Minding the Gap: Folk Marxism and income inequality Posted by: Jon Henke
on Friday, April 07, 2006
Folk Marxism looks at political economy as a struggle pitting the oppressors against the oppressed. … Under folk Marxism, the oppressed class has inherent moral superiority to the oppressor class... – Arnold Kling, in TCS Daily
In a previous TCSDaily series, Arnold Kling suggested that humans – and consequently, cultures – tend distill “the views of important thinkers…into folk beliefs”. That folk belief – perhaps similar to what Richard Dawkins called a “meme” — may bear only a passing resemblance to the original idea, but once embedded in a culture it can become “so automatic and so pervasive that it effectively goes unnoticed”. What Kling calls Folk Marxism is essentially the internalization of a membership-based Us VS Them worldview – identity as a signaling mechanism, or even a substitute, for merit.
The first entry in a Washington Post editorial series on poverty and inequality in America offers substantive evidence of Mr. Kling’s Folk Beliefs hypothesis – and of my own belief that US society is gradually moving from our original Folk Locke-ism to Folk Marxism.
The problems with the Post editorial are not limited to philosophy, either. Writing that, depending on the statistics used, “the tide is either not lifting most boats or lifting many of them modestly”, the Post seems to take the bold position that most people are either not doing better…or, uh, they are. Similarly, the Post simultaneously argues that it could be “disputed” that the tide is “lifting all boats”, and – mere sentences later – that “all boats did rise”.
But if the metaphorical tide is lifting all boats, then what, exactly, is the point? In another TCS Daily essay, I predicted we would soon see statistical sleight of hand employed to promote liberal and/or Democratic economic policies, and that is precisely what the Post intends with this series. After conceding that “all boats did rise”, the editorial nevertheless goes on to suggest that “there are promising policies out there, too: policies that would reduce inequality without damaging growth”.
The problem, according to the Post, is not that the poor are getting poorer, but the existence of inequality itself: “it's hard to celebrate such modest gains when the top fifth advanced 59 percent over the 24-year period”. A clearer expression of Folk Marxism we'll rarely see.
But if the problem is inequality itself, then the answer necessarily must be one of two possibilities: we can either restrain economic growth at the top, or increase it at the bottom. Yet, as Dale Franks has pointed out, the “Top” and “Bottom” are not exactly equivalent. While, for example, the “household income for the 10th percentile, in constant 2003 dollars, rose from $9,583 to $10,536” between 1985 and 2003 – an increase of ~10% — the households in the lowest income quintile look very different from those against which they are compared. For one thing, they contain different numbers of people. Heritage: “the average household in the Census' top quintile contains 3.2 persons, while the average household in the bottom quintile contains 1.8 persons.” Worse, as the Dallas Fed pointed out some years back, “Households in the top income quintile have, on average, 2.1 workers, compared with only 0.6 for the bottom fifth.”
It should be no surprise to the Post that proportionally fewer people working proportionally less will fall farther and farther behind. Indeed, unless we want to incentivize unemployment and the break-up of families, it shouldn’t necessarily even be something we ought to “fix”.
PJ O’Rourke, in Eat The Rich, wrote that in “the difference between poverty and plenty, the problem is the poverty and not the difference”. Having conceded that even the poverty is getting better, the Post is now determined to mind the gap, as well, seeking new monsters to slay in inequality. In doing so, all of what Max Borders called “the Stone Age Trinity” – guilt, envy and indignation – are used to advance the sentiments of Folk Marxism. Guilt, when Folk Marxists compare themselves to lower income individuals; envy, when Folk Marxists compare themselves to higher-income individuals; indignation, when, instead of examining the discrete economic activity that produces our fabulous wealth, the Folk Marxists create a “struggle pitting the oppressors against the oppressed”.
In the end, though, those left behind by income inequality are not oppressed, and those who do well are not oppressors. Ronald Wirtz wrote for the Federal Reserve Bank of Minneapolis that…
...critics are eager to identify hand-in-the-cookie-jar sources that might help identify culprits responsible for inequalities. But like many other policy issues, there are few easy villains that might explain the income disparity. Indeed, the single largest factor—education—can hardly be considered evil. In a world of increasing sophistication, the market is paying a premium for ever-higher levels of education...
If the Post — and Folk Marxists in general — want to take genuinely liberal steps towards reducing inequality, poorly targeted programs like price controls, protectionism and minimum wage hikes may be briefly appealing, but they do nothing to solve the underlying problems. If the Post would reduce inequality, the solution is to encourage US workers—starting with US children—to get education and job skills relevant in a highly productive economy. In an increasingly specialized economy, we need to invest in human capital — not class warfare.
Great post. Would have made a good essay on TCS, actually. The only thing I would add is Paul Graham’s point about Inequality and Risk: reducing inequality means reducing the maximum amount of money people can make, which reduces the amount of risk they’re willing to take. This necessarily means a less dynamic economy and ipso facto slower economic growth. Over the long run, economic growth makes the least well off in society far better off than any amount of wealth redistribution by government.
Great post it illustrates the vital need for redistribution of income. I will, reluctantly, volunteer to undertake this task. Everyone with an income GREATER THAN US$250,000 please send me that excess, in the form of small unmarked bills and I will see to it that this evil, filthy lucre is redistributed. Thank you.
Here’s a quick and easy way to expose that kind of nonsense when talking to one of these pseudo-Marxists. Tell them you’ve decided to be generous today, and you’re going to give them some money. You’re also going to give some to the next stranger than passes by. They get to choose between two possibilities:
You give them $5 and give the stranger $10, or
You give them $10 and give the stranger $100
If they choose the second option, ask them how they could possibly be in favor of increasing the gap between themselves and the stranger. (If they choose the first option, I’d say there’s not much point in interacting with them any further.)
Oh HECK NO, Billy haven’t you heard, Cynthia doesn’t like Bay Watch, or Scientology, or Pam Anderson, Carmen Electra, David Hasselhof, OR Puppies... I wound NEVER contribute to HER campaign!
I might use the money to protect Carmen and Pam from the assaults from Cynthia, and others....and any other women, blonde, brunette, red-head, (girls just a recent photo of yourself in a bikini or lingerie) that need protecting from danger, because that’s just the kind of giving, other-regarding Sensitive New-Age Guy that I am...In fact that would be the focus of my monetary crusade, it’s fairly safe to say.