Inneqaulity in the US.

Economics is flawed, at least as currently practiced. Currently markets are used quite effectively to carry out the key function of resource distribution. States cannot do this, as the Soviets so convincingly illustrated. However, distribution of economic resources is not the only problem that we need to solve.

If you are a traditional economist then the two areas of concern are:

• Distribution of resources efficiently. (this gets all the atention at present)
• Allocation of wealth. (Ineqaulity in excess leads to low economic productivity)

If you are an ecological economist then these two issues are joined by a third

• Scale. (if the physical limits of the planet are to be considered there is an optimum scale for the economy; with a given distribution and allocation pattern a variety of standards of life are possible depending on scale)

This is best explained by means of an analogy:

Boat's have a plimsol line. You can add goods to the vessel untill the water reaches this level. If you are careful and distribute the goods evenly over the vessel you may carry more than if the weight is to one side. The weight is analagous to the economic activity, the boat our planets carrying capacity and the distribution is the perfect distribution of resources in the economy.

We can stretch this analogy further to cover inneqaulity. It is well known that a unit of wealth for very poor is more productive than for the wealthy. If you give a poor farmer $500 dollars he may be able to transform his livelihood, the same can not be said for a millionaire. So if we imagine not a deck with goods to be sifted around but a series of decks where goods on the higher decks represent the wealthy we can see that this to destabilises our boat. The higher the centre of gravity the more the boat rocks, even if the load is even and not great the plimsol line will be diping into the water and tising far above.

When dealing with envieronmental issues we must embrace economics. We must say, what a facinating system, let us set it a new challange. Having largely solved distribution let us then look at scale and allocation. We must fight inneqaulity and population growth as we promote innovation and eco-efficiency.

All of this is important not only in terms of comming to grips with communal challanges but also in terms of getting such a movement off the ground. Ineqaulity has many associated malodies, it does not emerge out of thin air and the related social issues of insecurity and lack of trust are certain to promote reactionary, defencive politics not a generous progressive agenda.

The video bellow covers the current economic state of play in the US.

Panel discussants:

Alan Krueger, the Bendheim Professor of Economics and Public Policy and Director of the Survey Research Center at the Woodrow Wilson School;

Douglas Massey, the Henry G. Bryant Professor of Sociology and Public Affairs at the School;

Viviana Zelizer, the Lloyd Cotsen '50 Professor of Sociology at Princeton.

Moderator:

Stan Katz, Lecturer with rank of Professor of Public and International Affairs
Faculty Chair, Undergraduate Program

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