Arnold Kling, Capitalism and Inequality | Library of Economics and Liberty

The dynamics of capitalism are such that, looking forward a few generations, the proportion of winners from economic growth approaches 100 percent, and the proportion of losers approaches zero. That is, economic growth will make nearly everyone will be better off several generations from now compared to where they would be without any economic growth.

This same dynamism, however, produces what proponents of capitalism ought to concede are clear losers. People whose lives are adversely disrupted by innovation would be better off, at least in the short run, under a less dynamic system. The manufacturing worker displaced by globalization or technical innovation is a short-term loser.

Source: Arnold Kling, Capitalism and Inequality | Library of Economics and Liberty

And if we commit to John Rawl’s justice, in making decisions concerning our future –  we must focus on clear losers and for this reason only we have to reject economic growth.

8 thoughts on “Arnold Kling, Capitalism and Inequality | Library of Economics and Liberty

  1. The guy is essentially saying that Stalin took country with “sokha” and left with nuclear plants, and there were some short term losers during this transformation.

    Ok. But is it possible to give up some growth in exchange for “less losers”?
    In fact, maybe we don’t need to give up growth at all?

    1. Ormuz, I don’t believe you don’t see the difference between an inorganic growth with losers by fiat, and an organic growth with losers by chance or choice, between forced collectivization and voluntary contractual relationships.

        1. I am not talking about growth. I am talking about the level of coercion. Even though the observable outcome is the same, there is a difference between you not coming home tonight because of your non-sanctioned world view, and you not coming home tonight because of, say, your involvement in insider trading.

          1. My point is that there is no question “focus on growth or focus on justice”, call it level of coercion, general fairness of society – anyway, growth is secondary. if we make any decision about future “we” will have some sort of justice in mind, even if outcomes are NOT the same, lower “level of coercion” beats “higher outcome”.

            I have off-topic question – is GCM you’d been working at, any good? worth to apply? ppl say different things.

  2. I can’t accept the difference between “general fairness” and “coercion” as merely lexical.

    I will accept and even praise John Rawl’s principles of caring for the worst-off as principles of an ethical individual – if such moral guidance leaves the individual free to choose whether to follow them or not and at what cost and to what degree. But I do reject them as the principles of justice permitting coercion – potentially unlimited – in their implementation.

    Growth versus fairness. You do participate in local charities, don’t you? Everybody in CT does. When you give your time or money to, say, support Belarusian orphans spending their summer in CT, the time you spent on charitable cases is taken from the time you could spend on your professional growth; the funds you give to orphans are not available for investment in a medical start-up or in fertilizer stocks. The same is true on a larger scale: Bill and Melinda Gates exercise their moral principles when they support inner-city education and eradication of diseases, and don’t invest in driverless cars or a restaurant chain – they are being ethical at the cost of some probable growth. I am okay with that.

    GCM: the old building is charming, top to bottom. I would apply just for a chance to see the interior. I was happy there when I joined. I left because I wasn’t happy. We parted not on very good terms. It was a long time ago. I can share more in private – over the phone if you want.

  3. (ah, again lost comment about Nozick’s NAP, and that it also means giving up on economical growth).

    Thanks for GCM. I’ve just applied – will contact you if it gets any serious.

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