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February 5, 2011

How much is enough?


From The Economist: "Jan Pen, a Dutch economist who died last year, came up with a striking way to picture inequality. Imagine people’s height being proportional to their income, so that someone with an average income is of average height. Now imagine that the entire adult population of America is walking past you in a single hour, in ascending order of income."

"The first passers-by, the owners of loss-making businesses, are invisible: their heads are below ground. Then come the jobless and the working poor, who are midgets. After half an hour the strollers are still only waist-high, since America’s median income is only half the mean. It takes nearly 45 minutes before normal-sized people appear. But then, in the final minutes, giants thunder by. With six minutes to go they are 12 feet tall. When the 400 highest earners walk by, right at the end, each is more than two miles tall."

February 5, 2011 at 12:01 PM | Permalink


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Looks like Dave beat me to it. Regardless, the thing that gets lost in these appeals to emotion is that the barriers to becoming a giant shrink the more you shift to a free market society.

Posted by: Rocketboy | Feb 5, 2011 4:25:57 PM

How much is enough?

"I’ve had all I can stand. I can’t stands no more."

Popeye 1927 - 1980

Posted by: Joe Peach | Feb 5, 2011 4:23:34 PM

"There are three kinds of lies: lies, damned lies and statistics."


Posted by: bookofjoe | Feb 5, 2011 12:45:07 PM

It is nonsense to say this graph tells us about inequality.

Rather, it tells us about envy.

The "trick" is that the vertical axis is growth rates not absolute amounts of income. All of the "people" represented by each bar have gotten better off because the bars are on the positive growth side of the vertical axis.

What do you call someone who is better off, but is upset because others are even better off? Envious.

Note that my argument says nothing about whether inequality is an important issue (it may be), or whether it has gotten worse (in terms of income, it has, although in terms of consumption that isn't quite as clear). I'm merely saying this graph is a lie, and if we're genuinely concerned about this issue, we shouldn't lie to promote our position.

Posted by: Dave Tufte | Feb 5, 2011 12:40:09 PM

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