Watts Question 4 Reply 1 – Income Inequality

Question 4
Hushbeck Answer to Question 4
Watts Answer to Question 4
Hushbeck Question 4 Reply 1
(The numbered questions were posed by Joel Watts to Elgin Hushbeck. See links above.)
1) You claim that “While many are coming out of poverty… there are many more who are going into it.”  While given the recent ecomonic problems this is undoubtedly true for last few years,  it is hardly true if one  takes a longer view, and certainly conflicts the statistic cited by Brooks of the unprecedented decline in poverty around the world.  For another example, in the US poverty declined steadily from after WWII to the mid 1960s when Johnson launched the war on poverty, and which point the decline halted and poverty actually rose slightly until the late 1990s when welfare reform move away from redistribution and towards more market based solution, at which point poverty declined again.  How do you account for these facts?
It is difficult to argue against such highly selective blips. However, one must first understand what poverty is. What we need to do is to discuss the United States and its rise in poverty during the last few decades. What are we seeing?
We are seeing an increasingly smaller group of people at the very top who own more with the remainder group owning less. Further, in the 1990’s, laws were put into place that first benefited the ownership society but has now shown to have created a false economy. The “market based solution” in the 1990’s created the market based problem in the last decade.
2) You cite Europe as an example, but European governments have faced growing fiscal problems in recent decades.  In my book, written before the recent economic problems I cited the growing problems in Europe as a reason we should not follow their example.  The more successful, such as Germany, have been moving more towards market based solutions while others are on the verge of collapse. They seem to be either moving away from the very policies you advocate or are collapsing.  Why should we adopt the policies that are failing in Europe?
This is a bit of a strawman. What I said was, “As we see in Europe, free market systems are sometimes controlled, and the better controlled, the more rewarding it is for their economies (German, for example).” It is well noted that the increase of capitalism has caused the problems in Europe. Further, as we can see, Germany is not all up for free markets without a tighter control. There is a Soziale Marktwirtschaft. So, sadly, nothing you have said in this question has an ounce of reality in it. Pure, unrestrained capitalism destroys, but Government regulated markets gives life.
3) You claim that wealth is fixed and that for the weathly to do good, they must take from the poor.  If this is true, how do you account for the growth in overall wealth in the United State given the grow in population over the last 100 years? If wealth were actually fixed as you claim, then there simply would not be enough of it to go around given the growth in population and everyone would be poor.  But the standard of living today is far higher than 100 years ago.
I think your mixing up some ideas here without a sound philosophical basis. First, wealth, like energy, cannot be created. It can be explored, stretched, and used. Attempts at increasing the amount of wealth lead to inflation which will correct itself. Further, I didn’t say wealth was fixed. I said there was a limited good.
For instance, when land was the ideal of wealth, the only way to get more wealth was to get more land. Then, we invented money — coins. But, this took away people’s land and other means of production — namely, land. This is the idea of limited good.
Yes, the standard of living is increased, but to what end? Wealth became more evened out. Now, we see it shrinking, pooling into just a few hands. This is why poverty and the decrease in the standard of living have occurred in the last few decades. And, you confuse standard of living with independent wealth. You remove the role government safety nets and technology have worked to increase the standard of living.