Spread the Wealth

Apparently, if you spread the wealth, you improve the economy. According to the International Monetary Fund, inequality is actually bad for economic growth. Furthermore, redistribute policies are actually beneficial to an economy. Who knew?!

Apparently, lots of economists knew all along. From the IMF report:

In sum, then, inequality remains harmful for growth, even when controlling for redistribution. And we find no evidence that redistribution is harmful. The date tend to reject the Okun assumption that there is in general a trade-off between redistribution and growth. On the contrary, on average – because with these regressions we are looking only at what happens on average in the sample – redistribution is overall pro-growth, taking into account its effects on inequality. And these results do not seem to depend on the levels of inequality or redistribution.

On average, across countries and over time, the things that government have typically done to redistribute do not seem to have led to bad growth outcomes, unless they were extreme. And the resulting narrowing of inequality helped support faster and more durable growth.

Robin Hood? Not good. Raising the low end of the spectrum up with assistance? Very good.

The IMF report is very clear: the greater the inequality, the slower the economic growth. So instead of telling the poor to stop being poor, how about helping them? As the facts (yes, they are facts) in the IMF report shows, helping the poor helps us all. It’s a win-win.


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Bryan is the founder of 2 Rights Make a Left. While obtaining his J.D., Bryan researched and wrote extensively on Capital Punishment, an issue that remains close to his heart to this day. He has spent the majority of his adult life involved in politics in some form or another. Bryan spends most of his time reading, writing and discussing all things politics. Bryan loves to travel and, if he had his way, would constantly be jetting off to another destination. The rest of his time is spent following his beloved Bears, Bulls and Cubbies.

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