Liberalism and inequality

Here’s Victor David Hanson:

Strip away the veneer of Silicon Valley, and it is mostly a paradox. Almost nothing is what it is professed to be. Ostensibly, communities like Menlo Park and Palo Alto are elite enclaves, where power couples can easily make $300,000 to $700,000 a year as mid-level dot.com managers.

But often these 1 percenter communities are façades of sorts. Beneath veneers of high-end living, there are lives of quiet 1-percent desperation. With new federal and California tax hikes, aggregate income-tax rates on dot.commers can easily exceed 50 percent of their gross income. And hip California 1 percenters do not enjoy superb roads and schools or a low-crime state in exchange for forking over half their income.

Housing gobbles much of the rest of their pay. A 1,300-square-foot cottage in Mountain View or Atherton can easily sell for $1.5 million, leaving the owners paying $5,000 to $6,000 on their mortgage and another $1,500 to $2,000 in property taxes each month. Add in the de rigueur Mercedes, BMW, or Lexus and the private-school tuition, and the apparently affluent turn out to have not all that much disposable income. A visitor from Mars might look at their relatively tiny houses, frenzied go-getter lifestyle, and leased BMWs, and deem them no better off materially than middle-class state employees three hours away in supposedly dismal Merced, who earn 20 percent as much, but live in a home twice as large, with only 10 percent of the monthly mortgage and tax costs.

.  .  .

In the South Bay counties, Democratic registration outnumbers Republican often 2 to 1. If liberals like Barbara Boxer, Dianne Feinstein, and Nancy Pelosi did not represent the Bay Area, others like them would have to be invented. Yet, most Northern California liberal politics are abstractions that apparently provide some sort of psychological compensation for otherwise living lives that are illiberal to the core.

Take K-12 schools. Currently, there is a stampede to enroll students in upscale private academies “” often at $30,000 a year. That seems strange, when local public high schools like Menlo-Atherton, Woodside, and Palo Alto were traditionally among the highest-ranked campuses in an otherwise dismal state public-school system.

But things have changed “” or at least are perceived to have changed. About 25 percent of the Silicon Valley population is now Hispanic, representing a huge influx of service employees “” to work in hotels and restaurants, as nannies and housecleaners, in landscaping and construction “” and their presence has expanded beyond the old barrios of San Jose and Redwood City.

The result is that Silicon Valley liberals are apparently worried about the public schools, given that second-generation Hispanics are perceived to be disproportionately represented in statistics on gang activity, illegitimacy, and high-school dropout rates. In crude terms, would a Google executive really wish his child’s hard-driving college-prep curriculum or enlightened social calendar altered somewhat to accommodate second-language teenagers whose parents recently arrived illegally from Oaxaca?

Something similar happened in the Deep South in the 1960s, when court-mandated integration brought black students into formerly all-white enclaves, spurring a white flight to private academies. Upscale hip whites and Asians in Northern California, of course, do not have southern twangs and in theory are multiculturalists to the core. But they are no more invested in a truly diverse public-school experience for their children than southern separatists of the past.

When I suggest to my Silicon Valley friends that their fixation on academic achievement is misplaced and that the academic peer and institutional pressure that my own children might have lost out on by going to the almost exclusively Mexican and Mexican-American public schools of southern Fresno County was balanced by the “life experiences” of dealing with those of all classes, races, and attitudes, they think I am unhinged. Diversity, in other words, is a cosmic ideal of voting for Barack Obama, not a cross that a Stanford-bound kindergartener must bear in the here and now.

I see exactly the same thing in my town (Newton MA), which is very wealthy and very liberal.  But I don’t see the contradiction that Hanson seems to see.  Suppose you loved your children, and also thought inequality was a huge problem.  Then it would make sense to do everything possible to get your kids into elite schools.  After all, if inequality is a huge problem then your kids will suffer greatly if they end up with a lower than average income.

I don’t think inequality is a big problem (although I do think it is a problem.)  As a result I don’t share the obsession of most of my neighbors in getting my child into an elite university.  In my view happiness depends on your personality, not whether you make $70,000 or $700,000 per year.  There are happy people and grouchy people.  Getting a better job isn’t going to change that.

So the real problem with liberals is not that they are hypocrites, it’s that they are too materialistic.  But that’s also the real problem with moderates and conservatives.

By the way, the same thing occurs in higher education.  The people who run our universities are overwhelmingly left-of-center.  And yet they are engaged in the process of corporatizing universities, into a sort of mirror image of the highly inegalitarian set-up of the corporate sector.  More elite professors with outrageous pay packages, and more adjuncts making low pay.  Less in the middle.  They aren’t forced to do this; they are choosing to remake the American university system.

This is why progressives will fail to make a significant dent in inequality.  Because they (wrongly) think inequality is so important, they will (as individuals) fight hard against any truly egalitarian policies, as it would hurt their kids or their career, even as they vote egalitarian.  If we could somehow convince liberals that inequality isn’t as important as they think it is, if we could convince them to share Hanson and my attitude toward inequality, then we might finally be able to make some headway against the problem.  And it is a problem.  We need to convince parents that it’s not important that their kids get into the best schools. We need to convince administrators that it’s not important that their university moves up in the “rankings.”

PS.  The example in the third paragraph is just one more example of why the “inequality” data used by progressives is so worthless.  We already know that they use income, whereas they should be using consumption.  But even when we use consumption data it’s distorted by huge differences in the cost of living.  And these differences are both time-varying, and biased against the rich.  Someone from a 100 years ago who arrived here in a time machine and who drove past a lower middle class Hispanic home in Merced, and then a $1.5 million 1300 sq. foot home in Palo Alto, would be flabbergasted by the claim that there are huge inequalities in modern America.

PS.  I realize that rich people are happier, on average, but correlation doesn’t . . .

Look at the sad fate of lottery winners.


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37 Responses to “Liberalism and inequality”

  1. Gravatar of jknarr jknarr
    25. October 2013 at 13:22

    In a world of superabundant education capacity — we have not even seen what online courses will do to the academy — it’s not what you learn, it’s who trusts you.

    Mutual trust is the new scarce good, not educatable skills. I can go to india and get a programmer any time I want. I just cannot trust the same way, nor have a startup with him.

    Hence, narrow private schools for private class trust. The marketplace should take care of the availability of slots.

  2. Gravatar of Tom Brown Tom Brown
    25. October 2013 at 13:32

    This guy gives some pushback on the merits of Hanson’s assertions:

    http://www.cjr.org/the_audit/silicon_valley_regressive_prog.php

    Thoughts?

    One of Hansen’s commenters left a link:
    http://nationalreview.com/article/361828/bay-areas-1-percenters-victor-davis-hanson#comment-1094667973

    Plus this was interesting:
    http://nationalreview.com/article/361828/bay-areas-1-percenters-victor-davis-hanson#comment-1093145556

    Sadowski, what say you? What do you make of Hanson’s assertions?

  3. Gravatar of Chuck E Chuck E
    25. October 2013 at 13:33

    My community changed demographically in the late 90’s. I faced the same situation as Hanson. I had the choice of moving to a community which had better public schools or staying. I chose to stay and change the school system. I eventually become president of the elementary district school board. We passed a bond issue to increase funding, developed a strategic plan with community input, and hired a superintendent to implement the plan. It was very successful. I am satisfied with my kids’ elementary education and the high performance schools that continue to excel as the population has shifted to a Hispanic majority. The high school district did not follow the same path. I am very disappointed with the education it provided to my kids. I am also disappointed that I could not do more to effect change in that high school system. In hindsight, perhaps I should have moved my kids into a private high school.

  4. Gravatar of ssumner ssumner
    25. October 2013 at 13:48

    Tom, As I said, I don’t agree with Hanson’s “hypocrisy” claim. The 50% income tax rate applies at the margin, the average tax rate is somewhat lower, although I don’t know the exact figures.

    Chuck, Thanks for those comments.

  5. Gravatar of kebko kebko
    25. October 2013 at 13:51

    Here are some Robin Hanson posts that get at this:

    http://idiosyncraticwhisk.blogspot.com/2013/08/hanson-on-inequality.html

    I think the underlying factor is that concern for inequality is just a Trojan horse for anti-Bourgeois posturing. The proposed solutions always involve rules imposed on producers or taxes on high earners. Solutions never involve limitations on private school choice, anti-discrimination rules imposed on employees or consumers, or programs against assortive mating or networking. In these areas, the universal acceptance of liberty makes the potential impositions a non-starter.

    Inequality is the trigger, but the subtext is about who has rights. I think Deirdre McCloskey has it right, but the triumph of Bourgeois dignity will always be a somewhat Sisyphean task.

  6. Gravatar of Geoff Geoff
    25. October 2013 at 13:57

    Inequality is not in itself a problem to any degree. We are not our brother’s keepers.

    If one individual half way across the world works hard and produces 20 times more than another individual on the other side of the world, then this is not in itself a problem for either individual. The poor individual is not made poor, and not made poorer, on account of the wealth individual.

    Fretting over inequality is derived from a combination of unwarranted passions (jealousy, resentment, etc) and unwarranted economic assumptions (denial of the law of comparative advantage).

    A poor person can gain when others gain more than he does, because as others get more wealthy, there arises more opportunity for the poor individual to trade with the wealthy individuals. The more wealth the wealthy have, the more wealth they can trade with the poor individuals.

    You can easily grasp this by imaginging the fate of a poor individual living in a rich country, versus living in a poor country. If that poor individual is a janitor in the wealthy country, he’ll have far more opportunity to gain via trade, than if he were living in a poor country.

    What people are complaining about when they complain of inequality is either coercion as cause, or productivity as cause. More people rightfully complain about the former than the latter. But the latter is very prevalent, unfortunately.

    Sumner has not actually presented any arguments for how or why inequality is in itself a “problem” at all (as opposed to a “big problem”).

  7. Gravatar of Mark A. Sadowski Mark A. Sadowski
    25. October 2013 at 14:11

    Tom Brown,
    This is not something that interests me but since you ask:
    1) I agree with Scott. I don’t think there anything hypocritical about thinking inequality is a problem and sending your kids to private school. (I myself went to the same private school from Pre-K through the 12th grade, and by my reckoning my parents were liberal.) Conservatives frequently accuse liberals of hypocrisy but most of them don’t appear to understand the meaning of the word.
    2) As far as Hanson’s tax math goes it all depends on how you calculate it. Given this is the National Review he’s probably exagerating.
    3) You have to be insane want to spend $90,000 a year on mortgage payments and property taxes just for the privilege of living in a 1300 square foot shack in Silicon Valley. Please don’t tell me its paradise because you can get paradise for a lot less elsewhere.

  8. Gravatar of Randomize Randomize
    25. October 2013 at 14:12

    Dr. Sumner,

    On how much you really have to make to be happy:

    http://lifehacker.com/5905027/the-new-salary-happiness-tipping-point-50000

  9. Gravatar of Steve Steve
    25. October 2013 at 14:13

    “But even when we use consumption data it’s distorted by huge differences in the cost of living… a $1.5 million 1300 sq. foot home in Palo Alto,”

    If you live on a half acre lot in the middle of a dense crowded metropolis, I would argue that you are consuming a lot, even if the square footage of your home is small. Price is truth.

    “Add in the de rigueur Mercedes, BMW, or Lexus and the private-school tuition, and the apparently affluent turn out to have not all that much disposable income.”

    And there we have our problem. Keeping up with the Zuckerbergs.

    “more adjuncts making low pay.”

    I want to meet the liberal administrators who are cutting adjunct hours to avoid giving out health insurance.

  10. Gravatar of jknarr jknarr
    25. October 2013 at 14:14

    Finally, to add to the stench of moral hypocrisy, Silicon Valley are the same people who are the eyes, ears, and hands of the surveillance state: they sell your fourth amendment rights to the highest bidder, whether in the US or China.

    Part of the reason they get paid so much in IPOs and cash is not the profitability of the companies, but the Omerta of criminal activity — no better than the guys selling bad mortgage bonds on the street, no better than the oil executive who gets lifelong health care, and no better than the public pension dangled in front of policemen. In sum:

    “Keep your mouth quiet about what we do, or we’ll take your goodies away (and worse).”

    Omerta requires trust, payoff, and silence. Private schools help.

    http://people.iq.harvard.edu/~dhopkins/jopfinal.pdf

  11. Gravatar of Ashok Rao Ashok Rao
    25. October 2013 at 14:16

    “Housing gobbles much of the rest of their pay. A 1,300-square-foot cottage in Mountain View or Atherton can easily sell for $1.5 million, leaving the owners paying $5,000 to $6,000 on their mortgage and another $1,500 to $2,000 in property taxes each month. Add in the de rigueur Mercedes, BMW, or Lexus and the private-school tuition, and the apparently affluent turn out to have not all that much disposable income. ”

    I love how people subtract “housing costs” as if people living in places like Manhattan or Palo Alto are paying so much more for nothing. It’s not at all the same thing as a burger costing twice as much.

    Of course, all of this may lead back to problems from the hedonic treadmill, but I’ve never understood this calculation.

    Anyway, my best guess is most Silicon Valley types are not liberals. Many probably have a Galtian complex. They like Rob Paul a lot, so they are clearly not great at economics either. It’s just that the Republican party is so repulsive to anyone with blood in their brain that California seems a lot more liberal than it is.

    IF the Republicans ever became neoliberals who supported a market-based safety net, Democrats would have a run for their money.

  12. Gravatar of rbl rbl
    25. October 2013 at 14:21

    Funnily enough, I think VDH’s description of the bay area is a good argument for increased taxes on the wealthy and more redistribution. Private academies, BMWs and houses with $6000/ month mortgages are mostly positional goods. If everyone else has a Lexus, you feel bad not having one, but if no one else has a Lexus, you get almost the same level of utility out of your Corolla. Someone complaining about their mortgage after they chose an exclusive neighborhood should elicit as much sympathy as someone complaining that the maintenance costs on their new Ferrari are bankrupting them.
    Beyond that, the equivalence between the Deep South and Silicon valley is nonsense. The same people who put their kids in private white only schools in the South also tend to try and disenfranchise black voters, think Obama is Kenyan, and try to blame their tax bills on welfare queens and young bucks buying steak with their welfare money. The California Liberals keep voting, as VDH notes, for higher-tax, higher-redistribution politicians. To the extent that inequality is a problem, and I think it is a problem, it a society wide collective action problem, not one that can be fixed by individuals, any more than roads can be maintained by helpful souls randomly going out and patching up potholes.

  13. Gravatar of Geoff Geoff
    25. October 2013 at 14:24

    Liberalism generates coercion based inequality.

    Premise: The only thing that economically benefits the poor, indeed anyone, is production.

    Premise: Income taxes primarily finance the welfare/warfare state, neither of which goes to producing anything.

    Thus: Incomes taxes hurt the poor.

    Income taxes are like taking a man’s pile of wood planks, giving him an equivalent weight in sawdust, thus preventing him from investing the wood in the production of a shop that serves to increase his wealth.

  14. Gravatar of Steve Steve
    25. October 2013 at 14:41

    Yale professor discovers positive correlation between science knowledge and Tea Party identification; head subsequently explodes, admits prejudice from reading NY Times, but still maintains negative view of Tea Party.

    http://www.culturalcognition.net/blog/2013/10/15/some-data-on-education-religiosity-ideology-and-science-comp.html

    Except that it has the opposite sign: that is, identifying with the Tea Party correlates positively (r = 0.05, p = 0.05) with scores on the science comprehension measure

    “I don’t know a single person who identifies with the Tea Party. All my impressions come from watching cable tv — & I don’t watch Fox News very often — and reading the “paper” (New York Times daily, plus a variety of politics-focused internet sites like Huffington Post & Politico).”

    “Of course, I still subscribe to my various political and moral assessments-all very negative- of what I understand the “Tea Party movement” to stand for.”

  15. Gravatar of Tom Brown Tom Brown
    25. October 2013 at 14:47

    Scott, Mark, thanks for you replies.

  16. Gravatar of ssumner ssumner
    25. October 2013 at 15:46

    Kebko, I’m sure there’s some truth to that, but I don’t think I’m anti-bourgeois.

    Steve and Ashok, There’s more to it than that. Take a 3 bedroom condo that sells for $3,000,000 in Manhattan, and the same size house in a midwestern suburb is $200,000. The New Yorker would hate living in a Kansas City suburb, but the reverse might well be equally true. Hence there is no objective difference in living standards, at least in terms of housing (it may differ in other dimensions.)

    rbl, It’s an argument for land taxes, and progressive consumption taxes. The top personal income tax rate should be zero.

    You said;

    “Someone complaining about their mortgage after they chose an exclusive neighborhood should elicit as much sympathy as someone complaining that the maintenance costs on their new Ferrari are bankrupting them.”

    I think Hanson would agree with you.

  17. Gravatar of ssumner ssumner
    25. October 2013 at 16:02

    Steve, Hilarious article.

  18. Gravatar of kebko kebko
    25. October 2013 at 16:21

    Scott, my assessment wasn’t aimed at you. You don’t fetishize the inequality issue, and you explicitly acknowledge the practical and philosophical costs of taxes and mandates levelled on producers.

  19. Gravatar of Steve Steve
    25. October 2013 at 16:23

    “Take a 3 bedroom condo that sells for $3,000,000 in Manhattan”

    But an identical structure would be a lot cheaper in Jersey City.

    My point is that a lot of the price is for scarce land and zoning, which is consumption at the expense of other local residents.

    A 1300 sq ft home in Palo Alto ranges from $700k to $1.5mm depending on whether it is a condo or has it’s own private park (a.k.a., backyard).

  20. Gravatar of Lorenzo from Oz Lorenzo from Oz
    25. October 2013 at 16:58

    On correlations between income and happiness, if happiness makes focused effort easier, would not that tend to lead to higher income? Note, this is both a micro (individual outcomes) and macro (more functional societies) point.

    I guess it is not hypocritical to want the best for your children, but it certainly seems hypocritical to support policies which advantage folk like you and disadvantage poorer folk and say you are for compassion and less inequality.

    Zoning/land use rationing is a case in point. Since houses are, in Matt Yglesias’s words, large decaying physical objects, most of the value of a house is the land it sits on. Which includes, of course, what it is near. Such as nice cafes, for instance.

    Supporting high immigration, land rationing while opposing new infrastructure investment–as “progressives” typically do in Oz–is a pretty socially dysfunctional policy mix. But it does drive up inner city property values, where most “progressives” live.

  21. Gravatar of Dustin Dustin
    25. October 2013 at 17:00

    Mark A. Sadowski,

    You’ll excuse me for pointing out that:

    “3) You have to be insane want to spend $90,000 a year on mortgage payments and property taxes just for the privilege of living in a 1300 square foot shack in Silicon Valley. Please don’t tell me its paradise because you can get paradise for a lot less elsewhere.”

    Is a brief delusion of the Money Illusion!

  22. Gravatar of Philo Philo
    25. October 2013 at 17:01

    “We need to convince parents that it’s not important that their kids get into the best schools. We need to convince administrators that it’s not important that their university moves up in the ‘rankings’.” I don’t know who “we” are supposed to be, but please count me out. Because I agree with you that inequality is, at most, a minor problem, I don’t see that “we” *need* to do anything about it. Besides, it is (somewhat) important that one’s children get good educations, and that one’s university function well (thus being ranked highly by knowledgeable observers). Why try to convince anyone otherwise?

  23. Gravatar of Lorenzo from Oz Lorenzo from Oz
    25. October 2013 at 17:01

    “Supporting high immigration and land rationing while opposing new infrastructure investment” is perhaps a little clearer.

  24. Gravatar of Doug M Doug M
    25. October 2013 at 17:04

    I lived in Menlo Park 1993 – 1996. I don’t think it has significantly changed… nor Atherton, nor Woodside, nor Palo Alto….
    Not quite true. You can get better Indian food today in Palo Alto than you could in the early 90s.

  25. Gravatar of Dustin Dustin
    25. October 2013 at 17:20

    As a new NY professional – it has become abundantly clear that federal tax rates should be anchored to PPP of city of residence! Absurd it is that I pay a great deal more of my income in federal taxes, proportionally, than someone in Des Moines who enjoys a similar quality of life on a much lesser salary.

    Something to do with this whole nominal vs real discussion. x%-er be darned, it ain’t right!

  26. Gravatar of Floccina Floccina
    25. October 2013 at 17:49

    Ironically the evidence from school voucher programs shows that private schools do not make much difference academically.

  27. Gravatar of Benjamin Cole Benjamin Cole
    25. October 2013 at 19:44

    This post underlines a point I sometimes make, but then only to be accused of economic dunce-hood and nostalgia…

    People had higher living standards in Los Angeles of the 1960s than today….

    Housing is a big part of it..what used to be middle-class neighborhoods now have homes for $1 million and up…people feel compelled to send kids (or the one child) to private schools..

    Then, add on, Social Security taxes used to take 1-2 percent of payroll, and now take 14.2 percent, and sales taxes were 2-3 percent and now hit 7 percent in the County of Los Angeles…

    Sure, due to technical advancements, medical care is better…and way more expensive…

    Two spouses working 100 hours to live like one guy doing 40 hours a week got in the 1960s…a nice house (but no manse), sunshine, and a health plan.

    Of course, life has changed, the Internet etc. Nothing is apples to apples…many women prefer to work, or at least have bought into the social norm that they “should”…

    Another change: In 1960 there were a few good restaurants in L.A. Today, you could eat every day for a year in wonderful restaurants, and many not expensive either…that is better by far…

    And smog? In 1965 you could see looking down a street…taking a deep breath could hurt (lead in the gas too)…eyes would water…now smog reduced 95 percent…perhaps a reason why so many LA neighborhoods have made dramatic comebacks…

  28. Gravatar of kebko kebko
    25. October 2013 at 21:49

    Benjamin,

    The enigma for me in that narrative is: If the problem is widespread decline in real incomes, how can one of the main manifestations of that decline be a massive increase in real estate values, in real terms?

  29. Gravatar of Michael Michael
    26. October 2013 at 04:03

    An unrelated point on Palo Alto…

    Most of the homes there are little one floor ranches that were built pre-Silicon Valley. What many of the Silicon Valley folks who move there really want to do is buy the lot, demolish the house, and build a bigger one, but they are generally not able to do so due to restrictions on land use.

  30. Gravatar of sam sam
    26. October 2013 at 05:23

    There’s no hypocrisy here at all. They see themselves as fundamentally different from the rest of us.

    It is like the nouveau riche in any feudal society, desperately aping the behavior of the aristocracy.

    From their point of view, they are superior to the rest of us, and thus have a right to tell us what to eat, drink, drive, shoot, and live in. They have the right to live in their own society, free from social interactions with us proles. They also have the obligation as part of the nobility to give money to the poor – as a matter of fact, doing so ostentatiously reinforces their status.

    That’s also why they continually bash suburbanites and downscale whites (to whom they are dangerously close to in class and must separate themselves from culturally) but praise poor minorities and poor people (whom they will never be mistaken for)

  31. Gravatar of ssumner ssumner
    26. October 2013 at 05:59

    Steve, I still think you are missing my point. It’s not at the expense of anyone who doesn’t want to live there, which makes inequality data very deceptive.

    Suppose a Democratic politician said “we have a huge inequality problem because some people get to live in 2000 sq foot units in Manhattan, and others are forced to live in 2000 sq foot units in the suburbs.” Would that get the Occupy Wall Street movement out into the streets?

    Lorenzo, Good points. I see both happiness and wealth being caused by a third factor.

    Philo, You said;

    “Besides, it is (somewhat) important that one’s children get good educations”

    What does that have to do with elite schools? Do people get a better education at Harvard than Wisconsin (where I went?) The things administrators do to boost a schools’ rankings have no overall social value. It’s just an arms race.

  32. Gravatar of Steve Steve
    26. October 2013 at 08:50

    “I still think you are missing my point.”

    Scott, I see your point. I just think you are comparing a status good (condo in Manhattan, or single family home with a huge lot in Palo Alto) to an ordinary home in Kansas City.

    A better analogy would either be to use a 20 acre ranch inside the city limits of Wichita, which would cost a lost more than $200k, or use a pedestrian condo in Jersey City or Mountain View, which is a lot less than $3mm/$1.5mm.

  33. Gravatar of benjamin cole benjamin cole
    26. October 2013 at 12:20

    Kebko–
    I have wondered that myself…I think the answer is two incomes and larger fractions of those going into housing…less children…people are working to live in the house, by far their largest asset…like I say, net net people in L.A. have lower lifestyles now…density plays a role too

  34. Gravatar of ssumner ssumner
    26. October 2013 at 13:00

    Steve, You are still missing the point. I’m claiming it’s not a status good for people in KC.

    Let me put it this way. I’m claiming the people in KC suburbs are just as happy as the people on the upper east side.

  35. Gravatar of ssumner ssumner
    26. October 2013 at 13:03

    Steve, You are still missing the point. I’m claiming it’s not a status good for people in KC.

    Let me put it this way. I’m claiming the people in KC suburbs are just as happy as the people on the upper east side. But you’d never know that from the income data.

    On the other hand, I think the people in the KC suburbs would much rather live in $40 million mansions in Beverly Hills. So I’m not denying the possibility that consumption inequality leads to utility inequality. I’m just saying the connection is much weaker than we assume.

  36. Gravatar of Sam Sam
    26. October 2013 at 13:38

    “Because they (wrongly) think inequality is so important, they will (as individuals) fight hard against any truly egalitarian policies, as it would hurt their kids or their career, even as they vote egalitarian.”

    I like this theory a lot. It has a ‘paradox of thrift’ element to it.

  37. Gravatar of ssumner ssumner
    27. October 2013 at 07:01

    Thanks Sam.

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