[FoRK] Income distribution changes over the last 30+ years
J. Andrew Rogers
andrew at ceruleansystems.com
Wed Nov 10 23:11:30 PST 2010
On Nov 10, 2010, at 2:34 PM, Lorin Rivers wrote:
> More commentary about wealth distribution in the US.
> “The richest 1 percent of Americans now take home almost 24
> percent of income, up from almost 9 percent in 1976. As Timothy
> Noah of Slate noted in an excellent series on inequality, the
> United States now arguably has a more unequal distribution of
> wealth than traditional banana republics like Nicaragua, Venezuela
> and Guyana.”
It is not obvious that the distribution of income matters per se. How effectively that income is utilized and deployed in the aggregate matters far more for the well-being of a society than any details of the distribution.
In this context, banana republics are not defined by the distribution of income but by how many barriers exist to prevent a fool from being parted from his money. The income distribution in the US exists despite the fact that there are relatively few barriers to separating fools from their money. Income accruing to those that do nothing to earn it, whether concentrated in a handful of warlords or being nominally redistributed evenly by communists, is the real issue.
Economies are sensitive to deadweight loss and opportunity costs more than they are sensitive to income distributions.
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