Monday, September 19, 2016

Extreme Inequality Is Not Driven by the Merit, but by Rent-Seeking and Luck — Sam Pizzigati interviews Didier Jacobs

Jacobs: Because meritocracy rates as the number one argument that defenders of inequality invoke. It is easy to make an ethical case against extreme concentrations of wealth, drawing from the perspectives of Marxism, utilitarianism, or the egalitarian liberalism of John Rawls. But going down that road requires people you’re trying to persuade to change their value systems, and that’s difficult.
Debunk the meritocratic argument on its own terms, by contrast, and all the defenders of inequality have left is libertarianism, a value system that has much less appeal among the American public than meritocracy.…
Altogether, my research traces 65 percent of the world’s billionaire wealth to the rents of cronyism, inheritance, and monopoly.
Evonomics
Extreme Inequality Is Not Driven by the Merit, but by Rent-Seeking and Luck
Sam Pizzigati interviews Didier Jacobs

20 comments:

Matthew Franko said...

" libertarianism, a value system that has much less appeal among the American public than meritocracy.…"

Maybe by a hair....

Random said...

Well one tenth of Sanders supporters are loons.

According to a recent poll, 10% of Bernie Sanders' primary backers support Johnson, and 13% of non-Trump Republicans:

https://archive.is/TrcNr

"He wants to eliminate the income, capital gains, payroll, and estate taxes completely and replace them all with a flat 23% 28% national sales tax (much like Mike Huckabee's "fair tax" plan), it is even called "FairTax".[16][18] He is opposed to the government borrowing any money, ever! Even in times of war. He also opposed trade unionism, the regulation of big banks, supports the Trans-Pacific Partnership (very libertarian!) and is opposed to any control or management of trade from the government (oh, except for TPP).[16] Similar to Trump's promises to abolish the Department of Education,[19] Gary Johnson believes that "education is best provided by the free market".[16]"

Matthew Franko said...

Random,

libertarianism is 'un-authority'... ie completely dark...

imo it is described via the "mark of the beast" metaphor in scripture...

Gary Hart said...

Mr. Johnson also doesn't know what an Aleppo is.
I think that taxing rentiers was discussed here a few weeks ago and as I understand such a tax isn't popular with MMT'ers.

Andrew Anderson said...

and all the defenders of inequality have left is libertarianism, Tom Hickey

There is NOTHING free market about government subsidies for private credit creation.

Neil Wilson said...

"I think that taxing rentiers was discussed here a few weeks ago"

Why do you think taxing anybody reduces inequality? It's only numbers and doesn't alter the control over resources.

So instead why not give people at the bottom resources, change the game into a sellers market, and let the capitalists compete for resources in that pool.

The 'egalitarian' left are obsessed with taxing people rather than allowing people who don't have enough resources to command that those resources are created for them. They then get the entire level of increased production. Only then do you have to worry about redistributing resources - which requires rather more surgical techniques than carpet bombing the economy with taxation in the hope it frees up the right sort by magic.

The general trick here is to stop those who have wealth from getting the income in the first place. And you do that by tackling monopoly, oligopoly and cartels.

Andrew Anderson said...

The general trick here is to stop those who have wealth from getting the income in the first place. Neil Wilson

What about government subsidized private credit?

And you do that by tackling monopoly, oligopoly and cartels. Neil Wilson

And that would have to include depriviledging depository institutions, since the rich are the most so-called creditworthy, by definition.

Ryan Harris said...

The instant that I read, " libertarianism, a value system that has much less appeal among the American public than meritocracy," I immediately thought of Mr. Franko.

Matthew Franko said...

"The 'egalitarian' left are obsessed with taxing people rather than ..."

Neil that is because they think that is where munnie comes from... same on the right...

No understanding of authority from either side left or right of libertarianism...

The common denominator in this moronhood is libertarianism... ie 'anti-authority' or 'un-authority'...

We have authority to foment any material economy we want (subject to real constraints...which btw there arent many...) just like we have freedom to conduct ourselves personally any way we want (subject to criminal laws...)

libertarians are hostile to both of these realities...

Auburn Parks said...

AA troll-

deposit insurance protects depositors not bankers.

Andrew Anderson said...

AP,

Accounts at the central bank are inherently risk-free. Hence there would be no need to insure the deposits of purportedly private banks if citizens were allowed accounts at the central bank. Hence government-provided deposit insurance is a privilege for the banks and, by extension, for the most so-called creditworthy, the rich.

Ryan Harris said...

I'm discouraged by the lack of constructiveness in the comments.


If you are an economics educator, what does this mean? It means the #1 thing you should be teaching your students is to say "YES." They should sit in front of their mirror everyday and practice. Their final exams should test on their ability to take unexpected opportunities even if they don't fit. When someone asks them if they want to try some new job, some new hobby, some new business, pretty much anything where an opening exists, the answer should be yes.

The Humans (agents in econo-speak) in positions of power, authority and privilege are generally far less talented and knowledgeable than you imagine. Learning to take opportunities is 99%.

The other 1% means that government should probably minimize regulatory protections and keep tax rates higher on incumbents by design. Contrary to orthodox thinking, it also demonstrates why corporate taxes are a necessity and why taxes at the bottom level are no substitute.

When you get rid of the simple equilibrium assumptions and have meta-stable, but persistent and illusory equilibrium the rules of the game are far different from orthodox economics.

Ignacio said...

Ever wonder yourself why every policy goes against any sort of logic?

See: "The other 1% means that government should probably minimize regulatory protections and keep tax rates higher on incumbents by design. Contrary to orthodox thinking, it also demonstrates why corporate taxes are a necessity and why taxes at the bottom level are no substitute."

Yet what we see is the contrary of that, pursue to increase 'taxes at the bottom' and reduce 'corporate taxes'.

Is like "youth unemployment is so high, young people is not spending", who cares, let's just "rise retirement age, cause munnie".

We are ruled by stupid everywhere (impersonal stupid, stupid is everywhere), stupid and greed. In fact, greed is synonym of stupid probably. Everything comes down to the same 3 or 4 memes pushed by the majority. Most of what is wrong with the economy can be tracked to those 3 or 4 memes, so sad.

Andrew Anderson said...

We have authority to foment any material economy we want (subject to real constraints...which btw there arent many...) Franko

Babylon was given authority to conquer Judah and then punished itself for misusing that authority.

just like we have freedom to conduct ourselves personally any way we want (subject to criminal laws...) Franko

Counter to a consistent interpretation of Scripture.

Gary Hart said...

Mr. Wilson: "The general trick here is to stop those who have wealth from getting the income in the first place. And you do that by tackling monopoly, oligopoly and cartels."
I am interested to know how you propose to stop those people from gaining wealth from the real economy.

Matthew Franko said...

Hebrew Scripture AA....

Tom Hickey said...

I am interested to know how you propose to stop those people from gaining wealth from the real economy.

There are two ways Positive law based on consequences.

1. Laws should be crafted that prevent rent-seeking behavior and accumulation of economic rents.

2. to the degree that is not possible laws should be passed that confiscate rents. The usual way to do this is through the legal remedy of tax policy.

Thus these two ways boil down to one way — law. One type of law is targets rent ex ante and the other ex post.

Gary Hart said...

Tom Hickey: I agree. But, I have the impression that some people who write here disagree on the tax policy and I wondered what their solutions would be. Maybe I have just misunderstood them. Thanks

Tom Hickey said...

Taxes have two major purposes once it is recognized that government doesn't need to obtain the money it issues.

The first is controlling inflation.

The second is incentive (tax credits) and disincentives (taxing negative externalities and perverse behavior).

I doubt anyone on the MMT side would argue about this in principle, although some might chose to state it differently.

The arguments within MMT are generally about addressing issue ex ante or ex post, taxation being ex post. Those arguing for an ex ante approach to specific issues recommend changing the institutional arrangements.

Matthew Franko said...

Hey AA,

here uh-oh:

"tWhen a soul |offends
with an offense and sins inadvertently in any fof the holy things of
Yahweh, +then he will bring `as his guilt offering to Yahweh, a flawless
ram from the flock, iby your appraisal in silver shekels iby
the shekel of the holy place, >as a guilt offering." Lev 5

Looks like "the bible" says munnie is weights of silver! Uh-oh!

Looks like you have to go back to the drawing board oh no!