As with most people (I would like to believe) I get entrenched in one line of thought about many things. At the top of that list is economics. I know very little about economics, but have always assumed that economic classes will always exist, and that government intervention is necessary to assist lower economic classes to survive.
Today, my assumptions were challenged. Among my daily blog reads is Crooked Timber. Prof. Henry Farrell has a post today that I liked which he titles "Sam Bowles and Inequality". I followed his link to the Santa Fe Reporter article, read it all, and highly recommend that you read it also. I also watched the video at the end. It's interesting, but doesn't actually provide much light. I think this excerpt is illuminating, and maybe will raise enough interest that you will read the entire article to see other, equally interesting numbers.
... numbers, for your consideration:
45.7
23
The first number is the “Gini coefficient” for New Mexico. The Gini is an expression economists use to measure equality or inequality in a society.
Zero describes the ultimate level playing field, a nonexistent land in which everyone has all the same stuff. A completely unequal society, in which one person has sole control of literally everything, would have a Gini of 100. New Mexico’s Gini score (45.7) reveals this state is more unequal than most. Utah is the most egalitarian state (with a 41.3 Gini), while the District of Columbia (53.7) is the most economically polarized, according to the most recent Census report, from 2006.
The second figure, 23, is the Gini for Sweden, the world’s most egalitarian country. Whereas most of Europe, Canada and Australia have Ginis in the low 30s, the US has over the past several decades developed inequalities usually found only in poor countries with autocratic governments.
So what? Isn’t inequality merely the price of America being No. 1?
“That’s almost certainly false,” Bowles tells SFR. “Prior to about 20 years ago, most economists thought that inequality just greased the wheels of progress. Overwhelmingly now, people who study it empirically think that it’s sand in the wheels.”
If it is "sand in the wheels", what should be done to remove the sand? Bowles has a unique suggestion, and I'm not economically knowledgeable to be able to say whether it would work. I'm inclined to say no, but whether that is because of decades of belief in the current system or actual understanding is debatable.
I think Farrell's last paragraph is correct, and a very good place to end my contribution. I definitely, and likely all of us, need to study it more.
Mainstream political science was no better, failing nearly entirely to investigate the sources of structural inequality in the US (there is still no coherent field of American political economy) . My sense is that both fields have improved significantly over the last several years – the causes and consequences of inequality is a significant focus of research – but they have a hell of a long way to go.
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