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I found this "room for debate" to be a disappointment. The nytimes wrote an earlier article titled "how we value the super rich" that I thought was far more insightful. This article indicated that Americans distinguish between super-rich who create wealth, and super-rich who are essentially toll collectors. It appears that conventional wisdom does an ok job at this - tech entrepreneurs, for instance, are generally admired, whereas wall street is generally despised, especially these days. There is some merit to this: http://www.newyorker.com/reporting/2010/11/29/101129fa_fact_... Unfortunately, there is nuance, and I don't think there is really any possibility that the public will fully grasp it. Not because they're dumb, but because it takes a huge amount of time to figure it out. Even that new yorker article, which takes a severely dim view of wall street, absolutely acknowledges that banking fulfills a critical role in the creation of wealth. How do you make sure you keep the baby when you throw out the bath water? And we're all too familiar with "innovative technology development" companies that really just exist to patent stuff, in order to extract a toll from those who do create (often completely independently of the original "innovation"). As for what to do? I don't even have a good answer in theory. I browse the randian/libertarian literature at top dog in berkeley every now and then, and there is a compelling case that many rent-collecting segments of the economy are propped up by government regulation, though even then, what do you do, eliminate the patent system? go back on the gold standard? abolish the AMA? Some people would say yes, I'm not so sure. I wonder if just a more vigilant attempt on the part of government to identify and eliminate rent-collection would help... I know, I know, a lot of people would hear this and say "in your dreams", and as usual, I'm really unsure about this myself. |
More seriously, I think there is a strong case for seriously limiting if not completely eliminating government intervention in the economy as those interventions often lead to very unintended consequences, notably favoring special interest groups at the expense of others.
As Milton Friedman said: "One of the great mistakes is to judge policies and programs by their intentions rather than their results."
Regarding income inequality, I do think it is a worrying phenomenon but a very small price to pay for a healthy economy and most of all, individual liberty.