"That’s just a reminder of the enormous power of redistribution to improve human welfare. People in the top 5 percent, and especially in the top 1 percent, are competing against one another primarily in positional ways. Nobody wants to lose tens of thousands of dollars in income and fall behind the Joneses. But if everyone’s incomes in the tippy top dropped, not only would there be no loss of psychological positional advantage, but the price of many of the goods consumed by wealthy people would fall. If you’re super-rich, instead of just prosperous, you can afford that great summer place in the Hamptons. But the only reason that great summer place in the Hamptons costs so much in the first place is that all these other people are so rich. Moving consumption opportunities down the income ladder does much more benefit to the people who get the money than it does harm to those at the top. (source - boldface added)"
Matthew Yglesias - Oct 27, 2011
By Lee (via Diigo) on Tue 14 Feb 2012