Growth Should Trump Envy

October 3, 2024 by Dan Mitchell @ International Liberty

I frequently cite a column I wrote in 2017 about how 1980-2010 was a reasonably good era for China, thanks to a bit of economic liberalization.

My leftist friends will say that can’t be true because inequality increased during those decades.

I respond by pointing out that average incomes dramatically increased during those 30 years and there was a huge reduction in poverty.

The lesson to be learned (echoing my Eighth Theorem of Government) is that nobody should care if some people get richer faster than others get richer. The goal should be better policy so everyone has the chance to rise as far and as fast as possible, given their talents, abilities, and willingness to work hard.

Today, let’s look at American history to see the same principle at work.

Here’s a chart from Professor Vincent Geloso looking at data from 1870 to 1910. It shows what happened to inequality in various nations on the vertical axis (as measured by income share of the top 1 percent) and average income (as measured by per-capita income for the bottom 90 percent).

The first thing to notice is that inequality increased in every nation and per-capita income increased in every country.

But the data from the United States is particularly instructive. Here’s some of what Geloso shared in a tweet.

America had a very mild increase in inequality between 1870 and 1910… However, its also in America that the living standard of the bottom 90% surged the most. By 1910, their living standard had increased by a factor of 2.37. Only Canada got close to that increase and it was still immensely behind America. …only America went fast and hard at improving the living standards of the bottom 90%. By 1910, America not only had confirmed its historical position as the “Best Poor Man’s Country”, it had widened the lead. No country ever before witnessed such a level of living standards for the poor as witnessed in America.

Given this information (as well as the data about China), the challenge for my left-leaning friends who fixate on inequality is deciding which of these two options they prefer.

1. Do they hate the rich so much that they are willing to reduce living standards for lower-income people so long as upper-income people suffer an even greater reduction?
2. Do they love the poor so much that they are willing to let rich people get richer (even disproportionately richer) so long as poor people get to enjoy higher living standards?

Sadly, many folks on the left pick option #1. They hate the rich more than they care about the poor.

P.S. Readers interested in this issue will appreciate this column and this set of tweets.

P.P.S. This four-part series (here, here, here, and here) also is very relevant.

Leftists lack the courage of their convictions

April 20, 2023 By Bob Ryan

Leftists lack the courage of their convictions, almost every time. It is easy for them to claim they hold to some beliefs, but it's something else entirely for them to have the courage to stand by such beliefs.  To take but one example, during the Vietnam War, thousands of hippies dodged the draft by moving to and living in Canada. If they truly believed their stance was right, why didn’t they stay to face the courts? It was easier for them to talk about their convictions, but something else entirely to prove them to others, the way Muhammad Ali, who also dodged the draft, did.  I disagree with everything Ali stood for. But do admire he had the courage of his convictions. He was willing to risk everything, including his career, because he truly believed Vietnam was wrong.

There are other examples, too. Environmentalists make demands of others for the sake of "saving the Earth," without giving up a single luxury. They aren’t living off the grid the way the Amish do. They would rather travel and use modern technology, since it would take true conviction to live without modern conveniences. If they had an ounce of courage, they would at least boycott the world’s biggest polluter, which is China.  And in this modern day, there are still more examples..........To Reads More...

German officials jettison the elderly to make way for migrants

“The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie… Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property….” — Karl Marx and Friedrich Engels in The Communist Manifesto

 

March 9, 2023 By Olivia Murray

One of the most distressing trends to witness in the modern era is the governments’ trajectory towards utilitarianism that leaves behind it a bloody wake of “useless eaters.” Finding a person’s value not in his/her humanity but in subjective and ever-changing standards (commoditized humanity), is rampant within leftism — which is why they’re such vocal proponents of abortion and euthanasia. Human rights abuses, and eventually state-sponsored murder, seems to always emerge as the “solutions.” Enter (again): the German government and its collaborators. Last week, Remix News published a report which began with the following:

Many elderly nursing home residents were left in tears after they were evicted to make room for migrants in Berlin. The case has received widespread media coverage and highlights a growing trend in Germany.

Also, from Slay News:

Germany has begun serving eviction notices to poor and elderly citizens as the government makes room to house foreign refugees. In the German city of Lӧrrach, forty people living in the same apartment building have been given eviction notices.

Zsolt Bayer, a well-known Hungarian journalist, identified these leftist open-border migration policies as “communism” and noted that these “policies are a replica of earlier Hungarian ones under Soviet rule.”..........To Read More....

My Take - This is just like everything else these leftist misfits touch. The left destroys everything!  The real plague on the world isn't Covid, it's leftism. Leftism is deadly in all it's manifestations, whether it involves social issues, the environment or government. To be a leftist is to be irrational, misanthropic and morally defective. This is so out of kilter with the foundational cultural paradigms and Germans I keep wonder how much longer all this will go on before the dam of outrage breaks? 

 

Moral Inequality and Immoral Inequality

April 12, 2021 by Dan Mitchell @ International Liberty

While debunking OECD and IMF research on inequality, I explained that it’s important to distinguish between income that is earned honestly and loot that is obtained thanks to government cronyism.

That’s also the message of this video from the Hoover Institution.

In the video, David Henderson contrasts how our lives are improved when an entrepreneur develops a new product.

The entrepreneur almost surely gets richer faster than we get richer, but we all wind up better off. Indeed, there’s a clear relationship between the share of rich people in a society and overall prosperity.

 

And that’s a good description of what has actually happened in market-oriented nations such as the United States.  Heck, it even happened to some degree in China when there was partial reform. By contrast, government favoritism is a recipe for inefficiency and stagnation (and since LBJ was an awful president, I like that David used him for the example of corrupt cronyism). In a column for CapX, Andrew Lilico correctly differentiates between moral inequality and immoral inequality.

The only legitimate questions about the distribution of wealth concern whether it is truly the property of those that possess it, as opposed to having stolen or extorted it. …Wealth is property. If it has been innocently acquired, people should be able to enjoy their property without censure or the (quite incorrect) suggestion that their flourishing causes others harm.

Not only is it incorrect to suggest that one person’s flourishing causes harm to others, it is completely wrong.   As pointed out in the video, Nobel Prize-winning economist William Nordhaus calculated that entrepreneurs only capture a tiny fraction (2.2 percent) of the wealth they create for society. That means 97.8 percent for the rest of us.

And other academic scholars have produced similar results. The bottom line is that the recipe for growth and prosperity is the same recipe for helping the less fortunate.

P.S. As you can see from his Wikipedia page, Professor Nordhaus is not a libertarian or conservative, so it should be clear he wasn’t trying to come up with a number to justify capitalism.

P.P.S. I also recommend my four-part series (see here, here, here, and here) on why we should care about poverty reduction rather than pushing for coerced equality, as well as my two-part series (here and here) on how statist policies produce the immoral type of inequality.

Poor People and Minorities Are Victimized by “Predatory Cities”

June 11, 2020 by Dan Mitchell   @ International Liberty

One week ago, I wrote about how the welfare state creates high implicit marginal tax rates, thus making it difficult for low-income people to climb out of poverty and dependence.

But that’s not the only way that poor people are victimized by big government. Another very serious problem is the way local and state governments impose a plethora of fees, fines and charges that can wreck the lives of the less fortunate.

 In a column for the New York Times, Professor Bernadette Atahuene of the Chicago-Kent College of Law opines on the problem of greedy local governments.

As a 2015 Department of Justice report showed, the police in Ferguson systematically targeted African-Americans and subjected them to excessive fines and fees. …local courts issued arrest warrants for unpaid fines and fees… Minor offenses, like parking infractions, resulted in jail time… The Ferguson Police Department and courts prioritized revenue raising over public safety, transforming Ferguson into a predatory city.

Professor Atahuene cites the pernicious policies of New Orleans and Washington, D.C. (and note that asset forfeiture is one of the problems).

 New Orleans is another. …Orleans Parish Criminal District Court’s primary source of funding was the fines and fees it collected. This created a structural incentive for judges to aggressively and erroneously pursue payment from those with no ability to pay, turning New Orleans into a predatory city. Washington, D.C., is yet another predatory city. While civil asset forfeiture laws allow the police to seize property that they suspect was involved in a crime, in Washington, D.C., property owners had to post bonds of up to $2,500 in order to challenge the seizure. If the owner could not raise money in time, the D.C. Police Department sold the property, and the money went into its annual budget. In a two-year period, the Police Department made $4.8 million in profit by seizing money from over 8,500 people as well as seizing 339 vehicles. Every decent human being should get upset about the grotesque way that politicians are mistreating their residents. Especially since poor people are being disproportionately victimized.

By the way, it appears that Professor Atahuene is not a libertarian. She wants Congress to approve a big bailout, based on the theory that state and local politicians will be less likely to engage in what I’ve called “rapacious revenue-raising tactics” if they get big buckets of money from Uncle Sam.

Needless to say, I think that would be a mistake.

But I don’t think someone needs to agree with me on everything, or even most things, if we can periodically find common ground on proposals that would improve the lives of people (not just on the need to curtail greedy local governments, but also on issues such as over-criminalization and police unions).

 P.S. I wonder if there would be fewer petty fines, fees, and charges if they were levied on the ability to pay, thus making higher-income people more sensitive to the problem?   

Why Most Rich 1 Percenters Would Give Anything To Be Among The 99%

Louis Woodhill

If the Democrats are not (electorally) washed away by a tsunami of voter outrage over Obamacare, they will no doubt seek to make “growing inequality” the principal issue in the 2014 elections. So, let’s apply a little unconventional logic to the subject of inequality.

The “Occupy Wall Street” crowd that took over New York City’s Zuccotti Park on September 17, 2011 was protesting inequality. They seemed infuriated that “the one percent” was so much better off than “the 99 percent.” But is this really true?........The Occupy Guy is better off. .....And why is that? Because the Occupy Guy is 24 and the FFHFC is 70.   Almost any 70-year-old male would gladly trade all of his worldly goods for a healthy 24-year-old body, even if it came complete with $20,000 in student loans. And, very few 24-year-olds would take the other end of that deal—not even for $41.1 billion.....To Read More....

My Take - There are some points here that should be obvious to the most casual 0bserver, but I’m going to outline them anyway.  First, the “evil” 1% usually worked all their life to accumulate their wealth.  Those OWS representing the “good” 99% only want what the 1% has and worked for without any effort on their part and without waiting.  They want what others have worked for and they want it now.  The old and ‘evil’ wealthy would be more than willing to give it to them if they would give them their youth because they know they with their drive, intelligence, ambition and work ethic [now enhanced by 70 years experience in life] they would have it all back in five years.  The OWS losers would be broke in five years, demanding the rich give them back their youth and their money.