20 ms·

I'm still waiting to see a justification for anti-inequality talk other than asserting it as a moral imperative. What is the economic justification for more agg

I'm still waiting to see a justification for anti-inequality talk other than asserting it as a moral imperative. What is the economic justification for more aggressive taxation?

imgabe 12y ago
I'd rather be moderately well off in a society where everyone else is moderately well off than filthy rich in a society where everyone else is poor. There's no point in having a lot of money if everywhere outside your house is a slum.
deleted 12y ago
[deleted]
chc 12y ago
It looks a lot like the justification for schools: Places with very pronounced inequality tend to have a lot of societal problems (up to and including the massive underclass deciding to behead members of the upper class). I suppose if you want to get really nihilistic, you can say that you don't care if society at large goes into the toilet as long as you can achieve short-term monetary gains such as could be obtained by cutting funding to schools, but I think most people agree that maintaining a well-functioning society is a good goal for the government.
freehunter 12y ago
If the country is broke, you don't get more money by taxing people without money. If the country needs more money, ask the people who have some to spare.
- smacktoward 12y ago
  And even if the country isn't broke, the principle still stands; if you put the tax burden on those who can least afford it, they pay it by cutting back on what they spend on consumer goods and services, which slows the overall performance of the economy.
- jgoewert 12y ago
  Furthering on that, by placing the civil burden on those with less income reduces the amount of taxes areas have to deal with, so like any industry, they need to find other sources. Those sources then seem to target the ones in the worst position to be able to afford it. Example: Heavy fines for speeding and other traffic violations in poorer neighborhoods. Look at the state of Ferguson, MO which was just analyzed in great details. Something like an average of 2.7 warrants per person because they don't appear in court to be able to afford fines. We are making criminals out of vast oceans of people because a few people at the top don't feel much like paying a fair share of the taxes.
deleted 12y ago
[deleted]
totalrobe 12y ago
Not aggressive taxation, but here's some anti-inequality justification: states that have recently raised minimum wages have also seen greater gains in employment. http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the-minimum-wage http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creat...
- tvhiggins 12y ago
  correlation not causation. this flies in the face of econ 101. if a company has $100 budget and pay min wage of $8/hr they can have 12 employees. you raise min wage to $12/hr? they can only hire 8 people. you make human capital more expensive? more incentive to automate
  - smacktoward 12y ago
    > this flies in the face of econ 101 Econ 101 provides an extremely limited understanding of economics. Your assumption is that the company is a closed system -- a fixed pile of money. But in the real world it isn't, it's part of the overall economy. If people are spending more, the overall economy expands, which increases the earnings of our hypothetical business, which leads to them having more than $100. The benefit of a minimum wage increase is in the way it puts money in the hands of people who will spend it.
    - freehunter 12y ago
      Even in Econ 201, my teacher was quick to point out "this assumes perfectly rational actors in working within ideal situations". Which doesn't exist ever.
    - fixedd 12y ago
      I also assume that a boost in morale would increase productivity.
    - tvhiggins 12y ago
      raising min wage would price people out of jobs! on another note, most people assume incorrectly that this bottom portion of earners is a fixed group of people year in year out. Simply not true. look at us bureau census data. Over half of people earning minimum wage are under 24. If you don't have skills for a job, you work for min wage, gain skills and experience so you can get better jobs. When the government makes companies pay more for these teenagers they will hire less. these would-be workers will have more difficulty gaining skills/experience.
tfigueroa 12y ago
Because economics as a system has a band in which it operates. Outside of that, the system fails.
rosser 12y ago
The marginal utility of a tax dollar is greater to someone who makes less than I do than it is to me. EDIT: s/value/utility/
- RickHull 12y ago
  > The marginal value of a tax dollar is greater to someone who makes less than I do than it is to me. Perhaps you mean marginal utility? Strictly in terms of value, the wealthy tend to trade that dollar for assets rather than consumption. Marginal value of any dollar is higher when it generates a return. If you do mean marginal utility, there is a strong philosophical position that interpersonal utility comparisons are not meaningful. Diminishing marginal utility holds for any one person, but subjective preference and merely ordinal (rather than cardinal) preference confounds any attempt at interpersonal comparison.
  - rosser 12y ago
    Yes, I meant marginal utility. I think it's going to take rather more than a "strong philosophical position" to convince me that 1/100000 is somehow not bigger than 1/100000000.
  - genericuser 12y ago
    I think he was trying to talk about MPC. http://en.wikipedia.org/wiki/Marginal_propensity_to_consume http://en.wikipedia.org/wiki/Marginal_propensity_to_consume
  - tunesmith 12y ago
    I'm curious what the philosophical position is that says that $1,000 is not worth meaningfully more in value or utility to a poor person than an equity fund manager, and why that position would be described as "strong".
    - RickHull 12y ago
      There is no known measurement of utils and good reason to believe there never will be. Our strongest insight into subjective preference is revealed preference. Without action, preference is not revealed, and where preference is revealed by action, we can only know that one preference is higher than another -- ordinal. We cannot determine that one preference is, say, 10x higher than another. These are the limitations of utility analysis for a single person. Diminishing marginal utility holds for a single person, and it ought to hold for interpersonal comparisons ceteris paribus, but of course ceteris paribus is a logical impossibility for interpersonal comparison given subjective preference. To hold ceteris paribus for two people is to assert they are the same person, and we're back to diminishing marginal utility for a single person. Our only guide to interpersonal utility comparison is intuition, which is easily confounded. There is no way to say that my number one preference has more utility than yours, and we have even less reason to say anything meaningful about my number X preference compared to your number Y preference.
gizmo 12y ago
One big reason is that people who don't have much money tend to spend what they have. The very rich tend to invest their money, frequently overseas. So by redistributing wealth you give a direct boost to the economy by transferring money from people who won't spend it to people who do. Taxation in the States is at an all time low, and a handful of decades ago the US has much higher taxes at the top and much bigger growth. So there's also plenty of historical evidence supporting the case for redistribution. There are also a number of moral arguments (which I think are much stronger).
- blue11 12y ago
  > Taxation in the States is at an all time low Not true in 2014. Obama raised a number of taxes for the top bracket: Ordinary income: 35% -> 39.6% Capital gains: 15% -> 20% Medicare tax: 1.45% -> 2.35% Meanwhile in California: 10.3% -> 13.3% Marginal taxes and the top for residents of California are: 39.6+2.35+13.3 = 55.25% The number is similar for New York City. You have to go back to the Reagan's first term to find higher tax rates. Now all we have to do is wait for the growth.
  - BigTuna 12y ago
    1. Presidents don't raise taxes. 2. There are far more loopholes and exemptions than there were in Reagan's first term.
danielnaab 12y ago
Let me reframe your question. What is the economic justification of deficit exploding tax-cuts? http://www.washingtonpost.com/business/economy/us-debt-outlook-still-dark/2013/09/17/27470394-1feb-11e3-8459-657e0c72fec8_graphic.html http://www.washingtonpost.com/business/economy/us-debt-outlo... Generally speaking, though, I don't think most of us who are concerned about inequality think that our tax system is the only, or even the most important, thing that needs to be addressed. The fact that I could work 40 hour weeks and still be eligible for food assistance, Medicaid, and other poverty bandaids tells me that we don't properly value work in this country... and that's a cultural problem.
- jrells 12y ago
  How is this a cultural problem? It seems strictly like an economic problem. Teachers are highly valued in our culture (or at least, valued much more than they are in our economy). We DO value work, and that's precisely why people are concerned. The economy doesn't value work as much as our culture does.
  - danielnaab 12y ago
    I don't disagree with your wording... However, economics _is_ culture. If I pay my workers less than the cost of living I can justify it by the logic of the market, but it is still my choice. The "greed is good" mantra allows too many of us to rationalize away our economic choices as as different from our values. They're not, they're one and the same.
    - jrells 12y ago
      I think I understand where you're coming from, economics is a form of culture, but I was trying to distinguish the cold economic price of low-skilled labor from the non-economic value we place on it (sorry I don't know a better way to express this). Hard work is generally considered very important and valuable in our culture, but excess supply and low demand drives down the economic value. I value water very highly (non-economically), more than gold, but the economy disagrees. You could say employers are greedy and hoard excess profits while keeping wages low, or you could say that they generously provide much needed jobs to a struggling low-skill labor market. Both are true. It would be nice if low-skilled labor drew higher wages, but wages above the economic rate are just another form of charity. You don't compromise your value of hard work by choosing to pay low wages, you just lack charity.
drinkzima 12y ago
Do mean besides the hoards of research linking larger income inequality to lower growth: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.nytimes.com/2014/08/06/upshot/alarm-on-income-inequality-from-a-mainstream-source.html?abt=0002&abg=1 http://www.nytimes.com/2014/08/06/upshot/alarm-on-income-ine... http://www.sciencedirect.com/science/article/pii/0014292195000305 http://www.sciencedirect.com/science/article/pii/00142921950... Not to mention the marginal value of dollars to the hyper rich is substantially lower. The wealth/income distribution we have now looks very different than it did even 10 years ago, so it is worth discussing as a society what the 'correct' distribution should be. Hedge fund managers now are no better than the managers of 10-20 years ago, the system has evolved to favor them more. We can argue about whether they 'deserve' said wealth, but research shows that the wealthy need a given dollars less than the impoverished and growth can benefit when the distribution is more equal as well.
- jiggy2011 12y ago
  "Hedge fund managers now are no better than the managers of 10-20 years ago, the system has evolved to favor them more." Don't hedge funds now have better technology and bots etc that boost the productivity of each trader?
  - elastine 12y ago
    Yes, but at the same time there are many more hedge funds canceling out the relative advantage of each trader.
    - jiggy2011 12y ago
      Yes, but that makes the market as a whole more effective.
      - Ma8ee 12y ago
        In what sense "more efficient"? There is nothing that says that just because some people have become better at making money the market as a whole is working better.
smacktoward 12y ago
Oh, all right, I'll bite. Here's two. 1) In a society whose economy is driven by sales of consumer goods, having wealth spread more broadly results in greater sales of consumer goods, which means more economic activity and a higher standard of living for everybody. (Concentrating wealth in a small strata of very wealthy people doesn't have the same effect, because once people get past a certain level of wealth they don't spend money they earn beyond that on consumer goods; they put it in the bank or the stock market.) 2) You've heard of the Bastille, I assume?
- johnrob 12y ago
  I think your first point is a pretty good summary of where the US economy is. Plenty of dollars chasing investments, but fewer looking to consume products. High price/earning ratios reflect this.
totalrobe 12y ago
Justification here: “a more vibrant middle class… increased long-run economic growth.” http://www.academia.edu/248659/Does_Income_Distribution_Affect_US_State_Economic_Growth_ http://www.academia.edu/248659/Does_Income_Distribution_Affe...
- nazgulnarsil 12y ago
  Thanks for posting something reasonable. Most of the rest of this thread is people assuming they are qualified economists. I think that people assumed I was asking the original question in bad faith. I'm actually curious about this question.
deleted 12y ago
[deleted]
dominotw 12y ago
Isn't moral imperative good enough?
foobarqux 12y ago
Besides the fact that you arguably can't dismiss morality out of hand, inequality makes people unhappy and they don't want it.
- Florin_Andrei 12y ago
  > Besides the fact that you arguably can't dismiss morality out of hand I've always thought that libertarians and free-market extremists are some sort of outliers on the morality spectrum - probably sitting near the extreme low end of the axis. That's just how their brains are wired. Then the rational mind starts spinning reasons, trying to justify the givens of their intuition.
  - nazgulnarsil 12y ago
    The people I know who donate significant sums lean libertarian.
    - rosser 12y ago
      As true as that may be, it's anecdata, and not necessarily representative.
  - ad_hominem 12y ago
    > I've always thought that libertarians and free-market extremists are some sort of outliers on the morality spectrum - probably sitting near the extreme low end of the axis That's funny, because I'd think it the exact opposite. The linchpin of most libertarians, the non-aggression principle (NAP), is pretty much all about morality. It might not be correct, especially with the sticky issue of defining property rights and whatnot, but it certainly aspires to be a moral framework. A libertarian would say it's not moral for you to take resources from the "haves" by force and redistribute it to the "have-nots" just because you think it's for the greater good; morality is achieved by voluntary cooperation. Basically this: http://i.imgur.com/vmMrN6O.png http://i.imgur.com/vmMrN6O.png
eli_gottlieb 12y ago
You can argue about whether something constitutes a moral imperative, but to dismiss moral imperative entirely means you're excluding yourself from humane discussion.
glomph 12y ago
Diminishing returns.
eevilspock 12y ago
What basis does any economic justification rest on if not at bottom a moral one?
RickHull 12y ago
Furthermore, most of Krugman's argument seems to be an appeal to envy. Without envy, what reason should anyone have to begrudge Steve Jobs or Bill Gates their enormous financial success. Wealth is not a zero sum game, and these men have contributed untold amounts of wealth to society, in several important forms: * Iphones in the hands of welfare moms * Lavish consumption habits which distribute cash throughout the goods and services economy * Massive amounts of investment yielding better technology and higher productivity and efficiency * Charitable giving and other altruistic endeavors It is not at all obvious, even if 90% would vote to do so, that taking resources from those who have earned them and putting them under government control and distribution would put them to better use. Leaving aside the moral concerns of taking justly acquired property from individuals, and the undermining of private property as an institution, there is great reason to believe that government distribution puts resources to lower use rather than higher. Positive sum games are always to be preferred over zero or negative sum games.
- elastine 12y ago
  Your argument is predicated on the assumption that the rich use their wealth only for the "important forms" you mention. What you don't mention is how they are able to influence the political arena with their wealth. The influence of politics by a few is a very natural consequence of massive inequality, and is a zero-sum game. More political influence of the wealthy means less political influence of the poor. You cannot divorce the economy from politics.
  - RickHull 12y ago
    I don't disagree with your analysis, but this is not relevant to Krugman's argument nor my objections to it.
- freehunter 12y ago
  >there is great reason to believe that government distribution puts resources to lower use rather than higher. Not exactly true. https://en.wikipedia.org/wiki/Fiscal_multiplier#United_States_of_America https://en.wikipedia.org/wiki/Fiscal_multiplier#United_State...

I'm still waiting to see a justification for anti-inequality talk other than asserting it as a moral imperative. What is the economic justification for more aggressive taxation?

imgabe 12y ago

I'd rather be moderately well off in a society where everyone else is moderately well off than filthy rich in a society where everyone else is poor. There's no point in having a lot of money if everywhere outside your house is a slum.

deleted 12y ago

[deleted]

chc 12y ago

It looks a lot like the justification for schools: Places with very pronounced inequality tend to have a lot of societal problems (up to and including the massive underclass deciding to behead members of the upper class). I suppose if you want to get really nihilistic, you can say that you don't care if society at large goes into the toilet as long as you can achieve short-term monetary gains such as could be obtained by cutting funding to schools, but I think most people agree that maintaining a well-functioning society is a good goal for the government.

freehunter 12y ago

If the country is broke, you don't get more money by taxing people without money. If the country needs more money, ask the people who have some to spare.

smacktoward 12y ago
And even if the country isn't broke, the principle still stands; if you put the tax burden on those who can least afford it, they pay it by cutting back on what they spend on consumer goods and services, which slows the overall performance of the economy.
jgoewert 12y ago
Furthering on that, by placing the civil burden on those with less income reduces the amount of taxes areas have to deal with, so like any industry, they need to find other sources. Those sources then seem to target the ones in the worst position to be able to afford it. Example: Heavy fines for speeding and other traffic violations in poorer neighborhoods. Look at the state of Ferguson, MO which was just analyzed in great details. Something like an average of 2.7 warrants per person because they don't appear in court to be able to afford fines. We are making criminals out of vast oceans of people because a few people at the top don't feel much like paying a fair share of the taxes.

deleted 12y ago

[deleted]

totalrobe 12y ago

Not aggressive taxation, but here's some anti-inequality justification: states that have recently raised minimum wages have also seen greater gains in employment. http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the-minimum-wage http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creat...

tvhiggins 12y ago
correlation not causation. this flies in the face of econ 101. if a company has $100 budget and pay min wage of $8/hr they can have 12 employees. you raise min wage to $12/hr? they can only hire 8 people. you make human capital more expensive? more incentive to automate
- smacktoward 12y ago
  > this flies in the face of econ 101 Econ 101 provides an extremely limited understanding of economics. Your assumption is that the company is a closed system -- a fixed pile of money. But in the real world it isn't, it's part of the overall economy. If people are spending more, the overall economy expands, which increases the earnings of our hypothetical business, which leads to them having more than $100. The benefit of a minimum wage increase is in the way it puts money in the hands of people who will spend it.
  - freehunter 12y ago
    Even in Econ 201, my teacher was quick to point out "this assumes perfectly rational actors in working within ideal situations". Which doesn't exist ever.
  - fixedd 12y ago
    I also assume that a boost in morale would increase productivity.
  - tvhiggins 12y ago
    raising min wage would price people out of jobs! on another note, most people assume incorrectly that this bottom portion of earners is a fixed group of people year in year out. Simply not true. look at us bureau census data. Over half of people earning minimum wage are under 24. If you don't have skills for a job, you work for min wage, gain skills and experience so you can get better jobs. When the government makes companies pay more for these teenagers they will hire less. these would-be workers will have more difficulty gaining skills/experience.

tfigueroa 12y ago

Because economics as a system has a band in which it operates. Outside of that, the system fails.

rosser 12y ago

The marginal utility of a tax dollar is greater to someone who makes less than I do than it is to me. EDIT: s/value/utility/

RickHull 12y ago
> The marginal value of a tax dollar is greater to someone who makes less than I do than it is to me. Perhaps you mean marginal utility? Strictly in terms of value, the wealthy tend to trade that dollar for assets rather than consumption. Marginal value of any dollar is higher when it generates a return. If you do mean marginal utility, there is a strong philosophical position that interpersonal utility comparisons are not meaningful. Diminishing marginal utility holds for any one person, but subjective preference and merely ordinal (rather than cardinal) preference confounds any attempt at interpersonal comparison.
- rosser 12y ago
  Yes, I meant marginal utility. I think it's going to take rather more than a "strong philosophical position" to convince me that 1/100000 is somehow not bigger than 1/100000000.
- genericuser 12y ago
  I think he was trying to talk about MPC. http://en.wikipedia.org/wiki/Marginal_propensity_to_consume http://en.wikipedia.org/wiki/Marginal_propensity_to_consume
- tunesmith 12y ago
  I'm curious what the philosophical position is that says that $1,000 is not worth meaningfully more in value or utility to a poor person than an equity fund manager, and why that position would be described as "strong".
  - RickHull 12y ago
    There is no known measurement of utils and good reason to believe there never will be. Our strongest insight into subjective preference is revealed preference. Without action, preference is not revealed, and where preference is revealed by action, we can only know that one preference is higher than another -- ordinal. We cannot determine that one preference is, say, 10x higher than another. These are the limitations of utility analysis for a single person. Diminishing marginal utility holds for a single person, and it ought to hold for interpersonal comparisons ceteris paribus, but of course ceteris paribus is a logical impossibility for interpersonal comparison given subjective preference. To hold ceteris paribus for two people is to assert they are the same person, and we're back to diminishing marginal utility for a single person. Our only guide to interpersonal utility comparison is intuition, which is easily confounded. There is no way to say that my number one preference has more utility than yours, and we have even less reason to say anything meaningful about my number X preference compared to your number Y preference.

gizmo 12y ago

One big reason is that people who don't have much money tend to spend what they have. The very rich tend to invest their money, frequently overseas. So by redistributing wealth you give a direct boost to the economy by transferring money from people who won't spend it to people who do. Taxation in the States is at an all time low, and a handful of decades ago the US has much higher taxes at the top and much bigger growth. So there's also plenty of historical evidence supporting the case for redistribution. There are also a number of moral arguments (which I think are much stronger).

blue11 12y ago
> Taxation in the States is at an all time low Not true in 2014. Obama raised a number of taxes for the top bracket: Ordinary income: 35% -> 39.6% Capital gains: 15% -> 20% Medicare tax: 1.45% -> 2.35% Meanwhile in California: 10.3% -> 13.3% Marginal taxes and the top for residents of California are: 39.6+2.35+13.3 = 55.25% The number is similar for New York City. You have to go back to the Reagan's first term to find higher tax rates. Now all we have to do is wait for the growth.
- BigTuna 12y ago
  1. Presidents don't raise taxes. 2. There are far more loopholes and exemptions than there were in Reagan's first term.

danielnaab 12y ago

Let me reframe your question. What is the economic justification of deficit exploding tax-cuts? http://www.washingtonpost.com/business/economy/us-debt-outlook-still-dark/2013/09/17/27470394-1feb-11e3-8459-657e0c72fec8_graphic.html http://www.washingtonpost.com/business/economy/us-debt-outlo... Generally speaking, though, I don't think most of us who are concerned about inequality think that our tax system is the only, or even the most important, thing that needs to be addressed. The fact that I could work 40 hour weeks and still be eligible for food assistance, Medicaid, and other poverty bandaids tells me that we don't properly value work in this country... and that's a cultural problem.

jrells 12y ago
How is this a cultural problem? It seems strictly like an economic problem. Teachers are highly valued in our culture (or at least, valued much more than they are in our economy). We DO value work, and that's precisely why people are concerned. The economy doesn't value work as much as our culture does.
- danielnaab 12y ago
  I don't disagree with your wording... However, economics _is_ culture. If I pay my workers less than the cost of living I can justify it by the logic of the market, but it is still my choice. The "greed is good" mantra allows too many of us to rationalize away our economic choices as as different from our values. They're not, they're one and the same.
  - jrells 12y ago
    I think I understand where you're coming from, economics is a form of culture, but I was trying to distinguish the cold economic price of low-skilled labor from the non-economic value we place on it (sorry I don't know a better way to express this). Hard work is generally considered very important and valuable in our culture, but excess supply and low demand drives down the economic value. I value water very highly (non-economically), more than gold, but the economy disagrees. You could say employers are greedy and hoard excess profits while keeping wages low, or you could say that they generously provide much needed jobs to a struggling low-skill labor market. Both are true. It would be nice if low-skilled labor drew higher wages, but wages above the economic rate are just another form of charity. You don't compromise your value of hard work by choosing to pay low wages, you just lack charity.

drinkzima 12y ago

Do mean besides the hoards of research linking larger income inequality to lower growth: http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf http://www.nytimes.com/2014/08/06/upshot/alarm-on-income-inequality-from-a-mainstream-source.html?abt=0002&abg=1 http://www.nytimes.com/2014/08/06/upshot/alarm-on-income-ine... http://www.sciencedirect.com/science/article/pii/0014292195000305 http://www.sciencedirect.com/science/article/pii/00142921950... Not to mention the marginal value of dollars to the hyper rich is substantially lower. The wealth/income distribution we have now looks very different than it did even 10 years ago, so it is worth discussing as a society what the 'correct' distribution should be. Hedge fund managers now are no better than the managers of 10-20 years ago, the system has evolved to favor them more. We can argue about whether they 'deserve' said wealth, but research shows that the wealthy need a given dollars less than the impoverished and growth can benefit when the distribution is more equal as well.

jiggy2011 12y ago
"Hedge fund managers now are no better than the managers of 10-20 years ago, the system has evolved to favor them more." Don't hedge funds now have better technology and bots etc that boost the productivity of each trader?
- elastine 12y ago
  Yes, but at the same time there are many more hedge funds canceling out the relative advantage of each trader.
  - jiggy2011 12y ago
    Yes, but that makes the market as a whole more effective.
    - Ma8ee 12y ago
      In what sense "more efficient"? There is nothing that says that just because some people have become better at making money the market as a whole is working better.

smacktoward 12y ago

Oh, all right, I'll bite. Here's two. 1) In a society whose economy is driven by sales of consumer goods, having wealth spread more broadly results in greater sales of consumer goods, which means more economic activity and a higher standard of living for everybody. (Concentrating wealth in a small strata of very wealthy people doesn't have the same effect, because once people get past a certain level of wealth they don't spend money they earn beyond that on consumer goods; they put it in the bank or the stock market.) 2) You've heard of the Bastille, I assume?

johnrob 12y ago
I think your first point is a pretty good summary of where the US economy is. Plenty of dollars chasing investments, but fewer looking to consume products. High price/earning ratios reflect this.

totalrobe 12y ago

Justification here: “a more vibrant middle class… increased long-run economic growth.” http://www.academia.edu/248659/Does_Income_Distribution_Affect_US_State_Economic_Growth_ http://www.academia.edu/248659/Does_Income_Distribution_Affe...

nazgulnarsil 12y ago
Thanks for posting something reasonable. Most of the rest of this thread is people assuming they are qualified economists. I think that people assumed I was asking the original question in bad faith. I'm actually curious about this question.

deleted 12y ago

[deleted]

dominotw 12y ago

Isn't moral imperative good enough?

foobarqux 12y ago

Besides the fact that you arguably can't dismiss morality out of hand, inequality makes people unhappy and they don't want it.

Florin_Andrei 12y ago
> Besides the fact that you arguably can't dismiss morality out of hand I've always thought that libertarians and free-market extremists are some sort of outliers on the morality spectrum - probably sitting near the extreme low end of the axis. That's just how their brains are wired. Then the rational mind starts spinning reasons, trying to justify the givens of their intuition.
- nazgulnarsil 12y ago
  The people I know who donate significant sums lean libertarian.
  - rosser 12y ago
    As true as that may be, it's anecdata, and not necessarily representative.
- ad_hominem 12y ago
  > I've always thought that libertarians and free-market extremists are some sort of outliers on the morality spectrum - probably sitting near the extreme low end of the axis That's funny, because I'd think it the exact opposite. The linchpin of most libertarians, the non-aggression principle (NAP), is pretty much all about morality. It might not be correct, especially with the sticky issue of defining property rights and whatnot, but it certainly aspires to be a moral framework. A libertarian would say it's not moral for you to take resources from the "haves" by force and redistribute it to the "have-nots" just because you think it's for the greater good; morality is achieved by voluntary cooperation. Basically this: http://i.imgur.com/vmMrN6O.png http://i.imgur.com/vmMrN6O.png

eli_gottlieb 12y ago

You can argue about whether something constitutes a moral imperative, but to dismiss moral imperative entirely means you're excluding yourself from humane discussion.

glomph 12y ago

Diminishing returns.

eevilspock 12y ago

What basis does any economic justification rest on if not at bottom a moral one?

RickHull 12y ago

Furthermore, most of Krugman's argument seems to be an appeal to envy. Without envy, what reason should anyone have to begrudge Steve Jobs or Bill Gates their enormous financial success. Wealth is not a zero sum game, and these men have contributed untold amounts of wealth to society, in several important forms: * Iphones in the hands of welfare moms * Lavish consumption habits which distribute cash throughout the goods and services economy * Massive amounts of investment yielding better technology and higher productivity and efficiency * Charitable giving and other altruistic endeavors It is not at all obvious, even if 90% would vote to do so, that taking resources from those who have earned them and putting them under government control and distribution would put them to better use. Leaving aside the moral concerns of taking justly acquired property from individuals, and the undermining of private property as an institution, there is great reason to believe that government distribution puts resources to lower use rather than higher. Positive sum games are always to be preferred over zero or negative sum games.

elastine 12y ago
Your argument is predicated on the assumption that the rich use their wealth only for the "important forms" you mention. What you don't mention is how they are able to influence the political arena with their wealth. The influence of politics by a few is a very natural consequence of massive inequality, and is a zero-sum game. More political influence of the wealthy means less political influence of the poor. You cannot divorce the economy from politics.
- RickHull 12y ago
  I don't disagree with your analysis, but this is not relevant to Krugman's argument nor my objections to it.
freehunter 12y ago
>there is great reason to believe that government distribution puts resources to lower use rather than higher. Not exactly true. https://en.wikipedia.org/wiki/Fiscal_multiplier#United_States_of_America https://en.wikipedia.org/wiki/Fiscal_multiplier#United_State...