Of safety nets and inequality
October 21st, 2009Kenworthy responds to the core of Wilkinson’s argument. Kenworthy says income inequality matters because outcomes are determined by luck. Its not fair that two people of equal talent, who both worked hard in school, etc, etc should have different outcomes because one was lucky enough to “have a friend in the business” or won the lottery.
To me, this is an argument for a social safety net not for income redistribution. Most people I know are happy for the people that win lotteries. Nobody bemoans others’ good fortunes. However, most people I know dislike when people hit dire straights because of bad luck. It is unfair for people that have worked hard to be knocked down too far.
Good thing that you don’t have to believe “most people I know”. Experiments have shown that people have preferences for efficiency not for equality.
The difference matters for policy because policy makers should give more weight to policies that increase growth rates even if they increase inequality and less weight to redistributive policies.
October 21st, 2009 at 4:07 pm
Haven’t there been some studies showing that many lottery winners are actually less happy a few years down the road?
Why should hard work be valued?
October 21st, 2009 at 4:22 pm
Because people tend to like more rather than less stuff? I mean, give me all your stuff if you don’t want it.
October 22nd, 2009 at 4:18 pm
All else being equal, why do we value hard work over productive, effective work? Does suffering give it moral credence?
October 22nd, 2009 at 5:02 pm
Well ok…
October 24th, 2009 at 5:08 am
This posits a tradeoff: equality vs. growth. But it’s a false choice.
http://www.asymptosis.com/socialism-and-prosperity.html
October 25th, 2009 at 12:48 pm
Steve, no it doesn’t. It suggests that policies that trade growth for equity aren’t smart. I didn’t say anything about there being a necessary trade-off.