Income inequality, autonomy, etc.

Will Wilkinson tackles income and consumption inequality:

Economic inequality is too easy. It makes us lazy in our quest to sniff out injustice, which, after all, is not so hard to find. There is overwhelming reason to believe that in the United States the deck really is stacked against some people. As a consequence, many millions are doing much less well than they might be.

Legions of inner-city kids consigned to abysmal public schools are systematically denied a fair chance to develop the capacities need to participate fully in our institutions, or to enjoy their potentially ample rewards. The United States imprisons a larger share of its citizens than any country on Earth, literally disenfranchising hundreds of thousands of men and women (though they are mostly men) and leaving hundreds of thousands more dispirited and damaged. Undocumented immigrant workers increasingly constitute a permanent economic underclass explicitly denied many of the basic legal protections of citizens, inviting both government and private abuse. And, at the level of culture, patterns of private discrimination continue to constitute for millions a web of real, seemingly inescapable barriers to opportunity and achievement, and help to generate self-reproducing patterns of diminished expectations and wasted potential. We should focus  our attention and energy to the task of rectifying these vicious injustices.

Rortybomb responds:

What good is money for? Well, in a liberal society, it’s good for two things: more things and more autonomy. The things part is down – as Will is quick to point, goods at the lower end of the consumption scale are cheaper and better working over the past few decades. So even if many consumers have not seen their incomes rise, they feel richer since the goods they are getting are cheaper. True dat!

What I’m more interested in is the autonomy end of it. What about the ability to leave an abusive partner or job without worrying about health care? Travel, spend more time with your family, feel a sense of financial security, etc? Here people less worried about income inequality would say that consumers are in better position to take advantage of this as well since they are richer.

So what they have a cheaper basket of certain goods. Now though autonomy isn’t commodified and sold on a market, the items that we associate with it, insurance, education, perhaps housing, have all seen skyrocketing prices, an effect that blocks out the first effect. This leaves consumers noticeably poorer than they would be otherwise. You’d need to construct a separate index and see the effects played out; I hope researchers are able to do that.

(He has more to say and you should read it!)

Then, Creon Critic:

Additionally, the extra income buys opt-outs. Unsatisfactory local schools, you can opt-out of that – move to a better school district or send your kids to private school. Medical care in your city not up to par, you can opt-out – travel to a medical facility that specializes in your illness. Local authorities considering building something loud, smelly, inconvenient, or unsightly near your manicured McMansion or penthouse, lo and behold, money helps with that too; there’s a pretty strong case to be made that NIMBY and income inequality intersect in ways that don’t redound the benefit of the less equitable scenarios. “In Longstanding Plan for Met Expansion, Battle Line is Fifth Avenue” (NYT), or Googling this will bring up a good deal of relevant environmental equity literature: “Commission for Racial Justice United Church of Christ. Toxic Wastes and Race in the United States; A National Report on the Racial and Socio-economic Characteristics of Communities with Hazardous Waste Sites”. I don’t think it’s unreasonable to propose that extensive opt-outs for certain sections of society have invidious consequences for everyone else (witness America’s experience with segregation).

To me it’s not so much that we should or should not redistribute wealth.  I think we should.  I just don’t think we’re very good at it, and before we shout about needing to raise taxes or make things more equitable, we need to determine whether not only the revenue will be there if we up taxes, but also whether our bureaucracy is up to the task of truly redistributing it well.  For all that I agree with Rorty and Creon’s talk of “opt-outs” and autonomy, I’m not sure that either gives a compelling solution to the income equality gap.

Often enough, government can do more to help by simply promoting job creation.  And this may mean lowering taxes on corporations and slashing corporate gains taxes.  It may also mean providing safety nets that keep poor people from being in situations where they don’t have opt-outs, and where they can be a little more autonomous, and yes – this may mean higher income taxes, or a more progressive tax model.

It also wouldn’t hurt to slash defense spending, and put some of that money back into the economy (not to mention, put some of those soldiers back into their local economies!)