Talk:Economic inequality/Archive 2

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Replace "innate abilities" with "Cultural Capital"?

I think the innate abilities section as a cause for economic inequality is seriously flawed. Here's why: For the purposes of acquiring wealth (which is the subject of discussion) it doesn't matter if a person is charismatic because they got a certain gene from their parents, or if that person is charismatic because their teacher encouraged them to join the debate team (or whatever). The point of this example is to illustrate that what we should really be talking about are those personality traits that make people good at acquiring wealth. We can remain agnostic about where they got those traits. It's also worth pointing out that claims about innate intelligence and its relationship with other things is very much contested in the literature.

I think the appropriate theoretical framework to approach this is that of Cultural capital, due to the sociologist Pierre Bourdieu. The idea is that individuals have a certain amount of "cultural capital" in a given social context, which they can use to get what they want (for our discussion, the assumption is that they want wealth). So for example, if a business-person can play golf, they could use this ability to help build relationships with clients. Notice that it makes no difference whatsoever whether or not the person's golf game came from superior genetics, or where ever.

Cultural capital also provides a better account of intelligence. Maybe there is such a thing as innate intelligence, maybe not. But the point is it doesn't really matter in the marketplace. In the marketplace, "raw intelligence" (if such a thing even exists) is never encountered. What is encountered is socially conditioned "signs of intelligence."

Just a warning IANAS (I am not a Sociologist) so it would be nice if somebody more competent than I could write in the actual article. I just wanted to motivate why the assumptions of this sub-section as its written are flawed.

Jaisenberg (talk) 10:49, 9 November 2011 (UTC)jaisenberg

Bad idea - it's the nature vs. nurture thing again. "Innate abilites" is pure "nature" and this section does not promote the idea that innate abilities are the sole determinant of economic inequality. "Cultural capital" stresses "nurture" aspect, and replacing "innate abilities" with "cultural capital" destroys the intent of this section. "Cultural capital" has a place in the article, but that place is not to replace the "innate abilities" section. PAR (talk) 03:25, 3 January 2012 (UTC)

US Census report 2000

In the gender section a quote is included:

"The U.S. Census's report on the wage gap reported "When we account for difference between male and female work patterns as well as other key factors, women earned, on average, 80 percent of what men earned in 2000… Even after accounting for key factors that affect earnings, our model could not explain all of the differences in earnings between men and women."[38] "

But this gives a misleading impression. Going by that statement, one would assume hours-worked (a MAJOR factor) was properly accounted for, but when you actually look at the source, it's clear hours were not accounted for. Instead, they simply counted "full-time year-round employees", and their definition of this is as follows:

" Year-round means an individual worked 50 or more weeks in 1999 (or is an elementary or secondary school teacher who worked 37 or more weeks). 3 Full-time means the individual worked 35 or more hours a week. Workers in the armed forces are excluded. "

A person working 37 weeks a year, 35 hours a week, is counted the same as a person working 52 weeks a year, 60 hours a week. If both parties earned only $10 an hour, you would have person 1 earning $12,950 a year, and person 2 earning $31,200 a year. They also stated that "paid vacations count as weeks worked" which could further skew the numbers.

I believe that quote should either be removed, or its misleading effects should be tempered with information on how they "accounted" for these "key factors". — Preceding unsigned comment added by 74.60.172.249 (talk) 10:42, 15 January 2012 (UTC)

Ornstein quote

Besides restoring some unexplained deletions, I have removed the following:

Inequality occurs when some people work harder, but receive less economic rewards, while others work less and receive most of the rewards. (citing book|author=Ornstein, Allan C.|title=Class counts: education, inequality, and the shrinking middle class|publisher=Rowman & Littlefield|year=2007|isbn=9780742547421|page=123|url=http://books.google.com/books?id=RurktfSO-y4C&pg=PA123)

I don't know whether the book actually says that or not, but its not clear whether this is a redefinition of inequality or whether it is supposed to be one cause of inequality, or the only cause. As a redefinition, it is not useful. Surely it is one possible cause of inequality, but definitely not the only cause. For example, inequality also occurs when some people work harder, and receive more economic rewards, while others work less and receive fewer rewards (without implying a value judgement on either possibility). PAR (talk) 06:46, 27 January 2012 (UTC)

Davos: At World Economic Forum, Income Inequality A Major Concern

Good article:

• Davos: At World Economic Forum, Income Inequality A Major Concern. The Huffington Post, Alexander Eichler, 01/25/2012

Brangifer (talk) 01:23, 29 January 2012 (UTC)

Wealth concentration section

A paragraph in the Wealth concentration section reads as follows:

"Related to wealth concentration are the effects of intergenerational inequality and housing inequality. The rich tend to provide their offspring with a better education, increasing their chances of achieving a high income. Furthermore, the wealthy often leave their offspring with a hefty inheritance, jump-starting the process of wealth condensation for the next generation. However, it has been contended by some sociologists such as Charles Murray that this has little effect on one's long-term outcome and that innate ability is by far the best determinant of one's lifetime outcome."

I've deleted the sentence in bold, which is an out of place addition (diff) that seems to have gone mostly unnoticed. I've brought it up here simply because of how long it has been on site. Regarding the sentence itself, it's under a branch of Causes of Inequality, which already contains another subsection entitled Innate ability. There's no reason for an unsourced statement like this, which (if even relevant) should have been included in the correct section. As a further note, the Wealth concentration article itself includes no reference to Murray or to the argument regarding innate ability at all. Vel non (talk) 15:20, 17 April 2012 (UTC)

Social capital index?

The graph in the "social cohesion" section needs to be fixed. Nowhere in the article is "social capital index" defined, and the links provided in the graph's data page are dead. PAR (talk) 05:11, 6 September 2012 (UTC)

Population Health

At the moment this is simply a one sided summary of a low quality popular book. It should be deleted until someone can write a proper summary of the academic literature, which is much more mixed overall. As an example, "Is Income Inequality a Determinant of Population Health? Part 1. A Systematic Review" by Lynch et al is the most thorough review of the literature I know and finds that "The evidence suggests that income inequality is not associated with population health differences—at least not as a general phenomenon—among wealthy nations". — Preceding unsigned comment added by 84.61.165.78 (talk) 00:52, 23 May 2013 (UTC)

You removed 13 references, citing issues with only one reference. Restoring removed content. aprock (talk) 19:26, 23 May 2013 (UTC)

No, I showed that the section did not accurately reflect the academic literature. Please do not revert my edits without justification. — Preceding unsigned comment added by 84.61.181.253 (talk) 13:04, 24 May 2013 (UTC)

Inaccurate Chart

This chart:

...purportedly comes from the table on page 5 of this PDF. [1]

But the chart is not a faithful representation. It omits an entire category, by folding two categories together. Thus, it's original research, and it should be removed. I pulled it out once, with an edit summary that explains the reason. Another editor has reverted it back in, with the rationale that WP:OI allows original graphics. True enough, WP:OI would allow the creation of a chart from a table found in a reliable source. But it does not allow manipulation of the data in this way. Discuss... Belchfire-TALK 08:39, 23 December 2012 (UTC)

I don't see a problem. The omitted category is three categories folded together. The wedge captions are original, though, and the table is from a questionable source, although the data might be taken from a reliable source. — Arthur Rubin (talk) 10:41, 23 December 2012 (UTC)

Just as I said before, it's not a faithful representation of the source table. It's original research. If the source is unreliable, that's an additional issue. Belchfire-TALK 10:46, 23 December 2012 (UTC)

In addition to the OR concerns, can we really trust the numbers in a PDF entitled "Revealed: global super-rich has at least $21 trillion hidden in secret tax havens"? bobrayner (talk) 21:51, 23 June 2013 (UTC)

slums image in the lede

Currently we have a montage of slums in the lede with the caption: Slums, also called favelas and townships, are a visible indicator of economic inequality. They are a common feature midst major cities of the world. Above are nine examples.

There are several problems here. First and most importantly, what slums are not necessarily indicators of inequality (they could be, but not necessarily) but rather of poverty. Two different things, often confused by lack of careful thinking, and as such the image is misleading.

Second, the term "favela" is specific to Brazil. Not sure why this particular alternative name should be privileged since slums exist in all kinds of places and have all kinds of names.

I'm removing the montage for that reason, and will probably put back the map that was there originally. Volunteer Marek 20:51, 23 June 2013 (UTC)

Nice work. bobrayner (talk) 21:52, 23 June 2013 (UTC)

Causes of inequality

The bullet list under "Causes of inequality" is also a bit embarrassing. For one thing, several items in the list are not causes of economic inequality they are economic inequality - inequality in wages, wealth, racial inequality.Volunteer Marek 21:12, 23 June 2013 (UTC)

The list includes racial discrimination not racial inequality

Common factors thought to impact economic inequality include:

*labor market outcomes [9]

*globalization;[18]

*technological changes;

*policy reforms;[9]

*more regressive taxation[19]

*computerization and increased technology;[18]

*racial discrimination;[20]

*the gender pay gap;[21]

*nepotism.[22]

*variation in natural ability [23]

maybe the list should be headed "causes of economic inequality" to be clearer --BoogaLouie (talk) 00:30, 3 July 2013 (UTC)

That's caused I changed "racial inequality" to "racial discrimination".Volunteer Marek 06:54, 3 July 2013 (UTC)

Proposal to replace deleted intro paragraph

I asked on WT:ECON#Another request to review a questionable deletion about reverting this edit, and I agree it should be replaced. Could someone give me a clue as to how the edit summary is supposed to describe the deleted text, please? EllenCT (talk) 06:08, 25 April 2013 (UTC)

So it's been reverted by two different editors, but you keep re-adding it without sufficient justification or discussion for improvement. For the first statement, it's an opinion stated as a fact, so it fails WP:NPOV. There is also no conditions or context for the statement - so what are we talking about? The source does not support that, given enough time, pure economic equality (socialism) would not inhibit growth compared to one that has greater inequality. It's discussing a measure - inequality is essential for growth and too much inequality can be destructive. Those are statements directly supported by the article and probably ones that not many would dispute, but we might want to even attribute that as an opinion. So, you're first sentence I find POV and incomplete, which presents a bias and misleading picture. The second statement fails similar tests.. under what conditions, fact or opinion, (greater equality) compared to what, NPOV issues. I searched the sources for the terms contained in that sentence and I didn't find where they were supported. My concern is that it takes a primary source and draws conclusions not directly stated, which might constitute WP:OR. The changed content was supported by the source and I think addressed the point - that a measure of equality can be important for economic growth. Morphh ^(talk) 12:33, 16 May 2013 (UTC)

Which "first statement" are you talking about? You used two sources after a sentence that they specifically refute. Where is your evidence that "inequality is essential for growth"? Do you think two people with the same amount of wealth are somehow unable to trade beneficially with each other? The idea is absurd. Of the two sources from MIT and the IMF, which have you actually read? I ask because there does not seem to be any way to conclude that you have read or understood either of them. EllenCT (talk) 17:18, 30 May 2013 (UTC)

The first statement that I referred was the first statement of the reverted content, which was "Early studies suggesting that greater equality inhibits growth have been shown to be flawed because they did not account for the many years it can take equality changes to manifest in growth changes." As for the content added, the IMF publication[2] states "After all, some inequality is essential to the effective functioning of a market economy and the incentives needed for investment and growth (Chaudhuri and Ravallion, 2007). But too much inequality might be destructive to growth." It's almost a direct quote from the IMF. The second sentence is supported by this IMF statement "In fact equality appears to be an important ingredient in promoting and sustaining growth." They're balanced statements, which seems appropriate for the lead. The MIT paper[3] probably shouldn't have been kept as a source as it describes the error of using linear models for the effects of inequality on growth, but I maintained it as it was being used to support the statement that other studies "did not account for the many years it can take equality changes to manifest in growth changes.", which would seem to say that equality can have a positive effect on long term growth. Morphh ^(talk) 18:19, 30 May 2013 (UTC)

So you admit that the MIT paper explicitly says that earlier models got it all wrong. That's a fact, not an opinion. And the "essential" inequality is essential because it's caused by trade, not a cause of it. So you kept in the one statement that opposes the otherwise unopposed premise of the IMF article, that income equality is slightly more effective than free trade at promoting economic growth. I will correct the article. EllenCT (talk) 10:37, 31 May 2013 (UTC)

The MIT paper argues that linear models are flawed, but specifically states that their data has little to say on if inequality is bad for growth. As for fact or opinion, models often change to better account for empirical evidence and their publication is one of many in assessing the best way to measure the economic effects. I'm not sure how or where you get that the IMF paper concludes "income equality is slightly more effective than free trade at promoting economic growth". Overall, we should be assessing these based on WP:WEIGHT, not what we think is the latest correct assertion. The majority opinion may be what leads the IMF paper by Arthur Okun, that pursuing equality can reduce efficiency, and even at the conclusion of the IMF paper, they state poorly designed efforts to reduce inequality could be counterproductive, doing more harm than good to the poor, but suggesting some win-win equality policies they believe can improve growth. Morphh ^(talk) 13:56, 31 May 2013 (UTC)

Further discussion at User_talk:Srich32977#Early_studies_of_income_inequality. EllenCT (talk) 16:04, 16 June 2013 (UTC)

No — the further discussion is here (cut & pasted from my talk page – S. Rich (talk) 16:38, 16 June 2013 (UTC)):

Early studies of income inequality

Did you read http://www.imf.org/external/pubs/ft/sdn/2011/sdn1108.pdf or http://www.imf.org/external/pubs/ft/fandd/2011/09/berg.htm and what the latter says about Art Okun's regression error and how it carried forth the early view and dominated all studies until it was corrected in 2011, including Garret's 2010 work? Did you read http://economics.mit.edu/files/753 showing that any year-over-year regression is inconclusive because the pertinent economic factors often take more than a year to have an effect, therefore requiring regression with total years of growth as the dependent variable, as Berg & Ostry were the first to do in 2011? What is your source for your statement that "the issue (in the real world) is not resolved"? What in Morphh's and my compromise do you think is flawed? I believe you are mistaken. EllenCT (talk) 16:00, 16 June 2013 (UTC)

Regarding "two people with the same amount of wealth are somehow unable to trade beneficially", no, of course not, but the trade can give rise to inequality, which if "corrected" somehow, can render that trade counterproductive to one or both. Reading the MIT reference, the bottom line is in the summary: "On the more fundamental question of whether inequality is bad for growth, our data has little to say.", so it cannot be used as an argument pro or con. Regarding the IMF reference, it is a good reference for the "pro enforced equality" POV. I don't think it destroys the "anti enforced equality" POV, however, especially in light of the MIT reference, which says things are much more complicated. In short, the matter is not "settled". PAR (talk) 20:29, 16 June 2013 (UTC)

Consider an isolated island economy based on two crops, one of which provides essential vitamins and the other of which provides essential proteins; both of which are required for the islanders to survive, and both of which can be stored for a couple growing seasons before spoiling. If the islanders trade within a strong social safety net funded by progressive taxation (enforcing greater income equality) then a blight wiping out one crop will still allow its farmers to survive and replant the next season, but a weak social safety net would bankrupt the blighted farmers, starving them and then the entire island population as soon as the stores are depleted. Yes, it's a contrived example with various assumptions, but it explains why your use of "can render" is more accurately "might but almost always doesn't render" per Berg & Ostry's 2011 work. From real-world data, you see more start-ups in countries where the social safety net (effectively statutory limits on income inequality) lowers the risk of starting a business.

The reason that the MIT reference has little to say about whether inequality is bad for growth is explained on page 13: "the effects of inequality on growth through these channels is unlikely to be realized over the time-scale of 5 or even 10 years. Therefore it is unlikely to provide a convincing justification for estimating a relation between short-run changes in inequality and changes in the growth rate", which is the whole point of the statement that reference is used to justify.

You and I as editors might have our differing opinions about whether Berg & Ostry's 2011 work "destroys the 'anti enforced equality' POV" but what do the citing and secondary sources say? Here is one of each, representative of every single one of about two dozen I found with Google Scholar:

The economics profession convinced governments that growth would be enhanced if they reduced the tax rates for top income earners, the so-called wealth generators. The evidence didn’t support these claims and even the IMF (Berg and Ostry, 2011: 3) recently admitted “that longer growth spells are robustly associated with more equality in the income distribution.” —Mitchell (2013)

and

Finally, the empirical, largely cross-country, evidence generally tends to deny a negative inequality-growth relationship (e.g. Bénabou, 1997; Berg and Ostry, 2011). An interesting case study of Korea and the Philippines suggests the advantages of lower inequality for growth. These countries had similar macroeconomic indicators in the early 1960s (GDP per capita, investment and savings), but substantial differences in inequality. Korea was a much less unequal society in terms of income and grew much faster than the Philippines. —Paunov (2013)

Can you find any secondary source that disagrees with Berg & Ostry's conclusion using run lengths of economic growth as the dependent variable? I couldn't. Can you find any reliable secondary source supporting the idea that the matter is not settled or that the issue is not resolved? EllenCT (talk) 18:59, 19 June 2013 (UTC)

Regarding the crop problem, the farmers could also take out crop insurance from one of a number of competing private insurance companies. There could also be a crop futures market which the farmers could use to buffer themselves against crop loss. In both of these cases there is a natural feedback mechanism which rewards those private individuals who understand the economics of the situation. In the case of forced redistribution by a central government, there is much less of a feedback mechanism, the central government is more motivated to understand the politics of the situation rather than the economics of the situation. They will redistribute in a politically beneficial way rather than an economically beneficial way, and are not at all motivated by fear of competition. (Note: politically and economically would tend to overlap in the disaster scenario you have outlined). What if the farmers of the failed crops tended to be democrats and the central government was dominated by republicans? Would the redistribution be the same as if the failed farmers tended to be republican in a democrat controlled government?. Probably not. Of course, there are problems with the private solution as well. If the insurance companies and market players can use their profits to influence the government to lock in or increase their profits, the whole idea goes south as well. So the bottom line in both cases is the need for a government which is least corrupt. There has to be a balancing act - Power corrupts, absolute power corrupts absolutely, and lack of power... well, nature abhors a vacuum.

Regarding Berg & Ostry, yes, they are a good reference for the "enforced equality" argument, and I do not have any secondary references which critique them at this point (two years after) in time. However, I believe as a general rule, that the idea that anything is "settled" in the sphere of economics by something published two years ago is ludicrous. Will there be anything published in the next 10 years which refutes Berg & Ostry, and "settles" the matter in the opposite direction? I don't know and neither do you. Nevertheless, I will look for sources which in some way disagree with Berg & Ostry. PAR (talk) 15:05, 20 June 2013 (UTC)

To add a bit to PAR's comment, we should be looking at the WP:WEIGHT relative to the various opinion presented in reliable sources. While notable, newer studies (which often get funded by producing contradictory or different findings - otherwise why fund them) may not be the ones with the most weight given in the article. If we have 10 prior studies that say X and 2 newer studies that say Y, then X will be given the most weight in the article, with reference to recent studies that contradict prior research for balanced pov. We should not present the new studies as if it were the prevailing viewpoint and we certainly shouldn't present it as the new point of fact truth. That would violate our WP:NPOV policy. Something to keep in mind. Morphh ^(talk) 18:03, 20 June 2013 (UTC)

I don't think we should present B&O as conclusive, but I really disagree with the past couple comments. As far as I can tell, the "enforced equality" term isn't used by any of the papers discussed here. I don't think it's fruitful to describe research with one's own POV-laden terms. The idea that we must also give 8 old studies more weight than 2 newer studies is wrong. Raw article counts are not a criterion for weight. B&O has received a lot of attention, is well regarded, and addresses past research in the area. It deserves a substantial amount of weight. Moreover, when another article, like Banjeree and Duflo demonstrates that a class of previous results isn't valid, those results no longer deserve much weight unless its shown that B&D is controversial. We can't assume new research is academically controversial because the associated politics are controversial. If an article has been out for a few years, there has been time for a response. If the authors' of old research want to defend their work, they will at least comment on a paper that questions their work. There is also a lot of reaching here to dismiss sources on dubious grounds: There's no place for us to question the validity of new research because of our personal views on research funding. There's no evidence that IMF researchers are going out of their way to be controversial in an effort to get funds. That's your own view, and it has no weight here.

EllenCT's wording needs to be better couched and less POV, but I don't think any of the discussion on sources here can lead to article improvements.--Bkwillwm (talk) 00:57, 21 June 2013 (UTC)

Sorry if my thought was not clear. I agree that number of studies does not determine weight. The weight of those studies in reliable sources should determine weight. So if the past 8 studies have more coverage in reliable sources, then we should balance accordingly. Of course, if significant weight has been given in reliable sources to newer studies, we should consider that as well. My point was only that being the latest study does not instantly make it the predominate viewpoint and serve as fact and truth, which seemed to be implied by EllenCT. Morphh ^(talk) 15:11, 21 June 2013 (UTC)

I used the term "enforced equality" to refer to wealth redistribution that is not the result of a free market, aimed at equalization of wealth. In other words, redistribution by rule of law - e.g. thru taxation, etc. as opposed to private transactions between consenting individuals. If you can suggest a more appropriate term which you think is less POV-laden, I would be glad to use it, as well as any low-POV term for "anti enforced equality". I think it is wrong not to question the funding mechanism behind any research, on either side of a question. Not only wrong, but negligent. There were plenty of articles proving that cigarette smoking did not cause lung cancer, funded by the tobacco companies. It is absolutely true that this does not imply that their methods and conclusions were wrong, but any research that arrives at a conclusion that is pleasing and profitable to those who funded the research needs extra scrutiny. As for being controversial to obtain funds, I have seen this in action many times. You go to a doctor who says you are completely healthy, you go home happy. A doctor says you need an operation, you get a second opinion, and a third. Anyone who writes an article that reaffirms the current wisdom, is not going to get funding for a followup. Someone who rocks the boat, creates an uproar, will definitely find funding, particularly if their article fits in with the agenda of the people funding them. PAR (talk) 02:01, 21 June 2013 (UTC)

Most of the literature, including B&O, is light on policy. The "enforced equality" characterization comes more from you projections than anything in the articles themselves. Feel free to use it, but it makes it hard to take your comments seriously. The issue here is how inequality and growth are related. Are there causal relations between the two, or are there latent factors driving both? When you jump to characterizing the literature based on your perceptions about policy implications, you miss out on what the research is saying.

If you have a specific problem with an article's integrity based on its funding, please lay out an argument, preferably with a source that makes the argument so that its not your own OR analysis. Morphh initially made a broad argument that would apply to any new research that could be considered contradictory. It's hard to take that argument seriously. Evaluating research based on funding can be worthwhile but dismissing results based on funding can be fallacious unless you actually back them up. You can't just assume that an study was funded by some nefarious interest because you don't like its implications. Neither you nor Morphh has said anything about how these studies were funded or how this relates to the result. (Keep in mind, it's still fallacious to dismiss research based on its source unless you can actually explain what about the research is invalid. The problem with tobacco research wasn't how it was funded, it's in bad results from flawed methods. If the research had been conducted properly, it would have shown a relationship with cancer regardless of how it was funded.)--Bkwillwm (talk) 02:31, 21 June 2013 (UTC)

I didn't say I had a specific problem. Let me say it again, just to be clear - the validity of research has absolutely nothing to do with whether the conclusions drawn benefit the agenda of those providing the funding. I am also saying that there is a non-negligible correlation of the conclusions drawn with the agenda of the funders.

This is a subject in which policy implications are implicit. Are you saying that if there is a causal relationship between equality and growth, that there are no policy implications? Its like saying that a causal relationship between smoking and lung cancer carries no policy implications. I disagree. I admit, it is wrong to jump to the conclusion that finding a correlation between equality and growth implies an "enforced equality" policy implication. Only a causal relationship would imply it. It's just that I come to this page, and I see that "natural ability", one of the most important determinants of wealth inequality, is practically ignored, and I suspect that the article isn't as NPOV as we would both like it to be. PAR (talk) 04:06, 21 June 2013 (UTC)

If you're resorting to making baseless, ad hominem attacks on sources based on funding sources, you don't have an argument. I never said there were no policy implications of this research, but that isn't what's at issue. You are segmenting the literature into two groups based on your perception about policy. Much of the work here doesn't delve much into policy. You are inserting your POV on policy into this discussion, and it has no place here. Going with your example, B&O is like a study noting that second hand smoking is correlated with cancer. This is an important finding to include here, but says little about policy related to this finding. You're coming along and saying, "this study says I can't smoke in my own home!" Maybe someone will make that policy proposal, but that's a separate issue not addressed by the study in question. When you start discussing a factual finding based on your own personal feelings about potentially related discussion, you get this fruitless discussion.--Bkwillwm (talk) 17:37, 23 June 2013 (UTC)

I really considered ignoring this comment, since it sounds like baiting. I will say it again for the third time: The validity of research has absolutely nothing to do with whether the conclusions drawn benefit the agenda of those providing the funding. Pay attention, now, I'm going to say it again, for the fourth time: The validity of research has absolutely nothing to do with whether the conclusions drawn benefit the agenda of those providing the funding. Did you get that? I can say it a number of different ways, if it's still not clear. With regards to policy, I did not introduce B&O into the discussion, and the fact that it has an entire section entitled "Some Tentative Policy Implications" means that I did not insert policy into the discussion, someone else did. Policy IS an issue here, and we need to represent all points of view, and the distinction between science and policy must be made clear. You imply that my take on the smoking-cancer issue is "this study says I can't smoke in my own home!". That never came from, me, you are projecting here. Not everyone who disagrees with you is a nutcase, sorry. I only sound like some kind of right wingnut to left wingnuts. Right wingnuts think I'm a left wingnut. That's the trouble with trying to be reasonable and NPOV, you get stuck in the middle with a bunch of other head-scratchers, being accused by both wingnuts of consorting with the enemy. PAR (talk) 21:43, 23 June 2013 (UTC)

Does B&O show a "causal relationship" between equality and growth? Very few studies have tried time-series analysis. If B&O doesn't, one might as well report it says that growth causes equality. — Arthur Rubin (talk) 17:49, 23 June 2013 (UTC)

To quote B&O (2011): "This note has uncovered some patterns in the growth spell data. But income distribution is only a part of the story—there are clearly many other variables involved and much about growth spells that remains unexplained. Also, it is hard to separate cause from effect." They also state "much of the vast cross-country and time-series variation in income inequality cannot be rationalized as an efficient market outcome." Now I expect to be mercilessly attacked by the right wingnuts as well. Yeah, so bring it. PAR (talk) 21:43, 23 June 2013 (UTC)

In their Finance and Development article they also wrote, "We compare the risk that the spell will end in a given year with the values of these variables in previous years—at the beginning of the spell or the previous year—to minimize the risk of reverse causality." If growth causes equality, then it goes back in time to do so. EllenCT (talk) 23:00, 2 July 2013 (UTC)

Please stop doing this. The full quote is "We compare the risk that the spell will end in a given year with the values of these variables in previous years—at the beginning of the spell or the previous year—to minimize the risk of reverse causality. In the face of the usual difficulties involved in disentangling cause and effect, and the risk that we have been unable to find good measures of important variables, the results we report below should nonetheless be interpreted only as empirical regularities (“stylized facts”)."

With regard to the recent edit, the fact remains that the "before 2011" reference is dated 2010, and the "has since become" reference is dated 2009. PAR (talk) 00:31, 3 July 2013 (UTC)

Again, all of the two dozen citing and secondary sources which mention B&O agree with their methods and conclusions. The same can not be said of Garrett. Unless you have evidence to the contrary, then why not represent B&O's conclusions prominently? The first six paragraphs of [4] make an explicit case for causality. There is no way for growth to reach back in time and cause the equality which preceded it. (Plus, one of Garrett's main points with which I do agree is that ordinary trade causes income inequality. I do not agree with his inference that it is therefore healthy.) The "usual difficulties" refer to the impossibility of ruling out some unknown mysterious common cause of both. But think about that: anything which causes greater income equality, such as progressive taxation or a social safety net or transfer payments to the poor is going to be a common cause of both. EllenCT (talk) 01:23, 3 July 2013 (UTC)

First of all, the "it has since come to be seen" reference is the Spirit Level, not B&O. Did you intend the "it has since come to be seen" reference to be B&O ?.

Assuming you did, then I think that B&O is an important reference and its results and conclusions should be prominently mentioned. Let's define Caveat#1 as the fact that the scientific validity of a particular piece of research is independent of the politics or personal value system of the funding body or the author. Now lets look at the publishing dynamics. B&O work for the IMF, their results suggest conclusions in line with the IMF's stated goals - to improve the economies of its 188 member countries, most of which are "poor" compared to, say, the US. (Caveat#1).

The Spirit level has been roundly criticized by many libertarian and conservative publications, and I think their criticism has a lot of validity (Caveat#1). Do you think that these libertarian and conservative think tanks have been stunned into perpetual silence by B&O? I don't think so. I expect some serious criticism to be forthcoming (Caveat#1). At present, however, B&O offer the best criticism of their own work, which is one of the reasons it has to be taken more seriously than the Spirit level. Referring to their purely scientific paper (the IMF staff discussion note, April 8, 2011) they NEVER make an explicit case for causality. On the contrary, they are continually qualifying their tentative conclusions by citing the "correlation does not imply causation" truism. The never use the word "is", they always use the word "may be". They suggest conclusions but never firmly draw any.

I understand the reasoning - equality implies long term growth therefore government mandated equality (progressive taxation or a social safety net or transfer payments to the poor) causes long term growth. The problem is that B&O do not draw this conclusion without a load of caveats. Equality does not imply long term growth, it correlates with long term growth. The idea that the correlation is causative is tentative. The idea that government mandated equality can supplant every other cause of equality is going further out on a limb, and B&O explicitly warn against drawing such a conclusion blindly. Only a blind socialist will pick this up and run with it, not a true scientist. Only a blind libertarian or conservative will pick it up and run with any criticism of it, not a true scientist.

As a scientific matter, I think it is enormously premature to declare the matter "settled", particularly when B&O repeat over and over that, in effect, nothing is "settled". I think B&O may be a good piece of scientific work, and I expect it will prod those who do not share their funding or values to examine it with a fine-tooth comb (Caveat#1). If they come out with a series of ad-hominems and hand-waving, then B&O gains credibility. If they find valid questions about their techniques and results, then B&O loses credibility, as was the case with the Spirit Level. How much you want to bet the matter is far from settled? I object to any edit which implies that it is. PAR (talk) 03:43, 3 July 2013 (UTC)

Well I think the epidemiologist authors of The Spirit Level have been far better and more careful scientists than the ideologues who have criticised them. I was just writing today about how we should be giving the final say in economics to data-grounded epidemiologists such as Hans Rosling instead of the politicians who end up with the decision authority in both democratic and more autocratic societies these days. In any case, I find [5] and [6] thoroughly convincing in contrast to the critiques which they address, in no small part because of the authors' background in epidemiology instead of economics. Their profession is all about distilling actual causation from data.

But I must agree the general issue will never be settled in the popular press, not just because ideologues with authority and buckets of modern media ink are on each of its sides, but even moreso because the evidence falls in favor of greater taxes on the rich, which guarantees a perpetual stream of the best PR, lobbying, and astroturf money can buy. As far as the science, though, I think it's fair to say it has been settled for years now. And as far as Wikipedia criteria go, both B&O 2011 are reliable secondary sources, publishing under the editorial direction of an respected organization with a reputation for fact-checking and accuracy (e.g. auditing all manner of government books), output spanning decades of which they effectively contradicted, and then they published under peer review in a prestigious journal. The secondary sources which cite them agree with them, as do all of the less reliable sources citing them. I don't see any chance of someone coming along and overturning them in the peer reviewed literature, although I suppose it's possible if it turns out they've fudged data -- which I think is very unlikely because their longer initial papers include so much of it. EllenCT (talk) 05:33, 3 July 2013 (UTC)

Why do you characterize the authors of the Spirit Level as scientists and their critics as ideologues? Also (Caveat#1) what has this got to do with the validity their statements?

Decision authority should NOT be given to pure scientists. Do you understand the distinction between science and the application of a value system applied to those scientific results? Scientific results imply no action whatsoever. Only when a value system, a desired outcome, is specified can those scientific results be translated into action. In an open society, democratic, republic, whatever, it is the elected politicians who ideally represent the value system(s) of the electorate, not the scientists.

The evidence does not fall in favor of greater taxes on the rich. The evidence along with some system of values may do so. What value system are you using to make this statement?

You don't distill causation from data, you distill correlation. Causation is when you have a models or hypotheses that predict the correlation. You keep refining those models, picking the "best". Today's "best" is rarely tomorrow's "best".

You say all these sources agree with B&O. Can you give just one example of a secondary source "agreeing with them" so I can understand the nature of this "agreement"?

B&O have found a correlation between a particular measure of inequality and a particular measure of long-term growth. The question is not whether that correlation exists, but rather what does it mean? They may very well not be "overturned" regarding that correlation. But to jump to the conclusion that inequality can be treated as an independent controlled variable, causatively linked to the long-term-growth dependent variable is a conclusion that even B&O are not willing to draw.

Why is it not possible that some underlying situation is generating both equality and long term growth? The two will then be correlated, yet neither causes the other. Correlation does not imply causation, even if the variables are time-shifted, as in B&O. PAR (talk) 05:58, 4 July 2013 (UTC)

Wilkinson and Pickett are both epidemiology professors, and Pickett is also a career government scientist studying the social determinants of health. They published the articles on which The Spirit Level was based in peer reviewed epidemiology journals. Runciman is a political science professor and columnist; not an actual scientist. Reeves is a communications lecturer with a background in mechanical engineering. Kay and Sanandaji are public policy economists with no background in epidemiology. Saunders and Hassan are sociologists, again without any background in epidemiology. Snowdon has a bachelor's in history, and is an outspoken opponent of tobacco controls and taxation, among other things. Is there any reason to believe that any of the critics have an adequate understanding of the epidemiological arguments involved? In any case, I am not the only one who refers to their critics as ideologues.

I strongly disagree that scientific results do not have policy implications apart from subsequent value judgments. Values are already baked in to the questions that scientists try to answer. Suppose it was discovered that lead is a neurotoxin -- do you want a scientist or a politician deciding how much lead should be allowed in your water? And the scientists were asking whether lead is toxic in the first place because of the prior value judgement that long healthy life is preferable to the alternative, which is shared among the scientists, those sponsoring their work, and those who publish and report on it. We don't let politicians decide what media to use for developing a particular vaccine. It makes just as much sense to let politicians decide what sort of tax brackets will optimize public health and well-being. There is still a place for politicians -- they should be in charge of hiring the best scientists and then they should accept the answers to the questions they ask them.

Maybe you and I don't distill causation from data, but epidemiologists most certainly do, according to their job description sourced in the Epidemiology article to [7]. There are several methods from distinguishing causation from correlation which in fact set epidemiology apart from almost all other sciences beyond physics. What is your source for your statement that "causation is when you have a models or hypotheses that predict the correlation"? Simply being able to predict a correlation doesn't establish causality. You also need to show that the proposed cause occurs prior to the effect, and that it is either necessary or sufficient for the effect. Convergent cross mapping is the current state of the art, as far as I can tell. It was a big deal last year, but it's not perfect.

I excerpted Paunov (2013) above as an example review agreeing with B&O. I believe that the statement "equality appears to be an important ingredient in promoting and sustaining growth"[8] is a statement about causation, notwithstanding the disclaimer about possible third common causes of both. While there is no way to rule such common causes out, there are also no hypothetical possibilities for such forthcoming.

I gave three examples of possible underlying causes of both income equality and long term growth: progressive taxation, social safety nets, and transfer payments, which are such because they cause the former which causes the later. Other possibilities are reductions in economic rents and the subsidy of education, although the latter is technically a form of transfer payments to the poor, in aggregate. I think this discussion by a Stanford sociologist is a pretty good overview, even if you don't read the original article it refers to. EllenCT (talk) 04:05, 5 July 2013 (UTC)

archiving

Considering the length of this talk page, I think the archiving set up was a good idea. Could someone manually archive the sections with "improper" signatures so that the bot won't see them. ("Improper", only in not having the material necessary to identify the time of the comment. Most potentially identify the commentor.) — Arthur Rubin (talk) 17:03, 5 July 2013 (UTC)

I think you mean add time stamps so that the bot will see them and archive as appropriate. Maybe we can add an arbitrary 5 tildes ~~~~~ with a notation that says "This is not the actual posting date, ersatz post-dated time stamp posted for archiving purposes." Then, I think, the bot will pick up the comment after 180 days. – S. Rich (talk) 17:23, 5 July 2013 (UTC)

It's an option, but archiving comments dated (but in a questionable format) in 2005 shouldn't need to wait 180 days. — Arthur Rubin (talk) 17:56, 5 July 2013 (UTC)

If I did this right, the bot will come along and set up the first batch of archives. At that point we might do a manual transfer. – S. Rich (talk) 17:59, 5 July 2013 (UTC)

First section "measurement..." fails and leads to big problems

My reason for visiting this article was to learn methods of measuring inequality, but the first section titled "measurement..." fails to give any definition of any measure of inequality, so what follows is a mess of almost contradictory explanations for inequality. While one chart uses gini, that is only one attempt to quantify inequality, and it isn't clear any of the other sections are discussing inequality in terms of gini.

The talk above reflects the problems the lack of a coherent measure of inequality poses. The article and the talk criticizing it all have merit, but without a definition of the framework, the article will never have coherence.

Given I came looking for insight, I'm hardly the one to solve the problem with the article, but I'm make a few stabs at direction:

Math metrics like gini coefficient, but I'm pretty sure other esist

Social metrics, like social mobility hindered by class or caste

Land, like farming based family centered societies vs nomadic vs economy largely independent of land

Wealth in terms of control of land, resources, or corporations vs earning ability

Mulp (talk) 22:01, 6 September 2013 (UTC)

Suggested removal

I'm opening this section to discuss this suggested removal. At first glance, it looks like the inline citations support it. MilesMoney (talk) 01:51, 10 December 2013 (UTC)

I don't have a problem with the second sentence, but I'd like to see a source for the first sentence. If it is covered by the source of the second sentence, I'd suggest including the reference for both. Morphh ^(talk) 02:14, 10 December 2013 (UTC)

There are three sentences, by my count, but I agree that the first one is the issue. The problem is that the reliable source offers a complex explanation, with pages of charts that are hard to accurately summarize. I think that the editor who wrote this did their best, but may have distorted it a bit.

In particular, top rate isn't mentioned in the cited area of the source, and probably shouldn't be, as it's only a crude measure of progressivity. What matters isn't how much of your last dollar of income goes to taxes but how much of your total income does. There are also confounding factors, such as (bottom of pg. 105) taxes being effectively more progressive where taxable income is less equal. This paradoxically makes American taxes look more progressive because income distribution is so unequal.

I think the right thing to do here would be to try to rewrite these sentences and maybe find a source that, while just as reliable, is easier to summarize. Do you want to take a stab at it first? MilesMoney (talk) 02:45, 10 December 2013 (UTC)

Rather than follow BRD and join this discussion, Rocco edit-warred to remove the material under discussion. This is despite the fact that there's a consensus for keeping the second half of it, and perhaps some version of the first. This is extremely counterproductive behavior which violates policy. Oh, and just for fun, they tagged my talk page with a false accusation. MilesMoney (talk) 05:48, 10 December 2013 (UTC)

You need to be less combative and be a little more careful about what you are inserting into the encyclopedia. It took about 4 seconds worth of due diligence to see that nothing inserted by your edit[9] is actually supported by the sources provided. The previous edit was a valid removal, and you (MilesMoney) are not editing within the bounds of WP:BRD, as you falsely claimed in your edit summary. Do not falsely accuse me of edit warring again, unless you are prepared to defend an RFC/U. Roccodrift (talk) 05:55, 10 December 2013 (UTC)

You need to stop telling me what I need to do. Until you're more polite, I'm going to ignore you. MilesMoney (talk) 06:03, 10 December 2013 (UTC)

For the record, Rocco claims that the previous edit was a valid removal. The previous was this.

1. It cuts the article in the middle of a link.
2. It has no edit comment.
3. It is the sole edit by an IP.

In other words, the previous edit was vandalism. If you agree that vandalism is valid, vote for Rocco! MilesMoney (talk) 06:06, 10 December 2013 (UTC)

What are the specific objections to the text in question? There are several measures of tax progressiveness and several measures of economic inequality, but all other things being equal, all of the former tend to decrease all of the latter. EllenCT (talk) 07:55, 10 December 2013 (UTC)

This is really weird. Rubin is edit-warring with the edit comment: "why is an OECD publication reliable?"

It's not clear why an OECD would be unreliable, and with Rubin refusing to join the discussion, we can only guess. MilesMoney (talk) 05:03, 11 December 2013 (UTC)

@Arthur Rubin: what reason do you have to believe that OECD publications are not reliable? EllenCT (talk) 06:13, 11 December 2013 (UTC)

Why would it be reliable? Is there any indication that their publications are not solely to support their position? — Arthur Rubin (talk) 06:46, 11 December 2013 (UTC)

What position does the OECD take? Economic cooperation and development is opposed to war and recession, I suppose, and I guess war and decay proponents aren't very well represented on Wikipedia. But seriously? The OECD tends to describe the US Gini index prior to tax transfers unlike other countries, and other than that I don't know of any reasons that they wouldn't be reliable. But if I understand where you're coming from, that means they side with you on what may or may not be the underlying issue here. It would be nice if administrators tried to set a good example for other editors in discussion before reverts. Is that too much to ask, or are you too busy fighting ideological battles to explain your edits? EllenCT (talk) 08:17, 11 December 2013 (UTC)

Also, it takes two (or more) editors to edit-war. MilesMoney, can you explain why you explain why you criticise other editors as edit-warriors, when you're the only person to hit the revert button more than once? bobrayner (talk) 07:38, 11 December 2013 (UTC)

I don't understand why we make any mention of "Overall income tax rates in the United States are below the OECD average". This is a global article on income inequality. It seems out of place as it doesn't present an example for the content. The sentence doesn't belong here regardless of our thoughts on the OECD unless we're presenting a larger example that compares multiple countries in context with the content. The preceding sentences were on progressivity, then we jump to the overall tax rates of the U.S. being below the OECD average - what? What the source actually references is "taxation is most progressively distributed in the United States", which is a very different from the included statement (and somewhat contradicts the prior points in the section). But again, I see no reason to specifically call out the United States - leave that for a U.S. article. Morphh ^(talk) 14:21, 11 December 2013 (UTC)

U.S. tax rates lower than OECD average

Resolved

Regarding this deletion, I believe the text was correct when actual historical effective tax rates are used, as opposed to the much larger nominal U.S. tax rates. However, I don't really understand the edit summary and the URL doesn't work, so if I am misunderstanding it or mistaken, please let me know. EllenCT (talk) 15:27, 16 December 2013 (UTC)

You can see my statement for this sentence in the "Suggested removal" section above. That sentence does not provide sufficient relevancy and context for the text preceding the statement. It goes from talking about, in a global context, the effect of a progressive tax structure on income equality to jumping to the overall U.S. income tax being below OECD average. It makes no sense. Even if we were to specifically highlight the U.S. as an example, which seems improper by itself, how does their overall income tax being below OECD average relate to high progressivity or income equality? They're two different subjects and it's just left hanging out there. What the source for the statement actually references is the sentence "taxation is most progressively distributed in the United States", which is at least relevant to the context. So I'm not sure how we got from there to "Overall income tax rates in the United States are below the OECD average". It actually appears to contradict the preceding text. In any case, it seems completely out of place and out of scope. It does nothing for that paragraph / section. Morphh ^(talk) 18:46, 16 December 2013 (UTC)

Thank you. On reflection the deletion makes perfect sense, as is even more clear in light of your helpful explanation. Sorry about the time and effort here. EllenCT (talk) 08:35, 18 December 2013 (UTC)

Inaccuracy

In the lede: "A 2010 study considered it beneficial,".

No. The study said it was "not that bad". That's different. "Beneficial" means useful, good for some purpose. "Not that bad" means a (possibly) bad thing of which there isn't as much of as was thought. Volunteer Marek  09:31, 18 December 2013 (UTC)

Oxfam on whether income of top 100 individuals could end global poverty

Policies aren't just an acronym that you use to justify pushing the article in your preferred direction. Policies are rules that editors are supposed to respect.

• MilesMoney, here you edit-warred whilst complaining about other people edit-warring. Do you understand what edit-warring is?
• DrBogdan, here you cited WP:BRD whilst undoing somebody else's revert of a bold edit. If you genuinely intended to follow WP:BRD, presumably you will now self-revert, yes?

If either of you are still unable to comply with the rules you're citing, please let me know. bobrayner (talk) 22:19, 15 December 2013 (UTC)

I'm not sure I understand BRD well enough to figure out who is supposed to be doing the discussing, but I think it's everyone involved. Does anyone take issue with the accuracy, reliability, or neutrality of the statement or its source? I believe it is true, from an organization employing several if not dozens of subject matter experts, and I can find no peer reviewed sources in opposition to the statement included or the conclusions of the source supporting it. EllenCT (talk) 04:50, 16 December 2013 (UTC)

Yes, I take issue with the reliability of this source for this information in the absence of independent corroboration. Oxfam is an advocacy organization, and for that reason their pronouncements need to be treated with great caution. The claim itself is plainly extraordinary, and requires verification from at least one disinterested party with no conflict of interest. Roccodrift (talk) 05:47, 16 December 2013 (UTC)

Do you have any mathematical reason to doubt the statement? I agree independent corroboration would be great, but I think it's pretty easy to do on the back of an envelope. EllenCT (talk) 09:23, 16 December 2013 (UTC)

FWIW - seems there's numerous references re the Oxfam International text/ref including the Washington Post => < ref name="WP-20130120">Khazan, Olga (20 January 2013). "Can we fight poverty by ending extreme wealth?". Washington Post. Retrieved 16 December 2013.</ref> - and BBC News => < ref name="BBC-20130118">"Oxfam seeks 'new deal' on inequality from world leaders". BBC News. 18 January 2013. Retrieved 16 December 2013. {{cite news}}: Unknown parameter |authors= ignored (help)</ref> - many, many more references can be seen in a casual Google Search - seems to be sufficiently worthwhile to present in Wikipedia I would think - in any case - Enjoy! :) Drbogdan (talk) 14:01, 16 December 2013 (UTC)

I'm concern with using the term "annual income", when what is really meant is "wealth", since most increases are in the value of their wealth - assets and capital. Most of the sources are not as vague when you look beyond the headline. The quote seems to be "The top 100 billionaires added $240 billion to their wealth in 2012- enough to end world poverty four times over", which is very very very different than annual income. Who are they going to sell such assets too in their effort to redistribute said income - might the poor Africans want some Facebook stock as they struggle to eat? Seems misleading. It would also seem to beg for clarification on what they mean by "end world poverty", which is probably not what most Western countries internally classify as their poor (who have a home, tv, and car). It's probably in reference to providing food, water, and shelter for third world countries. So I would ask that we skip the sound bite and put this in proper context. Morphh ^(talk) 15:07, 16 December 2013 (UTC)

Income is correct, including capital gains of marketable assets. What replacement text do you propose? EllenCT (talk) 15:23, 16 December 2013 (UTC)

"of marketable assets", which seems to mean "if they sold it" - so not income, wealth. Which brings up the question, what would the market be if they were all selling? It's not appropriate for simplicity to define income as non-income here - it is misleading. If it's wealth, then say wealth, which is what the quote and original document states. The Oxfam group used it as a preface for making certain recommendations to help alleviate income inequality (Closure of tax havens around the world; A reversal of "the trend towards more regressive forms of taxation"; A global minimum corporation tax rate; Increased investment in free public services and safety nets for people out of work or ill.) We should not leave the Oxfam statement hanging out there like that was actually the conclusion of their report - it should be clear they were making a point if we're to include it. Morphh ^(talk) 19:05, 16 December 2013 (UTC)

I'm sort of realizing the amount they're talking about - 240/4 = 60 billion. So 60 billion could end world poverty? Seems unlikely. U.S. Gov spends that in one week and spends more than half of that a year in foreign aid. Morphh ^(talk) 20:33, 16 December 2013 (UTC)

Sorry, I know this is not a forum. Several sites say 30 million to end world hunger. Actually quite shocking... I'm surprising that it's so little comparatively. I have a tough time believing that those that needed it would get the money and not those in control, but still - surprising. I see another site putting world poverty at $175 billion. Morphh ^(talk) 20:54, 16 December 2013 (UTC)

@Morphh - Thank you for *all* your excellent comments re the edited text/refs - nonetheless - at the end of the day - seems to be a lot of unsourced opinions (and/or presumptions?) (WP:OR?) - (for example, "Problem is, it could never be done in practice..."{ {cn}}; "...probably collapse the entire world economy."{ {cn}}; "...readers shouldn't be left thinking that such redistribution would actually work..."{ {cn}}; "...group used it as a preface for making certain recommendations to help alleviate income inequality..."{ {cn}}; more) - which may (or may not) be true of course - worthy suggested text to improve the article - w/ WP:RS, WP:CITE (& related) - welcome of course - Thanks again for your comments in any case - and - Enjoy! :) 21:03, 16 December 2013 (UTC) Drbogdan (talk) 21:39, 16 December 2013 (UTC) (signed belatedly)

I based some of those statements on the sources. But part of it was questioning what is actually implied in the report and how we present it. Part of my confusion, which was my own fault, was that I thought it was talking about all wealth / income, not the yearly accumulation and I overestimated the cost (didn't know what their definition was) to end world poverty. So, ya... I went a little wild in my thoughts on that one - tend to ramble sometimes. My main issue was that we not use the term "annual income" if we're including unrealized gains from capital, which is supported by the sources. Morphh ^(talk) 21:17, 16 December 2013 (UTC)

Seems all may agree with the basic notion (ie, a *very, very* small group of *very, very * wealthy people have enough wherewithal to greatly reduce basic poverty in the world) - there may be different ways of presenting this notion in the article - the present text/references seems to do the job *very* well imo (see below):

Copied from December 16, 2013 diff and related version:

In January 2013, an Oxfam International report stated that the annual income of the top 100 wealthiest individuals would be enough to end global poverty four times over. Executive Director Jeremy Hobbs noted that "We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true."< ref name="OXF-20130119">Slater, John (19 January 2013). "Annual income of richest 100 people enough to end global poverty four times over". Oxfam International. Retrieved 15 December 2013.</ref>< ref name="WP-20130120">Khazan, Olga (20 January 2013). "Can we fight poverty by ending extreme wealth?". Washington Post. Retrieved 16 December 2013.</ref>< ref name="BBC-20130118">"Oxfam seeks 'new deal' on inequality from world leaders". BBC News. 18 January 2013. Retrieved 16 December 2013. {{cite news}}: Unknown parameter |authors= ignored (help)</ref>

plus - there seems to be numerous references supporting this presentation - in any regards - hope this helps in some way - Enjoy! :) Drbogdan (talk) 16:20, 16 December 2013 (UTC)

The problem (several actually) with the statement is that it's based on Bloomberg's list of changes in rich individuals *net worth*. A change in a person's net worth is not the same as "annual income". If I make 100k a year and spend 120k, financing the difference by borrowing the change in my networth is negative (by the present value of the newly incurred debt). However that doesn't mean that my income in that year was PV(-20k). If I make 100k a year and spend 80k, and use the other 20k to purchase assets, that doesn't mean that my annual income was PV(20k).

As another example. If I and a whole bunch of other "wealthy" people buy a house, then a housing bubble develops and the price goes up then our recorded networth will go up. But suppose we all tried to sell our houses so that we can use the proceeds to eradicate poverty (or any other purpose). Obviously, the price of the houses would quickly drop and those networth gains would be erased and the actual revenue would not be as high as expected on the basis of the initial value.

That's the main mistake in that claim. There might be some others. The Bloomberg's list is actually the top 200 biggest *changes* not 100, and not top 100 wealthiest. Maybe Oxfarm only counted the first 100. Ok. But the 100 biggest changes is not the same thing as the increases in the net worth of the top 100 wealthiest.

An accurate statement would be something like "the 100 largest changes in wealthy individual's networth in 2012 was enough to eliminate poverty four times over".

It's sourced and all but this is where you get into the whole WP:V vs actual accuracy issue. Volunteer Marek  08:57, 18 December 2013 (UTC)

You and Morphh are both absolutely correct on your respective points. I changed the text to, "An Oxfam International report stated that the change in net worth of the top 100 wealthiest individuals from 2011 to 2012 was four times more than enough to eliminate global malnutrition in 2013." EllenCT (talk) 11:20, 18 December 2013 (UTC)

Thanks - I'm fine with that wording. Morphh ^(talk) 14:05, 18 December 2013 (UTC)

Yes, I agree w/ the wording as well - Enjoy! :) Drbogdan (talk) 14:30, 18 December 2013 (UTC)

Cleanup work on section Measurement of inequality in the modern world

I think the Measurement of inequality in the modern world section need some cleanup work. Specifically, while it contains a lot of interesting and relevant statistics, but it would be nice if they were arranged in a more logical fashion. Maybe it could be organized by metric, and the section could report the most recent (or any notable) findings using that metric? I'm not an expert on this stuff. What are the ways to give a cohesive picture of wealth distribution rather than just a list of facts? GuineaPigC77 (talk) 06:43, 22 January 2014 (UTC)

Game theoretic models of cooperation

Re this deletion, why is the summary claimed to be inaccurate? EllenCT (talk) 11:37, 1 May 2014 (UTC)

@EllenCT: Because, at least, the abstract says nothing at all about "economic inequality". If you can provide a quote from the article itself.... — Arthur Rubin (talk) 14:41, 1 May 2014 (UTC)

The iterated prisoners' dilemma models an economy with two participants, and is the same model of reduction used to prove that monopolies are worse than trade, among several other very important facts. I read the article but am not sure where the text is now. I think you want one of the commentaries on it from the DSGE modelers. EllenCT (talk) 01:15, 2 May 2014 (UTC)

Do you mean Dynamic stochastic general equilibrium? – S. Rich (talk) 01:32, 2 May 2014 (UTC)

Yes, the DSGE models include the macroeconomic models proven to be most accurate over the past couple decades. That is why the IMF reversed its position on inequality. That the game theoretic models didn't agree with the best large forecasting models until recently was very disturbing, but now we're only left with cleaning up the aftermath and then everything will be great, or at least potentially not terrible. EllenCT (talk) 01:39, 2 May 2014 (UTC)

Thanks. Agree with Rubin that the material is not helpful. (The DSGE info was interesting, but did not clarify.) Will be reverting the latest edit because consensus to include the material has not been achieved. – S. Rich (talk) 06:08, 5 May 2014 (UTC)

What do you mean "not helpful"? Anything specific? EllenCT (talk) 08:11, 6 May 2014 (UTC)

That paper has no relationship with this article, furthermore, game theory relies on individual choice where as people in this situation have no individual choice as to whether they should pay more in taxes. Clearly an attempt to synthezise material. Arzel (talk) 21:14, 5 May 2014 (UTC)

The individual choice in both cases is how much to produce, whether bitwise in the reduced simulation or along the continuum of everyday choices everyone in economy of millions faces. The incidence is defined by the game outcome matrix and the suits index combined with the total amount of taxation. Stewart and Plotkin cite the books Theory of Games and Economic Behavior and [10] and this highly cited and regarded John Nash article to show the correspondence. EllenCT (talk) 08:11, 6 May 2014 (UTC)

Could you please point out where, in each of the two mentioned publications, the support for the statements in the "Policy responses..." section are found? PAR (talk) 08:47, 6 May 2014 (UTC)

Those texts establishing the relation between economics and game theory are cited in Stewart and Plotkin's previous paper from 2012 in the 2nd paragraph. Could you give me some level of indication of your familiarity with game theoretic reductions of economic models? The DSGE modelers' commentaries are heavy on the jargon.

I am more comfortable with pure game theory as represented by Stewart and Plotkin, not very familiar with DSGE stuff. But that's beside the point, your response doesn't answer the question. Are you retracting the statement that the two mentioned references support the statements in the "Policy responses..." section?

Absolutely not! The additional three which Stewart and Plotkin cited in their 2012 paper address the accusations of synthesis entirely, and should be included along with the deleted passage. EllenCT (talk) 00:57, 7 May 2014 (UTC)

Ok, then I ask again, could you please point out where, in each of the two above mentioned publications (Von Neumann and Nash), the support for the statements in the "Policy responses..." section are found? PAR (talk) 03:03, 7 May 2014 (UTC)

The deleted passage is supported because the peer reviewed literature reviews say that the most accurate models are now in agreement at both the full DSGE and reduced game theory levels. I will provide passages to that effect. EllenCT (talk) 23:56, 8 May 2014 (UTC)

Ok, so you are saying never mind the Von Neumann and Nash articles as support for the policy section? PAR (talk) 00:31, 9 May 2014 (UTC)

No, and they should be sufficient to show how forecasters use game theoretic models to verify the validity of their equilibrium models. Have you read either of them? EllenCT (talk) 03:51, 10 May 2014 (UTC)

I've read the Nash article, which is a general description of equilibrium in an n-player game, with absolutely no mention of a government nor the effects of progressive taxation and/or spending. The reference you originally provided was Stewart & Plotkin, which I have read and whose methods I partially understand, and whose conclusions I understand. Again, no mention of any agency with special powers to, for example, enforce contracts, collect or spend taxes, regulate monopolies. Indeed, their results show that no contract-enforcing agency is required to guarantee that cooperative behavior will naturally emerge in a long-term donation variant of the prisoner's dilemma game with many players. For the Von Neumann 640-page book, I have only read the "economic conclusions" section beginning at page 555. While not understanding it in detail, the discussion is clearly not about a prisoner's dilemma game, but rather a free market game in which cooperation (in the Stewart and Plotkin sense) is always assumed. Again, absolutely no mention of a central agency with the power to tax and spend, or to regulate monopolies.

But again, this is all beside the point. As the editor who made the revision, the question is not whether I understand it, but rather if you understand it. From your repeated inability or refusal to quote where, in any of the above three articles, support for your revision is found, I'm beginning to wonder if you have read or understand any of the three articles. If you have read and understand them, for the fourth time, please point out where, in any of them, support for your revision is stated. If you can or will not, then I will have to agree with the reversion. — Preceding unsigned comment added by PAR (talk • contribs)

@PAR: why do you say that the economic conclusions of the Von Numann book always assume cooperation as opposed to competition? My appraisal of your understanding of the background material seems to be substantially less than your appraisal of mine, given your summary analysis. EllenCT (talk) 10:03, 18 May 2014 (UTC)

Again, you didn't answer the question - I support the reversion. PAR (talk) 15:33, 18 May 2014 (UTC)

I don't understand how progressive taxation can be conflated with cooperation among autonomous individuals. I also don't understand why severe income inequality is considered a cause rather than a symptom of injustice. Eliminating the symptom does not eliminate the disease. PAR (talk) 08:21, 6 May 2014 (UTC)

Please see [11], [12], [13], and [14], for starters. The ideas that more progressive taxation is more cooperative and that economic inequality leads to injustice and vice versa are mainstream in economics, and if you don't see how those sources show the former, please let me know. The latter is covered more in The Spirit Level: Why More Equal Societies Almost Always Do Better by epidemiologists trained in describing cause and effect. EllenCT (talk) 11:59, 6 May 2014 (UTC)

Rather than giving me 20 hours of homework, could you give a rough description of how the iterated prisoners dilemma analysis supports the idea of, say, progressive taxation? I don't understand how cooperation in a game between autonomous individuals relates in any way to progressive taxation of those individuals. PAR (talk) 15:08, 6 May 2014 (UTC)

Imagine an isolated desert island coconut economy with two participants, Alice and Bob. If Alice hoards all the coconuts, she has all the nominal wealth but its real value is diminished because Bob starves and exits the labor pool, but if they trade with each other they both prosper, maybe enough to construct a fishing spear for protein or something. The iterated prisoners dilemma has been recognized since the 1940s as an idealized economy with two participants. It's probably best to read the original sources on this because I'm in a hurry at present. EllenCT (talk) 00:57, 7 May 2014 (UTC)

Please, I would rather have a reasoned response later than a less-reasoned one earlier. The above response gives me no clue as to how conclusions drawn from the iterated prisoners dilemma support the suggested policy responses such as progressive taxation. I believe I understand the iterated prisoners dilemma well enough to make some sense of any explanation you give. Rather than point me to references, could you just explain it in your own words? PAR (talk) 03:03, 7 May 2014 (UTC)

Ellen, the Prisonners' Dilemma was formulated around 1950, and the study of iterated series of PD was much later. SPECIFICO talk 03:34, 7 May 2014 (UTC)

Thank you! That sure explains why I haven't been able to find the best sources these editors have been asking for. I was thinking of whatever the 2-person formulation in Theory of Games and Economic Behavior was called back then. EllenCT (talk) 05:47, 7 May 2014 (UTC)

Confirmation synthetic or analytic?

I can't address every point that has been made above, but, echoing some of the things that Arthur and Arzel sort of said above, game theory is a method. You can have a game theoretic model which shows one thing, or, with different assumptions and structure, another game theoretic model which gives different results. To put it in other words, the method - game theory - that is used to establish a particular result is sort of secondary. Anyway, looking at why the refs were removed it appears to be because the papers don't really support the claim being made in the text (although there may be other sources which do). Honestly, the whole relationship between inequality and growth, or even in a purely Keynesian context, between inequality and aggregate demand is uncleear and somewhat controversial (the latter less than the former). There are different channels through which inequality can affect demand and/or savings and investment and sorting it out can be messy (not least because in the short run and long run demand vs saving can have opposite effects). Hence I support the removal of this claim as presented.

Also note that "cooperation" and "inequality" are different things. Greater cooperation can in fact lead to more inequality. The relevant question when talking about cooperation is always "cooperation by whom and against whom?". Cartels are great examples of cooperation. Which rip off consumers and potentially increase inequality. Be careful about drawing WP:SYNTH conclusions here.Volunteer Marek (talk) 06:01, 7 May 2014 (UTC)

Right; therefore the most predictive game theory models are now in agreement with the most predictive DSGE models. What is the best way to phrase that? Just because A and B imply an obvious conclusion C, it's not synthesis unless the conclusion is stated outright. EllenCT (talk) 00:03, 9 May 2014 (UTC)

Actually implying C is unacceptable. Per WP:SYNTH "...do not join A and B together to imply a conclusion C ..." – S. Rich (talk) 00:22, 9 May 2014 (UTC)

If C is not stated, then how can A and B be "joined"? Does your interpretation allow censorship of established, verifiable facts simply because someone doesn't like what they imply? EllenCT (talk) 03:51, 10 May 2014 (UTC)

Suggested changes and comment

Change 1

One idea above is to split the article in two with this (perhaps) as the superior article. Wealth inequality and income inequality. Overlaps perhaps contained in this article.

It seems to me that wealth is often "unrealized," which makes a difference. Income is (or should be for discussion purposes) realized, that is, money or a close equivalent, and certainly not a change in unrealized wealth.

Change 2

The article would be more convincing if the "Effects of inequality" were moved earlier in the article, ahead of "Factors impacting economic inequality" which are more vague and maybe more controversial.

Social unrest (US-centric)

Social unrest can either lead to domestic breakdown. Somalia, for example. Or World Wars I & II. Note that the argument changes. I want to relieve poverty in Somalia out of a sense of justice. I want to relieve poverty in North Korea because I might get a bomb on my head! A bit more of an incentive! I want to relieve poverty in Liberty City because they might riot and "cause problems." More incentive than Somalia, less than North Korea.

While editors seem to have no problem with discussing "social justice" or whatever, as a virtue, omitted seems to be "greed", as a vice, driving both wealth/income builders and people watching television in the inner city whose needs are provided for but "want more." It's not just Wall Street that is greedy and causing immediate problems.

Discussing inequality (US-centric)

While we have at one extreme "millions of millionaires" discussed and how they could (alone) relieve poverty (media hype IMO), at the other extreme, and Gini index at the other which usually seems more obscure than helpful. A statement of a) income and b)wealth by levels of say each 20% of the population would seem to be more understandable. Having said that, Ginis have to be used as well. They can't be avoided. They just aren't particularly noticeable. Kind of like a list of little finger lengths in centimeters. Great for somebody, just not your average reader.

The "millions of millionaires" types of comment ought to be removed as pov, WP:OR, undue or not useful. Yes, if we all shot our neighbor and took his money, those of us who survived would be better off, at least on paper. But hardly a practical, workable economic solution. Secondly, the money would not be worth the same afterwards. Prices would tend to rise.

We seem to have true economics mixed in with political wishful thinking.

Unrealized wealth

Taking stock from billionaire Bill Gates and giving it to 43 (still billionaires!) prospective Bill Gateses would do what good? Unrealized wealth can cause housing bubbles, stock market overinvestment, etc. but doesn't seem to affect everyday life.

This was different than when Marx was writing his book. Money was "hard." If I put in "under my mattress" and I had a lot of money, I could do real damage, particularly if followed by a lot of other people. Indeed, this happened in 1929 and was the reason for kicking the gold standard in part in the 1930s (US again), and finally, for good in 1972 or so. If the economy flags today, the Federal Reserve can (supposedly) pump in a bit more money, or take it out, as need be. Accumulated wealth is mostly unrealized and is either invested (and creates jobs) or is in capital investment like a house, which, in fluctuating, neither creates nor removes jobs. Wealth itself, important in Marx' day, seems nearly irrelevant today, because it is "soft" (malleable).

Income (realized) may be important, but a separate article could do this better justice IMO. Student7 (talk) 22:31, 27 June 2014 (UTC)

Also, please note (US_centric again), that the article World Bank high-income economy defines the threshold for a high income economy at an average of US$12,615 in 2012. Note that this may be below the poverty rate in some cities in the United States, but certainly not in most states. Does this factoid affect this article? Student7 (talk) 21:34, 28 June 2014 (UTC)

Although interesting, I'm concerned that it could make the article less clear to readers - unless we give it better context? bobrayner (talk) 21:44, 28 June 2014 (UTC)

Expanding the "Effects of inequality" section as per my comments at [15] would be a much better improvement than moving it, but I support both. I agree that lack of realization of wealth also needs to be addressed as per my comments at [16]. EllenCT (talk) 05:12, 31 July 2014 (UTC)

Factoid from UN

A factoid from the UN was added with what I assume is a reliable source, "The United Nations Development Programme in 2014 asserted that greater investments in social security, jobs and laws that protect vulnerable populations are necessary to prevent widening income inequality, fluctuating food prices, disasters and conflict from reducing human development."

This might be great in some higher level article, but strays well from the mark that is supposed to be focusing on an "economic inequality" article. "fluctuating food prices" - well, I hate to see them fluctuate, but people tend to buy whatever is cheapest. If I was buying "soybeans" and prices went up, I would then buy "butterbeans" or whatever, if they were cheaper. This is one of the problems everyone has with "cost of living" index - it tracks a more or less fixed basket despite the fact that people no longer consume the items in the basket, but buy more wisely.

Disasters? huh? Conflict" What? What are they talking about?

I tried to rm this because of its overreaching scope but was myself reverted because ""economic inequality" includes both income and wealth inequality." Not sure how that justifies the inclusion of an overstatement with odd words in it. Student7 (talk) 23:46, 30 July 2014 (UTC)

Your edit summary said, "too much scope for this article which focuses on economic inequality ONLY. Statement does not differentiate", so I thought you were complaining that it wasn't about wealth inequality. Most sources of protein nutrition are fungible not only across kinds (when corn prices increase because of drought in maize farmlands, the price of beans from elsewhere go up along with them, and meats go up multiple times as much) but across continents because excess grains have been shipped in greater quantity than they're stored in silos for over half a century now. UNDP gets plenty of criticism from US Republicans in the legislatures, but everywhere else they're considered an objective, reliable source. Wikipedia should side with the rest of the world over gerrymandering minorities carrying the astroturf water for economic elites in a single country. EllenCT (talk) 00:26, 31 July 2014 (UTC)

Since starting this thread we have a new addition that says that equality between nations has diminished presumably despite lack of investment in whatever...

I'm not criticizing UNDP, though this particular sentence sounds "funny" (peculiar). I assumed the source was WP:RS. Rather see it from UN than US for global article.

Having said that, it appeared to me that the writer was trying to hard to say something and wound up with cant, instead of sense. "Feelings" don't mean anything here. Sense does.

My church (with my support) focuses on "improving" a poverty-stricken area in a poverty-stricken nation. We are close to day-to-day decisions. It is tough trying to improve "somebody else," even though we have resources and they don't. And they are positive, willing and cooperative!

While you have a point on tradeoff for cost-of-living, it is still a point used by both US parties when adjusting COLA. Apples have risen in price. I have no doubt that groceries are selling less of them and more of locally grown fruit (for example). But yes, when oil prices rises, fertilizer prices rise, wheat prices rise, beef prices rise, etc.

So I still disagree (don't see the point of) that part of the sentence that reads, "...fluctuating food prices, disasters and conflict from reducing human development."

"Fluctuating" food prices does not say "rising" food prices, which would make some sense (if they always rose).

And "disaster and conflict from reducing human development" doesn't seem to say anything that makes sense. It's like random words off a joke list inserted into what is supposed to be a sensible report.

It would be better to stick to what the article (quote) says than argue some point that was not in the article, IMO. Student7 (talk) 14:37, 31 July 2014 (UTC)

I think that may even need a [sic] tag, as it really doesn't make sense. It's obviously on-topic. Extracting "information" from the quote is problematic. — Arthur Rubin (talk) 20:20, 1 August 2014 (UTC)