Libertarians Often Care About Millionaires More Than The Median

Today Tyler Cowen writes that “Singapore is inequality on steroids” and he notes how inequality is causing increasing segregation and rising indebtedness due to exorbitant car and housing prices, but he is a big fan of the Singapore model.  He has praised Singaporean food, its health system, and its government.  But he never even questions whether the policies that created this inequality should be changed.  Instead of wondering how the median Singaporean is doing he wonders, “At what level of wealth is inequality no longer a moral or practical problem?”

Cowen has also been linking to Scott Sumner’s writings about Singeaporean inequality.  To Sumner, Singapore is great because Singapore is rich.  That does not mean that the median Singaporean is rich, it means that an incredible 17% of Singaporean households are millionaires!  He says that the US should strive to increase our number of millionaires too and he worries that “the number of millionaires in the US declined” from 2010 to 2011.  But let’s think about what else happened in this time period in the US.  Mean income increased and median income decreased.  If the median household was getting poorer, and the millionaire households were getting fewer, but overall (mean) income was growing, then all the growth was probably going to the super rich from 2010 to 2011.  Sumner is worried about the welfare of US millionaires at a time when the median household income has had zero real growth in almost two decades.

Cowen and Sumner have bizarre values.  They put more priority on the rich than on the median.  A search for “median income” on Cowen’s site reveals that he thinks stagnant median income is a natural result of increased information technology and trade with China which are both trends that Cowen likes.  He often brings up stagnating median income as part of his Great Stagnation idea, but I have never seen him propose ways of helping the median.  The same search on Scott Sumner’s site finds him claiming “income distribution data is meaningless.”  ¡¿Inequality is meaningless? Another post notes that median income has been declining, but I didn’t find any post where he suggests that this could be as big a priority as his obsession: GDP.

Libertarianism is relatively popular among wealthy elites, but very few of the rest of us can get enamored with it.  Maybe if libertarians had more interest in the economic well being of the majority it could become a more popular ideology.

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2 comments on “Libertarians Often Care About Millionaires More Than The Median
  1. Nothing you say about my views here is accurate. it’s fine if you want to criticize my views, but you ought to first find out what they are. I happen to favor policies that that reduce economic inequality, and I think the welfare of the rich is of trivial importance compared to the welfare of the masses.

    • Thanks for your reply. I am glad that you (like most people) favor policies that that reduce economic inequality, and think the welfare of the rich is of trivial importance compared to the welfare of the masses. The point of my blog is that mainstream economics is biased in favor of measuring the economic welfare of elites over the median. In perusing your blog, I feel like it has the same revealed preference as mainstream economics which is to favor GDP over the median. And my general impression is that libertarians are even more biased in favor of the interests of the wealthy than the average economist is.
      If you are truly interested in the welfare of the masses, how about writing more about how your preferred policies will help the median rather than how they impact GDP or even the welfare of millionaires. I would be truly interested in hearing more about how Singapore’s policies are impacting the median Singaporean. Like you, I don’t care much about the Singaporean millionaires who are already doing fine. I am mainly interested in how the Singaporean system is helping the masses.
      The problem for us is that economists spend too much emphasis on measuring the welfare of millionaires and the mean income instead of thinking about the economic welfare of the median.

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