3.7.1 Introduction to Income Inequality
243.7.1.1 Welcome to Does Inequality Matter: Exploring Poverty and Finding a Way Out Have you ever been concerned with income inequality? If so, this is the place for you. We've curated a list of fantastic videos from many perspectives to help you think about income inequality in a new way. Here's how it works:
1. Watch the introductory videos featuring Professor Sean Mullholland of Stonehill College.
2. Watch the supplementary videos linked below.
3. Answer multiple choice questions at the end of each section.
4. Consider what you've learned. Does inequality matter? What are the most eective ways to alleviate inequality?
Figure 3.6: "Introduction to Income Inequality" by the Institute for Humane Studies
19http://philosophyfaculty.ucsd.edu/faculty/rarneson/ElizabethAndersonWhatIsthePointofEquality.pdf
20http://www.philostv.com/elizabeth-anderson-and-david-schmidtz/
21http://diego-rios.fr/Webpage/FILOSOFIA_POLITICA_-_UTDT_les/Part%20Equality%20and%20Priority.pdf
22https://www.law.upenn.edu/institutes/cerl/conferences/prioritarianism_papers/Session3Frankfurt.pdf
23https://www.tfaforms.com/428832
24This content is available online at <http://cnx.org/content/m66246/1.1/>.
29 3.7.1.2 Supplementary Videos
1. How wealth inequality is dangerous for America25 : When people talk about inequality, they're often concerned with income inequality. This video argues why we should be concerned about income inequality and why we should be even more concerned by wealth inequality.
2. What Wasn't Said in "Wealth Inequality In America"26 : Professor Steve Horwitz of St. LLawrence University argues that discussions of income inequality miss a central point: Are the poor in our society able to lift themselves out of poverty?
Exercise 3.7.1.1 (Solution on p. 34.)
Which of the following statements is true?
a. The rate of return on wealth is lower than the growth rate of the overall economy.
b. The top 1% of Americans takes home 40% of national income.
c. Income inequality is at its highest rate since the Great Depression.
d. The top 1% of Americans holds 20% of the national wealth.
Exercise 3.7.1.2 (Solution on p. 34.)
A key factor that some graphs of income inequality miss is income mobility over time. Why is this factor important?
a. Income levels cannot be accurately measured at one time.
b. Income levels are dynamic and can shift greatly from one generation to the next.
c. It isn't. Income mobility does not change interpretation of any data.
d. Income levels uctuate rapidly from one year to the next.
3.7.2 Thinking of Income Mobility
27Figure 3.7
3.7.3 Fuzzy Snapshots
28Figure 3.8: "Mobility Intro" by the Institute for Humane Studies
Description
According to Professor Sean Mulholland of Stonehill College, statistics about income inequality provides only a fuzzy snapshot of the economy. In order get a full snapshot, Mulholland says, we also need to examine income mobility.
25https://www.youtube.com/watch?v=6Xa9T2OMzmw
26https://www.youtube.com/watch?v=44LHBViTZI0
27This content is available online at <http://cnx.org/content/m66245/1.1/>.
28This content is available online at <http://cnx.org/content/m66247/1.1/>.
Available for free at Connexions <http://cnx.org/content/col23833/1.4>
30 CHAPTER 3. EQUALITY 3.7.3.1 Supplementary Videos
1. Is there Income Mobility in America?29 : Are the rich getting richer while the poor get poorer?
Professor Sean Mulholland uses several statistical measures and nds that this common perception may not be accurate. A surface-level examination of statistics may indicate that the poor are getting poorer, but a more thorough study shows that there is more income mobility in the United States than many might think.
Exercise 3.7.3.1 (Solution on p. 34.)
From 1967 to 2009, the share of total income for the poorest Americans decreased. However, a. the share of total income was measured incorrectly in 1967.
b. the actual amount of income increased.
c. social programs made wealth unnecessary.
d. the share of income for the wealthiest Americans also fell.
3.7.4 Does It Matter?
30Figure 3.9: "Inequality Problem Into" by the Institute for Humane Studies
Description
According to Professor Sean Mulholland of Stonehill College, some economists are concerned by rising in-equality, while others are not. Professor Mulholland introduces these dierences in opinion.
3.7.4.1 Supplementary Videos
1. Daron Acemoglu on Why Nations Fail31: Professor Daron Acemoglu of MIT argues that institutions that promote equality are crucial to prosperity.
2. Does U.S. Economic Inequality Have a Good Side?32 : Professor Richard Epstein of New York Uni-versity argues that wealth inequality acts as a driving force for innovation.
Exercise 3.7.4.1 (Solution on p. 34.)
Extractive institutions
a. are designed by the elite to take resources away from the general population.
b. remove the inuence of special interest groups from politics.
c. redistribute wealth to the less wealthy.
d. limit private property rights.
Exercise 3.7.4.2 (Solution on p. 34.)
According to Professor Epstein, higher marginal tax rates a. increase production and decrease wealth distribution.
b. decrease production and have little eect on wealth distribution.
c. have little eect on production and increase wealth distribution.
d. decrease production and increase wealth distribution.
29https://www.youtube.com/watch?v=UbueX92CKPk
30This content is available online at <http://cnx.org/content/m66249/1.1/>.
31https://www.youtube.com/watch?v=2z5RAZlv2UQ
32https://www.youtube.com/watch?v=7pq79lYauZo
31
3.7.5 Does It Matter? - More Thoughts
33Figure 3.10: "Inequality Problem Conclusion" by the Institute for Humane Studies
Description
Professor Sean Mulholland of Stonehill College discusses whether and when he is concerned by economic inequality
3.7.5.1 Supplementary Videos
1. Living in Poverty USA34: This video describes what life at the poverty line looks like.
2. Suburb in Wealthy Illinois County Sees Unexpected Rise in Poverty35 : A suburban neighborhood of one of the nation's wealthiest counties has experienced a surprising rise in the number of people living below the poverty line a trend that accelerated in suburbs across the country during the recession.
Elizabeth Brackett of WTTW Chicago reports.
Exercise 3.7.5.1 (Solution on p. 34.)
Which of these would be unhelpful in ending poverty in the long run?
a. Job training b. Free childcare
c. College Grants d. Subsidies
Exercise 3.7.5.2 (Solution on p. 34.)
Which of the following statements is true about funding for welfare programs?
a. Government funding goes disproportionately to urban areas.
b. Funding as dramatically reduced the number of people living below the poverty line in the wake of the 2008 nancial crisis.
c. Welfare recipients typically rely on local funding more than federal funding.
d. Federal funding has proven more eective than state or local funding.
3.7.6 We Can Help
36Figure 3.11: "Poverty Conclusion" by the Institute for Humane Studies
3.7.7 Designing Policies
37Figure 3.12: "Policies Intro" by the Institute for Humane Studies
33This content is available online at <http://cnx.org/content/m66248/1.1/>.
34https://www.youtube.com/watch?v=MHPz8YPys2w
35https://www.youtube.com/watch?v=T9ZFoI0CNqU
36This content is available online at <http://cnx.org/content/m66243/1.1/>.
37This content is available online at <http://cnx.org/content/m66250/1.1/>.
Available for free at Connexions <http://cnx.org/content/col23833/1.4>
32 CHAPTER 3. EQUALITY Description
Professor Sean Mullholland introduces a few public policies that could help alleviate poverty.
3.7.7.1 Supplementary Videos
1. World Poverty: Foreign Aid vs. Charity That Actually Works38 : Professor Matt Zwolinski of the University of San Diego discusses why foreign aid often fails to help poor people and proposes a better solution.
2. Working More to Earn Less | Why the Poor Stay Poor39 : What if I told you that the government is keeping people poor in our welfare system by paying less when they work more? Professor Mulholland argues that this is happening every day. Well-intentioned welfare programs drastically decrease benets at certain income thresholdswhich in eect can make a breadwinner and his/her family worse o when they start earning more.
3. Racial Inequality in the Criminal Justice System40 : Minorities are grossly overrepresented in U.S.
prisons, and Professor Daniel D'Amico argues that the root of the problem may lie with the criminal justice system itself.
4. What You Should Know About School Choice41: Professor Angela Dills of Providence College explains how school choice would benet low income and minority students.
Exercise 3.7.7.1 (Solution on p. 34.)
Why is giving directly to the poor more eective than top-down foreign aid systems?
a. Private charities giving directly to the poor are able to raise far more money.
b. Governments and NGOs often lack the local knowledge needed to provide aid eectively.
c. Voters are extremely hostile towards foreign aid programs.
d. Trick question! Foreign aid has been extremely eective at reducing poverty.
Exercise 3.7.7.2 (Solution on p. 34.)
Perverse incentives created by a sudden cuto of benets a. oer rewards for working more.
b. make nding work more dicult.
c. oer rewards for working less.
d. compete with corporations.
Exercise 3.7.7.3 (Solution on p. 34.)
Why are minorities over represented in US prisons?
a. Minorities are inherently more violent.
b. Overt racism in the writing of anti-drug laws.
c. Police ocers are incentivized to arrest minorities.
d. People with dierent levels of wealth face dierent costs and benets to participating in the drug trade.
Exercise 3.7.7.4 (Solution on p. 34.)
Which of the following is NOT true about school choice?
a. It raises the quality of schooling.
b. It lowers the cost of schooling.
38https://www.youtube.com/watch?v=TIrEbiUIVQQ
39https://www.youtube.com/watch?v=NH-3HlrnHQs
40https://www.youtube.com/watch?v=He5bHG1OA
41https://www.youtube.com/watch?v=GPvotHZNpyE
33 c. Parents of students enrolled in a school choice system are more satised with the safety of
their children in school.
d. It disproportionately helps high-income students.
3.7.8 Conclusion
42Figure 3.13: "Policies Conclusion" by the Institute for Humane Studies
Description
Professor Sean Mullholland of Stonehill College explains which public policies he believes would best help alleviate income inequality.
42This content is available online at <http://cnx.org/content/m66252/1.1/>.
Available for free at Connexions <http://cnx.org/content/col23833/1.4>
34 CHAPTER 3. EQUALITY
Solutions to Exercises in Chapter 3
Solution to Exercise 3.7.1.1 (p. 29)
c. Income inequality is at its highest rate since the Great Depression.
Solution to Exercise 3.7.1.2 (p. 29)
b. Income levels are dynamic and can shift greatly from one generation to the next.
Solution to Exercise 3.7.3.1 (p. 30) b. the actual amount of income increased.
Solution to Exercise 3.7.4.1 (p. 30)
a. are designed by the elite to take resources away from the general population.
Solution to Exercise 3.7.4.2 (p. 30)
b. decrease production and have little eect on wealth distribution.
Solution to Exercise 3.7.5.1 (p. 31) d. Subsidies
Solution to Exercise 3.7.5.2 (p. 31)
a. Government funding goes disproportionately to urban areas.
Solution to Exercise 3.7.7.1 (p. 32)
b. Governments and NGOs often lack the local knowledge needed to provide aid eectively.
Solution to Exercise 3.7.7.2 (p. 32) c. oer rewards for working less.
Solution to Exercise 3.7.7.3 (p. 32)
d. People with dierent levels of wealth face dierent costs and benets to participating in the drug trade.
Solution to Exercise 3.7.7.4 (p. 32)
d. It disproportionately helps high-income students.
Chapter 4
Introduction to Political Philosophy
4.1 Introduction to Political Philosophy
14.1.1 Introduction
Figure 4.1: "Introduction to Political Philosophy with Jason Brennan: A Libertarianism.org Guide"
by Libertarianism.org
Most political debate is supercial. If you want supercial debate, you need only turn on cable news. Political philosophy is for people who want to understand and debate the deep questions.
People debate whether it's more just for the rich to pay a 40% or 38% marginal tax rate. They rarely ask the deeper questions: Why should we be forced to pay taxes at all?
People debate whether we should speed up the process for immigrants to become nationalized, or how many skilled immigrants we should allow in. They rarely ask the deeper questions: Why should we divide the world into nation-states with strict territorial borders in the rst place? If I want to hire a Haitian to clean my house, why should the rest of you be allowed to stop me?
People debate whether congressional districts are gerrymandered or whether voters should be required to show ID. They rarely ask the deeper questions: Why should our fellow citizensmost of whom know nothing or less than nothing about politicsget to decide who gets to lead the country? Why not instead, say, limit the right to vote to people who can pass the US citizenship exam, or who show a basic understanding of economics and history?
People debate whether a too-big-to-fail corporation should get a bail out. They debate whether a local government should use its power of eminent domain to transfer land from poor people to General Motors.
They rarely ask the deeper questions: Why should we allow limited-liability corporations to exist in the rst place? Why should anyone be able to claim land as her own? Why not instead hold that the world and all its resources belong to all us equally?
People debate whether the American police are too brutal and violent, and what can be done to make the police force more civil. But they rarely ask the deeper questions: Why should we create governments in the rst place? A government claims a monopoly on the use of violence to create and enforce rules. If it would be bad for, say, Walmart or Target to become monopolies, why would we want a monopoly on the coercive power? Why shouldn't I be allowed to choose which police force will protect me, just as I can choose where to shop for clothes or food?
Political philosophy is the branch of philosophy that asks and attempts to answer these deeper questions.
There are many other questions: Which matters more, individuals or the community as a whole? What
1This content is available online at <http://cnx.org/content/m66020/1.1/>.
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35
36 CHAPTER 4. INTRODUCTION TO POLITICAL PHILOSOPHY kind of government, if any, ought we have, and what should it be permitted and forbidden to do? Do we have any moral obligation to obey our government's laws and commands? What rights do people have, and why? Should be people be allowed to own private property? If they don't have enough property to live well, should the government provide it through tax-funded welfare programs? Should people be free to choose what to eat, how to live, what to worship, what to say, or on what terms they will work? Is it important that everyone have equal opportunity to succeed? Should we make sure everyone ends up equally successful?
Should people be allowed to emigrate freely? When, if ever, is war justiable? What's more important, liberty or equality? And what exactly is liberty, anyways? Of all the ways people could be equal, which, if any, matter from the standpoint of justice?
We manage to live together peacefully (more or less) because we accept and live by commonly accepted rules. I don't show up at your house to drink your beer, and you don't snatch my car out of the parking lot.
When we come to a four-way stop sign, we all know what to do. I don't tell you not to let your kids play Minecraft, and you don't forbid me from letting mine have ice cream. You don't force me to attend your church, and I don't force you to stay away from yours.
Our lives are governed by many such rules, most of which we rarely notice or think about. Economists refer to the various rules of social life as institutions. Institutions are the rules of the game that structure our lives together. For example, if you think about it, democracy and monarchy are really a set of rules about who gets to make the rules. The institution of marriage is a set of rules about how to allocate and control property, children, and sex. The institution of private property is a set of rules about who gets to use, modify, trade, and destroy various external goods.
The main goal of political philosophy is to determine the standards by which to judge dierent institutions good or bad, just or unjust.
Some people might think they don't have much need of political philosophy: Who cares about wishy-washy obtuse notions of justice? I'm a pragmatist. I just want to know what works.
But this isn't a way of avoiding political philosophy; it's a way of being dogmatic about it. After all, before we can just do what works, we have to know what counts as working. I look at a system in which both the poor and the rich are getting richer and think, It's working! A friend looks at that same system, sees the income gap between the poor and rich growing, and thinks, It's not working. We can both pound the table and call ourselves pragmatists. But at the end of the day, we're divided not by our lack of pragmatism, but by our dierent political philosophies.
John Rawls, an eminent twentieth-century political philosopher, Rawls says that theories of justice are about assigning the rights and duties and determining the proper distribution of benets and burdens of social cooperation.1What make dierent political philosophies distinct from one another is what rights and duties they think people ought to have, what principles they think determine the proper distribution of benets and burdens ought to be, and most fundamentally, what they regard as a society.
The purpose of this primer in political philosophy is to introduce you to some of the major theories of justice, to see some of the arguments philosophers have adduced for and against these theories, and, ultimately, to help you be more thoughtful and rigorous in your own thinking. My goal is to supply you with questions more so than answers.
1. John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), pp. 5-6.
4.1.2 Political Philosophy: An Introduction
Jason Brennan's companion volume to this guide, Political Philosophy: An Introduction oers a short introduction to economics and the market economy. Visit Libertarianism.org2 to download the book for free.
2https://www.libertarianism.org/books/political-philosophy-introduction
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4.1.3 Libertarianism.org Guides
Libertarian.org's guides are self-paced online courses taught by top professors and experts. Guides introduce the basic ideas and principles of a free and ourishing society and serve as a path to further learning. Start with the introductory video, then dive into the lecture series and featured book. Each Guide's homepage oers reading lists, essays, and links to other helpful materials. Check out Libertarianism.org3 to nd more guides.