Here's a thought experiment regarding the benefits of greater equality.
Imagine you are participating in a company 401k plan. Your plan has two choices for investment. (A) An investment fund run by Dick that has consistently produced an annual rate of return of 5-7%. (B) An investment fund run by Jane that has consistently produced a 2-3% annual return.
What percent of plan participants do you think will choose Dick's fund? Suppose, not illogically, that 80% of plan participants choose Dick's fun. Is this fair to Sue? Sure, Dick appears to be a more capable investor than Sue, but should Dick really get four times Sue's income for doing the same thing? Especially since it turns out that women who run investment funds attract fewer investments than those run by men?
Now suppose your company (being progressive thinkers) ordered some of the plan's participants to take money from Dick's fund and give it to Sue. Would the plan participants as a whole be better off by doing this? Would the rate of return for the plan be better or worse? Do you think anyone here (other than Sue) would think this was a good idea? How much of your retirement investment are you willing to give up so that Sue is treated with greater equality?
Why, then, is it a good idea in general to re-allocate resources from the members of society who produce high returns to those who produce lower returns. The latter, like Sue, may be nice people and work hard, but what they produce just isn't quite as valuable. Are the members of society better off in total by doing this? Would the total rate of economic growth be better by doing this? How much economic growth are you willing to give up so that the lower producers receive resources more nearly equal to high producers?
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