Steven Kyle on Tyler Cowen on inequality:
Angry Bear: Tyler Cowen Makes Two Mistakes: Tyler Cowen says that rising inequality in the US isn's as bad as we think it is and also that insofar as it does exist we shouldn't worry about it. He makes two mistakes:
He says that because much of measured inequality in incomes can be traced to differences in education, it isnt a result of policy or of basic unfairness in the system. This would be true if there were a level playing field in terms of education in the first place. However, there very obviously isnt.... Bottom line %u2013 If the deck is stacked against poor people in terms of educational opportunity then we can't say that tracing income inequality to education shows that "the contemporary American economy isn't rigged in favor of the rich," to use Tyler Cowen's terminology.
Cowen goes on to say: "The broader philosophical question is why we should worry about inequality -- of any kind -- much at all. Life is not a race against fellow human beings, and we should discourage people from treating it as such. Many of the rich have made the mistake of viewing their lives as a game of relative status. So why should economists promote this same zero-sum worldview? Yes, there are corporate scandals, but it remains the case that most American wealth today is produced rather than taken from other people. What matters most is how well people are doing in absolute terms."
To this, I can only say that it takes a white middle aged economics professor with tenure to come up with a statement like that.... [I]n the real world [inequality] makes people distrustful of the system and causes them to lose faith in the fairness of society. General belief in the social contract is a long term asset to us all and one we should be very worried about losing. Only a very narrow view of the world could conclude otherwise...