A debate on the signficance of income inequality and it's effects on the economy.
posted by muirgeo @ Sunday, June 26, 2011
Sunday, June 26, 2011
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6 Comments:
have you read "Depression economics" by Krugman? Do you have any disagreements with it, especially when it comes to financial crisis of 2008?
Nope. Have not read this and won't be either. Let's take something from an earlier blog post of your: The more basic question is for me to ask how would a libertarian society NOT devolve into one where ALL the property and means of production were controlled by a few.
You all-capped the word "all"; why? Do you really mean all or is this just hyperbole. You could mean a large portion, something along the lines of the Pareto Principle where 20% of the population have 80% of the wealth. if the 20% had talents and skills to add that would bring that much economic value to society, it may just happen. But here's what you have to realize: in a libertarian society where property rights are well-respected and exchange/trade is free an unencumbered, the 20% would have either created the means of production on their own or would have traded for it in a mutually beneficial trade; one that just happened to pan-out well for the forward-thinking risk taker. Should the forward-thinker under such a trade scenario have to further compensate their trading partner after-the-fact?
In nature, some people are just born or develop into more gifted economic actors. What they bring to society is more valued than the many others. These people just manage to accumulate more during their lifetimes as long as they continue to bring value. I do not begrudge these people! Sometimes I'm envious of their success. But when I think about how to apply justice in these matters, I come up short on solutions and fixes and realize that my emotions are misplaced; that these people earn their success. I should aspire to do the same rather than continue to covet and dwell in my own insecurities on the matter; it's the mature thing to do.
I missed this comment of yours
link here
I think you are a little bit confused on aggregation. You just proved my point. I have responded to it.
subhi wrote,
"You are aggregating the world into some undifferentiated molecules, which is the opposite of what I was trying to do – which is differentiate demand for TV from that for cabbage.
In other words, there are rabbits & human beings on planet, not just a large aggregates of electrons, protons & neutrons. Hope that clears up some confusion – such aggregates are meaningless."
No. I would still hold that the combined monetary value of all the demand for TV's and cabbage and (add in any other product you want) is dependent on wages.
Right now most businesses will tell you their number one problem is not regulation ect but it is low sales. That's because wages are still dropping off and this no one has money to so end and aggregate demand is low. and i think you will NOT see improvement in our economy until wages pick up. Which will not happen with the current government gridlock.
Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, Just One Percent Went To Wages
This is what is happening in the real world. I'd argue it is a result of too much influence from neoliberal economics on policy and I'd argue that neoliberalism does not have a solution for this catastrophe rolling out before us.
But to back up a bit the question i asked in a previous post was, "Do you believe the argument that IF workers wages ARE stagnant than demand will also become stagnant?" If you can first address this question we could proceed from there because i think this is fundamental.
Muirgeo,
I think you are missing a lot of difference between economists that you might consider as right wing! There are more than 2 opinions in this discussion.
What do you mean by Neoliberal?Which economists in Obama administration will qualify as Neoliberal? What are the characteristics that differentiates a neoliberal economist from a Keynesian one?
Thanks,
George,
If we were to take at facevalue your argument stated elsewhere that the recession would have been worse but for Obama stimulus package, TARP, corporate bailouts, bank bailouts etc., how could you deny that all that growth could be due to anything other than the stimulus package? Seriously, I want to hear it, if you have a coherent argument. "I think" is not good enough.
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