Denying the significance of statistics on income distributions, you often get some complaints. In particular, the role of government to help the poor has been expressed over and over again. Many people claim more redistribution was needed to allow everyone to live in freedom. If some people have x times the income or wealth of other people, they say, society will divide.
First of all, this is an empirical question. And we do see that countries with very high Gini coefficients (i.e. very high inequality) tend to suffer from social unrest. However, in most cases an ill-defined role of government and misbehavior by incumbents causes this unequal distribution of wealth in the first place. The same holds true for today’s Western countries. In fact, back in 1978 Friedman already explained how government intervention creates the poverty that many politicians want to fight through new government programs.
First of all, the government doesn’t have any responsibility. People have responsibility. Second, the question is how can we as the people exercise our responsibility to our fellow men most effectively.
Swiss Economist 
While I was not able to push through the YouTube video you included because of my own poor streaming capabilities, I did want to leave a response to what you wrote.
Discussing what causes poverty and what role the government has in it is really a topic that is simply too complex for anyone to really ever grasp. As humans, we really are not programmed to participate in a society that is as large and over-reaching as the ones we are accostomed to today; furthermore, so long as “money” (which can be personal property, investments, and other such things) is a driving force in all human communication, we will continue to see a slow, steady march towards various forms of fascism.
In terms of the US (as I am not really all that knowledgeable about countries elsewhere), the government MUST intervene. Deregulation, and other social and economic policies such as self-regulation of a free market, are the tools through which the “incumbants” you meantioned will misbehave. (I apologize if I’ve misunderstood what you’ve written — as again, I don’t have the context of the video.)
Hey Sarah, thanks for your comment.
What do you mean by “the government MUST intervene”? In my humble opinion, the US government has largely extended its interventions. While government spending was below 10% of GDP for about 150 years, the country flourished. But since the New Deal, government spending rose to almost 50% of GDP. The result has been more poverty, more dependency, less freedom, and less justice. In fact, also the most recent financial crisis is a result of government intervention.
So, I do not see any logic in increasing the role of government. If that is what you meant.
I think its important to remember that the New Deal came on the heels of the Great Depression — obviously, something in the way that the government had worked prior had horribly failed. I’m wary about comparing the “old” US with the “new” one, however, since there is a great deal that is different between them outside of economic policy — since the 30’s, we’ve had numerous social reforms, the formation of the UN, the changing role of the dollar, globalization, and digitization, just to mention but a few points. I would chance to say that things did not start going downhill until we began dealing with these new factors, and responding to them with the same old conservative approach that we had been using for decades.
I do feel that the government has to intervene on the behalf of the middle and lower classes. My position comes more from my beliefs in sociology than it does from historical scrutiny: I feel that, without restriction, the “natural form” a large society will inevitably take will be some form of oligarchy. It balloons, and then pops. It is my understanding that this is not really what we want.
That aside, a government CAN intervene irresponsibly and without consistency, which is the case with the US. I largely blame our bi-partisan politics: we end up with good ideas with horrifically bad implementations. The most recent financial crisis (if you are speaking of the unemployment rates, the housing market, and lending bubbles) were a result of government intervention -in the wrong places- coupled with a LACK of oversight. When I talk about needing government intervention, I mean that we need common-sense oversight that’s not purchased by special interests or pandering, not that we need even more of the mountain of loophole-filled BS that our law culture has become.
For sure, the world has changed. But the idea of freedom and personal liberty is neither ancient nor obsolete. And it still works if you look at those countries who are doing (relatively) well. The rise of China with hundreds of millions of people leaving poverty, for instance, is simply the result of more liberty in the Middle Kingdom. Moreover, if you look at all the problems the US faces today, every single one of them is the result of governmental mismanagement.
In order to overcome these problems, you are arguing that MORE governmental intervention would work in favor of lower and middle classes. For that matter, I’d like to suggest one of my previous posts on the “Director’s Law”. It beautifully describes that governmental programs are never designed to benefit the poor. At least not in a democracy with some kind of self-interest.
And for your complaint about the bi-partisan system, I absolutely agree. Have a look at my new post on “Blue Republicans”. Hope you like it.
–swissecon