Posts tagged with: Income distribution

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 Wednesday, July 30, 2014

Christian churches in the West have been focused on redistribution of income rather than the creation of wealth, says Brian Griffiths in this week’s Acton Commentary.

Through much of the post-war period in the West, the formation of economic policy was dominated by Keynesian activism on the part of governments seeking an increasing role in providing public services, reducing material poverty, and reshaping income redistribution.

In the United States, President John F. Kennedy launched the New Frontier program and his successor, President Lyndon Johnson, soon after embarked on what came to be called the Great Society. In both cases, emphasis was placed on increasing the role of the state in order to solve problems of poverty and destitution. In intellectual terms, the economist John Kenneth Galbraith made the case for trade unions and government becoming “countervailing powers” in capitalist economies in order to check the power of large corporations. In Britain, Harold Wilson nationalized various industries, developed a national plan, a comprehensive prices and incomes policy, and extended the scope of the welfare state. Across the Channel and Rhine, the Social Democrat Willy Brandt was a major influence in extending the role of government in social policy throughout West Germany.

The full text of the essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

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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Blog author: jcarter
posted by on Thursday, June 26, 2014

In 1820, America’s per capita income averaged $1,980, in today’s dollars. But by 2000, it had increased to $43,000. That economic growth has benefited the rich, of course. But it has also transformed the lives of the poor — and prevented many more from becoming or staying poor.

In this superb short video, the American Enterprise Institute briefly explains the moral value of economic growth.

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…)

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)

Blog author: jcarter
posted by on Wednesday, March 26, 2014

dv1693021Modern rhetoric of income inequality is driven by covetous envy, says Russell Nieli. Caritas, humility, gratitude, and goodwill toward others are a healthy society’s answer to the ancient curses of envy and pride:

The problem of the chronically poor is that they are chronically poor, not that some people make a lot more money than other people and bring about “inequality.” The fact that some fail to earn enough to live at a decent level is a genuine social problem. The fact that those who are not poor are widely dispersed in terms of how much they earn is not.

Under the rhetoric of “inequality,” covetous envy—including that of the upper-middle-class for the truly affluent—has reared its ugly head. Mayor de Blasio’s proposal to fund universal pre-kindergarten education by an income tax increase solely on the income of the highest income earners making more than $500,000 a year, who already pay city income taxes at the highest graduated rate, is an iconic example of this newer tendency to combine genuine anti-poverty concerns with envy-driven, soak-the-rich taxation policies. It is perhaps no accident that New York’s upper middle class (those making between $100,000 and $200,000 annually) voted for de Blasio in greater proportion than many New Yorkers in lower income brackets.

Read more . . .

Blog author: jsunde
posted by on Wednesday, March 5, 2014

In an excerpt from the splendid PovertyCure series, Michael Fairbanks offers a helpful bit on why our attitudes about competition matter for economic development:

I can predict the future of a developing nation better than any IMF team of economists by asking one question: “Do you believe in competition?” When I go to Venezuela and I say, “do you believe in competition?,” they say “competition means the rich get richer and the poor get poorer.” They say “competition is the unnecessary duplication of effort because you have two firms doing the same thing.” They say “competition is a quaint North American concept that doesn’t apply here.”

But when I go to Silicon Valley and I say,“What do you think about the word competition?,” they say, “Well, I love competition, because even when I lose, I learn something. And my success is due to the fact that I speeded up my failures, and the only way to fail was to compete, and figure out where I wasn’t good enough.”

As Hayek put it, competition is a discovery procedure. If we neglect, distort, or downplay that process, we can expect the outcomes of discovery — the fruits of our sacrifice and service — to digress accordingly.

PovertyCure DVD Series

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