Monday, April 24, 2006

Okun's Big Tradeoff

An op-ed today by pollster Peter Brown reminds us that Arthur Okun was right: the "big tradeoff" is between equality and efficiency:
In case you haven't noticed, a number of countries --China, Russia, India, much of the rest of Asia and Eastern Europe -- that used to be more focused on the idea of making sure everyone is treated the same have changed their tune.

They haven't fallen in love with inequality, but have come to realize that in the real world, incentives spur productivity, which creates wealth that is shared unevenly. The alternative is equality in poverty, or at least in a lower standard of living.

Welcome to economics 101.