09-22-2010, 09:33 PM
(09-22-2010, 06:42 PM)kandrathe Wrote: Overall, I agree that a more careful look needs to be made, but I'm not ready to declare that the earning power of the bottom 3 income quintiles is keeping up. Another factor in comparing Good A to Good B, purchased 30 years later is the amount of innovation added. A vehicle of 1980 is hardly comparable to a vehicle of 2010. Food is food, thankfully.
Food is not just food. The 20th century has seen as much innovation in the food we eat as in anything else. Livestock from 1900 are very different from 2000, leaner, faster growing, mass produced. Wheat is faster-growing, and better tailored to growing environments. Vegetables are ... well, they're mostly just bigger and more watery, but I guess that's what people want. There are many that have been created with better vitamin content, or resistance to certain pests and diseases (although perhaps vulnerability to others.)
Innovation over the century has improved our lives in countless ways that we do not count in GDP. We have also endangered ourselves in ways that are equally not counted, by depleting environmental capital. What the net balance is, is anyone's guess. I would suggest it is strongly positive, even for the relatively poor in the first world, but certainly not without concerns for the future.
The Economist article is interesting. Descending into the quagmire of constructing baskets based on the goods people actually consume is a dangerous road to travel. Suddenly, you start saying things like "because poor people buy bulk cans of low-quality soup, and rich people buy gourmet organic chef-branded soup, both groups are getting soup, and that means lower inequality." If there are one set of goods for the poor and another for the rich, that's another facet of inequality.
Globalization proponents argue that access to cheaper, better products counteracts the deterioration of wages. They might be right, it's hard to say. But there is certainly a countervailing force there - you can get all sorts of cheap junk made in China, and if you're in the lowest income brackets, that's probably a major savings.
Moreover, we can't just ignore the top 1%, as if that part didn't matter at all. That's something like 1.5 million people in the US, and if their incomes are taking off like rockets when everyone else's are puttering along barely keeping up, then that's a major increase in inequality. Whether it's worth doing anything about is another question, but it can't just be swept under the rug. Tsarist Russia had 1% that were phenomenally wealthy, and everyone else dirt poor, but nobody called that an equal society.
-Jester