Just vs. Unjust Inequality?

"For economists, then, inequality has typically represented at worst a necessary evil and at best a reasonable price to pay for growth. So, for the most part, they have not been concerned with the apparent trend of rising inequality. Development economists in particular have focused instead on the reduction of absolute poverty. "
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"Subsequent work by many economists has strengthened my conviction that while inequality may be constructive in the rich countries—in the classic sense of motivating individuals to work hard, innovate, and take productive risks—in developing countries it is likely to be destructive. That is especially true in Latin America, where conventional measures of income inequality are high. It also may well apply in other parts of the developing world, where our conventional indicators are not so high but there are plentiful signs of other forms of inequality: injustice, indignity, and lack of equal opportunity.
Distinguishing between constructive and destructive inequality is useful. To clarify the distinction: inequality is constructive when it creates positive incentives at the micro level. Such inequality reflects differences in individuals’ responses to equal opportunities and is consistent with efficient allocation of resources in an economy. In contrast, destructive inequality reflects privileges for the already rich and blocks potential for productive contributions of the less rich. "

Nancy Birdsall writes about globalization and inequality in the latest edition of The Boston Review. Read it here.

Darwin In Situ

"It 'has always appeared to me more satisfactory to look at the immense amount of pain & suffering in this world, as the inevitable result of the natural sequence of events, i.e. general laws, rather than from the direct intervention of God' [said Darwin]. Like most Victorian parents, Darwin had watched several of his children die in infancy, including his beloved daughter Annie in 1851. He was not the only one who found such tragedies easier to comprehend if they resulted from 'general laws', rather than being the products of God’s personal and seemingly murderous intent."

From a London Times book review of an interesting book looking at Darwin and the religious views of the time. Read it here.

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The Lottery Is A Tax On People Who Do Not Understand Probablilty Theory

"Dr. Cohen argues that lottery tickets are not an investment but a disposable consumer purchase, which changes the equation radically. Like a throwaway lifestyle magazine, lottery tickets engage transforming fantasies: a wine cellar, a pool, a vision of tropical blues and white sand. The difference is that the ticket can deliver.
And as long as the fantasy is possible, even a negligible probability of winning becomes paradoxically reinforcing, Dr. Cohen said."

A typical cost-benefit analysis of playing a state-run lottery proves without a doubt that no one would play..
So many people love to say that actions like playing the lottery are irrational..

Both of these claims are wrong -- we just need to consider more parts of the equation to figure out why people do it (and the certainly do it). Read about one approach to understanding human behavior in the face of punishing odds in The New York Times here.