The Futile Quest for Economic Equality

Discussion in 'Economy' started by Skull Pilot, Jan 6, 2009.

  1. Skull Pilot
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    Skull Pilot Platinum Member

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    Inclined to Liberty: The Futile Attempt to Suppress the Human Spirit

    Chapters 13 and 14

    The author cites a very interesting study, Economic Freedom of the World 2005, by the Fraser institute


    The study reports that regardless of the degree of economic freedom, the index of which is based on the degree of personal choice, freedom of voluntary exchange, protection of person and property, the right to keep earnings and th e freedom to enter and compete in markets, among 128 countries 9comprising 93% of the world's population), the percentage share of income by quintiles from 1998-2002 remained about the same in each country.

    Countries with greater freedom had higher per capita incomes but irrespective of the average level of per capita income of a country, the percentage distrubution of income for ascending quintiles settled out at approximately 6%, 11%, 15%, 21% and 47%.

    These figures seem to indicate that income quintile tiers are a natural distribution much like a bell curve and remain largely unchanged in terms of percentage regardless of the attempts to equalize them.

    The caveat of these numbers is that they are but a mere snapshot of a population at any given time and it is easy to assume they are static. that is that the people in the lower quintile are a fixed group.

    This is not true however. We see that the lowest quintile of earners has the least number of people and also the youngest people as should be assumed. income mobility or the freedom to move up in the quintile tiers make income gaps even more meaningless.

    Econ 309 Home Page (lecture 13 Economic Myths and reality)

    The above lecture details that in the US only 5% of those in the lowest quintile in 1975 were still in the same quintile in 1991.

    By 1991 59.3% of those people had mobilized to occupy the top 2 quintiles, while 35.6% mobilized to the second and third quintiles.

    take the natural quintile distribution tiers and the fact of income mobility into account and one can safely say the statement,

    "The rich are getting richer and the poor are getting poorer"

    is utterly false.

    Any attempt to attenuate the higher quintlies incomes only results in a depression of income over all quintiles with the relative percentages remaining about the same.
     
  2. Zoomie1980
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    Zoomie1980 Senior Member

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    A 19 year old apprentice plumber with no reputation, no experience could never hope to match a 30 year master plumber who has a 30 year reputation, seen and done it all within his profession, and now runs his own business.

    No one with a brain larger than a walnut with more skills than finding your ass with both hands that has been working longer than a couple of years, makes minimum wage. Minimum wage is reserved for teenagers with part time jobs as dishwashers and burger flippers and the elderly greeting at WalMart and SAM's. The notion that we have all these 30 something family supporting people who make minimum wage is sheer lunacy by the the kool-aide drinkers.

    If you are 30, of sound mind and body, and you are still flipping burgers or doing some other mindless labor, you DESERVE to be broke, poor, whatever.... You are hopeless, do us all a favor and shoot yourself....

    Almost ALL of us start out at the bottom and have to work our way up. How well we do is 100% up to US.
     
  3. Agnapostate
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    Agnapostate BANNED

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    Empirical evidence indicates that societal experiments aimed at achieving social and economic equality has had some measure of success in the past. This commentary is flawed because it assumes that reformers will operate within the restrictive confines of a centralized state system.
     
  4. Skull Pilot
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    Skull Pilot Platinum Member

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    What evidence?

    The numbers are the numbers. if 93% of the world's population regardless of country of origin and irrespective of any country's index of economic freedom, fall into the 6,11, 15, 21 and 47 percent quintiles, I would say that that is empirical evidence that no matter what system of government you have, the near constant result of the quintile tiers proves that any efforts to change this will result in failure.

    Wealth is not a zero sum game. If you earn X and I earn 10X, for you to earn 2X do you have to take one X away from me or someone else or can you earn 5X irrespective of what i earn?

    the way to increase income of the lowest quintiles is to let people in all quintiles have the freedom to make more.
     
  5. Agnapostate
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    Agnapostate BANNED

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    Of course, that continues to rely on the assumption that we preserve a standard monetary system, and the empirical evidence that I am referring to is based on entire societal reforms that have taken place in the past, most notably the anarchist collectives of the Spanish Revolution.
     
  6. Skull Pilot
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    Skull Pilot Platinum Member

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    links, data, charts, graphs?
     
  7. Zoomie1980
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    Zoomie1980 Senior Member

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    That's not entirely correct. Standard of Living improves over history due to things like technology and productivity. The pie, itself, usually get's bigger. So while the distribution curve is fairly constant, the second part, about earning, is not. Over time, you can earn 2X without taking an X away from someone else due to the increased standard of living (wealth creation).

    Policy goals should always focus on two things. Making the overall pie bigger (growth) and guaranteeing free flow of individuals from one quintile to another.
     
    Last edited: Jan 7, 2009
  8. Skull Pilot
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    Skull Pilot Platinum Member

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    Thank you for the mobility point, I left that out of my earlier response.
     
  9. editec
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    editec Mr. Forgot-it-All

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    Income hardly indentifies actual incomes.

    FYI among the industrialized nations the Untied States has the lowest incidence of people migrating from one income class to the other.

    Generally speaking the vast majority of us are born in one income class and we die in that income class.
     
  10. Old Rocks
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    Old Rocks Diamond Member

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    The combination of poor medical availability for the critical first few years of life, and the difficulty in achieving a higher education in this nation guarntees that outcome. And the outcome is one that pleases conservatives.
     

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