Wednesday, December 20, 2006

Perspectives on wealth

Read this article (Fat Cats 2007), and see some of the comments - a lot of people who took economics in college wrote in with their faux-contrarian criticisms of this article recommending wealth redistribution. As in, "while wealth redistribution may seem like a good idea - it's a feel-good idea - it goes against the non-intuitive truths of the non-ideological, purely scientific discipline of economics." (Capitalist/democratic government redistribution of wealth also goes against the non-ideological, purely scientific discipline of Marxism.)

What we see here is a conflict between the sense of fairness and moral outrage that were the prerequisites for the evolution of altruism and cooperative behavior in the human animal (read up on your evolutionary psychology), and neoclassical economics, which informs many bright people who have responded acerbically to this article.

The former aspect of human thought leads some to think that the work of Wall Street investment bankers - many long hours, stressful work conditions juxtaposed with lavish lifestyles outside of work - should not be compensated at a rate millions of times more than the work of, say, a factory worker in a free-trade zone in the Philippines - which features many long hours and stressful work conditions, hand in hand with an impoverished, equally stressful lifestyle outside of work. The latter aspect of human thought, restricted to those who have imbibed the teachings of the dying school of neoclassical economics, finds fairness in any outcome arrived at freely through market interactions. This is a peculiar definition of fairness, anathema to those who do not subscribe to neoliberal ideology; it basically equates justice with the following of certain rules, in this case the rules of an unregulated marketplace.

Thankfully, neoclassical economic theory is crumbling, partly as neoliberal economic policies have been discredited through the experience of their real-world application. However, as the Planck principle would have it, new ideas do not gain predominance by winning over the adherents of older ideas; rather, the adherents of older ideas die out, and younger people with new ideas take their place.

Economic outcomes like these, of the present world order, where an American male can make $100 million in a year for working on a computer and talking, and an African male can make a few hundred a year performing backbreaking labor in a diamond mine, will not forever be viewed as fair. Viewed through the odd prism of neoclassical economics, they are; thankfully, humans are continually improving their optics.

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