The Persistence of Constraints

by Russ Roberts on March 23, 2006

in Inequality

I was on the Diane Rehm Show earlier today talking about inequality—you can listen to by going here. The highlight is toward the very end when Diane Rehm announces that I don’t believe inequality exists, just a slight misreading of what I had been saying.

One of the challenges of playing the contrarian in this kind of debate is how easy it is to bring in other factors that have nothing to do with the debate but are in the vicinity. One of those is that there are poor people. So if you deny the importance of inequality as a pressing social problem, you are inevitably confronted by suggesting you don’t care about poor people. The two issues are related, but analytically distinct.

The other tangential issue that comes up is that the middle class is having a hard time. It came up on the show a few times—the idea that people have to go into debt to buy a nice house or to make ends meet.

The implication is that the economy isn’t working well. After all, if it were working well, then people could just get by with what they have. It’s tempting to counter with the point that going into debt is usually a sign of outgo exceending inflo and rather than borrowing, maybe people should spend less. Borrowing to live a lifestyle you can’t afford tells us more about the people doing the borrowing than it does about the economy.

But I think that misses a much deeper point, a point I first saw made by Thomas Sowell but I can’t remember where. The point was that people always want more than they have.  Always. It has nothing to do with the material age we live in. It has nothing to do with whether the economy is working well. Inevitably, our desires outstrip our resources.

Why is the middle class struggling so much today? The middle class always struggles in the sense that the people in the middle class would like more than they have. So do the people at the bottom and the top. If we all could be content with the small houses that people had in 1950 or even 1970, houses with fewer square feet, houses with fewer bathrooms, houses with fewer bedrooms, houses without an office or guest room, houses with modest kitchens and smaller dens and smaller televisions in those dens, then yes, we’d all have a lot less strife in our life. If the middle class were merely content with living as the upper middle class did in 1950, the middle class could relax and be content.

But relaxing and settling for less is not how most of us are made, rich or poor. The Talmud asks: who is wealthy? And the answer is: he who is content with his lot. Few reach that level, not because they are financial failures but rather because of their natures.

The same is true for how "busy" we are. Of course, we’re busy. Of course, we fill up our lives and schedules with more and more. Most of us don’t cut off the bottoms of our shoes and learn to play the flute. There isn’t enough time to go around. There are only 24 hours a day and we all die. We want to have as much life as we can.

The fact that we all feel busy and that we feel the pressure of financial issues has nothing to do with our economy and everything to do with our nature. Religion is a much better place to search for a cure for that ill than economic policy.


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