December 23, 2003
Kausfiles on the Stratification of America
Kausfiles has a comment on on the Krugman article cited by mallarme:
Economic inequality's clearly growing, because the rich are rapidly getting richer. What I resist is the idea that the average worker is getting poorer in absolute terms--a notion now pushed by Paul Krugman in The Nation as well as by Uchitelle. Arguing in this fashion that capitalism doesn't "deliver the goods" is a mug's game. It's the one thing capitalism does! The New Left knew that. The Newer, Hack Left seems to have forgotten. Have Krugman and Uchitelle been to Best Buy and seen all the average families buying big-screen TVs? Casual empiricism suggests that the vast majority of citizens are also getting richer, just more slowly--i.e. not enough to stop the rich-poor "gap" from widening. That gap creates lots of profound problems, but the progressive immiseration of the citizenry is not one of them. I suspect honest analysis of the statistics will erase all doubt on this point.If this were true would it be all right or would the Left prefer that that the rich be poorer in the interest of promoting greater equality?
That's a good question. Certainly at some point, if the gap becomes too large and the middle class too small or nonexistant, then you're left with a rather static society consisting of a lower class and their rich rulers, ie a plutocracy. That doesn't seem conducive to a harmonious society to me, regardless of how many goods are available to the lower class consumers. Of course, I would argue that the "average families buying big-screen TVs" are solidly middle class, certainly not part of the lower. No family making $25,000 a year can afford a $2000+ television. Furthermore, Kaus's "analysis" seems to be based entirely on anecdote and speculation; economics and social policy are complicated enough without muddying the waters with such things.
However, given that that's not your question, I'll leave it for now. I have nothing against people being rich, provided it is not harmful to the greater societal good. I do, however, support a highly progressive tax, so I guess you could argue that I think the rich should be slightly poorer. It's not, however, in the interest of promoting greater equality, as you asked. It's to decrease the tax burden on the lower and middle classes for whom taxes can be a serious problem. Also, the rich should pay more in taxes in order to help support our government and economy. Without the foundations of a stable nation and prosperous economy, they would never have become rich here in the first place, so it seems only fair that they be required to give more back than those who have not received as much. The same goes for corporations.
Naturally, I'm sensitive to concerns that too much taxation of corporations and the upper class could slow economic growth, so I'm not advocating any radically high rates of taxation, just higher than are currently in place. I would also couple this with serious policy shifts (like drug decriminalization or legalization) that would free up large amounts of money for currently underfunded domestic programs like education and health care. Vote for me in 2004!