Posts tagged with: Economic inequality

Earlier this month, I wrote a two part article for the Library of Law & Liberty, critiquing the uncritical condemnation of income inequality by world religious leaders.

In part 1, I pointed out that “while the Pope, the Patriarch, the Dalai Lama, and others are right about the increase in [global income] inequality, they are wrong to conclude that this causes global poverty—the latter is demonstrably on the decline. And that, I would add, is a good thing.”

F. A. Hayek

In part 2, drawing on the work of F. A. Hayek, I noted, “As societies learn to use their resources ‘more effectively and for new purposes,’ the cost of manufacturing luxury goods decreases, making them affordable to new markets of the middle class and, eventually, even for the poor.” I continue, “Such inequality not only accompanies the very economic progress that lifts the poor out of poverty, it is one essential factor that makes that progress possible.”

We may add to this two more ways in which focusing solely on income inequality can be misleading from article in the Wall Street Journal yesterday by Nicholas Eberstadt: increased equality in lifespan and education. He writes,

Given the close correspondence between life expectancy and the Gini index for age at death, we can be confident that the world-wide explosion in life expectancy over the past century has been accompanied by a monumental narrowing of world-wide differences in length of life. When a population’s life expectancy rises from 30 to 70, the Gini index drops by almost two-thirds—from well over 0.5 to well under 0.2.

This survival revolution—and the narrowing of inequalities in humanity’s life chances—is an epochal advance in the human condition. Since healthy life expectancy seems to track closely with overall life expectancy, a revolutionary reduction in health inequality may also have occurred over the past century. Improvements in global mortality for the poor have contributed to the very “economic inequality” so many now decry. This is another reason such measures can be deceiving.

The spread and distribution of education has had a similar impact. In 1950 roughly half of the world’s adults—and the overwhelming majority of the men and women from low-income regions—had never been exposed to schooling. By 2010 unschooled men and women 15 and older account for a mere one-seventh of the world’s adults, and about one-in-six from developing areas. (more…)

Francis (1)“If there is one thing that religious leaders around the world seem to agree on today,” says Acton research associate Dylan Pahman, “it is the evils of income inequality stemming from a globalized economy.” But as Pahman points out, there is a connection between inequality and poverty alleviation that affirms the moral merits of economic liberty:

It would seem the consensus is that economic inequalities have increased worldwide, and this is a clear moral evil. But when we examine the numbers, a somewhat different picture emerges. Even as inequality has increased, extreme poverty has simultaneously decreased—a clear moral good. Considered in this light, and with the help of Nassim Taleb and (in Part Two of this post) Friedrich Hayek, I will examine the connection between inequality and poverty alleviation and argue that the data affirm, rather than refute, the moral merits of economic liberty.

It stands to reason that if religious leaders are so willing to condemn global capitalism for its apparent evils, they ought to be even more eager to praise its actual goods. I will recommend a different moral metric, drawn from St. John Cassian and St. John Chrysostom, that would support people of faith in being attentive to the plight of the poor while prudently engaging the economic realities at hand.

Read more . . .

Participant in the Doe Fund, New York City

Participant in the Doe Fund, New York City

No one wants to be poor. No one enjoys figuring out how to stretch meals to last just three more days. No parent wants to tell their child they can’t play a sport or get a new backpack because there is simply no money. No one wants to be evicted. Poverty in America is a reality; so what are we going to do about it?

The American Enterprise Institute has a few ideas. They’ve taken a look at where we are 50 years after the War on Poverty was declared. The conclusion is that we’ve not been successful in that war. Poverty in America—and What to Do About It is a compilation of essays on the topic.

Aparna Mathur says the talk of late about “income inequality” is misleading. We must address poverty, not differences in individual income.

We are now in the fifth year of an economic recovery that does not seem like a recovery to most people in the labor market. There are more than 10 million unemployed workers, of which nearly 4 million have been jobless for longer than 27 weeks. In addition, there are another 10 million who are either in involuntary part-time jobs, or are too discouraged to look for work. Therefore, I would argue that the focus on income inequality is somewhat misplaced. This is essentially a problem of poverty.

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Blog author: jcarter
posted by on Thursday, July 17, 2014

social-mobility-01_500x260Earlier this year I wrote a series of posts explaining 12 principles that generally drive the thinking of conservative evangelicals when it comes to economics. Number 9 on my list was:

9. Social mobility — specifically getting people out of poverty — is infinitely more important than income inequality.

Social mobility is the ability of an individual or family to improve (or lower) their economic status. The two main types of social mobility are intergenerational (i.e., a person is better off than their parents or grandparents) or intragenerational (i.e., income changes within a person or group’s lifetime). Researchers at Harvard University recently released a study of intergenerational social mobility within the United States which controlled for five factors: racial segregation, income inequality, school quality, social capital, and family structure.

Can you guess which factor makes the most difference for social mobility?
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Arthur Brooks, president of the American Enterprise Institute, challenges conservatives to think and act differently in the fight against poverty and income inequality. He says conservatives must acknowledge that we have income inequality in our society, and be willing to do something about it. That does not mean income redistribution. Rather, he says, we must be willing to do what actually helps the poor.

Brooks is clear: what helps the poor is free enterprise. However, much of our political rhetoric is about things and ideas, and not people. People, he says, need to know that we care more about them than about ideas. People want to know someone is willing to fight for them, not a set of political or economic ideas.

He poses the question, “How do people change their lives?” In talking with people who have brought themselves out of poverty, he says three things are clear. People must be willing to make moral transformations and take responsibility for their own lives. They must have a dependable but short-term safety net from the government for extreme circumstances, and they must have hope. People need to know that if they work hard and commit to changing their lives, they can succeed. However, Brooks says that isn’t happening enough or fast enough in our country, and people lose hope.

Take a few minutes and listen to his thoughts on work, entrepreneurship and education.

Yahoo! Finance’s Stock Analyst, Kevin Chupka, recently interviewed Rev. Robert Sirico about the “Cure for Income Inequality” and the work of PovertyCure. Chupka begins by stating that “close to half the planet lives on less than $2 dollars a day” and that an alarming number of Americans are living below the poverty line. He then states that despite all the good intentions, decades of charitable giving hasn’t done much to end this problem. Chupka and Sirico discuss PovertyCure’s mission to “challenge the status quo and champion the creative potential of the human person;” looking for ways to engage the poorest of the poor in trade rather than simply giving them money and hoping for the best.

Read ‘Fighting poverty: We’ve been doing it all wrong.’ at Yahoo! Finance. (more…)

eat the richThe rich get richer and the rest of us…well, we struggle along. Shouldn’t those with more money be spreading it out a bit more? My coffers clink with spare change; I sure could use some of that money. It only seems fair, right?

Peter Morici, at Breitbart News, tackles the truth of income inequality. Those of us in the “rest of us” category are getting crushed by monopolies, unjust taxation, and political corruption. That, Morici says, is the truth of income inequality. It’s so bad that Vermont Senator Bernie Sanders (I) compared our situation to that of Russia, and a lot of folks nodded their heads in agreement.

Vermont Senator Bernie Sanders (I) recently asked Federal Reserve Chairwoman Janet Yellen “are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?”

Russia’s oligarchy has two salient characteristics. The government uses its power to regulate markets to concentrate wealth in the hands of an influential few, while most of its citizens stay poor by western standards.

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Blog author: jballor
posted by on Thursday, April 24, 2014

cittfcSpeaking of Thomas Piketty, here’s a very helpful and revealing interview with Matthew Yglesias, “Thomas Piketty doesn’t hate capitalism: He just wants to fix it.” (HT: PEG)

A few highlights with some comment:

On the need for a historical perspective in economics:

Thomas Piketty: … It’s not only economists’ fault. Historians and sociologists are too often are leaving the study of economic issues to economists. Sometimes nobody does it.
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l_20121213-school-reform-145-600-300If you really care about income inequality, notes John Goodman, you need only focus on one thing — the inequality of educational opportunity:

The topic du jour on the left these days is inequality. But why does the left care about inequality? Do they really want to lift those at the bottom of the income ladder? Or are they just looking for one more reason to increase the power of government?

If you care about those at the bottom then you are wasting your time and everyone else’s time unless you focus on one and only one phenomenon: the inequality of educational opportunity. Poor kids are almost always enrolled in bad schools. Rich kids are almost always in good schools.

So what does the left have to say about the public school system? Almost nothing. Nothing? That’s right. Nothing. I can’t remember ever seeing an editorial by Paul Krugman on how to reform the public schools. So I Googled to see if I have missed something. The only thing I found was a negative post about vouchers. And Krugman is not alone.

You almost never see anything written by left-of-center folks on reforming the public schools. And I have noticed on TV talk shows that it’s almost impossible to get liberals to agree to the most modest of all reform ideas: getting rid of bad teachers and making sure we keep the good ones.

(Via: AEI Ideas)

buddiesThere is a lot of talk about “closing the gap” and overcoming “income inequality.” Some of it is pure socialism: Redistribute! Redistribute! Others look for ways to create jobs and help people create new financial opportunities for themselves.

But what about the simple gift of friendship?

At The American Conservative, Gracy Olmstead suggests that friendship can bridge income gaps, and creates safety nets for people in ways government and even private agencies cannot. We all have close friends and family we know we can count on, but Olmstead (quoting Richard Beck) says “weak ties” must not be overlooked. “Weak ties” would be that sorority sister you actually haven’t laid eyes on in 12 years, but talk to daily on Facebook, or that second cousin you only see at family weddings and funerals.

Weak ties—distant relatives, acquaintances from our neighborhood or past—are usually more diverse in their background, tastes, and employment. This wider “social web” gives us philanthropic ammunition: when you see someone in need, you don’t just bring your own talents and gifts to the table. You bring everyone you’ve ever met—”Bluntly, you might not be able to help this person in a particular situation but you might know someone else who can. In sacramental friendships you are bringing the gift of your weak ties.”

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