From bad22ca9ffa31317789973d984ebbdf61da54858 Mon Sep 17 00:00:00 2001 From: =?UTF-8?q?Nicol=C3=A1s=20Ortega=20Froysa?= Date: Wed, 7 Jul 2021 16:52:43 +0200 Subject: [PATCH] New blog post on income inequality. --- ...e-inequality-is-not-directly-important.cfg | 5 + ...-inequality-is-not-directly-important.html | 106 ++++++++++++++++++ 2 files changed, 111 insertions(+) create mode 100644 blog/posts/0136-why-income-inequality-is-not-directly-important.cfg create mode 100644 blog/posts/0136-why-income-inequality-is-not-directly-important.html diff --git a/blog/posts/0136-why-income-inequality-is-not-directly-important.cfg b/blog/posts/0136-why-income-inequality-is-not-directly-important.cfg new file mode 100644 index 0000000..f5ec2e3 --- /dev/null +++ b/blog/posts/0136-why-income-inequality-is-not-directly-important.cfg @@ -0,0 +1,5 @@ +filename = 2021-07-07-why-income-inequality-is-not-directly-important.html +title = Why Income Inequality is not Directly Important +description = When speaking about the topic of poverty in economics, it is very common nowadays to speak of income inequality. Yet this is not a very helpful metric, as it doesn't measure what we're trying to know: the well-being of people in a country. +created = 2021-07-07 +updated = 2021-07-07 diff --git a/blog/posts/0136-why-income-inequality-is-not-directly-important.html b/blog/posts/0136-why-income-inequality-is-not-directly-important.html new file mode 100644 index 0000000..709c0b0 --- /dev/null +++ b/blog/posts/0136-why-income-inequality-is-not-directly-important.html @@ -0,0 +1,106 @@ +

Originally I had planned to make the title of this post "Why Income +Inequality is not Important", but I realized that this could be +misleading as to what I'm actually trying to express. Although I'm +unsure that the title I have chosen will be much different.

+ +

When talking about economics in a country, income inequality seems to +come up quite often, especially among those who are more left-leaning on +economic issues. It's generally hard to argue the position that it is +good for a country to have more income inequality - which is not to say +there aren't people who may try to defend this position - and in fact +it's quite normally described as being a bad thing, being representative +of an unjust society. However, this is not the focus of this post. +Instead, I'd like to focus on whether income inequality is a useful form +of measuring the well-being of the people in a country.

+ +

According to the OECD, income inequality is "an indicator of how +material resources are distributed across a +society."[1] As such, we can say it is an +indication of the difference of access to material resources from the +most to the least wealthy. However this definition has a flaw in it if +what we're trying to look for is well-being, and not simply difference +in income.

+ +

With this I'm not trying to deny that there is indeed a correlation +between income inequality and median income. In the following graph I +plot out over a dozen countries according to their median disposable +income and the Gini Coefficient.

+ +
+ Income Inequality vs. Median Income Graph +
+ Sources: "List of Countries by Income Equality" and + "Disposable Household and per Capita Income" from + Wikipedia[2][3] +
+
+ +

From this graph, there is a clear correlation between income +inequality and median income. Although there may be a few outliers, that +is the general trend. Yet if we're caring about the well-being of human +persons, then why would we use an indicator that does not directly +measure this? If we care about the well-being of all people in a country +then we shouldn't be looking at income inequality, or even median +income, we should be looking at the lowest income household in every +country. Reason being, we care about the human person, and while income +inequality may be correlated to the median income, it is better to have +a society with a large income inequality but where the poorest household +can afford to live a dignified life, than a small income inequality but +where the poorest household (and likely most households) are unable to +live dignified lives. In other words, we should be looking at a more +direct measurement of the well-being of the members of a society who are +worst off, and assure their dignified living.

+ +

The problem with focusing too much on income inequality is it can end +up turning into envy: we envy what the rich have and wish to either +bring them down, or for everyone to have what they have - regardless of +how unsustainable that may be. It leads to a lack of contentment with +what God has given us, and rather than focusing on the poorest members +of society, we turn ourselves into victims and believe the solution is +by bringing down those who are more well-off. Which is not to say that +some assets will not require redistribution, but the intention of that +redistribution should not be a sense of envy or hatred towards those who +have, but rather to simply provide the poorest members of our society +with a means to sustain themselves and live dignified lives.

+ +

To put this in a different manner, would it really matter if there +were a few really rich people, but every man still had a dignified job +such that he could sustain himself and his family? The anger and +unhappiness that manifests itself in this hatred of the rich seems to +simply be out of envy. But rather than advocating, like many of the +Libertarian persuasion would, that everyone should find their own way to +being rich, my line of arguing is to look at what we already have and be +content with it. Why do we need riches? Ultimately they will not bring +us joy, and may even risk our eternal happiness if we get too attached. +Our Lord Himself said that "It is easier for a camel to go through the +eye of a needle, than for a rich man to enter into the kingdom of God" +(Matt. 19:24). But to envy the rich is perhaps worse, as it stimulates a +hatred of others, which is sinful by nature.

+ +

Therefore, let's take care as to use the data that best represents +what we're actually trying to argue, and make sure that we're trying to +fix the right thing.

+ +
    +
  1. + + Society at a Glance 2011: OECD Social Indicators + +
    2. +
  2. + + List of Countries by Income Equality - Wikipedia + +
    3. +
  3. + + Disposable household and per capita income - Wikipedia + +
    4. +