Wednesday , August 21 2019
Home / Tag Archives: Income Distribution

Tag Archives: Income Distribution

The Persistence of Poverty: The Spinoffs (Part 8)

If Karelis is wrong, why have I written so much about his work?  Because his arguments are so much better than his conclusion.  Charles Karelis hasn’t explained poverty, but he has still enriched our understanding.  He’s hardly the first person to emphasize the connection between behavior and persistent poverty, but he makes this point more forcefully and eloquently than almost anyone else.  And he’s the first person to highlight the ubiquity of increasing marginal...

Read More »

The Persistence of Poverty: It’s Complicated (Part 7)

If Karelis fails to explain the persistence of poverty, what does?  Let’s return to his six competing theories: (1) apathy, (2) fragmentation of the self (which economists might call “hyperbolic preferences”), (3) akrasia (self-control problems), (4) restricted opportunity, (5) unusual preferences, and (6) perverse policies.  How do they really hold up? (1) apathy.  I don’t see this as a conceptually independent explanation.  Outright apathy is a special case of...

Read More »

The Persistence of Poverty: The Right, the Wrong, and the Overstated (Part 6)

Now that I’ve sketched The Persistence of Poverty, how does it stand up? The Right 1. Karelis blames persistent poverty on persistent poverty-inducing behavior: not working, not finishing school, not saving, abusing alcohol, committing non-lucrative crime.  While his evidence is a bit thin, almost everything else I’ve read on poverty confirms that such behavior (plus impulsive sex) is indeed one of poverty’s chief causes. 2. Karelis says that, contrary to standard...

Read More »

The Persistence of Poverty: Karelis’ Practice

Now that he’s explained the nature of persistent poverty, Karelis is ready to end it forever.  His solution is simplicity itself: Give the poor everything they need. Once their needs are met, they’ll start acting like regular middle-class folks in order to satisfy their wants.  Or in his terminology, once you give the poor enough to pay for all their relievers, they will prudently strive to acquire their pleasers.  Thus, even though many of Karelis’ statements will...

Read More »

The Persistence of Poverty: Karelis’ Theory

Karelis says that persistent poverty-including behavior is the main cause of persistent poverty, that none of the other major theories can explain what’s going on, and that he can.  How? He starts by attacking what initially seems like one of the most banal assumptions in all of economics: diminishing marginal utility.  If you could either have $500 for sure, or $1000 with 50% probability, you’d want the sure thing, right?  Economics aside, isn’t this just common...

Read More »

The Persistence of Poverty: Karelis vs. Six Standard Stories

After you read Karelis on the behavioral causes of poverty, you’ll probably assume he’s some sort of social conservative.  If you have the patience to hear him out, however, you’ll discover that he’s one of a kind; no earlier thinker ever thought what Karelis thinks. Skeptical?  After discussing how the poor make themselves poor, Karelis’ next task is to examine the leading left- and right-wing explanations for persistent poverty.  He breaks them into three...

Read More »

The Persistence of Poverty: Karelis’ Puzzle

I first heard about Charles Karelis’ The Persistence of Poverty when it was published in 2007.  I didn’t just fail to read it; after hearing summaries of its thesis, I considered it too absurd to read.  Now that I’m writing a book on poverty, however, I felt duty-bound to go through the whole book.  When I did, I wasn’t just pleasantly surprised.  I was astounded.  The Persistence of Poverty is an awesome book.  So logical.  So concise.  So direct.  So insightful. ...

Read More »

Beyond victims and villains

I’ve often argued against the “victims and villains” discourse on poverty. This refers to the tendency of progressives to view the poor as victims of a flawed economic system, and conservatives to blame poverty on bad personal decisions (drugs, crime, lack of education, single parenthood, etc.) I don’t like either view. Noah Smith has an excellent article on this subject, which helps to clarify some of the issues. In the end, I’ll interpret the data in a slightly...

Read More »

The Persistence of Poverty Book Club

Starting on Monday, I will be writing a long series of posts on Charles Karelis‘ utterly original book, The Persistence of Poverty.  I’d compare him to a left-wing Robin Hanson – gnawingly thought-provoking even when he’s mired in error.  (Don’t miss Robin on Karelis, by the way). The Persistence of Poverty is so well-written and concise you can finish in two hours.  And used copies cost less than $2.00 on Amazon.  So give it a try, and see you Monday! P.S. Charles...

Read More »

Animated chart of the day: America’s middle-class is disappearing…. but it’s because they’re moving up – Publications – AEI

AEI Animated chart of the day: America’s middle-class is disappearing…. but it’s because they’re moving up The new animated “bar chart race” visualization above is a dynamic version of the second static chart, and both show the percent shares of US households by total money income for three income categories annually from 1967 to 2017: a) low-income households earning $35,000 or less, b) middle-income households earning between $35,000 and $100,000 and...

Read More »