Don't Blame the 'Greedy Wealthy

Don't Blame the 'Greedy Wealthy
(AP Foto/Matt Rourke, Archivo)
remarkable discovery is here. World hunger can be eliminated if a few of the Greedy/Wealthy (hereafter, GW) class give up a portion of their wealth. The surprising conclusion is that if there were fewer rich people, there would be fewer poor people.

The exact mechanism by which reducing the number of GW would solve world poverty is murky, I have to admit. We know that the answer can’t be UN-managed aid programs: as NYU development expert William Easterly noted in his 2015 book, The Tyranny of Experts, aid programs are a transfer from middle-class taxpayers in developed nations to rich government officials in poor nations.

The thing is, most poor nations are also highly unequal in their income and power distributions. So it’s hardly surprising that when we give a nation money and say, “give it to the poor,” the money goes instead to the powerful, or is dissipated by corruption. As Humberto Lopez  points out, “Intuitively, if the poor have a low share in existing income, they will likely have a low share in newly created income.” As I have argued elsewhere, it is hard to “give away” money, because it sets up rent-seeking contests that can dissipate most of the value being transferred.

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