Income Inequality in the U.S.

This is an interesting paper (abstract) by economist Edward Glaeser exploring why there’s so much income inequality in the U.S. as compared to other rich, European nations. Glaeser posits that ethic heterogeneity and different kinds of political institutions are the main drivers.

He also touches on American exceptionalism. 60% of Americans believe the poor are lazy, while only 29% of Europeans think so, even though the prospects for economic mobility are virtually the same. How we are indoctrinated – in schools, in society – makes a big difference. Why are Americans so uncomfortable with socialist ideas, and why do so many of us think the poor should just go to work, whereas Europeans view the poor as "good people beset by forces outside of their control"?

(Hat tip: David Roth)

2 Responses to Income Inequality in the U.S.

  1. There’s a lot of overgeneralization going on here, but nonetheless it’s correct to observe that there’s a fundamental philosophical difference between those who believe in self-reliance and those who believe in paternal government.

    The Kuznets curve which Glaeser references is a theory – and is ‘proof’ of nothing. Having said that, it’s been proven repeatedly throughout history that overall societal wealth is correlated with greater inequality. Is it better for society to be more wealthy overall? Or for it to be more equal?

    I don’t believe there’s a 100% ‘right answer’ to this question. Which is ‘better’ is directly related to one’s core belief system. Thomas Sowell’s ‘A Conflict of Visions’ is a great book on the topic if you’re interested.

  2. Ben Casnocha says:

    Chris:

    Points well taken. I agree that there’s not a 100% answer to “Is it better for society to be more wealthy overall or more equal?” but it appears that Western European nations have managed to be both extremely rich and decently equal. Best I understand, the gap in the U.S. continues to rise. This should be cause for reflection.

    I read Conflict of Visions but it’s been awhile, and I ought to re-read it.

    Cheers,
    Ben

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