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“Inequality is a big policy issue because we have data on it” – David Henderson passes on that observation from one of his colleagues. My view is that this is largely correct. Until and whenever we are able to get information on the direct and indirect costs of rules, regulations, restrictions, special favors, etc. in the economy, we are never going to make progress toward improving economic conditions for all people, and in particular the poor, in ways that actually work and are meaningful.

Here is a thought: think hard about all of the things which make economic life for disaffected populations difficult. Accept all of the populist premises about ’em too – from systemic discrimination, to implicit biases and more. Now, think hard about how much of an economic toll those sorts of things are very reasonably expected to impose on people (this does not justify those awful things at all by the way). Now, think hard about what occupational licensing, zoning regulations, government schooling, restrictions on what small businesses can and cannot do, etc. do to those same disaffected populations. While I am not here presenting any empirical “proof” of anything – I would suggest that there is an order of magnitude, at minimum, more serious impact of these government regulations on the well-being of disaffected populations than all of the systemic biases put together. And certainly, focusing on things like measured inequality (which is nearly impossible to measure and of course still says little about overall well-being) not just doesn’t help the disaffected (seriously, what is the empirical evidence on what policies in inequality have helped the worst off around the world over time?) but totally takes our eyes away from the giant mastedons in the room about what is making it harder for the poor and disaffected to get a leg-up in this world.


5 Responses to “The Drunk Under the Lampost”

  1. Doug M says:

    Why do the municipalities with the greatest inequality have the most liberal local governments?

    • jb says:

      I agree with your point Doug, but a suggested substitution: Why do the municipalities with the greatest inequality have the most AUTHORITARIAN local governments?

      “Liberal” I am afraid has lost all validity as a term for describing the left. Personally I stick to “left” and “right” rather than loaded terms such as “progressive” (progress,…really?) or
      “conservative” (seems to me most of the new ideas generated in the last 30 years or so (vouchers, flat tax), have come from people who refer to themselves as conservatives).

      If “we” wanted a sound bite phrase to characterize the views of the left, maybe “the A.L.” would do nicely (Authoritarian Left).

  2. Michael says:

    For a further look at government regulation that adversely affects poor and minority populations, I suggest you look at Michelle Alexander’s work on the drug war and mass incarceration.

  3. Michael says:

    Also, I could be wrong, but you seem strongly suspicious of systemic racism, which is statistically observable in things like police shootings (the Guardian has good data on this), the history of redlining, and lower unemployment for black men graduating college. Because you do seem to make a point of valuing empirical evidence over whatever else.

  4. Michael says:

    I meant higher unemployment.

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