Thursday, January 11, 2007

Cafe Hayek on Income Inequality

I've taken to commenting on posts at the Cafe Hayek. Scroll down and you'll see what I wrote:

There are many disconcerting things about the income inequality. 40 million people are uninsured in the United States. 3 billion people in the world have less combined wealth than 200 people. People are starving while there is plenty of resources for all. Meanwhile, the Earth is being destroyed by unbridled, irresponsible consumerism.

The income inequality encourages inefficiency when you think of efficiency as distributing resources to people who need them and are certainly willing to work for them. Simply because these people grew up in an economy which cannot produce goods that we like doesn't mean they don't deserve to eat. We've made such vast productivity gains that laborers aren't really all that necessary. Soon the US economy is going to have to come to grips with the fact that the retail sector could be entirely phased out and replaced by managers overseeing shops, or online ordering.

Soon we're going to have to decide what to do with all these people who are actually incapable of integrating themselves into the "knowledge economy" -- with our huge advances in productivity, why can't we give them free healthcare, food stamps, and housing vouchers? Perhaps a small stipend (negative income tax credit) for other things. That leaves them with an incentive to work if they want further consumption, but still enough money to live. I'd venture to say many, many people would be happy to simply have a small house, basic food, the internet (free wireless!), and a small amount of discretionary income. And, in fact, that would be a very good thing - it would reduce the burden on the environment as we phase into a more equitable and highly populated world. The fact is that there are scarce resources, and the Earth does have a limit - we cannot support 9 billion people living like the 500 million in the developed world currently do. The market will show us that, but in order for people to live when they no longer have anything to offer, the government will inevitably have to tax the capitalists and fund these services.

There is nothing wrong with a post-materialist economy!

(What I would add is that people who are not employed are not necessarily not contributing to society. In the future people may be more and more inclined to contribute to society without being paid for it -- through community service, blogs (both word and video), research (editting Wikipedia), political campaigns, learning, art ect. Perhaps rewards could even be tied to such efforts by the government. It may be that even the media and the knowledge workers will soon be phased out as the volunteer efforts by internet users continue to forge ahead.)

1 comment:

ADHR said...

It's a nice idea. It would require a radical change in how people view property and money, though. Currently, we're still in the grips of the Locke-styled idea that we own our labour and should be compensated for expending it. This has to be replaced by another idea -- such as Locke's other claim, that everything in the world is owned in common -- in order for a general redistribution plus income guarantee to get off the ground.