Inequality and Populism

micosoft

An interesting article in Bloomberg this week. It submits that people have very little understanding when asked about how equal or unequal their society is and that in general perceptions count for more then reality. Really interesting piece of analysis given the view of many boardsies that this country is the worst ever with regard to equality when we are in actual fact the 13th most equal income after tax transfer society in the world.

My own take is that this narrative is being driven by a populist left wing who are not challenged by a complacent media on the actual facts of inequality.

I don't believe one can infer populism from bad information.

Populism, by which I assume you mean demagogue politics, is often much more about instinct and prejudice than bad information per se. Populist nationalism in poorer urban districts in Northern Ireland and the Republic, for example, probably has more to do with emotion and deprivation than bad information.

Of course there is another basic flaw in your argument, in that the article claims that in the most equal societies, the public have the highest awareness of income equality. In that case, we should expect a well-informed Irish public. Right? Right.

Finally, my argument is not necessarily one which left-wing people should be advancing, and yours is an argument that right-wing people should be careful about: you tackle income equality by lowering dependence on the State and by creating employment, which necessitates a favourable business environment.

If people want reform and less state dependence, they are going to have to convince government of the existence of an over-dependence. Claiming that 'the system works' will only ever prolong the massive adjustment that the Irish state already makes to massively unequal pre-tax, pre-welfare incomes.

So which is it? Does the system work or not?

Dannyboy83

micosoft wrote: »

An interesting article in Bloomberg this week. It submits that people have very little understanding when asked about how equal or unequal their society is and that in general perceptions count for more then reality. Really interesting piece of analysis given the view of many boardsies that this country is the worst ever with regard to equality when we are in actual fact the 13th most equal income after tax transfer society in the world.

I do agree with the general point made - perception is more important than reality - however, I thought they used an atrociously bad example to illustrate their point, which underlines how perception isn't shaped by a single metric...

Ukraine's government was overthrown last year partly because of a widespread perception that a corrupt elite had hogged the nation's wealth, leaving the majority destitute. In fact, the country had one of the most equal distributions in the world: It was 14th out of 114 countries for which data were available in terms of equality after taxes and social transfers.

http://www.kyivpost.com/content/ukraine/transparency-international-slams-ukraine-as-most-corrupt-in-europe-332965.html
Transparency International slams Ukraine as ‘most corrupt in Europe’

In its 2013 Corruption Perceptions Index released today, Transparancy International slammed Ukraine, calling the country the most corrupt nation in Europe and the fifth most corrupt in the Commonwealth of Independent States (CIS).

Ukraine tied for 144th place in the ranking with Cameroon, the Central African Republic, Iran, Nigeria, and Papua New Guinea. That ranking placed it ahead of several Central Asian post-Soviet states, including Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Ukraine’s position remains unchanged from 2012, though Ukraine’s score fell, indicating a marginally higher level of corruption over the previous year.

http://www.theguardian.com/world/2014/feb/27/ukraine-search-missing-billions-yanukovych-russia
Speaking in parliament, Yatsenyuk said that the former government had left the country with $75bn of debts. "Over $20bn of gold reserve were embezzled. They took $37bn of loans that disappeared," Yatsenyuk said. "Around $70bn was moved to offshore accounts from Ukraine's financial system in the last three years," he claimed.

BBC Report on how the former Ukranian government stole vast quantities of money from the HIV fund

Eric Cartman

Real equality is equality of oppertunity . This with access to education for free, wage equality laws and equal oppertunities employment put Ireland very high on this list.

What the left want is equality of outcome, this is your social welfare, your high taxation, trying to punish the rich and reward the poor trying to put them at the same level. Its from this we perpetrate the myth that income inequality or the "wage gap" is a bad thing, even though everyones standard of living has increased, workplace satisfaction has increased for everyone, the left are jealous of anyone trying to do better than the bare minimum.

You can have a fair society where everyone can work as inequally hard as they want

Or you can have an equal society, where everyones equally poor

Eric Cartman

Eric Cartman wrote: »

Real equality is equality of oppertunity . This with access to education for free, wage equality laws and equal oppertunities employment put Ireland very high on this list.

What the left want is equality of outcome

On what facts are you basing this claim?

Almost nobody, anywhere wants such a thing.

Where are you pulling this out of?

OldieWilson

Equality is not something we should be aiming for. People are not equal.

Fairness and equality of opportunity is what's needed

Eric Cartman

A Tyrant Named Miltiades! wrote: »

On what facts are you basing this claim?

Almost nobody, anywhere wants such a thing.

Where are you pulling this out of?

Wealth taxes and a welfare state are exact examples of equality of outcome , the idea that someone on the dole, a middle class worker and a bank manager all have similar standards of living is a pillar and ideal of socialism , and the absolute core idea behind communism.

jimmycrackcorm

A Tyrant Named Miltiades! wrote:

On what facts are you basing this claim?

A Tyrant Named Miltiades! wrote:

Almost nobody, anywhere wants such a thing.

A Tyrant Named Miltiades! wrote:

Where are you pulling this out of?

What about the discussion on fee paying schools. Apparently it's unfair that parents gain an advantage by spending some of their income on their children's education instead of buying a new car.

The clamour is to bring fee paying schools fully into the public education funding which is the same as making everyone equally poor (educationally).

The Corinthian

I think it fair to say that few would like to see either of the extremes of either pole of the discussion here.

On one side, be they meritocrats or Darwinists, I suspect no one would like to see society evolve to a point where one family could amass such wealth and advantage as to become beyond challenge and where downward mobility would be equally impossible regardless of incompetence or indolence.

On the other extreme, of the Communists, people would be forced to exist in the mold of the lowest common denominator, denied reward for their endeavors and thus inevitably would cease to make them.

So it really comes down to a middle ground, a compromise where the reward is sufficient to foster invention, creativity and labour, yet not so great that it may be amassed to such a level that it instead fosters an anti-meritocratic society.

So what's the sweet spot? Any why?

jimmycrackcorm

jimmycrackcorm wrote: »

What about the discussion on fee paying schools.

I can't think of a more archetyal 'equality of opportunity' debate than that.

Equality of opportunity is about removing involuntary disadvantage. A child does not volunteer to be have richer or poorer parents, so educational-resource inequality caused by purchasing power should be minimised where the state has a role.

An Equality of outcomes argument would imply quotas for particular income deciles in the universities, or worse, quotas for the allocation of student grades across household income deciles.

It's important not to confuse these two terms. Almost nobody favours 'equality of outcomes' approach. Accordingly the aspiration of 'equality of opportunity' is as meaningless as world peace. Almost everybody says they want it. Almost nobody wants to achieve it.

The Corinthian

A Tyrant Named Miltiades! wrote: »

Equality of opportunity is about removing involuntary disadvantage.

Problem is that one can define all wealth as involuntary advantage and thus justify removing it, thus leading us to one of the extremes I mentioned in the above post.

Where would you draw the line on such equity enforcement?

K-9

micosoft wrote: »

An interesting article in Bloomberg this week. It submits that people have very little understanding when asked about how equal or unequal their society is and that in general perceptions count for more then reality. Really interesting piece of analysis given the view of many boardsies that this country is the worst ever with regard to equality when we are in actual fact the 13th most equal income after tax transfer society in the world.

My own take is that this narrative is being driven by a populist left wing who are not challenged by a complacent media on the actual facts of inequality.

Social transfers often get over looked but with SW being by far our biggest expenditure area it's very hard to argue that we don't redistribute wealth to the less well off and indeed, with the likes of child benefit, to many who aren't less well off! We are on a par with Austria, Switzerland and Holland.

Interestingly us and Holland also have very low Corporation tax rates so it begs the question, what are we redistributing?
http://economic-incentives.blogspot.com/2013/04/corporate-tax-revenues.html?m=1

With medium to high earners paying a big chunk of income taxes, they pay a big chunk. Indirect taxes like VAT are also significant so it could be argued that's where everybody pays "their fair share".

Tigger

The Corinthian wrote: »

I think it fair to say that few would like to see either of the extremes of either pole of the discussion here.

On one side, be they meritocrats or Darwinists, I suspect no one would like to see society evolve to a point where one family could amass such wealth and advantage as to become beyond challenge and where downward mobility would be equally impossible regardless of incompetence or indolence.

The Bushes lol

micosoft

A Tyrant Named Miltiades! wrote: »

I don't believe one can infer populism from bad information.

Populism, by which I assume you mean demagogue politics, is often much more about instinct and prejudice than bad information per se. Populist nationalism in poorer urban districts in Northern Ireland and the Republic, for example, probably has more to do with emotion and deprivation than bad information.

One can infer and see where populist parties create a perception of inequality to drive their agenda. Whether nationalist or right wing or left wing, convincing your base that they are missing out is a guaranteed vote winner.

A Tyrant Named Miltiades! wrote: »

Of course there is another basic flaw in your argument, in that the article claims that in the most equal societies, the public have the highest awareness of income equality. In that case, we should expect a well-informed Irish public. Right? Right.

The article states the exact opposite to what you claim it does. It asserts (with evidence) that people in the most equal countries feel there is greater inequality then there actually is at a macro level. At a micro level the lower middle class seem to understate their relative prosperity and the actual poor overstate their prosperity.

A Tyrant Named Miltiades! wrote: »

Finally, my argument is not necessarily one which left-wing people should be advancing, and yours is an argument that right-wing people should be careful about: you tackle income equality by lowering dependence on the State and by creating employment, which necessitates a favourable business environment.

If people want reform and less state dependence, they are going to have to convince government of the existence of an over-dependence. Claiming that 'the system works' will only ever prolong the massive adjustment that the Irish state already makes to massively unequal pre-tax, pre-welfare incomes.

So which is it? Does the system work or not?

I'm neither left or right wing. I don't even believe that construct exists in Ireland. I am merely pointing out that individuals have difficulty understanding their relative prosperity in relatively equal societies. The received wisdom in Ireland is that we are an extremely unequal society. The facts indicate otherwise. This is being leveraged by certain parties to drive their electoral ambitions. The question then are people demanding the right policy decisions based on a faulty perception. That could well go to your point that instead of creating more social protections that money would go to job creation.

micosoft

Dannyboy83 wrote: »

I do agree with the general point made - perception is more important than reality - however, I thought they used an atrociously bad example to illustrate their point, which underlines how perception isn't shaped by a single metric...

Agreed. There were other very good reasons to get rid of that regime. That said, many of the worst countries are relatively equal in that everyone is poor except a tiny oligarchy.

micosoft

micosoft wrote: »

One can infer and see where populist parties create a perception of inequality to drive their agenda

ALL parties do that. How many times does the 'squeezed middle' myth need to be debunked before Lucinda Creighton, Liveline callers, and Fine Gael backbenchers let it go?

I have a feeling you are referring specifically to political parties you probably dislike. May I read your tea leaves? I suppose you probably dislike Sinn Fein and the socialists; maybe you're thinking of UKIP too. That's a really narrow, incorrect, classification of populism.

Indira Gandhi was a populist. Turkey is founded on populism. The modern Irish state is deeply populist - Fianna Fail have been characterised by populism since the 1950s.

Are you using populist as a pejorative, personally subjective term, and as shorthand for political parties that you dislike?

Populism is not an ideology that relies on inequality. It advances the shared values of the population at large, and rejects the excesses of "bourgeois individualism", to use a slightly archaic term.

The article states the exact opposite to what you claim it does. It asserts (with evidence) that people in the most equal countries feel there is greater inequality then there actually is at a macro level.

I don't think you were reading the same article as me. It says this:

People appear to be best informed about the actual level of inequality in countries where it's least acute. In egalitarian Norway, 61 percent of respondents correctly identified their country's income distribution; 59 percent of people in Denmark did so. Swedes and Danes are the most accurate in Europe at estimating poverty levels. P

Now, since Ireland is up there with Norway and Sweden in terms of equality, we should expect Irish people to tend to correctly identify the levels of inequality in their own society.

The received wisdom in Ireland is that we are an extremely unequal society.

No it isn't. There are plenty of people and plenty of evidence available to assert that Ireland is a very equal place to live, relative to the global population. It isn't "received wisdom" at all to suggest otherwise.

The Corinthian

A Tyrant Named Miltiades! wrote: »

Populism is not an ideology that relies on inequality. It advances the shared values of the population at large, and rejects the excesses of "bourgeois individualism", to use a slightly archaic term.

Fascism was a populist movement too. Should all of a population's shared values be advanced?