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Worth Reading – A New Review/Essay By William Voegeli

There is no horizontal Stratification of society in this country like the rocks in the earth, that hold one class down below forevermore, and let another come to the surface forever. Our Stratification is like the ocean, where every individual drop is free to move, and where from the sternest depths of the mighty deep any drop may come up to glitter on the highest wave that rolls.  James Garfield

The summer 2012 edition of the Claremont Review of Books features a book review by William Voegeli that inspired this post.  In his article Voegeli thoroughly destroys two books dealing with the liberal bugbear – economic inequality. The article is entitled, appropriately – Not Leveling With Us.   The books debunked by Voegeli are: The Great Divergence: America’s Growing Inequality Crisis And What We Can Do About It by Timothy Noah and The Price of Inequality: How Today’s Divided Society Endangers Our Future by Joseph Stiglitz.

Readers of WWTFT may have read a recent piece here dealing with the liberal panacea of equality.   Voegeli approaches the subject by methodically dismembering the arguments of Timothy Noah and Joseph Stiglitz.

Voegeli poses the same question asked in our earlier article.  If everyone’s quality of life improves, what does the ratio of improvement matter?  Voegeli observes:

To ask the question in that way is to distinguish inequality, on the one hand, from poverty and economic insecurity on the other.

Both of the authors Voegeli critiqued neglect to make this distinction.  Instead their thinking is focused on the evils of inequality.  According to the Brookings Institution, 81% of Americans who were children in 1968, had higher adjusted real household incomes than their parents. But this doesn’t address “the problem” of inequality.

Tmothy Noah acknowledges these findings and artfully figures out a way to make them bad.  Voegeli summarizes:

Noah takes note of the Brookings findings, too, but only one kind of mobility interests him.  If my household income is 30% higher than my parents’ when they were my age, I’ve had upward absolute mobility.  If, however, most people my age have incomes that are 60% greater than their parents did, I’ve experienced downward relative mobility.   I’m better off than my parents in terms of purchasing power, but worse off in the sense that the proportion of Americans with higher incomes than mine is larger than the proportion that once had higher incomes than my parents.  The former counts for very little while the latter is crucial because, writes Noah, “We are social creatures and we establish our expectations in relation to one another.”

Stiglitz also despairs of this “relative deprivation.”

These authors are emblematic of the Left’s skewed worldview.  In their view, it is better that everyone should be worse off and more equal, than everyone enjoy an 81% improvement in their standard of living, but be less equal, with some being “relatively deprived.”   The Left is manipulating their base to appeal to their envy – ignoring absolute reality.  “Fairness” is defined as equality – even if everyone starves.

As Leon Aron writes in Roads to the Temple:

Homo Sovieticus was envious of his neighbor who managed to earn more:  “better that my cow dies than that my neighbor has two.”  The squalor of the Soviet village, concluded a leading economic essayist, was “retribution” for over five decades of “violating common sense, violating everything that urges man to a normal, conscientious labor.”

The Left would have us create our own version of Homo Sovieticus.

Both Stiglitz and Noah propose much higher progressive tax rates to go after those filthy rich. They think doing so will solve the debt crisis.  Of course, the numbers don’t add up.

Further more, as Voegeli points out,

.. if we want the rich to bear a larger and larger portion of our national tax burden, it will become increasingly important for them to go on being rich and getting richer. “Some thirty years ago [1984 in fact], the top 1 percent of income earners received only 12 percent of the nation’s income.”  Stiglitz writes (emphasis in the original).  “That level of inequality should itself have been unacceptable; but since then the disparity has grown dramatically.”  If we had maintained 1984’s unacceptable but less unacceptable distribution of income, however, the hypothetical 100% tax bracket on the top percentile would have yielded $625 billion in 2010.

Back in 2010, the government’s outlays were $3.456 trillion, and its revenues were $1.29 trillion.  Adding another $.625 trillion still leaves a deficit of over a trillion dollars.

In the words of John Adams, “Facts are stubborn things.”

Facts are one thing and demagoguery is another.  In Designing a Polity, James W. Ceaser identifies envy as one of three demagogic appeals – the other two being fear or hope.

“Envy, a kind of ‘pain [felt} at the good fortune of the other,*’ is the staple of class-based demagoguery. The demagogue calls attention to something that many lack– be it wealth or position or honors–and tells his listeners that they are entitled to the object of their wishes…Envy is elevated to the status of a principle by being confounded with arguments of democratic justice.”

That sounds like an analysis of a typical Obama speech.

Voegeli connects the public policies advocated by Stiglitz and Noah and the Democratic Party platform, with the additions of “ proposals the platform committees found too provocative to include: increase regulation of business, especially finance; revive the labor movement; and spend much more on social welfare programs…. The familiarity of such proposals supports the conclusion that egalitarianism is the ultimate rationale for everything the Democratic Party wants to do, but also the alternative interpretation that everything Democrats want to do anyway has the bonus effect of curbing inequality.”

Voegeli’s essay explains a great deal about what passes for thinking on the Left.  It is available on line and well worth reading in its entirety.

*Aristotle, Rhetoric, 1108b

3 comments

1 William Voegeli { 09.25.12 at 3:47 pm }

Here’s additional discussion of the same subject: http://www.claremont.org/publications/crb/pageid.2752/default.asp

[Reply]

Martin Reply:

Thanks, I have been reading it. You have been doing a great job debating Noah.

I loved your closing argument:


The right amount of economic inequality is, by contrast, a philosophical rather than a technical question. Divergence mentions, but neither endorses nor rejects, the “difference principle” in A Theory of Justice (1971) by John Rawls, according to which economic and social inequalities are acceptable if, but only to the extent, that they conduce to “the advantage of the least favored.” If you would proclaim yourself a Rawlsian you would be taking a bold, politically controversial position, but also a coherent one. Unless and until you do so, your stance on the distinction between tolerable and intolerable economic inequality is the same as Justice Potter Stewart’s on pornography: he couldn’t define it but, “I know it when I see it.” You can understand, I’m sure, why ACLU-types were reluctant to constrain the freedom of expression on the basis of Stewart’s gut feelings. It’s the same reason CRB-types are reluctant to constrain the freedom of contract on the basis of yours.

[Reply]

2 Jeff Edelman { 09.25.12 at 10:25 pm }

This whole tax-the-rich-to-lessen-the-economic-inequality mantra socialist perpetually espouse is a strawman. It’s a fairy tale. Countries with the least amount of economic disparity are those with the greatest degree of capitalism/free markets. The economic disparities of the US have been created by its government’s fiscal and monetary policies — abandoning the gold standard, printing fiat money (quantitative easing), artificially holding down interest rates and fractional reserve banking. All of which either indirectly or directly creates inflation. Quantitative easing is one of the biggest causes of this disparity because those first to receive these monies also receive the greatest value. As the money trickles down through the economy, its value becomes diluted. Envision a drop of dye in a swimming pool. All the government has got now to print or redistribute is ever devaluing money. It’s running on the treadmill. It can never cover the gap. What the government takes in taxes is lost to the private ecomony where real wealth is created.

[Reply]

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