Interbane wrote: Why should my taxes go towards Walmart's employees because Walmart executives refuse to pay their workers more? To hell with that. That is NOT what my taxes should be used for. Walmart easily nets enough to pay all of their employees over the welfare limit. Having government subsidize the underpayment of workers is ridiculous, especially when the company can afford to pay more. Use those taxes to build infrastructure or invest in research.

Robert Tulip wrote: Walmart is an interesting case study. Providing an abundant range of low cost products promotes social inclusion, while paying low wages seems to lock its employees into poverty. Has Walmart become the Standard Oil of retail, a mega mart that sucks the diversity out of local economies?

People talk about how Walmart displaced Mom and Pop stores. Do you think these stores were providing lots of well-paying jobs?

Walmart employs a lot of people with low skills. Should a cashier be able to support a family and have a great benefits package? That's a nice fantasy, but many of these jobs will not even exist in 10 years. I worked as a cashier when I was 14 years old and didn't know shit about anything.

Research such as the World Bank's influential report Growth is Good for the Poor has proved strong correlation between growth and poverty reduction.

The reason I'm often so vocal about this topic is that so many otherwise intelligent people have been cognitively captured by arguments from plutocratic think tanks. It's the same widespread misinformation that you see from religion, and it's maddening. A study by the world bank, Robert? Really? The report may very well be true under many conditions, but it is not what is happening in the US.

Look at the statistics. A record one in six Americans are now being served by an anti-poverty program. More Americans than before the recession are on Medicaid. There are a record number of Americans on food stamps. The number of people who live paycheck to paycheck has increased over the course of the recession. There are a ton of statistics showing this trend.

In fact, inequality is good, reflecting reward for talent and risk.

Increasing inequality is not good. It's a marker that has shown the collapse of civilizations back to antiquity. Stable/unmoving inequality is okay, depending on other variables like you've mentioned. When the ratio shifts, it's a signal within the noise that should raise alarms across the board.

On the reflection of talent and risk. Do you think the free market accurately finds the best compensation for every job? What would you say to the idea that those who hire/fire have leverage that in aggregate, cause compensation at the top to go up relative to production, while compensation at the bottom goes down relative to production? It's a shift that doesn't happen all at once, of course. A slow and steady drift.

I think it's a farce that people worship the free market as if it's an agency outside the influence of men. Or that some men don't have far more influence than others.

I don't have a fixed view on minimum wages, but these sort of vexed problems should consider all the evidence, modeling different outcomes, not simply jumping to politically driven conclusions.

A part of me thinks the problem can't be solved to the benefit of the middle class. At least until the rest of the world is equally as prosperous as the US, and minimum wages are roughly the same everywhere. In other words, it might get worse for the next century until it gets better.

Should a cashier be able to support a family and have a great benefits package?

I think that if the cashier is working full time, my tax money should not be required to put food on their table. This is especially the case if the employer is making enough profit to pay more. There's no way to wiggle around this point. It's also true that we could let the family starve, right? But then it's right back on the employer. Why couldn't they just pay a bit more? It's not as if the cashier job can be outsourced.

Back in 1996 Richard Wilkinson wrote the book "Unhealthy Societies". In this book he produced extensive research showing how those countries with the smallest income differences between rich and poor have the best health.

He continued with this work producing the book "The Spirit Level" with Kate Pickett. Again they produced much evidence demonstrating how inequality produces numerous social problems. They studied twenty-nine areas of life such as infant mortality, longevity, crime, mental health, drug abuse and life satisfaction. Their research is clear and definite. The most egalitarian countries do best in all areas. The United States, the most unequal of developed nations, ranks near the bottom in all areas. What is especially interesting is their findings that the evidence from American states mirrors the evidence from the developed countries they studied.

More can be seen at their website: www.equalitytrust.org.uk

Inequality is certainly a hot button issue at the moment, featuring 7 times in President Obama's State of the Union Address.

And a big new UN report “Humanity Divided: Confronting Inequality in Developing Countries” allegedly "shows that if left unchecked, inequality can undermine the very foundations of development and social and domestic peace."

After looking at the page LevV linked, my skepticism about equalism is only deepened. The page provides nothing I could find regarding causal mechanisms for bad effects of inequality, and yet claims causation for a range of correlations. What I don't like is the big government agenda of tax and spend as a method to create equality and suppress success and freedom. I can't help thinking the research about the harm of inequality is driven more by political resentment and ideology than by facts. This is borne out by the citing of 'status anxiety' as the main transmission mechanism from inequality to bad health etc.

I tend to agree with the argument of Acemoglu and Robinson that inclusiveness is a far better indicator of social health, defined in terms of equality under the law. The challenge is therefore to provide for equality of opportunity through accountable and transparent governance, rather than to manufacture equality of outcomes. It looks like Why Nations Fail is lining up more with the political right than the left on its analysis of the causes of poverty.

Robert Tulip wrote:Your phrase "seems to" reflects the perception, often false, that the poor are getting poorer. Research such as the World Bank's influential report Growth is Good for the Poor has proved strong correlation between growth and poverty reduction. People feel resentment about growing inequality, but that does not prove that inequality as such is a bad thing. In fact, inequality is good, reflecting reward for talent and risk.

Here's Bill and Melinda Gates in the WSJ:

“[It’s a myth that] poor countries are doomed to stay poor. Incomes and other measures of human welfare are rising almost everywhere—including Africa. A new class of middle-income nations that barely existed 50 years ago now includes more than half the world’s population. Here’s our prediction: By 2035, there will be almost no poor countries left in the world. Yes, a few unhappy countries will be held back by war, political realities (such as North Korea), or geography (such as landlocked states in central Africa). But every country in South America, Asia, and Central America (except perhaps Haiti) and most in coastal Africa will have become middle-income nations. More than 70 percent of countries will have a higher per-person income than China does today.”

The idea would be not to take what they say as gospel, though we might reasonably think they could be as accurate as economists generally are. The idea would be to consider that we can't usually see forces that are at work continuously, from our fixed point in time and from our limited viewpoint. The Gateses would seem to be saying that, the matter of inequality aside, lifting people out of poverty has been happening through free markets and will result in even more dramatic improvements in a relatively short time.

The Gateses themselves are poster people for inequality. I imagine they would say, "So what?" Is what we care about that all people have a decent living standard or that a few not do so incredibly well? One side in the inequality debate assumes that the uber-wealthy are keeping the rest of us down in some way. The other denies this flat out. Would the evidence better support the latter view?

After looking at the page LevV linked, my skepticism about equalism is only deepened.

A single link would only highlight what you need a book to more fully understand. Has the link polarized you against the harms of inequality before you thoroughly research it? You may not like the idea of big government tax and spend, but you can't deny the success the US saw while the top tier tax rate was at 91%. That may not have been the key to our growth, but it's fairly obvious it wasn't an impediment. Are you sure your own views aren't driven more by ideology than facts?

The challenge is therefore to provide for equality of opportunity through accountable and transparent governance, rather than to manufacture equality of outcomes.

What I see in the US is a terribly underfunded infrastructure, underfunded schools, and faltering research. A boost in those areas would go directly toward increasing equality of opportunity. And we shouldn't even need to tax the rich to pay for these things. Just take away the free money. Eliminating rents and tax loopholes alone would likely pay for it.

I can't help thinking the research about the harm of inequality is driven more by political resentment and ideology than by facts.

There is some resentment. Take Donald Trump. In his book, he talks about how he started his business life with basically nothing. Just an apartment complex, and a father who could coach him. The guy is a moron, but he was already further ahead when he started than I'll be when I retire.

Is the difference between he and I something other than the inequality of opportunity? There is no way to create the equality of opportunity when money goes heirloom. It's a concept that sounds great in theory but fails in the real world due to succession. I don't see Donald Trump's wealth as an indicator of his skill or talent. I see it primarily as an indicator that he was born to the right parents and got lucky.

The needed solutions to create true equality of opportunity isn't to build a bunker around the benefits of heirloom wealth. Which is what libertarianism does. It ensures a lack of equal opportunity. Imagine all the changes taking place that a person like Ron Paul proposes. Ug.

Bill Gates illustrates how wealth can promote inclusion, through the role of Microsoft in providing mass access to information.

Donald Trump is a more complex character. Interbane is wrong to say he "just got lucky". The role of gambling as a form of rent seeking seems to illustrate how wealth can promote extraction, as does the spreading of political fables to serve vested interests. But I think it is hard to argue that America would be worse off without people like Donald Trump.

Why Nations Fail explores how policy can create the enabling conditions for a Bill Gates to emerge and prosper, while holding pure rent seekers in check.

Donald Trump is a more complex character. Interbane is wrong to say he "just got lucky". The role of gambling as a form of rent seeking seems to illustrate how wealth can promote extraction, as does the spreading of political fables to serve vested interests. But I think it is hard to argue that America would be worse off without people like Donald Trump.

What would you call the chances of being born to wealthy parents? Did Donald plan it? I wish I was given an apartment complex as a gift from my father. Being born to wealthy parents is something I'd call luck. I don't see how you're showing I'm wrong about that.

I'm also not saying to eliminate such people, or their roles. What I'm saying is that such heirloom wealth serves as an excellent counterexample to the claim that freedom of opportunity will naturally arise without government intervention. The natural way of things is for those who acquire power, by any means, to entrench. That entrenchment is long lasting, generation to generation. Freedom of opportunity is unnatural and must be fought for with intentional policies.

If the government is to be inclusive and serve everyone rather than the tiny elite, then attenuating this entrenchment is vital. Attenuate is a key word. You still want wealth to be passed along in a family. You still want rich people to be rich. But the problems we're currently seeing is the order of magnitude growth of those at the top since the 70's, while middle class wages have shrunk since the 70's. How can such a trend indicate anything other than that we have extractive policies in place?

I plan to read the book after you hooked me into this thread, thanks Robert! I'm wondering if the US doesn't operate in extractive ways that are too complex for us to fully understand. There's something to the complex instruments of the financial industry that seem extractive.

Finland has been mentioned on this forum for its excellent education system - one of the best in the world. It scores very high in other areas as well. In August 2010, Newsweek ranked the world's 100 best countries. Finland and the other Nordic countries, all more equitable than countries such as the USA and Great Britain, ranked at the top of the list. As well as ranking at or near the top of the list in quality of life areas, Finland is also near the top of the list for per capita income.

Like other European countries they struggled to overcome the devastation suffered during WWII. They decided early on to be self-reliant and to provide the best possible quality of life for all its citizens. As the quote below indicates, they didn't hold the common belief that a country must first get rich before providing the infrastructure to support all citizens:

"The Finns didn't simply redistribute cash. Well funded public services ( including child support allowances, forty-four weeks of paid parental leave per child, defined benefit pensions, free university through university,, free health care, free school meals, subsidized public transportation, free day care, and subsidized elder care, plus a high minimum wage and generous unemployment benefits) helped create the world's largest middle class (as a percentage of the population) and a skilled workforce. They outlawed compulsory overtime and have the world's longest paid vacations. Yet they are remarkably productive"
Quote from What's the Economy For Anyway? by J. de Graaf pg. 123

This is a country that understands the meaning of inclusion in every sense of the word!

I tried to save then upload this image, but I couldn't get it to work. In this Huffington Post article, there's a graph that represents what I was saying above.

http://www.huffingtonpost.com/2014/02/0 ... f=business