The Inequality That Matters
This is a must read. Tyler Cowen, in his latest (long) article in The American Interest, takes us through the evidence of income equality, opines on the actual impact, and then asserts some root causes. While I don’t necessarily agree with it all (mainly his assertion that the root cause is practice of ‘going short on volatility’), it is really a great read.
“A neglected observation, too, is that envy is usually local. At least in the United States, most economic resentment is not directed toward billionaires or high-roller financiers—not even corrupt ones. It’s directed at the guy down the hall who got a bigger raise. It’s directed at the husband of your wife’s sister, because the brand of beer he stocks costs $3 a case more than yours, and so on. That’s another reason why a lot of people aren’t so bothered by income or wealth inequality at the macro level. Most of us don’t compare ourselves to billionaires. Gore Vidal put it honestly: ‘Whenever a friend succeeds, a little something in me dies.’”