Why Decry the Wealth Gap?

[Michael Perelman]

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