[FoRK] The bee sting theory of poverty
Stephen D. Williams
sdw at lig.net
Mon Jun 28 23:09:31 PDT 2010
On 6/28/10 10:10 PM, Jeff Bone wrote:
> On Jun 28, 2010, at 21:52, "Stephen D. Williams" <sdw at lig.net> wrote:
> Trust me, though. His argument is simple, elegant, beautifully
> stated, and utterly devastating to the Golden Calf of progressives,
> diminishing marginal utility.
Haven't read the book yet. That article did *not* say anything that was
"utterly devastating" to the concept of diminishing marginal utility.
Perhaps it was devastating to someone who thought that marginal utility
was all that mattered in the psyche of people in the neighborhood of
poor. If so, that is a very weak point.
What exactly is your point about diminishing marginal utility? That
taking taxes of 20% from someone making $10K is as fair as taking 20% of
someone making $100K or $500K? Or something else? What would proof or
disproof of dminishing marginal utility mean in terms of policy changes
or anything else?
The main point was close to this: Poor people tend to be fatalist about
solving enough of their problems which leads them to give up, drop out,
not work hard consistently, and do self-destructive things because they
mostly observe and expect failure. Add in indirect effects of those who
have given up holding back, for various reasons in various ways, those
who are trying to break through, and you have a strongly negative dynamic.
The idea of diminishing marginal utility seems correct once someone is
over the baseline. I think that most people have experienced it
clearly. When they are significantly under the baseline, no piecemeal
or sporadic income can be expected (by them) to catapult them out of
their strata. In that mode, the marginal utility of income in terms of
changing their status remains close to zero. This is exactly the same
problem as providing bags of rice to a starving group of refugees in
Africa or whatever: If you aren't solving their problems in any lasting
way, it is just treading water at best. You may have kept them from
drowning, but it doesn't incrementally progress them to self-sufficiency.
> Then he goes all non-sequitur, attempting to rationalize his own
> progressiveness in light of his insight.
> Nonetheless, I loved the book for the clarity of his initial arguments.
If they are the same points made in the article, I don't think you
understood them properly.
Perhaps the book makes the arguments better.
>> Exercise for the reader. Or are you declaring it impossible to define?
> We've already done this exercise, as Russell has kindly reminded us.
> I still think it's - that is, what you have presented on the topic -
> utter nonsense.
You never proved or even justified why it is nonsense. You created a
straw man (that I was stating a definitive, for-all-time baseline set)
and then knocked it down.
> All for free! Yippee!
Where did I say it was for free?
Defining and measuring against a baseline is providing that baseline for
free? Jumping to conclusions again.
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