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Additional question : why should we care about income inequality? The post WW2 area had less income inequality because the world economy had been torn apart.

by guylhem 13y ago

Additional question : why should we care about income inequality? The post WW2 area had less income inequality because the world economy had been torn apart. We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.

mkr-hn 13y ago
WW2 happened because an angry failed artist convinced some people that inequality should be solved by force.
- MrZongle2 13y ago
  In part, yes. But that angry failed artist came to power by blaming the disastrous economic conditions on a) the victorious powers of WWI for imposing crippling penalties upon Germany, b) the existing government and their predecessors for accepting and adhering to these conditions, and c) certain groups within Germany for "exploiting" the situation.
- 21echoes 13y ago
  .... in what world did Hitler want to solve income inequality?
- vor_ 13y ago
  Yes, Hitler was well-known for treating people equally.
ItendToDisagree 13y ago
Because income inequality causes all sorts of issues (haves/have nots, concentration of power, etc) Regarding the difference between pre-WWI and Post-WWII income inequality it seems pretty disingenuous to claim (if you were) that the times (then and now) are similar in economic terms, not to mention quality of life. Between the 50s and 80s or so there was still great growth (for Americans at least) but much less income inequality. Some may argue that constituted a 'sweet spot' in terms of balancing growth with income inequality. There is some interesting information at the below link regarding the time period following WWII http://www.cbpp.org/cms/?fa=view&id=3629 http://www.cbpp.org/cms/?fa=view&id=3629
klenwell 13y ago
For my primer on this question, I look to The Moral Animal by Robert Wright, one of the first popular science books to introduce evolutionary psychology to a mainstream audience back in the 1990s. To boil down a lot of interesting reading (on a subject, which it is fair to say, generates a lot of controversy): income inequality produces social instability, primarily as a result of a lot of economically (and, by extension, sexually) disenfranchised young men.
- yummyfajitas 13y ago
  Given that instability is down in the US and young men are neither economically nor sexually disenfranchised, yet inequality is way up, it seems your theory is already falsified.
  - ItendToDisagree 13y ago
    Are you certain that Black or insert minority males are not economically disenfranchised to a greater or lesser degree? I'm not touching the sexual part with a 10 foot pole cause it bears no relevance in my opinion either. But I do think that many young men are economically disenfranchised in The States. Edit: In my comment any mention of 'men' should read "and women". I don't mean just males which is another reason I don't think it is important to address the sexual disenfranchisement part.
    - yummyfajitas 13y ago
      I'm pretty sure that black males are less economically disenfranchised today than in the past, in spite of increases in inequality. For example, we no longer have Jim Crow laws attempting to correct the excesses of capitalism (greedy employers hiring blacks instead of whites). A quick google search suggests black men are less sexually disenfranchized than non-blacks. http://www.thedailybeast.com/articles/2010/07/20/sex-statistics-who-does-it-the-most.html http://www.thedailybeast.com/articles/2010/07/20/sex-statist... http://www.nbcnews.com/id/19374216/#.Uv0a2HX_SFk http://www.nbcnews.com/id/19374216/#.Uv0a2HX_SFk
angersock 13y ago
basically reaching the point where we were before 2 world wars destroyed so much wealth. And this does not alarm you?
- guylhem 13y ago
  Your logic seems wrong for the causality. We destroyed wealth because of the world wars, which then caused "rising equality". I do not believe the world wars happened due to inequality - so no, I'm not worried.
  - mkr-hn 13y ago
    The National Socialist German Workers' Party would like to have a word with you.
    - arethuza 13y ago
      I think Hitler was rather more cynical than that - when he wanted to exploit socialists to achieve his ends he supported socialism. However, after the Röhm purge (AKA "The Night of the Long Knives") most of the socialists within the party were removed (and often killed) - making the Nazis far more acceptable to the rich industrialists and military leaders that Hitler needed support from to get total power.
      - ItendToDisagree 13y ago
        While what you say is true it does not change the fact that one of the main leverages used by Hitler was the economic inequality that the German public believed had been foisted upon them by the other European powers. Regardless of how the Reich was built, or oriented politically, economic inequality (and nationalism) were a primary tool used to gain momentum. You are totally correct that German leaders of business and holders of wealth were courted into the Reich. Many of them from Bayer to IG Farben benefited directly from the concentration camps.
  - angersock 13y ago
enewc 13y ago
Because excess income inequality is a symptom of larger societal problems. Much of the debate over inequality serves as a proxy for other issues such as classism, government/corporate relations, civic responsibility, and the future of the economy.
Retric 13y ago
Diminishing returns. The amount of resources it takes to make someone happier is non linear, so maximizing total wealth is a poor way to measure the health of a society. Realistically Log(income) is probably a much better measure. Granted, the economy is not a zero sum game. However, at a practical level simply accumulating wealth is often a zero or even negative sum game. EX: Spam, Pollution, etc.
- yummyfajitas 13y ago
  Spam and pollution both impose negative externalities. Are you arguing that the primary mode by which people become wealthy is by generating externalities? Also, Log(consumption) is a much better measure than Log(income) - a 1000 dollar bill doesn't make you happy, it's the hookers and cocaine you buy with it that does.
  - Retric 13y ago
    I do think most wealth accumulation causes both negative externalities and positive ones. But, my point was wealth accumulation is not inherently a virtue. Sure curing a disease or building the next Google is great, but you can also make a lot of money squatting domains etc. We often whitewash the rich but the sad truth of it is people are people and no large group is going to be limited to good or bad people. Also, unspent wealth buys piece of mind which is can make you happy. AKA, I would much rather have 100,000$ in my bank account than 100$. Really log(income) still understates things as lifestyle changes more going from 20,000$ to 40,000$ income vs 20,000,000 income to 40,000,000 income. PS: I think the amount of money entertainers can make is probably inherently detrimental to society. But, that's another debate entirely.
lgieron 13y ago
Democracy doesn't work with capital concentrated in a few hands - they can just buy the politicians and overtake the country, imposing laws which allow them to concentrate even more wealth and power. Arguably, that's something that's happening in the US already.
- altcognito 13y ago
  From a more practical perspective, concentrating wealth in the hands of a few people will cause inefficiencies. Rarely does a single person (or a small group of persons) have the best ideas on how to allocate resources. An important tenet of Capitalism is that fair competition breeds multiple solutions to the same problem. While it's inefficient because some aspects are duplicated or tangential (accounting/marketing), it is an excellent system for insuring the best players are providing products and services.
maxerickson 13y ago
A lot of people care about it simply because things feel unfair to them. (Of course you are driving at something else, but the way you have phrased it completely ignores this little piece of reality)
djs123sdj 13y ago
We should care about it in as much as it results in massive differences in basic quality-of-life for large numbers of people. Quality-of-life here is not defined by the ability buy iThings, flat-screens, and XBoxes, but affording decent education, health care, and a fair chance at upward social and economic mobility, regardless of where you come from.
- yummyfajitas 13y ago
  In spite of inequality increasing, relative mobility has remained the same and absolute mobility has increased. People consume more health care and education than ever before. http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf Does this mean inequality is not a problem?
  - djs123sdj 13y ago
    Mobility is far too complex a phenomenon to sum up with a single nationwide "rate". Here's an example that reflects on the role of race in metropolitan areas and commute zones on mobility: http://economix.blogs.nytimes.com/2013/07/25/the-complex-story-of-race-and-upward-mobility/ http://economix.blogs.nytimes.com/2013/07/25/the-complex-sto... The authors of the study you cite actually provided some input for that article. Regarding education, the total "quantity" of education people are consuming seems like a meaningless metric. It says nothing about the distribution of high-quality educational opportunities to people on different ends of the income spectrum. The disparities in access to quality education in many cases are strongly correlated to the income distribution. Measuring health outcomes is similarly more complex than the broad brush of "total health consumed" that you paint it with: http://www.nber.org/reporter/spring03/health.html http://www.nber.org/reporter/spring03/health.html http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/
    - yummyfajitas 13y ago
      Inequality went up, so did life expectancy. So by your criteria, we should probably not worry about inequality. What health outcome do you believe has decreased, as a result of inequality increasing? https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_dyn_le00_in&hl=en&dl=en&idim=country:USA:GBR:CAN https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&... What data (if any) would be sufficient to convince you that inequality is not a problem?
MisterBastahrd 13y ago
Yeah, because the world was just PEACHY before WWI. People starving in the streets if not downright famines, oligarchs meddling in the affairs of the people... just awesome. History has proven time and time again that when enough people are sufficiently marginalized, they tend to disregard the property rights of the wealthy in order to restore some sort of equilibrium. It's a game of chicken that numerically the wealthy can't win.
- altcognito 13y ago
  Ah, enter the drone. /dystopia
Zigurd 13y ago
Because you might have cause and effect exactly backward.
cabalamat 13y ago
> why should we care about income inequality? It's up to you what you care about. Some people find the arguments in https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equal_Societies_Almost_Always_Do_Better https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equ... persuasive. > The post WW2 area had less income inequality because the world economy had been torn apart. If that was true, then as the economy recovered, income inequality would have increased. But it didn't, it continued to decrease in the USA and UK until about 1980, when it started rising again. I feel that it is unlikely to be a coincidence that the trend changed around the same time Thatcher and Reagan were elected. > We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth. There was a vast net increase in wealth between 1914 and 1945.
huherto 13y ago
IMHO it is not so much the inequality, but the poverty. Too much poverty and everyone looses.

by guylhem 13y ago

mkr-hn 13y ago

WW2 happened because an angry failed artist convinced some people that inequality should be solved by force.

MrZongle2 13y ago
In part, yes. But that angry failed artist came to power by blaming the disastrous economic conditions on a) the victorious powers of WWI for imposing crippling penalties upon Germany, b) the existing government and their predecessors for accepting and adhering to these conditions, and c) certain groups within Germany for "exploiting" the situation.
21echoes 13y ago
.... in what world did Hitler want to solve income inequality?
vor_ 13y ago
Yes, Hitler was well-known for treating people equally.

ItendToDisagree 13y ago

Because income inequality causes all sorts of issues (haves/have nots, concentration of power, etc) Regarding the difference between pre-WWI and Post-WWII income inequality it seems pretty disingenuous to claim (if you were) that the times (then and now) are similar in economic terms, not to mention quality of life. Between the 50s and 80s or so there was still great growth (for Americans at least) but much less income inequality. Some may argue that constituted a 'sweet spot' in terms of balancing growth with income inequality. There is some interesting information at the below link regarding the time period following WWII http://www.cbpp.org/cms/?fa=view&id=3629 http://www.cbpp.org/cms/?fa=view&id=3629

klenwell 13y ago

For my primer on this question, I look to The Moral Animal by Robert Wright, one of the first popular science books to introduce evolutionary psychology to a mainstream audience back in the 1990s. To boil down a lot of interesting reading (on a subject, which it is fair to say, generates a lot of controversy): income inequality produces social instability, primarily as a result of a lot of economically (and, by extension, sexually) disenfranchised young men.

yummyfajitas 13y ago
Given that instability is down in the US and young men are neither economically nor sexually disenfranchised, yet inequality is way up, it seems your theory is already falsified.
- ItendToDisagree 13y ago
  Are you certain that Black or insert minority males are not economically disenfranchised to a greater or lesser degree? I'm not touching the sexual part with a 10 foot pole cause it bears no relevance in my opinion either. But I do think that many young men are economically disenfranchised in The States. Edit: In my comment any mention of 'men' should read "and women". I don't mean just males which is another reason I don't think it is important to address the sexual disenfranchisement part.
  - yummyfajitas 13y ago
    I'm pretty sure that black males are less economically disenfranchised today than in the past, in spite of increases in inequality. For example, we no longer have Jim Crow laws attempting to correct the excesses of capitalism (greedy employers hiring blacks instead of whites). A quick google search suggests black men are less sexually disenfranchized than non-blacks. http://www.thedailybeast.com/articles/2010/07/20/sex-statistics-who-does-it-the-most.html http://www.thedailybeast.com/articles/2010/07/20/sex-statist... http://www.nbcnews.com/id/19374216/#.Uv0a2HX_SFk http://www.nbcnews.com/id/19374216/#.Uv0a2HX_SFk

angersock 13y ago

basically reaching the point where we were before 2 world wars destroyed so much wealth. And this does not alarm you?

guylhem 13y ago
Your logic seems wrong for the causality. We destroyed wealth because of the world wars, which then caused "rising equality". I do not believe the world wars happened due to inequality - so no, I'm not worried.
- mkr-hn 13y ago
  The National Socialist German Workers' Party would like to have a word with you.
  - arethuza 13y ago
    I think Hitler was rather more cynical than that - when he wanted to exploit socialists to achieve his ends he supported socialism. However, after the Röhm purge (AKA "The Night of the Long Knives") most of the socialists within the party were removed (and often killed) - making the Nazis far more acceptable to the rich industrialists and military leaders that Hitler needed support from to get total power.
    - ItendToDisagree 13y ago
      While what you say is true it does not change the fact that one of the main leverages used by Hitler was the economic inequality that the German public believed had been foisted upon them by the other European powers. Regardless of how the Reich was built, or oriented politically, economic inequality (and nationalism) were a primary tool used to gain momentum. You are totally correct that German leaders of business and holders of wealth were courted into the Reich. Many of them from Bayer to IG Farben benefited directly from the concentration camps.
- angersock 13y ago

enewc 13y ago

Because excess income inequality is a symptom of larger societal problems. Much of the debate over inequality serves as a proxy for other issues such as classism, government/corporate relations, civic responsibility, and the future of the economy.

Retric 13y ago

Diminishing returns. The amount of resources it takes to make someone happier is non linear, so maximizing total wealth is a poor way to measure the health of a society. Realistically Log(income) is probably a much better measure. Granted, the economy is not a zero sum game. However, at a practical level simply accumulating wealth is often a zero or even negative sum game. EX: Spam, Pollution, etc.

yummyfajitas 13y ago
Spam and pollution both impose negative externalities. Are you arguing that the primary mode by which people become wealthy is by generating externalities? Also, Log(consumption) is a much better measure than Log(income) - a 1000 dollar bill doesn't make you happy, it's the hookers and cocaine you buy with it that does.
- Retric 13y ago
  I do think most wealth accumulation causes both negative externalities and positive ones. But, my point was wealth accumulation is not inherently a virtue. Sure curing a disease or building the next Google is great, but you can also make a lot of money squatting domains etc. We often whitewash the rich but the sad truth of it is people are people and no large group is going to be limited to good or bad people. Also, unspent wealth buys piece of mind which is can make you happy. AKA, I would much rather have 100,000$ in my bank account than 100$. Really log(income) still understates things as lifestyle changes more going from 20,000$ to 40,000$ income vs 20,000,000 income to 40,000,000 income. PS: I think the amount of money entertainers can make is probably inherently detrimental to society. But, that's another debate entirely.

lgieron 13y ago

Democracy doesn't work with capital concentrated in a few hands - they can just buy the politicians and overtake the country, imposing laws which allow them to concentrate even more wealth and power. Arguably, that's something that's happening in the US already.

altcognito 13y ago
From a more practical perspective, concentrating wealth in the hands of a few people will cause inefficiencies. Rarely does a single person (or a small group of persons) have the best ideas on how to allocate resources. An important tenet of Capitalism is that fair competition breeds multiple solutions to the same problem. While it's inefficient because some aspects are duplicated or tangential (accounting/marketing), it is an excellent system for insuring the best players are providing products and services.

maxerickson 13y ago

A lot of people care about it simply because things feel unfair to them. (Of course you are driving at something else, but the way you have phrased it completely ignores this little piece of reality)

djs123sdj 13y ago

We should care about it in as much as it results in massive differences in basic quality-of-life for large numbers of people. Quality-of-life here is not defined by the ability buy iThings, flat-screens, and XBoxes, but affording decent education, health care, and a fair chance at upward social and economic mobility, regardless of where you come from.

yummyfajitas 13y ago
In spite of inequality increasing, relative mobility has remained the same and absolute mobility has increased. People consume more health care and education than ever before. http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf Does this mean inequality is not a problem?
- djs123sdj 13y ago
  Mobility is far too complex a phenomenon to sum up with a single nationwide "rate". Here's an example that reflects on the role of race in metropolitan areas and commute zones on mobility: http://economix.blogs.nytimes.com/2013/07/25/the-complex-story-of-race-and-upward-mobility/ http://economix.blogs.nytimes.com/2013/07/25/the-complex-sto... The authors of the study you cite actually provided some input for that article. Regarding education, the total "quantity" of education people are consuming seems like a meaningless metric. It says nothing about the distribution of high-quality educational opportunities to people on different ends of the income spectrum. The disparities in access to quality education in many cases are strongly correlated to the income distribution. Measuring health outcomes is similarly more complex than the broad brush of "total health consumed" that you paint it with: http://www.nber.org/reporter/spring03/health.html http://www.nber.org/reporter/spring03/health.html http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/ http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/
  - yummyfajitas 13y ago
    Inequality went up, so did life expectancy. So by your criteria, we should probably not worry about inequality. What health outcome do you believe has decreased, as a result of inequality increasing? https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_dyn_le00_in&hl=en&dl=en&idim=country:USA:GBR:CAN https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&... What data (if any) would be sufficient to convince you that inequality is not a problem?

MisterBastahrd 13y ago

Yeah, because the world was just PEACHY before WWI. People starving in the streets if not downright famines, oligarchs meddling in the affairs of the people... just awesome. History has proven time and time again that when enough people are sufficiently marginalized, they tend to disregard the property rights of the wealthy in order to restore some sort of equilibrium. It's a game of chicken that numerically the wealthy can't win.

altcognito 13y ago
Ah, enter the drone. /dystopia

Zigurd 13y ago

Because you might have cause and effect exactly backward.

cabalamat 13y ago

> why should we care about income inequality? It's up to you what you care about. Some people find the arguments in https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equal_Societies_Almost_Always_Do_Better https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equ... persuasive. > The post WW2 area had less income inequality because the world economy had been torn apart. If that was true, then as the economy recovered, income inequality would have increased. But it didn't, it continued to decrease in the USA and UK until about 1980, when it started rising again. I feel that it is unlikely to be a coincidence that the trend changed around the same time Thatcher and Reagan were elected. > We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth. There was a vast net increase in wealth between 1914 and 1945.

huherto 13y ago

IMHO it is not so much the inequality, but the poverty. Too much poverty and everyone looses.