I listened to this episode last night and immediately ordered Professor Galor's book. This interview made me think of comparison's to Jonah Goldberg's book Suicide of the West. Jonah's book is about how what he called the "miracle" of liberal democracy is in danger from illiberal forms of populism. In some ways it seems like Professor Galor's book examines that miracle from another angle. But I will be better able to understand the similarities and differences once I finish Professor's Galor's book (and perhaps reread Jonah's).
In the meantime, I have a question for Glenn. Most of the discussion of economic inequality in the interview was focused on inequality between societies not within them. My degrees are in history and law, not economics. But from my understanding of economics, it seems to me that there is often a tension between policies that increase economic growth and policies designed to reduce income inequality. For instance, lower tax rates for investment income and capital gains promote economic growth, but also allow some very rich people to pay lower overall tax rates than working class people. I am thinking of the argument that Warren Buffet shouldn't be paying taxes at a lower rate than his secretary. Am I right that the tension exists? If so, so long as economic growth leads to improving standards of living for the poor and middle class alike, should it matter that Billionaires grow their wealth at a faster rate? Take this hypothetical. A teacher offers to either give every student in class $10, except for one student who would get $100 or every student but one $20 while that one student got $500. Which option do you think a class would vote for? Unfortunately, I couldn't afford to run this experiment when I was a high school social studies teacher. I suspect my students from the Bronx would have chosen more money, while many Ivy League students would choose fairness. I remember President Obama was asked once if he would support raising the capital gains tax rate if he knew for a fact it would lead to lower tax revenue. He said he would as matter of fairness. I would also be interested in John's opinion if you want to save your answer to the question show.
I listened to this episode last night and immediately ordered Professor Galor's book. This interview made me think of comparison's to Jonah Goldberg's book Suicide of the West. Jonah's book is about how what he called the "miracle" of liberal democracy is in danger from illiberal forms of populism. In some ways it seems like Professor Galor's book examines that miracle from another angle. But I will be better able to understand the similarities and differences once I finish Professor's Galor's book (and perhaps reread Jonah's).
In the meantime, I have a question for Glenn. Most of the discussion of economic inequality in the interview was focused on inequality between societies not within them. My degrees are in history and law, not economics. But from my understanding of economics, it seems to me that there is often a tension between policies that increase economic growth and policies designed to reduce income inequality. For instance, lower tax rates for investment income and capital gains promote economic growth, but also allow some very rich people to pay lower overall tax rates than working class people. I am thinking of the argument that Warren Buffet shouldn't be paying taxes at a lower rate than his secretary. Am I right that the tension exists? If so, so long as economic growth leads to improving standards of living for the poor and middle class alike, should it matter that Billionaires grow their wealth at a faster rate? Take this hypothetical. A teacher offers to either give every student in class $10, except for one student who would get $100 or every student but one $20 while that one student got $500. Which option do you think a class would vote for? Unfortunately, I couldn't afford to run this experiment when I was a high school social studies teacher. I suspect my students from the Bronx would have chosen more money, while many Ivy League students would choose fairness. I remember President Obama was asked once if he would support raising the capital gains tax rate if he knew for a fact it would lead to lower tax revenue. He said he would as matter of fairness. I would also be interested in John's opinion if you want to save your answer to the question show.