Thanks for your thoughtful reply. You make good points; I think my overlong comment mentioning so many subjects did not bring clarity to our discussion. You asked about inequality. Can we return to that subject? I've tried to explain why I don't think inequality is worth worrying about. I am concerned about poverty, but I don't see who is harmed by inequality. To use an imperfect analogy, there is some NBA team whose players have the greatest inequality of height. This doesn't mean anyone on that team is suffering from a lack of height. It's an entirely relative measure. When Albania and Norway get similar scores on inequality, or Spain and Romania, or the United States and Cameroon, I conclude that inequality doesn't tell us anything meaningful about quality of life. But some say inequality is the defining issue of our time. What am I missing?
It may not explicitly relate the material conditions on the ground, but it suggests a stratification that's unbecoming of an advanced country. To continue your basketball analogy: the basketball hoop is ten feet off the ground. So in addition to greater height enhancing your defensive skills when blocking and making you a manifestly safer target for passes because of your reach, height also contributes to your ability to dunk the ball because the net is an absolute, static height off the ground. You can figure that this ten foot high basket is analogous to the poverty level -- $24,300 for a family of four -- or the living wage ( $3-$7 above the federal minimum wage by location ) anualized per person. Or, if we're ambitious in our utopia, it's the $75,000 yearly income above which self-reports of emotional wellbeing stop rising (Kahneman and Deaton, 2010). A little income inequality isn't bad if it doesn't preclude those below a level of subsistence from moving up. (NB: We can argue about how arbitrary or valid those levels are, but I'm assuming we can agree that there is some level.) In fact, you can never eliminate inequality because some people are smarter than others and smart decisions accrue. Furthermore, a little inequality is probably a good thing, at least from a standpoint of capitalism, where envy is the great motivator. But here's the problem. We're not at a little bit of inequality. We're at a mind-boggling amount. I'm trying not to be hyperbolic, but it's more unequal than the gilded age. In 2010, the top 1% had 20%, the next 9% had 30%, and the bottom 50% of Americans had 20% of the income. We're at a point where, save for the 2014-2015 5.2% uptick in income, we've had stagnant income growth for the bottom 50% of wage-earners for the last 30 or so years. And I hate overloading an argument with statistics because I don't want to fatigue, I want to make a point. When people disparage income inequality, the unspoken modifier is the superlative income inequality. Moreover, it's the ongoing plundering of the working class, the despoiling of the planet. There's a lot to show for all the "growth of domestic product" in the jet-owning class, quite a lot less then in the public welfare, security, and health. I see real problems everywhere I look, complicated problems that require attention, painstaking patience, immense coordination and lots of resources. And it's utterly complicated by the concentration of all the income and attendant influence at the top, often if not always at the expense of the bottom. I'm sorry if I come off as short with you. It's a little discouraging to have to retread first principles, though I appreciate the practice of articulating something that may seem obvious to me but not as foregone a conclusion to another.When Albania and Norway get similar scores on inequality, or Spain and Romania, or the United States and Cameroon, I conclude that inequality doesn't tell us anything meaningful about quality of life.
I thought this would resolve the discussion. I only care about material conditions on the ground. I am willing to define this broadly, to include access to refrigeration, self-reported satisfaction, highway safety, life expectancy, beer consumption per year, whatever makes people happy. I am not much interested in the reputation or perceived decency of a country, which seems to me entirely a matter of opinion. But then you mentioned a number of material conditions on the ground, stuff I do care about: people moving above subsistence level, plundering of the working class, despoiling of the planet. Public welfare, security and health. "Real problems everywhere." You mention these real problems in abstract, non-specific language, without any explanation of how inequality is related, simply asserting that they are "utterly complicated" by concentrated wealth. What is the evidence that income inequality causes bad outcomes, apart from tarnishing the reputations of advanced countries? Your links sent me on a number of interesting rabbit trails. At the risk of complicating the conversation once more, I'll toss some back. The income study showed satiation around $75,000 for "emotional well being" but "life evaluation" continued to rise with additional income. After claiming that "inequality per se isn't a bad thing" b_b got me to read about the Gilded Age. It sounds to me like the best thing that ever happened to poor people: skyrocketing income, improvements in working conditions, new schools and hospitals. On the prospects of advancing out of poverty, I find encouragement in the Census report behind the NPR article b_b shared.It may not explicitly relate the material conditions on the ground, but it suggests a stratification that's unbecoming of an advanced country.
When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000.