Google Ngram chart of economic inequality and economic equality for the years 1901 through 2019

During my lifetime, the notion that material inequality, as such, is an ill has been made a dogma of the mainstream narrative.

Before this proposition was a dogma advanced from the commanding heights of our culture, I seldom encountered any argument for it; and, when I did encounter an argument, it was just one of two.

The less infrequent argument was one of a crude utilitarianism. Like any utilitarianism, it assumed that utility were a quantity (or measurable by a quantity) commensurable across persons, the interpersonal sum of which quantity ought to be maximized; the argument further assumed that the marginal utility of wealth diminished at rates sufficiently close between any two persons that one could be assured that, by playing Robin Hood, one would generally increase that interpersonal sum. This argument could not have won the day, because its distinctive assumptions wither and die as they are dragged into the light.

The remaining argument was that material inequality impeded growth or even caused economic decline. Still less discussion was provided as to how material inequality brought-about these effects on growth; but, when discussion was provided, that discussion was characterized by confirmation-bias in the interpretation of correlation, by an unstated presumption that unconsumed wealth tends just to be warehoused (rather than invested), and by hand-waving.

However, instead of relying much upon these two arguments or upon some alternative, journalists and others increasingly began treating the idea that material inequality were bad as if it were obvious and unquestionable and in no need of argument; indeed, it was not explicitly stated, but insinuated, in expressions such as the problem of rising economic inequality. I expect that, if pressed and unable simply to dismiss a challenger as wicked or as stupid, the typical subscriber to this egalitarianism would grope his or her way to the old utilitarian argument or something very much like it, or would grab with relief at the claim that inequality undermines growth. But the typical subscriber simply is not pressed; she is in a bubble in which the proposition is just not challenged, and not even stated so that she might imagine challenge.

[I posted the following as an entry to Facebook two years ago.]

In game theory, there's a proposal that, in selecting amongst options, a player should choose that option with the least-bad worst case. So, for example, if the worst that could happen if you go to the bistro is that they get your order wrong, while the worst that could happen if you go to the bar is that you get knifed, then you should go the bistro.

Such a strategy is usually called minimax. (I think that it should have been called maximin, and indeed some people call it that, but they're very much bucking convention.)

The proposal seems plausible, especially when measures of probabilities are unknown (so that expected values cannot be calculated). But I think that notions of probabilities as measures inform and thus disinform the apparent reasonableness of minimax strategy.

When one conceptualizes probability as a measure, it is all too easy to think that all events with probability measure 0 might as well be treated as impossible. But they're not quite the same thing if one has to deal with infinitely many possible cases; some precisely specified possibilities would each have to have a probability measure of 0.

Possible events with truly horrible consequences can have a probability measure of zero, and will be disregarded if one treats that probability as equivalent to impossibility.

And, in the absence of actual measures of probability, then from the habit of treating events with very low measures of probability as if impossible can slide into the practice of more generally disregarding events that have low probability rank.

In a textbook game of poker or of dice or whatever, the worst possible outcome in the model is most often a loss of funds. In a real-world game of poker or of dice or whatever, the worst possible outcome is something far more dire, and hard to identify; we can think of awful possibilities, and then think of something still worse. Puffy may get angry, and shoot us; or he may shoot not only us but in his rage go shoot our loved ones as well.

One of the points taught in a great many introductory courses on microeconomics is that a tax-cut can be expected to have the same effect on schedules of supply and of demand, and thence on the resulting equilibrium, as would a subsidy. In this sense, economics shows that a tax-cut is equivalent to a subsidy. And, ignoring differences in administrative costs, the resources possessed by the state given a tax-cut are equivalent to those after dispensation of a subsidy. But it is only in these effects that microeconomics shows an equivalence; and, even if we confine ourselves to the considerations of non-normative microeconomic theory, we would be speaking or writing rather loosely if we simply said that a tax-cut were the same as subsidy.

In the sphere of normative discourse, whether a party's refraining from taking is equivalent to giving is determined by whether that person or group of people is entitled to take. A person who forgives a debt may be said to give;[1] but the person who does not steal that which is yours does not in this way donate to you. The invaders or other thugs who declared themselves to be lords did not give what they merely did not confiscate from the farmers whom they conquered.

To treat a tax-cut as morally equivalent to a subsidy, or to do as so many progressives and left-wing populists — to insist that a failure to increase some tax on some party to a prior or even new level simply is a subsidy — is to insist that the state is morally entitled to tax at the greater level, that the state owns those resources.

This moral claim is certainly not a principle of economics nor a consequence of bringing economic principles to bear on moral theory, and should not be allowed to pass as such nor by insinuation.

[1] A creditor who forgives a debt has given her rights as surely as if she had assigned them to a third party.

In introductory treatments of economics, one often encounters a distinction drawn between what is called positive economics and what is called normative economics. In these names — and in typical discussion — there are problems.

The meaning of positive here is restricted to fact, as opposed to speculation. Now, on the one hand, supposedly positive economics, like all attempts by human beings to understand the world, is permeated by speculations, which in scientific effort are hypotheses. (The philosophic movement called positivism arose with incompetent aspirations.) On the other hand, contrasting the normative with something called positive entails an implication, insinuation, or declaration that the normative cannot be placed on as solid a foundation as the rest of our understanding. Sometimes a lack of present agreement is treated as if proof that there is no objective ethical truth; sometimes the question is just begged. In any case, the distinction is irrational.

Instead using the terms descriptive and prescriptive steps away from the worst aspect of using positive, though it would be less corrosive to refer to non-prescriptive economics as, well, non-prescriptive or as non-normative.

However, in behavioral science, elements drawn from prescriptive theory are often useful non-prescriptively, either as approximations or as bounding cases. Economic rationality and expected-utility maximization (the latter sometimes conflated with the former) are such elements.

Some economists would not even recognize economic rationality or expected-utility maximization as prescriptive in any case, because they are meta-preferential — they express a preference for structures of preference that have ordering properties such as transitivity and acyclicity, but say nothing about ultimate objectives and thus, in themselves, say nothing about whether one should prefer tomatoes to apples or life over death.

The prescriptive arguments for economic rationality and for expected-utility maximization are to the effect that those who conform realize more of their objectives — regardless of what those objectives might be — than those who do not, with it usually treated as tautologic that one desires such maximization.[1]

The non-prescriptive arguments for economic rationality and for expected-utility maximization as approximations note that these are relatively tractable models of behavior for which evolutionary dynamics will select. Because the models are taken from prescriptive work, some people mistake or misrepresent any use of them as necessarily prescriptive, but the claim is neither that social or other biologic evolution ought to select for something approximated by such behavior nor that agents ought to engage in the behavior for which evolution selects. (If anything, what is illuminated is that evolution selects for a propensity to such prescriptions!)

I endorse use of these models as tractable approximations in many cases, but I also embrace use of a weaker notion of economic rationality as a bounding case. A boundary of economic outcomes is given by considering what those outcomes would be were agents economically rational.

Behavioral economics concerns itself with when-and-how people actually behave, and especially with failures of the aforementioned models. Although this research is not what I do, I acknowledge its value. However, a great deal of what passes for behavioral economics involves an inferential leap from identifying a real or apparent deviation of behavior from one of these models to a conclusion that this-or-that result could be obtained by state intervention, with the researcher looking away from any proper examination of the behavior of agents determining practices of the state. Behavioral economics is thus used as the motte for a statist bailey. Additionally, even behavioral researchers with no apparent statist agenda often fail to recognize when behavior that seems at odds with these models is or may be instead at odds with some presumption of the researcher.[2]

[1] The main-stream of economic theory treats completeness of preferences as a feature of economic rationality but I've never seen a prescriptive argument even attempted for this feature. The prescriptive cases for transitivity and for acyclicity seem to presume an absence of conflicting, prior meta-preferences. The prescriptive argument for expected-utility maximization is especially problematic.

[2] While I have problems with some of the work and with much of the rhetoric of Gerd Gigerenzer, he has ably identified important cases of such failure on the part of researchers.

Assuming something that is not necessarily believed by oneself or by one's audience or by either is a regular practice in various intellectual pursuits.

In discussion of policy, appropriateness of the set objectives of a real or imagined audience will often be assumed by economists who are either attempting to proceed in a wertfrei[1] manner or to argue for or against some ostensible means of accomplishing that set of objectives because of how those means would affect other matters about which the economist has a normative position. Thus, an economist who does not believe that an objective is right and proper may none-the-less assume that it is, to explain

• that some policy will not accomplish the objective; or
• that some policy will be most effective at accomplishing the objective; or
• that some policy might be very effective at accomplishing the objective, but would, will, or does come at unacknowledged costs of importance to some in the audience; or
• that some policy will be very effective in accomplishing the objective, and would, will, or does bring unrecognized benefits of importance to some in the audience.

One of the various things that I find uncomfortable about engaging in discussion of policy is that some people lose or never catch sight of the point that my assumption of objectives is not an endorsement of those objectives. However, I think that repeatedly assuming objectives in the context of being socially surrounded by people with those objectives will indeed lead some analysts to fall into the habit of presuming those objectives — of implicitly embracing those objectives — and may eventually lead them to endorsing those objectives overtly.

Unhappiness prevails amongst various libertarians and near-libertarians, concerning the comportment of what are called beltway libertarians, who are scholars, intellectuals, and professional political operatives located in or near the District of Columbia, and who self-identify with libertarian yet who have been silent about some of the most illiberal[2] policies of our day, or contort themselves to argue that these policies are actually libertarian, or even assert that circumstances warrant policies that they acknowledge to be illiberal. For the most part, the liberal community elsewhere simply takes it that the beltway libertarians have been corrupted by their context; I am here suggesting part of the mechanism of corruption.

[1]  Normatively neutral.

[2] I use liberal and illiberal in their original and proper senses.

Since sometime in my childhood, I have repeatedly encountered arguments of the form

For example

The enough makes this claim a tautology; it really just unpacks to

But the tautology is vacuous and useless in cases in which

is not possible, as in

It is true that

It just isn't true that

Outside of pædogogic exercises, when someone makes a declaration of form

he or she is presuming or insinuating that

but this proposition may not be true, and certainly ought to be examined before accepting

as part of an argument that

or that

The reason that I write about this issue of logic now is that is seems to me that a great many people essentially believe that

Some critics would perhaps want to ask the genuinely important question of to just whom this we and us refer, but for my purpose here they can be left as a variable to be assigned whatever value the political left might want. My objection is that lurking in the argument is

And, in this context, even a genuine failure of socialism will not be seen as a reason to quit trying. The socialists can always tell themselves We can succeed next time, or at least fail better.

The typical opponent of socialism argues that socialism will fail because people will not be motivated to expend sufficient effort. Not only can this been seen as a problem of virtue by the political left; it has been seen as a problem of virtue by the political right, who sometimes ascribe the impossibility of well functioning socialism to Original Sin.

But a motivation to work with sufficient intensity is not the deepest practical problem of socialism. The problem of knowing at what to work — the Problem of Economic Calculation — is the deepest problem. We can presume that, somehow, everyone conforms utterly to a left-wing notion of virtue, and still the Problem of Economic Calculation will abide.

But, hidden behind an obscured and misapplied tautology, the presumption that such a level exists can keep socialists banging their heads against the wall indefinitely and putting other people against the wall indefinitely.

On YouTube, I encountered a video selling something (I didn't get to whatever it was) based upon a controversial theory, and using economic prejudices to make his case. To make the economic part of his case, he told an old, true story, but left-out an important detail.

There are a few incandescent light-bulbs that have been in continual use for many decades. (He referred to one of these.) They haven't needed to be changed. But that doesn't somehow prove that the manufacturers of light-bulbs have formed a cartel that avoids selling us cost-effective light-bulbs that will last many decades.

The bulbs that last for decades run on DC (direct current) rather than AC (alternating current). AC displaced DC because of issues of generation and of transmission; you'd be paying more for electricity if your power company used direct current. And, that these bulbs are run continuously means that they are never turned-off, and thus have only been turned-on once. It is the strains on the filament from being turned-on repeatedly and from running alternating current that cause our incandescent bulbs to fail more quickly. If you really want your bulbs to last longer, then install rectifiers in your lamps, and either never turn the bulbs off or also install devices that gradually increase the current when the light is turned-on.

Or just accept that you're trading higher bulb costs for lower power costs and lower costs of lamps.

Fairly inexpensive hair combs made of hard rubber — rubber vulcanized to a state in which it is as about firm as a modern plastic — could be found in most American drugstores at least into the mid-'90s. Now-a-days, they have become something of a premium item. I was looking at listing on Amazon supposedly of hard rubber combs and discovered, to my annoyance, that a careful reading of the descriptions showed that most of the combs explicitly described as hard rubber were made of plastic. To me, the situation seemed to be of pervasive fraud, as it will to many others.

But then I realized that it is more likely to be something else. Fraud, after all, involves deliberate misrepresentation. Whereäs we live in a world in which a great many people believe that no use of a word or phrase is objectively improper — that if they think that hard rubber means a rubbery plastic or a plastic that looks like another substance called hard rubber, then it indeed means just that. (Of course, we cannot trust any verbal explanation from them of these idiosyncratic meanings, as they may be assigning different meanings to any words with which they define other words.)

My defense of linguistic prescriptivism has for the most part been driven by concerns other than those immediate to commercial transactions. And, when I've seen things such on eBay as items described with mint condition for its age or with draped nude, my inclination has been merely to groan or to laugh. But it seems to me that the effects of ignoring or of rejecting linguistic prescription have found their way into commercial transactions beyond the casual.

Well, those who are not prescriptivists are hypocrites if they complain, and they're getting no worse than they deserve.

Those who support locking-down in response to SARS-CoV-2 are like weird locusts. Instead of eating the crops; these locusts prevent growth and harvest. That is to say that they prevent economic activity, which is an implicit consumption of an especially perverse sort. In any case, they leave despair and literal starvation in their wake.

To my chagrin, I find that I made a transcription error for an axiom in Formal Qualitative Probability. More specifically, I placed a quantification in the wrong place. Axiom (A6) should read I've corrected this error in the working version.