Okay well he doesn’t say it quite so succinctly.
Or categorically.
In fact he hedges his statement several ways from Sunday, and uses a hundred-and-twenty-three-word paragraph to do so:
The near-consensus view over here at Equitable Growth and at the Equitablog is that U.S. economic growth over the past generation has been very disappointing. Too-much of our economic growth has been wasted producing the wrong stuff and delivering it to the wrong people, and we have failed to properly and productively invest at the rate we could in people, machines and buildings, ideas and organizations, and institutions. The hunch around here is that these two are tightly coupled: that the rapid rise in inequality as a result of the derangement of incentives has both decoupled the links between higher measured real GDP and human economic welfare and material well-being, and has also slowed the growth of our potential to produce real GDP.
I know: he’s being responsible and careful not to overstate the case or torture the known evidence to date.
But still. Goddam liberals.
Happily, he then passes you on to Ashok Rao and Evan Soltas, who comprehensively eviscerate the inequality-causes-growth arguments of Scott Winship.
So at least we’ve got full-throated arguments that the arguments against the inequality-kills-growth position are hooey. We’re getting there.
Cross-posted at Angry Bear.
Comments
9 responses to “Brad DeLong Sez It! Inequality Kills Growth”
re: “Too-much of our economic growth has been wasted producing the wrong stuff and delivering it to the wrong people, and we have failed to properly and productively invest at the rate we could in people, machines and buildings, ideas and organizations, and institutions.”
Wow. If we invested in the right stuff, and delivered it to the right people, and if we were to invest in people, machines, buildings, etc., that’d be called…Socialism, right? As I recall, the predominant Marxist critique of Capitalism was…exactly this.
Thanks,
Ole
@Olav Martin Kvern
Ole, you hold up the word ‘socialism’ and expect people to shudder. That’s crappy argument.
Anyway, if the post referred not to “the wrong stuff” but to “malinvestment” then you would have to hold up the word ‘austrian’ instead.
Hi The Arthurian,
I was trying to be funny–I should have been more clear. I think people shuddering over “socialism” is silly. We could use a lot more socialism. It’d be a good start.
Thanks,
Ole
Yeah I got that but was a bit confused. I think I understand but…
“As I recall, the predominant Marxist critique of Capitalism was…exactly this.”
“This” being…?
Hi Steve,
I’m sure you’ve encountered the following self-contradictory structure: “I’m no , but I do think .” As in, “I’m not a feminist, but I believe women should be treated as equals.”
This one is, “I’m no Socialist [implicit in the source of the quotation], but it appears that Capitalism does a terrible job of allocating resources for the good of society.” Who knew?
I just thought it was funny.
Thanks,
Ole
Shoot. I see it did away with the variables I put in the text. Let’s try it a different way. “I’m no fill_in_belief_system, but I do think fill_in_central_point_of_belief_system.” Let’s see if that works.
Thanks,
Ole
NOW it’s gettin funny.
Hey, sorry Ole. I missed the point. (I hate it when that happens.)
@Olav Martin Kvern
I find it especially painful when it goes like this (condensed version):
“I’m a liberal, but I’m getting more conservative in my old age.”
IOW, “Kids these days.”
Im sure this has been tried before and the argument has been dismissed by others in the past but it seems to me that all we need to do is ask; “So if distribution/inequality doesn’t matter, would an economy where 1 person had 99% of the income/wealth function just like one where 1,000,000 people shared that 99%?”
The argument seems mostly over when it does start to matter. I think everyone would agree that one guy with 99% would not be a very functional economy by the standards we are used to so where is the point that the distribution becomes harmful? I and others think we have already reached that point but those that don’t agree must at least tell us what they are looking at to know when it is becoming harmful.