King Rat (gkr) wrote,
King Rat
gkr

Collective choice? (Eco 200 assignment question)

(group) "In truth, the presence or absence of poverty in this economically advanced society is now a matter open to public choice." Do you agree? Can we choose to abolish poverty in the United States simply because we have enough wealth to do so? Is "public choice" different in any important respects from individual choice?

We could choose to abolish poverty because we have enough wealth to do so. Public choice is collective choices. Whether we could permanently abolish poverty I do not know. We could redistribute wealth once so that all citizens would have equal wealth and theoretically equal choices thereafter. But since skills and connections and other intangible resources cannot be redistributed, I doubt we would see poverty abolished permanently, though it might reduce it in the long term. I personally would like to see us find a way to continuously redistribute a part of our wealth to permanently eliminate poverty. Doing so is currently prohibitively difficult, due to many individuals not valuing poverty reduction above other values. They do not see this as part of their self-interest, where I do. Even were people to agree with me in sufficient numbers, it's difficult to find an equilibrium where a minimal amount of wealth is redistributed to promote an ideal minimal amount of wealth across society.

Many already agree with me in principle, though they may not think they do. Everyone who donates to charity is making the choice that common good is beneficial to themselves. They are voluntarily re-distributing part of their wealth for very little direct gain. I suppose they could be doing so for individual tax benefit, or for publicity value. But they are implicitly agreeing that societal benefit benefits all (including them individually). In many cases, they can see how the societal benefit does benefit them; better roads means less time in traffic for instance. But less poverty can benefit them individually as well. For instance, less crime as the less affluent see less benefit from it.

I disagree with communist and heavily socialist methods of redistributing wealth simply based on their efficacy. They do not work as they do not promote individual economic activity. My hope is that we could find a way to create a market for poverty reduction the same way we've created a market for acid rain pollution reduction, through the use of tradable rights to pollute. The raw concept does not work even in all types of pollution (I do not believe it will work well in mercury reduction), but through effort some market type of solution might be found.

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