Egalitarianism - Inequality could be lower than you think
Metadata
Highlights
-
It is easily forgotten that America has put in place several policies in recent decades that have cut inequality, such as the expansion of Medicaid, government-funded health insurance for the poor, in 2014.
- Note: I donât think many people have forgotten about these things, but even if they reduce inequality some, most donât think theyâre sufficient.
- And a bigger chunk of corporate profits may flow to middle-class people than previously realised, because they own shares through pension
-
The huge variation reflects differences in how you treat inflation, government transfers and the definition of a household, but the lowest figures are hard to believe. If you argue that income has shrunk you also have to claim that four decadesâ worth of innovation in goods and services, from mobile phones and video streaming to cholesterol-lowering statins, have not improved middle-earnersâ lives. That is simply not credible.
- Note: This is a really weak point. It dismisses the low growth research out of hand on the basis of a non sequitur. First, it reduces inequality to simply âimproved livesâ for the middle-earners (not to mention the highest and lowest earners, where the inequality is most prominent). It then equates âbetter livesâ with goods and services. Access to better consumer goods and technology over time doesnât speak to stagnancy of wages. Further, one can argue that the stagnant wages are related to making technology cheap and accessible. I.e. Cheap overseas labor, exploitation of resources in impoverished countries, gig economy providing fewer benefits to workers to provide the cited services, etc.
-
Recent research, however, suggests that the decline in labourâs fortunes is explained in most rich countries by exorbitant returns to homeowners, not tycoons.
- Note: I would think that urbanization contributes to the most valuable land being held by companies rather than individuals, especially as areas previously comprised of single family homes are converted to high rise or other multi-family units. (See gentrification). Then in America you also have the racial inequities in housing (redlining and more) making it so black families almost entirely werenât able to accumulate home equity.
-
But that reflects a failure of regulation, not a fundamental flaw in capitalism. American antitrust regulators and courts have been unforgivably lax, allowing some industries to become too concentrated. This has enabled some firms to gouge their customers and book abnormally high profits.
- Note: 1. But given the ties between the political and economic systems, especially post-Citizens United, can one really discount a failure by regulators and courts as not being a flaw of capitalism too?
2. Deregulation has been pushed by business interests (capital!) since at least Reagan and continued in the last 20 years.
3. The courts have become increasingly favorable to deregulation and the interests of capital. This has been a long trend and a long term goal of big business and the GOP.
4. Could not the same deregulation trend that contributes to price gouging and unfair business practices with respect to customers also exist internally vis-a-vis ownership and labor?
- By contrast, few deny that the richest Americans have sprinted ahead. But even here, wealth is fiendishly difficult to estimate.