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Saturday, October 23, 2010

Poverty

"My advice to students and readers is: When you hear us economists wax eloquent on the virtue of greater efficiency — beware!"

This pretty much sums up the entire article. What I received from this article is that  when economists argue towards efficiency, they typically end up making recommendations based on the Kaldor-Hicks model of efficiency. However, ethical considerations also tend to be ignored. For example, it is considered efficient overall if Jack loses ten dollars but Jill gains fifteen. What is not considered in this example is that fifteen dollars to Jill might be like one million dollars to Jack. There are different preferences for each individual in this world.
To me, a great example of this type of ethical mistreatment is subsidies for those in poverty. College students like myself are not able to receive any type of assistance because we are attending school, and are ignoring the opportunity for immediate work, and an income. In order for those in poverty to benefit, taxes are taken out of what little income college students make to pay for items such as food stamps, medicaid, and housing. In my opinion, the ethical mistreatment lies in the assumption that assistance to college students is not allowed becausethe gain for those not in college is greater. This is a Kaldor Hicks way of looking at this. Food to me is just as important as it is to the one receiving food benefits. Wealth is a choice, and it seems as though those making the choice to ultimately be wealthy are being punished as opposed to those who do not choose wealth, because of this concept of efficiency. While I am speaking generally, I know that there are different cases for every individual.

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