Could giving $1,000 to the poor and $2,000 to the rich be a progressive policy?

Yes.

(For legal purposes I do not endorse this policy)

NEW: A groundbreaking survey on fairness across the world with 65,000 individuals across 60 countries -- from colleagues at @nhhecon.bsky.social.

Key findings:

* The West is especially meritocratic.
* What drives inequality? Globally, people believe luck matters more than merit.

bit.ly/41V6zJe

The resulting efficiency cost of inequality (an increased chance of crisis) implies an inequality externality.

This adds to a long and growing literature on inequality's externality effects.

Here are a few other macro examples (there are many others):

A new paper argues that rising inequality contributed to the pre-2007 crisis debt boom.

The idea is that people increased their housing expenditure to keep up with their neighbors' increased spending, fueling unsustainable demand.

Both Republicans and Democrats are likely to think inequality worsens democratic institutions.

An AI summary of their explanations when asked why:

"Economic inequality enables the wealthy to exert disproportionate influence on political processes, [...] undermining democracy."

The first question depends on difficult welfare calculations, but I think the answer is no.

I don't know the answer to the second question. In practice, what matters is the beliefs of a small group. Oppression or democracy, in the vein of Acemoglu and Robinson (2005)

If you thought you already knew this, you're not alone. 70% of U.S. citizens agree (from my work with Max Lobeck).

Why? Here's the AI-generated summary of their open-ended explanations;

This is a very consistent result in behavioral economics. More (unfair) inequality leads to more anti-social outcomes.

Fehr et al (2018) shows that more unfair inequality leads to more money-burning in a controlled setting.

Still, to clearly explore causality we need controlled settings. Barr et al (2024) is one of many to use an experimental approach, and find that inequality leads to unrest.

"[...] increasing inequality has a destabilising effect; the disadvantaged group attacks the status quo."

This correlation holds across smaller regions. Enamorado et al (2016) argues that higher inequality in Mexican municipalities lead to significantly more violent crime:

Social unrest is hard to measure, but homicides are relatively well-measured across countries. The most unequal countries have ~5-30 homicides per year per 100,000 citizens, the most equal ~1 (note the log scale).

Data from the IMF and World Inequality Lab.

The feeling that economic inequality leads to social unrest is mounting. Here is a brief overview of the current academic evidence.

Striking example of a point I often make academically -- people may think inequality is a negative externality without thinking that inequality is unfair.