Thursday, January 12, 2012

Bryan Caplan's Advice for More Equality

You'd think it's a joke, but it isn't. He's serious. Here's the advice.
If you really want a materially more equal society, stop beating up on the 1%. Do a complete 180. Smile upon them. Admire them. Praise them. Sing songs about how much good they do for the world.
He's got some tortured logic for why this really is how you do it. Additionally he wants to undermine democracy.

More advice for the poor. The key is to give the rich more of the money.


Ben said...

If only the interests and egos of the 1% mattered, we'd care about their damn self-esteem. Meanwhile in 100% reality land (where everyone is dependent on everyone else for a holistically healthy lasting economy), worker, consumer, and environmental protections go where?

HispanicPundit said...

Since I'm a big Bryan Caplan fan, I have to ask: where does his logic break?

He spells out his logic fairly easily, so it should be easy for you to spot where he goes wrong. So where?

Btw, the picture, or whatever you posted afterwards is not coming through.

Jon said...

It's just way too simplistic to assume that there's only one effect of shame, and that is to reduce the supply of persons willing to accept disrespected jobs. First of all this is not the only way to make money. You don't have to make money by working in a profession. Another way is to own things. Just sit at your poolside and own a company. The people at the company do all the work, pay all the bills related to running the business, then they send you a check for what's left over. You don't necessarily have to do a thing except cash checks.

What is the effect of that shame? The workers can be emboldened to negotiate for a larger portion of the revenue, which means less is sent to the capitalist by his poolside if they are successful.

Look to history and you can see this very effect. After the stock market crash in 1929 inequality was as large as it had ever been, and about as large as it is today. Shame intensified. The result was the passage of legislation. A major one was the Wagner Act, which required owners to negotiate with workers as a group (in a union) if the workers chose that they wanted to negotiate in that fashion. You can't just fire everyone by virtue of the fact that they have formed a union. This had the effect of strengthening the worker's bargaining position. Inequality began to fall. It worked.

You also got the passage of welfare state measures, like Social Security, which has had an enormous effect on the severe poverty that had afflicted the elderly prior. It was like flipping a light switch. The number of elderly living in borderline starvation conditions just dropped like a rock.

FDR didn't pass this stuff because he was a lover of the poor. He did it to save capitalism. He literally feared the anger of the population and thought these things were necessary to placate them and protect the wealth of the rich. So public pressure is key to legislation that can reduce inequality, and that is assisted with shame.

So Caplan, like most right wingers, needs to step back from his pretty mathematical equations that are based on highly dubious assumptions and look at the real world.

HispanicPundit said...

I tried, but I can't understand what you are saying in your reply. I'm sure it's my fault, just sayin.

Jon said...

I'll try to explain if you want.

Basically there's more than 1 effect of shame. Not only do you reduce the pool of people willing to do "rich" jobs, but you also can change Washington, which can have other effects on the compensation sent to the CEO's and workers.

Jon said...

Not sure if that helps.

HispanicPundit said...

I see, that makes sense.