THE POLICY THINKSHOP "Think Together"

Public Policy is social agreement written down as a universal guide for social action. We at The Policy ThinkShop share information so others can think and act in the best possible understanding of "The Public Interest."

What’s So Bad About Income Inequality?

Adam Smith played an important part in our understanding of how society affects the evolution of civil society and business.  As mathematics and reason improved economic theory through the development of rational choice theory, econometrics and mathematical modeling, economists took an important role at the governance table of most democracies.

The current deep and long recession and the troubling recovery, however, have cast some doubt on prevailing economic theories and their pundits and disciples.   Perhaps the turning points were the Enron scandal and Madoff caper because the inequality that pervades America today is not going away.  Somehow we have arrived at the moment when we are looking at values and relative differences between those who climb the ladder and those for whom there seems to be no ladder at all.  As America continues to be decided on ideological grounds and social space and social relations continue to be segregated in terms of education, access to higher paying jobs and wealth, it becomes increasingly difficult to see an American future where a large middle class supports the notion that everyone who tries hard can make it here.  That is a significant problem that is now seemingly being institutionalized as the American economy fails to create a necessarily clear and reasonable path between birth and upward mobility.

“One interpretation of the Pareto Principle, which suggests that 20% of the people own 80% of the wealth, is that there\’s no point in being angry about that inequality. Maybe the 20% is doing better than you because they went to college and you didn\’t — but that\’s not hurting you.

Dr. Deaton: I agree with the Pareto Principle, but you can be hurt by that kind of inequality, and that can happen in many different ways. If a bunch of people get extremely rich but nothing happens to your income, that\’s OK. But if they use their wealth to start buying the government, for instance, then it\’s not OK, because you don\’t get your share in the democracy anymore.

I\’ll give you an example from the U.S. right now. If you\’re a drug manufacturer and you come up with a blockbuster drug that does very well, eventually the patent runs out. Your business could let the patent run out and let the generics manufacture that drug, which is what\’s supposed to happen. But your company could also spend a lot of money lobbying Congress to get an extension of your patent. That\’s an example of blocking equality, and it hurts people. And economists have been very weak on that.

Like everyone, we economists specialize in what we do. So economists think we\’re the gods of income; we tend to think about well-being in terms of income, and we don\’t worry too much about the other things that contribute to well-being, such as health, education, or participating in a democratic society. But not having access to an important medicine doesn\’t show up as a share of GDP.

When we think about well-being, we can\’t just think about wealth. That\’s one of the things we\’ve learned from the Gallup World Poll — how important many other elements are to a person\’s satisfaction with his life.”

via What’s So Bad About Income Inequality?.

Advertisements

Filed under: access to education, Blogosphere, Children and Poverty, consumers, Demographic Change, Economic Recession, Economic Recovery, Education Policy, Education Reform, Job Sector, News, Political Economy, Pundits

Join the conversation...

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Recommend this blog on twitter & Visit us on Facebook

Policy ThinkShop: Rules for participation and sharing…

Policy ThinkShop RULES
Follow THE POLICY THINKSHOP "Think Together" on WordPress.com

Blog Stats

  • 49,655 Blog Visitors to Date

Receive Our Tweets on “Daily Public Policy Issues”

Receive Our Tweets on "Daily Public Policy Issues"

Follow us on twitter by clicking the WORDLE above...

Think with us …. Click below

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Scan Policy ThinkShop

Click here to scan us into your Cell Phone and take us with you...

Think with us on Twitter

The Policy ThinkShop On Twitter

Click the pic below to follow our new Philanthropy Discussion on Twitter

Philanthropy

Philanthropy

Search for our RSS Feeds at:

Feed Search Engine
See this inspirational story about kids in Indonesia having to go over a broken bridge every day in order to get to school...

PolicyThinkShop Top Topics

Enter your email address to follow this blog and receive notifications of new posts by email.

PolicyABCs

Featured Twitter Friend: PolicyABCs

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

Follow The Policy ThinkShop on Twitter

Follow us on twitter…

Perspectives on how the world is evolving…

These videos include ideas and events that impact public policy in our societies. View them and drop us a note. We will feature your thoughts here. Send your comments to: policythinkshop@policyabcs.org Thanks

The Policy ThinkShop: Think Together

It looks like the WordPress site URL is incorrectly configured. Please check it in your widget settings.

Recent Posts from our new PolicyABCs Blog: PolicyABCs ... "Thinks with us ..."

NYTimes: Justice Department Says Rights Law Doesn’t Protect Gays

by by

<a href="https://www.linkedin.com/hp/update/6261614876825784320">https://www.linkedin.com/hp/update/6261614876825784320</a>

by by

Donald Trump’s full inauguration speech transcript, annotated – The Washington Post

In seemingly endless times of “trash talk” that led to an improbable and unpopular political victory, the newly minted president clamors: “Now arrives the hour of action.” Fleeting relief comes to the nation as the transition of power portends the end … Continue reading

Thank you for visiting. Here are ways you can stay connected to us.

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 2,254 other followers

Goodreads

The ThinkShop promotes connections to all forms of social media to bring you resources beyond what you’ll find in your daily routine…

How Hispanics Describe Themselves

How Hispanics Describe Themselves

Poli Thinkshop

Create Your Badge

Take a "Brain Break" and visit this "fun link" by clicking this image now...

Break for Fun… click video below or have more fun by clicking the pic above…

Policy ThinkShop: Relax, we did the research for you…

Welcome to Policy ABC's ThinkShop, where getting news and public policy analysis is as easy as "A B C."

"The Policy ThinkShop team works hard researching the latests and most interesting news and reports. The resulting links will point you to the original sources so that you can spend as little time as possible getting the most news possible."

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 2,254 other followers

The Policy ThinkShop

ThinkShop Wordle

The Policy ThinkShop

Public Policy and Culture

CultureWebs and Policy

Policy ThinkShop Resources

Policy ThinkShop Resources for your policy work

Our experts do the searching and serve up the best resources to help you stay on top of key public policy issues.

Featured Twitter Friend: Health Literacy ABCs

Health Literacy

Twitter Friend: MigrationPundit

Open door policy?

Policy ThinkShop: “THINK TOGETHER”

"Policy is codified knowledge that stands as a universal guide for social action. Public policy is shaped by those who know and who act on that knowledge. We at The Policy ThinkShop share information so others can think and act in the best possible understanding of "The Public Interest."
%d bloggers like this: