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Comments on: Perspective is great – income http://www.tvhe.co.nz/2013/06/17/perspective-is-great-income/ The Visible Hand in Economics Tue, 18 Jun 2013 09:19:00 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2013/06/17/perspective-is-great-income/#comment-41188 Tue, 18 Jun 2013 09:19:00 +0000 http://www.tvhe.co.nz/?p=8846#comment-41188 In reply to Jason B.

Ahhh good point, and I can see where that is coming from for sure. I’ll try to be more mindful of that in the future – but I can’t promise I’ll manage it.

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By: Jason B http://www.tvhe.co.nz/2013/06/17/perspective-is-great-income/#comment-41186 Tue, 18 Jun 2013 08:23:00 +0000 http://www.tvhe.co.nz/?p=8846#comment-41186 In reply to Matt Nolan.

Ha, this is a good follow-up. I was just concerned you were falling into the fallacy/trap I sometimes hear, along the lines of “You can’t complain about **given unpleasant event thrust upon you that isn’t life-threatening**. Think about **given life-destroying events occurring overseas**.

But your clarification makes it clear this is not the case. Cheers.

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By: Matt Nolan http://www.tvhe.co.nz/2013/06/17/perspective-is-great-income/#comment-41185 Tue, 18 Jun 2013 07:42:00 +0000 http://www.tvhe.co.nz/?p=8846#comment-41185 In reply to Jason B.

Fair point, I’ll try to clarify what I meant.

I certainly don’t think we should ignore within-country income inequality. I was more stating the following:

1) Cross-country income inequality is vastly greater than within-country income inequality.

2) The economic method tends to presuppose treating individuals equally

3) Within countries, non-economists appear to focus more on within-country income inequality

4) As a result, economists tend to get relatively more “would up” (in a relative sense) about cross-country income inequality than non-economists.

Now I’m trying to avoid normative claims about how much we should be concerned about inequality or any such – but instead trying to defend the fact that economists often seem to argue more passionately for transfers to the third world than they do for transfers to citizens within their own country. By putting down the income figures, I hoping to give that some sort of perspective.

We could go further, and state that the real distinction also include a separate look into the costs of “inequality” as compared to “poverty”. And this would be a fair point. But taking things to their logical conclusion, I need to learn to write posts more clearly in the future so I don’t have to write so many comments trying to tease out what I actually meant 🙂

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By: Jason B http://www.tvhe.co.nz/2013/06/17/perspective-is-great-income/#comment-41184 Tue, 18 Jun 2013 06:58:00 +0000 http://www.tvhe.co.nz/?p=8846#comment-41184 I think it’s quite clear that development economics is the most important area in social science. There’s so much potential for improving the lives of billions of poor people.

What I don’t understand is your statement: “It is this sort of recognition that makes economists get so wound up
about global income inequality rather than income inequality within a
country.”

Why the comparison with inequality within a nation? Aren’t many labour economists concerned about the causes of inequality, and why it has risen so much in the last few decades in developed countries? Development economics is certainly more important than general macro (getting a better long-term trend is a bigger deal than minimizing the fluctuations around a given trend), but I haven’t seen anyone saying we should focus less on macro.

Why the implication that we should get perspective and worry less about within-country inequality? Why not simply say we should be much more concerned about global inequality, in addition?

Perhaps you’re arguing that we need fewer labour economists and more development economists. Or that people have a certain amount of mental capacity for “concern” about inequality, and the current balance is wrong. I’m not sure how plausible this is….

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