[JamesBarney]

Redistribution has very little effect on growth except at extreme levels.[0]

Over the last 20 years the U.S. economy has grown 25% but the income for the bottom quintile has stagnated.[1][2]

I would agree growth is probably the best medicine for the third world but the IMF shows it's not at odds with redistribution.

I would strongly disagree that we can solve poverty in the 1st world using growth. We have two options for replacing the $7,000 the bottom quintile missed out on in the last 20 years because of rising inequality. We could redistribute $7,000 to the bottom quintile or grow by 25%. Redistributing $7,000 is doable. I don't know of any policies, or even any set of policies that would increase the size of the economy by 25%. This is even more insurmountable given that in recent history the gains from growth have not been distributed equitably. We would need to see an order of magnitude more growth, an increase in the economy of 250%-500% before the poor would be substantially better off.

[0] - https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf [1] - https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA [2] - https://www.census.gov/hhes/www/income/data/historical/famil...

[beefman]

Redistribution has very little effect on poverty, even at extreme levels.

The growth over the last 20 years is much less than before, which is a likely cause of the increasing inequality. In a zero-sum economy, trade tends to concentrate wealth.[1] Growth is plausibly strong enough to counteract this, and historically, is overwhelmingly correlated with falling inequality.

Policy is much weaker than growth at doing anything. I personally favor progressive taxation and a basic income, and I think we can continue to improve the effectiveness of policy, but governments (and humans generally) don't have so much freedom in economic matters as is often supposed.[2][3]

Free trade doesn't cause growth (as ten thousand years of history prior to 1800 shows) but it may be a necessary condition for it.

[1] http://nbviewer.ipython.org/url/norvig.com/ipython/Economics... [2] https://plus.google.com/+CarlLumma/posts/T2fdtAHtU9W [3] https://plus.google.com/+CarlLumma/posts/fWhcsTxvZVM

[tn13]

Bottom quintile is a very vague term. Is it individual income of family income ? What is the breakdown of young population v/s > 40 year olds in this ?

Income remaining stagnant or going down for bottom quintile is not really a problem. When you look at the economy over decades what truly matters is the quality of life people could afford at that time compared to 20 years back despite being in the same quintile. That is going consistently up thanks to the efficiency brought in by the growth. A focus on redistribution might help the bottom quintile temporarily but it would hurt the efficiency of economy by moving the money from private hands to government hands. This hurts not just the poor people but also the middle class and rich.

[JamesBarney]

The third link takes you there which has definitions for the term family, as well as population breakdowns. The United State Census Bureau presents them.

I linked to a paper by the IMF where they could not find any evidence that redistribution hurt growth.

To my knowledge GDP captures changes in efficiency. If we become more efficient we produce more stuff. What efficiency changes do you think are invisible to GDP but make the poor's life significantly better?

[kfk]

If you want to look at things from a humanitarian perspective, then sure, let's talk re-distribution. But it should be in form of education and competitive markets (free milk quotas, anyone?). I struggle with the idea of making war to make peace (aka "democratization"). I also struggle with domestic re-distribution through "citizen income", because it makes life worst for all that pay taxes and those that are not "citizen" (foreigners, immigrants, etc.).

If we want to help the "poor", then we should make things more competitive, starting with relaxing immigration policies as much as possible...

[AnthonyMouse]

> I also struggle with domestic re-distribution through "citizen income", because it makes life worst for all that pay taxes and those that are not "citizen" (foreigners, immigrants, etc.).

It has very little real effect on middle income taxpayers who both pay for and receive it, because in the middle range the benefit cancels the tax.

And the consequence for immigrants is hugely advantageous to nearly everyone. The problem we have today is that we have a large number of undocumented immigrants, which consume the capacity we have to absorb immigrants and therefore reduce the number of documented immigrants we can reasonably accept.

Something that makes it economically infeasible to be an undocumented immigrant would allow us to accept that many more documented immigrants through official channels and give them the basic income, thereby allowing much the same people to immigrate, modulo the few criminals who can't pass the background check and we don't want anyway. And then they're above board and don't have to live in the shadows, which is clearly much better for them. But meanwhile it allows us to affirmatively choose how much immigration we want instead of having people who break the law choose for us.

[RobertoG]

The issue is far for being so white and black.

Not all the growth come from free markets. More efficient use of resources and the discovery of new technologies come from improving our knowledge. Sometimes this is done by business, sometimes no.

Also, there are economic theories (even mainstream economic theories) that express the view that some kind of redistribution is necessary for keeping the engines of growth working.

[tn13]

As a free market guy, I don't think free market ideas are anti-redistribution. They are against redistribution through the coercive power of government as moral principle and utilitarian argument.

I think private charity is far more effective in helping people in need. The government redistribution is merely a ploy to steal our wealth in the name of fighting poverty. I am totally surprised to see the amount of money US government wasted on Iraq war for which no one ever got punished.

[RobertoG]

Redistribution and charity are very different things. Redistribution comes from the idea that societies have goals, and that those goals are better served by thinking about where to spend resources instead of leaving it to blind markets.

I can see that you think of the government as 'them' instead of 'us', instead of something that we do as a society. We differ there.

Also, it worries me that you think (maybe I'm reading you wrong here) that is the spending of money, of all the things, what is the main problem with the war on Iraq.

[tn13]

We do disagree on the definition of redistribution. I do not accept that government=society. I also do not accept that society should have any goals and I would put individual liberty over everything else.

I do think spending money on Iraq war was bigger problem for Americans.I think you are referring to destabilization of middle east as another problem. We have essentially borrowed money from our children to simply waste it or rather on creating even huge problems for our children.