Here is another reason that it can be so hard to “reach your potential.”
No matter how much we like to think that hard work will be rewarded the sad fact is that the vast majority of people will never get beyond paying the rent and feeding thenselves and their families no matter how hard they work–and a good number of hard workers won’t be able to attain even that much. There are too many factors that are responsible for anyone’s successs or failure and we have little control over them, but we won’t think about that. For every person who succeeded through what we like to define as “hard work” there hundreds who worked just as hard and never got anywhere. History is written by the successful ones and they love to claim it was only their pluck and hard work that was responsible for their success, or at least most of it. . We just love a fairy tale. The ones who failed or just managed to scrape by–and they are legion–don’t get many listeners to their stories. Not all poverty–probably not even a good chunk of it, is or ever was created by people unwilling to work. We just love to hear stories of the ones who succeeded, especially if there is some bit of often exaggerated adversity to overcome, and we cheer the ones who “made it” as if they did it completely on their own and as if everyone who failed was somehow just not working hard enough or smart enough. It’s the Horatio Alger factor. We will believe any fairytale that makes us look good and which lets us denigrate the unfortunate ones as not being quite as up to snuff as we are. We love patting ourselves on the back. We’re the champs. We made it. We worked hard. And the only reason everyone can’t do the same is because of some intrinsic unwillingness to do the right thing. Aren’t we all wonderful specimens of humanity that we were able to raise ouselves by our bootstraps while other people were too lazy or just not smart enough like we were? All we have to do is disregard everything that doesn’t support our fairytale and we’ll never have to take off our rose colored glasses. It’s a wonderful world, after all, isn’t it?
We just love a fairy taleIt's one of todays myths, like science's objectivity.
From Wealth, Health and Inequality - The New York Times
Pareto’s principle applied too narrowly?
In his sobering Chapter 5 on the United States, however, Professor Deaton asserts that economists routinely apply Pareto’s principle too narrowly, overlooking that the wealthy in societies with highly unequal distributions of income and wealth may capture the country’s systems of governance. They may then use this power to rig market processes in their favor or to exploit taxpayers through what economists call “rent seeking" – that is, profit made on government contracts that is not matched by commensurate value delivered to society. That linkage can easily make the rest of society worse off.Democracy turned into plutocracy?
“There is a danger that the rapid growth in top incomes can become self-reinforcing through the political process that money can bring," Professor Deaton warns — a process that can turn democracy into plutocracy.From the link to "a series of papers" in the above article at the NYT: http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.3.103 Why Hasn’t Democracy Slowed Rising Inequality?
In this paper, we explore five possible reasons why the US political system has during the last few decades failed to counterbalance rising inequality. First, both Republicans and many Democrats have experienced an ideological shift toward acceptance of a form of free market capitalism which, among other characteristics, offers less support for government provision of transfers, lower marginal tax rates for those with high incomes, and deregulation of a number of industries. Financial deregulation, in particular, has been a source of income inequality (Philippon and Reshef 2008). The mass public may well embrace such an ideological shift if rising inequality nonetheless “trickles down" to rising incomes and home ownership for all. In recent years, there has been a serious financial crisis, declining median incomes, and declining home ownership rates. This raises important questions as to why these ideological trends persist and remain politically powerful.From the conclusion:
Overall, the kinds of government policies that could have ameliorated the sharp rise in inequality have been immobilized by a combination of greater polarization, lack of voter participation, feedback from high-income campaign contributors, and political institutions that must overcome a series of key pivots before making significant changes.Disturbing indeed.
No matter how much we like to think that hard work will be rewarded the sad fact is that the vast majority of people will never get beyond paying the rent and feeding thenselves and their families no matter how hard they work--and a good number of hard workers won't be able to attain even that much. There are too many factors that are responsible for anyone's successs or failure and we have little control over them, but we won't think about that. For every person who succeeded through what we like to define as "hard work" there hundreds who worked just as hard and never got anywhere. History is written by the successful ones and they love to claim it was only their pluck and hard work that was responsible for their success, or at least most of it. . We just love a fairy tale. The ones who failed or just managed to scrape by--and they are legion--don't get many listeners to their stories. Not all poverty--probably not even a good chunk of it, is or ever was created by people unwilling to work. We just love to hear stories of the ones who succeeded, especially if there is some bit of often exaggerated adversity to overcome, and we cheer the ones who "made it" as if they did it completely on their own and as if everyone who failed was somehow just not working hard enough or smart enough. It's the Horatio Alger factor. We will believe any fairytale that makes us look good and which lets us denigrate the unfortunate ones as not being quite as up to snuff as we are. We love patting ourselves on the back. We're the champs. We made it. We worked hard. And the only reason everyone can't do the same is because of some intrinsic unwillingness to do the right thing. Aren't we all wonderful specimens of humanity that we were able to raise ouselves by our bootstraps while other people were too lazy or just not smart enough like we were? All we have to do is disregard everything that doesn't support our fairytale and we'll never have to take off our rose colored glasses. It's a wonderful world, after all, isn't it?Thank you Lois, I think you made my point much better than I did.
From http://economix.blogs.nytimes.com/2013/11/08/wealth-health-and-inequality/ Pareto's principle applied too narrowly?Looks like an excellent piece that makes good sense. Thanks for sending it. LoisIn his sobering Chapter 5 on the United States, however, Professor Deaton asserts that economists routinely apply Pareto’s principle too narrowly, overlooking that the wealthy in societies with highly unequal distributions of income and wealth may capture the country’s systems of governance. They may then use this power to rig market processes in their favor or to exploit taxpayers through what economists call “rent seeking" – that is, profit made on government contracts that is not matched by commensurate value delivered to society. That linkage can easily make the rest of society worse off.Democracy turned into plutocracy?“There is a danger that the rapid growth in top incomes can become self-reinforcing through the political process that money can bring," Professor Deaton warns — a process that can turn democracy into plutocracy.From the link to "a series of papers" in the above article at the NYT: http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.27.3.103 Why Hasn’t Democracy Slowed Rising Inequality?In this paper, we explore five possible reasons why the US political system has during the last few decades failed to counterbalance rising inequality. First, both Republicans and many Democrats have experienced an ideological shift toward acceptance of a form of free market capitalism which, among other characteristics, offers less support for government provision of transfers, lower marginal tax rates for those with high incomes, and deregulation of a number of industries. Financial deregulation, in particular, has been a source of income inequality (Philippon and Reshef 2008). The mass public may well embrace such an ideological shift if rising inequality nonetheless “trickles down" to rising incomes and home ownership for all. In recent years, there has been a serious financial crisis, declining median incomes, and declining home ownership rates. This raises important questions as to why these ideological trends persist and remain politically powerful.From the conclusion:Overall, the kinds of government policies that could have ameliorated the sharp rise in inequality have been immobilized by a combination of greater polarization, lack of voter participation, feedback from high-income campaign contributors, and political institutions that must overcome a series of key pivots before making significant changes.Disturbing indeed.