Have you ever wondered how many marijuana dealers there are in the US? The DEA has, too. FiveThirtyEight reckons there are 121,600 of them. Walt Hickey uses the Fermi estimation technique, which helps create educated guesses for enormous problems, to evaluate this quandary. Of course, this is just a wild (educated) estimation, but it's interesting to put a number to the question.
Let's talk about "moochers".
"The 2012 election campaign popularized the notion that people who benefit from federal spending vote for Democrats, while people who pay the preponderance of taxes vote Republican. A survey conducted during the election included questions to test this hypothesis and to assess the accuracy of voters’ perceptions of federal spending. Voters’ perceptions of their benefit from federal spending are determined by family income, age, employment status, and number of children, as well as by party identification and race. Voters aged 65 and older who believe they are net beneficiaries of federal spending are more likely to be Democrats and vote for Barack Obama than seniors who believe they are net contributors to the federal government. However, the 77.5 percent of voters under age 65 who believe they are net beneficiaries of federal spending are as likely to vote for Romney as for Obama and as likely to be Republicans as Democrats. Voters who live in states that receive more in federal funds than they pay in federal taxes are less likely to vote for Obama or to be Democrats. For most of the electorate, dependence on federal spending is unrelated to vote choice. "
This is the abstract of a new paper by Dartmouth professor Dean Lacy (via Marginal Revolution). It's no surprise that senior citizens were more likely to vote Democrat. The intrigue arises in seeing that welfare dependents are equally as likely to vote Republican or Democrat. A great deal of partisan pandering (fun alliteration!) occurs around the topic of welfare, but the majority of Americans will receive federal aid at some point.
Beyonce is known to have said that "Pretty Hurts". According to the lifetime earnings and expected outcomes for beautiful people, she's wrong! Vox made a succinct video and article on the topic. The quantification of beauty is always an interesting issue. Scientists typically take the most symmetrical faces as being the most beautiful, as attraction to symmetry is deeply-rooted human nature. This metric can be fairly accurate, but doesn't account for the plethora of people who are not conventionally attractive (symmetrical) yet are still attractive. More attractive people can expect to make more money, get a better education, and generally be regarded as more competent and capable. Attractive CEOs can even get better returns for their companies! Perhaps corporations could invest in plastic surgery for executives in hopes of upping company performance. Could this be a new tax deduction?
Along the lines of questionable corporate motives, FiveThirtyEight writes about corporate America enriching shareholders at the expense of the economy. When large corporates decide to invest money in stock buy-backs or dividends for investors, they do so at the expense of not using that money for other things. This is obvious, every decision has a consequence. In this case, the money could have gone to new R&D, employee training and advancement, or company expansion - all of which would add to the economy. Stock buy-backs tend to have the purpose of increasing stock price (pleasing investors), and distributing large amounts to investors via dividends enriches only these investors. Of course, this is the company's prerogative - to make investors happy. However, by doing so companies sacrifice gains that could be economy-wide. Conflicts of interest arise when these companies are receiving subsidies or tax breaks and do not reinvest the extra money they make with taxpayers' help. This article provides a great illustration of the trade-offs companies face, though it doesn't touch on the issue of corporate welfare.
Economic historian Gregory Clark might say that the actions of these companies don't matter much, as social inequality is determined by one's surname. Clark recently released a book regarding the effect of one's last name on social status and inequality. Tracking the name allows him to look at a much longer span of historical records. Clark found that:
"The hard truth is that underlying social status is inherited from parents as strongly and mechanically as height. This iron law of status means there is no way that a merit or incentive system can be used to justify a winner-take-all society. Social mobility rates can be summarized by one number: the degree to which the social outcomes of children – earnings, education, wealth and health – correlate with that of their parents. The closer that correlation is to zero, the less family, lineage, race and ethnicity matter to the next generation. All is possible at birth. The closer that number is to one (in essence, 100 percent) the more status is predictable from family circumstances alone. Birth is fate."
Clark argues that traditional methods of measuring social mobility are incorrect. Traditionally, changing mobility is measured via income - someone making more or less than their parents has shifted in mobility. Yet, many familial names have persisted within certain socio-economic classes for hundreds of years. While descendants from famous surnames may not generate wealth of their own, the advantages given to them by their superior name and the status associated with it will follow them throughout their life. This inequality is particularly hard to shake, and takes many generations. Imagine meeting someone with the last name Rockefeller - you might assume they had inherited a bit of their ancestor's talent and success.
Clark shows the inequality for traditional measurements (left) and surname based (right). Higher numbers on the vertical axis indicate less equality.
If Clark is correct, it appears that inequality is a much more pervasive issue, and less easy to influence with policy. The Atlantic provides another summary of his findings, adding:
"Clark’s is indeed a discouraging story—as, inevitably, is just about any account of human existence in which heredity is the dominant factor governing our individual destinies... it’s hard to see the fairness in having not just every person’s position but every person’s chances of moving up or down so dominated by whatever subcellular makeup he or she simply happens to inherit. Clark himself steps forward to acknowledge just that:
"An important corollary to the finding that social outcomes are the product of a lineage lottery is that we should not create social structures that magnify the rewards of a high social position … If social position is largely a product of the blind inheritance of talent, combined with a dose of pure chance, why would we want to multiply the rewards to the lottery winners?"
Money represents a social agreement, which has implications for how we value wealthy people. Bitcoin replaces the need for this social agreement with technology, and in doing so challenges the values we ascribe to wealth.