ScreamingEagle
Gold Member
- Jul 5, 2004
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Imagine you are young and unattached -- unattached from everything: family, friends, country. A Martian takes you up in his spaceship and offers to set you down in one of two countries where you will have to make your way in life. All he tells you is that the average income in Country A is $49,000 and that of Country B is $40,900. You would probably pick A, right? It's 20% richer.
Now, what if your Martian host offered a bit more information? He gives you the distribution of incomes in those same two countries. In fact, he shows you this graph.
It looks like country A is still the preferred choice if you expect to be in the top half of the population. But if you expect to be in the bottom half, Country B looks more attractive.
Now your choice depends. It depends on where you see yourself with respect to the rest of the population. If you think you're above average, you'd pick Country A; if you think you're below average, you'd pick Country B, even though the average income of Country A is 20% higher. (All else equal, of course.)
Now think of yourself as a voter in Country A. Would you vote to continue your own country's economic policies, or would you vote for policies that would make your country more like Country B? Again, if you are in the top half, you'd prefer the status quo, but if in the bottom half, you'd want to be more like Country B (again, all else equal).
In fact, Country A is the U.S., and Country B is Sweden. My data source was the CIA's World Factbook, but you have to trust my interpretations of the CIA's data for now. The key point is the concept, not the exact numbers. (An explanation is provided at the end of this article. I admit that this is all a bit speculative.)
I think this explains quite a bit about U.S. elections, don't you? Conservatives are aghast to think that we might become too much like Europe. Liberals ask, "What's so wrong with Europe?"
If you are near average, you'd make about $43K in either country. But what if you think you are above average, or could be, and you are willing to work hard to achieve your potential? Let's say you could put yourself at the 80th percentile (top quintile) if you went all-out. In Sweden, that would get you an income of about $57K, but in the U.S., it would get you almost $90K.
Work your butt off in Sweden, and you make about one third more than the Average Sven. Do the same in the U.S., and make more than double the Average Joe.
On the other hand, what if you don't think you have "it"? What if you think you'd remain below average no matter how hard you try? If you think you are a 20-percenter (bottom quintile) no matter how hard you try, you would much prefer Sweden's $25K to the U.S.'s $9K.
In which country would more people try harder to excel? Maybe there's a reason why the U.S. is 20% richer than Sweden overall (again using GDP per capita PPP). More people trying harder means more work, effort, thought, risk, and innovation -- the very things that create wealth.
...
The key concept here is the possible explanation of why a certain segment of the population would be willing to accept a smaller GDP, meaning a less wealthy nation overall, if that wealth were spread more evenly. We as a country are about 20% to 40% richer than Sweden, France, and the EU. But about 40% to 50% of us would be better off, as individuals, with the economy of one of those other countries (all else equal).
...
And that, boys and girls, is today's lesson in why so many people vote Democrat. Half of us are below average. OK, maybe only 47% of us.
Read more: Articles: I Dream of GINI
Now, what if your Martian host offered a bit more information? He gives you the distribution of incomes in those same two countries. In fact, he shows you this graph.
It looks like country A is still the preferred choice if you expect to be in the top half of the population. But if you expect to be in the bottom half, Country B looks more attractive.
Now your choice depends. It depends on where you see yourself with respect to the rest of the population. If you think you're above average, you'd pick Country A; if you think you're below average, you'd pick Country B, even though the average income of Country A is 20% higher. (All else equal, of course.)
Now think of yourself as a voter in Country A. Would you vote to continue your own country's economic policies, or would you vote for policies that would make your country more like Country B? Again, if you are in the top half, you'd prefer the status quo, but if in the bottom half, you'd want to be more like Country B (again, all else equal).
In fact, Country A is the U.S., and Country B is Sweden. My data source was the CIA's World Factbook, but you have to trust my interpretations of the CIA's data for now. The key point is the concept, not the exact numbers. (An explanation is provided at the end of this article. I admit that this is all a bit speculative.)
I think this explains quite a bit about U.S. elections, don't you? Conservatives are aghast to think that we might become too much like Europe. Liberals ask, "What's so wrong with Europe?"
If you are near average, you'd make about $43K in either country. But what if you think you are above average, or could be, and you are willing to work hard to achieve your potential? Let's say you could put yourself at the 80th percentile (top quintile) if you went all-out. In Sweden, that would get you an income of about $57K, but in the U.S., it would get you almost $90K.
Work your butt off in Sweden, and you make about one third more than the Average Sven. Do the same in the U.S., and make more than double the Average Joe.
On the other hand, what if you don't think you have "it"? What if you think you'd remain below average no matter how hard you try? If you think you are a 20-percenter (bottom quintile) no matter how hard you try, you would much prefer Sweden's $25K to the U.S.'s $9K.
In which country would more people try harder to excel? Maybe there's a reason why the U.S. is 20% richer than Sweden overall (again using GDP per capita PPP). More people trying harder means more work, effort, thought, risk, and innovation -- the very things that create wealth.
...
The key concept here is the possible explanation of why a certain segment of the population would be willing to accept a smaller GDP, meaning a less wealthy nation overall, if that wealth were spread more evenly. We as a country are about 20% to 40% richer than Sweden, France, and the EU. But about 40% to 50% of us would be better off, as individuals, with the economy of one of those other countries (all else equal).
...
And that, boys and girls, is today's lesson in why so many people vote Democrat. Half of us are below average. OK, maybe only 47% of us.
Read more: Articles: I Dream of GINI
