[From Rick Marken (01.02.14.1830)]
Mike Acree (2001.02.14.1544 PST)--
The poorest 20% in the U.S. are vastly wealthier than the
poorest 20% in Cuba, even with the billions held by Bill
Gates and all the rest.) If you understand that one economic
system can, even in principle, lead to both greater wealth
held by the poor and a greater disparity between rich and poor
than another economic system
Yes. Of course. I understand that. In fact, I already agreed (in
Rick Marken (01.02.12.2130)) that this was possible. I said:
I agree...So the poor in an economy with a hugh wealth disparity
are getting a tiny portion of a large, fast expanding pie while the
middle class in an economy with no wealth disparity are getting a
large portion of a tiny, sluggishly expanding pie. It's easy to
work the numbers out so that the wealth of the poor person in the
large wealth disparity economy is always much larger than that
of the average person in the no wealth disparity one
What I didn't (and still don't) agree to is that the large, fast
expanding economy is that way _becuase_ of the wealth disparity.
we can return to the original question: Which do you favor?
Neither. Though if it were a forced choice I would, of course, pick
the high wealth disparity economy, where the poor are doing OK,
over the low wealth disparity economy, where the poor are in dire
straights.
Wealth disparity is only _one_ factor involved in economic
performance. According to the leakage model, wealth disparity
is keeping the US economy from producing up to its potential.
Other factors, such as central command and limited natural
resources, are surely the main factors that keep countries like
Cuba poor.
By the way, I am not against wealth disparity per se. All I'm saying
is that, according to the leakage model, anyway, significant wealth
disparity can produce leakage, which slows the economy. I don't know
what the "right" level of disparity is. But a lower level than what
we have now would be good for the economy as a whole and, of course,
for the poorest elements of the society. When 20% of the children
in a society are living below the poverty level, as they are in the
USA, you know that the wealth disparity is _way_ too large.
You asserted a truism: r + p = w
I think it's an assumption; the assumption that wealth is consumed
by the entire population (here represented as two groups, r and p).
This assumption could be wrong. It probably is wrong in at least
one little respect. Some wealth is never consumed by anyone. So a
slightly better assumption may be w = r + p + l where l is leakage,
wasted w.
Anybody who disagrees with you has to be wrong
No. Anybody who disagrees with me "has to" show their preferred
alternative model.
and you don't even have to pay much attention to what they
are saying.
I never "have to" pay attention to what anyone is saying. But I
do pay attention to people (like Bill and T.C. Powers) who talk
in terms of mechanistic, mathematical models of the phenomena
we are discussing.
However I try to redirect your attention, I get the same response.
f(x) = k is uninteresting, and I drop out...Possibly you have the
same experience in exchanges with me.
Yes. My problem with you is that I've never heard you describe
your model of the economy in anything like quantitative terms.
I find philosophical debates about the economy uninteresting; I
prefer models and data. Always have. Always will.
Best regards
Rick
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Richard S. Marken Phone or Fax: 310 474-0313
Life Learning Associates e-mail: marken@mindreadings.com
mindreadings.com