Why Decry the Wealth Gap?

Michael Perelman michael at ecst.csuchico.edu
Tue Jan 25 09:52:41 PST 2000

I wrote my note very early in the morning. You can suppose the economy begins with absolute equality, but that each time the GDP goes up by X percent that Y percent gets thrown into destination. The aggregate statistics will look good. The majority of people will be doing better. But a small fraction will be devastated.

Doug Henwood wrote:

> michael at ecst.csuchico.edu wrote:
> >I have a hypothetical question, relating to some of Brad's comments on
> >China as well as this discussion. Suppose that a society had an equal
> >distribution of income. Real GDP per capital could increase X% by
> >throwing Y% into poverty. Much of the debate about globalization, the new
> >economy, .... seems to reflect thinking about this question.
> Eh? How could you throw Y% into poverty if you have an equal
> distribution of income? You mean per capita GDP increases because
> (100-Y)% gain while Y stays stagnant? Meaning an increase in
> relative, though not absolute, poverty? Or what?
> Doug


Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901

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