Monday, December 26, 2016

Growth, Not Forced Equality, Saves the Poor

By Deirdre McCloskey. Excerpts:
"the Illinois state constitution, adopted in 1970. It sought to “eliminate poverty and inequality.”"

"The World Bank reports that the basics of a dignified life are more available to the poorest among us than at any time in history, by a big margin."

"The real income of India is doubling every 10 years."

"Even in the rich countries, the poor are better off than they were in 1970, with better food and health care and, often, amenities like air-conditioning."

"A good person, he [Anthony Trollope] declares, should rather “assist in lifting up those below him.”

Eliminate poverty, and let the distribution of wealth work. Economic growth has been accomplishing exactly that since 1800. Equality in the most important matters has increased steadily, through lifting up the wretched of the earth."

"What matters ethically is that the poor have a roof over their heads and enough to eat, and the opportunity to read and vote and get equal treatment by the police and courts."

"Equalizing possession of Rolexes does not."

"we should lift up the poor...enough for people to function in a democratic society and to have full human lives."

"John Rawls of Harvard, articulated what he called the Difference Principle: If the entrepreneurship of a rich person made the poorest better off, then the higher income of the entrepreneur was justified."

"Poverty is never good. Difference, including economic difference, often is. It is why New Yorkers exchange goods with Californians and with people in Shanghai, and why the political railing against foreign trade is childish."

"equality beyond the basics in consumption and in political rights isn’t possible in a specialized and dynamic economy."

"Trusting a government of self-interested people to know how to redistribute ethically is naïve."

"We need to allow for rewards that tell the economy to increase the activity earning them. If a brain surgeon and a taxi driver earn the same amount, we won’t have enough brain surgeons."

"An all-wise central plan could force the right people into the right jobs.'

"The magic has been tried, in Stalin’s Russia and Mao’s China. So has the violence."

 "Free adults get what they need by working to make goods and services for other people, and then exchanging them voluntarily. They don’t get them by slicing up manna from Mother Nature in a zero-sum world."

"Short of expropriation, we can and should join in supporting a safety net, keeping the violence to a minimum. K-12 public education, for example, should be paid for by compelled taxes on all of us. But we should not be doing a lot more.

As a matter of arithmetic, expropriating the rich to give to the poor does not uplift the poor very much. If we took every dime from the top 20 percent of the income distribution and gave it to the bottom 80 percent, the bottom folk would be only 25 percent better off. If we took only from the superrich, the bottom would get less than that. And redistribution works only once. You can’t expect the expropriated rich to show up for a second cutting."

"It is growth from exchange-tested betterment, not compelled or voluntary charity, that solves the problem of poverty. In South Korea, economic growth has increased the income of the poorest by a factor of 30 times real 1953 income."

"Liberal equality, as against the socialist equality of enforced redistribution, eliminates the worst of poverty. It has done so spectacularly in Britain and Singapore and Botswana."

"To borrow from the heroes of my youth, Marx and Engels: Working people of all countries unite! You have nothing to lose but stagnation! Demand exchange-tested betterment in a liberal society.

Some dare call it capitalism."

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