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January 18, 2007


Mark Wadsworth

I don't think there is an answer. Your 5 points are all perfectly valid, but you could add:

1) Inflation in the cost of services (in this case private school fees) has been much higher than inflation for essentials (food) over the past ten years or so.

2) Everybody's personal inflation rate is wildly different anyway, the variations between the personal inflation rate of two people in the "rich" category is probably ust as big as the overall variation between meaningless averages for "Rich" and "Poor" people.

3) Inflation tends to erde value of savings. Rich people have more savings than poor people (altho' you are right, house price inflation will make this effect on the whole more favourable to rich people).

And so on.

Tim Worstall

1 and 4 are compensating for inflation rates, not rebutting his point that the inflation rate for the rich might be higher than that for the poor.

Mark Wadsworth

I thought his point was that inflation hurt the poor more. My point is that you can make all manner of perfectly reasonable assumptions as to whom it hurts more, but the combined net effect of all these little impacts is probably difficult to quantify and subject to a margin of error that would make your findings meaningless anyway.

Maynard Handley

"it costs as much to heat a flat in Kensington as in Hackney."
This statement may be true, but it's also wildly irrelevant.

For example, here in LA we've had a week of extremely cold weather. The wealthy, presumably, switched on their heating systems. It would, sure, have cost me no more or less to switch my heating system on to the same comfy temperature --- a cost I am unwilling to bear --- so I suffered through the cold wearing extra clothing and using extra blankets.

The same occurs, in much the same way, in summer wrt air conditioning.

This is no different from claiming that (something I guess is less of an issue in the UK) heart surgery costs the same whether you are rich or poor. Well, yes it does. As a consequence, there are a whole lot of poor people who, when they are not suffering through the cold by wearing extra blankets, are not having heart surgery they probably need.

Fabian Tassano

Saying that inflation hitting rich more than poor has a "relatively benign social character" is fairly tendentious anyway. Is that supposed to be a benefit in the cost-benefit analysis of inflation? Only if you support redistribution in the first place.

We're not exactly talking about the Beckhams or the McCartneys here. More like, ordinary middle class families. But perhaps implying it's okay if they're penalised has become a position which no longer requires being argued for.


inflation? atre you talking about rising prices or money printing?

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