Re: Standard economic models and poverty

["Keith Wilde" <kwilde@magi.com>]

-----Original Message-----
From: David Spitzley <dspitzle@gw.wash.k12.mi.us>
To: <"'Homestead'" <Homestead@cog.kent.edu>
Date: Wednesday, January 12, 2000 4:30 PM
Subject: Standard economic models and poverty


In his posting to the "homestead" group, David says:
>I honestly believe that there >is< ground to be won in economics by trying
to show that concentrated wealth tends to slow economic growth, and
otherwise screw up the macroeconomy, as well as show that "stakeholder"
ownership tends to produce superior microeconomic outcomes. Unfortunately,
this is not an approach which "sings" to the inner being of most activists
in the field of capital democratization.  I just happen to be on the skinny
end of the bell curve (as usual)...


This comment about their "inner being" is interesting information to me, for
I have had almost no links to "activists in the field of capital
democratization" prior to this COG forum.  Given David's interest, however,
it is an issue that should appropriately be addressed by participants in the
Economics of Ownership discussion.  His comment suggest a couple of
questions that I put back to him for possible expansion:
1.  Why do we care about economic growth, and what does it mean to "screw up
the macroeconomy"?

As I understand it, growth was initially promoted as an instrumental goal in
service of the more important policy objective of maintaining incomes via
employment.  This would suit merchants and manufacturers as well as
consumers.  But if we had a reasonably democratic capitalism, what would
then be our interest in deliberate promotion of economic growth?  One
plausible answer I can think of is that it has become an important tool for
those who have made their economic niche in the government sector, who see
it as the source of their revenue stream--i.e. taxes.  But is the arms
industry something that we really want to promote?

2.  And what is it that constitutes "superior microeconomic outcomes"?
To me, this means "better" allocation of resources, using them more
effectively to serve collective values.  I have heard others use this
terminology, however, in reference to the behavior and motivation of
individuals (e.g. they wouldn't work if they had incomes from capital).  To
me, this latter meaning is not so much an economic issue as it is a social
one.  I wonder what it is that you have in mind, David.


>Keith Wilde
Ottawa, Canada
kwilde@magi.com
613 990-8125
613 747-6847

>