The zero-sum assumption that income inequality is an inherent cause of economic injustice in and of itself rather than an effect of a still larger problem of economic growth is a populist tale as old as time, and it isn’t just American progressives deciding to make it their especial issue of the year. The Financial Times reports that the esteemed financiers and bureaucrats of the world are once again conferring this week, and “the World Economic Forum has identified the gap between the rich and poor as an important theme for this year’s gathering”:
The International Monetary Fund has highlighted the threat posed to the global economy by growing income inequality as the world’s business and political leaders prepare to head off to the World Economic Forum in Davos this week.
Christine Lagarde, managing director of the IMF, is concerned that the fruits of economic activity in many countries are not being widely shared.
“Business and political leaders at the World Economic Forum should remember that in far too many countries the benefits of growth are being enjoyed by far too few people. This is not a recipe for stability and sustainability,” she told the Financial Times. …
The message is hitting home. Shinzo Abe, Japan’s prime minister, is coming to Switzerland with the message that Japanese companies must raise wages, while the government of David Cameron, his UK counterpart who is also attending the forum, called for a large inflation-busting rise in the British minimum wage last week.
So, I’d imagine, these guys will be talking about exactly what our own darling Democrats plan to campaign upon: More government intervention; more financial regulation; higher taxation on the ill-begotten wealthy; coercing private-sector companies into doing things like raising wages because it’s the “fair” thing to do rather than the profitable thing to do (as if those two agenda items are mutually exclusive); and etcetera. In a nutshell, all of the old-and-tired non-solutions that will pretty much ensure the problem of income inequality persists, rather than relieving it with a freer, more fluid and robust economy capable of creating more wealth for more people. Goody.
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