My argument here then is that it may not be very useful to have an economic discussion from the point of view of aggregate GDP or other related metrics.
From the frame of policy, of course. But I am talking about ideal benchmarks that help shape our expectations and approaches towards more nuanced legislative solutions.
Regardless, it’s an interesting example of how aggregate growth may be a) undemocratic in a broad sense and b) anti-utilitarian (if the latter’s moral principles are in any way a matter of concern). My point here is that growth alone is no panacea.
That is certainly a fair interpretation, one others may disagree with nonetheless.
One way to think about your ideal option is to see it as an emulation of the distribution process (intended or unintended) of the 50s-60s era…
Though I did not intend to emulate the 50s-60s with Option D, I did take the liberty of comparing the option with an example distribution from that era. Using 2014 CPI-adjusted values for comparing 1967 and 2014 incomes, you’ll quickly notice that it’s actually quite different from Option D (ASIDE: the source of income values is table A-2 here). Also note that poverty rates are very similar when inflation-adjusted, yielding around $17,000-$20,000 (reason why I only have 1 line here).
Although total poverty in terms of population percent is just about equal (for added reference, you can compare the 14% to 15% poverty difference between 1967 and 2012), a lot more people — given rising population sizes — were actually uplifted into the working and middle classes (just as more people in general are now under poverty). The economic pie also grew significantly, increasing the standards of living for many Americans along the way. Option D is very different because everyone is at least above the poverty line. Now whether the policy environment of the 1960s is more conducive towards a realization of Option D is another question. But in terms of distribution, the 1960s and Option D are quite different.
Perhaps our view of the 1950s-1960s is biased as we see it through the lens of Middle class America? Perhaps my data set is unrepresentative of the generation as a whole? If so, I would appreciate factual evidence to the contrary (re. the overall distribution). Otherwise it may simply be that differences in the price costs of goods and services simply made life easier, independent of inequality and low income. There are a lot of variables to consider here.
But the choice may be a false one since the paper above if true means that future growth is attainable simply by exercising the latter measure; the consequence of that latter measure would most likely mean more access to the money supply for other sectors.
That is only true if you assume my four options predicate the exact policy approaches that come with them (e.g., only relying on regulation and monetary policy). And besides, if regulation only succeeds at reducing growth in one sector, that does not guarantee that the losses would be distributed as gains elsewhere. Penalizing the top quintile while leaving the bottom 80% the same would, in many peoples’ eyes, seem not only vindictive and immoral, but counterintuitive as an approach towards equality. Nevertheless, I appreciate the effort to substantiate the policy approaches behind these options, though that steps beyond the intended theoretical underpinnings of my article.
I will not pretend to know the nuts and bolts of perfectly realizing Option D, much less any distribution. If PhD economists can’t reach consensus on these practical, policy-related issues, then it is unlikely that we can so boldly proclaim to know the solutions ourselves.