey-RECS-Files-A/eypy-jxs2 https://explore.data.gov/Energy-and-Utilities/Residential-En...
- LekkoscPiwa 13y ago
  The problem lies elsewhere. The problem is that the system is so sick that the poor have to pay taxes for rich banksters bonuses. Hence, destoying all the credibility of the system. Rich paying to the poor is socialism. Poor paying to the rich is feudalism. Poor could care less about the toys they can get when they can afford less and less food, energy free time. Plus pay feud to the corrupt banksters on top of that. That's not capitalism, that's feudalism. Cowen is proposing neo-feudalism.
- _delirium 13y ago
  Empirically, however, societies with higher income inequality have lower happiness (and this is fairly robust to confounding factors and different kinds of society, and even shows up internally when comparing different time periods of the same society, e.g. when you look at different U.S. decades). Perhaps in principle it's possible to have a happy and highly unequal society (in sci-fi this is commonly imagined as involving happiness drugs or VR), but we haven't seen one yet.
  - yummyfajitas 13y ago
    Empirically, however, societies with higher income inequality have lower happiness... Could you link to some data on this? Ideally something other than "The Spirit Level", which basically just observes that many negative traits are correlated and then puts inequality on the x-axis.
talmand 13y ago
I believe the argument is: Today people without money are not happy because life itself requires resources, that many people do not have, to be happy and healthy. Tomorrow people without money could be happy and healthy because many of the things that make them so will require less resources to access. One example given in the interview I heard is that eventually you'll be able to get a good education for free from the Internet. Once people accept that premise, then spending big money on a college education isn't as necessary. But then, it's the future so who knows what will happen since the future doesn't exist yet.

loceng 13y ago

I think it's lacking in scope of what's possible in the future. If you stick to the status quo of how things are, then yeah, the future will be shit for most people. The status quo will be different in the future though.

graeme 13y ago
Maybe. It could always get worse though. The poor maintain their current standard of living in part thanks to laws and structures that protect this: minimum wage, food stamps, welfare, unions, Medicaid These tend to be in decline or under attack, sometimes with good reason. But there's no impetus to replace them with anything. Brazil may be our future. The low end goes very low there.
- bernawil 13y ago
  Modern urban poverty as in Brazil is really rarely a matter of lack of resources. The poor in Brazil suffer from a poor organization rather than material poverty; people in favelas suffer the daily violence and rampant drug trade, but they don't really go hungry often.

rokusho 13y ago

Indeed, a lot of data suggests that a countries level of income equality and citizens happiness is negatively correlated. http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_inequality http://en.wikipedia.org/wiki/Economic_inequality#Effects_of_...

marknutter 13y ago
But very little data exists about the happiness levels of people in a country where despite income inequality the poor have a higher living standard than they did at any other time in history, as it is in the US. If the poor are doing better than ever, and the rich are doing better than ever, what's the problem, really?
- cschwarm 13y ago
  There is, for instance, the problem that some "goods" cannot be produced although people care very much about them, namely partners to start a family with. Unfortunately, women tend to be attracted to relatively rich men, which can result in a lower "supply" for relatively poor men if a rich man can attract several women (for instance, by using serial monogamy). It's been suggested that this leads to a larger amount of violence in poor neighborhoods (due to increased competition among men). Which leads to another problem: Being relatively poor may not be a problem, provided the level of wealth is secure. Due to the lack and inefficiency of social safety nets in the US, however, being relatively poor can always turn into being poorer still. Since being relatively poor often means living in a relatively poor neighborhood with a higher prevalence of violence, there's a good reason for feeling insecure all the time. Your son may get killed in a drive-by shooting, while your daughter may get raped. Meanwhile, you may get robbed. Even if one's situation is not as critical, it's always possible to become critical. For instance, one may simply loose one's job, and thus the means to provide for a family. Or one becomes ill. The number one reason for declaring personal bankruptcy in the US are medical bills. A large percentage of these people were health insured, by the way. These are just a few examples on the top of my head.

yummyfajitas 13y ago

I do not subscribe to this wishful thinking... This isn't wishful thinking. It's simply recognition of the fact that feeling materially superior to others is only one of many routes to happiness. If income doubles for the poor and quadruples for the rich (Cowen's postulated mechanism of increasing inequality), the poor have many new sources of happiness. For example, currently only 38% of the poor have a Playstation or XBox [1]. If the income of the poor doubles, probably every poor person could gain some happiness from video games. [1] https://explore.data.gov/Energy-and-Utilities/Residential-Energy-Consumption-Survey-RECS-Files-A/eypy-jxs2 https://explore.data.gov/Energy-and-Utilities/Residential-En...

LekkoscPiwa 13y ago
The problem lies elsewhere. The problem is that the system is so sick that the poor have to pay taxes for rich banksters bonuses. Hence, destoying all the credibility of the system. Rich paying to the poor is socialism. Poor paying to the rich is feudalism. Poor could care less about the toys they can get when they can afford less and less food, energy free time. Plus pay feud to the corrupt banksters on top of that. That's not capitalism, that's feudalism. Cowen is proposing neo-feudalism.
_delirium 13y ago
Empirically, however, societies with higher income inequality have lower happiness (and this is fairly robust to confounding factors and different kinds of society, and even shows up internally when comparing different time periods of the same society, e.g. when you look at different U.S. decades). Perhaps in principle it's possible to have a happy and highly unequal society (in sci-fi this is commonly imagined as involving happiness drugs or VR), but we haven't seen one yet.
- yummyfajitas 13y ago
  Empirically, however, societies with higher income inequality have lower happiness... Could you link to some data on this? Ideally something other than "The Spirit Level", which basically just observes that many negative traits are correlated and then puts inequality on the x-axis.

talmand 13y ago

I believe the argument is: Today people without money are not happy because life itself requires resources, that many people do not have, to be happy and healthy. Tomorrow people without money could be happy and healthy because many of the things that make them so will require less resources to access. One example given in the interview I heard is that eventually you'll be able to get a good education for free from the Internet. Once people accept that premise, then spending big money on a college education isn't as necessary. But then, it's the future so who knows what will happen since the future doesn't exist yet.