Good old Guardian

Politicians want us to believe that it is possible to make better-off people richer without making poor people poorer.

Stunning that politicians actually are accused of holding a belief which is true.

Similarly stunning that The Guardian assumes that this is obviously not true.

The Guardian is stuck in that idea that the size of the pie is fixed. Which, of course, it isn\’t. It is possible to grow the pie.

Just as one example. Way back when, around the time of the start of the Industrial Revolution, the gini (a measure of the inequality of the society) was about 0.50 for the UK.

The unchanged gini (ie, before we consider the effects of the tax and benefits system) for the UK now is about 0.50.

Are the rich better off now than they were in 1750? I think the answer to that is obviously yes. Are the poor better off now than they were in 1750? I think the answer to that is similarly and equally obviously yes.

So, we\’ve got unchanged inequality of market incomes over the 259 years, the better-off are better-off (umm, obviously, making adjustments for the fact that no one at all is 259 years old) and the poor are not poorer.

It is therefore possible to make the better-off better-off without making the poor people poorer.

The mechanism is called economic growth.

Such a pity that the leading left wing newspaper in the country seems entirely ignorant of this fact.

7 thoughts on “Good old Guardian”

  1. Well, politicians are so seldom correct that it may be worth noting.

    Having said which, the Grauniad is so seldom correct that I’m not stunned at all.

  2. Of course, economic growth, over time, enriches everyone. But it doesn’t follow from this that the Guardian is wrong. It’s quite possible that governments, for all their bluster, cannot affect long-run growth:
    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/07/can-governments-increase-growth.html
    If this is so, then perhaps all governments can do is to redistribute income – which might well be zero-sum (or, if the bucket is leaky, negative sum).

  3. If poverty is defined relatively we can indeed have rich being richer and poor poorer. It’s pretty much required in order for the facile slogan to work.

  4. Contrary to chris, there is ample evidence that governments can indeed affect long-run economic growth. Zimbabwe’s comes to mind as perhaps the clearest example.

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