Dan Carlin’s Common Sense podcast from January 31, 2015, used the most recent State of the Union and subsequent political maneuvering as a launching point to discussing the nature of work and similar themes. Carlin notes that he hates the term “income inequality” because it frames the issue of wealth disparity in ways that are potentially unhelpful, but struggles for a better term.
His stuff is always worth a listen. This particular podcast reminded me of some prior posts I had done, particularly this one entitled “Technology and the Future of Work.” One question we have to ask ourselves is whether what we designate as the free market, if unregulated, will function in a sustainable way. And, if not, what sorts of regulations are necessary to create that sustainability. Obviously, I think regulation of some sort is necessary. After all, the very concept of property (as distinguished from “stuff you happen to possess at the moment” and the manner of its enforcement is itself regulation of sorts. Now we’re just haggling over the price.
We also have to come to grips with our goals for an economy. Maximum productivity sounds like a good goal until you think of the distribution. Lets say the unregulated free market produces $100 worth of value but $98 goes to one guy and the remaining $2 is divided up so that the remaining 99 people get about $0.02 apiece. Then lets say that regulations put a serious drag on productivity, cutting it in half so that the regulated economy produces only $50 in value. But, let say that the distribution is much closer to equal – maybe the one guy gets $10 while the other 99 get more like $0.40 apiece. Which economic system is better?
One of the things Carlin mentioned was a billionaire commenting that the masses simply needed to reduce their expectations. Maybe the economy has changed such that the average job simply isn’t going to make you able to afford a suburban home and an iphone. This plays somewhat on an idea I’ve had for awhile – that it would be useful for the State to provide a model budget for its citizens based on various income levels. My initial impulse for this was that a lot of citizens are bad with money, and there are often complaints that poor people have enough to live on, but they’re making poor spending choices (e.g. cable, cell phones, tattoos, cigarettes). Perhaps a model budget would help — one for poverty level, one for median income, and maybe model budgets for other income levels. On the other hand, it would be a little uncomfortable if that model budget for median income revealed that the middle class simply could not afford the things we normally associated with “middle class.”
A certain amount of income inequality is very sustainable and, in fact, desirable. If there is that pot of gold available if you just work a little harder, that is quite an incentive. But, at a certain point, the folks on the bottom just aren’t going to give a damn about the productivity of the system and the underlying government structure that supports it. Carlin mentioned the people in Greece and their recent lurch to the left in the wake of austerity measures. How much of a reduction are the people at the top of the heap willing to take in exchange for a sustainable system? Maybe the guy getting $98 in the unregulated market is willing to go to $10 if his alternative is the peasants snapping, wrecking the system, and just murdering him for his stuff (think French & Russian Revolutions).
If we don’t rely solely on the free market to make the determination, how do we decide who gets what and under what circumstances? Well, that’s politics.
Not to get too lecture-y, but having a cell phone is not, of itself, a sign of poor budgeting. For poorer people, who tend to move around a lot, it is easier to have a cell phone than to disconnect and reconnect a land line. A lot of jobs require an employer to be able to reach employees at all hours. Having a cell phone may be better than having to be home to get calls from work. Also, a lot of people have phones that look fancy, but are not the latest iPhones, Samsung, LG, etc. A lot of poor people have “Obama” phones. I think they should be called “Reagan” phones, but whatever the name, having one is hardly a sign of poor budgeting skills.
One of my in-laws has done a lot of public health research that involved poor populations. He found that while poor people have cell phones, they typically do not use them in the ways that middle class and wealthy people use them. Phone numbers change constantly. If the minutes run out, or the great deal they got expires, they get new phones. They share and borrow phones a lot. Depending on the plans they have, texting and data can be expensive and/or very limited.
That’s fair enough. I would envision that this model state budget would have $x for “utilities” or the like, and if the cell phone was a better bang for the buck, then that’s where the money should go.
My grim suspicion, however, is that by creating this budget, the State would have to grapple with the fact that a bunch of its citizens aren’t making enough money instead of being content with the soothing fiction that most citizens are making enough money but are simply allocating it in a frivolous manner.
We have the same grim suspicion.
I guess I get a little concerned when we make judgments about people based upon them having what appear to be luxuries. “They’re poor, but they have cable TV!” Well, maybe cable TV is one of the few luxuries “they” have. Some people may not be able to go on vacations, hire decorators, or eat out at fancy restaurants, but they can scrape up enough money to pay a cable bill every month. They may negotiate a deal with the cable company every time the special rate expires. “I know someone on food stamps who drives a Lexus!” Maybe that person has borrowed a car from a well off relative. Maybe that person just lost a good job. I think we need to be careful about making assumptions.
Oh, I make judgments all the time. They are often wrong. Mostly they don’t matter inasmuch as I keep the opinions to myself and/or my opinions have nothing to do with their lives — it’s just an internal monologue. I do this with rich and poor alike.
To the larger point, for the most part, the philosophy I’ve picked up in the gym or on the running trail translates well to observations of other people’s lives: you run your own race, you do your own workout. You have no idea what variables the other person is dealing with, and they have no idea what variables you are dealing with.
That may be less possible when dealing with public policy and wealth distributions. I think it’s a legitimate concern for policy makers to wonder whether they should tax someone else to provide food for a person’s hungry kids when that person is paying for the expanded cable package or something. (That’s the first example that came to mind – it’s not a great one since I’ve come to the conclusion that I don’t really mind being overtaxed to make sure kids are fed — even if their parents ought to be taking care of it.)
But these sorts of examples are, I think, overdone. Yes, I expect there is some frivolous spending. But I doubt it’s the primary reason people are struggling financially. I think more often, it’s a convenient excuse not to help them.
We are pretty much in agreement. Certainly, I don’t mean to suggest that I never make judgments, especially in the moment. I remember well working in a local health department and wondering why well-dressed women with manicures, the latest hairdos, and leather cigarette cases would balk at paying a few dollars for a birth certificate.
As far as food stamp/SNAP policy, the eligibility process looks at a family’s resources, but cable and satellite TV service, televisions, furniture, and personal effects are not included in the resource calculation.
Acknowledging that the problem lies not with the victims of capitalism but with structural evils inherent to capitalism would confer upon someone a moral obligation to do something about it.
But “doing something about it” is hard work, and right-wingers are fundamentally lazy. Pointing fingers at the victims is much, much easier.