Libertarian Dismissals Of Inequality

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Rebuttals to libertarian's five dismissals for problems of extreme inequality: it is market-based just dessert, it is needed for incentives, it is freedom, it is the fault of government, and it is unimportant. All five are wrong.

While inequality can be market-based, it may not be justly so. It obviously has other bases as well, as any study of income mobility will show.

The greatest lessening of inequality ever was the creation of the middle class by government policy.

Inequality is extremely important: it greatly affects health and productivity.


Adam Smith is not the antidote to Thomas Piketty [More...]
"Smith’s attacks on the laws that allow the concentration of wealth, primogeniture and entail, are not simply policy prescriptions; they are the lynchpin of his explanation for the delayed growth of Europe before 1700."
Fighting Poverty And Inequality The Proven Way [More...]
David Brooks suggest improving education to fight poverty and inequality. 40 years of history demonstrates that does not work. Transfer programs do work.
Greg Mankiw and the Gatsby Curve [More...]
While Greg Mankiw is a conservative, his economics position is often repeated by libertarians. Three lines of critique against justification of the one percent plus Paul Krugman's take on historical change.
How Intellectual Property Reinforces Inequality [More...]
"Economic power often speaks louder, though, than moral values; and in the many instances in which American corporate interests prevail in intellectual property rights, our policies help increase inequality abroad. In most countries, it’s much the same as in the United States: the lives of the poor are sacrificed at the altar of corporate profits. "
How Thomas Piketty Destroys Libertarian Talking Points [More...]
"The wrong-headed policies promoted by libertarians and their ilk, who hate any form of tax on the rich, such as inheritance taxes, have ensured that big fortunes in America are getting bigger, and they will play a much more prominent role in the direction of our society and economy if we continue on the present path."
Inequality and the arts [More...]
Tyler Cowen's defensive observation that inequality allows patronage of the arts gets properly skewered by Henry Farrell and assorted commenters such as Corey Robin.
Inequality By Design: It Is Not Just Talent and Hard Work [More...]
"If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren't interested in changing things."
Is Life Unfair? Milton Friedman and John Rawls [More...]
John Rawls smacks down Milton Friedman's idea of passivity in the face of inequality.
It is Not a School Problem
Diane Ravitch used to be a supporter of school reform. But now she is the author of Reign of Error: The Hoax of the Privatization Movement and the Danger to America's Public Schools. The problem is poverty and segregation.
Liberty, Equality, Efficiency (2 links)
Inequality of outcome is a drag on economic growth according to recent studies by the IMF. "In short, what’s good for the 1 percent isn’t good for America. And we don’t have to keep living in a new Gilded Age if we don’t want to."
Life Spans Shrink for Least-Educated Whites in the U.S. [More...]
Educational inequality correlates strongly with decreases in life expectancy in whites, and especially among white women. High inequality isn’t just unfair, it kills. Libertarians generally suggest market solutions: but equality is not something the market provides.
Median incomes aren’t keeping up with growth- however closely you look [More...]
"Over the period 1986–2015, the size of the economy per person grew by about 59%, whereas individual median salary income plus our estimate of non-wage compensation grew by about 31%."
My Take on the Seven Things We Need to Focus on for Equitable Growth in America [More...]
Brad DeLong presents seven progressive ideas that promote growth and simultaneously reduce inequality.
Of the 1%, by the 1%, for the 1% [More...]
Nobelist Joseph Stiglitz describes where our inequality comes from, how bad it is, and the likely consequences.
Redistribution is not bad for economic growth: Evidence from the IMF [More...]
“…redistribution appears generally benign in terms of its impact on growth; only in extreme cases is there some evidence that it may have direct negative effects on growth. Thus the combined direct and indirect effects of redistribution — including the growth effects of the resulting lower inequality — are on average pro-growth.”
Squeezing the rich is good: even when it raises no money [More...]
Three examples of how unrestrained income for the wealthy is socially harmful and should be taxed, even if it doesn't raise more money.
The Cost of not Redistributing Money Part 1 [More...]
"... from a utilitarian point of view, the United States is ‘wasting’ (again, not factoring in the costs of redistribution), at least a third and a bit of its income through the distributive inefficiency of its income allocation."
The End of Loser Liberalism: Making Markets Progressive (book, online)
Dean Baker's online book describing how upwards distribution through markets is a result of government policy (due to capture by the rich), and how to change to more equitable polices.
The Four Biggest Right-Wing Lies About Inequality [More...]
The right wing lies about job creation, just desert, opportunity and minimum wage. Demand creates jobs, pay rates depend on bargaining power, opportunity requires better education, and minimum wages are good for the economy and the poor.
The importance of redistribution [More...]
"democratic egalitarianism"--the idea that individuals flourish best in a free society that allows them to choose democratically the rules that govern their lives, with the understanding that the institutions must be sustainable and must allow all individuals to flourish, not just a select few.
The Inefficiency of Inequality [More...]
"This problem, which economists call inefficient allocation, is present in the market for opportunities as well. [...] To a great degree, access to opportunity in the United States depends on wealth. Discrimination based on race, religion, gender, and sexual discrimination may be on the wane in many countries, but discrimination based on wealth is still a powerful force."
The libertarian solution to inequality [More...]
"So, the libertarian solution to the problem of inequality is to socially persecute anyone who talks about inequality?" A strange notion of liberty.
The Spirit Level: Why Equality is Better for Everyone (book) (1 link)
Wilkinson and Pickett make an eloquent case that the income gap between a nation's richest and poorest is the most powerful indicator of a functioning and healthy society. -- Publishers Weekly
The War Over Poverty [More...]
Paul Krugman points out that the war on poverty has been a huge success with important long-term effects when you look at the data. And that "the problem of poverty has become part of the broader problem of rising income inequality, of an economy in which all the fruits of growth seem to go to a small elite, leaving everyone else behind."
Union decline and rising inequality in two charts [More...]
"By most estimates, declining unionization accounted for about a third of the increase in inequality in the 1980s and 1990s." Union decline is a result of conservative policy.
Why Economists Are Finally Taking Inequality Seriously [More...]
"Inequality could be a natural outcome of capitalist systems, and market failures could magnify unequal outcomes, but the main point is that economic research has not yet settled these fundamental questions. "
Why Inequality Matters and What Can Be Done About It [More...]
Inequality is not "natural", nor is it "just deserts": it is in large part a result of policy, which we can change. Economic inequality is harmful to democracy, because it causes political inequality.


[...] the idea that people have full liberal property rights in their pre-tax income is unwarranted. They participate in a co-operative venture with others in society subject to certain conditions, and those conditions include one that part of “their income” already belongs to the wider society, via the state. This point, hated by libertarians, defeats the widespread view that people are having “their money” taken off them: it wasn’t theirs to start with.
Chris Bertram, "Squeezing the rich is good: even when it raises no money"
Working people are far, far freer than slaves or indentured servants, but they are not as free as their bosses and not nearly as free as they might be. [...] In a society that is forever boasting of its dedication to democratic ideals, employees are, however affluent they may have become, members of a subordinate, unmistakably lower, class.
Richard Cornuelle, "The Power and Poverty of Libertarian Thought", Cato Policy Report Volume XIV Number 1, pp. 12-13.