Going to Harvard Can Lead to Rising Inequality


There is a great webcast of a discussion on the Challenges to the American Prosperity at Harvard; Lawrence Summers moderated the discussion between Gregory Mankiw and Gene Sperling. I have tried to give an ‘index’ for the issues discussed below.

Just a couple of observations;
- Sperling was very emotional on the issues discussed where as Mankiw appeared a little bit of ‘don’t worry be happy’ type.
- Mankiw’s point of assistance to be focused on the person rather than place is a very important issue often politicians fail to accept, most of the time willingly
- Sperling urged for the need for political compromise in the light of the value choices we need to face and accept the fact that money is fungible.
- As usual Summers was at his best, posing difficult questions for the both of them
- On global poverty issues, Sterling's point about resources do matter (for eg. in education) was important and we tend to forget too often while getting carried away with Easterly type discussion on incentives, institutions and corruption.

I would have liked them to have discussed the thesis put forward by Benjamin Friedman in his recent book, Moral Consequences of Economic Growth;

..the idea that I advance is that when the broad bulk of a society's citizens are enjoying an improvement in their material standard of living, that is the circumstance under which the society is also able and likely to make progress in other dimensions of its life, and dimensions that Western thinking, at least since the Enlightenment, has regarded not only positively, but positively in explicitly moral terms…

If what matters for these purposes is not just how rich a society is but the sense of forward progress, or lack thereof, of the broad bulk of the citizenry, then no society, no matter how rich, is ever immune from seeing its basic democratic values at risk.

Now this is a very sobering thought today, especially for Americans. As I hope people are aware, we have just finished what I think will turn out to have been the sixth year in a row in which the median income in the United States failed to keep pace with inflation. The total GDP of course is expanding very nicely. But the fruits of the gains from that increased production have been sufficiently skewed over this period that the average American's living standard is not even keeping pace with inflation. We know that that was true through 2004….

Now this is a very daunting and, as I say, sobering thought, because not just in the United States but in many of the advanced democracies in the past, periods when people have lost the sense of forward progress have translated into either no progress or real retreat, often with disastrous consequences, in many of the dimensions of moral character that I have just described

An Incomplete Index to the Forum;

The Crimson / 'The Fearful Pig' / The Pro-Growth Progressive or 'Growing Together’ / discounting pain game / trade overblame game / sky is falling party / don't worry be happy party / humility Party / Graduates vs. Oligarchs / Dividing the Pie / Social Security / Mankiw / Ricardo's Difficult Idea / assotative mating / Pigovian tax / Edward L. Glaeser / Global Poverty/ White Man's Burden/ Global Campaign for Education/ Centre for Universal Education /
World is Flat/ EITC and Sperling

By the way the title refers to the issue of assotative mating that Mankiw highlighted in the discussion; people come to Harvard and get married to someone who studied at Harvard (both Mankiw and Summers are married to Harvard graduates) and both get very high wages, thereby rising the income inequality as a whole.

Multi-media Links;

-A discussion with Sperling and Friedman at Centre for American Progress.
- Book forum web cast on the book Moral Consequences of Growth at IMF
- The recent Harvard discussion


who needs Harvard this guy dropped out and did great

Bill Gates to Relinquish Duties at Microsoft in 2008

look what happens when you do not go to Harvard

Amish Farmer Says Milk Law Contrary to Religious Beliefs


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This page contains a single entry by Paul published on March 7, 2006 11:49 PM.

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