Inequality is Necessary for Growth, Right?

I’m going to start this post with a proleptic response:

No, nobody is suggesting a Maoist cultural revolution, forcing executives and professors to muck shit on collective farms.

But I feel compelled to share the results from my latest, comparing income inequality to prosperity and prosperity growth in the fifty states.

Contrary to the supply-sider narrative, income inequality appears to have almost no correlation with prosperity growth (.05). What correlation it does show is the opposite of what the supply-siders would have you believe.

This suggests — also contrary to all-too-commonly received wisdom — that there is not in fact an inevitable trade-off between equity and efficiency. That it’s a false choice. That we can in fact have more of both.







One response to “Inequality is Necessary for Growth, Right?”

  1. joel hanes Avatar
    joel hanes

    What, you mean Reagan’s economic policies do not in fact lead to prosperity?

    Alert the media.