Reducing Inequality gives purpose to government
In what must be a massive win for pedant grammar twats everywhere an economist is probably right that inequality is less of a problem than unfairness. Semantics aside inequality is the net result of unfair conditions in the market that affect individuals and society across all sectors.
The traditional political spectrum of left / right has very little meaning now. No one believes in trickle down economics and overly simplistic split between communism and capitalism is also wrong.
Governments are active influencers in health, education, transport, culture and pretty much all sectors. Even choosing not to do something has an impact and so in my view it is better for the government to lead by example and to invest in improved social outcomes for all.
I agree with Deaton’s statement that “Economic inequality is a symptom of processes—some good, some bad—that drive the global economy.” He is writing about the US but the same forces exist in other countries. In New Zealand though we mediate some of the market forces as our governments try level the playing field.
A cynic would say that politicians calculate the outcome of policies on whether it will win more votes for their particular team. On the other hand there are some politicians and parties that are more idealistic and hope to improve the chances of a more egalitarian society.
We can see a range of economic trends across many countries and it is obvious that inequality is rising. We can also see what the levers and it is not rocket science to try and reduce unequal outcomes.
All of which brings me to the 2018 NZ Budget today. From what I can see the new Labour, New Zealand First, Greens coalition has made some great steps towards improving outcomes. Of course there will be arguments in every direction on the detail but I see a government that wants to promote fairness and to reduce inequality.
Realistically expectations were too high regarding this budget and in my personal view it moves in the right direction even if it is actually quite restrained.