Asymmetrical Information

If you truly believe that last paragraph, I suggest you get out more. Your image of people is too utopian.

The quest for autonomy, the thirst for knowlege, the desire to live a cleaner, healthier, richer life, free of hunger and want . . . these are the sorts of values we want our government to express and empower. Envy is not.

I second Jack Wayne's comment. You are expressing an ideal, not reality.

Here's the argument I like to use against redistributional schemes: Taking from X and giving to Y doesn't increase "social utility" -- because there is no such thing. Y may be better off (in the short run), but X remains worse off. The increase in Y's short-run happiness doesn't "rub off" on X. Moreover, taking from X (the wealthier person) to give to Y (the poorer person) deprives Y of the benefits of economic growth, which is financed and executed by people like X. That is to say, redistribution actually harms Y in the not-so-long run.

I don't think Brad De Long was arguing against wealth per se. The issue is that the rich are spending a substantial portion of their wealth on conspicuous consumption and other kinds of positional competition ("status seeking"), which notoriously results in socially inefficient outcomes.

No, I don't think we should disfigure Hollywood actors, but that's a matter of allocating property rights. Do you also object to subsidizing them with a Pigovean subsidy if they choose to forgo their beauty?

Status is zero sum, total status can neither be increased or decreased. The only thing that can change is what determines status. Increasing prosperity may not increase total happiness, but reducing the prosperity of the rich will also not increase total happiness. If we reduced or eliminated income as a determinant of status then we would still have high and low status and half of the population would still be below average status and unhappy. Without income, other factors, like appearance, popularity, and inheritance would determine status -- just like high school, except that nerds could not benefit by studying to earn a high income later and increase their status later.

Income is the best determinant of status. Income is positive sum because free exchange always benefits both parties. People with more income usually benefit others more than people with lower incomes. Conspicuous consumption, however, does not benefit other people, but it is caused by privacy. If income and wealth were public then there would be no need for conspicuous consumption to signal our income and wealth. No one is in favor of this because we like privacy more than we dislike conspicuous consumption. Fitness is also a small positive sum status factor since it helps prevent our bodies from dying before our brains. Appearance and most other status factors are zero sum. Bullying and envy are bad because they are negative sum. The worst thing we can do is to grant status to people who harm or kill others to gain status.

Income is the best determinant of status. Income is positive sum because free exchange always benefits both parties.

Wrong. The "best" determinant of status is that with the greatest positive externalities. Pecuniary externalities don't count (see Coase, The Problem of Social Cost).

Charitable contributions and other forms of public good provision are probably the best candidates.

If we wish to evaluate the social utility of enforced economic equality or policies which tend to shift societies in such a direction, such as steeply progressive income taxes, doesn't it make sense to compare emmigration rates between countries that have mechanisms for cutting down the "tall poppies" as opposed to the countries that have fewer such barriers? If economic equality per se will make society as a whole that much happier, then why is it that so many Cubans wish to get to the United States and so few Americans wish to go and live in egalitarian Cuba?

Of course, a quick response to this is that the causes are more due to a repressive political climate and poverty, but then one is confronted with the question as to whether you actually can have enforced economic equality without having a government that has virtually unlimited power over the lives of its citizens. And then there is also the question of how economically efficient forced egalitarian societies are compared to those which are less inclined in such a direction.

In essence, does forced economic equality necessarily entail structural "negative externalities" that outweigh any benefits that would come from it?

The reason why we recoil is that burning people from acid is something we recoil from. Hell being fat is something we recoil from (to a lesser extent). Humans have a hard-wired aversion to outward manifestations of infirmity. We don't have similar aversions to someone not having a really nice car. If you can't understand why people would respond with more revulsion to things that are more revolting then I have to hope you are just being silly for a lark.

The other important difference if that money is transferable in a way that beauty is not. The state makes the rich less rich with the goal of improving the lot of people who have less. I doubt many people would support the explicit destruction of wealthy people's property, because it may make them feel better about themselves.

I don't agree with what you are arguing against, but this is a terrible analogy because it differs from reality in important and relative ways.

«But why is this so much more horrifying than the idea of taking the fruits of people's labours--most of which were gotten fairly honesty, by dint of hard work and delayed gratification (even if those efforts got a big boost from education etc.) [ ... ] No, I think the reason that we recoil is that it is repulsive to make people suffer just because others enjoy it. And it is horrifying to give free reign to our worst impulses through the power of the state.»

To me this is is a thoroughly vile and utterly dishonest misrepresentation of the position of DeLong.

Shame ''Jane Galt'', shame on you, and shame on Mankiw too because DeLong clearly argued that only the rich enjoy making the poor feel worse off:

«I'm enough of a touchy-feely sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor.»

Manifestly and unambiguously DeLong is arguing that (some of) the rich enjoy more their wealth («the utility of the rich») because there are the poor to look down to and before which to flaunt it («conspicuous consumption»).

Note also that he is not at all arguing as Mankiw states with what to me looks malicious twisting:

«as Brad suggests, people derive utility from comparisons with others.»

that the «people» enjoy making others feel worse off: DeLong nowhere «suggests» what Mankiw in my opinion utterly dishonestly attributes to him, as he is explicitly limiting his statement only to the rich, which are a very small percentage of «people»:

«a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them»

A version of the well known saying ''winning is not enough, everybody else must be seen to lose''.

That is, DeLong's argument is that (some of) the rich often enjoy their wealth and flaunting it because it makes the poor more miserable. The worse off the poor are, the more humiliated and insecure they feel, the better (some of) the rich enjoy their security and perquisites. If everybody was rich the same, well, what would be the fun in being rich? :-)

So DeLong argues not that (some of) the poor envy the rich, but that conversely (some of) the rich spite the poor, and that this transfers utility from the poor to the rich (as if all those government policies that transfer income from the poor to the rich were not enough).

Side note: this is a variant of the well known Weberian idea about Calvinism and wealth: success is a sign of God's Grace and thus salvation, and the more satisfying because the saved are few, and everybody else is damned. Thus ''holier-than-thou'' is just a variant of ''richer-than-thou''.

How this very clear position can be honestly translated into ''this sort of redistribution--"cutting down the tall poppies"''? DeLong is instead complaining about the ''pissing on the short poppies'' attitude instead.

Now what DeLong opines is surely not a very nice thing to say about what motivates (some of) the rich, but hey, ''f*ck you, I am fully vested'' is not something that the poor say...

«But why is this so much more horrifying than the idea of taking the fruits of people's labours--most of which were gotten fairly honesty, by dint of hard work and delayed gratification»

This is just malicious handwaving. The poor do, involuntarily, a whole lot more «delayed gratification» than the rich. And «the fruits of people's labours» is exactly what the rich base their fortunes on. Most become rich by running businesses... And many by awarding themselves backdated options. The story of the rising inequality of the past 10-15 years is mostly about management getting an ever larger share of the value added of the businesses they manage, thanks largely to principal-agent hazards.

«Do not most of today's wealthy make their money by presenting their body at work for many hours a day, and labouring with their minds,»

Do they? What kind of evidence do you have for this? Or is it just your imagination talking? And are the returns that the wealthy get from their work, if any, proportional to that work or just a little bit ''padded'' by rents or worse? Did the top 1% of the USA household halve their productivity in 1930-40 and then redouble it in 1990-2000, just like that? How comes that when the top income rate was 90% in the 1950s the economy was doing so well?

«Beauty, like wealth, is relative--it benefits its possessor only insofar as they are lovelier than the women, or handsomer than the men, around them.»

This is another feat of sheer fantasy, and inconsistent too: if «wealth, is relative--it benefits its possessor only insofar» then the logical consequence seems to be that the whole utility that the wealthy derive from their wealth is their enjoyment of spite towards the poor. If there were no poor, the wealthy would derive no utility from their wealth, because there would be no relative benefit.

But just as beauty, wealth has an absolute utility! Beauty is pleasing whether or not there is uglyness to compare it with (and more than pleasing: it seems also to be a marker of better health), and wealth is useful regardless of whether there are poor people to flaunt it to.

If every household in the USA earned $1,000,000/y then 99% of them would feel rather better than now, even if (some of) the remaining 1% might enjoy their lifestyle less because of the inability to spite those poorer than themselves.

tcobb:

Again, Brad De Long was discussing conspicuous consumption and status seeking, not inequality per se. As Michael F. argues on Marginal Revolution, "people don't resent Bill Gates or Warren Buffett, not because of lack of proximity, but because both people are pretty understated with their consumption. People seem to resent Paris Hilton, even though she is no more local than either Gates or Buffett."

tcobb:

So, is Mexico run by an all-powerful redistributionist state? Because the direction of migration in that case seems to contradict your model. In fact, my not-well-researched intuition is that most migration is based on the desire to live somewhere with a decent economy, rather than the desire to get away from a redistributionist state.

Understated? Remember the coverage of Bill Gates's house? He just hasn't publicized his other ones - I'm assuming he doesn't stay in Warren's guest room when he goes to play bridge in Nebraska.

«free lance beauty socialists could give the rest of America a big boost in net happiness with every jar of acid they toss. All right, so we're not going to do this. But why is this so much more horrifying than the idea of taking the fruits of people's labours»

I think there are a few other examples of intellectual dishonesty in this comparison (other than the malicious assumption that DeLong argument is an any way similar to «boost in net happiness with every jar of acid they toss» that is):

* Making beautiful people scarily ugly is gratuitous malice; some degree of redistribution benefits the recipients materially.

* The degree of damage to the victim of some degree of redistribution is infinitely smaller than a painful scarification of someone's body. There is a huge difference between turning a beauty into a monster through torture, and turning someone earning $1,000,000 a year into someone earning $700,000 a year with a 1040.

* While beauty is something that people have or have not, the «fruits of someones's labor» can never be entirely ascribed to the laborer: as a rule profitable labor involves taking advantage of social, governmental, corporate support. How much of what one produces is solely the fruit of their efforts is a very debatable subject.

As to the latter point, for example in effect the state is at least a minor and often a senior partner in any venture because it provides most of the infrastructure needed for that venture. To the point that well organized, funded, robust states tend to be much more business friendly than weak, poor, failed states, and same for the civil society on which the state is based.

Again, Brad De Long was discussing conspicuous consumption and status seeking, not inequality per se.

And your point is ...? What does that have to do with the questions I raised?

And as for people who have their feelings hurt by knowing that there are people who have much more money than they do, they need to grow up. The only people who are truly HURT by people who seek to gain status by conspicuous consumption are those who would like to do the same but just don't have the resources to do so. They buy into the game but they just don't like the level of the pyramid they've been assigned to.

When Mankiw writes:

«In Brad's world, a rich person conveys a type of negative externality, like pollution.»

I believe that he is maliciously twisting DeLong's position into its opposite, because DeLong's argument sems to me that the poor have a positive externality to the rich, that they can the object of spite.

However, as to a «rich person conveys a type of negative externality» that actually is almost defensible, and is better rewritten as ''high inequality conveys a type of negative externality, like pollution''.

In the reality based community it is well understood that economic inequality often results in political inequality, and therefore in unbalanced power relationships in which rent seeking is easier for the powerful, and that is a powerful negative externality, which is pollution of both the market and of the political sphere of power relationships.

So, is Mexico run by an all-powerful redistributionist state? Because the direction of migration in that case seems to contradict your model. In fact, my not-well-researched intuition is that most migration is based on the desire to live somewhere with a decent economy, rather than the desire to get away from a redistributionist state.

In a very real sense Albatross, Mexico is a redributionist state. I may have the number wrong, but economically the country is ruled by the forty families. If you rise and prosper, some way is found to make you turn over your business to them. The idea of having some independent person becoming rich is not one that the ruling elite likes much at all. The great majority of the peoplen there live in circumstances that we would consider as poverty.

And what exactly is the functional difference between the government keeping you from being prosperous as opposed to some non-governmental elite doing the same thing to you? If you are successful either one of them will take what you have and throw you back down to the level of the lowest common denominator. I submit to you that there is no FUNCTIONAL difference between the two.

tcobb:

The problem is that people are NOT "assigned" into the pyramid. Rather, they are forced to compete for their level by escalating material consumption, simply to keep up with other consumers. This wastes scarce resources which could be put to more productive use. Redistributing wealth does nothing to solve this.

If economic equality per se will make society as a whole that much happier, then why is it that so many Cubans wish to get to the United States and so few Americans wish to go and live in egalitarian Cuba?

Perhaps it'd be better to compare the US to another nation where the level of wealth is similar but the distribution of wealth (among other aspects) are smaller in order to isolate the variable we're trying to test? Say the US vs. Denmark or England vs. Germany?

How comes that when the top income rate was 90% in the 1950s the economy was doing so well?

The problem with the 1950-1960 era as a model is that Europe's factories had been bombed to rubble and Asia had yet to emerge as a world power. America had no real competition from other nations. That was the age of labor unions in the US being able to strike for better wages, a tactic that has dramatically less power today since many companies have access to labor pools in multiple countries and can switch from one to the other.

Michael Tinkler: Yes Bill has the fancy house, but it's in the middle of a suburb on only 5 acres. He doesn't live like Rockefeller or Hearst. I have no direct knowledge, but I bet he does stay in a guest room at Warren's upper middle class style house. Bill flew coach until he was 35 or so, after he was already a billionaire. Ballmer still lives in a house that is just "fancy upper middle class". There are plenty of plaintiff's lawyers in places like Houston who live much more ostentatiously. Sergi and Larry were at Burning Man this week, living in tents.

Generally speaking, our productive rich do not have the characteristics of a degenerate class.

Ryan
I agree with you that the ideal comparisons should be made as you suggest. I used the Cuba-US example as an extreme example to make a point. So, what are the statistics about immigration from western Europe and the US? I have read people talking about the "brain drain" from Europe to the US. Whether it is true or not I have no idea.

I think Brad DeLong should've read Harrison Bergeron at a younger age...

I encourage Blissex to actually *read* DeLong's post before making statements like "DeLong argues not that (some of) the poor envy the rich, but that conversely (some of) the rich spite the poor, and that this transfers utility from the poor to the rich (as if all those government policies that transfer income from the poor to the rich were not enough)."

For example - this is also from DeLong:

"the happiness America's working poor and middle class derive from the compensation distribution--given their compensation, the compensation of the rich, and the lifestyles of the rich and famous--seems to me to be certainly less than that of their counterparts back in 1973."

I read that as, the working poor and middle class are unhappy because they know there are rich people out there not (as per Blissex), some rich people are happy because they know there are poor people out there.

As to the main point - income inequality *may* be a symptom of a divided society,and those divisions *may* become socially problematic.

However - imagine a society where doctors, lawyers, financiers, artists, and bricklayers live in the same neighborhood, go to the same churches, bowl in the same leagues, gold at the same clubs, and send their kids to the same school. Furthermore, those kids all have equal access to the same colleges and jobs.

Does someone really think that anyone would care about the level of income inequality in that society?

Now imagine a second society of nearly equal incomes but... college grads and white collar professionals only live/work/play/worship with other college grads/professionals, and only their kids go on to college.

Would that fact that incomes were equal in that society mean that all was well?

tcobb - (posted in two chunks to avoid the spam filter)

Here's the best I could find in a quick google search;

a significant proportion of immigrants have found it quite difficult to get work in Denmark, while the country has been relatively unattractive to high-skilled foreigners. Furthermore, the structure of the economy not only makes it difficult for low-skilled foreigners to gain a foothold in the labour market, but also provides generous social benefits that have caught many of the least skilled immigrants in a benefit trap.

ideas.repec.org

However there's also some evidence that societies which value equality and have greater wealth than surrounding countries have some incentive to be anti-foreigner in order to maintain the current situation. amren

One of stated goals of the Anders Fogh cabinet, and especially the supporting Danish People's Party which secured the governments majority, was to stem the flow of refugees to Denmark, and new tougher rules did drastically reduce the number of refugees being granted asylum. Another initiative was the 24 year rule, which stated that husbands/wives must be 25 or older before they could immigrate to Denmark through family reunification (there had been many cases of arranged marriages of young people being used to get around immigration restrictions).

wikipedia

The countries with the least inequality seem to represent the highest paid workers in the US; The European-born groups with the highest male median earnings were from Norway ($64,792), Denmark ($60,983), and Switzerland ($60,826).
http://www.migrationinformation.org/USfocus/display.cfm?ID=287

But I couldn't find anything that speaks directly to relative immigration in terms of numbers.

hmm... looking over some of my sources. Amren is somthing of a hate site. I apologize for that (though it does seem to still support the point since Denmark does seem to be getting more nationalist, with recent immigration policies that are far stricter than the US.)

I agree that Jane Galt is not really addressing DeLong's point which is that some conspicuous consumption serves no purpose other than to flaunt wealth and lord it over the poor. Do rich people light their cigars with $100 bills when no one is watching? I see no great harm in trying to discourage this sort of consumption. Of course you can argue about how much consumption falls into this category and about whether the target is primarily poor people or people just slightly less wealthy.

Jane Galt goes on and on about how bad envy is. She should give equal time to the converse emotion, feelings of superiority towards those worse off than you. This can be socially destructive also. Also note envy can be useful as a spur to effort.

Finally I doubt popular fascination with the lives of celebrities is primarily driven by a desire to see them suffer, instead many people live vicariously through celebrities.

While it may be difficult to draw philosophical similarities between envy-based redistribution and scarring beautiful people permanently, it seems like an adequate metaphor when it comes to explaining the egalitarian-liberal obsession with economic inequality. Considering the fact that the same liberals also like to stress the comparative lack of importance of money when it comes to living a meaningful life, it is surprising that they have not taken the same position toward redistribution in other primary goods, such as beauty and love.

The metaphor may be a harsh one, but it should be used more frequently, for if redistribution is ever justified on the basis of raw envy, then the consequence would indeed be a justification for Galt's thought experiment.

1. Conspicuous consumption serves a very valuable social function. It creates jobs for those who make conspicuous consumption items (e.g., actors and musicians, professional athletes, media pundits and blog hosts, fashion designers, sports car manufacturers, liberal arts professors). Shall we close down all these industries in the name of equality? Perhaps a bit of cost benefit analysis would be in order first. Oh, and don't forget that quite often those who make such items achieve a very high degree of status for doing so.

2. The choice is not between equality and inequality - but between inequality in a free and prosperous society or inequality in an impoverished and controlled society. Inequality itself is simply a fact.

«For example - this is also from DeLong: "the happiness America's working poor and middle class derive from the compensation distribution--given their compensation, the compensation of the rich, and the lifestyles of the rich and famous--seems to me to be certainly less than that of their counterparts back in 1973." I read that as, the working poor and middle class are unhappy because they know there are rich people out there»

Perhaps because that's the reading you want to do, because all this says is that if the rich transfer utility from the poor with the politics of spite («the lifestyles of the rich and famous»), the poor understandably don't enjoy that a lot. The issue is not the wealth of the rich, is the transfer of utility. DeLong is fully aware that most Americans (incredibly) think that they will become rich themselves, it just sucks more to be poor if the rich look down on the poor.

Mankiw has managed by a prevaricating use of «suggests» to turn an article about the rich increasing their utility by decreasing that of the poor into one where the poor want to harm the rich with no gain to themselves; and ''Jane Galt'' has characteristically dropped even the small astute proviso of the ''suggests'' used by Mankiw to turn that argument into one that a progressive tax/spend state budget is like the plain being happier if the beautiful were tortured into becoming repulsive.

But DeLong's argument (if I understand it correctly) remains that (some of) the rich are happier if the poor are unhappy.

Secondarily, in this specific case Mankiw's and ''Jane Galt''s argument is entirely founded on the quote they give, and whether or not the context confirms the plain, clear meaning of that quote (and it does), that specific quote still unambiguously and clearly says the viceversa of what Mankiw says it ''suggests'' and nothing at all like what ''Jane Galt'' claims.

DeLong is also far too mild to point out in that post that the politics of spite are founded not just on enjoying the misery and penury of the bottom 99% of the population, but also on a material, rather than psychological, situation: that somehow the top 1% of household have managed to capture virtually all the pre-tax productivity increases of the bottom 99% for well over a decade, while at the same time improving their after-tax position too, and are celebrating it.

«but between inequality in a free and prosperous society or inequality in an impoverished and controlled society.»

This argument is based on the prevarication that someone is arguing that the goal is perfect equality, and the astute dissembling that somehow the degree of inequality does not matter, and the sheer ignorance of the well known fact that there are free and prosperous societies where the degree of inequality is much lower than in the USA today.

A simple example will suffice: the USA in the 1950s.

Would that fact that incomes were equal in that society mean that all was well?

Obviously not. But is there anyone who truly believes that social separation doesn't fundamentally derive from wealth inequality?

Government policy is a fairly blunt instrument. That said, redistributionist policies (or the threat thereof) are fairly obvious social pointers. ("Don't draw excessive attention to your own wealth.")

imagine a society where doctors, lawyers, financiers, artists, and bricklayers live in the same neighborhood, go to the same churches, bowl in the same leagues, gold at the same clubs, and send their kids to the same school. Furthermore, those kids all have equal access to the same colleges and jobs. Does someone really think that anyone would care about the level of income inequality in that society?

Well, first you describe a society where somehow all these people have if not equal, not too distant lifestyles. How can similar lifestyles happen without incomes being similar too?

Second, I think that in such a society the rich would worry about any excessive income inequality. Because in such an integrated society the less perverse rich would easily realize that the poor are not exploitative parasites living in idle luxury off the back of the hard work of the rich, but that they are human beings too, and usually try hard, and are mostly out of luck. There was after all a difference between Rockfeller (''yankee'') and Goldwater (''plantation'') Republicans.

Aside: sometimes I think that a large part of the relentless pressure of the past couple decades to put down the poor and enrich the already rich may be due to the end of the draft. When people of different classes serve together in a mixed environment and share the same hardships and get to know each other they usually tend to respect each other, and their histories, more. The relatively progressive and consensual 50 and 60s perhaps were so because of the veterans.

«Now imagine a second society of nearly equal incomes but... college grads and white collar professionals only live/work/play/worship with other college grads/professionals, and only their kids go on to college. Would that fact that incomes were equal in that society mean that all was well?»

But this is another contrived absurdity. But in some form it may happen: some group of people may prefer college, some group of people may prefer work. But consider these two points:

* The fact that incomes are less unequal would mean that the median be nearer the average. That is, smaller dispersion, that is, less bottom-level incomes. Because one effect of inequality is to push the bottom level down, and viceversa.

* However yes, this kind of ''separate but mostly equal'' society, if possible, would reduce the happyness of one or both groups, depending on the relationship between status and group. But that is a secondary effect, compared to lower extremes of poverty.

«where the degree of inequality is much lower than in the USA today. A simple example will suffice: the USA in the 1950s.»

Here probably I must confess that this is in part a trick statement. Spot the deliberate mistake :-).

Blissex,

Actually, my point is that equality is simply not possible. The degree of inequality is therefore irrelevant.

Justice (the same rules applied to all), is another matter. Injustice can and should be corrected. But inequality, being a natural fact, cannot be corrected, and any attempt to do so will result in injustice.

Randy:

Conspicuous consumption serves a very valuable social function. It creates jobs for those who make conspicuous consumption items (e.g., actors and musicians, professional athletes, media pundits and blog hosts, fashion designers, sports car manufacturers, liberal arts professors).

You may want to read up on the broken window fallacy. The "social function" is only valuable if provision of conspicuous consumption items also exerts real positive externalities on the social welfare. This is not the case in general.

«equality is simply not possible.»

But equality of what? And why should that be possible or desirable?

Equality and inequality, whatever they are, are just points on a continuum, let's say 0.0 for perfect equality and 1.0 for perfect inequality. Well, only 0 is equality and any other value up to 1 is inequality. That 0 is unattainable is irrelevant to any argument about inequality.

«The degree of inequality is therefore irrelevant.»

This does not follow at all, this is just made up. Equality is not a truth value, so that either equal or unequal, as mentioned above even if value 0.0 is not achievable, that does not make the rest of the values up to 1.0 irrelevant.

«Justice (the same rules applied to all), is another matter.»

That's one definition, and one should at the very least include ''in the same circumstances''. But anyhow, thank you for finally revealing to humanity what the correct definition of justice is, fools have been debating the subject for thousands of years... :-)

«Injustice can and should be corrected. But inequality, being a natural fact, cannot be corrected,»

But which ''inequality''? Of what? The only inequality that seems to me a natural fact is numerical inequality (of the ''3 greater than 2'' sort), and there are good arguments that even that is not a natural fact (it is truth by construction).

But we were talking about inequality of income, which may be argued to be many things, but not a natural fact. It may be regarded as a statistic, but that's not the same.

«and any attempt to do so will result in injustice.»

But you have just revealed to humankind (thanks again!) that justice is «(the same rules applied to all)».

If one the rules were ''everybody should have equal pre-tax income'', justice would be made if it was applied to all.

Or perhaps your arguments are a jumble of poorly misunderstood words without concepts and concepts without words and need a bit of rethinking? :-)

"But why is this so much more horrifying than the idea of taking the fruits of people's labours--...Do not most of today's wealthy make their money by presenting their body at work for many hours a day, and labouring with their minds, which are far more sacred to any rational person than their limbs or cheeks?"

Not at all clear. Many (probably most) of today's (and indeed yesterday's) wealthy got that way by parasitically charging others for access to natural resources (esp. land) that they themselves did not create.

"The quest for autonomy, the thirst for knowlege, the desire to live a cleaner, healthier, richer life, free of hunger and want . . . these are the sorts of values we want our government to express and empower. Envy is not."

Uh huh. And government mandated and enforced theft of the fruits of labor by private capture of land rent is fine, just dandy.

Are you a real libertarian, or a freedom-despising royal libertarian?

Blissex,

Show me any two people who are equal.

You say that equality is a continuum. I say that it is a condition which either is or is not. And when discussing human beings, it is always not. While the application of the word "equality" to human relations may be useful rhetorically or politically, it is invalid logically.

Justice means applying the same rules to all. There are some who attach expanded concepts of equality to a definition of justice, but such uses are, again, logically invalid.

Randy wrote, "The choice is not between equality and inequality - but between inequality in a free and prosperous society or inequality in an impoverished and controlled society. Inequality itself is simply a fact."

Huh? On net, government redistribution of wealth is clearly upwards, not downwards, in most places.

Google on "ricardian rent" and "land value taxation," since I'll wager you don't know enough economics to understand why.

Blissex wrote, "the «fruits of someones's labor» can never be entirely ascribed to the laborer: as a rule profitable labor involves taking advantage of social, governmental, corporate support. How much of what one produces is solely the fruit of their efforts is a very debatable subject."

Yes, but this point can be made much sharper.

There are three factors of production: labor, capital, and land.

Income from land (which classically is defined as all natural resources, including such things as the electromagnetic spectrum) is collected by private owners in exchange for no meaningful contribution to production (no labor, no capital). It's simply government-mandated theft.

Of course, I'm sure a lot of the folks reading and posting to this blog think _this_ kind of "socialism" is wonderful, as it redistributes wealth upwards.

Randy wrote, "Justice means applying the same rules to all."

LOL! Uh huh.

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

Guest,

I understand your thought about the broken window fallacy, but I don't think it applies. Broken window is about breaking things in order to create jobs, but where the total gain is seldom equal to the total loss. What I'm talking about is people creating new jobs out of pure desire and imagination. The gain is pure gain. It does not remove resources from other productive uses because those other productive uses are already being accomplished by others. It is pure growth. By way of example, both higher education and the automobile were at one time considered to be items of conspicuous consumption. Stopping their development in the interest of "equality" would not have accomplished anything for anyone - though it turns out that their development did accomplish much in terms of greater total wealth for nearly everyone. One more example, which would create more total wealth for a society; allowing the professional baseball player, or actor, or diamond cutter, to pursue their trade? - or forcing them to get a job in a clothing factory?

liberal:

I think you're going WAY off-topic here. And I say this as a LVT supporter.

Liberal,

Justice has not been perfect in the past, nor is it perfect now, but it is a reasonably achievable objective. Equality is not.

«Income from land (which classically is defined as all natural resources, including such things as the electromagnetic spectrum) is collected by private owners in exchange for no meaningful contribution to production (no labor, no capital). It's simply government-mandated theft.»

Under some theories of economics this may even be a defensible idea, but it is irrelevant, because rent, to some (large) degree, is a socially accepted norm, whatever its merits. And in the particular case of the USA, it was government-mandated theft from the natives, and frankly even the then-natives realize that is a non-issue. So it is a bit of a waste of time to raise it, whether it has merit or not.

Especially when there are much better arguments as to the process of production of goods or services itself, where nobody is a hero, and everybody stands on the shoulders of others. At least for the past few dozen thousand years or so :-).

Liberal,

Of course most government redistribution is upwards. What is intriguing to me is how any could assume that it would be otherwise.

«You say that equality is a continuum.»

This is such a ridiculous misrepresentation that I cannot even think it is dishonest, just laughable... As I wrote explicitly precisely the opposite, that equality is not a continuum, but inequality is:

«Well, only 0 is equality and any other value up to 1 is inequality.»

I apologize if the context has misled you into reading the opposite of what I wrote :-).

As an aside, I sort of understand where you are coming from, but frankly debating what you write is not as enjoyable as commenting on what Greg Mankiw and ''Jane Galt'' write. I feel that they are great, hardnosed, enjoyable scoundrels, Greg with his subtle sophistry in provisos like «suggests», and ''Jane'' dropping such pretences entirely and just making things up, wildly.

Lots of fun :-), but just paraphrasing what I write in exactly the opposite way of what I put a few lines above is not very smart. :-).

That is, DeLong's argument is that (some of) the rich often enjoy their wealth and flaunting it because it makes the poor more miserable. The worse off the poor are, the more humiliated and insecure they feel, the better (some of) the rich enjoy their security and perquisites.

This is like saying that some birds enjoy flying overhead because of the utility they derive from shitting on the people below them.

Blissex,

The word games are fun, but the point is that equality is an impossibility and inequaltity a fact.

Better to approach the issue of "need" from the perspective of justice.

For example, Americans have agreed that no one should be allowed to starve to death or die of exposure. We have written laws to ensure that assistance will be given to prevent this if at all possible. But it isn't about equality or an attempt to achieve equality. We don't say that the person in need is an equal. We say that we have agreed to help those in need. Agreement. Rules applied to all. Justice.

"That is, DeLong's argument is that (some of) the rich often enjoy their wealth and flaunting it because it makes the poor more miserable. The worse off the poor are, the more humiliated and insecure they feel, the better (some of) the rich enjoy their security and perquisites."
«This is like saying that some birds enjoy flying overhead because of the utility they derive from shitting on the people below them.»

First of all, my point here is that whether or not what DeLong actually said is right or wrong, it is not what Greg Mankiw and ''Jane Galt'' have attributed to him.

As to the merit of he actually said, I think that he is partially right. I have seen obvious cases where wealth has gone to the head of people, and that was not pretty. There is even a proper word for a similar attitude, ''Schadenfreude'', so it can't be that rare. It is a feeling of middle class people look with horror at documentaries about the slums of Kolkata or Rio: there is a component of ''I am happier for not being there''.

As to birds, the analogy is not that bad; most of then utility of flying for birds is just the transport, but birds sometimes do dump on people out of spite... :-)

However perhaps a more proper analogy is that part of the utility of flight to birds may be in looking down on those unfortunate ground based bipeds...

As to the merit of he actually said, I think that he is partially right. I have seen obvious cases where wealth has gone to the head of people, and that was not pretty. There is even a proper word for a similar attitude, ''Schadenfreude'', so it can't be that rare. It is a feeling of middle class people look with horror at documentaries about the slums of Kolkata or Rio: there is a component of ''I am happier for not being there''.

But this is a far cry from saying "I am happier because they are there".

Delong's point seems to be that the rich who conspicuously consume - and he doesn't say "some rich", which implies that, to him, all rich people conspicuously consume - get a good chunk of their jollies from the notion that their actions make others miserable. With the possible exception of Paris Hilton singing, the idea is, on its face, nonsense.

I understand that some rich people might feel this way and that some poor people might somehow feel they are denigrated by all this conspicuous consumption, but neither feeling has any basis in fact.

And as for the birds, how do we know they dump on anyone out of spite? They might just have to go and someone gets in the way.

Gee, all these individuals daring to measure social utilities and goods. Feh, they're just privileging their preferences.

50+ posts, and a majority have not even bothered to question the underlying assumption: if "conspicuous consumption" is a bad attitude and socially destructive, what about the attitude of the less wealthy who decide to be offended by it? Are they not both materialists with the same basic fault, i.e., of measuring happiness by presence (or lack) of material goods? How, then, is the lot going to be improved by cutting down the fortunes of the other? The problem is not the possessions (or lack), it is the attitude of heart that would measure status thereby.

To wit: spite and/or envy.

Here's a thought experiment for you: go buy a Ferrari, park it in front of where I'm standing, get out, jangle the keys in my face a few times, then spend five minutes talking about how fun it is to own a Ferrari. Chirp the tires a few times on your way out, for good measure. After you drive away to your next destination, I'm going to get into my twenty-year-old Toyota with the rust spots starting to form (and which I cannot now afford to replace), and drive away to my own next destination, fully purposed-in-mind that I am no better or worse off than I was before.

Questions of the day: (1) How did I do that, and (2) Why is it unreasonable to expect the same of others?

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

I've always wondered about this criticism of the law. It seems rather pointless. What would be the alternative?

"The law, in its majestic equality, permits the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread." - this sounds equally sarcastic as the first forumulation.

"The law, in its majestic inequality, forbids the rich but permits the poor to sleep under bridges, to beg in the streets, and to steal bread." - this also sounds equally sarcastic as the first two formulations.

"The law, in its majestic inequality, permits the rich but forbids the poor to sleep under bridges, to beg in the streets, and to steal bread." - this just sounds nuts.

If a government thinks it is bad for people to sleep under bridges, beg in the streets or steal bread, then it is bad for anyone to do so. If the problem is that some people are poor, then set up a welfare safety network and stop fiddling around with the law.

And incidentally, if people, be they rich or poor, are freely permitted to steal bread, shortly there will be no bread to steal or buy at all.

Surely the obvious conclusion is that the happiness of everyone in a western society can be raised, by the simple method of detailed press coverage of [African] forth-world countries?

I think Delong is silly to suggest that the rich engage in conspicuous consumption to get utility from showing how much better off they are than the poor (if, indeed, that is what he meant). Much more likely they get that bigger, more luxurious private jet to demonstrate to those in their economic peer group that they are better off economically that they are.

Likewise, middle income people who spend more than they can afford on luxury items are not trying to demonstrate how much better off they are than the welfare mother living across town. They are trying to demonstrate to their peers living on the same block how well off they are.

Delong really just doesn’t like economically successful people and dearly wants to strip them of their assets. To do so his must demonize them and assign vile motives to their actions to assuage any guilt people might have in doing so. Lot of that went on in Germany in the 1930s as I recall

...the poor are not exploitative parasites living in idle luxury off the back of the hard work of the rich, but that they are human beings too, and usually try hard, and are mostly out of luck.

Funny thing. When I shifted my priorities to where getting high was less important than earning a living, developed a marketable skill and actually did try hard, my luck changed.

James Shearer: “Do rich people light their cigars with $100 bills when no one is watching? I see no great harm in trying to discourage this sort of consumption.”

Blissex: “DeLong's argument is that (some of) the rich often enjoy their wealth and flaunting it because it makes the poor more miserable.”

Blissex: “it just sucks more to be poor if the rich look down on the poor.”

Liberal: “Many (probably most) of today's (and indeed yesterday's) wealthy got that way by parasitically charging others for access to natural resources”

Do you guys really know any rich people at all? Or do you just believe what you see on television and in movies?

Fred Smith (Fedex), Herb Kelleher (Southwest Airlines), and Sam Walton (WalMart) are typical rich men. All of them loved their employees, treating even the least paid with the greatest respect. All of them provided thousands of those employees with well-paying jobs. All enjoy the love and respect of the people who work for them. None are parasites.

I have personally known five rich men. One was my wife's uncle. All were entrepreneurs or corporate executives who worked 70 to 80 hour weeks, creating this strong economy from which we all benefit. All these men had one common admirable trait: a respect for every person they came in contact with, even though their busy schedules didn't always allow them to show it.

None of the rich I've ever met flaunted their wealth. None of them were pleased that others in this world lived in poverty. But some of them - and I suspect all - believed that charity and transfers are the wrong ways to help those in poverty.

When I read the comments of you three gentlemen, I felt that we must live in a different world. I know mine is a real one.

Of course most government redistribution is upwards. What is intriguing to me is how any could assume that it would be otherwise.

This is empirically untrue. Countries that redistribute a lot more (Continental Europe, Scandinavia) have much less income inequality and smaller percentage of people below the poverty line. By your reasoning, considering how little redistribution there is in Ameirica compared to other developed countries, our poor are doing just fine and our rich people are just begging for more government entitlement programs, right?

Randy,

2. The choice is not between equality and inequality - but between inequality in a free and prosperous society or inequality in an impoverished and controlled society. Inequality itself is simply a fact.

So the degree of inequality doesn't matter? Stop being absolutist. No one ever argues for complete equality. Not even in the Soviet Union (and I would know, I was born there) did everyone have the same income or wealth. Of course there will always be inequality. The question is how much of it are we are willing to tolerate.

I see you already said that "Actually, my point is that equality is simply not possible. The degree of inequality is therefore irrelevant."

That is a ridiculous statement. I could say, "We will never completely prevent airplane hijackings. It is simply not possible. The choice therefore is not between safe flying and unsafe flying, it is between unsafe, controlled and frustrated flying with annoying metal detectors on one hand, and unsafe, hastle-free, quick and pleasant flying without metal detectors on the other."

There are lots of bad things in life that although we cannot get rid of completely, we still *try*, even if our efforts have a cost. Prett much any law enforcement falls into this category.

Saying that the costs of redistribution outweigh the benefits is a legitimate arguement. However statements like your "inequality is a fact" are just hard to take seroiusly.

Hey, if Liberal and other liberals say that rich folks get their jollies by rubbing it in on the poor, it must be true. It must also be true that all rich folks dress just like that little guy in the Monopoly game, too, and they all got rich by exploitin' the masses, or inheriting wealth -- like Senator-For-Life Edward Kennedy -- or by marrying it -- like Hero-For-Life John Kerry, right? Or is it about time to change the subject, Liberal?

Say, if there's really too many poor folks in the United States, why in the heck are our liberals so bound and determined to import 10 or 20 million more from the 3rd world, why is that, hmm?

I mean, sure, I confuse easily, but this is really confusing. It's almost as though poverty is just a cause that liberals use when they can't make false charges of racism stick...

Ellipsis,

I'll bite.

I wouldn't say rich rub it in to the poor. It is a subconsious thing. People care about their status and relative wealth, and are happy/unhappy about it depending where they are on the scale. Patricians in ancient Rome would probably be very unhappy to find out that they dont even have most of the things that a even lower-middle class American does like cable internet, a car, or modern health care. But in their society, they were the cream of the crop and they were probably very happy about that. People have always compared themselves to the Joneses (or Pompeis); that is a fact (Randy likes this word). Call it envy, spite, pride - whatever. But hey, why don't we start telling them they are being irrational and tell them what they should REALLY care about - just their absolute wealth. That would be a perfectly libertarian thing to do!

Immigration: most liberals want to stop/control illegal immigration. They just think that people who have worked hard for years for little gain and who have become productive memebers of society should be treated like human beings.

For the record, I don't think rich people exploit the poor (though generally, rich people enjoy a favorable bargaining position in relation to the poor).

MS,

The relevant difference between hijackings and inequality is that nearly everyone considers hijackings to be unjust, while most do not consider inequality to be unjust.

Again, the issue is better understood and approached from the perspective of justice. We understand that people have basic needs. We agree that these basic needs should be met, regardless of the fact of inequality, and regardless of what the individual has earned. We have agreed. We have written laws to record our agreement. We apply these laws to all. We apply justice.

On the other hand, we do not agree that everyone should have an equal measure, or even anything close to an equal measure. There is no agreement. And because there is no agreement, attempts to enforce the distribution of an equal measure (or a more equal measure) constitute a violation of justice.

If you feel that some should have more than they currently have, you must convince those who disagree. You may use your concept of equality as an argument, but I've got to tell you, its not a very convincing argument. An argument to the virtue of equality will always be answered by an argument to the virtue of productivity. An argument to need has a somewhat better chance of success as Americans have shown a tendancy to respond to need, but I think your best bet is an argument to productivity. Prove that providing more to some will provide more to all (e.g., education, nutrition, counter dependancy, etc.).

Bottom line; Arguments from the perspective of equality will be met with suspicion, questioning of motives, and outright resentment - count on it. But arguments from the perspective of justice have some hope of incremental success. Its a harder path, but what good has ever been accomplished by taking the easy way?

P.S. When I use the term justice, I mean the traditional concept of justice. The modern term "social justice" is just "equality" in disguise and everyone knows it. Its a mistake and a trap. Don't fall for it.

Surely one test of this spitefulness is the desire of the rich to live within sight of the poor. Yet in many countries with really horrible income inequalities, large fractions of the richest people (in the top 5% of the income distribution) prefer to emigrate and live among the middle classes in the US rather than remain among the wealthiest at home. That doesn't disprove Brad's thesis, but absent equivalently strong emigration in the opposite direction, it suggests that the desire to do well in an absolute sense is much more powerful than the desire to spite others or the wish to be envied.

In my experience with "rich" people who flaunt their money (and it is a pretty small portion of the rich people I've known and met) flaunt it to impress other "rich" people. These types do not have a concern about the poor; whether to help them or to impress them.

In fact, a very high portion of the people I've known to flaunt their "wealth", were not particularly wealthy. In many cases they were basically broke but needed to present a facade that looked like they were successful in order to get money or jobs out of powerful people. Sometimes the gambit worked (sometimes for a while) but quite often the house of cards collapsed.

Maybe DeLong doesn't know many "rich" people very well. Too bad. I imagine if he did he'd find that the reality is that most rich people are VERY conservative; they own modest homes, cars, live well below their means and are pretty darn charitable (often anonymously). Why do many rich people not flaunt their wealth? Most rich people (besides the Donald Trump types) know that being known as rich merely increases the probability someone will try and take it from them. Google "lottery winners woes" for more on this phenomena.

"people don't resent Bill Gates"

They DON'T?

Whatever the economy or government, there will be status seeking going on, and status, as opposed to wealth, is a zero sum-game. Someone is king of the hill, someone else is not.

Whatever brings status will be pursued, occasionally to excess. Our host touches on that with the reference to Veblen, who thought potlatches were conspicuous consumption. For people who make a profession out of envy, even giving away wealth is "bad" when it's done for status. There is no pleasing some people.

Mr. Snitch - "people don't resent Bill Gates"

I've known a lot of people who resented Bill Gates because of his business practices, quality of products and the fact that his monopoly on windows seemed to give him an unfair advantage.

The fact that Windows (and DOS before it) sometimes had 'undocumented features' meant that Microsoft had an unfair advantage in producing software. Laws which prevented reverse engineering software, even for the purpose of interoperability added to these resentments among programmers.

Perhaps some people resented Bill Gates for the sake of his wealth, but if you skim through the google search that you gave the most common complaints are lack of quality in MS products and lack of ethics and occasionally abuse of power, not the fact that Gates is rich.

How does Bill Gates screw in a lightbulb? He doesn't. He just declares darkness the industry standard.... etc.

It seems to me that, whatever class you are in, you flaunt the wealth you have to introduce envy into those members of your class. As long as one class does not affect another things are cool. I don't think one class thinks about another class because they are not members of that class. I hate microsoft not Gates. Only because I work in IT and have to deal with their sofware. Rich people who flaunt their wealth are usually entertainment for those in the classes below them.

My link was somewhat tongue-in-cheek,but clearly there is general resentment and envy of the wealthy. There are plenty of examples of this. We're fortunate that it hasn't gotten so out of hand the we've gone completely communist, but still, there are plenty of people who would have the government take a bigger bite of the wealthy so that it can be redistributed.

Gates probably does see LESS resentment now that he is as affiliated with philanthropy as he was with MS. As someone who has worked in philanthropic fund-raising, I see that as the hope of this country (and the world), not government take-aways. The government spends money very badly, and its taking is resented by the wealthy (who usually find ways round it anyway). On the other hand, if one can persuade the truly wealthy that philanthropy fills a void in their lives that nothing else can satisfy (which was my job as a marketer and which I honestly do believe), they will often give with both hands. (At some point in their lives, giving to build a church/research lab/scholarship foundation sounds a lot better to some than leaving it to those ungrateful kids. Heh.) Gates seems immensely satistfied with the new turn his life has taken, as does Buffet. A message delivered this way has a weight no other medium could carry.

I saw Ken Burns' documentary on Frank Lloyd Wright last night. It recalled how Herb Johnson said he was 'working for Wright' on the Johnson Wax building, rather than the other way around. Still, Johnson endured the wild cost and time overruns, and had Wright build his own house after. One of the commenters said the greatest thing in Wright's clients' lives was their association with Wright. It can be the same thing with philanthropy, if packaged right. It becomes a cause, and an all-consuming passion.

So, when I see the NY Times, as it periodically does, bemoaning the 'gap between rich and poor', I probably look at it a bit differently than most people. I say it can't happen soon enough, and I say the wealthy need causes that make their hearts light and young, rekindling lost passions.

My Dad and Mom live in a 1400 sf single-story house on a very small lot, have only bought 1 brand new car in over 35 years, and take very few vacations, of which all have something to do with visiting their kids and grandkids. Yet, the family members on my Dad's side of the family resent (envy) them their wealth and conspicuous consumption because they put kids through college, have cars that run and are less than 10 years old, keep a neat and tidy house, etc.

Truncate the top 10% of wage earners/wealth possessers in the world, redistribute all that wealth, and you know what happens. A new top 10%. A new bottom 90%. More resentment, more envy. Wake up. Life is competition. If you don't understand this, you are fooling yourself and not paying attention to the real world.

For people who make a profession out of envy, even giving away wealth is "bad" when it's done for status.

I'm going to echo Mr. Snitch's comment - giving away wealth is definitely NOT bad. The status effects cancel out and the net outcome is a transfer which is usually welfare improving. This contrasts with conspicuous consumption where the net effect is a waste of resources.

Put another way: Yes, rising water lifts all boats. But on the way up, somebody with initiative and energy is building a bigger, better, faster boat - because he/she can.

Prove that providing more to some will provide more to all

I dont think that is the sole overriding factor. I admit that some equality measures will hurt productivity, but I am fine with that. Note that the kind of equality I'm talking about is (reasonable) equality of opportunity, some kind of safety need agaist misfortunes of life, and redistribution from the very top of the economic ladder to those most need to keep inequalit from spiralling out of control. Wealth tends to create more wealth and poor people tend to remain poor for generations, meaning inequality tends to be self perpetuating, like a positive feedback mechanism. If no effort is made to stop it, the country will eventually become one with classes, where people are increasingly unable to move up. Also, because wealth tends to increase policial power, the country will be in danger of becoming a plutocracy or even a kleptocracy with a ruling elite at the top telling the poor at the bottom, "We are doing this for you guys, redistibution will only hurt you. Trust us".

So again, I'm fine with taking a productivity hit if the benefits of that productivity are not widely shared. And politically, most people seem to agree with this. In the US and even more so in other democratic countries people are not against some form of "social justice". So it is you who needs to do some convincing.

MS wrote:

Ellipsis,

I'll bite.

I wouldn't say rich rub it in to the poor. It is a subconsious thing. People care about their status and relative wealth, and are happy/unhappy about it depending where they are on the scale.

That's not at all what I've been reading up until now, though. Never mind that it is far from universal, that I have personally known many people who cared little for status or relative wealth, because their personal and cultural norms taught them to actively reject "keeping up with the Joneses" and materialism in general, what I've seen so far in these comments is flat claims that at least some of "the rich" (whoever that may be) gain personal and real pleasure from flaunting their wealth to "the poor" (whoever that is). So your comments, though temperate, seem about 30 to 50 posts late...

Patricians in ancient Rome would probably be very unhappy to find out that they dont even have most of the things that a even lower-middle class American does like cable internet, a car, or modern health care. But in their society, they were the cream of the crop and they were probably very happy about that. People have always compared themselves to the Joneses (or Pompeis); that is a fact (Randy likes this word). Call it envy, spite, pride - whatever. But hey, why don't we start telling them they are being irrational and tell them what they should REALLY care about - just their absolute wealth. That would be a perfectly libertarian thing to do!

Actually, not giving a fig what the Joneses are up to, within broad limits, is a very socially conservative thing to do, in keeping with several different cultural strains of American thinking. Various relatives and ancestors of mine lived a bit below, or sometimes a whole lot below, their level of wealth so far as the neighbors were concerned. Call it "INconspicuous consumption"; an older house, an older car, a fat bank account...or a midrange house, a couple of slightly old cars, a large and growing brokerage account. You should get the picture, by now. Of course, this non-materialistic approach also fits in with what used to be the dominent religious thinking...

Immigration: most liberals want to stop/control illegal immigration.

Prove it. Provide some evidence for this claim, I do not believe it for a minute. Exactly the opposite is what I see. From where I sit, liberals and leftists desire the influx of poor, ignorant, future voters who can be counted on to vote a straight ticket, as we see now in many of the Texas counties that border Mexico (El Paso county, most of the lower Rio Grande Valley from Del Rio south to the Gulf). Of course, the Business Roundtable Republicans want all the cheap nannies, gardeners, kitchen help, waiters, slaughterhouse workers, etc. they can import as well, but they aren't the subject to hand right now...

Prove it. Show me liberals who want illegal immigration controlled. Start with Edward Kennedy, or Nancy Pelosi...

They just think that people who have worked hard for years for little gain and who have become productive memebers of society should be treated like human beings.

Nice words, but the majority of illegals arrived in the last few years, and thus haven't "worked hard for years" but have "worked hard for months". I'm afraid that this supports my claim; empty boilerplate like this proves only that words are cheap.

For the record, I don't think rich people exploit the poor (though generally, rich people enjoy a favorable bargaining position in relation to the poor).

Again, this is an interesting sentiment, but a whole lot of posts late.

Brad DeLong made the extraordinary statement recently that "Nobody who is an immigrant or descendant of immigrants has any business voting Republican. Nobody".

The Futurist has challenged Brad DeLong to a debate over the sentence. Check out how that went.

Ellipsis,

I was under the impression that both parties wanted to control the borders and the main obstacle with getting a bill passed in congress was what to do with illegals already in the country.

As far as evidence, here is a quick google search gave me:
http://www.cnn.com/2006/POLITICS/05/15/democrat.response/index.html
From Sen. Richard Durbin, asst minority leader:
All Americans agree: We must act now to secure our borders and fix our broken immigration system ... Democrats are willing to support any reasonable plan that will secure our borders, including the deployment of National Guard troops

Another older result:
http://www.boston.com/news/nation/articles/2004/05/02/democrats_urge_immigration_changes/
Congressional Democrats, playing catch-up with President Bush's guest worker proposal, plan to introduce an ambitious immigration restructuring bill Tuesday that would put millions of illegal immigrants on the path to citizenship but restrict the entry of future workers.

Regarding anony-mouse's Ferrari v Toyota example, I would like to point out that altho owning an automotive work of art is one of the emoluments of wealth, I would hate to have to depend on such a complex finicky piece of machinery as transportation. Envy of my exceptionally low mileage 18 year old Toyota would make more sense, and it would be envy of my shopping skill and not my money.

For the record, I don't think rich people exploit the poor...

The richer everyone else is, the more money I can make doing business with them.

Put another way: Yes, rising water lifts all boats.

Some boats have been moored on too tight an anchor chain, some have been so poorly maintained that their hulls leak, and some are simply so far out to sea as to miss the tide.

MS, any amnesty will merely bring us back to the same situation in 5 to 20 years. Recall the "one time" amnesty of 1986 was supposed to solve the problem and never require any further amnesty. Note that the "guest workers" of Europe are anything but guests. No, I'm afraid that neither party is serious about controlling the border, not the leadership/elites anyway. It's astounding that an issue where a majority of registered, ordinary Democrats and Republicans agree is essentially off the table so far as the respective party leadership is concerned.

I fear that the "North American Union" isn't just a conspiracy-theorist nightmare, but a real plan, and thus the real reason for no elite interest in controlling the border is that 10 or so years from now, the border will effectively not exist. If that's the case, then all the "green" efforts that California's leadership wishes to enact will be meaningless in more ways than one.

I said:

For people who make a profession out of envy, even giving away wealth is "bad" when it's done for status.

a Guest said:

I'm going to echo Mr. Snitch's comment - giving away wealth is definitely NOT bad. The status effects cancel out and the net outcome is a transfer which is usually welfare improving. This contrasts with conspicuous consumption where the net effect is a waste of resources.

But I didn't say it was. Veblen did.

Potlatch culture based status on how much you gave away (somthing akin to what Mr. Snitch is proposing, I think), and still it was criticized. The act of seeking status, regardless of the means, is a sin according to a school of thought that hates the idea of winners and considers inequality worse than poverty.

Does DeLong belong to that school?

Congress, while under Democratic control, imposed a 15% luxury "surtax" on the purchase of large yachts. George Mitchell, Maine, was the Senate Majority Leader. But luxury yachts are not a necessity and if you want one and can afford it, you don't have to buy it in the US. The Maine iudustries involved in constructing, repairing, selling and otherwise servicing yachts [which are a significant part of Maine's economy] collapsed, throwing many salaried workers and commission salespersons out of work. Mitchell led the repeal effort, although he had been all for the law initially. In a free society, people who create wealth generally do so by satisfying the wants or needs of the greatest number of people for the lowest possible cost [i.e., Sam Walton, Henry Ford, et. al.]. You can have economic equality [i.e., Communist Albania] or you can have economic liberty [New Zeland, for example] but you cannot have both - and generally more of the former means less of the latter.

Elipses - the very fact that many, many registered partisans on both sides AGREE on immigration is EXACTLY why its NOT on the table. You can't win elections stressing points of consensus.

Sadly, we won't wake up to the border problem until we experience something very bad - not a threat, but an action - from that direction. Remember, there was the Reuben James sinking 2 months prior to Pearl Harbor. 9/11 could very well have been more of a Reuben James incident than Pearl Harbor. Not many people were screaming for our entry into the almost 4-year-old World War going on around us (the Japanese invaded China in 1937) until sometime after 0745ish Hawaii time on Dec 7, 1941.

As for the wealth redistribution discussions: here's an experiment for those still clinging to the dying corpse of populism/socialism/communism/classism. Go find a group of folks who've recently worked/studied their way out of poverty/near poverty and into the middle class. It won't be that hard. If you're struggling, I'll give you leads to half of my immediate family. I'm willing to bet that they don't feel nearly as resentful of the "Ritchie Rich" class as the born-into-comfort class that just can't seem to manage that next step. Regardless of where you sit on the "wealth" ladder, it's when you've decided you've peaked (i.e. you've culminated) but have not reached your aspirations (voiced or otherwise) that you start resenting those you have envied.

In the same way that great musical skill cannot be gifted but must be achieved through practice, so too does wealth require discipline, hard work, dedication, sacrifice, and yes a little bit of luck in order to achieve it. Easy wealth never lasts and usually ends very badly. The sports and entertainment world is riddled with the corpses of instant (and short-lived) millionaires.

The point I guess is that (and I speak from very personal experience here) poor people have terrible, terrible habits and its these habits that keep them mired in poverty - not the rich folks and certainly not the government. The answer in my opinion won't come from schools, or government, or even aid organizations - although these all are incredibly important. The answer has to come from each individual. You either do it (whatever it is - school, work, your marriage, parenthood, sobriety, etc), or you don't. So, redistributing wealth artificially (i.e. insane taxes, etc) only hurts those (in the long run) that you're ostensibly trying to help - assuming your goal really isn't just to stick it to those who have more than you....

Teach a man to fish - corny, but oh so wise.

> But DeLong's argument (if I understand it correctly) remains that (some of) the rich are happier if the poor are unhappy.

(1) Is that actually true?
(2) Why should govt do anything about it? (The answer can't include envy or conspicuous consumption.)
(3) How do you intend to distinguish the folks who "should be done" from others? (The answer better not be "wealth" because we already know that an interesting fraction of the wealthy don't feel this way. In fact, I'll bet that Paris Hilton doesn't even know or care that you're alive, so even she isn't afflicted.)

> As to the merit of he actually said, I think that he is partially right. I have seen obvious cases where wealth has gone to the head of people, and that was not pretty. There is even a proper word for a similar attitude, ''Schadenfreude'', so it can't be that rare.

Zombies don't even exist and there's a word for them.

> It is a feeling of middle class people look with horror at documentaries about the slums of Kolkata or Rio: there is a component of ''I am happier for not being there''.

That's not actually "Schaudenfreude" but I'll play along - what is the acceptable feeling for people who don't live in a hell-hole wrt living in said hell-hole?

Sorry - it's Ellipsis....my bad....

"Elipses - the very fact that many, many registered partisans on both sides AGREE on immigration is EXACTLY why its NOT on the table. You can't win elections stressing points of consensus."
Of course you can win elections that way, IF your opponents are ignoring a popular consensus and doing the opposite of what the voters wantThe question is, why are all the politicians ignoring that consensus? Theories:

1) What the people want is impossible and/or unconstitutional. No, that never stopped the politicians from pretending to do something before...

2) There really isn't a popular consensus on this issue at all. Maybe...

3) The pols are following the money rather than the votes, figuring that with enough campaign contributions they can buy enough advertising to baffle the voters. Hey, it's worked many times before.

I find that in most ideological disputes it is useful to question whether each side is discussing individuals or groups. We are often exhorted not to indulge in stereotyping, but most often about race, ethnicity, religion or similar social characteristics. When it comes to wealth, where individual circumstances and actions should be considered, that advice is so often lost.

In most discussions of whether wealth should be redistributed from the wealthy to the poor, the wealthy are treated as a group with little consideration for their differences, as are the poor. Yet the differences among both groups are so easy to enumerate: How wealthy? How poor? Earned vs. inherited. Age.

Perhaps the reason that some politicians are so hostile to wealth is that their only contact with it is politicians enriched through patronage and the wealthy people seeking to buy their favor. When you create a system that rewards some of the worst behaviors, the people within that system are going to see those behaviors disproportionately represented.

MS,

I don't think we are that far apart on this really. I don't even think that the left and right are very far apart.

We have already reached agreement in several areas. If we see it as a sort of hierarchy of welfare;

We are in agreement that people's basic needs should be met. This is the law.

We are in agreement that in some cases investing in people can yield benefits to all. E.g., public education, nutrition programs, etc. This is also law.

We have not, however, reached agreement that people should be given an equal measure, or anything close to an equal measure, regardless of their contribution. This is not the law, and hopefully never will be.

Personally, I think the latter is simply overreaching. It strikes a chord in some people and is therefore politically useful, but it is impractical, and Americans are at heart a practical people. So if progress is truly the goal, the best bet is to focus on the first two. Expand the concept of need as prosperity expands. Make a better case for investments in people - and yes, I do believe there is a solid case to be made. But equality? It'll never sell to any but the far left. I'm sure we'll keep hearing it - but nobody's really listening.

DeLong's entire comment appears to be an attempt to justify what he wants to do anyway, take other people's property and redistribute it. To justify this, it is necessary to demonize those you are taking from.

Jane's analogy seemed to draw the ire of a few of the early commenters that I read, but her analogy is a logical consequence of a policy of redistribution based simple pride/envy.

Simple redistribution from one person to another to equalize incomes is a failing policy. Policies to address in inequality should be directed to the preparation of children to face life. People like Buffett and Gates, if they really wanted to do something for the poor, would offer to educate the children of the poor in the best available schools, offering direct tutors as necessary. Few liberals propose this as dos few philantropists. I wonder why?

The Maine iudustries involved in constructing, repairing, selling and otherwise servicing yachts [which are a significant part of Maine's economy] collapsed, throwing many salaried workers and commission salespersons out of work. Mitchell led the repeal effort,

Sounds like a significant part of Maine's economy is based on socially wasteful activity. That's life for ya.

Either that, or 15% is an excessive estimate for the status component in the value of large yachts.

Assume for the moment that being overflown by private 747s really rankles the people who live in single-wide trailers.

Secondly, assume a government wealth-transfer program is implemented that takes a large proportion of the wealth of the rich, and delivers it efficiently to the poor.

Now that you have a bunch of people who live in double-wide trailers looking up at private Lear Jets flying overhead, do you expect their resentment to be any less?

The only way a society can wealth-transfer its way out of wealth-based envy is to apply a level of redistribution that record of history shows always ends in disaster.

Guest,

Re; "Sounds like a significant part of Maine's economy is based on socially wasteful activity."

You are assuming that the resources could have been used somewhere else - that the yacht makers could have been used to build freighters or plant potatoes. But what if we already have enough people building freighters or planting potatoes? That is, what if the resources now being used to build yachts were already free? So now, unemploying the yacht makers does nothing but unemploy yacht makers. Where's the gain?

Sounds like a significant part of Maine's economy is based on socially wasteful activity. That's life for ya.

I can hear the choir applauding, but the audience is about to go church shopping.

Notably, would somebody care to provide a definition for "socially wasteful" without employing the terms "pontificate" or "self-appointed judge"?

All these arguments tend to accept the theory that the wealthy became wealthy and maintained their wealth by their own hard work, genius, etc. If everyone started from zero and there was a level playing field, no passing of wealth from generation to generation, etc., this may be true. I have no figures, but intuitively I would guess the majority of the have nots began with a major handicap before the race began.

The haves want everyone to play by the rules, but the vast majority of Americans have no control over how the rules are written. It doesn't seem quite right that only the people who actually make the rules get to benefit from them.

Since the government has been redistributing the wealth for a long time, the direction the wealth goes in this social engineering exercise can just as easily be aimed at the ones who will benefit the most, say the bottom 90%.

Blissex:

Do you, ya know, actually have a job?

I see your long long LONG posts all over Jane Galt's comment sections and am quite curious.

Or can you type and compose prose at 300 words/minute?

Ms. Galt, your comparison of envy of wealth to envy of beauty shows your total lack of understanding for the economics of the money supply. Taking away a chunk of the money from the rich actually does make the poor wealthier. Since there is now less money out there then to be spent on goods, prices decrease since the value of each dollar rises. Even though the poor person has the same ammount of cash, its value has changed. They are not 'happier' because the rich have less money (assuming they are not spiteful), they will be happier because their money now buys more things.

All this chatter over the rich making the poor envious is useless. People will always be envious of things they do not have. However, given the advances in technology and productivity, the lack of growth in real income for the majority of Americans out there shows that there is a concerted effort to move the wealth from the poor to the rich.

Ben,

The question is, where does the money you would take from the rich come from?

blissex has mastered the patter of economics and sociology but seems remarkably obtuse concerning the substance of economics.

If conspicuous consumption is the "problem" rather than "wealth" per se, the obvious answer would be to tax consumption rather than wealth - hence the 'in your face' high-liver would pay through the nose for the privilege of flaunting it, while the modest rich fellow who simply wants to pass things on to the kids or build a company could do so - to the benefit of society by creating greater wealth - without being penalized.

The only socialist country in which I've spent significant time - and talked to a broad spectrum of people from essentially peasant farmers through extended members of the royal family in unguarded ways (because they were my wife's relatives) - is Norway. Norway's socialism is strong (except for those who were already rich, rather like Sweden) and rather thorough-going. It is made possible by oil; before the discovery of oil the country was rather to quite poor and emigration was high -- there were more Norwegians in Brooklyn in 1925 than in Oslo. But, I digress. Norwegian socialism, as far as I could discern from actual conversations with professing socialists - not academics full of theory, but average teachers and workers - is based on ENVY - if I can't have it, why should my neighbor?

That sort of thinking, of course, pervades redistibutionist thinking. But, as we know from experience, remove the incentives to be productive and accumulate wealth and you don't have wealth created or innovation in the economy.

Ben's points are simply risible: to take money from someone who will invest it to create more wealth, and give it to someone who will simply spend it, will over time simply reduce the rate of growth and innovation and hence everyone will be poorer in the long run.

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