Wednesday, January 18, 2012

A different tale of income inequality

I hate it when people say the things I think or I know, before I get to say them. And that seems to happen all the time, when it comes to articles by Niall Ferguson. His latest at Newsweek takes on the idea of income inequality and the fundamental realities of why there is such a large apparent divide between rich and poor in America.

He crafts this piece by citing arguments from Charles Murray's upcoming book, Coming Apart, to provide a more conservative approach to a problem he--and Murray--sees as very much a reality. The piece is well worth a full reading, as Murray's book will no doubt be as well. But I'd like to touch on several observations made that are very much consistent with my own observations.

Murray posits two "communities," one home to the well-educated (Belmont), the other to the not-so-well educated (Fishtown). He then argues that four distinct social trends of the past fifty years have had far greater consequences--negative consequences--for the latter types of communities.

Marriage has declined in both, but it has declined further in Fishtown, where a much larger proportion of adults either get divorced or never marry, so that a far higher share of Fishtown children now live with a lone divorced or separated parent. Unlike Belmont, Fishtown has a sad underclass of “never-married mothers”—who also happen to be the worst-educated women in town.
Industriousness has scarcely declined in Belmont, but it has plummeted among Fishtown white males, an amazing number of whom are unable to work because of illness or disability, or have left the workforce for some other reason, or are unemployed, or are working fewer than 40 hours a week. The big problem here is not so much a lack of jobs as a new leisure preference (“goofing off” and watching daytime TV). The work ethic has been replaced by a jerk ethic.
Crime has become more of a problem in Belmont than in the good old days, but again it is much worse in Fishtown, where an alarming share of white males are either in prison, on parole, or on probation.
Finally, religiosity has declined in both towns, but much more steeply in Fishtown. Contrary to popular belief, Murray argues, it’s not the elites who have become secularized and the working class that has remained devout. In fact, church attendance is much lower in Fishtown than in Belmont.
For Murray, the consequence here is a far greater breakdown in the traditional bonds of civil society in Fishtown, the destruction of the community--as a community--itself. From my perspective, it's also a consequence of incentives--particularly the ones created by government programs--going the wrong way.

Murray has a solution packet, as well, one that should cause most libertarians an conservatives to stand up and cheer:
As Murray shows, there is a conservative solution to the problem of inequality. Scrap the failing welfare programs of the ’30s and ’60s before they bankrupt America. Ensure that everyone has a basic income. Then simplify the tax code to restore the incentives that used to exist for everyone to work hard. Finally, end the state monopolies in public education to launch a new era of school choice and competition.
Now, Ferguson rightly questions some of the idealization of the past Murray appears to be engaging in, but that's a minor point, I think. Regardless, this should be a great book, one our friends in DC should read, first and foremost.

Cheers, all.


  1. Strangely, Santorum had made relatively similar observations in the last debate :)

  2. I like all the solutions but this one, which seems highly problematic: "Ensure that everyone has a basic income."

    Who pays for it? Doesn't it produce disincentive to work? How do you resolve those two fundamental issues?

    Also, I'll echo Dimitry's comment. Check out what Santorum had to say.

  3. Yes, I assumed you'd pick up on that one as the weak link. I'm not sure exactly what it means, to be honest. Guess we'll have to wait for the book to hit the shelves...(end of month, I think)