Equals Zero
““For you will have the poor with you always”
Jesus Christ (Matt 26:11, NKJV)”
The MacDoctor has already blogged on the book The Spirit Level, the book that contends that inequality is the cause of all social evils. As Jesus Himself points out, the poor are not going away any time soon, which means this could be a bit of a problem, if it were true. Fortunately it is not.
In a National Bureau of Economic Research working paper, Michael Haines ably demonstrates that relative inequality has remained virtually unchanged over the whole of the 20th Century in the US, and yet infant mortality has dropped markedly. Of course, this is in agreement with most of the epidemiological evidence on infant mortality, that is is heavily tied to standards of living and nutritional status. A simple comparison of low-income stats with those in upper-income brackets will always show that poorer people do worse than the wealthy.
in the long term, democratic societies that are unequal will fare better than democratic societies than are not
”However, it is clear from Haines’ work that inequality of income is not a good marker for a nation’s overall well-being (the main contention in The Spirit Level). At most, inequality of income has only a slight influence on health and well-being indices, far less than economic growth and technological progress. Because of this disparity of influence, it is by no means certain that this small influence is sustainable. If reducing inequality of income also causes slow-down of economic growth, it may well be that the reduction in economic growth may eventually swallow the benefits of reduced inequality.
In the previous post I cite above, I have argued that inequality of income is merely the inevitable result of an adequate rewards system for success. If success is not rewarded, it follows that fewer will strive for it. It therefore seems logical to me that a social system that actively seeks to reduce inequality by transferring the rewards of the successful to the unsuccessful, must eventually cease to be as productive both in terms of wealth and in terms of innovation as a system that does not. Therefore, in the long term, democratic societies that are unequal will fare better than democratic societies that are not, regardless of their level of technological expertise. A truly equal society (in terms of income) would have zero reason to strive and would rapidly stagnate.
Humans do not survive very well as ant colonies.
Hat Tip: Freakonomics
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Jul 18 10 12:34 am
The reconstructed communist thinks that people would work hard for the same money, because work in itself is the reward.
I myself believe greatly in the redemptive value of work, regardless of the wage.
However, if I got paid the same for ANY job, I would pick a less challenging/stressful job and make sure my personal development is more focused into other activities.
Because I can derive great personal development from my work, AND provide a good income and living standard for my family, then it becomes worthwhile to commit to such work, which my employer wants to pay me for as I try to generate value for his business.
ZenTiger´s last blog ..An Interview with Andy Haden
Jul 18 10 8:59 am
I the last years of my working life I’ve deliberately chosen an unchallenging, poorly-paid job. ( for reasons which aren’t important here)
Yet the socialists would insist that my labour is worth as much as yours and Zen’s!
These people are insane.
Jul 18 10 9:50 am
A point that gets overlooked is that to get true equality we would need to ensure there is no change in income/economic well being over our life times.
Jul 18 10 1:17 pm
And US studies have shown that only around 9% of the poor stay poor. The rest improve their situation.
JC