Monday, January 16, 2012

Two brief thoughts that MLK day inspires about income inequality

(1) Income inequality is still very much a legacy of differences in how government defended the property rights of people from different races.  The US government has been pretty good at defending the property rights of white people for a long time; in the case of other races, not so much.  Even if the government now defended all property rights equally, it would take many generations before differences in wealth across races would disappear.

(2) I have heard business people, to the extent they complain about income inequality, complain about the outrageous incomes earned by athletes and entertainers.  Yet I venture to guess that Lebron James and Beyonce have much higher marginal products than the vast majority business people, including CEOS and investment bankers.  

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