What does 'and' mean?
If you order fish and chips, it's fairly obvious what you want - fish, and (as well as and at the same time) chips. Not just the fish, not just the chips, not the fish then the chips, not the chips then the fish ... fish and chips.
Plus you might want the options of salt, vinegar, buttered bread, pot of tea, tartare sauce, slice of lemon, what have you, but you definitely expect fish and chips.
If it was a politician running the chippie you might well be fobbed off with a raw goldfish and wood chippings and a speech about how the chip shop's menu manifesto commitments had been met.
But when politicians promise things like reductions in poverty and inequality, what are the chances of them delivering. They usually have in mind the dead, static model of a society and economy where you take some money of some richer people, give it to some poorer people, et voila, mission accomplished.
Trouble is, the higher taxes on the richer people reduces their incentive to produce more economically useful goods and services, the benefits given to the poorer people, reduces their incentive to have to produce economically useful goods and services, and the necessary state bureaucracy means many people are employed in shifting resources inefficiently between these groups, instead of being employed in economically productive tasks. The whole result is lower total wealth.
When countries experience rapid economic growth you will almost always hear politicians and commentators complaining about how some groups haven't benefited, or become worse off, or haven't benefited to the same extent as other groups, etc. Usually some formulation along the lines that 'the rich are getting richer, and the poor are getting poorer', or 'the proceeds of growth aren't being divided equally' will be invoked.
But in a living, growing, thriving economy that is always going to be the case. In fact it is the availability of extra rewards for some that encourages and enables entrepreneurs to take the risks and make the efforts that result in wealth creation. It the the different rewards available that result in resources being diverted to the most profitable, in demand activities, leading to economically efficient allocation of productive resources.
Wealth isn't created by magic, ready to be divided, and then divided unequally by malicious unfairness. It is the potential for unequal benefits from economic activity that causes the activity and wealth creation in the first place.
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And and Other Things
@ 2008-10-31 – 02:49:57 am
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