QOTD: On politics and economics

I was chatting about some policy recently with another economist, when they came out with this great line about how some policy was being reported (overseas):

Every political editor loves it and all the economics editors are unimpressed.

What does this mean?  What does this imply about politics and economics?  I’ll leave it up to you to discuss that – I’ll just giggle ;)

QOTD: Andrew Dickson and Bill Kaye-Blake

While the blog was out of action I noticed a lot of people linking the following article by Andrew Dickson and Bill Kaye-Blake (from Groping to Bethlehem).

All the links focused on how the article made the case for a tax on sugar.  That is fine and all, it was an externality case that we can discuss, appeal to evidence and value judgments on, and then decide whether we agree or not.  In fact, I get the impression that is the exact point that the authors are raising after setting up the pro-argument.

However, I didn’t get the impression that many people made it to the second half of the article (given the way it was used) – and the second half was absolutely glorious.

The second half starts with this: Read more

QOTD: John Roemer on Equality of Opportunity

Unrelated note:  I am not around too much atm, so as you may have noticed I am not replying to comments at the moment.  I intend to catch up on the comments I missed later in the week, so please still comment.  Things are a tad busy is all ;)

From the start of his book “Equality of Opportunity” comes the following quote from John Roemer.  Note that the two poles, non-discrimination and leveling the playing field, are described earlier in the book.  Also, equality of opportunity isn’t necessarily the only principle of distributive justice.  However, taking these as given we have:

Among citizens of any advanced democracy, we find individuals who hold a spectrum of views with respect to what is required for equal opportunity, from the nondiscrimination view at one pole to pervasive social provision to correct for all manner of disadvantage at the other.

Common to all these views, however, is the precept that the equal-opportunity principle, at some point, holds the individual accountable for the achievement of the advantage in question, whether that advantage be a level of educational achievement, health, employment status, income, or the economist’s utility or welfare.

Thus there is, in the notion of equality of opportunity, a “before” and an “after”: before the competition starts opportunities must be equalized, by social intervention if need be, but after it begins, individuals are on their own.  The different views of equality of opportunity can be categorized according to where they place the starting gate which separates “before” from “after”.

Read more

Quote of the Day: Kolm on inequality

One of the forefathers of modern income inequality analysis, Serge-Christophe Kolm, started one of his most famous papers (REPEC) in the following way:

Many people consider the reduction of economic inequalites as a basic aim of society. Such ideas are, however, largely nonoperational, sterile, and even meaningless, as long as what is called inequality is not stated with precision. This is so because, as well appear below, different measures of inequality give widely different, and even opposite, results. Such policy which diminishes some apparently reasonable measure increases other ones.

This is no small point.  While it is nice for us to bang on about “reducing inequalities”, it is nothing more than empty platitudes if we aren’t willing to discuss the trade-offs associated with individual policies.

Also, let’s not forget this quote:

Few concepts are as meaninglessly used as that of inequality.

But this is not because he thinks analysing issues of social justice don’t matter – in fact it is the complete opposite!  He believes that multi-dimensional ethical issues deserve careful and specific analysis, rather than being thrown into one broad, and close to meaningless, term.

Like exchange rates, productivity, GDP, and inflation, inequality is a broad macro(social/economic) term that can be used as a touch stone to go on to think about other real issues.  But it should not be allowed to become more important than these issues, and an understanding of the trade-offs that do exist when we go to make policy choices.

QOTD: Mark Carney

On being challenged over an evasive answer in a Committee hearing, Carney quips:

I didn’t get to my position by being overly precise when I didn’t need to be.

Yet bloggers spend much of their time proffering opinions on questions nobody is asking.