Democratism Blog

This interesting news piece from Princeton’s Wilson School, about a paper on the causes of income and wealth inequality, points to a danger in trying to learn too much from causes.

The paper attributes a great deal of the swell in inequality to, in the words of one of its authors, “the mere process of development,” which raises demand for higher-skilled workers in the service sector of rich countries. The paper itself (at NBER, restricted access) doesn’t  address policy solutions, but the authors offered one up for the news story: “Equipping workers with high-level skills could be key to closing the gap, they said.”

So, a thought on causes and solutions: I may be enjoying a swim in a river and then notice that I’ve drifted too far downstream. Fortunately, I don’t necessarily have to swim upstream to get back. I could take a bus instead. That’s the difference between me and a salmon.  Likewise, even to the extent that inequality arises from disparity in certain skills, the solution isn’t necessarily training more people in those skills.

However we got here, the challenge before us is to balance the needs and desires of everyone involved, including

• people with skills that pay well; let’s call them the “richly skilled” (they’re not, after all, the most highly skilled in any other sense than that their particular skills can make them rich)
• people who might seek the services of the richly skilled
• people who aspire to be trained and to enter the ranks of the richly skilled
• people who don’t really want to spend their lives doing what the richly skilled do but might consider it if it seems the most practical option
• people who just aren’t going to end up richly skilled no matter what
• people who might seek other kinds of services, such as from the not-richly-skilled
• the family and friends of any of these people

Okay, evidently it includes everyone. So the right question isn’t, How can we increase the number of richly skilled people competing for riches? It’s something more to the effect of, Given everything we’re capable of, what’s the best balance we can strike in fulfilling our needs and aspirations for ourselves and our society? We can build a system that allows us to answer that question together and shift resources accordingly.