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October 07, 2004


Jon Ihle

This sort of basic economic illiteracy crops up everywhere, like when reporters say the US consumes 25% of the world's energy without mentioning it produces 25% of the goods and wealth, too; or when they gasp that the US has a greater military expenditure than the next 10 top spenders combined without noting whether or not the spending levels are proportional to the relative sizes of their economies. The list goes on and on.

The other annoying thing about drawing conclusions based on absolute spending on social welfare is that it fails to consider the possible deleterious effects of higher spending - what is the net effect on all economic actors in a society if welfare spending increases? Is it a net good? Is it better to have high spending levels and 12% unemployment (France, Germany), or low spending and high employment (Ireland, UK, US)?

I like the bit about burning the money. Apt metaphor.

Frank McGahon

It doesn't take too much thought to realise that the first priority for those such as Chrisafis is to validate prior beliefs about inequality.

I thought that burning the money would be a more useful way of demonstrating the absurdity of the relative poverty notion. You can really muddy the point if you just redistribute it - it isn't instinctively obvious to many people the disastrous consequences of such an action but they do "get" the burnt banknotes.


Relative poverty could also be eliminated, of course, if we had 50% unemployment. Maybe that is what they want.

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