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Sunday, May 13, 2012

The Growing Societal Divide Makes Us Worse Off

Thomas Friedman:

This Column Is Not Sponsored by Anyone, by Thomas Friedman, Commentary, NY Times: ...Harvard philosopher Michael Sandel ... sees ... a bad trend:...
Throughout our society, we are losing the places and institutions that used to bring people together from different walks of life. Sandel calls this the “skyboxification of American life,” and it is troubling. Unless the rich and poor encounter one another in everyday life, it is hard to think of ourselves as engaged in a common project. At a time when to fix our society we need to do big, hard things together... And we should be asking how to rebuild class-mixing institutions.
“Democracy does not require perfect equality,” he concludes, “but it does require that citizens share in a common life. ... For this is how we learn to negotiate and abide our differences, and how we come to care for the common good.”

That's sort of what I was getting at when I talked about one way to defend progressive taxation. There are times when progressive taxes make it possible to provide public goods and services that couldn't be provided otherwise. With these projects, everyone gets value in excess of their contributions, i.e. everyone can be made better off. But there is a critical requirement that the well-off and the not-so-well-off share common facilities:

This is, of course, an argument for the government provision of certain types of goods through a tax structure that requires the wealthy to pay a larger share of the bill..., but here’s the problem. This only works if the rich and the poor live in the same neighborhoods, share the same roads, use the same parks, attend the same schools, and so on. In an increasingly divided economy and society – as in the US in recent decades – the opportunities for mutually beneficial arrangements diminish. If the wealthy do not attend the same schools, live in the same areas as the poor, have special lines at airports, shun public pools, have their own tennis courts, golf courses,  and parks, if they have helicopters to avoid city traffic, their own security arrangements independent of the police – the list goes on and on – then these opportunities  are lost. ...
The more divided our society becomes, and the divisions are growing, the less shared experience we will have. The rich live in one world, the poor in another, and mutually beneficial arrangements between the two groups fail to occur.
And we are all worse off because of it.

There's no reason to think that this problem will necessarily fix itself.

    Posted by on Sunday, May 13, 2012 at 11:01 AM in Economics | Permalink  Comments (33)


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