Michael Perelman's post reminds me of a point that I've been meaning to make regarding the relevance of income inequality to the well-being of the poor. I held it back from my response to Warren's last post in which he queried whether inequality didn't matter. My point is that analysts and governments should worry about absolute poverty rather than inequality of incomes. As I argued yesterday, "what we call income distribution is simply another name for the relative contributions of different members of a society to total income production. There is no one out there handing different individuals or groups their shares of 'national income'." Thus, inequality may well increase with economic growth, but the poor would get better fed, clothed, housed, educated, and also purchase higher quality health, entertainment, and other services. The data I cited yesterday has Sri Lanka showing the best index of equality (34.4); better than that of the US (40.8). But it is a no-brainer to ask the poor in which of these countries they would rather live. Indeed, several former Soviet Bloc countries have better indexes of equality than the US, UK, or Canada. But where would the poor in those countries rather leave if they had the freedom to move around? It is natural for people who have less to be envious or jealous of those who have more. And that's why Adam Smith included in his list of the legitimate functions of government, in order to promote economic growth, the protection of private property. He writes: "It is only under the shelter of the civil magistrate that the owner of the valuable property, which is acquired by the labour of many years, or perhaps of successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it." Thus, I think egalitarians or redistributionists (not meant as "name-calling," but simply identifying a category of analysts!) play too much on emotions with their concerns over inequality. They should rather think of ways to remove the obstacles in the way of the poor from earning higher incomes, without hindering the income-earning capabilities of the more industrious. Even David Ricardo and Thomas Malthus were in agreement on this point when addressing the Poor Laws of England. Ricardo acutely observed that these laws were not going to make the poor rich, but make the rich poor. I'd like to recommend to Michael Perelman that he spend some time pondering the absolute vs relative poverty issue in his forthcoming book, parts of which he has shared with us. James Ahiakpor