A Reply to Russell Okung

January 2016

Recently I tried something I usually avoid and replied to Ezra Klein's criticisms of Economic Inequality. It was a strange sort of writing, easier than writing an essay but also less interesting. But I'll give it another shot. A lot of people are talking about Russell Okung's response to what I wrote, so I'll try replying to that.

1. He says I say economic inequality is "a good thing." I didn't say that. What I said is that it has multiple causes, some bad (lack of social mobility) and some good (Larry and Sergey starting Google).

If you attack economic inequality, you're indiscriminately attacking both the good and bad causes. So instead attack specific bad causes. To fix lack of social mobility, for example, attack that specifically. Then you not only avoid throwing out the babies with the bathwater, but you'll also be more likely to actually fix the problem, because you'll focus on all the contributing factors, including those which are only peripherally economic.

2. He says "economic inequality isn't the symptom; it's the virus that attacks." I'm guessing from the sentences that follow that what he means by "economic inequality" is some combination of poverty and lack of social mobility. And those are certainly bad, but that is not what the term "economic inequality" means. It means the variation between different quantiles' wealth or income.

So you could for example have no poverty and perfect social mobility, and still have great economic inequality.

If he thinks what "economic inequality" means is poverty and lack of social mobility, it's not surprising he was upset enough to write a reply to my essay. In fact I suspect much if not most of the angry reaction to it was a result of people not understanding what the term "economic inequality" means.

Just so we're clear about this, I didn't say that poverty and lack of social mobility are harmless, or inevitable. In fact I said the opposite.

3. He says I believe "that anyone who works hard can move up economically regardless of his or her social circumstances." Not only do I not believe that, I said so explicitly in the essay. I called out lack of social mobility as one of the worst problems contributing to economic inequality, and talked about how I had personally seen the effects of it in the relative scarcity of successful startup founders who grew up poor.

Those three seem to be his only points specifically about what I wrote. The rest of what he says is about social mobility and startups generally. I agree with almost all of it.

The only potentially dubious point is that we need silicon valleys to be scattered instead of in one place. I've written about this question before. There are advantages to concentration; it may not be optimal to scatter startups too much; but I wouldn't pick a fight over the question.

Having gone through this exercise, the thing that strikes me most is that so many people think Russell's views are different from mine. As far as I can tell, we don't disagree about anything.

I suspect what's going on here is that a lot of people start from "rich guy says economic inequality is not bad" and then expand that in their heads into whatever they think such an essay would say, and for them that is what I wrote.

There is a way to protect against this phenomenon. Quote the specific passages you disagree with. This forces you to calibrate your mental model of what someone said with what they actually said. In my (sadly extensive) experience, the two are often wildly divergent.