Mr. Barro and many other commentators on economics often write as though there were buckets marked “Income” and “Wealth,” the contents of which are ladled out by some agency or agencies according to a set of rules and procedures. There is in fact no such thing as income distribution — “distribute” is a transitive verb, and here it has no real direct object. What there is is the occurrence of income. The argument that inequality causes income stagnation or decline for those who have been worse off in recent years assumes that if the rich were earning less then the middle class and the poor would be earning more, which in most situations is not the case. If Goldman Sachs earns less money this quarter, that does not mean that some quantity of money is therefore liberated from their foul clutches to float about until lower-wage workers can claim it. High incomes at the top do not cause low incomes at the bottom, or vice versa. To assign economic agency to the abstraction that is inequality assumes the opposite.Inequality Does Not Matter is the title, and, of course, I think you should read the whole thing. Williamson takes on the inequality mantra that the good Democrats of Stepford seem to have instituted as their current rallying cry, along with the economic fallacies of some of their prescriptions to "fix" that problem.
18 December 2013
"Inequality Does Not Matter" says Williamson. Read it.
Kevin Williamson has a good one today over at National Review. Here's a sample: