Tyler Cowen on Inequality and Mobility, and a Conversation with Jeff Sachs on The Future of Economic Development

|Peter Boettke|

One of the many amazing things of working with Tyler Cowen is that he seems to be everywhere raising provocative questions and pushing those around him to be ever more curious about the world.  In the NYT he is raising important points about income mobility.  Our colleague Richard Wagner likes to make this general theoretical point by way of examining the first still photos of a horse during a race -- mid-gallop the horse has all four hooves off the ground.  Such a picture may give the wrong impression that horses fly. But horses don't fly, they gallop.  If you were viewing a moving picture, then you would never make such an error.  

As Tyler puts it:

To be sure, we need to retain the concept of inequality in our thinking, if only to understand public perceptions of the economy or how pay structures are evolving inside corporations. Still, we should be cautious in using “inequality” as an automatically negative term. A lot of inequality is natural and indeed desirable, because individuals have different talents and tastes and opportunities can never be fully equalized.

The concept of mobility helps us distinguish between “good inequality” and “bad inequality.” Reductions in inequality can follow from a leveling in either direction — by elevating the poor or pushing down the wealthy. It is the plight of the poor that we most need to improve.

As our colleague Gordon Tullock used to stress, if you really care about inequality then you should focus your attention on the less developed world and not those relatively worse off in the developed world.  The gap in living standards between those in Sub-Saharan Africa and Western Europe and North America is clearly staggering.  On Tuesday April 7th, Tyler will have an extended public conversation with Jeff Sachs on The Future of Development.

Pretty amazing stuff going on and around GMU.

Comments

[Junaid]

Everyone is concerned about their future, but I believe that too much thinking will always create problem, therefore we need to just focus on getting education as that will definitely secure our future. I am educated with help of OctaFX broker, it’s a worldwide recognized company with been regulated and have outstanding offers which includes the massive 50% bonus on any amount of deposit minimum of just 5 USD, so that really secures our career and help us succeed to make good profits.