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Date: Mon, 20 Aug 2007 11:04:23 -0400 (EDT)
To: Daniel Reeves <dreeves &AElig umich.edu>
cc: improvetheworld &AElig umich.edu, reeves-hayos &AElig umich.edu,         reeves-kalkman &AElig umich.edu
From: Kevin Lochner <klochner &AElig eecs.umich.edu>
Subject: Re: mind the gap

I'm all for capitalism, but the argument is simplistic.  If our only goal 
is to maximize production, then sure, inequality is terrific.  Below are 
some research abstracts hinting at an alternate goal that may be 
important.  I also advocate taxing inheritances to avoid the creation of 
new "ruling classes," with enough money to both control government and 
avoid any real work.

- kevin


Fajnzylber, P., D. Lederman and N. Loayza, 1998, "What causes violent 
crime?", The World Bank, Office of the Chief Economist, Latin America and 
the Caribbean Region, processed.
   "This cross-country study of the determinants of violence finds that
    income inequality raises crime rates, deterrence effects are
    significant, crime tends to be counter-cyclical, and criminal inertia
    is significant."

Hsieh, C. and M.D. Pugh, 1993, "Poverty, income inequality, and violent 
crime: a meta-analysis of recent aggregate data studies", Criminal Justice 
Review, 18(2): 182-202.
   "This paper reports on 34 aggregate data studies that almost all find a
    positive correlation between violent crime on one hand and poverty and
    income inequality on the other."

Kennedy, B.P. and I. Kawachi, D. Prothrow-Stith, K. Lochner and B. Gibbs, 
1998, "Social capital, income inequality, and firearm violent crime", 
Social Science and Medicine, 47(1): 7-17.
    "This paper finds that income inequality and social capital are highly
     correlated with firearm violent crime rates."


On Mon, 20 Aug 2007, Daniel Reeves wrote:

> We've been debating this essay
>  http://www.paulgraham.com/gap.html
> and I thought I'd move it to improvetheworld...
>
> I'll start:  Graham is so right!  The income gap between the rich and the 
> poor is wonderful!
>
> Actually it started more as a debate about the nature of capitalism and 
> interest ("why should money 'grow'?").  Here was the gist:
>
> * [the economy] is a zero-sum game, isn't it?
> - no
>
> * those earning money are taking it away, even if only indirectly, from
>  other people, no?
> - no, not if you think in terms of wealth (wealth = stuff you want,
>  money = way to transfer wealth)
>
> * Or am I totally simplifying the haves vs. the have-nots with my pie
>  metaphor?
> - yes, that's precisely the Daddy Model of Wealth!
>
> * Is it THEORETICALLY possible for no one to owe any money at all in this
>  world, i.e., that everyone just has money that "grows"? Or does money
>  only grow if it is taken away from others?
> - You're right, not possible, but for the opposite reason of what you seem
>  to be suggesting.  You grow money by giving it to someone (lending it),
>  not by taking it away.
>
> It even got a bit heated, along the lines of "Trixie, I don't think it's 
> right for you to lash out against capitalistic/yootlicious ideas without 
> grokking the answers to your questions [above]".
>
> Oh, and I offered a yootle to the first person who could answer the 
> quasiphilosophical question why money *should* grow, with the hint that it 
> has to do with human mortality.  I believe that's the only reason that holds 
> in all circumstances.
>
> In any case, Trixie wanted to resume the debate and this is clearly the place 
> to do it!
>
> DO NOT CHANGE THE SUBJECT LINE WHEN YOU REPLY (so it's easy for those not 
> interested in this debate to delete the whole thread).
>
> Ok, go!
> Danny
>
> -- 
> http://ai.eecs.umich.edu/people/dreeves  - -  search://"Daniel Reeves"
>
> "Everything that can be invented has been invented."
>   -- Charles H. Duell, Commissioner, U.S. Office of Patents, 1899.
>