How Visible Are Differences in Incomes?

by Don Boudreaux on November 4, 2007

in Inequality, Standard of Living

Here’s a letter that I sent a few days ago to the Wall Street Journal:

Your readers identify
genuine flaws in Arthur Brooks’s argument that inequality of incomes in
America is counteracted by near-equality of "happiness" (Letters,
November 1).  The unhappy fact is that "happiness research" is a
smorgasbord of foolishness.

Nevertheless, measures of inequality
of incomes do indeed vastly overstate the inequality of material living
standards.  Nearly all Americans enjoy easy access to the likes of
microwave ovens, cell phones, the Internet, and MP3 players, as well
as, of course, to food, clothing, and shelter.  So the differences
separating the super-rich from ordinary folks are increasingly abstract
and invisible.  I’m told that, say, David Koch has billions more
dollars in his bank account than I have in mine, but I never see his
bank statements.  The fact is, Mr. Koch is no better fed, clothed, or
coiffed than I am.  And when he walks down the street, Mr. Koch’s
immense wealth does little to distinguish him from the many
middle-class Americans who walk past him – all unaware that his
portfolio is unusually hefty.

Sincerely,
Donald J. Boudreaux

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