Tag: wealth

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general freedom individual achievement responsibility tax policy

Plotting Progress

Angus Deaton, Nobel Prize, Economics, The Great Escape, Inequality, collage, photomontage, JGill, Paul Jacob, Common Sense

The prestige of the Nobel Peace Prize has been tarnished by some more-than-dubious awards, in our time . . . Henry Kissinger and Barack Obama, most obviously.

Same goes for the Bank of Sweden’s knock-off “Memorial” prize for economics.

But, according to David R. Henderson, this week’s Nobel nod to Scottish-born Angus Deaton, for his “analysis of consumption, poverty and welfare,” is “a fine pick.”

Deaton is, writes Henderson, “an important chronicler of the market’s abilities to create wealth and improve society.”

While it is all the rage, these days, to complain about increasing inequality, Deaton has been instrumental in showing that wealth, health and welfare have increased as poverty, worldwide, has decreased.

And this has been largely the result of markets. Not big government programs.

Deaton, Henderson tells us, “believes that the approximately $5 trillion given by governments of rich countries to poor countries over the past 50 years has undercut good governance by making poor countries’ leaders less accountable to their own citizens.”

ABC News seconds Henderson’s account:

In his 2013 book, The Great Escape, Deaton expressed skepticism about the effectiveness of international aid programs in addressing poverty. . . . China and India have lifted tens of millions of people out of poverty despite receiving relatively little aid money. Yet at the same time, poverty has remained entrenched in many African countries that have received substantial sums.

Peter G. Klein, at mises.org, identifies a deeper insight by the latest Nobel economist: “aggregate measures of consumption and inequality conceal important differences among individuals.” This explains why Deaton came to his other (controversial) conclusions: he never took his eye off the real player in market life, the individual.

This is Common Sense. I’m Paul Jacob.

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Angus Deaton, Nobel Prize, Economics, The Great Escape, Inequality, collage, photomontage, JGill, Paul Jacob, Common Sense

 

Categories
free trade & free markets ideological culture tax policy

Unfuzzying Up the Past

We hear a lot of talk about the disappearing middle class. Sometimes this jabber goes so far as to posit that normal folks — say, the “99 percent” — haven’t really experienced any progress since the ’60 or ’70s.

So blame the rich. And their government.

It’s not an implausible case. Wealthy interests do rent politicians at extravagant rates, changing policy in their favor.

But as economist Russ Roberts and Cornell University’s Richard Burkhauser discussed recently, sloppy statistics feed the hand-wringing over middle-class decline. Considering government transfer payments from rich to poor and plotting income by household rather than individually, the basic “stagnation” thesis doesn’t pass the “smell test.”

For the real stink, however, consult the Internet memes, particularly this goofy contention:

In the 1950s and 1960s when the top tax rate was 70-92%, we laid the interstate system, built the Internet, put a man on the moon, defeated Communism, our education system was the envy of the world, our middle class thriving, our economy unparalleled. You want that back? Raise taxes on the rich.

Forget the obvious nonsense (ARPANET was the Internet only in ovo; Communism collapsed in the ’80s), and concentrate on the main points, as Tom Woods has done: tax evasion was rampant back in the alleged “good ol’ days”; public schools have doubled in per capita spending since then, and not improved; and the stagflationary ’70s followed the booming ’60s, almost certainly as a consequence of the policies being touted, here.

Selective memories help in constructing just-so policy “proofs.” The middle class has received some big hits, I grant you. Still, we’ve seen progress, too.

This is Common Sense. I’m Paul Jacob.