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Comments on: Too little economics caused the crisis/inequality http://www.tvhe.co.nz/2011/11/23/too-little-economics-caused-the-crisisinequality/ The Visible Hand in Economics Thu, 24 Nov 2011 20:36:52 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2011/11/23/too-little-economics-caused-the-crisisinequality/#comment-35872 Thu, 24 Nov 2011 20:36:52 +0000 http://www.tvhe.co.nz/?p=6554#comment-35872 In reply to Millinillion.

Relative poverty issues are interesting – I find them to be a lot more about attitudes then anything else, and in context making sure there is equality of opportunity seems sufficient for me.

Absolute poverty is of course a different beast, one that we shouldn’t allow given the amount of wealth and technology we have available.

Agreed regarding the initial endowment and concentration, these are huge issues – and definitely part of the reason we have redistribution.  I think in essence some of the protesters understand this more than some people writing on the issues.

]]> By: Millinillion http://www.tvhe.co.nz/2011/11/23/too-little-economics-caused-the-crisisinequality/#comment-35788 Tue, 22 Nov 2011 22:15:37 +0000 http://www.tvhe.co.nz/?p=6554#comment-35788 I think it’s worthwhile distinguishing “absolute” scarcity (i.e. subsistence poverty) which is largely overcome by technological progress. But this generally requires incentives  which (in a market economy) lead to inequality as a byproduct and so “relative” scarcity between people. It seems after a certain point some prefer trade-offs that are not pareto optimal in the strict sense: i.e. in a two person society, they would prefer Ana and Ben with equal wealth after a decision, rather than Ana slightly better off and Ben far better off. 
Also the intial endowments at any given time include lots of power to one particular group then it might be difficult to redistribute, but that says more about politics than economics. This is my impression of what the Occupy St. Paul’/Wall Street protests are about.
Finally, it’s great to see those Havard students at least quitting early – there would no doubt have been a wholesale riot when they were suggested to assume, say, universal Cobb-Douglas utility functions for the whole of society.
 

Interesting that the Havard class

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