Imagine if the United States government taxed the nation’s one-percenters so that their post-tax share of the nation’s income remained at 10 percent, roughly where it was in 1979. If the excess money were distributed equally among the rest of the population, in 2012 every family below that very top tier would have gotten a $7,105 check.
This is hardly trivial money. But it pales compared to the gap between the wages of a family of two college graduates and a family of high school graduates. Between 1979 and 2012, that gap grew by some $30,000, after inflation.
Originally posted on Ioadicaeu's Blog:
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When economists talk about how a market “regulates itself,” what they mean is that markets reach an equilibrium between supply and demand.
This says nothing about whether or not this equilibrium will be a good thing for society. It simply states that if consumers choose what to buy and producers choose what to sell and how to produce it, the market settles on a product distribution and prices.
Lately, many people I know have argued that “free markets” mean something more. They see markets as ethically right or ethically moral, meaning pursuit of profit always somehow leads to a greater good.
Unfortunately, morality isn’t built into markets.