Sunday, November 13, 2011

Massive Income Inequality, and Achievement among the 99%

The latest from Tyler Cowen:
Nonetheless, higher income inequality will increase the appeal of traditional mores — of discipline and hard work — because they bolster one’s chances of advancing economically.
Let's be clear here:

Severe income inequality DECREASES, not increases, the chances of the poor and middle class to get ahead, not that Libretario Cowen would care much; as an extreme libertarian he'd rather have massive suffering, loss, and decreased growth rather than give up even a tiny amount of personal freedom.

It DECREASES the chance to get ahead when you have to work 40 hours per week while going to college full time, thus having far less time to study, learn, and succeed. Studies have shown that this substantially reduces the odds of graduating, as well as learning, and GPA. But, hey, let's cut college aid even further, so we have even more income inequality!

It DECREASES the chance to get ahead when poor –  and middle class – children have no health insurance, so they grow up sicker, and more poorly developed mentally and physically, and when their mothers can't afford to spend the time to breastfeed due to work, or to buy and cook the healthier foods, whole fruits and vegetables. Or when they have to live in more and more polluted areas because of Republican deregulation. But, hey, no problem, the rich can afford to move away from the pollution. It's only the children of the poor – and middle class – who as a result will be sicker, dumber, and more likely to suffer from behavioral problems.

It DECREASES the chance to get ahead when poor and middle class children can't go to pre-school because their parents can't afford it, or they can only afford day care which just sits them in front of the TV because that's a lot less time consuming and expensive than teaching.

It DECREASES the chance to get ahead when little regulated for-profit schools can prey on unknowing young people with promises of great careers from substandard education that does little to increase earnings, but costs 10 times as much as GOVERNMENT community colleges, and is financed with loan shark private student loans that can quickly grow exponentially so they're impossible to ever pay off, but thanks to the Republicans can never be escaped in bankruptcy – Welcome back indentured servitude! Always nice to ruin lives before they can even get started, and the poor kid has any idea even what's going on. But hey, Pure Free Market! And better to ruin a billion lives than give up even one micron of personal freedom, right Libretario?

But does this "increase the appeal of traditional mores — of discipline and hard work", as Libretario says? Taken to this kind of extreme, especially for the poor, it can do the opposite, because it can increase hopelessness, people just giving up and turning to crime and an underclass mentality, people just thinking why try.

Remember, it may not be nice and simple, but the reality is that lots of things graph U-shaped, or upside-down U, not simple straight line, always increasing or always decreasing. A certain amount of income inequality increases discipline and hard work, but at some point it gets so extreme that things just look too daunting or herculean for most,  hopeless and rigged, and then effort, and a belief in the payoff of hard work, starts decreasing.

You increase discipline and hard work, and achievement, overall, by giving people the means to succeed and clear, reasonably realistic looking, routes to success. Make college more affordable (a lot more), give all children healthcare and truly nutritious school breakfasts and lunches, and quality pre-school and daycare, give middle aged mothers and fathers who have made mistakes, or just had no idea of how important education was when they were kids, but want to work hard now and turn it around, the realistic possibility of going back to school and getting a college degree, without making it a herculean task that few will attempt, let alone succeed at.

Do these kinds of things, and then you'll see both more effort AND more success, because effort is a lot more productive if you provide tools and resources to go with it, and you get a lot more effort from most people if you make the goal look realistically achievable, not a daunting, or herculean, task. Yes, some people will take on daunting or herculean tasks; they won't shy away, and they will work themselves to the bone, and may succeed. But do you want only this minority of people to get ahead and do well, and screw the majority, or do you want to make the high return investment to make the majority highly productive and financially comfortable too?

Of course, Libretario, you don't actually care, if it means giving up even a speck of personal freedom.


Anonymous said...

It would be nice if you and a gang of like-minded bloggers could hold Libertario's feet to the fire long enough to get him to explain how to make society work for McDonalds employees and nursing home aides.

They keep getting stuck in the easy stuff, college majors with degrees in French literature, single moms with 3 kids before age 21, 16 year old boys who's rather run crack than stay in high school.

Make society work so 2 minimum wage people, each working 30 hours a week, can live in a 1 bedroom apartment and commute an hour or less to work each day and still have money enough for minimum food and clothing. No vacations, no car, just basic staying alive stuff. If society would reward the work and discipline needed to survive there, I don't care what they do to those damn French majors.

Richard H. Serlin said...

Libertario's educated enough in economics and smart enough to know full well that society won't work for the vast majority of these people, and it will be tragic. He knows this; he just doesn't care if it means giving up even a speck of personal personal freedom to prevent it.

It's a very ugly extremist philosophy where nothing matters in comparison to maximal personal freedom. You don't give up even the tiniest spec, even if it will prevent monumental suffering and loss. That spec of personal freedom is more important, more important than anything.

Richard H. Serlin said...

To an extreme libertarian, every thing else that's so precious in life is worth nothing compared to even the tiniest spec of personal freedom. There's no balance, no tradeoffs. You don't give up even the tiniest spec no matter how much suffering or loss you prevent in return, no matter how much more utility, wealth, health, growth, happiness you would create in return.

The tiniest spec of personal freedom that hardly anyone would even notice is still more important.

Anonymous said...

So what -- my preferences are my preferences. And Serlin, you're a crackpot of the first rank.

nemi said...

"To an extreme libertarian, every thing else that's so precious in life is worth nothing compared to even the tiniest spec of personal freedom."

Seen this one?