One composition stat that most annoys me is the average wage. It ought to be possible to have a wage index the same way as we have a price index. Define a job and sample IT (them) with fixed weights.
It's hard for me not to call a country with 50% of GDP being government spending "socialist".
But I will admit that basically everyone is socialist. Excepting a few tiny countries like Singapore most countries spend between a low of 40% to a high of 60%. Sweden is right in the middle. If you consider "employer group health insurance" a de facto government program in the USA then the US also spend close to 50% of GDP on government.
So if we are all going to be mixed market socialist states where government is half the economy...we might as well be good at it.
Sweden is good at "socialism" of this type. More social insurance than welfare state. Mostly rule following middle class paying taxes to themselves. Better design programs, etc.
The government is probably going to tax/spend right up to the limit that they can get away with in the short/medium term. Then the question becomes how it's spent. I'd take "socialism" over say incompetent kleptocracy for the same price.
"The point is that over time the membership of a group changes. ... most of them are no longer in the bottom 20 percent." I believe this but NOT because "their incomes may have risen a lot, so that most of them are no longer in the bottom 20 percent."
It's because in 40 years many of them died. I'm sure many of the 1980 poor never left the bottom 20 % in any year since 1980. There is an obvious accounting issue in labelling young college students as in the bottom 20%, since at 21 (or 18??) they are adults - tho no the IRS allows dependency credit until 25? So many poor college grads do leave that 20%. But take all those non-college grads over 30 who are in the bottom 20% in '80 or '90 or '00 or '10 and my guesstimate is that 80% do not leave the bottom 20%, and of the 20% who do, 60% don't get above the 40% level (most).
What are the right metrics for discussing this problem? Is it even a problem?
It is a problem. Income mobility is more important than inequality, because meritocracy is so important and the poor need to know that, following the success sequence, can lift them out of poverty.
A famous 2014 Harvard paper: "The 8-9% likelihood that a child born into the bottom twenty per cent will reach the top twenty per cent of earners has barely changed over the period studied (the research follows cohorts born between 1971-86)." This is not the best metric for mobility.
Rather take all households in the bottom 20% and put them in age decades of their oldest earner, usually the married husband; single mothers will naturally be lower-earners on average. Five age decades <30, <40, <50, <60, 69< (70+).
But I didn't quickly & easily find this data - maybe tomorrow will try AI.
We also need more talk about absolute poverty - since with good economic growth, based on win-win deals and positive sum results, EVERYBODY could have the material conditions that current US middle class folk enjoy.
However, there will always be a bottom 20% - so income rank, like status, is zero-sum in that for one to move up, another must move down.
Bryan Caplan wrote awhile ago about how more Free Marketeers should be concerned about unemployment. Gov't jobs for the jobless, in one way or another, is likely the best way / least bad way to increase the wealth of the bottom 20%
From The Zvi: "Stanley Pignal: 41% of French population is in favour of a proposal to limit everyone to 4 flights in their entire life."
I've seen that "poll" before. The company that did that poll is a Marketing mix modeling company (https://csa.eu/csa/). It was an online poll (!) at the request of HERE (https://www.here-by-vivendi.com/). From the HERE site: "flows of tourists are increasing globally, travelers are more demanding and complex while the planet cannot afford our current tourism habits anymore". Cannot afford.
This is a recent (4 months ago) job posting by the same director of HERE quoted in the summary of the poll results: "The HERE team is looking for a new 🚀 rock star 🚀 to take over ... from July.
We are looking for a talent :
- Fond of travel and concerned about sustainable travel". Coherence.
Did the respondents understand the poll? When asked where would they go if they were restricted to just 4 flights in their whole life: "les Etats-Unis (31%), le Canada (14%), le Japon (13%) et l’Australie (11%)". Ok. So they do understand. Nobody answered with an European country... oh wait: "Le continent américain (71%), puis l’Europe (49%) et l’Asie (39%)". You can check a partial breakdown of Europe, and it's not countries far away from France, in fact 9% is France (!).
And about the sample of respondents, for that same question of where would they go in their 4 flights, 36% would not go anywhere and 3% don't know... that would be 39% total compared with the 41% who said they agree with the proposition... what a curious poll.
Swedish individualism is very interesting. If one were to take Norberg at face value that Swedes are individualists and leave it there I think there would be something missing. It does not seem to be the same as Scottish individualism. There is a norm in Northern Germany and Scandinavian countries where giving someone a gift isn't really seen very well from the gift receiver because now an obligation has been created. This was shown in maps and explanation here: https://www.boredpanda.com/european-countries-dont-offer-food-guests/
So Norberg's noting of individualism coupled with the rise of big government and the movement away from big government seems to lead to the structure of the Swedish state as it is today where it has been noted many times, especially in UK publications, that Swedes now use the state to be individualists and not rely on others. https://en.wikipedia.org/wiki/Statist_individualism
Christopher Lasch: Excellent selection of Revolt of the Elites quotes.
One big problem is that - with the massive post-90s expansion of tertiary education - the 'elite' (that Lasch so presciently identified) has grown so large that no one - not even the 'New Right' - dares criticise its tens-of-millions of members head on. So the New Right tends instead to come up with conspiracy theories of one sort or another (Marxist academics, Weathermen, Tech Giants, etc etc) so that they can re-state the truth of Lasch's analysis whilst nevertheless implicitly absolving those tens-of-millions of Democrat-voting, semi-woke, graduate class of any personal responsibility for the mess we're in. https://grahamcunningham.substack.com/
Re: "The point is that over time the membership of a group changes."
Another point is that one must distinguish *selection effects* and *treatment effects*.
Consider the correlation between educational attainment (a college degree) and high life expectancy. The two outcomes might partly have a common independent cause; say, individual intelligence and conscientiousness. (which have also a genetic component). College completion, then, *selects* individuals who are relatively intelligent and conscientious. These traits then also partly cause greater longevity.
Alternatively, college attendance and completion might tend to inculcate health-mindedness and/or open doors to careers, peer groups, and elite cultures that facilitate good health and longevity. These would be *treatment effects* of educational attainment.
One composition stat that most annoys me is the average wage. It ought to be possible to have a wage index the same way as we have a price index. Define a job and sample IT (them) with fixed weights.
It's hard for me not to call a country with 50% of GDP being government spending "socialist".
But I will admit that basically everyone is socialist. Excepting a few tiny countries like Singapore most countries spend between a low of 40% to a high of 60%. Sweden is right in the middle. If you consider "employer group health insurance" a de facto government program in the USA then the US also spend close to 50% of GDP on government.
So if we are all going to be mixed market socialist states where government is half the economy...we might as well be good at it.
Sweden is good at "socialism" of this type. More social insurance than welfare state. Mostly rule following middle class paying taxes to themselves. Better design programs, etc.
The government is probably going to tax/spend right up to the limit that they can get away with in the short/medium term. Then the question becomes how it's spent. I'd take "socialism" over say incompetent kleptocracy for the same price.
I'd like to finance all "life situation" transfers with a VAT adjusted to keep the average at zero deficits.
"The point is that over time the membership of a group changes. ... most of them are no longer in the bottom 20 percent." I believe this but NOT because "their incomes may have risen a lot, so that most of them are no longer in the bottom 20 percent."
It's because in 40 years many of them died. I'm sure many of the 1980 poor never left the bottom 20 % in any year since 1980. There is an obvious accounting issue in labelling young college students as in the bottom 20%, since at 21 (or 18??) they are adults - tho no the IRS allows dependency credit until 25? So many poor college grads do leave that 20%. But take all those non-college grads over 30 who are in the bottom 20% in '80 or '90 or '00 or '10 and my guesstimate is that 80% do not leave the bottom 20%, and of the 20% who do, 60% don't get above the 40% level (most).
What are the right metrics for discussing this problem? Is it even a problem?
It is a problem. Income mobility is more important than inequality, because meritocracy is so important and the poor need to know that, following the success sequence, can lift them out of poverty.
A famous 2014 Harvard paper: "The 8-9% likelihood that a child born into the bottom twenty per cent will reach the top twenty per cent of earners has barely changed over the period studied (the research follows cohorts born between 1971-86)." This is not the best metric for mobility.
Rather take all households in the bottom 20% and put them in age decades of their oldest earner, usually the married husband; single mothers will naturally be lower-earners on average. Five age decades <30, <40, <50, <60, 69< (70+).
But I didn't quickly & easily find this data - maybe tomorrow will try AI.
https://hbr.org/2014/02/what-we-know-about-income-mobility-depends-on-how-we-define-it
This 2021 AEI paper echoes Arnold, but still misses a bit:
https://www.aei.org/carpe-diem/explaining-us-income-inequality-by-household-demographics-2020-update/
Good note that single-parent or singles are 83% of the bottom 20%.
Getting married is a very important thing poor people could do, and should do, to reduce the poverty; more important than finishing high school.
Quintile level changes are shown well by the tax policy center:
https://www.taxpolicycenter.org/statistics/household-income-quintiles
We also need more talk about absolute poverty - since with good economic growth, based on win-win deals and positive sum results, EVERYBODY could have the material conditions that current US middle class folk enjoy.
However, there will always be a bottom 20% - so income rank, like status, is zero-sum in that for one to move up, another must move down.
Bryan Caplan wrote awhile ago about how more Free Marketeers should be concerned about unemployment. Gov't jobs for the jobless, in one way or another, is likely the best way / least bad way to increase the wealth of the bottom 20%
From The Zvi: "Stanley Pignal: 41% of French population is in favour of a proposal to limit everyone to 4 flights in their entire life."
I've seen that "poll" before. The company that did that poll is a Marketing mix modeling company (https://csa.eu/csa/). It was an online poll (!) at the request of HERE (https://www.here-by-vivendi.com/). From the HERE site: "flows of tourists are increasing globally, travelers are more demanding and complex while the planet cannot afford our current tourism habits anymore". Cannot afford.
This is a recent (4 months ago) job posting by the same director of HERE quoted in the summary of the poll results: "The HERE team is looking for a new 🚀 rock star 🚀 to take over ... from July.
We are looking for a talent :
- Fond of travel and concerned about sustainable travel". Coherence.
Did the respondents understand the poll? When asked where would they go if they were restricted to just 4 flights in their whole life: "les Etats-Unis (31%), le Canada (14%), le Japon (13%) et l’Australie (11%)". Ok. So they do understand. Nobody answered with an European country... oh wait: "Le continent américain (71%), puis l’Europe (49%) et l’Asie (39%)". You can check a partial breakdown of Europe, and it's not countries far away from France, in fact 9% is France (!).
And about the sample of respondents, for that same question of where would they go in their 4 flights, 36% would not go anywhere and 3% don't know... that would be 39% total compared with the 41% who said they agree with the proposition... what a curious poll.
https://csa.eu/news/etude-here-les-francais-et-la-proposition-dun-quota-de-4-vols-par-personne-dans-une-vie/ (total of destinations must add up to 400% in case you were wondering)
Swedish individualism is very interesting. If one were to take Norberg at face value that Swedes are individualists and leave it there I think there would be something missing. It does not seem to be the same as Scottish individualism. There is a norm in Northern Germany and Scandinavian countries where giving someone a gift isn't really seen very well from the gift receiver because now an obligation has been created. This was shown in maps and explanation here: https://www.boredpanda.com/european-countries-dont-offer-food-guests/
So Norberg's noting of individualism coupled with the rise of big government and the movement away from big government seems to lead to the structure of the Swedish state as it is today where it has been noted many times, especially in UK publications, that Swedes now use the state to be individualists and not rely on others. https://en.wikipedia.org/wiki/Statist_individualism
So why did Sweden get big government to begin with? Does it have anything to do with the urbanization rate? https://www.researchgate.net/figure/Urbanisation-rate-in-Sweden-percent-1800-2010-see-online-version-for-colours_fig1_274299172
Christopher Lasch: Excellent selection of Revolt of the Elites quotes.
One big problem is that - with the massive post-90s expansion of tertiary education - the 'elite' (that Lasch so presciently identified) has grown so large that no one - not even the 'New Right' - dares criticise its tens-of-millions of members head on. So the New Right tends instead to come up with conspiracy theories of one sort or another (Marxist academics, Weathermen, Tech Giants, etc etc) so that they can re-state the truth of Lasch's analysis whilst nevertheless implicitly absolving those tens-of-millions of Democrat-voting, semi-woke, graduate class of any personal responsibility for the mess we're in. https://grahamcunningham.substack.com/
Re: "The point is that over time the membership of a group changes."
Another point is that one must distinguish *selection effects* and *treatment effects*.
Consider the correlation between educational attainment (a college degree) and high life expectancy. The two outcomes might partly have a common independent cause; say, individual intelligence and conscientiousness. (which have also a genetic component). College completion, then, *selects* individuals who are relatively intelligent and conscientious. These traits then also partly cause greater longevity.
Alternatively, college attendance and completion might tend to inculcate health-mindedness and/or open doors to careers, peer groups, and elite cultures that facilitate good health and longevity. These would be *treatment effects* of educational attainment.