Can we afford equality?
Angus Kennedy will introduce a discussion on the classic text Equality and Efficiency: the big tradeoff by Arthur M. Okun. As many call today for increased taxes to pay for social entitlements and to restrain the alleged greedy excesses of bankers and the City, for the state to deliver social justice and fairness, it is worth considering the arguments that attempts to increase equality in society can not only be economically wasteful and inefficient but also even that they come at the expense of freedom and at the risk of creating a culture of dependency and passivity.
“High tax rates,” wrote Okun, “are followed by attempts of ingenious men to beat them as surely as snow is followed by little boys on sleds.” Is it true that there is a necessary tradeoff between equality and efficiency? That attempts to regulate the economy such as Basel III are doomed to failure? Would lower tax rates benefit us all or just the well-off? In what sense can we be considered to be equal, if any, so long as inequalities in wealth distribution remain?
Slides referred to (on inequality in the UK from the IFS) can be found here.
And US income/money distribution is here.
Equality and Efficiency: the big tradeoff, Arthur M. Okun, Brookings Institution: 1975
America’s inequality need not determine the future of Britain, Martin Wolf, FT, 22/12/11
A fixation with inequality, a poverty of understanding, Daniel Ben-Ami, spiked, 23/12/11
Defending rights from the right, Matthew Taylor, RSA Blog, 27/12/11
The problem with entitlements, Matthew Taylor, RSA Blog, 30/12/11
Obama’s “war on religion”, Economist, 11/02/12
What voters never hear about the English health service, Iain Martin, FT, 12/02/12
America’s failed promise of equal opportunity, Alex Gourevitch & Aziz Rana