Joye on inequality

Chris Joye has some thoughts on Andrew Leigh’s new book.

I am much more worried about poverty and inequality of opportunity. Obsessing over income differentials, on the other hand, is a potentially dysfunctional development. What alternative reality are these advocates striving for? Income equality? Nobody serious today would support that. Maybe ‘greater income equality’? I don’t really think so. And, if you are gunning for the latter, who should be entitled to determine what the appropriate benchmark for greater income equality is? I know of nobody suited to the task. It is not hard to work out that pushing equality is a very slippery ideological slope.

In his academic research, Dr Leigh struggles to find any compelling evidence that rising inequality is associated with higher crime rates or deteriorations in health and life expectancy. In fact, he concludes that increases in income inequality are – as I would expect – correlated with higher economic growth. Simply put, the more opportunities that you give to people to fulfil their potential, rather than coercing them to revert back to the financial mean, the more dynamic an economy you are likely to end up with.

Leigh concludes that “those who believe in the ideal of a more equal Australia will be disappointed to learn that the ‘instrumental’ case against inequality is so weak.” Instead, he argues that “policymakers ought to worry about inequality if it offends the typical person’s sense of justice. We all have different feelings about how much inequality is tolerable, but most people have a visceral sense that at a certain point, the income gap can grow too wide.”

This strikes me as weak stuff: we should not be setting economic and social policy by appealing to the law of averages, or some visceral gut feeling about right and wrong. This does not come remotely close to satisfying the hard, evidenced-based policymaking tests that Dr Leigh himself has been such a strong advocate of.

Update: MattC has a reply here.

Christopher Joye doesn’t “think there is anything wrong at all with a rise in income inequality if one assumes that we have equality of opportunity; we are committed to combating extreme poverty; and we are vigilant in protecting those members of the community who are fundamentally and irreversibly damaged through, say, mental or physical disabilities”.

This is a common position among small-l liberals of the centre-right, and I see this as a key ideological dividing line between liberals and social democrats.

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31 Responses to Joye on inequality

  1. JC

    Instead, he argues that “policymakers ought to worry about inequality if it offends the typical person’s sense of justice

    What an evidence based pol he’s turned out to be. I wouldn’t have guessed it for a mile.

    It’s almost a form of primitivism.

  2. Tom Valentine

    In taking this position Leigh cannot be speaking as an economist although he has a right to speak as a citizen or political commentator.Reading his AFR columns,I decided some time ago that he was one of those economists(eg.Krugman,Stiglitz,Gittins)who had given economics up in favour of populist stuff.

  3. daddy dave

    Equality equals homogeneity.
    There are certain kinds of equality that are good to have: equality before the law (ie “rule of law”);
    equality of vote (ie “franchise”);
    equality of opportunity;
    equality of access to social institutions (such as universities etc).

    Other kinds of equality are just trying to obtain the impossible. eg.
    equality of income
    equality of house size
    equality of educational attainment
    equality of physical fitness

    and so on. These are absurd equalities, and every time they are attempted, bad things happen.

  4. JC

    In taking this position Leigh cannot be speaking as an economist

    He was campaigning on adding more public servants and criticizing Howard for allowing numbers to drop. That’s the sort of “economist” he is.

    The only notable research I know of that he’s done was that he found the ABC new programing to be right wing supporting the coalition. Seriously.

    But he just loves little black babies though, as he’s always talking about them. Just loves little black babies.

  5. boy on a bike

    I’d like equality of seating access on the bus. It’s abhorrent that some should stand, sniffing the armpits of others, whilst others get to sit in luxury.

    “Wadda we want?
    Bums on seats.
    Whendowewanem?
    Now!”

    In lefty-equality world, this would result in the removal of all seats from buses so everyone could stand in equal misery. Even if you’re the only person on the bus.

  6. boy on a bike

    Leigh is concerned by the drop in social capital since WWII.

    Let’s think for a moment what sort of venues were used in the 1940s and 50s for “building social capital”.

    For starters, the Labor party had a lot of members who met in smoke filled halls. Unfortunately, the only women who they allowed in were those that took the minutes and served the tea and cake. They also excluded ethnics. Smoking was almost compulsory.

    Then there were pubs, which excluded women and blacks etc etc.

    The biggest one though was probably the church and all its associated “outreach” programs. Take your pick of religion.

    Then there were lots of clubs – social, sporting and other (men only, no ethnics or blacks).

    So if we want to go back to having the social capital of the 1950s, we should go to church every week, kick women out of the pubs and reclaim them as “man spaces”, allow indoor smoking in all venues, kick women and ethnics etc out of whatever clubs are still functioning and reclaim them as “man spaces”. Those infernally annoying bearded fembots in purple kaftans with teacosies on their heads should be banned from all political meetings.

    In short, more church, more beer, more tobacco and more PPP nights with the boys.

  7. Jacques Chester

    Relevant: Inequality in Eqaulland

    Summary: even in a society with perfectly equal citizens leading perfectly identical lives, the statistics will show a scary-looking power-law distribution of wealth because old people have a time advantage.

  8. Jacques Chester

    bloody typos. s/Eqaulland/Equalland/

  9. Sleetmute

    The issue with Joye’s criticism is that “equality of opportunity” is not much less problematic than equality of outcome. What does equality of opportunity mean? That all kids must receive the same amount of ‘quality’ childcare, attend the same types of schools with the same quality of teachers, have the same access to computers and other educational aids, etc etc.

  10. Judith Sloan

    In his academic research, Dr Leigh struggles to find any compelling evidence that rising inequality is associated with higher crime rates or deteriorations in health and life expectancy. In fact, he concludes that increases in income inequality are – as I would expect – correlated with higher economic growth. Simply put, the more opportunities that you give to people to fulfil their potential, rather than coercing them to revert back to the financial mean, the more dynamic an economy you are likely to end up with.

    So where does that leave the findings of the book The Spirit Level which contended that more equal societies had better outcomes on just about everything. Peter Saunders of the CIS, however, has demolished most of the findings of The Spirit Level.

  11. Jarrah

    “There are certain kinds of equality that are good to have [etc]”

    Very well put, daddy dave. I raise a similar point every time a lefty friend criticises inequality – Which inequality are you talking about? Which of the many kinds is important?

    “He was campaigning on adding more public servants and criticizing Howard for allowing numbers to drop. That’s the sort of “economist” he is.”

    That’s him becoming a politician. He’s a good economist, and probably doesn’t like having to toe that line, but in a PS town like Canberra, it’s political suicide to not take their side. Besides, if the primary purpose of an MP is to represent their electorate, then he’s doing that. It’s one of the flaws in representative democracy, more than a flaw in his thinking.

    “Inequality in Equalland”

    That is a great link, Jacques, thank you. There is no escaping the power of compound interest.

    “So where does that leave the findings of the book The Spirit Level”

    Where they belong – in the bin. As Leigh has said before.

  12. JC

    That’s him becoming a politician. He’s a good economist, and probably doesn’t like having to toe that line, but in a PS town like Canberra, it’s political suicide to not take their side. Besides, if the primary purpose of an MP is to represent their electorate, then he’s doing that. It’s one of the flaws in representative democracy, more than a flaw in his thinking.

    Are your minimum standards really this low?

    Don’t dismiss rank dishonesty/disingenuous pronouncements that easily even by a person that essentially is appointed to a soviet seat.

    He has a right to say that and people have a right to mock him mercilessly for the things he’s said.

    Furthermore he has form by suggesting the ABC represents the liberal party.

  13. Jarrah

    Feel free to mock him, JC, and I agree. He is not serving the greater good by resisting PS lay-offs. I’m just pointing out that it’s political reasoning that is making him do it, not economic. He has blogged on the large differences and the struggle to adjust.

    “Furthermore he has form by suggesting the ABC represents the liberal party.”

    A strangely false description, considering you’ve had Andrew Norton explain the reality to you (and presumably you also saw Sinclair’s take on it). In fact Leigh co-authored a study that purported to show that the ABC has a Liberal slant due to its mentions of pigeon-holed public intellectuals. I think their chosen metric was obviously flawed, but Leigh didn’t suggest what you say he did.

    There’s no need to make stuff up to criticise when there’s plenty that actually exists.

  14. JC

    ….but Leigh didn’t suggest what you say he did.

    He didn’t? Are you retarded? Of course he reported the freaking finding, as it made it’s way on Media Watch by the presenter’s using that crap in attempt to suggest ABC impartiality.

    “Lookey here people. While there’s a lot of viewers who think we’re leftarded loons living off the taxpayer, there’s Dr. leigh from ANU who did a study to show we’re actually liberal party slanting every time we try to roast Murdoch and push a green agenda”.

    That what that idiot more or less said!

    When did Leigh ever explain that he thought that insides of a toilet of a study was flawed? Did he?

  15. JC

    Here Keyze.

    They sent it to the ABC, which used that crap and published it as an authoritative news story , which I guess is where that little two bit Englishman at Media watch (climbing out from under his rock for 10 mins a week 7 months of the year) got it from.

    http://www.abc.net.au/news/stories/2009/09/02/2674717.htm

    Those two academics sent it to the ABC and they knew exactly what they were doing by sending it there, as it would give those reprobates a chance to hide behind an air of a “study” they aren’t partisan. They wanted the ABC to use it and they knew there was a good chance the ABC would do so.

    It’s so mendacious what they did that we should get our freaking money back as taxpayers.

  16. Jarrah

    “He didn’t?”

    No, he did not suggest “the ABC represents the liberal party”. This has been explained to you by at least two knowledgeable commentators that you respect and who broadly share your politics. If that’s not enough, then there’s no point continuing here.

    Like I said, you don’t need to make stuff up to criticise, when the facts will suffice (cf Lambert, Lancet, etc).

  17. JC

    Am I taking this out of context then Keyze?

    Newspapers are left wing, television is right wing, and the media as a whole tends to favour the Coalition.

    And surprisingly, according to researchers from the Australian National University, the ABC Television news is the most pro-Coalition of them all.

    Are you nuts? Seriously.

  18. Jarrah

    “Am I taking this out of context”

    No. You are taking a media report (ie a simplification) of a bad study and trying to make it prove your original assertion is right, when it doesn’t support it. If you can’t grasp that after several explanations, then I can’t help you.

    For the last time – criticise what people actually say, you’ll be taken seriously. Making shit up to bolster your argument is not only unnecessary, it makes people dismiss any legitimate criticisms and you end up worse off.

  19. JC

    Listen, if you have any evidence then present it.

    If the ABC is wrong then take it up with them and while doing that show evidence that the ABC got their (Gan and Leigh) research incorrect… and while doing so you may want to explain that if the ABC got it wrong why didn’t they request a retraction… and also present the evidence they did request a retraction which is what stand up people would do. Failing that then stop it with the bullshit.

    The fact, as far as I see it, is that the ABC did NOT incorrectly conclude that this toilet of a study (paid for by taxpayer funds) suggested the ABC had a right wing/coalition slant.

    I don’t care what AN says. If he’s unable to present evidence otherwise he’s in the same leaky boat as you are.

  20. JC

    Here’s Jonathon Holmes:

    On the ABC, according to former Treasurer Peter Costello, lefties rule…It’s hardly a new complaint, of course. But imminent retirement has given Mr Costello the freedom to join the chorus. As he put it in The Age three weeks ago: “I am not now at the mercy of the media so I can afford to say what everyone on the conservative side of politics knows – the ABC is hostile territory.”

    The ABC has always denied that its output leans to the left – a denial greeted with hoots of derision by its Coalition critics. Coincidentally, just a few days later, a couple of academics from Melbourne Uni and the ANU published a study which attempts, using some impressive-looking mathematical formulae, to answer the question: “How Partisan is the Press?” using “Multiple Measures of Media Slant”. It finds that the answer is “not very partisan at all”. Most newspapers, radio and television, says the study, take a centrist line. But in a finding that must have amazed Mr Costello, the authors add: “The only media outlet that is significantly slanted is the ABC Channel 2 television station, which is significantly pro-Coalition during the period in question.”

    Pro-Coalition! Well knock me down with a feather! Bias, like beauty, is in the eye of the beholder – and just as hard to quantify.

  21. JC

    Here’s Gerard Henderson on Gans reaction to what you believe is incorrect reporting by the ABC.

    On his website, Mr Gans has declared that, following the citation of his work by Jonathan Holmes on Media Watch, he has been able to tick-off one item on his “little list of life’s achievement”. Wrote Gans: “At long last, I got a mention on Media Watch.“Wow. Or as Jonathan Holmes would say: Wow!!!

    Here’s hoping that Mr Holmes and his Media Watch team will publish much more of Joshua Gans’ ground-breaking research in future editions of the program. MWD is particularly impressed by his work on, er, male urinals. Gans’ paper “Urinal protocol vulnerability” attempts to answer one of the key questions of our time. Namely: “When a guy goes to the bathroom, which urinal does he pick?” Good question, don’t you think?

    So we know that Gans was more than aware this toilet bowel of a study was being reported on Media Watch and chose not to correct it.

    He had no problem and in fact was high fiving himself for scoring a mention. Elation would be a good way to characterize his feelings.

    I think an apology is in order, Keyze, as it’s game set a freaking match (something you seem to be used to here)

  22. Rafe

    The point about demanding equity is that the demand can never be satisfied so the good folk can feel warm and wonderful for ever, or at least as long as organizations are silly enough to fund their campaigns.

    I would be more sympathetic if they had something to say about the people who are really doing it tough for no fault of their own, like the carers of severely disabled dependents, young and old. But it is not about the human reality of disadvantage, it is about “statistics’ and pseudoscience, static concept of society (as Judith noted) and a narrow, cramped ideology.

  23. JC

    Rafe:

    The equality angle is over. It’s finished. Globalization has basically seen the end of that attempt to make everyone furry little equals.

    Globalization means the best talent for allocating capital, whether it’s a car maker executive, banker or any talented individual will end up with the most income.

    It’s a star system and matter how much leftwingers whine nothing will stop it.

    This will work right through industry.

    Look at what is happening to the retail industry here and how it’s being forced to compete with online global firms.

    That’s why re-regulating the labor market places the retail industry at a huge disadvantage.

  24. Peter Patton

    You folks are kidding, right?

    Joye says

    The first observation is that a lot of people get awfully worked up about ‘income inequality’. I am not entirely sure what they are on about

    Here’s why Joye is “not entirely sure why people get awfully worked up about “income inequality”. Behold the very normal average digs Comrade Joye grew up in.

    http://theage.domain.com.au/real-estate-news/holiday-house-for-40000-per-week-20101202-18hi5.html

  25. jtfsoon

    err yes Peter what’s your point

    I grew up in a modest bourgeois household and don’t give a shit about income inequality either.

  26. Jarrah

    JC, you do realise “suggesting the ABC represents the liberal party” and “suggested the ABC had a right wing/coalition slant” are very different things? Did you notice that the latter – your words – is also how I corrected the former? You have changed your description to the correct one while trying to pretend it’s the same thing as your incorrect one.

  27. Jc

    Keyze

    Is there a phd in pedantry?

  28. Jarrah

    I doubt it, but I can recommend this one for you.

  29. Jc

    Peter

    Leave people’s private lives alone. That crap doesn’t belong here and has nothing to do with the point of the thread.

    If people are wealthy and they earned the money legally … Good luck to them . They can buy buck palace.

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