Inequality and Declining Marginal Utility
The good life
Will Wilkinson advances a number of argument in his recent Cato paper “Thinking Clearly About Inequality” including one that’s pretty question-begging. This point, however, seems valid:
You can see leveling in quality across the price scale in almost every kind of consumer good. At the turn of the 20th century, only the mega-rich had refrigerators or cars. But refrigerators are now all but universal in the United States, even while refrigerator inequality continues to grow. The Sub-Zero PRO 48, which the manufacturer calls “a monument to food preservation,” costs about $11,000, compared with a paltry $350 for the IKEA Energisk B18 W. The lived difference, however, is rather smaller than that between having fresh meat and milk and having none.
The upshot is that tracking the growth in inequality of wealth and income may be overstating the growth in actual inequality of human welfare.
At the same time, the point here is that the marginal utility of money income declines as it grows. This is also a strong argument for believing that redistributing money from wealthy or high-income individuals to the poor or to public services will be welfare-enhancing. The difference, in welfare terms, between a Sub-Zero refrigerator and an Ikea refrigerator is much smaller than the difference in welfare terms between having health insurance and not having health insurance. So a surtax on high earners that goes to finance expansion of health coverage to the working poor is making people better off. In that case, when we look at statistics indicating skyrocketing income inequality we’re seeing evidence of inefficiency that can be rectified through the policy process.
51 Responses to “Inequality and Declining Marginal Utility”
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July 20th, 2009 at 2:29 pm
Weren’t you complaining about signaling and Kindles last week?
You buy an $11,000 fridge because a. you can and b. (more importantly) it demonstrates to me you can.
I mean, why do you think those Renaissance princes were building fabulous palaces when they died off nearly as fast as anyone by living in the malarial swamp that was Italy pre-Mussolini? Or the Romans?
July 20th, 2009 at 2:30 pm
That’s a hardcore utilitarian argument, since it depends on a substantive and specific definition of “utility.” I.e., we’re not just measuring the intensity of people’s preferences; we’ve decided what human welfare is, in an objective way.
I’m not complaining — just pointing out that MY is a hardcore utilitarian.
July 20th, 2009 at 2:37 pm
Beyond about $50,000 more money doesn’t bring more happiness. There is little or no correlation. The research is pretty clear in, for example, “Stumbling on happiness”. People always overestimate the degree to which more or better stuiff will make them happy.
You are right that this should make the rich less panicked about giving up 1-5% of AGI over $350,000. But it is also true that what we lose hurts us more than what we gain pleases us. And it is also true that most people don’t understand what makes them happy.
July 20th, 2009 at 2:44 pm
How to make interpersonal comparisons of utility, please?
July 20th, 2009 at 2:50 pm
I love this line of argumentation. Charlemagne never had a pre-paid cell phone. Alexander the Great never got to eat Cheez-Whiz. Hey, poor people: shut up ’cause you’re doing great just by being alive!
The marginal utility point would go a lot further with me if I thought thought lower-income people and the middle class needed better refrigerators and cars with XM radio. But isn’t the starting point for the discussion that these people need health care, homes, income security, retirement savings and affordable education for their children? You have to really be rolling in it to think that the inequality argument is about consumer durables instead of the basics.
July 20th, 2009 at 2:56 pm
Or have a limited imagination, one bounded by the small circle of people you work with and associate with every day. What looks like apparent malevolence is sometimes just people being rather dim….and there is no shortage of dim out there.
Not that your larger point is spot on.
July 20th, 2009 at 2:59 pm
Poverty and inequality are fundamentally moral issues.
The homeless person of today is probably better off than the average person of 500 years ago. And yet, a normal human senses that it is somehow wrong for so much inequality to exist.
After all, rich people didn’t create Earth and its bounty, and what we have today was slowly accumulated by the labors of past generations. People also understand intuitively that, without the society around them and the leverage that produces, nobody could possibly be rich.
So the moral issue is: If wealth was mostly created by prior generations, and depends on the whole society for its fruition – why should only a few, basically lucky people benefit while others are degraded?
July 20th, 2009 at 3:00 pm
Access to our legal system comes to mind. Civil and probate courts are clogged with people who can’t afford representation and, often as not, are there because their low income makes prime targets for car inspection stops, etc.
July 20th, 2009 at 3:12 pm
While we see “price leveling” in many consumer goods, we certainly aren’t seeing them in PUBLIC goods.
Poor people can’t afford to eat healthy food, drink clean (lead-free) water, commute to work, receive an education, live in unpolluted and physically safe neighborhoods the way well-off and rich people can.
Perhaps to put it more strongly, it seems that basically any good that isn’t a manufactured good hasn’t achieved this kind of “price leveling.” And, uh, it does appear manufactured goods are only super-cheap and super-affordable because we pay incredibly poor people incredibly low wages to produce them in third-world countries.
So, “cheap TV’s, unaffordable cancer treatment,” isn’t exactly the ringing endorsement of the status quo that Wilkinson would like to pretend it is.
July 20th, 2009 at 3:22 pm
Manufacturing of durable goods has seen huge growth in productivity since the turn of the 20th century, that has resulted in cheap material goods. Even poor people can have a TV and a microwave. To some extent even the lifestyles of the wealthy and middle class is not much different. (I’m thinking here of 2 income parents, 2 cars, a house in the suburbs) The break is now in services. The poor cannot get dental care or even a haircut regularly. The middle class can’t quite afford an accountant, while the rich have a personal assistant.
July 20th, 2009 at 3:30 pm
Davis X. Machina Says: Or have a limited imagination, one bounded by the small circle of people you work with and associate with every day
The joke is that many people with massive generational wealth are not buying the $11,000 refrigerators and similar trinkets; if you check out their kitchens you’ll find a 15 year-old $500 Whirlpool humming away.
July 20th, 2009 at 3:34 pm
It’s quite an old joke.
July 20th, 2009 at 3:34 pm
“But isn’t the starting point for the discussion that these people need health care, homes, income security, retirement savings and affordable education for their children?”
That’s one starting point. But not the only one. For instance, there are scads of people who COULD afford health insurance but choose to forego it. Instead, they spend their money on booze, cigarettes, books about home design, $11,000 refrigerators, etc. I happen to know this because I was one of them for a long time. I was young, in good health, so I took the risk. And guess what? I won. I never went to a doctor over that period. So I had thousands, if not tens of thousands more, to spend on stupid crap that I really, really liked.
This, I think, is the less-tired version of the old saw about poor people who buy $300 sneakers. The thing is, those people really do exist. For whatever reason. I doubt the lesson that we should learn from it is that poor people are immoral. But it’s clearly not the case that 100 percent of people without health insurance can’t afford it. So a lot of times, it’s not as simple as taxing the rich guy, who will have to forego an expensive refrigerator so the 30-year-old widow can have insurance for her five kids. Sometimes, you are taxing the rich guy so the poor guy can get health insurance while still enjoying his Camels.
That doesn’t make it not worth doing. And clearly, the system, as it is, is screwed.Just as clearly, most of the millions of people who don’t have coverage really can’t afford it.
But as MY has pointed out, I doubt the extra tax on the rich is going to cover the difference. So pretty soon, it’s not just going to be the Sub-Zero set paying more. Which complicates things even further.
July 20th, 2009 at 3:38 pm
If there is little difference than why do rich buy it? I mean it would seem to destroy all rationality and would crumble Wilkinson’s oh so perfect market ideal. Unless of course Wilkinson doesn’t believe a word he’s writing and is just serving his rich pay masters at Cato.
July 20th, 2009 at 3:46 pm
Holy shit is this ridiculous. Get everyone out of poverty and into a decent middle class existence — the ability to live in reasonable housing, the ability to get the kids a college education, a nice vacation at least once a year, no threat of bankruptcy from a health problem, and the ability to save something extra for retirement — and then we can begin a civil discussion about the significance of inequality. Until then, these idiots should sit down and shut up.
One thing we do know is that when there is substantial poverty, and it is growing, and equality is growing, it is time to do something to halt that trend. What it really means is taking away some of the political and economic power of those who are abusing the power they have grabbed. Yes, pitchforks please.
July 20th, 2009 at 3:47 pm
Does it follow from Matt’s point that imposing higher marginal tax rates on high income earners will discourage the consumption of $11,000 refrigerators? For some, I believe the answer is yes. And I also suppose that most on the right would find that highly objectionable. On the other hand, most on the right think it absolutley marvelous that we tax capital gains, dividends, and interest at relatively low, favored rates, even though doing so necessarily discourages work (since labor is taxed at the maximum marginal rate).
July 20th, 2009 at 3:47 pm
Except the argument falls apart under a little careful analysis. David Schmidtz pretty much destroys it in his paper ‘Diminishing Marginal Utility and Egalitarian Redistribution’ (Journal of Value Enquiry, Vol 20). The point is that in a world where money can be spent solely on consumption, the argument might hold. But this is not the world we live in – money can be saved and go towards production too. Given that the rich have a higher marginal propensity to save (rather than consume) than the poor, it it precisely the DMU of money which allows higher levels of investment, and hence growth.
July 20th, 2009 at 3:54 pm
If having more money really doesn’t make rich peoples’ lives easier or any more enjoyable, then why do rich people get so upset when the government takes some of their money?
It’s just such a mystery!
Luckily we have economists to help us try to figure it out…
July 20th, 2009 at 4:11 pm
@8: Note that the same conservatives who publicly complain about how so many lawsuits are clogging the legal system are also the ones busily drowning the legal system in the bathtub so it can’t actually have the capacity to meet those needs. Why don’t we have twice as many judges and three times as many clerks, who could handle the lawsuit volume, particularly when hiring them would reduce unemployment? Because that would require taxes.
What is the right number of lawsuits for a very large, fairly rich, very high-tech country full of cars and other potentially dangerous devices, in which even minor injuries can lead to many thousands of dollars’ worth of medical care, to have? I don’t know exactly, but I suspect that the number is well above the capacity of a legal system developed in times of simpler lifestyles and then placed on a starvation diet of right-wing ideology.
(Note, also, that the major element of damages in both medical malpractice and personal injury cases is medical bills. Anything that takes the burden of those bills off the patient takes them out of the lawsuit, too.)
From Wilkinson’s paper:
Perhaps the most curious feature of this form of taxation, at least compared to other forms of taxation, is that it builds no schools or bridges, nor does it pay down the deficit or provide health care or retirement security. The fact that so much spending by the wealthy doesn’t actually produce any utility for *anyone, even the wealthy*, until it gets redistributed through yacht-building shipyards and so forth, is actually an ironclad argument for much higher marginal tax rates on very high incomes and redistributing that same income through production of social goods instead. As long as Warren Buffett still stays ahead of the next richest merchant prince, what does he care if it’s $20 billion to $10 billion or $10 billion to $5 billion? If they’re all running to beat each other rather than for any particular material need, what difference does it make if you put different numbers on the racetrack?
July 20th, 2009 at 4:11 pm
Well if the guy who owns the Subzero had gotten there by earning a fair profit from a productive enterprise that paid his workers living wages so they can afford the Ikea, fine.
But increasingly, Mr. Subzero got there by outsourcing Mr. Ikea’s job, then turning around and loaning him $850, after interest and fees, to buy an Ikea.
July 20th, 2009 at 4:16 pm
Supposedly the Sub-Zeroes aren’t nearly as loud (when the compressor comes on) as the regular Frigidaires and whatnot. Also they are built-in, like most people’s dishwashers, which might contribute to the noise abatement. I might have read about them in, of all places, the Atlantic, about 20 years ago.
July 20th, 2009 at 4:31 pm
Rob: I don’t follow Wilkinson too closely, but I believe a common idea among libertarians who follow these findings is that “economic freedom” leads to happiness in of itself, even if people use their freedom to do things that don’t actually make them much happier. It’s a very different approach than the traditional neoclassical theory, but it leads to the same result. (And there’s no inherent contradiction in saying that individuals are irrational but that this irrationality cancels out when you get to the level of the marketplace.)
July 20th, 2009 at 5:09 pm
IKEA sells refrigerators?
July 20th, 2009 at 5:30 pm
My, what a fine show of creativity to rationalize taking more of other people’s property. If you folks were this creative on the job, you’d probably be able to afford a Sub-Zero.
July 20th, 2009 at 6:07 pm
I’m not sure that the point is that we need to tax these people so they don’t buy a new fridge. People all pay a premium for only small increases in quality or utility or the rest. Creating a system where we stop poeple from being able to buy slightly nicer things so that a couple more people have insurance is a trojan horse.
The point is that the marginal gain on the fridge (of quality) is a result of research, extensive engineering, testing, and product development all of which cost money. The sale is supporting the production lines (jobs for uneducated/poor people), all of the jobs to do the aformentioned tasks (ie engineers), and commercial/marketing departments, which are the bread and butter of any middle class. Without the slightly better fridge, these jobs would not exist (far fewer engineers are needed to design and produce a previously existing fridge).
Additionally, the mainanance of the creative classes (ie engineers) by these specialty goods and such is required in order to make new, revolutionary discoveries that will raise everyone’s quality of life (ie the first fridge) a generation from now.
So its clear, I’m mostly playing devils advocate, but to some extent I think this arguement is valid. Favoring the redistribution of wealth to provide services at the cost of innovation that could provide the recipients with jobs seems like a valid concern. On that note, I don’t think an extra 2 to 5% on the wealthiest people will do such a thing.
July 20th, 2009 at 6:33 pm
@AP “IKEA sells refrigerators?”
Unfortunately, yes.
@Mack “Additionally, the mainanance of the creative classes (ie engineers) by these specialty goods and such is required in order to make new, revolutionary discoveries that will raise everyone’s quality of life (ie the first fridge) a generation from now.”
That wasn’t Wilkinson’s point. His point was that consumption inequality is much lower than income inequality. He’s not saying there’s a big benefit to luxury goods, in the form of R&D and technological innovation. He’s saying that the stuff that the rich are buying for 10x more is not really 10x better. Surprise! A billionaire is not consuming 100,000 times the value of stuff that middle class people are.
As MattY points out, the real inequality in the U.S. right now is not between what kind of refrigerators people have, it’s between people who face the realistic prospect of financial ruin and resort to public assistance, and those who don’t. A lot of middle class people whose consumption habits are fairly affluent can still go bankrupt due to medical bills or the loss of a job. That’s not exactly consumption inequality or income inequality, but something more difficult to measure. It’s nice that bankruptcy and some safety net protections exist, but for most Americans it’s disasterous to resort to those things and represents a really big blow in a spiritual or social sense.
July 20th, 2009 at 6:35 pm
Shorter Will Wilkinson: Inequality isn’t as bad as it seems because rich people waste their money.
July 20th, 2009 at 6:51 pm
Does this also explain part of the rise in income inequality. In 1974 the gap in power, comfort and safety between a VW Beetle and a Mercedes 450SEL was huge. Today, I would argue, the gap between a VW Jetta and a Mercedes S550 isn’t so big. (you could substitute Ford Focus/Lincoln Towncar and Pinto/Continental if you prefer.)
In 1974 if you got a raise and a big promotion, allowing you to moving up from a Pinto, Beetle, Vega into a Buick/Mercedes/Mercury that was a huge jump. Today, to get that kind of lifestyle bump an employeer would have to offer a much bigger salary increase to generate the same benifit.
July 20th, 2009 at 7:03 pm
Inequality is all about access to information.
It’s not so much that there is a $500 refrigerator and an $11k refrigerator. It’s that *real* ice cream is now “super-premium” ice cream. Many people have never had the chance to taste real ice cream with just an added binder and deicer, and don’t know that what they are eating probably should only marginally be called ice cream. It’s the same with beer (and no knowledge of the different kinds), and bread (wonderbread for all!), and many other direct to consumer products are adulterated, strained of value, or fake (like the practice in China of reserving real medicine for the upper classes and fakes for the poor that don’t know better).
I think that the beer laws that Germany has is brilliant in some ways. It levels the field, and makes it difficult for poor people to buy bad beers (water, barley, and fucking hops). Applying these types of laws to many kinds of direct-to-consumer product will reduce *practical* inequality and raise living standards at really low costs.
July 20th, 2009 at 8:12 pm
It’s about security and stability. The middle class that emerged in the 1950s was all about more people having security and stability in their lives. That is what is disappearing now for more and more people as income inequality grows.
Gah, this is all just a red herring. Wilkinson would look at the history of the dust bowl in Oklahoma and say, “hey, a bunch of them had cars, so they couldn’t have been THAT poor.” Jackass.
July 20th, 2009 at 8:26 pm
Re: Poor people can’t afford to eat healthy food, drink clean (lead-free) water, commute to work, receive an education
Huh? Healthy food is not particularly expensive. You most certainly can eat healthy on a limited budget, and you donklt have to shop at WShole Foods to do so. There’s healthy food available even at walmart. You just have to want to.
As for lead-free water, last I checked lead plumbing is no where in use anywhere in any municipal water system in this country and while some imported objets de cuisine may have lead paint despite bans on its use, most glassware is safe to drink from. Leaded gasoline also belongs to history. So where is this lead in the water coming from? If it’s just part of the general environemnt then the rich will be exposed to it as the poor.
Meanwhile, the poor do commute to work. They even use public transportation, which Matt should approve of. And public education K-12 is still free, though you get out of it what you put in.
July 20th, 2009 at 10:59 pm
JonF is correct. The poor are unhealthy because they want it that way. They also want their public schools to suck.
July 21st, 2009 at 12:28 am
They also want their public schools to suck.
They do – education is liable to turn their children into nerds, dorks or teh gay. That is why they fear it.
July 21st, 2009 at 3:13 am
[...] nails it: the more money you have, the less useful it becomes. It’s like the old joke: a culture that sanctifies greed creates people who buy elephants, [...]
July 21st, 2009 at 9:11 am
Re: The poor are unhealthy because they want it that way.
That was not my point at all. No one wants to be unhealthy (apart from a tiny number of true hypochondriacs). My point was that the poor (other than maybe the truly destitute who do not even have a roof over their heads) have the means to eat healthy, but often fail to do so. And that’s hardly unique to the poor: working and middle class people, even many rich folks, fail to eat healthy also. The issue is not money (again, excepting the very lowest income stratum). And the problem is a society-wide one which won’t be solved with increasing food stamp benefits.
July 21st, 2009 at 9:32 am
This all points to a balance between public and private goods on the one hand, and a clear definition of what it means to be “poor” or “rich” on the other.
For instance, one public good that has been largely privatized in the USA is public safety. Poor people are much more likely to be victims of crime than the middle class or the wealthy. Private security boomed in the 80’s and 90’s, and although violent crime rates have gone down overall, poor people suffer disproportionately. It’s nice to have a fridge, but it doesn’t offset that, and all the other public goods that the poor lack access to because the rich and the middle class prefer not to pay the taxes that support them for all, but would rather have a private market. Public transportation is rarely seen as a public good in the US as elsewhere, even in cities, where it is sorely missed.
As for the definition of poverty (”are you really poor if you can afford…?”), the poor buy what they can afford. They are also affected by the larger culture, which is consumerist. No one is advertising to the public that they should save money, but everyone is being urged to spend money on all kinds of items that will soon be obsolete. “I see people in poor neighborhoods walking around talking on cell phones — everyone seems to have them — and cell phones are not as necessary as a healthy diet, right? So the poor are poor and unhealthy because of their choices.”
That discussion goes back a long way. “Virtuous, deserving poor people are so few; most of them spend all their money on gin, etc.”
Whatever choices poor (or rich) people make, there should be a bare minimum of social SECURITY, as mentioned in an earlier comment. That includes health care and all the public goods and services that allow for a decent, public life — education, clean air, public safety, affordable transportation — that benefits everyone, except those who are so wealthy they can afford to pay for substitutes: private schools, air conditioning, security guards, etc.
July 21st, 2009 at 10:12 am
@Matt
Almost nobody would argue that public SECURITY and other public services are not necessary. The question is how much. The virtuous poor arguement holds water because there is some truth to it. I grew up with friends many of whom (including myself) did not have affluent family or help once a late teen. Some worked hard and took out loans and applied for aid and went to college and some didn’t. The ones who did (like me) have decent jobs with good wages and health care and food etc. The ones who did not.. don’t. Same background (with little comparative opportunity), different choices, different results.
I have never gotten one social benefit from the government except a loan guaranty (which I still pay back) and last year payed around 13000 in income taxes alone.. Is 13000 a year enough to support my friends who pay very little or none? Should it be more?
Public safety is not largely privatized. I pass police and shariffs and state troopers every day. I see private street security once a week topps. The wealthy need more security because they are more prone to large losses from property crime: they have more to steal! (and are targeted more frequently because of it) They support the police (available to everyone) and additional security for themselves. This is not unethical unless u make an arguement that police is mostly not good enough in this country to provide the security everyone is entitled to(and I would disagree and have lived in very poor areas and conditions, of course there are exceptions).
July 21st, 2009 at 11:25 am
It is always funny when a libertarian’s argument does not prove what he thinks it does.
July 21st, 2009 at 12:14 pm
[...] worth saying explicitly that the points I was making yesterday about the egalitarian implications of the declining marginal utility of money apply even more forcefully to the international context. An extra $1,000 a year in income for a [...]
July 21st, 2009 at 12:41 pm
That’s the stupidest fucking thing I’ve read in a good long while.
July 21st, 2009 at 1:00 pm
The virtuous poor arguement holds water because there is some truth to it. I grew up with friends many of whom (including myself) did not have affluent family or help once a late teen. Some worked hard and took out loans and applied for aid and went to college and some didn’t. The ones who did (like me) have decent jobs with good wages and health care and food etc. The ones who did not.. don’t. Same background (with little comparative opportunity), different choices, different results.
The “I made it” argument misses the point.
The question isn’t whether people who’ve gotten ahead did so with virtue and hard work. The question is whether the people who didn’t get ahead actually lack “virtue”, or whether (momentary) lapses in virtue should be punished endlessly.
I’ve seen this argument from conservatives all the time. Their first instinct when looking at a person who’s fallen on hard times is to go back and question the record to see if ANY mistakes were ever made. Would a person still be poor if they had worked a little harder 20 years ago when they were a teenager back in high school? Could they at least theoretically feed themselves and their kids on minimum wage if they budgeted perfectly and spent hours each night carefully making all their own food in a rice cooker?
If so, obviously it’s all their own fault if they’re not doing well. SOL. The rest of us shouldn’t do anything to help.
After all, there’s no need for a safety net if everyone would just be perfect.
I don’t find that argument convincing.
We ALL make mistakes. But if you’re born middle class, you’ve got a safety net of parents, family and friends. Even big mistakes aren’t forever. Being born poor means you’re walking on a razor’s edge where ANY lapse in judgement or virtue (or bad luck) means you can fall into the abyss.
Maybe you made it “on your own”. Congratulations. Lucky you. Until everybody else is perfect though, we still need a safety net.
July 21st, 2009 at 1:12 pm
“Could they at least theoretically feed themselves and their kids on minimum wage if they budgeted perfectly and spent hours each night carefully making all their own food in a rice cooker?”
Well, I am not sure that the standards are always THAT high. For instance, sometimes it might be nice of the folks on the dole didn’t smoke crack, wear $300 sneakers and fill their apartments with 56-inch flat screen TVs.
This is of course a ridiculous caricature of the “average” aid recipient. But it’s no more a caricature than the hard-working, put-upon virtuous widow who’s raising five kids while working three jobs.
Examples of each exist. And in makes sense for any sytem to try to account for them as best it can. Sadly, the pursuit of “purity” in this regard often adds a pretty onerous administrative drag on any sort of social policy.
And by the way… my wife and I spend hours budgeting every night, and we try to save as much as we can by preparing as much of our own food as we can. We have a garden, for instance.
To be honest, these are chores. But I don’t think it’s all that much to expect. Is it? Are we envisioning a welfare state that allows people to NOT budget their money carefully? I am not sure you’ll get many people to sign on for that.
July 21st, 2009 at 2:29 pm
Possibly even more absurd as a show of conspicuous consumption are these $350 “bespoke” designer axes:
http://www.bestmadeco.com/FEATURES/about/aboutus.html
Their advertising copy on that page is very telling…
The rest goes on to basically say that you should purchase one of their colorfully-painted handmade axes because of what an axe represents — self-reliance, working with your hands, etc. As an afterthought, they encourage you to maybe thinking about one day getting up the gumption to actually use the axe for its intended purpose.
July 21st, 2009 at 2:37 pm
Well, I am not sure that the standards are always THAT high.
Believe it or not, I’ve seen exactly that argument made. “There isn’t really a hunger problem in this country because…”
For instance, sometimes it might be nice of the folks on the dole didn’t smoke crack, wear $300 sneakers and fill their apartments with 56-inch flat screen TVs.
Yeah, maybe so. But so what? But have you ever bought some stupid luxury you couldn’t really afford? Why do we get to demand that poor people should be MORE virtuous than the rest of us?
People are poor. People make bad decisions. Those are the facts. How does railing self-righteously about how people are impure and stupid actually help fix the problem?
(And obviously crack is an addictive drug. I imagine becoming addicted to crack is a fairly easy mistake to make if you grow up shit poor and hopeless in a crime ridden neighborhood, and a hard one to undo on your own. Again, an institutional and a public health problem, not a virtue problem.)
July 21st, 2009 at 2:40 pm
To be honest, these are chores. But I don’t think it’s all that much to expect. Is it? Are we envisioning a welfare state that allows people to NOT budget their money carefully? I am not sure you’ll get many people to sign on for that.
I guess I’m not exactly imagining a welfare state at all. I’m imagining institutions that help us all make better decisions, and some “equality of failure”, where recoverable mistakes are still recoverable, even when you’re poor.
July 21st, 2009 at 3:04 pm
[...] Yglesias from Think Progress has posted twice on Wilkinson’s study: I’m not in agreement with the overall thrust of Will Wilkinson’s [...]
July 22nd, 2009 at 11:07 am
Yglesias vs Yglesias
Also, you can’t compare interpersonal utilities. It is true that the marginal utility of wealth for each individual decreases with each additional dollar, but this tells you nothing about the difference in marginal utility between people. Unless you’ve invented a utilometer.
July 22nd, 2009 at 11:27 am
[...] (or even the primary) arguments available for redistributive taxation and also to point out that considerations related to the declining marginal utility of money do, in fact, militate in favor of redistributive [...]
July 22nd, 2009 at 5:12 pm
[...] Matt Yglesias July 20, 09: [...]
July 23rd, 2009 at 3:24 pm
[...] Matt Yglesias July 20, 09: [...]
July 24th, 2009 at 3:57 pm
[...] Burkhard Bilger’s excellent 2004 New Yorker article persuasively argued that the growing stature gap between Americans and northern Europeans is largely explained by the United States’ high level of inequality and child poverty. Consider it another reason to belief that using a surtax on high earners to finance generous health care for the poor and lower-middle class would be welfare enhancing. [...]