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Shrinking inequality and rising living standards

Here is an interesting discussion – of the sort likely to send parts of the redistributionist left over the edge – pointing out that in certain respects, the poorest in the US have become better off and that by some yardsticks, inequality has also shrunk. For what it is worth, inequality per se is not an issue that I regard as one raising any injustice whatsoever so long as the economic pie expands. If the economy was a fixed pie, then there might be some presumption that a large slice for Mr X came at the expense, possibly, of Mr Y. It is, however, worth noting, I think, that support for the free market order tends to be more robust when there is a large, entrepreneurial middle class into which anyone, given sufficient hard work and a pinch of luck, can enter and where the chance to escape poverty is high.

All in all, the stats I refer to in the link are encouraging news, and worth spreading around.

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8 comments to Shrinking inequality and rising living standards

  • RW

    Johnathan, you’ve posted the Peter Schiff link here again! Where’s the real one – I’m interested.

  • Johnathan Pearce

    Link has been fixed. My error

  • RRS

    Why can we not move away from the uses of the terms “inequality” and “equality” in the political economy discourse?

    Of course those terms have rhetorical impact for (non-pejorative) demagoguery in attempts to set social agendae.

    Are we not really examining “differentiations” on various scales of measurements, such as possessions, income, preferences, abilities, resources, etc., etc.?

    “Equality” does not exist in the nature we can observe, but absolute differentiations are the extant condition of reality.

    We generalize similarities of differentiations for social and economic convenience. Still, it is those differentiations, similar to the cellular, neurologic, organic functions, etc. in the composition of all organisms, that actually sustain life as we perceive it.

    They also sustain “Economic Man.”

  • Jerry

    ‘some presumption that a large slice for Mr X came at the expense, possibly, of Mr Y’

    There is a large percentage of people who believe exactly this – the ‘rich’ are rich ONLY because others are poor.

    This lie is perpetuated by so-called leaders of some minorities along with the MSM.

    I find it incredible just how many people I’ve talk with who have NO CLUE as to how our economy works.

    A good place to start ( and I have ) is correcting every variation of ‘government money/Federal money’ that I encounter.

    The pie does get larger ( chart GNP over time ) but if everyone knew and understood that, some agendas would be more difficult to sell to the masses !!

  • ahem

    Gotta love the free market.

  • People who believe in equality generally believe in zero-sum economics. (What one person gains, another must inevitably lose.)

    As a rule, rich people have the money to spare to invest in generating more wealth, so greater inequality leads to a richer society and a reduction in the number of poor. Inequality is good, especially for the poor.

    (The exception is with barriers to trade which split the market into non-communicating segments. It leads to inequalities and excessive poverty, but it is the barriers that are the problem, not the inequality. That’s what goes wrong in the developing world.)

    Alternatively, it is merely the politics of envy.

  • FJ Harris

    The massive federal spending has been directed towards the public sector. Private business has continued to wither.
    If this continues, which it will, then the professional welfare and government employees will do well. All of those depending on public money will do well, relativelty and for a while.
    The problem is private business pays all the bills.
    We are dealing with delay, until the private sector recovers there is no hope. The democrats must go and most assuredly take this President with them.

  • Paul Marks

    On avarage pay in the “public sector” in the United States is now higher than it is in civil society (the “private sector”).

    How about the a differnent understanding of “class”.

    Not “rich and poor” – but “tax payers and tax eaters”.

    Although some of the tax eaters are very rich indeed.