Being poor sucks. And I don’t mean “having a lot of college debt and not making the kind of bucks I expected” class of poor. I mean actually poor: lacking in education, skills, knowledge, social support, and opportunity. The kind of poor you can’t just “bootstrap” your way out of. Now tack on a couple of dependent children, and you’ve got yourself a real economic puzzle with no obvious solution.
Inequality, it has been said recently, is the “defining issue of our era.” An upcoming book, which few have read (
including myself CLARIFICATION: I’m among those who haven’t read it) but many are talking about, attempts to explain the economics of inequality. French economist Thomas Piketty’s Capital in the 21st Century has struck a nerve in the chattering classes. As of this writing, it’s #1 on Amazon. The book has been received as a sort of economics textbook for progressives, using historical data to make the case that inequality worsens over time, and that America’s meritocracy is heading down a path toward 19th-century plutocracy in which The One Percent own all the capital and control all the wealth. Public intellectuals have been all over it this week. (Shockingly, Paul Krugman loves it, while Tyler Cowen remains unconvinced by its arguments).
Standard libertarian reaction to debates of inequality include, but are not limited to:
Don’t Tax Job Creators
Poor People Have iPhones and Cable TV Now
Things Aren’t as Bad as They Appear
Mexican and Filipino Laborers Have it Worse
So You Want To Talk Inequality While Flying Robots Murder People in Yemen
THE WAR ON DRUGS
Upper-Middle-Class Envy of the Ultra Wealthy
Wealth Accumulates To Those Who Create Wealth For Others, and:
Here Are All The Reasons the State is to Blame
None of these are wrong, but most of them are unpersuasive to the Establishment-Left’s true believers.
Fortunately, Megan McArdle has a very smart blog post (too good to adequately excerpt) detailing why cash transfers to those at the base of the wealth pyramid won’t be enough to help them attain self-sufficiency or better lives. In short: mitigating material inequality doesn’t salve the psychological effects of long-term unemployment, transfer payments won’t fix the fact that marriage and two-income households have long ago broken down among the poor, and the economy has left a large swath of the labor force behind in menial, low-paid jobs.
Let me be clear: people are not “in danger of being left behind,” or “being left behind.” The information economy ship has left the harbor.
The stars of the information economy are people with brains accustomed to dealing with complexity, most notably in quantitative fields like finance and computer science. For the rest of America’s 21st-century labor force, you either have a productive trade, marketable people skills, a bland-but-stable public-sector job, or you’re hustling to get by on 2-3 marginal, part-time jobs. That’s if you’re lucky. If you’re unlucky, your consolation prize is SSI/disability/public housing/prison.
For all the talk of inequality, nobody has any clue about what America should do with its unskilled, increasingly unemployable labor force. No politician wants to admit that we’ve already ceded Appalachia, the Rust Belt’s cities, and the rural south to persistent poverty. Instead, they’ll say we need to raise the minimum wage, and kick the can down the road to the next guy in office. Piketty’s proposed wealth tax would certainly punish the ultra-wealthy, but it’s not clear that it would do much to address other factors that determine individuals’ capabilities, like whether your parents read books to you, or abused Xanax.
Policies that actually might make a difference – criminal justice reform and complete liberalization of the education system, to name two – are not only huge, systemic reforms that will take decades to push through; they also remain off-limits according to huge blocs of quasi-sympathetic political supporters (unions, teachers, trial lawyers, cops, etc).
Let me repeat that: Our political system is not equipped to implement the kind of reforms necessary for continuing broad-based prosperity.
If this post sounds bleak, it’s because I think the future is looking pretty bleak as far as employment goes. As I’ve written before, I don’t think the economic future is going to resemble the economic past of the last 60 years. Short of scientists discovering how to cheaply install memory chips into the human brain to facilitate learning, there’s no way that this kludge of a government apparatus is going to pull millions of under-educated people out of poverty and into jobs that need to be done by engineers or robots.