Piketty Notes and Quotes 2: The Envy Objection

So this isn’t so much a note on anything in Piketty per se, but rather some thoughts in answer to one of the objections that inevitably comes up as soon as the subject of inequality is raised (in particular, this arises out of a recent exchange on Facebook).  You are no doubt familiar with the line of objection: “Why does it matter so long as everyone is benefiting?  If the poor guy sees his income double, and the rich guy sees it go up tenfold, then the only possible reason for complaining must be envy.”

Of course, there are a zillion things that could readily be said in response to this objection.  For one thing, inasmuch as it’s being used as an ad hominem against whoever is bringing up income inequality (which is shockingly often), it’s a bit bizarre: after all, if person A is complaining about person B having more than himself, well, there might be envy going on.  But if person C is complaining about person B having more than person A (but not about person B having more than himself), then whatever’s going on, it sure doesn’t seem to be envy.  For another thing, there’s actually all kinds of other possible reasons, pertaining to the bad consequences that many see flowing from inequality, which will in the end make life more difficult for the poor guy, despite his immediate material improvement.  These can all be explored in due course.  But for now, I want to get to the heart of the objection, by asking, “Suppose the concern is inequality per se—in abstraction from various injustices that may have led to it, and various social ills expected to follow from it.  Is there an immediate and inherent problem, and if so, is it distinguishable from sinful envy?”  I.e., let’s assume that if you doubled the poor guy’s income while increasing the rich guy’s tenfold, the poor guy would, not long after he got over his initial glee, start feeling quite unhappy, perhaps even more unhappy than before.  This, I think, is a plausible assumption.  Is there any way to characterize his unhappiness besides “envy”? Read More

Piketty Notes and Quotes, 1: From McDonalds to Wall St.?

I finally got my copy of Thomas Piketty’s blockbuster Capital in the Twenty-First Century last Friday (it was on backorder for almost a month, such is the demand), and have been spending every minute of spare time since reading and pondering it.  My brain is getting too full to store all the ruminations, so I’ll start depositing them (along with choice quotes) here, beginning with this little passage on pp. 299-300, which ends with a nice example of Piketty’s trademark wry understatement:

“This unprecedented increase in wage inequality [in the US, 1975-present] does not appear to have been compensated by increased wage mobility over the course of a person’s career.  This is a significant point, in that greater mobility is often mentioned as a reason to believe that increasing inequality is not that important.  In fact, if each individual were to enjoy a very high income for part of his or her life (for example, if each individual spent a year in the upper centile of the income hierarchy), then an increase in the level characterized as ‘very high pay’ would not necessarily imply that inequality with respect to labor—measured over a lifetime—had truly increased.  The familiar mobility argument is powerful, so powerful that it is often impossible to verify.

But in the US case, government data allow us to measure the evolution of wage inequality with mobility taken into account: we can compute average wages at the individual level over long periods of time (ten, twenty, or thirty years).  And what we find is that the increase in wage inequality is identical in all cases, no matter what reference period we choose.  In other words, workers at McDonald’s or in Detroit’s auto plants do not spend a year of their lives as top managers of large US firms, any more than professors at the University of Chicago or middle managers from California do.  One may have felt this intuitively, but it is always better to measure systematically wherever possible.”