Arkady
President
One way to think of the economy is as a kind of game, where the government sets the rules of the game, and then we play by them. Seemingly neutral rules can make the game more or less fair and more or less competitive. If you look at a sports league as an analogy, that's easy enough to see. In theory, you could have the Super Bowl winner have the first pick in the draft or the last pick in the draft or you could assign draft order randomly. In practice, most sports leagues have teams draft in more or less reverse order of performance in the prior season. This keeps the league more competitive, rather than allowing some early luck to become a self-sustaining advantage that leads to complete dominance by a few teams, at the expense of competition. Ease of schedule is another way leagues try to make competition better (assigning the hardest schedules to the teams that performed best in the prior year), so are waiver wire rules (letting the teams with the worst records have first crack at pickign up players off waivers), and so are salary caps and revenue sharing. And, even within a game, the rules can be set up to prevent one team from getting on too much of a roll. That's why, for example, the team that was just scored against typically starts with the ball on the next possession, rather than the team that just scored, or having it determined by a coin toss each time. It's also why there's often a feature like a "punt" that can let a team that's gotten into a big hole dig itself out in one big move.
Once you think about the "economic ground-rules" in that way, it should be clear that judging how well those rules are set up, on the whole, can be done by judging the outcome. A system that puts too much emphasis on the "field leveling" economic rules would be expected to be nearly flat in economic distribution -- it being almost impossible to move much ahead or behind the median. A system that put too little emphasis on "field leveling," by comparison, could be spotted by radically unequal and increasing wealth inequality -- it would be almost impossible for a rich person to lose that status, and almost impossible for a poor person to move ahead.
Where our current system lies on that spectrum is obvious. We have a set of economic rules that favor wealth redistribution from the poor and middle class upwards. Over the last few decades, pretty much ALL new wealth has been captured by the very rich, and income mobility has declined precipitously. Most people have had stagnant income, while the wealthy double and triple their incomes. In 1960, the average CEO earned 40 times as much as the average worker, but now it's more like 300 to 1. That ratio is much lower in most other wealthy countries.
With the current system being biased so heavily in favor of redistributing wealth to the elite, it's kind of funny to hear right-wingers whine about "redistribution" any time someone proposes tinkering with our economic rules in a way that would level the playing field a little and make things more competitive.
Once you think about the "economic ground-rules" in that way, it should be clear that judging how well those rules are set up, on the whole, can be done by judging the outcome. A system that puts too much emphasis on the "field leveling" economic rules would be expected to be nearly flat in economic distribution -- it being almost impossible to move much ahead or behind the median. A system that put too little emphasis on "field leveling," by comparison, could be spotted by radically unequal and increasing wealth inequality -- it would be almost impossible for a rich person to lose that status, and almost impossible for a poor person to move ahead.
Where our current system lies on that spectrum is obvious. We have a set of economic rules that favor wealth redistribution from the poor and middle class upwards. Over the last few decades, pretty much ALL new wealth has been captured by the very rich, and income mobility has declined precipitously. Most people have had stagnant income, while the wealthy double and triple their incomes. In 1960, the average CEO earned 40 times as much as the average worker, but now it's more like 300 to 1. That ratio is much lower in most other wealthy countries.
With the current system being biased so heavily in favor of redistributing wealth to the elite, it's kind of funny to hear right-wingers whine about "redistribution" any time someone proposes tinkering with our economic rules in a way that would level the playing field a little and make things more competitive.
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