Re: Rich Getting Richer--NY Times

[briand@xxxxxxxxxxxxxxxxxxx (Brian Carnell)]

On Mon, 24 Jun 1996 10:10:40 -0500, dhenwood@xxxxxxxxx (Doug Henwood)
wrote:

>At 11:05 PM 6/23/96, Brian Carnell wrote:

>Welcome back, bonehead; long time no hear.

Hey, it's all the love I feel that keeps me coming back (actually I
was sick).

>Two points. First, as no less an authority than Adam Smith - the political
>economist, not the Wall Street fellow - said, poverty is a matter of "the
>custom of one's country," not some absolute level of income. To be poor in
>1996 is different from having been poor in 1950; to be poor in Guatemala is
>different from being poor in the USA. Besides, using a price index to
>measure changes in "real" incomes over the course of 46 years is bad
>economics; even a bourgeois dismal scientist would have reservations.

No, actually it's done quite easily.

If in fact it is bad economics to track real incomes over time, then
of course we have to throw out just about all of the Marxists claims
about economic change (or lack thereof).

As for the relative poverty bit (poverty in Guatemala vs. poverty in
the United States), that is precisely the point. Obviously without
massive redistribution of income, there is always going to be a bottom
20%, and there will always be people who make significantly less than
the highest paid people.

But the absolute condition of the economic position at every level has
improved drastically. Just look at asset analysis of the poor, for
example. Something like 35 percent of the poor own their own homes.
The differences in diets is extremely close.

Poverty in the United States is more about relative income disparities
rather than a phenomenon of large numbers of people being unable to
meet basic needs.

On the other hand, there are good reasons for income inequality --
structural reasons in the nature of capitalist economies that ensure
there will always be disparities. As long as the real wages of
everyone rises over time, however, this is a good thing.

Obviously the socialist analysis is that this is not a good thing, but
I think the last 50 years demonstrates that this is nonsense.

We've seen what happens when socialists try to completely equalize
economic outcomes.

>Second, there was a tremendous growth in incomes in the former USSR and
>Eastern Europe from the 1950s through the mid-1970s.

Huh? You're not relying on the Soviet statistics which are almost
meaningless, are you?

Perhaps you can explain why if there was a tremendous growth in the
USSR economy during the 1950s and 1970s the entire economy was on the
verge of collapse in the 1980s.

>Question, Brian: would you rather live in Cuba or Haiti?

Well, that's sort of a toss-up. It's like asking would you rather be
executed by Idi Amin in Africa, or Hitler in Europe. Either way you
don't have much hope.

Of course the problem in both nations has been dictatorial rule, in
Haiti's case supported by the U.S. and in Cuba's case opposed.

I guess I'd have to go with Cuba, because if I make it from Cuba to
Florida I'd probably have less chance of being sent back.

-----------------------------------------------------------------
Brian Carnell                   http://www.net-link.net/~briand/
briand@xxxxxxxxxxxxxxxxxxx


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