One of my MUST-READ blogs is Carpe Diem, written by Dr. Mark Perry, an economist. Perry relishes in debunking conventional wisdom by the mainstream media, as he recently did in posts on the real estate bubble, and far more notably, on the role of speculators in a free market (no surprise to anyone with a modicum of training in economics: speculators are agents of stability, not instability). Perry often accomplishes these feats with “back of the envelope” calculations that are both simple and intuitive, yet not replicated in other media. Of course, the author also suffers from two serious maladies: a propensity to hammer a subject until its 60 feet under the ground and also to make arguments that may not necessarily address the subject at hand.
The chart above shows 2006 income shares from the IRS, and medal shares at the 2004 Summer Olympics. Notice the amazing similarity? For example, the top 5% of U.S. taxpayers earned 36% of all income, and the top 5% of the 74 medal-winning countries (the top three: U.S., Russia, and China; and 70% of fourth place Australia’s points to total 3.7 countries) won about 33% of the total medal points (598.3 out of 1832).
[And] notice the amazingly similar outcome between shares of adjusted gross income earned by the top 5, 10 and 25% of Americans, and the shares of the 906 Olympic medals in 2008 earned by the top 5, 10 and 15% of medal-earning countries.
Perhaps any competitive process, whether it’s athletics or the economy, distributes results (medals, income) unequally? And perhaps that unequal distribution, whether it’s income or Olympic medals is a natural, expected outcome of any competitive process?
It just occurred to me that I have posted on a similar subject before that may be even more analogous. There is certainly a wide, varied gradient of artists in the world, whose more specific occupation could be called painter, architect, designer, or whatever. But not many are very popular. Those who are seem like they are everywhere. For every Klimt, Matisse, Picasso, Koons, Monet, or Hirst, there are a thousand artists toiling in obscurity selling their paintings to law offices, public courthouses, and unwary passersby at local art festivals.
In the European Union, a jurisdiction with some very blah so-called moral rights laws, artists receive royalties on works sold by auction houses and dealers between €1,000 – €500,000. In this way, artists continue to possess an inalienable right to the proceeds from resales of their art works. That’s why they’re called moral rights, because they’re just that important. As Perry has done before, I have beat that subject into the ground before — no, what is interesting in this case isn’t the moral rights themselves, but assuming that most art works sold in auction houses sell between 1,000 and 500,000, it’s the distribution of the royalties:
A study sponsored by the Antiques Trade Gazette showed that, in the 18 months to August 2007, 10% of the 1,104 artists benefiting from ARR in Britain (around half of whom are British) got 80% of the pot; the bottom 30% received less than £100 each.
It seems like evidence that in a field of human endeavor (that is to say, any artistic endeavor) that resembles something akin to a perfectly competitive or even monopolistically competitive market structure, when freedom is allowed to take its course, freedom results in Pareto-distributed outcomes, be it in athletics, paintings, or any other human endeavor. If liberals are to be believed by their words, that inequality must be fought with wealth redistribution because it is somehow per se unjust, then their entire worldview is anti-human and far more artificial than any industrial or metallic monstrosity.