“If you’re so smart, why aren’t you rich?” was a common expression in New York City during my father’s youth (Great Depression and World War II).
I’m wondering if this way of thinking explains why so many Americans who’ve obtained degrees from elite institutions and earn above-median wages are advocates of socialism. On the face of it, it doesn’t seem rational for people who earn 4-5X the median wage to say that income inequality is a national emergency and to be more enthusiastic about socialism than are people who earn below-median wages.
Pre-2016, my neighbors here in Eastern Massachusetts were upset when politicians and bureaucrats in Washington, D.C. would make decisions without consulting them. Since they knew themselves to be the smartest folks on the planet, why wouldn’t President Obama, the Wise One, call them up to ask for advice? Upset turned to rage following the country’s choice of Donald Trump.
What’s even more upsetting than not having one’s desired level of political influence? Not having one’s fair level of financial reward.
In a fair market, someone with a Ph.D. in humanities would get paid more than someone with a high school degree, at least if the Ph.D. in humanities is allowed to define “fair.” Yet an American bond trader with a high school degree can easily earn 10X what a liberal arts professor may earn (100X if we compare to an adjunct!). Thus we come to slightly newer adage: “When the market gives you an answer you don’t like, declare market failure.”
Readers: What do you think? What accounts for people with incomes that are well above the median advocating for “socialism”, which would tend to narrow the income distribution? Could it be rational? As the U.S. population expands and there is a brutal competition for scraps of desirable real estate, for example, will it help the Ph.D. academic to afford a beach house if central planners won’t give the bond trader enough to buy 10 beach houses?Full post, including comments