Edward Conard: “Gap Between Rich and Poor Benefits All”

The original story by the New York Times –  Romney’s Former Bain Partner Makes a Case for Inequality – NYTimes.com

Even though Adam Davidson did very good analysis of the situation, we still think additional translation is required.

A quick summary of the article:

Edward Conard, Romney’s former collegue, wrote a book called “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong”. The book allegedly is a proof of the fact that inequality is a sign of economic prosperity. Conard is convinced that the more money the elite has, the more money it can invest, which ultimatedly improves everyone’s well-being.

The logical fallacy

Even though the New York Times article praises Conard’s shapness of mind, what grabbed our attention right at the beginning of the article was a logical fallacy in Edward Conard’s reasoning.

Even though more money in the hands of the rich may lead to progress, stating that this is a sign of economic presperity is really a stretch.

Consider the following example from “The Curious Incident of the Dog in the Night-Time” by Mark Haddon.

An economist, a professor of logic and a mathematician are travelling by train through the coutry-side in Scotland. Suddenly, they see a purple cow in the window.
“Look, cows are purple in Scotland”, says the economist.
“There are cows in Scotland, of which at least one is purple”, says the professor of logic.
“There is at least one cow in Scotland, of whom one side appears to be purple”, says the mathematician.

Sorry that we didn’t quote the book word-for-word, this is more of a retelling of the story, but you should get the point. Concluding that much money at the top means prosperity on all levels, including the bottom, is more of a logical fallacy, than a sound conclusion.

Into Edward Conard’s mind

Now, when we think about what motivates Edward Conard, we find this piece of the article to give us food for thought:

“God didn’t create the universe so that talented people would be happy. It’s not beautiful. It’s hard work. It’s responsibility and deadlines, working till 11 o’clock at night when you want to watch your baby and be with your wife. It’s not serenity and beauty.’

Add to it the most common terms in Mr. Conard’s vocabulary, which are ‘money’, ‘wealth’, ‘economy”, and you get a more or less complete picture. If Edward Conard was Oscar Wilde, he would probably proclaim the value of ‘money for the sake of money’ or ‘economy for the sake of economy’.

We get the impression of a person who has had too much faith in something that has relative value for so long that it is now hard for him to accept that he may have been mistaking this whole time.

It’s similar to how ex-members of different sects have a hard time getting their minds clear of the doctrine they absorbed while in the sect. Economy may be a sect for some people who tend to underpraise things that have real value (food, water, health) and attach value to things with relative meaningfulness (interst, shares, money) that some people even find useless.

Is this the only way?

Ok, to sum this up, there is one question we’d like to leave you with. Edward Conard thinks that the more money investors have, the better it is for everyone. But let us ask – is this the only way to make the world a better place? Isn’t there a better one? Do let us know, Mr. Conard.

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