PM Pick

Income inequality as symptom

Economists Gary Becker and Kevin Murphy recently mounted a defense of income inequality on the grounds that it is a sign of increased returns to human capital -- in other words, better-educated and higher-skilled people made more, which is as it should be. Hence they view progressive taxation as being tantamount to a tax on ability.

For many, the solution to an increase in inequality is to make the tax structure more progressive—raise taxes on high-income households and reduce taxes on low-income households. While this may sound sensible, it is not. Would these same indi­viduals advocate a tax on going to college and a subsidy for dropping out of high school in response to the increased importance of education? We think not. Yet shifting the tax structure has exactly this effect.

This seems hardly an exact analogy. Those in favor of progressive taxation would likely favor redistributing some of that money so that others could afford to acquire the skills and education that created the gap in the first place.

But the underlying question of whether an egalitarian distribution of outcomes rather than opportunities is possible (and desirable) remains -- can these concepts be neatly separated, as is often the tendency? Becker and Murphy's argument relies on the idea that merit is on the whole rewarded and they have an impressive battery of graphs and statistics to support that case that I'm not remotely qualified to critique. The implication that we live in a merit-rewarding society seems to require many codicils and exceptions and hedges, most of which revolve around what constitutes merit (being born rich and connected -- this has obvious value and constitutes a kind of human capital; is it being lumped in with the human capital of education? If this kind of old-boys network facilitates productivity, should it be condemned or does it have merit, by that definition?) So my mind turned to a more abstract question: Is inequality a matter of the return coming from relative differences in skills in a population, or is the return absolute to the skills themselves, no matter how widely they are distributed? If the former is the case, then this would ultimately impinge on equal opportunity, as those with advantages will in accordance with rationally seek to consolidate them rather than let others catch up. Those left behind initially will remain behind, because the meaning and value of the skills they acquire is always defined in relation to those ahead of them, who are presumably maintaining their skills lead.

This is especially the case with education, where the abilities acquired are less significant than the signaling value of the institutions involved. At the Economist's blog, Will Wilkinson, citing Bryan Caplan, makes the point

that university diplomas mostly function to signal prior competence, and that time and money spent in school is largely wasted. If [Caplan]'s right, Becker and Murphy's emphasis may be misguided, and I suspect Bryan may in fact be right, despite the fact that he's never won a Nobel or Clark prize and wears shorts in the winter. In which case it strikes me that there is a huge entrepreneurial opportunity for whomever can come up with an alternative scheme of credible human capital certification. Who cares if people develop their skills by attending classes at their local college, listening to free lectures from MIT, learning on the job, or by sitting in their mom's basement gaining mad hacking skilz? I don't. But employers do.

The point is, signaling communicates relative rather than absolute values -- the Harvard degree has more credibility than the State U. degree, and if we made it such that everyone could get a Harvard degree, some new elite institution would arise to take its place. Whereas the human capital that enhances productivity and quality of life relates not to the signals, which preserve class distinction, but to the actual skills -- the ability to build useful machines and develop useful medicines and so on. The question then becomes do we need the class system to motivate people to pursue the skills, and does coasting on the signaling power at one's disposal -- the habitus and social capital and networking connections -- inhibit the development of their actual capabilities such that they are incompetent when they wind up in power (a certain North American world leader comes to mind). All of this makes me wonder if an alternative human capital certification program is even possible given our current set of social relations -- the University of Phoenixes of the world don't seem in any danger of supplanting Princeton and Yale anytime soon, but the blogosphere may prove a viable arena for autodidacts to build their reputation. (Or destroy it.)

So far J. J. Abrams and Rian Johnson resemble children at play, remaking the films they fell in love with. As an audience, however, we desire a fuller experience.

As recently as the lackluster episodes I-III of the Star Wars saga, the embossed gold logo followed by scrolling prologue text was cause for excitement. In the approach to the release of any of the then new prequel installments, the Twentieth Century Fox fanfare, followed by the Lucas Film logo, teased one's impulsive excitement at a glimpse into the next installment's narrative. Then sat in the movie theatre on the anticipated day of release, the sight and sound of the Twentieth Century Fox fanfare signalled the end of fevered anticipation. Whatever happened to those times? For some of us, is it a product of youth in which age now denies us the ability to lose ourselves within such adolescent pleasure? There's no answer to this question -- only the realisation that this sensation is missing and it has been since the summer of 2005. Star Wars is now a movie to tick off your to-watch list, no longer a spark in the dreary reality of the everyday. The magic has disappeared… Star Wars is spiritually dead.

Keep reading... Show less
6

This has been a remarkable year for shoegaze. If it were only for the re-raising of two central pillars of the initial scene it would still have been enough, but that wasn't even the half of it.

It hardly needs to be said that the last 12 months haven't been everyone's favorite, but it does deserve to be noted that 2017 has been a remarkable year for shoegaze. If it were only for the re-raising of two central pillars of the initial scene it would still have been enough, but that wasn't even the half of it. Other longtime dreamers either reappeared or kept up their recent hot streaks, and a number of relative newcomers established their place in what has become one of the more robust rock subgenre subcultures out there.

Keep reading... Show less
Theatre

​'The Ferryman': Ephemeral Ideas, Eternal Tragedies

The current cast of The Ferryman in London's West End. Photo by Johan Persson. (Courtesy of The Corner Shop)

Staggeringly multi-layered, dangerously fast-paced and rich in characterizations, dialogue and context, Jez Butterworth's new hit about a family during the time of Ireland's the Troubles leaves the audience breathless, sweaty and tearful, in a nightmarish, dry-heaving haze.

"Vanishing. It's a powerful word, that"

Northern Ireland, Rural Derry, 1981, nighttime. The local ringleader of the Irish Republican Army gun-toting comrades ambushes a priest and tells him that the body of one Seamus Carney has been recovered. It is said that the man had spent a full ten years rotting in a bog. The IRA gunslinger, Muldoon, orders the priest to arrange for the Carney family not to utter a word of what had happened to the wretched man.

Keep reading... Show less
10

Aaron Sorkin's real-life twister about Molly Bloom, an Olympic skier turned high-stakes poker wrangler, is scorchingly fun but never takes its heroine as seriously as the men.

Chances are, we will never see a heartwarming Aaron Sorkin movie about somebody with a learning disability or severe handicap they had to overcome. This is for the best. The most caffeinated major American screenwriter, Sorkin only seems to find his voice when inhabiting a frantically energetic persona whose thoughts outrun their ability to verbalize and emote them. The start of his latest movie, Molly's Game, is so resolutely Sorkin-esque that it's almost a self-parody. Only this time, like most of his better work, it's based on a true story.

Keep reading... Show less
7

There's something characteristically English about the Royal Society, whereby strangers gather under the aegis of some shared interest to read, study, and form friendships and in which they are implicitly agreed to exist insulated and apart from political differences.

There is an amusing detail in The Curious World of Samuel Pepys and John Evelyn that is emblematic of the kind of intellectual passions that animated the educated elite of late 17th-century England. We learn that Henry Oldenburg, the first secretary of the Royal Society, had for many years carried on a bitter dispute with Robert Hooke, one of the great polymaths of the era whose name still appears to students of physics and biology. Was the root of their quarrel a personality clash, was it over money or property, over love, ego, values? Something simple and recognizable? The precise source of their conflict was none of the above exactly but is nevertheless revealing of a specific early modern English context: They were in dispute, Margaret Willes writes, "over the development of the balance-spring regulator watch mechanism."

Keep reading... Show less
8
Pop Ten
Mixed Media
PM Picks

© 1999-2017 Popmatters.com. All rights reserved.
Popmatters is wholly independently owned and operated.

rating-image