Capital in the Twenty-First Century by Thomas Piketty

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pages: 345 words: 92,849

Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

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3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, corporate governance, correlation does not imply causation, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, women in the workforce, working poor

Stiglitz, “Equal Opportunity, Our National Myth,” New York Times, February 2013, http://opinionator.blogs.nytimes.com/2013/02/16/equal-opportunity-our-national-myth/ (accessed April 12, 2015). 3. Thomas Piketty, “Capital in the Twenty-First Century,” March 2014, http://piketty.pse.ens.fr/en/capital21c2 (accessed April 12, 2015). 4. On some of the problems with Piketty’s data on wealth inequality, see Phillip W. Magness and Robert P. Murphy, “Challenging the Empirical Contribution of Thomas Piketty’s Capital in the Twenty-First Century,” Journal of Private Enterprise, Spring 2015, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 (accessed April 12, 2015); Malin Sahlén and Salim Furth, “Piketty Is Misleading about the Swedish Case,” Timbro, November 7, 2014, http://timbro.se/en/samhallsekonomi/articles/piketty-is-misleading-about-the-swedish-case (accessed April 12, 2015); Phillip W. Magness, “5 Remaining Problems for Thomas Piketty in the Wake of the FT Controversy,” Atlas Network, June 16, 2014, http://www.atlasnetwork.org/news/article/5-remaining-problems-for-thomas-piketty-in-the-wake-of-the-ft-controversy (accessed April 12, 2015); and Alan J.

Timothy Noah, The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It (New York: Bloomsbury Press, 2013), chapter 1. 6. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap, 2014), pp. 1, 514. 7. Obama, “Remarks by the President on Economic Mobility.” 8. James Truslow Adams, The Epic of America (Garden City, NY: Garden City Books, 1933), p. 317. 9. Obama, “Remarks by the President on Economic Mobility.” 10. Joseph E. Stiglitz, “Conclusion: Slow Growth and Inequality Are Political Choices. We Can Choose Otherwise,” Washington Monthly, November/December 2014, http://www.washingtonmonthly.com/magazine/novemberdecember_2014/features/conclusion_slow_growth_and_ine052716.php (accessed April 12, 2015). 11. Obama, “Remarks by the President on Economic Mobility.” 12. Piketty, Capital in the Twenty-First Century, pp. 513, 517. 13.

See also Daniel J. Mitchell, “What Can the United States Learn from the Nordic Model?,” Policy Analysis, November 5, 2007, http://object.cato.org/sites/cato.org/files/pubs/pdf/pa-603.pdf (accessed May 28, 2015). 60. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap, 2014), pp. 247–49. 61. Johnny Munkhammar, “The Swedish Model: It’s the Free-Market Reforms, Stupid!” Wall Street Journal, January 26, 2011, http://www.wsj.com/articles/SB10001424052748704698004576104023432243468 (accessed April 13, 2015). 62. Piketty, Capital in the Twenty-First Century, p. 246. Chapter 5 1. Joseph Stiglitz, “America Is No Longer a Land of Opportunity,” Financial Times, June 25, 2012, http://www.ft.com/intl/cms/s/2/56c7e518-bc8f-11e1-a111-00144feabdc0.html (accessed April 28, 2015). 2.


pages: 221 words: 55,901

The Globalization of Inequality by François Bourguignon

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Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, income inequality, income per capita, labor-force participation, minimum wage unemployment, offshore financial centre, open economy, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

During the last few years, rising inequality in certain countries, notably the United States, has been the subject of or inspiration for several major books—among which it would be difficult to overstate the importance of two recent books by Joseph Stiglitz and Thomas Piketty, the success of which is a clear sign of the mounting public interest in the issue of inequality.2 While few books address global income inequality directly, with the exception of Branko Milanovic’s Worlds Apart,3 many have analyzed inequalities in development between 2  Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012); Thomas Piketty, Capital in the Twenty-­First Century (Cambridge, MA: Harvard University Press, 2013). 3  Branko Milanovic, Worlds Apart, Measuring International and Global Inequality (Princeton, NJ: Princeton University Press, 2005).

Another way in which these very high salaries spread comes from the provision of specialized services to superstars or multinational corporations. For example, lawyers who take part in litigation involving large sums of money will often be compensated directly in proportion to 10  Carola Frydman and Raven Saks, “Executive Compensation: A New View from a Long-­Term Perspective, 1936–2005,” Review of Financial Studies 23, no. 5 (2010): 2099–2138. In Capital in the Twenty-­First Century, Thomas Piketty relates the explosion in top executives’ pay to the drop in top marginal income tax rates in the 1980s, the argument being that it was not worth negotiating a high level of compensation when 70% would go to the state. I’ll return to the tax issue later. 90 Chapter 3 the sums in question. Certain law firms have therefore seen their fees skyrocket just like those of the superstars they work for, and the net effect of this process of contagion has made a significant impact on income distribution.

But there are also non-­monetary forms of inequality—some of which can be measured and some of which cannot—that are also socially and economically significant from the point of view of both social justice and the perity in India and China prior to 2002 was estimated by Sanjay Ruparelia et al., Growth, Reforms and Inequality: India and China Since the 1980s, APSA 2010 Annual Meeting Paper, 2010. 11  Piketty, Capital in the Twenty-­First Century. Are Countries Becoming More Unequal?61 ception that the public may have of the equity of the economy. This is the case, in particular, of the inequality of opportunities. Two individuals or two families whose economic standards of living, measured by income or consumer spending are identical, will not necessarily feel “equal” or be considered equal in the eyes of an observer. One might have to work longer than the other or endure longer commutes and less pleasant surroundings.


pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

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accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, very high income, We are the 99%

Capital in the Twenty-First Century CAPITAL IN THE TWENTY-FIRST CENTURY Thomas Piketty Translated by Arthur Goldhammer The Belknap Press of Harvard University Press CAMBRIDGE, MASSACHUSETTS LONDON, ENGLAND 2014 Copyright © 2014 by the President and Fellows of Harvard College All rights reserved First published as Le capital au XXI siècle, copyright © 2013 Éditions du Seuil Design by Dean Bornstein Jacket design by Graciela Galup The Library of Congress has cataloged the printed edition as follows Piketty, Thomas, 1971– [Capital au XXIe siècle. English] Capital in the twenty-first century / Thomas Piketty ; translated by Arthur Goldhammer. pages cm Translation of the author’s Le capital au XXIe siècle. Includes bibliographical references and index.

The Capital/Income Ratio over the Long Run 6. The Capital-Labor Split in the Twenty-First Century Part Three: The Structure of Inequality 7. Inequality and Concentration: Preliminary Bearings 8. Two Worlds 9. Inequality of Labor Income 10. Inequality of Capital Ownership 11. Merit and Inheritance in the Long Run 12. Global Inequality of Wealth in the Twenty-First Century Part Four: Regulating Capital in the Twenty-First Century 13. A Social State for the Twenty-First Century 14. Rethinking the Progressive Income Tax 15. A Global Tax on Capital 16. The Question of the Public Debt Conclusion Notes Contents in Detail List of Tables and Illustrations Index Acknowledgments This book is based on fifteen years of research (1998–2013) devoted essentially to understanding the historical dynamics of wealth and income.

This first part of the book contains nothing really new, and the reader familiar with these ideas and with the history of global growth since the eighteenth century may wish to skip directly to Part Two. The purpose of Part Two, titled “The Dynamics of the Capital/Income Ratio,” which consists of four chapters, is to examine the prospects for the long-run evolution of the capital/income ratio and the global division of national income between labor and capital in the twenty-first century. Chapter 3 looks at the metamorphoses of capital since the eighteenth century, starting with the British and French cases, about which we possess the most data over the long run. Chapter 4 introduces the German and US cases. Chapters 5 and 6 extend the geographical range of the analysis to the entire planet, insofar as the sources allow, and seek to draw the lessons from all of these historical experiences that can enable us to anticipate the possible evolution of the capital/income ratio and the relative shares of capital and labor in the decades to come.


pages: 515 words: 132,295

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

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3D printing, accounting loophole / creative accounting, additive manufacturing, Airbnb, algorithmic trading, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, interest rate derivative, interest rate swap, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund

Financial sector wages—an easy way to track the two variables’ relationship—were high relative to everyone else’s in the run-up to the market crash of 1929, then fell precipitously after banking was reregulated in the 1930s, and then grew wildly from the 1980s onward as finance was once again unleashed.49 The share of financiers within the top 1 percent of the income distribution nearly doubled between 1979 and 2005.50 Rich bankers themselves aren’t so much the reason for inequality as the most striking illustration of just how important financial assets have become in widening America’s wealth gap. Financiers and the corporate supermanagers whom they enrich represent a growing percentage of the nation’s elite precisely because they control the most financial resources. These assets (stocks, bonds, and such) are the dominant form of wealth for the most privileged,51 which actually creates a snowball effect of inequality. As French economist Thomas Piketty explained so thoroughly in his 696-page tome, Capital in the Twenty-First Century, the returns on financial assets greatly outweigh those from income earned the old-fashioned way: by working for wages.52 Even when you consider the salaries of the modern economy’s supermanagers—the CEOs, bankers, accountants, agents, consultants, and lawyers that groups like Occupy Wall Street rail against—it’s important to remember that somewhere between 30 and 80 percent of their income is awarded not in cash but in incentive stock options and stock shares.

It’s telling that technology, which usually decreases industries’ operating costs, has failed to deflate the costs of financial intermediation. Indeed, finance has become more costly and less efficient as an industry as it deployed new and more advanced tools over time.16 It’s also telling that during the last few decades financiers have earned three times as much as their peers in other industries with similar education and skills.17 As Thomas Piketty put it in Capital in the Twenty-First Century, financiers are, in some ways, like the landowners of old. Instead of controlling labor, they regulate access to things even more important in the modern economy: capital and information. As a result, they represent the largest single group of the richest and most powerful people on earth. Even more so than Silicon Valley titans or petro-czars, financiers are truly masters of our capitalist universe.

That’s a big deal, because when Bertolini first posed the idea of his wage hike to a group of Harvard Business School professors whom he regularly consulted with, they responded negatively. The CEO, who grew up working class in Detroit and worked a welding line for years before going to college on scholarship, has continued to push forward his agenda within Aetna; in 2015 he gave all his top executives something that’s not yet on the typical MBA reading list—a copy of Thomas Piketty’s Capital in the Twenty-First Century. Companies, says Bertolini, shouldn’t just be moneymaking machines. They also have to invest in people, the real economy, and society as a whole if they want to succeed in the long term. “Capital is the resource that we often manage well, but in my opinion, the scarce resource is a talented and engaged workforce.” Creating that requires thinking bigger, looking at people as assets, not just costs on a balance sheet, and knowing how to think beyond the quarter.


pages: 332 words: 89,668

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

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Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, Bernie Sanders, big-box store, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, low skilled workers, low-wage service sector, minimum wage unemployment, moral hazard, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, Plutocrats, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scientific racism, Simon Kuznets, single-payer health, strikebreaker, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

My New Mexico State University (NMSU) colleague Mark Walker, who was writing a book on the Basic Income Guarantee as I wrote this one, first encouraged me to consider inequality from a historical perspective. The NMSU conference that Mark organized on the Basic Income Guarantee in 2014 introduced me to scholars who have long worked on the philosophy of contemporary inequality. Simultaneously, participation in an ad hoc reading group facilitated by NMSU student Alan Dicker on Thomas Piketty’s Capital in the Twenty-First Century helped to get my thoughts flowing My NMSU colleagues Lori Keleher, Peter Kopp, and Julie Rice, and my former graduate student Ryan MacLennan, all provided helpful suggestions at crucial moments. In the later stages of the project’s completion, Tim Ketelaar of the psychology department at NMSU gave me the opportunity to present the ideas contained in this book to a wider general audience, allowing me to better focus my message.

The New York Times in 2005 ran a series of articles on class, pointing out for its readership that, contrary to popular belief, the United States is not the most upwardly mobile country in the world.9 A number of recent books question the notion that deregulation, budget cuts to safety nets, free trade promotion, and privatization have promoted growth to benefit all.10 Despite its length and serious subject matter, economist Thomas Piketty’s Capital in the Twenty-First Century (2014) was widely read and reviewed. Historian Steven Fraser’s Age of Acquiescence (2015) compared the modern American public unfavorably with Americans in the late nineteenth and early twentieth centuries, who were not afraid to call out class warfare against the working poor when they saw it.11 Former Secretary of Labor Robert Reich’s documentary Inequality for All (2013) reached a wide audience, with an accessible message: the prosperity of the United States hinges on the middle class having an income to spend.

Although some economists called for an economic stimulus package on par with the New Deal, Republicans and most economists opposed the idea. They called for austerity instead, and President Barack Obama lacked the political capital to press the issue.20 The Great Recession thus came and went with no significant steps taken to prevent inequality from causing another economic panic. Many structural features of the modern American economy promote inequality. In his well-received book Capital in the Twenty-First Century (2013), economist Thomas Piketty argued that out-of-control executive compensation has caused much of the growth in inequality across Europe and in the United States. Executives are granted enormous salaries by boards of directors whom the CEOs themselves control, in a direct conflict of interest.21 Executive compensation hides the real inequity in the share of compensation going to labor: “In 2002–2012 the bottom 90 percent of the population saw their average family income … drop by 11 percent, while those in the top .1 to .01 percent saw theirs rise by 30 percent.”


pages: 297 words: 89,206

Social Class in the 21st Century by Mike Savage

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call centre, Capital in the Twenty-First Century by Thomas Piketty, Clapham omnibus, Corn Laws, deindustrialization, deskilling, Downton Abbey, financial independence, gender pay gap, Gini coefficient, income inequality, Mark Zuckerberg, megacity, New Urbanism, Occupy movement, precariat, psychological pricing, The Spirit Level, unpaid internship, upwardly mobile, very high income, winner-take-all economy, young professional

In making this argument, there is a clear overlap with our findings in Chapter 7 regarding the power of elite universities, all of which are located close to London. London is now a vortex – a voracious and intense space, in which an elite class finds its home. In the early twenty-first century, the very wealthy are subject to increasing attention. The remarkable reception of Thomas Piketty’s Capital in the Twenty-first Century, allied to increasing concern about spiralling remuneration at the top, has made the sociological analysis of the elite essential. But we need to guard against the view that this new, wealth-elite marks a return to the aristocratic, landed and gentlemanly class which held sway in Britain until the later twentieth century. It is easy to be confused here by the prominence of old idioms and the relics of aristocracy which abound.

There is one important caveat to note, however, and this is that the GBCS only has information on household income, so the figures for Table 2.3 will be affected by whether there are two or more income-earners in the household. Subsequent analysis by Sam Friedman, David Laurison and Andrew Miles in ‘Breaking the “Class” Ceiling? Social Mobility into Elite Occupations’, Sociological Review, 63(2), 2015, 259–89 (which compares the GBCS findings with those from the Labour Force Survey on individual incomes), suggests that similar patterns can be found in both sources. 7. See Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA: 2014), p. 116, Figure 3.1. 8. Markus Jäntti, Eva Sierminska and Philippe Van Kerm, ‘The Joint Distribution of Income and Wealth’, in Janet C. Gornick and Markus Jäntti (editors), Income Inequality: Economic Disparities and the Middle Class in Affluent Countries (Redwood City, CA: 2013), pp. 312–33. 9. Eva Sierminska, Timothy M. Smeeding and Serge Allegrezza, ‘The Distribution of Assets and Debt’, in Gornick and Jäntti (editors), Income Inequality: Economic Disparities and the Middle Class, pp. 285–311, at p. 294.

Indeed, further research on the GBCS by the leading French mathematician Professor Brigitte Le Roux, using a different technique – multiple correspondence analysis – and somewhat different measures of social and cultural capital – also demonstrates that the most distinctive cluster continues to be at the top and that in the middle reaches of the social structure there is much more fuzziness. See Mike Savage, Brigitte Le Roux, Johannes Hjellbrekke and Daniel Laurison, ‘Espace culturel britannique et classes sociales’, in Frédérie Lebaron and Brigitte Le Roux (editors), La méthodologie de Pierre Bourdieu en action: espace culturel, espace social, et analyse des données (paris. 2015). 2. Danny Dorling, Inequality and the 1% (London: 2014), Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA: 2014). 3. The same general point also applies to gender: but because we asked about household income, gender differences are not well defined when using the GfK sample (since some badly paid women might be living with well-paid men, and vice versa). 4. We repeat our earlier comments about the problems of using the GBCS and the GfK survey to analyse ethnicity in detail.


pages: 366 words: 94,209

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity by Douglas Rushkoff

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3D printing, Airbnb, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Burning Man, business process, buy low sell high, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, centralized clearinghouse, citizen journalism, clean water, cloud computing, collaborative economy, collective bargaining, colonial exploitation, Community Supported Agriculture, corporate personhood, crowdsourcing, cryptocurrency, disintermediation, diversified portfolio, Elon Musk, Erik Brynjolfsson, ethereum blockchain, fiat currency, Firefox, Flash crash, full employment, future of work, gig economy, Gini coefficient, global supply chain, global village, Google bus, Howard Rheingold, IBM and the Holocaust, impulse control, income inequality, index fund, iterative process, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joseph Schumpeter, Kickstarter, loss aversion, Lyft, Mark Zuckerberg, market bubble, market fundamentalism, Marshall McLuhan, means of production, medical bankruptcy, minimum viable product, Naomi Klein, Network effects, new economy, Norbert Wiener, Oculus Rift, passive investing, payday loans, peer-to-peer lending, Peter Thiel, post-industrial society, profit motive, quantitative easing, race to the bottom, recommendation engine, reserve currency, RFID, Richard Stallman, ride hailing / ride sharing, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, social graph, software patent, Steve Jobs, TaskRabbit, trade route, transportation-network company, Turing test, Uber and Lyft, Uber for X, unpaid internship, Y Combinator, young professional, Zipcar

Central currency is the transactional tool that has overwhelmed business itself; money is the tail wagging the economy’s dog. Financial services, slowly but inevitably, become the biggest players in the economy. Between the 1950s and 2006, the percentage of the economy (as measured by GDP) represented by the financial sector more than doubled, from 3 percent to 7.5 percent.13 This is why, as Thomas Piketty demonstrated in Capital in the Twenty-First Century, the rate of return on capital exceeds the growth rate of the economy.14 Money makes money faster than people or companies can create value. The richest people and companies should, therefore, position themselves as far away from working or creating things, and as close to the money spigot, as possible. Some companies, such as General Electric in the 1980s, understood this principle quite well and acted on it.

Andrew Keen, The Internet Is Not the Answer (New York: Atlantic Monthly Press, 2015). 43. Vivek Wadhwa, “The End of Chinese Manufacturing and Rebirth of U.S. Industry,” forbes.com, July 23, 2012. 44. Daniel Bell, The Coming of Post-Industrial Society: A Venture in Social Forecasting (New York: Basic Books, 1976). 45. David Rotman, “How Technology Is Destroying Jobs,” technologyreview.com, June, 12, 2013. 46. Ibid. 47. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap Press, 2014). 48. Bernard Lietaer, The Mystery of Money: Beyond Greed and Scarcity, 148 [PDF]. 49. Jeff Tyler, “Banks Demolish Foreclosed Homes, Raise Eyebrows,” Marketplace, American Public Media, October 13, 2011. Transcript available at www.marketplace.org/topics/business/banks-demolish-foreclosed-homes-raise-eyebrows/. 50.

Wilson, “Platform Monopolies.” 34. Betsy Corcoran, “Blackboard’s Jay Bhatt Strikes Up the Brass Band,” edsurge.com, July 23, 2014. 35. Justin Pope, “E-Learning Firm Sparks Controversy with Software Patent,” washingtonpost.com, October 15, 2006. 36. withknown.com. 37. Carlota Perez, Technological Revolutions and Financial Capital (Cheltenham, England: Edward Elgar Press, 2002). 38. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap Press, 2014). 39. Mario Preve, quoted in Ernst & Young and Family Business Network International, “Built to Last: Family Businesses Lead the Way to Sustainable Growth” (n.p.: Ernst & Young Global Limited, 2012), www.ey.com/Publication/vwLUAssets/EY-Built-to-last-family-businesses-lead-the-way-to-sustainable-growth/$FILE/EY-Built-to-last-family-businesses-lead-the-way-to-sustainable-growth.pdf. 40.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

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3D printing, Airbnb, American energy revolution, autonomous vehicles, Bakken shale, barriers to entry, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population

Much the same is true of the long-term unemployed, many of them older men without much education, who drift around, often drinking to pass the day, lacking much, if any, connection to society at large. For an awful lot of people, work has become a less certain and often less remunerative contributor to material security. It is a development that makes political forces of populist outsiders, such as Donald Trump and Marine Le Pen, and bestsellers of wonky economics books, such as Thomas Piketty’s Capital in the Twenty-First Century,10 an analysis of global inequality published in 2014 that flew off the shelves. Work is not just the means by which we obtain the resources needed to put food on the table. It is also a source of personal identity. It helps give structure to our days and our lives. It offers the possibility of personal fulfilment that comes from being of use to others, and it is a critical part of the glue that holds society together and smoothes its operation.

Worries and speculation have grown more intense and more common since 2011, when Erik Brynjolfsson and Andrew McAfee published Race Against the Machine,19 which laid out in compelling detail how quickly the capabilities of clever software and robots were improving. Authors like Martin Ford, whose 2015 book Rise of the Robots20 described a vision of a post-work world, argue that robots and machine intelligence will create a world wholly different from anything that has come before, and that a techno-socialism of sorts will need to be adopted to keep society functioning. Economist Thomas Piketty’s aforementioned masterpiece, Capital in the Twenty-First Century, set out a bold theory of inequality and predicted trouble ahead, as did Chris Hayes, whose book Twilight of the Elites21 was an incisive examination of the loss of faith in elite institutions and technocrats, who have struggled to manage recent economic change. Yet at the moment there is little agreement on how seriously to take automation concerns, how a transition to something like a jobless future might unfold and what ought to be done about it.

The rising tide didn’t wash away inequities, but it kept both capital and labour satisfied enough to hold the revolution at bay. From 1875 until the eve of the First World War, the world’s industrialized economies were extraordinarily unequal, but rising living standards for workers kept revolutionary fervour in check. Yet societies were not exactly living harmoniously, either. As Thomas Piketty notes, in Capital in the Twenty-First Century, it took the turmoil of the first half of the twentieth century to undo the inequality that developed in the nineteenth. War, taxation, inflation and economic depression destroyed many of the great fortunes of the industrial era. They ushered in an entirely new state structure, in which extensive taxation was used to fund massive welfare states. And that structure ensured that the rapid economic growth of the first few decades after the Second World War was highly egalitarian in nature.8 The taming of capitalism was not a smooth or easy or inevitable process, however.


pages: 524 words: 143,993

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

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air freight, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, Bretton Woods, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, forward guidance, Fractional reserve banking, full employment, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, price stability, private sector deleveraging, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen: Great Stagnation, very high income, winner-take-all economy

See ‘Moore’s Law’, http://en.wikipedia.org/wiki/Moore’s_law. 58. On the forces driving inequality and their consequences, see Organisation for Economic Co-operation and Development, Divided We Stand: Why Inequality Keeps Rising (Paris: OECD, 2011), Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers our Future (New York and London: Norton, 2012), and Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA, and London, England, 2014). 59. See, in particular, a remarkable paper by Christoph Lakner and Branco Milanovic of the World Bank, ‘Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession’, World Bank Research Working Paper 6719, December 2013, http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2013/12/11/000158349_20131211100152/Rendered/PDF/WPS6719.pdf. 60.

Mervyn King, ‘Banking from Bagehot to Basel, and Back Again’, 25 October 2010, The Second Bagehot Lecture, Buttonwood Gathering, New York City, http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech455.pdf, p. 18. 4. Luc Laeven and Fabian Valencia, ‘Systemic Crises Database: An Update’, International Monetary Fund Working Paper, WP/12/163, June 2102, http://www.imf.org/external/pubs/ft/wp/2012/wp12163.pdf. 5. This proposition is supported by Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA, and London: Harvard University Press, 2014). 6. For a detailed discussion of the evolution of real interest rates, see International Monetary Fund, World Economic Outlook, April 2014, ch. 3, http://www.imf.org/external/Pubs/ft/weo/2014/01/. 7. See the speech by Lawrence H. Summers at the 14th IMF Annual Research Conference in Honor of Stanley Fischer, 18 November 2013, http://larrysummers.com/imf-fourteenth-annual-research-conference-in-honor-of-stanley-fischer/.

On the risks of low inflation or even deflation in the Eurozone, see Reza Moghadam, Ranjit Tela and Pelin Berkmen, ‘Euro Area – “Deflation” Versus “Lowflation” ’, 24 March 2014, IMFdirect, http://blog-imfdirect.imf.org/2014/03/04/euro-area-deflation-versus-lowflation. 16. A fully worked out plan for such a reform is in Andrew Jackson and Ben Dyson, Modernising Money: Why our Monetary System is Broken and How it Can be Fixed (London: Positive Money, 2013). 17. See Andrew Smithers, The Road to Recovery: How and Why Economic Policy Must Change (London: Wiley, 2013). 18. See Piketty, Capital in the Twenty-First Century, Part Four. 19. For elements of the new Eurozone policy system, see ‘Stability and Growth Pact’, http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm; ‘Macroeconomic Imbalance Procedure’, http://ec.europa.eu/economy_finance/economic_governance/macroeconomic_imbalance_procedure/index_en.htm; ‘Treaty on Stability, Co-ordination and Governance’ (also known as the Fiscal Compact), http://european-council.europa.eu/media/639235/st00tscg26_en12.pdf; ‘European Semester’, http://ec.europa.eu/europe2020/making-it-happen; ‘Euro Plus Pact’, http://ec.europa.eu/europe2020/pdf/euro_plus_pact_background_december_2011_en.pdf; and ‘European Stability Mechanism’, http://www.esm.europa.eu/index.htm; ‘European Financial Supervision’, http://ec.europa.eu/internal_market/finances/committees; and ‘Banking Union’, http://ec.europa.eu/internal_market/finances/banking-union. 20.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

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accounting loophole / creative accounting, Airbnb, Ben Bernanke: helicopter money, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, winner-take-all economy, Wolfgang Streeck

The content and goal of this new social and economic order can no longer be the capitalistic pursuit of power and profit; it must lie in the welfare of our people.’ 9Ironically, it was in the aftermath of the two great wars of the twentieth century, in 1918 and 1945, respectively, that the working classes under capitalism made their most effective advances in the capitalist political economy (Piketty, Capital in the Twenty-First Century). 10I have sketched out this dynamic in Buying Time. 11Merkel, ‘Is Capitalism Compatible with Democracy?’, p. 126. 12Mair, Representative versus Responsible Government. 13See ‘Jürgen Habermas im Gespräch: Europa wird direkt ins Herz getroffen’, Frankfurter Allgemeine Zeitung, 29 May 2014. One interesting irony is that Juncker ascended to the presidency shortly after the publication of Thomas Piketty’s now famous book in which he demands a general wealth tax to correct the long-term and inherent increase in inequality under capitalism (Piketty, Capital in the Twenty-First Century). On the farce of last year’s ‘European election’ see Susan Watkins, ‘The Political State of the Union’. 14Merkel, ‘Is Capitalism Compatible with Democracy?’

‘SAC Starts to Balk over Insider Trading Inquiry’, New York Times, 17 May 2013, dealbook.nytimes.com, last accessed 30 November 2015. 45A fascinating example is the Koch brothers’ nurturing, over several decades, of James Buchanan’s Center for Study of Public Choice at George Mason University. See Nancy MacLean, Forget Chicago, It’s Coming from Virginia: The 1970s Genesis of Today’s Attack on Democracy, Unpublished Manuscript 2015. 46Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press 2014. 47An exception is David A. Stockman, ‘State-Wrecked: The Corruption of Capitalism in America’, New York Times, 31 March 2013, who may be considered particularly knowledgeable on the subject. 48‘Vernunft durch Strafen in Milliardenhöhe’, Frankfurter Allgemeine Zeitung, 29 June 2015, faz.net, last accessed 2 December 2015. The estimate seems far too low, given that another source names the same sum for Bank of America alone: John Maxfield, ‘The Complete List’, The Motley Fool, 1 October 2014, fool.com, last accessed 2 December 2015. 49‘Banken zahlen 260 Milliarden Dollar Strafe’, Frankfurter Allgemeine Zeitung, 24 August 2015, www.faz.net, last accessed 2 December 2015.

As long as they succeed in this, there is no need for American-style oligarchic neo-feudalism to be replicated, for example, in Western Europe. Given the structure of the contemporary capitalist world system, what matters for global oligarchic wealth defence, both politically and ideologically, is control over American politics to ensure, for example, that the American Congress will never agree to a global wealth tax as proposed, among others, by Thomas Piketty.46 As long as this is certain, it does not really matter who governs with what ambitions in France or Germany. The second disorder of capitalism to be briefly touched upon here is corruption. I use this concept broadly, beyond its definition in criminal law, to mean the gross violation of legal rules and the systematic betrayal of trust and moral expectations in pursuit of competitive success and personal or institutional enrichment, as elicited by rapidly growing opportunities for huge material gain in and around today’s political economy.


pages: 190 words: 53,409

Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop, income inequality, invisible hand, labor-force participation, labour mobility, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy

By every measure, markets have grown more competitive, and the most productive players have gained additional leverage since The Winner-Take-All Society’s publication in 1995. What’s also clear is that the economic forces that have been causing the spread and intensification of winner-take-all markets have by no means run their course. We can expect continued growth in the intensity of competition on the buyers’ side for the best talent, and on the sellers’ side for the top positions. In his widely discussed 2013 book, Capital in the Twenty-First Century, Thomas Piketty suggested yet another reason for rising inequality, which is the historical tendency for the rate of return on invested capital to exceed the overall growth rate for the economy.10 When that happens, he argues, wealth continues to concentrate in the hands of those who own the most capital. All things considered, then, it appears prudent to envision a future characterized by continued growth in income and wealth inequality—which is to say, a future in which chance events will become still more important.

You can review some of The Nepotist’s music videos here: http://thenepotist.com/videos/. 7. Xavier Gabaix and Augustin Landier, “Why Has CEO Pay Increased So Much?” Quarterly Journal of Economics 123.1 (2008): 49–100. 8. Adam Smith, The Wealth of Nations, book 1, chap. 10. 9. The Conference Board, “Departing CEO Age and Tenure,” June 13, 2014, https://www.conference-board.org/retrievefile.cfm?filename=TCB-CW-019.pdf&type=subsite. 10. Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, 2013. CHAPTER 4: WHY THE BIGGEST WINNERS ARE ALMOST ALWAYS LUCKY 1. High School Baseball Web, “Inside the Numbers,” http://www.hsbaseballweb.com/inside_the_numbers.htm. 2. See Wikipedia, List of World Records in Athletics, http://en.wikipedia.org/wiki/List_of_world_records_in_athletics#Men and http://en.wikipedia.org/wiki/Athletics_record_progressions. 3.

., 73 Alou brothers, 33 American Dream, the, 4, 145 American Economic Association, 25 American Economic Review, 28, 126, 133, 171 American Enterprise Institute, 127, 171 American Society of Civil Engineers, 87 Anderson, Chris, 47 antlers in bull elk, 116–18, 118 Apotheker, Léo, 53 Apple, 44, 49, 132 Arab Spring, 107 Archilla, Gustavo, 106 artificial intelligence, 70 attention scarcity, 48–49 attribution theory, 77 austerity policies, 134 availability heuristic, 79, 80 baby boomer retirements, 97, 127, 167 Baker Library, 36 Bartlett, Bruce, 90 Bartlett, Monica, 101 Baumeister, Roy, 75 Beatty, Warren, 23 behavioral economics, 69, 70, 96 Bernanke, Ben, 133–35 best seller, xiii, 45 Betamax, 44, 45 birth order effects, 32 birth-date effects: in hockey, 38; in the workplace, 38 Blackstone, 103 Blockbusters, 48 Bloomberg Business, 132 Bonaparte, Napoleon, 7 Boudreaux, Donald, 122 Breaking Bad, 24, 31, 68 British accent, 4 Broderick, Matthew, 24, 68 Brooklyn Dodgers, 142 Brooks, David, 83, 84 Buffett, Warren, 12, 39 Bush, George H. W., 90 Bush, George W., 90 Caan, James, 23 Cabrera, Miguel, 63 Calvino, Italo, 128 Campanella, Roy, 142 Canada, 20, 88, 106 Capital in the Twenty-First Century, 55 Carroll, Robert, 127 Casablanca, 87 Cayuga Lake, 6 CEO pay, 49–51 character assessment, 129–31 Clinton, Bill, 126 Clotfelter, Charles, 72 Congressional Budget Office, 90 conservatives, xi, 17, 83, 171 context and quality assessment, 122, 123; a formal model of, 123 Cook, Philip, 9, 41, 42, 72 Cook, Tim, 133 Coppola, Francis Ford, 23 Corleone, Michael, 23 Corleone, Vito, 23 Cornell University, 4, 25–29, 59, 67, 125, 143 CP/M (computer operating system), 35 Cranston, Bryan, 24, 68 Cusack, John, 24, 68 da Vinci, Leonardo, 22 Dalai Lama, 29 Darwin, Charles, 73, 115, 116, 121 Darwin Economy, The, 117 Davidai, Shai, 81 Delaplane, VA, 60 dentists, 51 Department of Motor Vehicles, 17–19 depressive realism, 73 DeSteno, David, 98–101 Detroit Tigers, 63 DeWall, Nathan, 103 Dickens, Charles, 102 Dickens, Mamie, 102 Digdon, Nancy, 102 Digital Research, 34, 35 divine intervention, 2 Domenici, Pete, 126 Econometrica, 28 economic pie, 16 Educational Longitudinal Survey, 144, 145 Edwards, Mike, 2 Elberse, Anita, 48 Electric Light Orchestra, 2 Emmons, Robert, 102 environment, xvi, 8, 13, 115, 119, 123, 143, 144 envy, 112, 122, 132 estate taxation, 166, 167 expenditure cascades, 112, 113, 121, 165, 169 expertise, 77 Federal Reserve Board of Governors, 134 Ferrari, 15, 16, 91, 119 52 Metro, 30 Fitzgerald, F.


pages: 165 words: 45,129

The Economics of Inequality by Thomas Piketty, Arthur Goldhammer

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affirmative action, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, conceptual framework, deindustrialization, Gini coefficient, income inequality, low skilled workers, means of production, moral hazard, purchasing power parity, Simon Kuznets, The Bell Curve by Richard Herrnstein and Charles Murray, very high income, working-age population

That is, the macroeconomic or functional distribution of national income and national wealth is substantially less stable than what I was taught in graduate school and what I report in this book. The large historical variations in top income shares also receive insufficient treatment in the present book, because the corresponding research became fully available only recently. Readers interested in a detailed account of that more recent research and the lessons that can be drawn from it are advised to consult the World Top Incomes Database (available online) and my book Capital in the Twenty-First Century (Belknap Press, 2014). Introduction The question of inequality and redistribution is central to political conflict. Caricaturing only slightly, two positions have traditionally been opposed. The right-wing free-market position is that, in the long run, market forces, individual initiative, and productivity growth are the sole determinants of the distribution of income and standard of living, in particular of the least well-off members of society; hence government efforts to redistribute wealth should be limited and should rely on instruments that interfere as little as possible with the virtuous mechanisms of the market—instruments such as Milton Friedman’s negative income tax (1962).

THE ECONOMICS OF INEQUALITY Thomas Piketty Translated by Arthur Goldhammer The Belknap Press of Harvard University Press CAMBRIDGE, MASSACHUSETTS LONDON, ENGLAND 2015 Copyright © 2015 by the President and Fellows of Harvard College All rights reserved First published as L’économie des inégalités copyright © Éditions La Découverte, Paris, France, 1997, 2008, 2014 Jacket design by Graciela Galup 978-0-674-50480-6 (hardcover) 978-0-674-91558-9 (EPUB) 978-0-674-91557-2 (MOBI) 978-0-674-91556-5 (PDF) The Library of Congress has cataloged the printed edition as follows: Piketty, Thomas, 1971– [L’économie des inégalités. English] The economics of inequality / Thomas Piketty ; translated by Arthur Goldhammer. pages cm Includes bibliographical references and index. 1.


pages: 293 words: 81,183

Doing Good Better: How Effective Altruism Can Help You Make a Difference by William MacAskill

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barriers to entry, Black Swan, Branko Milanovic, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Brooks, effective altruism, en.wikipedia.org, experimental subject, follow your passion, food miles, immigration reform, income inequality, index fund, Isaac Newton, job automation, job satisfaction, labour mobility, Lean Startup, M-Pesa, meta analysis, meta-analysis, microcredit, Nate Silver, Peter Singer: altruism, purchasing power parity, quantitative trading / quantitative finance, randomized controlled trial, self-driving car, Skype, Stanislav Petrov, Steve Jobs, Steve Wozniak, Steven Pinker, The Wealth of Nations by Adam Smith, universal basic income, women in the workforce

References to the 1 percent versus the 99 percent—i.e., the rest of the population—quickly became shorthand for the income gap in America. Inequality in America is getting starker over time: while typical household income grew by less than 40 percent between 1979 and 2007, the income of the richest 1 percent grew by 275 percent in that same time period. The French economist Thomas Piketty, who gained international fame for his 2014 book Capital in the Twenty-First Century, has suggested that the level of income inequality in the United States is “probably higher than in any other society at any time in the past, anywhere in the world.” This can lead those of us who aren’t in that 1 percent to feel powerless, but this focus neglects just how much power almost any member of an affluent country has. If people focus exclusively on American inequality, they’re missing an important part of the bigger picture.

In an effort to avoid technical vocabulary whenever possible, throughout this book I use “typical” to refer to “median,” and “average” to refer to “mean.” while typical household income: Congressional Budget Office, Trends in the Distribution of Household Income Between 1979 and 2007, October 2011, http://www.cbo.gov/sites/default/files/10-25-HouseholdIncome_0.pdf. “probably higher than in any other society”: Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), 265. Consider this graph of global income distribution: The data on world income distribution is drawn from several sources. The figures for between the richest 1 percent and the richest 21 percent are based on microdata from national household surveys carried out in 2008, kindly provided by Branko Milanovic. The figures for the poorest 73 percent are based on the 2008 data from PovcalNet (http://iresearch.worldbank.org/PovcalNet/index.htm?


pages: 318 words: 77,223

The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse by Mohamed A. El-Erian

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Airbnb, balance sheet recession, bank run, barriers to entry, Bretton Woods, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, collapse of Lehman Brothers, corporate governance, currency peg, Erik Brynjolfsson, eurozone crisis, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, Flash crash, forward guidance, friendly fire, full employment, future of work, Hyman Minsky, If something cannot go on forever, it will stop, income inequality, inflation targeting, Jeff Bezos, Kenneth Rogoff, Khan Academy, liquidity trap, Martin Wolf, megacity, Mexican peso crisis / tequila crisis, moral hazard, mortgage debt, oil shale / tar sands, price stability, principal–agent problem, quantitative easing, risk tolerance, risk-adjusted returns, risk/return, Second Machine Age, secular stagnation, sharing economy, sovereign wealth fund, The Great Moderation, The Wisdom of Crowds, too big to fail, University of East Anglia, yield curve

Federal Reserve Board of Governors, “Changes in US Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances,” Federal Reserve Bulletin 100, no. 4 (September 2014), http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf. 6. Rakesh Kochhar and Richard Fry, “Wealth Inequality Has Widened Along Racial, Ethnic Lines Since the End of the Great Recession,” Pew Research Center, December 12, 2014, http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/. 7. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014). 8. Mohamed A. El-Erian, “The Inequality Trifecta,” Project Syndicate, October 17, 2014, http://www.project-syndicate.org/commentary/imf-world-bank-annual-meetings-and-inequality-by-mohamed-a--el-erian-2014-10. 9. Madeline Ostrander, “What Poverty Does to the Young Brain,” New Yorker, June 4, 2015, http://www.newyorker.com/tech/elements/what-poverty-does-to-the-young-brain. 10.

As noted earlier, the expansion of their balance sheets has tended to support the wealthy since the latter hold a disproportionately large share of the financial assets being targeted for support by central bank action. Given all this, it should come as no surprise that there is now quite a bit of general interest in the matter. Recall how in 2014 a big economic tome (almost seven hundred pages, including research analysis and historical insights) on inequality by French economist Thomas Piketty shot up to the top of bestseller lists, triggering lots of discussions, panels, and interviews in the process.7 At the 2014 IMF–World Bank Annual Meeting in Washington, D.C., inequality was the most common topic in seminars organized by the official sector, industry groups, and think tanks. There is also a growing realization that the effects of inequality may well have evolved beyond questions of fairness, and beyond the threats it poses to social, geopolitical, and political well-being: Inequality also creates adverse economic feedback loops that make it much harder for the advanced countries to emerge from their generalized economic malaise.

Deep Work: Rules for Focused Success in a Distracted World by Cal Newport

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8-hour work day, Albert Einstein, barriers to entry, business climate, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, David Brooks, deliberate practice, Donald Trump, Downton Abbey, en.wikipedia.org, Erik Brynjolfsson, experimental subject, follow your passion, Frank Gehry, informal economy, information retrieval, Internet Archive, Jaron Lanier, knowledge worker, Mark Zuckerberg, Marshall McLuhan, Merlin Mann, Nate Silver, new economy, Nicholas Carr, popular electronics, remote working, Richard Feynman, Richard Feynman, Silicon Valley, Silicon Valley startup, Snapchat, statistical model, the medium is the message, Watson beat the top human players on Jeopardy!, web application, winner-take-all economy

The New Yorker, January 29, 2010, http://www.newyorker.com/online/blogs/georgepacker/2010/01/stop-the-world.html. The Metric Black Hole “A ‘free and frictionless’ method of communication” and other details of Tom Cochran’s e-mail experiment: Cochran, Tom. “Email Is Not Free.” Harvard Business Review, April 8, 2013. http://blogs.hbr.org/2013/04/email-is-not-free/. “it is objectively difficult to measure individual”: from page 509 of Piketty, Thomas. Capital in the Twenty-First Century. Cambridge, MA: Belknap Press, 2014. “undoubtedly true”: Manzi, Jim. “Piketty’s Can Opener.” National Review, July 7, 2014. http://www.nationalreview.com/corner/382084/pikettys-can-opener-jim-manzi. This careful and critical review of Piketty’s book by Jim Manzi is where I originally came across the Piketty citation. The Principle of Least Resistance “At first, the team resisted”; “putting their careers in jeopardy”; and “a better product delivered to the client” as well as a good summary of Leslie Perlow’s connectivity research can be found in Perlow, Leslie A., and Jessica L.

This example generalizes to most behaviors that potentially impede or improve deep work. Even though we abstractly accept that distraction has costs and depth has value, these impacts, as Tom Cochran discovered, are difficult to measure. This isn’t a trait unique to habits related to distraction and depth: Generally speaking, as knowledge work makes more complex demands of the labor force, it becomes harder to measure the value of an individual’s efforts. The French economist Thomas Piketty made this point explicit in his study of the extreme growth of executive salaries. The enabling assumption driving his argument is that “it is objectively difficult to measure individual contributions to a firm’s output.” In the absence of such measures, irrational outcomes, such as executive salaries way out of proportion to the executive’s marginal productivity, can occur. Even though some details of Piketty’s theory are controversial, the underlying assumption that it’s increasingly difficult to measure individuals’ contributions is generally considered, to quote one of his critics, “undoubtedly true.”

Of course, just because it’s hard to measure metrics related to deep work doesn’t automatically lead to the conclusion that businesses will dismiss it. We have many examples of behaviors for which it’s hard to measure their bottom-line impact but that nevertheless flourish in our business culture; think, for example, of the three trends that opened this chapter, or the outsize executive salaries that puzzled Thomas Piketty. But without clear metrics to support it, any business behavior is vulnerable to unstable whim and shifting forces, and in this volatile scrum deep work has fared particularly poorly. The reality of this metric black hole is the backdrop for the arguments that follow in this chapter. In these upcoming sections, I’ll describe various mind-sets and biases that have pushed business away from deep work and toward more distracting alternatives.


pages: 320 words: 87,853

The Black Box Society: The Secret Algorithms That Control Money and Information by Frank Pasquale

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Affordable Care Act / Obamacare, algorithmic trading, Amazon Mechanical Turk, asset-backed security, Atul Gawande, bank run, barriers to entry, Berlin Wall, Bernie Madoff, Black Swan, bonus culture, Brian Krebs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chelsea Manning, cloud computing, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, Debian, don't be evil, Edward Snowden, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, financial innovation, Flash crash, full employment, Goldman Sachs: Vampire Squid, Google Earth, Hernando de Soto, High speed trading, hiring and firing, housing crisis, informal economy, information retrieval, interest rate swap, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, Julian Assange, Kevin Kelly, knowledge worker, Kodak vs Instagram, kremlinology, late fees, London Interbank Offered Rate, London Whale, Mark Zuckerberg, mobile money, moral hazard, new economy, Nicholas Carr, offshore financial centre, PageRank, pattern recognition, precariat, profit maximization, profit motive, quantitative easing, race to the bottom, recommendation engine, regulatory arbitrage, risk-adjusted returns, search engine result page, shareholder value, Silicon Valley, Snapchat, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical arbitrage, statistical model, Steven Levy, the scientific method, too big to fail, transaction costs, two-sided market, universal basic income, Upton Sinclair, value at risk, WikiLeaks

Ben Austen, “The YouTube Laugh Factory: A Studio System for Viral Video,” 260 NOTES TO PAGES 86–90 Wired, December 16, 2011, http://www.wired.com /magazine/2011/12/ff_you tube/all /. 159. On the barriers to organization of digital labor, see Scholz, Digital Labor. 160. Lawrence Lessig, Remix: Making Art and Commerce Thrive in the Hybrid Economy (New York: Penguin, 2008), 128. 161. James Galbraith, The Predator State (New York: Free Press, 2008), xix. 162. Thomas Piketty, Capital in the Twenty-First Century (Cambridge: Harvard University Press, 2014): 571. 163. Turow, The Daily You. 164. Jerry Kang, “Race.Net Neutrality,” Journal on Telecommunications and High Technology Law 6 (2007): 9–10. 165. Ibid. See also Jack Balkin, “Media Access: A Question of Design,” George Washington Law Review 76 (2008): 933. 166. “Complaint of McGraw-Hill Companies, Inc.,” McGraw-Hill Companies, Inc. v.

MacKinnon, Consent of the Networked; Anupam Chander, “Facebookistan,” North Carolina Law Review 90 (2012): 1807–1844. 304 NOTES TO PAGES 214–218 95. For the strange career of neoliberal approaches to antitrust law, see Robert Van Horn and Philip Mirowski, “Reinventing Monopoly,” in The Road from Mount Pèlerin, ed. Philip Mirowski and Dieter Plehwe (Cambridge, MA: Harvard University Press, 2009), 219 ff. 96. C. Wright Mills, The Power Elite. New ed. (New York: Oxford University Press, 2000). First published 1956. 97. Thomas Piketty, Capital in the Twenty-First Century (Cambridge: Harvard University Press, 2014), 574. 98. Pope Francis, Evangelii Gaudium (Apostolic Exhortation), November 24, 2013, para. 55. Available at http://w2.vatican.va /content /francesco/en /apost _exhortations/documents/papa-francesco_esortazione-ap_20131124 _evangelii -gaudium.html. ACKNOWLEDGMENTS This book is based on ten years of research covering law, technology, and social science.

This allows them to offer data-driven targeting to advertisers, with whose handsome payments they can buy content, apps, and other enticements (the fruits of other people’s ingenuity) that draw a bigger audience still, and so on. The well-realized technological vision that attracts the initial user base deserves recompense. But it does not entitle present corporate leaders to endlessly leverage past success into future dominance. What Thomas Piketty said of unlimited capital accumulation applies as well to untrammeled tech giants: “the past devours the future.”162 The data advantage of the Silicon Valley giants may owe as much to fortuitous timing as to anything inherent in the firms themselves. Social theorist David Grewal has explained the “network power” of English as a lingua franca; it’s not “better” than other languages; it’s not easier to learn, or any more expressive.


pages: 558 words: 168,179

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer

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affirmative action, Affordable Care Act / Obamacare, anti-communist, Bakken shale, bank run, battle of ideas, Berlin Wall, Capital in the Twenty-First Century by Thomas Piketty, carried interest, centre right, clean water, Climategate, Climatic Research Unit, collective bargaining, crony capitalism, David Brooks, desegregation, diversified portfolio, Donald Trump, energy security, estate planning, Fall of the Berlin Wall, George Gilder, housing crisis, hydraulic fracturing, income inequality, invisible hand, job automation, low skilled workers, market fundamentalism, Mont Pelerin Society, More Guns, Less Crime, Nate Silver, New Journalism, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, oil shock, Plutocrats, plutocrats, Ralph Nader, Renaissance Technologies, road to serfdom, Ronald Reagan, school choice, school vouchers, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, the scientific method, University of East Anglia, Unsafe at Any Speed, War on Poverty, working poor

Hacker and Paul Pierson, Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class (Simon & Schuster, 2010), says in 2007 that the top 1 percent of earners took home 23.5 percent of the country’s income, when capital gains and dividends were factored in. Liberal critics: See Chrystia Freeland, Plutocrats: The Rise of the New Global Super-rich and the Fall of Everyone Else (Penguin, 2012), 3. “We are on the road”: Paul Krugman, speaking in an interview with Bill Moyers about Thomas Piketty’s book Capital in the Twenty-First Century. “What the 1% Don’t Want Us to Know,” BillMoyers.com, April 18, 2014. “Wealth begets power”: Joseph E. Stiglitz, “Of the 1%, by the 1%, for the 1%,” Vanity Fair, May 2011. Thomas Piketty: Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Belknap Press/Harvard University Press, 2014). “disconnect themselves”: Mike Lofgren, “Revolt of the Rich,” American Conservative, Aug. 27, 2012. Only one full guest list: The list was published by the Web site ThinkProgress, on October 20, 2010, in a news story by Lee Fang.

As the conservative Nobel Prize–winning economist Milton Friedman wrote, “A society that puts equality—in the sense of equality of outcome—ahead of freedom will end up with neither equality nor freedom…On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality.” In the new millennium, however, this consensus was beginning to fray. A growing number of academics studying the nexus of politics and wealth regarded the accelerating inequality in America as a threat not only to the economy but to democracy. Thomas Piketty, an economist at the Paris School of Economics, warned in his zeitgeist-shifting book, Capital in the Twenty-First Century, that without aggressive government intervention economic inequality in the United States and elsewhere was likely to rise inexorably, to the point where the small portion of the population that currently held a growing slice of the world’s wealth would in the foreseeable future own not just a quarter, or a third, but perhaps half of the globe’s wealth, or more.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

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3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar

713 http://www.economist.com/blogs/freeexchange/2012/06/innovation 714 Thomas Paine, Agrarian Justice, 1797 715 http://www.progress.org/banneker/chur.html 716 John Stuart Mill, Principles of Political Economy, 1848, quoted in Richard Reeves, John Stuart Mill: Victorian Firebrand, Atlantic: 2007 717 Friedrich Hayek, Individualism and Economic Order, University of Chicago: 1948. http://library.mises.org/books/Friedrich%20A%20Hayek/Individualism%20and%20Economic%20Order.pdf 718 http://www.worldbank.org/en/region/eca/publication/golden-growth 719 http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech442.pdf 720 http://www.lrb.co.uk/v34/n04/andrew-haldane/the-doom-loop 721 Facundo Alvaredo, Tony Atkinson, Thomas Piketty and Emmanuel Saez, “The World Top Incomes Database” http://topincomes.parisschoolofeconomics.eu/#Database: 722 Ibid. Table 4 723 Thomas Piketty, Capital in the Twenty-First Century, Harvard: 2014 724 David Sainsbury, Progressive Capitalism: How To Achieve Economic Growth, Liberty and Social Justice, Biteback: 2013 725 "Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.

The top 1 per cent earned 7.02 per cent of national income, nearly twice the 3.97 per cent they received in 1981, while the top 0.1 per cent obtained 2.19 per cent, nearly three times the 0.77 per cent they obtained in 1986. The top 0.01 per cent took home 0.75 per cent, nearly five times the 0.17 per cent they got in 1980. Looking at the Gini coefficient, a measure of a society’s overall income inequality, Britain and Italy are the most unequal societies in western Europe, while Denmark is the most equal, with Sweden just behind.722 The distribution of wealth is generally much more unequal. And as Thomas Piketty of the Paris School of Economics has pointed out, as growth slows and with it the creation of new wealth, old (inherited) fortunes weigh more heavily than before.723 A decent society should want to encourage effort and enterprise – by everyone, not just those who end up billionaires – without rewarding undeserved or unearned income. Battles between right and left about how high tax rates should be generally fail to make this distinction: those who want to cut taxes point to people like James Dyson, those who want to raise them point to Fred Goodwin.


pages: 261 words: 86,905

How to Speak Money: What the Money People Say--And What It Really Means by John Lanchester

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asset allocation, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamonds, Bretton Woods, BRICs, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, financial innovation, Flash crash, forward guidance, Gini coefficient, global reserve currency, high net worth, High speed trading, hindsight bias, income inequality, inflation targeting, interest rate swap, Isaac Newton, Jaron Lanier, joint-stock company, joint-stock limited liability company, Kodak vs Instagram, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, Plutocrats, plutocrats, Ponzi scheme, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Richard Feynman, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, South Sea Bubble, sovereign wealth fund, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trickle-down economics, Washington Consensus, working poor, yield curve

From there, it is a short move towards the politics of economics, maybe beginning with Ha-Joon Chang’s 23 Things They Don’t Tell You about Capitalism, a highly effective account of the arguments and evidence against neoliberal free-market orthodoxies. A number of very good recent books look at the effect of these policies in terms of their impact at the top end of the income distribution, and the consequences of that inequality for everyone else: Chrystia Freedland’s Plutocrats, Robert Frank’s Richistan, Jaron Lanier’s Who Owns the Future?, and George Packer’s The Unwinding. Spring 2014 saw the publication of Thomas Piketty’s masterpiece Capital in the Twenty-First Century, an important, powerful, and densly argued study of the shift in the balance of power between capital and labor. There is a notable gap in the market here: there are attacks on the existing neoliberal order, but there doesn’t seem to be a powerful popular counternarrative. It’s not as if there are no arguments on the economic and political right, and no one who believes and indeed acts on those arguments; but they aren’t well represented in book form.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010—about the same as the share of income they took home, an outcome that is not progressive at all. With such low effective tax rates—and, importantly, the low tax rate of 20 percent on income from capital gains—it’s not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation’s wealth, and the picture becomes even more disturbing.64 prop trading In proprietary trading, banks bet their own money for their own benefit, as opposed to making such trading only on behalf of their clients. It is supposed to be banned by the forthcoming Volcker rule. quantitative easing (QE) An “unconventional” technique used by governments and central banks when interest rates are too low to go down any further, but the need for economic stimulus still exists.

Undoing the Demos: Neoliberalism's Stealth Revolution by Wendy Brown

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Affordable Care Act / Obamacare, bitcoin, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, corporate governance, credit crunch, crowdsourcing, David Brooks, Food sovereignty, haute couture, immigration reform, income inequality, invisible hand, labor-force participation, late capitalism, means of production, new economy, obamacare, occupational segregation, Ronald Reagan, shareholder value, sharing economy, The Chicago School, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trickle-down economics, Washington Consensus, Wolfgang Streeck, young professional

“Remarks by the President in the State of the Union Address,” February n o t e s   225 12, 2013, White House Office of the Press Secretary, available at http://www. whitehouse.gov/the-press-office/2013/02/12/remarks-president-state-unionaddress, p. 1. 13. Ibid., pp. 1–9. The one exception to this was gun control, which may also explain why Obama gave up on it so quickly in 2013. 14. Ibid., p. 2. 15. Ibid., p. 4. 16. Ibid., p. 5. 17. Ibid., p. 6. 18. Ibid., p. 6. 19. Ibid., p. 7. 20. Ibid., p. 8. 21. Ibid., pp. 8–9. 22. See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014) and “Dynamics of Inequality,” an interview with Piketty, New Left Review 85 (January–February 2014). Many are arguing with Piketty’s policy prescriptions, few with his fundamental claim that capital accumulation without growth is at the bottom of intensifying inequality. 23. There are many other examples of the neoliberalization of social justice concerns by the Obama administration.

The first is intensified inequality, in which the very top strata acquires and retains ever more wealth, the very bottom is 28  u n d o in g t h e d e m o s literally turned out on the streets or into the growing urban and suburban slums of the world, while the middle strata works more hours for less pay, fewer benefits, less security, and less promise of retirement or upward mobility than at any time in the past half century. While they rarely use the term “neoliberalism,” this is the emphasis of the valuable critiques of Western state policy offered by economists Robert Reich, Paul Krugman, and Joseph Stiglitz and of development policy offered by Amartya Sen, James Ferguson, and Branko Milanvic, among others.24 Growing inequality is also among the effects that Thomas Piketty establishes as fundamental to the recent past and near future of post-Keynesian capitalism. The second criticism of neoliberal state economic policy and deregulation pertains to the crass or unethical commercialization of things and activities considered inappropriate for marketization. The claim is that marketization contributes to human exploitation or degradation (for example, Third World baby surrogates for wealthy First World couples), because it limits or stratifies access to what ought to be broadly accessible and shared (education, wilderness, infrastructure), or because it enables something intrinsically horrific or severely denigrating to the planet (organ trafficking, pollution rights, clearcutting, fracking).


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How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy by Mehrsa Baradaran

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access to a mobile phone, affirmative action, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, cashless society, credit crunch, David Graeber, disintermediation, diversification, failed state, fiat currency, financial innovation, financial intermediation, Goldman Sachs: Vampire Squid, housing crisis, income inequality, Internet Archive, invisible hand, Kickstarter, M-Pesa, McMansion, microcredit, mobile money, moral hazard, mortgage debt, new economy, Own Your Own Home, payday loans, peer-to-peer lending, price discrimination, profit maximization, profit motive, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, Ronald Reagan: Tear down this wall, savings glut, the built environment, the payments system, too big to fail, trade route, transaction costs, unbanked and underbanked, underbanked, union organizing, white flight, working poor

The eventual downturn that “white flight” created in these urban areas also resulted in “bank flight” as private business followed the white customers out. The social contract forged during the Great Depression stabilized U.S. banking for several decades. For fifty years, the banking sector experienced measured growth and success while the rest of the economy generally thrived. This growth and stability coincided with exceptional international economic growth. As Thomas Piketty explains in Capital in the Twenty-First Century, the time between the Great Depression and the 1970s marked a unique period in world history of relative equalities of wealth and remarkable economic growth.89 Surely, sustained economic growth contributed to a stable and successful banking system. And so did the federal deposit insurance fund, which succeeded in finally ending the confidence-destroying runs that had historically wreaked havoc on banks.

Freddie Mac, “Company Profile,” accessed September 30, 2014, www.freddiemac.com/corporate/company_profile/. 88. For a comprehensive discussion of “redlining,” see Charles Lewis Nier, III, “The Shadow of Credit: The Historical Origins of Racial Predatory Lending and its Impact upon African American Wealth Accumulation,” University of Pennsylvania Journal of Law and Social Change (2008). 89. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press: 2014), 80. 90. Martin Luther King Jr., “I Have a Dream,” accessed March 19, 2015, www.thekingcenter.org/archive/document/i-have-dream-1. 91. Richard Scott Carnell, Jonathan R. Macey, and Geoffrey P. Miller, The Law of Banking and Financial Institutions, 350 (New York: Aspen Publishers, 2009). 92. Jan Blakeslee, “ ‘White Flight’ to the Suburbs: A Demographic Approach,” University of Wisconsin Institute for Research on Poverty Newsletter Vol. 3, No. 2 (1978–1979), 1. 93.

Before the civil-rights-era laws forbidding discrimination in banking were passed, many blacks were left out of the mainstream banking institutions. Many blacks had to form their own institutions—black-owned banks. The story of black banking is too rich to be summarized in this text but will be the topic of the author’s future research and study. 36. Regulation Q, 12 CFR §217. 37. Thomas Picketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). 38. Connecticut Department of Banking, “ABCs of Banking,” accessed March 17, 2015, www.ct.gov/dob/cwp/view.asp?a=2235&q=297892. 39. “The relaxation of restrictions on intrastate branching and interstate banking that took place in the 1980s and early 1990s facilitated both mergers and consolidations. While only sixteen states permitted unrestricted intrastate branching in 1984, by 1994 the number had risen to forty.


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The Health Gap: The Challenge of an Unequal World by Michael Marmot

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active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, lump of labour, Mahatma Gandhi, meta analysis, meta-analysis, microcredit, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, urban planning, Washington Consensus, Winter of Discontent, working poor

I have long harboured a wish to adapt her most famous opening line, and write: ‘It is a truth universally acknowledged that a single man not in possession of a good fortune must be in want of a life.’ Single, poor, his prospects for life expectancy are not good.) Large inequalities of wealth and income and a preponderance of inherited wealth characterised nineteenth-century Britain and France. These insights and the concern that we may be heading that way again are the message of Thomas Piketty’s Capital in the Twenty-First Century. For a 685-page economics book, published by a university press, to become a best-seller – it sold out within days, and was likely to have sold 200,000 copies within three months – and for its author, a serious French economics professor, to become a superstar, Capital must be tapping in to something important. It is. There are two issues that Piketty highlights: growing inequalities of wealth and income and the fact that, in the future, much of the wealth will be inherited rather than earned.

But half the people in the world have less than $3,650 each; and the richest 20 per cent have 94.5 per cent of all the wealth. What the figures on income and wealth show is that there are oceans of money sloshing about. It is not easy to maintain the fiction that we do not have enough money to do good things. The problem is that, within countries, the concentration of wealth is becoming more extreme. That was the message of Piketty’s Capital in the Twenty-First Century. At the same time as wealth concentration is increasing, all across Europe and the US we are being lectured to on the dire importance of austerity. Public services have to be cut back because . . . because . . . we cannot afford them? John Maynard Keynes, immediately after the Second World War, wrote: ‘The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behaviour and religion.’8 In country after country, too much of our public conversation is about how we can grow national income, too little about how we can improve society.

Available from: http://dx.doi.org. 12Lundberg O, Aberg Yngwe M, Kolegard Stjarne M, Bjork L, Fritzell J. The Nordic Experience: welfare states and public health (NEWS). Health Equity Studies. 2008; 12. 13Woolf SH, Aron L, editors. U.S. Health in International Perspective: Shorter Lives, Poorer Health. National Research Council; Institute of Medicine. Washington, DC: The National Academies Press, 2013. 14Stiglitz J. The Price of Inequality. New York: Penguin, 2013. 15Piketty T. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press, 2014. 16Vardi N. The 25 Highest-Earning Hedge Fund Managers and Traders. Forbes. 2014. 17Ostry JD, Berg A, Tsangarides CG. IMF Staff Discussion Note: Redistribution, Inequality, and Growth. International Monetary Fund, 2014. 18Sen A. Inequality Reexamined. Oxford: Oxford University Press, 1992. 19Dahl E, van der Wel KA. Educational inequalities in health in European welfare states: a social expenditure approach.


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Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World by Don Tapscott, Alex Tapscott

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Airbnb, altcoin, asset-backed security, autonomous vehicles, barriers to entry, bitcoin, blockchain, Bretton Woods, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, cloud computing, cognitive dissonance, corporate governance, corporate social responsibility, Credit Default Swap, crowdsourcing, cryptocurrency, disintermediation, distributed ledger, Donald Trump, double entry bookkeeping, Edward Snowden, Elon Musk, Erik Brynjolfsson, ethereum blockchain, failed state, fiat currency, financial innovation, Firefox, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, Galaxy Zoo, George Gilder, glass ceiling, Google bus, Hernando de Soto, income inequality, informal economy, interest rate swap, Internet of things, Jeff Bezos, jimmy wales, Kickstarter, knowledge worker, Kodak vs Instagram, Lean Startup, litecoin, Lyft, M-Pesa, Mark Zuckerberg, Marshall McLuhan, means of production, microcredit, mobile money, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer lending, performance metric, Peter Thiel, planetary scale, Ponzi scheme, prediction markets, price mechanism, Productivity paradox, quantitative easing, ransomware, Ray Kurzweil, renewable energy credits, rent-seeking, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, seigniorage, self-driving car, sharing economy, Silicon Valley, Skype, smart contracts, smart grid, social graph, social software, Stephen Hawking, Steve Jobs, Steve Wozniak, Stewart Brand, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, The Wisdom of Crowds, transaction costs, Turing complete, Turing test, Uber and Lyft, unbanked and underbanked, underbanked, unorthodox policies, X Prize, Y2K, Zipcar

Anyone who has been jobless knows how it erodes self-esteem and well-being. Those with power and wealth are getting ahead, and those without are falling behind. This new prosperity paradox, not to be confused with the intergenerational “Paradox of Prosperity” coined by economists such as Gilbert Morris, has befuddled every policy maker in the Western world. One of the best-selling business books of 2014, Capital in the Twenty-First Century by Thomas Piketty, became the #1 best seller on the New York Times hardcover nonfiction list in 2014. A tour de force of academic scholarship, Capital explains why inequality is accelerating and will likely continue to do so as long as the return on capital exceeds long-term economic growth. The rich have gotten richer because their money made them more money than their work did. Hence, the proliferation of new millionaires and billionaires.

Ibid. 7. www.worldbank.org/en/news/press-release/2015/04/15/massive-drop-in-number-of-unbanked-says-new-report; and C. K. Prahalad, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Philadelphia: Wharton School Publishing, 2009). This figure is an estimate. 8. Interview with Joyce Kim, June 12, 2015. 9. www.ilo.org/global/topics/youth-employment/lang—en/index.htm. 10. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, Mass.: Belknap Press, 2014). 11. www.brookings.edu/~/media/research/files/papers/2014/05/declining%20business%20dynamism%20litan/declining_business_dynamism_hathaway_litan.pdf. 12. Ruth Simon and Caelainn Barr, “Endangered Species: Young U.S. Entrepreneurs,” The Wall Street Journal, January 2, 2015; www.wsj.com/articles/endangered-species-young-u-s-entrepreneurs-1420246116. 13.

Airbnb, 115–17 Big Seven, 128–42 distributed applications, 117–22 distributed autonomous enterprises, 126–28 hacking your future, 142–44 Buterin, Vitalik, 87–88, 262, 278–80 autonomous agents, 123, 125 consensus mechanisms, 31 futarchy, 220 re-architecting the firm, 18, 87–88, 96, 100–101 Buzzcar, 137 Byrne, David, 227 Byrne, Patrick, 83 Byzantine Generals’ Problem, 241 Cabell, James Branch, 277 California Public Employees’ Retirement System, 77 Campus microgrids, 148 “Canonical persona,” 16, 140 Cap-and-trade system, 222–23 Capital in the Twenty-First Century (Piketty), 173, 175 Carlyle, James, 69 Cars, 137, 164–67, 165–67 Cavoukian, Ann, 27, 28, 41, 42, 51–52, 275 CBW Bank, 73 Ceglowski, Maciej, 254, 275 Central banks (banking), 9, 31, 57, 286–87, 293–96, 309 Cerf, Vint, 274, 281, 299 Chain (company), 67–68 Chamber of Digital Commerce, 208, 287, 288, 302, 303 Change.org, 304 Chase, Robin, 137 Chaum, David, 4, 219 Chesky, Brian, 135 China, 13, 56, 174, 243–45, 264, 266–67, 272 Choi, Constance, 288, 307 Christie, Chris, 98 Circle, 83, 284 Circle Internet Financial, 71–72 Cisco Quad, 139 Civil Justice Council, U.K., 221 Clark, David, 281 Clark, Jeremy, 215 Climate change, 149, 221–23 Cloud computing, 118, 122 Coalition for Automated Legal Applications (COALA), 301–2, 303 Coase, Ronald, 74, 92–93, 100, 105, 121, 142, 319n Cohen, Bram, 119, 262 Coinbase, 44, 83–84, 284, 302 Coin Center, 286, 287, 302, 303 CoinPip, 217 Collaboration, 139–42 Collins, John, 302 Colu, 238 CommitCoin, 215 “Commons-based peer production,” 129 Competitive advantage, 64, 66, 110–11, 140 Complex instruction set computer (CISC), 260–61 CompuServe, 118 Computer viruses, 122, 123 Computing, evolution of, 150–52 Conflict adjudication, 100, 105, 219, 221 Conflicts of interest, 100, 125 Consensus mechanisms, 30–33, 36–37, 95, 98, 262, 266, 305 Consensus Systems (ConsenSys), 15, 87–92, 99, 101, 112–14, 130 Consideration, 10, 30 Conspiracy theories, 213 Content ID, 235 Contract breaches, 104, 258 Contracting costs, 99–101 Contracts.


pages: 829 words: 229,566

This Changes Everything: Capitalism vs. The Climate by Naomi Klein

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1960s counterculture, battle of ideas, Berlin Wall, big-box store, bilateral investment treaty, British Empire, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, Climategate, cognitive dissonance, colonial rule, Community Supported Agriculture, complexity theory, crony capitalism, decarbonisation, deindustrialization, dematerialisation, Donald Trump, Downton Abbey, energy security, energy transition, equal pay for equal work, Exxon Valdez, failed state, Fall of the Berlin Wall, feminist movement, financial deregulation, food miles, Food sovereignty, global supply chain, hydraulic fracturing, ice-free Arctic, immigration reform, income per capita, Internet Archive, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, market fundamentalism, moral hazard, Naomi Klein, new economy, Nixon shock, Occupy movement, offshore financial centre, oil shale / tar sands, open borders, patent troll, planetary scale, post-oil, profit motive, quantitative easing, race to the bottom, Ralph Waldo Emerson, Rana Plaza, Ronald Reagan, smart grid, special economic zone, Stephen Hawking, Stewart Brand, structural adjustment programs, Ted Kaczynski, the scientific method, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, transatlantic slave trade, trickle-down economics, Upton Sinclair, uranium enrichment, urban planning, urban sprawl, wages for housework, walkable city, Washington Consensus, Whole Earth Catalog, WikiLeaks

And each news story about an Italian or Greek pensioner who took his or her own life rather than try to survive under another round of austerity is a reminder of how many lives continue to be sacrificed for the few. The failure of deregulated capitalism to deliver on its promises is why, since 2009, public squares around the world have turned into rotating semipermanent encampments of the angry and dispossessed. It’s also why there are now more calls for fundamental change than at any point since the 1960s. It’s why a challenging book like Thomas Piketty’s Capital in the Twenty-First Century, exposing the built-in structures of ever-increasing wealth concentration, can sit atop bestseller lists for months, and why when comedian and social commentator Russell Brand went on the BBC and called for “revolution,” his appearance attracted more than ten million YouTube views.66 Climate change pits what the planet needs to maintain stability against what our economic model needs to sustain itself.

Department of Energy, Office of Energy Efficiency and Renewable Energy, June 14, 2013, http://energy.gov; “Greenhouse Gas 100 Polluters Index,” Political Economy Research Institute, University of Massachusetts Amherst, June 2013, http://www.peri.umass.edu. 47. Borgar Aamaas, Jens Borken-Kleefeld, and Glen P. Peters, “The Climate Impact of Travel Behavior: A German Case Study with Illustrative Mitigation Options,” Environmental Science & Policy 33 (2013): 273, 276. 48. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard University Press, 2014); Gar Lipow, Solving the Climate Crisis through Social Change: Public Investment in Social Prosperity to Cool a Fevered Planet (Santa Barbara: Praeger, 2012), 56; Stephen W. Pacala, “Equitable Solutions to Greenhouse Warming: On the Distribution of Wealth, Emissions and Responsibility Within and Between Nations,” presentation to International Institute for Applied Systems Analysis, November 2007, p. 3. 49.

., 211–12, 328 cadmium, 176 Caldeira, Ken, 263–64, 271 Calgary, Canada, 2, 245–49 California, 13, 52, 347 California, University of: at Davis, Institute of Transportation Studies at, 101 at Irvine, 14 Cameron, David, 7, 106–7, 110, 149, 251 Cameron, James, 449 Canada, 11, 17, 19, 71, 83, 143 divestment movement in, 354 environmental legislation in, 202 extractive industry subsidies in, 127 fossil fuels in, 69, 79, 178 fracking in, 299, 303–4, 313 government attacks on Indigenous land rights in, 381–82 government repression of environmental protest in, 299, 303 politics of climate change in, 36, 46 pro-mining policies of, 382 S&P rating of, 368 tar sands in, see Alberta tar sands weakening of environmental protections in, 381–82 Canadian Association of Petroleum Producers, 149 Canadian Auto Workers Union, 122 Canadian Centre for Policy Alternatives, 70, 129, 400 Canadian Natural Resources, 281 Canadian Security Intelligence Service, 362 cancer, tar sands linked to, 327 cap-and-trade system, 208, 218, 226–29, 287 cap and dividend, 118 capitalism, 22, 25, 38–39, 47, 61, 88, 89, 125, 158, 159, 176, 179, 228n, 233, 450 and attempts to mitigate climate change, 230–55 climate change as argument against, 157 climate change regulation seen as threat to, 31, 33 conservation and, 185–86 deregulated, 18, 20, 75, 154 disaster, 51, 109, 154, 233 fossil fuels and, 175, 176 Gaia, 231 industrial, 173–74, 177 nature vs., 177, 186 rebranding of, 252 see also free-market ideology Capital in the Twenty-First Century (Piketty), 154–55 carbon: atmospheric, 109 high-risk, 130 new sources of, 141 carbon bubble, 358 carbon budget, collective, 153 carbon cowboys, 220–21 carbon credits, 305 carbon dioxide, 143 recycling into products, 246–47 carbon emissions, 14, 23, 79 caps on, 118, 141, 208, 218, 226–29, 287 climate debt and, 409 cutting of, see carbon reduction of developing world, 409–10 historical evidence for, 415, 452 Industrial Revolution and increase in, 175–76, 409 rising levels of, 4, 11, 13, 14–15, 26 of U.S., 113, 409 wartime activities and, 17 wealth and, 113–14 see also greenhouse gas emissions Carbon Engineering, 281 carbon footprint, 77, 144, 178, 235, 247, 248, 288 carbon markets, 211, 218–25, 233 failure of, 224–25, 252 carbon offsets, 8, 39, 212, 251, 287 ineffectiveness of, 223–24, 387 carbon sequestration, 134, 218, 221–23, 232, 245, 247–48, 284, 439 carbon-sucking machines, 236, 244, 245, 254, 257, 260, 263, 279, 288 carbon taxes, 112, 114, 125, 157, 218, 250, 400, 461 Carbon Tracker Initiative, 148 carbon trading, 39, 87, 124, 125, 199–201, 208, 218, 226–29, 287, 418 Carbon War Room, 199, 264 Cargill, 89 Caribbean, 240, 414–15 caribou, 435 Carleton College, 401 Carmichael, Ruth, 433–34 cars, 16, 90–91, 116, 210 Carson, Rachel, 185, 201, 207, 286, 337 Carter, Bob, 33, 47 Carter, Jimmy, 116–17, 205 Carter, Nick, 349 Case for Climate Engineering, A (Keith), 275 Casselton, N.Dak., 312, 333 Castro, Rodrigo, 161 Caterpillar, 227 Cato Institute, 32, 33, 36, 39, 45, 142 CBC, 362 CBS This Morning, 288 cell phones, 91n Cenovus, 349 Center for American Progress, 111 Center for Biological Diversity, 206 Center for Strategic and International Studies, 53 Center for Sustainable Shale Development (CSSD), 216, 356n Central America, sweatshops in, 81 Centre for Science and Environment, 96, 414 Centrica, 149 centrism, 22, 59, 83 Cha, J.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

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3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yield management

The American Grocery Store: The Business Evolution of an Architectural Space. Westport, CT/London: Greenwood Press. McCarthy, Jeanette J., McLeod, Howard L., and Ginsburg, Geoffrey S. (2013). “Genomic Medicine: A Decade of Successes, Challenges, and Opportunities,” Science Translational Medicine 5, no. 189: 189sr4. McCloskey, Deidre. (2014). “Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capital in the Twenty-First Century,” Erasmus Journal of Philosophy and Economics 7, no. 2: 73–115. McDowell, M. S. (1929). “What the Agricultural Extension Service Has Done for Agriculture,” Annals of the American Academy of Political and Social Science 142 (March): 250–56. McIntosh, Elaine N. (1995). American Food Habits in Historical Perspective. Westport, CT/London: Praeger. McKee, John M. (1924). “The Automobile and American Agriculture,” Annals of the American Academy of Political and Social Science 115 (November): 12–17.

Phillips, Ronnie J. (2000). “Digital Technology and Institutional Change from the Gilded Age to Modern Times: The Impact of the Telegraph and the Internet,” Journal of Economic Issues 34, no. 2 (June): 266–89. Pierce, Bessie Louise. (1957). A History of Chicago, vol. III: The Rise of a Modern City 1871–1893. Chicago, IL/London: University of Chicago Press. Piketty, Thomas. (2014). Capital in the Twenty-First Century. Cambridge, MA/London: Belknap Press of Harvard University Press. Piketty, Thomas, and Emmanuel Saez. (2003). “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (February): 1–39. Pinker, Steven. (2011). The Better Angels of Our Nature: The Decline of Violence in History and Its Causes. London: Allen Lane. Pletz, John. (2015). “No More Pens, No More Books,” Crain’s Chicago Business, April 20, p. 4.

A symbol of rising inequality, a topic treated in chapter 18, is the ever-growing chasm between domestic travel in economy class and the quality of the premium cabin on international flights, whether from San Francisco to Hong Kong or from Seattle to Amsterdam. As stated by the Economist in its issue of September 20, 2014: Nowadays those at the cheap end of the plane barely have room to open their copies of Thomas Piketty’s Capitalism, at the top of the national best-seller lists for its lament about the new age of inequality. Airlines keep cramming more bodies into economy class while passengers, despite their moans, regard this as a fair tradeoff for cheap fares. But in the front of the cabin carriers have made seats as plush as first class seats used to be a few years earlier.48 One exception to the discomfort of economy-class air travel is the spread of inflight entertainment options.


pages: 237 words: 64,411

Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence by Jerry Kaplan

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Affordable Care Act / Obamacare, Amazon Web Services, asset allocation, autonomous vehicles, bank run, bitcoin, Brian Krebs, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, combinatorial explosion, computer vision, corporate governance, crowdsourcing, en.wikipedia.org, Erik Brynjolfsson, estate planning, Flash crash, Gini coefficient, Goldman Sachs: Vampire Squid, haute couture, hiring and firing, income inequality, index card, industrial robot, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Loebner Prize, Mark Zuckerberg, mortgage debt, natural language processing, Own Your Own Home, pattern recognition, Satoshi Nakamoto, school choice, Schrödinger's Cat, Second Machine Age, self-driving car, sentiment analysis, Silicon Valley, Silicon Valley startup, Skype, software as a service, The Chicago School, Turing test, Watson beat the top human players on Jeopardy!, winner-take-all economy, women in the workforce, working poor, Works Progress Administration

Income data is from the World DataBank, “GNI per Capita, PPP (Current International $)” table, accessed November 29, 2014, http://databank.worldbank.org/data/views/reports/tableview.aspx#. 4. For example, Robert Reich (http://en.wikipedia.org/wiki/Robert_Reich, last modified December 31, 2014); Paul Krugman (http://en.wikipedia.org/wiki/Paul_Krugman, last modified December 12, 2014); and the recent influential book by Thomas Piketty, Capital in the Twenty-first Century (Cambridge, Mass.: Belknap, 2014). 5. This analogy relies primarily on income data from the U.S. Census (http://www.census.gov/hhes/www/income/data/historical/families/index.html, last modified September 16, 2014). 6. I recall as a child buying packs of “chocolate cigarettes” (cylindrical sticks of candy wrapped in rolling papers). 7. However, high homeownership rates have a strong negative effect on employment because people can’t easily migrate to follow the jobs.


pages: 274 words: 93,758

Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller

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Andrei Shleifer, asset-backed security, Bernie Madoff, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, en.wikipedia.org, endowment effect, equity premium, financial intermediation, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, late fees, loss aversion, Menlo Park, mental accounting, Milgram experiment, moral hazard, new economy, payday loans, Ponzi scheme, profit motive, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, wage slave

Auerbach (Chicago: University of Chicago Press, 1988), pp. 33–68. 30. Brian Hindo and Moira Herbst, “Personal Best Timeline, 1986: ‘Greed Is Good,’ ” BusinessWeek, http://www.bloomberg.com/ss/06/08/personalbest _timeline/source/7.htm. 31. Bruck, The Predators’ Ball, p. 320. 32. Bruck, The Predators’ Ball. 33. FDIC v. Milken, pp. 70–71. 34. Alison Leigh Cowan, “F.D.I.C. Backs Deal by Milken,” New York Times, March 10, 1992. 35. See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), p. 291, fig. 8.5, and p. 292, fig. 8.6. 36. Andrei Shleifer and Robert W. Vishny, “The Takeover Wave of the 1980s,” Science 249, no. 4970 (1990): 745–49. Chapter Eleven: The Resistance and Its Heroes 1. For 2013. World Bank, “Life Expectancy at Birth, Male (Years)” and “Life Expectancy at Birth, Female (Years),” accessed March 29, 2015, http://data .worldbank.org/indicator/SP.DYN.LE00.MA.IN/countries and http://data .worldbank.org/indicator/SP.DYN.LE00.FE.IN/countries. 2.

“Bill to Let Medicare Negotiate Drug Prices Is Blocked.” New York Times, April 18, 2007. Last accessed April 30, 2015. http://www .nytimes.com/2007/04/18/washington/18cnd-medicare.html?_r=0. “The Personal Reminiscences of Albert Lasker.” American Heritage 6, no. 1 (December 1954). Accessed May 21, 2015. http://www.americanheritage .com/content/personal-reminiscences-albert-lasker. Piketty, Thomas. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press, 2014. Pizzo, Stephen, Mary Fricker, and Paul Muolo. Inside Job: The Looting of America’s Savings and Loans. New York: Harper Perennial, 1991. “Poor Beer vs. Pure Beer.” Advertisement reproduced in Current Adver­ tising 12, no. 2 (August 1902): 31. Accessed June 13, 2015. https://books .google.com/books?id=Xo9RAAAAYAAJ&pg=RA1-PA31&lpg=RA1-PA31&dq =schlitz+beer+both+cost+you+alike,+yet+one+costs+the+maker+twice+as +much+as+the+other+one+is+good+and+good+for+you&source=bl&ots =5jCKe1yFqB&sig=-X5uwF5VqK6BicU41zneHyNRMmU&hl=en&sa=X&ei BIBLIOGR APHY Akerlof.indb 197 197 6/19/15 10:24 AM =1lp2VbPQEc6VyATjjoOYCA&ved=0CB4Q6AEwAA#v=onepage&q=schlitz %20beer%20both%20cost%20you%20alike%2C%20yet%20one%20costs% 20the%20maker%20twice%20as%20much%20as%20the%20other%20one %20is%20good%20and%20good%20for%20you&f=false.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

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3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, autonomous vehicles, banking crisis, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, computer age, debt deflation, deskilling, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, John von Neumann, Khan Academy, knowledge worker, labor-force participation, labour mobility, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, performance metric, Peter Thiel, Plutocrats, plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Richard Feynman, Rodney Brooks, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

Excessive risk aversion could lead to less entrepreneurship, lower incomes, and less vibrant market demand.* Yet another problem, of course, is paying for these equity endowments. My guess is that redistribution of vast amounts of capital would prove even more politically toxic than would be the case for income. One possible mechanism for prying wealth away from its current owners was proposed by Thomas Piketty in his book Capital in the Twenty-First Century: a global tax on wealth. Such a tax would require cooperation between nations in order to avoid massive capital flight into lower-tax jurisdictions. Nearly everyone (including Piketty) agrees that this would be impractical for the foreseeable future. Piketty’s book, which was deluged with attention in 2014, argues that future decades are likely to be marked by an inevitable progression toward increased inequality of both income and wealth.

., 214–215 Bernanke, Ben, 37 big data, xv, 25n, 86–96 collection of, 86–87 correlation vs. cause and, 88–89, 102 deep learning and, 92–93 health care and, 159–160 knowledge-based jobs and, 93–96 machine learning and, 89–92 The Big Switch (Carr), 72 Bilger, Burkhard, 186 “BinCam,” 125n “Bitter Pill” (Brill), 160 Blinder, Alan, 117–118, 119 Blockbuster, 16, 19 Bloomberg, 113–114 Bluestone, Barry, 220 Borders, 16 Boston Consulting Group, 9 Boston Globe (newspaper), 149 Boston Red Sox, 83 Boston University, 141 Bowley, Arthur, 38 Bowley’s Law, 38–39, 41 box-moving robot, 1–2, 5–6 brain, reverse engineering of human, 237 breast cancer screening, 152 Brill, Steven, 160, 163 Brin, Sergey, 186, 188, 189, 236 Brint, Steven, 251 Brooks, Rodney, 5 Brown, Jerry, 134 Brynjolfsson, Erik, 60, 122, 254 Bureau of Labor Statistics, 13, 16, 38n, 158, 222–223, 281 Bush, George W., 116 business interest lobbying, economic policy and, 57–58 “Busy child scenario,” (Barrat) 238–239 Calico, 236 California Institute of Technology, 133 Canada, 41, 58, 167n, 251 “Can Nanotechnology Create Utopia?” (Kaku), 247n capital individual endowments of, 273–275 taxes on, 277–278 Capital in the Twenty-First Century (Piketty), 275 capitalism, drive to automate and, 255–256 Car and Driver (magazine), 185 carbon-based materials, 70, 70n carbon nanotubes, 70n, 245 carbon tax, 272 Carr, Nicholas, 72, 254, 256, 257 cars, autonomous, xiii, 94, 176, 181–191 cause, big data and correlation vs., 102 CBE. See competency-based education (CBE) CBS News, 249 CDOs. See collateralized debt obligations (CDOs) Center for Economic and Policy Research, 171n Central Intelligence Agency, 46, 85 cervical cancer screening, 152–153 chargemaster prices, 160–161, 164 cheating, MOOCs and, 136–137 Cheney, Dick, 240 chess, 97–98, 122, 123 Chicago, data portal of city of, 87–88 China American consumer spending and, 54 college graduates overqualified for occupations in, 251 consumer demand in, 223–227 globalization and, 53 industrial automation in, 3, 10–11, 225–226 labor’s share of national income in, 41 offshoring and, 120 reshoring and, 9 saving rate in, 224–225 super-intelligence and, 236n China rebalancing, 224–225 Chomsky, Noam, 129, 236 Christensen, Clayton, 142 Chronicle of Higher Education (journal), 139 Chrysler, 76 Circuit City, 16 Cisco, 234 Citigroup, 103, 198 citizen’s dividend, 266–267 Cleveland Clinic, 102 Clifford, Stephanie, 8 climate change, xvii, 211–212, 282–283 Clinton, Bill, 242 cloud computing, 52, 104–107, 109 cloud robotics, 20–23 cobalt poisoning, 145–146 cognitive capability, global competition for jobs and, 120 cognitive computer chip, 72 cognitive computing, 96–104 collaboration software, 64 Collapse: How Societies Choose to Succeed or Fail (Diamond), x collateralized debt obligations (CDOs), 56 college-educated workers, 120–121, 126–128 college graduates, declining income and underemployment for recent, 48–49 College Unbound (Selingo), 140 college wage premium, 48n Colton, Simon, 112 “The Coming Technological Singularity” (Vinge), 233 community colleges, 276–277 comparative advantage, 73–75 compensation.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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Andrei Shleifer, asset-backed security, bank run, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, bonus culture, Bretton Woods, business climate, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collapse of Lehman Brothers, collective bargaining, computer age, Corn Laws, corporate governance, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, discovery of the americas, diversification, Eugene Fama: efficient market hypothesis, eurozone crisis, failed state, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, Fractional reserve banking, full employment, Gordon Gekko, greed is good, Hyman Minsky, income inequality, inflation targeting, invention of the wheel, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, labour market flexibility, London Interbank Offered Rate, London Whale, Long Term Capital Management, manufacturing employment, Mark Zuckerberg, market bubble, market fundamentalism, means of production, Menlo Park, moral hazard, moveable type in China, Nick Leeson, Northern Rock, Occupy movement, offshore financial centre, paradox of thrift, Plutocrats, plutocrats, price stability, principal–agent problem, profit motive, quantitative easing, railway mania, regulatory arbitrage, Richard Thaler, rising living standards, risk-adjusted returns, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, short selling, Silicon Valley, South Sea Bubble, spice trade, Steve Jobs, technology bubble, The Chicago School, The Great Moderation, the map is not the territory, The Wealth of Nations by Adam Smith, Thorstein Veblen, time value of money, too big to fail, tulip mania, Upton Sinclair, We are the 99%, Wolfgang Streeck

Also a reference from Daunton. 195 The Cash Nexus: Money and Power in the Modern World 1700–2000, Allen Lane/ The Penguin Press, 2001. The phrase ‘cash nexus’ comes from Thomas Carlyle, who used it in Chartism, 1840, and Past and Present, 1843. 196 See Gold and Iron: Bismarck, Bleichröder and the Building of the German Empire, Fritz Stern, Vintage Books, 1979. 197 The British Tax System, Oxford University Press, 1978. 198 Remarks from Ayrshire Pullman Motor Services v. Inland Revenue, 1929. 199 Capital in the Twenty-First Century, Harvard University Press, 2014, translated by Arthur Goldhammer. 200 I owe this insight to Brian Reading of Lombard Street Research. 201 Penguin Classics, 2009, translation by David Constantine. All subsequent quotes from Goethe are from the same source. 202 Stabilizing an Unstable Economy, Yale University Press, 1986. 203 ‘Manifest der Kommunistischen Partei’ in Marx-Engels Werke, Vol. 4, Berlin, 1969.

James Buchanan and his followers saw the state as predatory, using its monopoly power over the tax base to maximise revenue. On this view, politicians and bureaucrats were ‘personal utility maximisers’ who needed to be curbed. Such thinking played a part in the Californian tax revolt in the late 1970s that led to the famous Proposition 13 referendum, which put a curb on property taxes. Now a new challenge has arisen from the left of centre. The French economist Thomas Piketty has advanced a novel theory of capitalist accumulation, backed by a mass of data on income and wealth over three centuries, which asserts that the ratio of capital to income will rise without limit so long as the rate of return on capital is significantly higher than the rate of growth of the economy. Piketty argues that, historically, this is a normal state of affairs. The only deviations from the norm have occurred when much of the return on wealth has been expropriated or destroyed, or when economies have grown exceptionally rapidly, as in the post-war reconstruction of Europe or the catch-up growth now taking place in emerging markets.

Frugal Innovation: How to Do Better With Less by Jaideep Prabhu Navi Radjou

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3D printing, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, barriers to entry, Baxter: Rethink Robotics, Bretton Woods, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, cloud computing, collaborative consumption, collaborative economy, connected car, corporate social responsibility, crowdsourcing, Elon Musk, financial innovation, global supply chain, income inequality, industrial robot, Internet of things, job satisfaction, Khan Academy, Kickstarter, late fees, Lean Startup, low cost carrier, M-Pesa, Mahatma Gandhi, megacity, minimum viable product, more computing power than Apollo, new economy, payday loans, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, precision agriculture, race to the bottom, reshoring, ride hailing / ride sharing, risk tolerance, Ronald Coase, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, software as a service, Steve Jobs, supply-chain management, TaskRabbit, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, transaction costs, unbanked and underbanked, underbanked, women in the workforce, X Prize, yield management, Zipcar

We also want to thank the public relations teams at the companies that appear in our case studies for arranging interviews with their corporate executives. Lastly, we appreciate the care and support of our families and friends throughout the writing of this book. We couldn’t have done any of this without them. Notes and sources Notes 1Frugal innovation: a disruptive growth strategy 1Rosemain, M., “Renault 2013 Sales Gain on Surging Demand for Dacia Cars”, Bloomberg, January 21st 2014. 2Piketty, T. and Goldhammer, A., Capital in the Twenty-first Century, Belknap Press, 2013. 3Cone, C., global chair, Edelman Business + Social Purpose, interview with Navi Radjou, November 26th 2012. 4European Commission, “Environment: New rules on e-waste to boost resource efficiency”, press release, August 13th 2012. 5Mainwaring, S., We First: How Brands and Consumers Use Social Media to Build a Better World, Palgrave Macmillan, 2011. 6Hatch, M., The Maker Movement Manifesto: Rules for Innovation in the New World of Crafters, Hackers, and Tinkerers, McGraw-Hill, 2013. 7Rifkin, J., The Age of Access: The New Culture of Hypercapitalism, Where All of Life Is a Paid-for Experience, J.P.

Car purchases by Americans aged 18–34 fell 30% between 2007 and 2012. In Japan, where the poverty rate shot up to a record 16% in 2012, consumers are shifting from premium brands to inexpensive private-label products in retail stores. Rather than eating out, more Japanese workers now pack their own lunch, earning themselves the nickname bento-danshi or “box-lunch man”. These changes are here to stay. Thomas Piketty, a French economist, predicts that income inequality in developed economies will widen in the coming decades, as long-term annual growth rates remain stuck below 2%.2 With inflation outpacing their incomes since 2007, 76% of US adults now believe their children will be financially worse off than them in the future. And well over half of consumers, surveyed by Booz & Company (now Strategy&), a global management consultancy, in late 2012, reported that they would not revert to their previous spendthrift behaviour when times improve.


pages: 464 words: 121,983

Disaster Capitalism: Making a Killing Out of Catastrophe by Antony Loewenstein

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Affordable Care Act / Obamacare, anti-communist, Asian financial crisis, British Empire, Capital in the Twenty-First Century by Thomas Piketty, Chelsea Manning, clean water, collective bargaining, colonial rule, corporate social responsibility, Edward Snowden, facts on the ground, failed state, falling living standards, Ferguson, Missouri, financial independence, full employment, Goldman Sachs: Vampire Squid, housing crisis, illegal immigration, immigration reform, income inequality, Julian Assange, market fundamentalism, Naomi Klein, neoliberal agenda, obamacare, Occupy movement, offshore financial centre, open borders, private military company, profit motive, Ralph Nader, Ronald Reagan, Scramble for Africa, Slavoj Žižek, stem cell, the medium is the message, trade liberalization, WikiLeaks

The challenge faced by opponents of rampant capitalism was how to focus their rage coherently against increasingly pervasive forces. The study of capitalism is soaring at universities across America, indicating the desire on the part of tomorrow’s graduates to understand the tenuous connection between democracy and the capitalist economy.12 The phenomenal success of French economist Thomas Piketty’s book Capital in the Twenty-First Century—a work arguing that social discord is the likely outcome of surging financial inequality —indicates that the public knows there is a problem and is in search of clear accounts of it. Piketty advocates a global system of taxation on private property. “This is the only civilized solution,” he told the Observer newspaper.13 In 2014, even the world’s leading economic think-tank, the Paris-based Organization for Economic Cooperation and Development, urged higher taxes for the rich to help the bottom 40 percent of the population.

Index Abbott, Tony 279, 286 Abdul (asylum seeker) 286 Abu Ghraib prison 15 abuse 258–62 aid 123 child 102 drug 37–9 human rights 110 labor 29 outsourced 260–1 in prisons 216–17, 218 sexual 252–8, 280–1 accountability 16, 30–1, 180, 277, 291, 310 Adam, Harry 118 AECOM 53–4 Aegis Defence Services 33 Afghan Institute for Strategic Studies 44 Afghanistan 12, 19–56, 59–63, 117, 175 arrival of PMCs 20 asylum seekers from 69–70 Australian contractors 60 casualties 32, 326n27 Chinese support for 37 contractors 28–31 corruption 22, 24, 27, 42, 45, 328n48, 329–30n58 counterinsurgency 43, 52–3 departure of foreign troops 62–3 dependence on America 45 development support 62–3, 324n2, 324n3 drug economy 37–9 election, 2004 31–2 election, 2009 32 election, 2014 32 entrepreneurs 56 fear of resurgent Taliban 44–5 financial situation 62–3 future of PMCs in 23 GDP 330n61 human rights 42 inequality 56 insurgency 12, 32 intelligence gathering 51–6 intelligence-sharing nations 21 invasion of 20, 31 labor abuses 29 laws against PMCs 21 locals’ view of 48 mineral rights 24, 330n65 mining industry 24, 49–50, 330n65 Ministry of Interior 21, 40–2 Ministry of Mines 50 natural resources 49 night raids 43, 46, 52, 54, 55, 328–9n50 occupation of 22, 31–5, 36, 43, 44, 52–3, 63, 325n10 official line 40–3 past conflicts 36–7 PMC numbers 20 population surveys 330–1n66 private military companies 16, 19–25, 33–5, 41–3, 44, 46–8, 48, 50, 59–62, 331n69 propaganda 26 reconstruction 325n11 resource exploitation 49–50 security forces 27, 330n61 Soviet invasion 37 suicide attacks 41 suicide rates 332n83 Taliban rule 25 translators 55, 325n19 USAID 327–28n46 US military bases 28 violence 20 war economy 25–31, 38, 63 warlords 32–3, 44, 326n28, 326–7n30 women in 44, 47–8, 48–9, 50–1, 330n59 Afghanistan Analysts Network 54–6, 328–9n50 Afghanistan Reconstruction Group 26 Afghan police force 27 Afghan Public Protection Force 21 Africa 23 African-Americans, incarceration rates 195, 196 Agility Logistics 124 aid Afghanistan 62–3 Australia 50 contracts 123–5 corruption 126, 171 criticism of process 144–7 food 145–6 fraud 123–4 Haiti 12, 108, 120, 144–7, 340n56, 342n89 human rights abuses 123 NGO-ization of 137–41 Papua New Guinea 13, 158–9, 167, 171–5, 179 profiteering 139 waste 146 aid dependency 121, 126 AIDS 89 Alexander, Michelle 195–6 Alex, Commander 156–7 Al-Hussein, Zeid Ra’ad 277 Al Jazeera America 29 American Correctional Association (ACA) conference, 2014 202–11 American Legislative Exchange Council (ALEC) 201 American University of Afghanistan 43–4 Amnesty International 259 Anastasiou, Vassilis 102 Anti-Defamation League 93 anti-fascist activism 93–4 anti-Semitism 90–1, 93 Arab Spring 97, 127–8 Arawa, Papua New Guinea 158, 167, 180–4 Aristide, Jean-Bertrand 26, 112–13, 151 Arizona 200–2 AshBritt 108 Ashton, Paul 201 assassinations 323n33, 331n69 Assessing Progress in Haiti Act (US) 124 Asylum Help 234 asylum seekers abuse 258–62 austerity 69 Australia 269–305 children 249–50 closed hospitality centers 67–8 costs 304 demonization of 77, 288 deportations 258–63 destinations 68 detention centers 13, 64–71, 76, 77–80, 230–5, 245–51, 271 detention costs 281–3 detention network privatization 77 Greece 64–71, 75–7, 77–80, 89 indefinite detention 68 lack of sympathy for 287–8 medical care 77–80, 256–8 mental health 254–5, 285, 286, 295, 302 motivation 68, 302–3 numbers reaching Europe 96 privatized housing 230–5 processing times 300–1 public sympathy 271 racist violence 71 reception centers 67 refugee crisis 95–8 self-harm 295–6 sexual abuse 280–1 Syntagma Square protest, 2014 70 United Kingdom 230–5, 244, 245–51, 252–8, 258–63 women 253–4 Athens 67, 102–3 Metropolitan Community Clinic 80–4 AusAID 158–9, 161, 171–5, 182, 189–91, 331–2n77 austerity, opposition to 72–5 Austin American-Statesman 108 Australasian Centre for Corporate Responsibility 190 Australasian Correctional Management (ACM) 282 Australia 8, 104 and Afghanistan 50 aid 50 asylum policy development 275–85, 286, 357n4, 357n9 asylum seeker network 269–305 asylum seekers 13 Community Assistance Program 304 complicity with BCL 160 Department of Immigration and Border Protection (DIBP) 271, 274, 279, 281–2, 284,286, 289–93, 295, 297–8, 300–1, 303 detention centers 13, 271, 274, 276, 278–9, 280–5, 285–305, 356n2, 357n11 detention costs 281–3 economic reforms 322n16 exploitation of Papua New Guinea 169–75 foreign policy 173–4 goals in PNG 172 immigration policy 278 “Mining for Development” initiative 190 the Pacific Solution 276–81 and Papua New Guinea 154, 160, 163, 167, 169–75, 176–7, 179, 188–91 PMC contractors 60 privatization 361n51 and Rio Tinto 162 state-ownership approach to resources 177 tender process 289–90 turnback policy 280, 286 Australian Mercy 285 Australian Navy 276 Australian Strategic Policy Institute 190 Autonomous Bougainville Government 161, 167, 178–80, 184, 346n33 Avera eCare 205 Avon Protection 203 Bagram prison 31 Bainimarama, Frank 346–7n41 Baker, Charles 117 Baldry, Eileen 285 Balkonis, Thomas 78–80 Bamazon (TV program) 306–7 Bangladesh 341n65 bank bailouts 3 bankers bonuses 4 Ban Ki-moon 113 Bank of America 3 Barnardo’s 249–50, 266 Barrick Gold 174 Batay Ouvriye 126 Bauer, Shane 204, 207–8, 210 bearing witness 9–10 Becket House, London 263 Bedford, Yarl’s Wood detention centre 252–8, 265 Behavioral International 227 Berati, Reza, murder of 283 Berghorn, George H. 204 Berman, Steve 187 BHP Billiton 172–3, 187, 189 Bigio, Gilbert 108 Bill and Melinda Gates Foundation 114 Bishop, Julie 176, 182 black sites 16 Blackwater 16, 35, 59, 323–4n40, 331n69 Blair, Tony 60, 236 Blanchard, Olivier 99 bloggers 308 Bloom, Devin D. 307 Blue Mountain Group 30 Boeing 15–16 Bolivia 26, 125 Booz Allen Hamilton 15 border controls, privatization 241 Bougainville Copper Limited (BCL) 159, 159–61, 162, 163, 184–6, 188, 190, 343n6 Bougainville, Papua New Guinea 154–64, 167–9, 176, 178–80, 184–5 Bougainville Revolutionary Army (BRA) 154–5, 163–4, 176, 343n6 Bougainville Women in Mining 183–4 Bozorg (asylum seeker) 232–3 Brand, Russell 267–8 bribery 22, 38, 41, 329–30n58 Brown, Bob 174 Brown, Michael, killing 203 Buckles, Nick 283 Burma 14 Bush, George W. 7, 25, 43, 118, 149 Cable, Vince 236 CACI 15–16 California 5, 196–7, 208 Callick, Rowan 176 Call Sense 210 Cambodia 276 Cameron, David 50, 62, 243, 244, 252, 263 Campbell, Chad 201 Campbell, David 284, 359n30 Campsfield detention facility 246–9, 266–7 Canada 120, 304 Capita 241–2 Capital in the Twenty-First Century (Piketty) 6 capitalism 1–2 critiques 361n5 disaster 6–9 Klein’s critique of 7–8 predatory 11, 13–14, 162, 310–11 unregulated 135–6 Caracol industrial park, Haiti 116, 128–33, 133–6, 148 Carol (senior analyst) 54–6 Carr, Bob 188–9 Cash, Linda 279 Centre for Economic and Policy Research (CEPR) 124–5 Centre for Public Integrity 34 Chalmers, Camille 151–2 Chaman (Afghan refugee) 64–71 Channel 4 News 253, 267 Chaparro, Enrique Mari 137–9 cheap labor 117, 127, 132, 133, 144 Chemonics 123 Cheney, Dick 28, 30 CHF International 138–9 child abuse 102 children detention 249–50, 272 immigrants 212, 225 malnourished 82 in prisons 208 child slaves 145 China 14, 16, 24, 37, 49, 170 China Metallurgical Group Corporation (MCC) 24 cholera 113–16 Chomsky, Noam 238, 310 Christmas Island 269–75, 356n1 Christmas Island Community Reference Group 356–7n3 Christmas Island detention facility 271, 272–3, 274, 276, 278–9, 285–9, 299–305, 356n2 Chrysohoidis, Michalis 67–8 CIA 15, 59, 110, 331n69, 331n73 Citizens for a Free Kuwait 25 City AM (newspaper) 236–7 civilian casualties, Afghanistan 32 Clarke, Victoria 26 Clayton Homes 118 climate change 1–2, 8 Clinton, Bill 116, 118–19, 122, 123, 135 Clinton Foundation 118, 126, 136 Clinton, Hillary 8, 30, 118, 125, 131, 135, 171 Clive (information management consultant) 51–2 Clive (Serco contractor) 289–92 Coffey International 162 Colas, Landry 131 Cold War 33, 111 Collective Against Mining 121 colonialism 109, 160 Comcast 5 Commission on Wartime Contracting (US) 34 Community Assistance Program, Australia 304 community mapping 58 Conflict Mapping in Afghanistan since 1978 (Independent Human Rights Commission) 32 Congo, Democratic Republic of 120 contractors, Afghanistan 28–31 Conway, Jim 208–9 copper mining, ecological damage of 173 Corcoran, Thomas J. 110–11 Corinth detention centre 64, 78–80 Corizon 209 corporate ideology 14 corporate power 7 Corporate Responsibility Coalition 187–8 Corporate Watch 255, 263 CorrectHealth 199 Corrections Corporation of America (CCA) 13, 197–8, 199, 201–2, 211–22, 227, 228, 284–5 corruption Afghanistan 24, 27, 42, 45, 328n48, 329–30n58 aid 126, 171 Greece 64, 72 Haiti 141 overcharging 240–1 Papua New Guinea 170, 171, 188 price-gouging 292 counternarcotics information campaign 26 Crocker, Ryan C. 43 Crockett, Greg 204–5 Crossbar 204–5 Cuba 122 cultural sensitivity 21 Daily Mail 235 Daily Telegraph (Sydney newspaper) 172 Damana, Chris 184–5 Das, Satyajit 309 Daveona, Lawrence 177–8 David (Serco source) 292 Davis, Raymond 57, 331n73 Davis, Troy 199 Davos conference, 2015 2–3 debtocracies 99 Defence Logistics Agency 29 democracy 16, 311 Democracy Now!

Ashraf 42–3 Haiti 26, 105–53, 175, 308 aid 12, 108, 120, 123–8, 144–7, 342n89 aid delivery failure 340n56 aid dependency 121, 126 American colonialism 109–13 American corporate pillaging 111–12 American investment 116–20 American policy 115–16, 116–20, 134 Aristide rule 112–13 beggars 106 Canadian aid 120 Caracol industrial park 116, 128–33, 133–6, 148 challenge facing 152–3 child slaves 145 cholera outbreak 113–16 CIA involvement 110 and the Cold War 111 corruption 141 coup, 2004 112 death toll, cholera outbreak 113 death toll, earthquake 107, 145 debt 127 Duvalier dictatorship 109–12 earnings 117, 132, 144 earthquake, January 2010 12, 107, 117 earthquake, January 2010, aftermath of 105–7 economic exploitation 132, 133–6 economic fragility 109–13 economic resistance 150 eco-system damage 130 effect of neoliberalism on 112–13 exploitation 107–8 foreign investment 116–18, 121–2, 133–6 French aid 120 historical background 109–13 homelessness 107 housing 129–30, 140, 150–1 human rights 110, 116 indigenous development 147–9, 150–2 job creation 131 leadership 119–20 living conditions 105–7, 141–4 mining regulation 120–1 National Palace demolition 137–9 NGO-ization of 137–41 occupation of 127 organisations populaires 112 paramilitary groups 109 political freedom 109 Presidential elections, 2015 140 reconstruction gold rush 107–9 refugee camps 141–4 religious faith 106 resource exploitation 120–1 revolution 109 rice imports 122–3 sovereignty 135, 146, 152 tourism 152 unemployment rate 127 unregulated capitalism 135–6 UN stabilization force 113, 115–16 women in 142–3 workers’ rights 148 Haiti Economic Lift Program 133 Haiti Grassroots Watch 117, 120 Haiti-Liberte 108–9 Halliburton 28 Hallward, Peter 109, 111–12, 152 Hamburg 84, 311 Hammond, Philip 16 Harding, Richard 284 Hardwick, Nick 263–7 Harper, Stephen 120 Harry (Christmas Islander) 272–3 Hastings, Michael 26 Hayatullah (asylum seeker) 301–3, 360n49 Headley, Linden 220–1 health services privatization, United Kingdom 244–5 heart disease 14 Hellenic Broadcasting Corporation 74 Hellenic Foundation for European and Foreign Policy 96 Hellenic Republic Asset Development Fund 101–2 helplessness, feeling of 308–9 Higgins, Greg 128 Hill+Knowlton 25–6 History Channel 306–7 homelessness 107 Honduras 225 Howard, John 275–6, 279 humanitarian relief, NGO-ization of 137–41 humanitarian work, military and 58–9 human rights 123 Afghanistan 42 commodification of 308 disregard for 9 and economic freedom 2 Haiti 110, 116 Human Rights Defense centre 216 Human Rights Watch 47, 48, 67, 71, 196, 200 Human Terrain System 53, 331n67 human trafficking 29, 70 Huppert, Julian 249–51 Hurricane Katrina 26, 118, 124, 337n6 Hurricane Sandy 8 Hyman, Christopher 290 identity, questions of 103–4 immigrants children 212, 225 criminalization 198–9 demonization of 226 deportation 212, 227–8 detention centers 211–28 incarceration rates 195 legal representation 217–18 United Kingdom 243–4 United States of America 198–9, 211–28 see also asylum seekers imperialism, legacy of 10–11 Independent Human Rights Commission, Conflict Mapping in Afghanistan since 1978 32 Independent Timbers and Stevedoring 344n19 IndustriALL 187 inequality 2–4, 56, 242–3, 302–3 information management consultancy 51–6 Innocent, Alix 130–2 Integrity Watch Afghanistan 24 intellectuals, responsibility of 310 intelligence gathering, privatization 51–6 Inter-American Development Bank 123, 130 Interfaith Prison Coalition 216 Interim Haiti Recovery Commission (IHRC) 118 International Criminal Court (ICC) 43 International Health and Medical Services 295 International Monetary Fund (IMF) 4–5, 62, 72, 99, 112, 127 International Organization for Migration 74 International Relief and Development (IRD) 28 International Security Assistance Force (ISAF) 32 interrogators and interrogation, privatization 15 Inter-Services Intelligence 56, 331n73 “Invisible Suffering” (MSF) 75 Iran 23, 49 Iraq 12, 14, 25, 27, 28, 323n33 Islamabad 56, 57 Islamic State (ISIS) 16, 41 Jack (PMC owner) 20–5 Jalalabad 38 Japan 11 Jean, Arnolt 121 Jean, Wyclef 141 job creation 131 John (BCL manager) 160–1, 164–5, 166–7 John (detention center guard) 296–8 Jones, Justin 198 Josephine (teacher, PNG) 183 Josh (PMC contractor) 59–60 journalism, usefulness of 309 J/P Haitian Relief Organization 137–9 JSOC 59 Jubilee 159 Jubilee Australia 190–1 Justice Police Institute (JPI) 201 Justinvil, Pierre 130 Kabul 19, 36 drinking holes 59–62 drug abuse 38–9 population 45 private military companies 19–25 suicide attacks 41 women in 47–8 Kambana, Adrienne Makenda 258–9 Kampagiannis, Thanasis 93–5 Kandahar 55 Karachi 56 Karunakara, Unni 139 Karzai, Ahmed Wali 41 Karzai, Hamid 27, 31–2, 41, 44, 47 Katz, Jonathan 119, 139–40 Kauona, Samuel 161, 178–80, 346n35 Kavo, Havila 186 KBR 28 Keerfa, the Movement United Against Racism and the Fascist Threat 93 Kelleher, Joan 285–6 Keller, Ska 97 Kemish, Ian 189 Kentucky 205, 228 Kerry, John 30, 62 Khalilzad, Zalmay 50 Khan, Muhammad Alamgir 57 Khogyani, Saima 48–50 Khyber News Bureau 58–9 Kilcullen, David 53 Kim Woong-ki 133 Kirra, Bernadine 185 Klein, Naomi 6–8, 11 KOFAVIV 142–3 Koim, Sam 188 Koofi, Maryam 50–1 Korean Peninsula 23 Kosovo 26 Kotsioni, Ioanna 76–7 Krugman, Paul 243 Kuwait 25 labor abuses 29 Laleau, Wilson 116–17 Lamothe, Laurent 120 landowner rights 177 Langdon, Robert 60, 332n82 Lasslett, Kristian 159–60, 161 Lebrun, Jean Robert 148 Lemberg-Pedersen, Martin 96–7 Leonard (teacher, PNG) 181 Lepani, Charles 189 Libby Sacer Foundation 103–4 Libya 16, 30 Limits to Growth, The (Randers) 1–2 Lloyds Banking Group 16 lobbying 124 Lockheed Martin 31 Logan, Steve 198–9 London, Becket House 263 Louisiana 200 Lucke, Lewis 108–9 Lujan, Nathan K. 306–7 Lumpkin, Georgia, USA 222–3 Stewart immigration detention center 211–22 McDowall, Paul 252 McDowell, Janine 252 McFate, Sean 16 McGregor-Smith, Ruby 242, 245–9 McKibben, Bill 8–9 McLean, Murray 11 Malmström, Cecilia 98 Management and Training Corp 218–19 Management Today 242 Manjoo, Rashida 252 Manus Island 276–7, 280, 281, 282–3, 297, 357n11 market principles, application of 14–15 market system 2 Marr, David 282 Martelly, Michel 106, 110, 116, 117, 140, 339n34 Mason, Paul 73, 267 MASS Design Group 114–15 Matheson, Scott 299 Maywood, California 5 Médecins de Monde (MdM) 77–80 Médecins Sans Frontières (MSF) 75–7, 114, 183 media outlets, ownership of 5 Medical Association of Athens 84 medical care asylum seekers 77–80, 78–80, 256–8 detention centers 77–80, 266, 295 Germany 84 Greece 80–4 prisons 205, 209, 214–15, 215–16 Medical Justice 256–8, 260 Medina, Roberto Martinez 218 Meek, James 234, 239 Mehmood, Tahir, death of 241 mental health 254–5, 285, 286, 295, 302 mentally disturbed people, incarceration rates of 201 mercenaries 20, 59 Merkel, Angela 73 Merten, Kenneth 107–8, 339n34 Metropolitan Community Clinic, Athens 80–4 Michael (asylum seeker) 230–2 Migration Policy Institute (MPI) 212 MiHomecare 255 military ideology 15 Miller, Phil 263 “Mining for Development” initiative, Australia 190 Ministry of Public Order and Citizen Protection, Greece 76 MINUSTAH 113, 115–16 Mitie 242, 245–9, 255 Mlotshwa, Emma 255–8 Moise, Rosembert 150 Momis, John 159, 161, 169 Monaghan, Karon 260 Monbiot, George 9, 236 Money Morning 49 Monsanto 267 Moradian, Davood 44–6 Morales, Evo 125 Morales, Pablo 107 Morauta, Mekere 188 Morrison, Scott 279–80 Mortime, Antonal 140 Morumbi 346n33 MSS Security 296–8 Mubenga, Jimmy, killing of 258–60 Mudd, Gavin 185 Mundell, Robert 84 Munnings, Kate 358n25 murders, private military companies 15, 46, 57, 60, 323–4n40 Murdoch, Rupert 5, 41, 359n30 Musharraf, Pervez 57 MWH Americas 124 Nader, Ralph 173 Namaliu, Sir Rabbie 160, 343n6 Namorong, Martyn 190 Nashville, Tennessee 209 Nathan (PNG resident) 167–8 National Audit Office 236 National Health Service 244–5 National Institute of Money in State Politics 201 National Research Council 198 nation building 23 Nation (magazine) 118 Nation (newspaper) 57 NATO 32, 55, 63 Nauru 275–6, 276, 276–7, 280–1, 283, 296 Needham, Emma 299 neo-colonization 190 neoliberalism 83, 112–13 New Economics Foundation 243 Newmont Mining 120 News Corporation 5 New York Times 8, 38, 101, 113, 115, 118, 131, 141, 199, 212, 226, 243, 284, 340n56 New Zealand 361n51 New Zealand Aid Programme 158–9 Nicaragua 134 Nicholls, Adelina 224–6 No Logo (Klein) 7–8 non-government organizations, and humanitarian relief 137–41 North American Free Trade Agreement 225 Northrop Grumman 35 Norway 2, 186–7 Obama, Barack 3, 31, 35, 45, 118, 124, 149, 195, 212, 221–2, 224 obesity 14 Occupy movement 5–6, 309 Occupy Wall Street 3 O’Faircheallaigh, Ciaran 162 Office for the Coordination of Humanitarian Affairs, United Nations 139 O’Grady, Mary Anastasia 134 Ohio 197–8 oil prices 166 Ona, Francis 169, 178 O’Neill, Peter 159, 166, 171, 186, 188, 347n50 One World 117 Operation Enduring Freedom 31 organisations populaires, Haiti 112 Organization for Economic Cooperation and Development 6, 267 outsourcing 28–30 outsourcing contractors, United Kingdom 240–2 overcharging 29 overconsumption 8 Oxfam 191, 242–3 Pakistan 12, 56–9, 62 community mapping 58 Federally Administrated Tribal Areas 58 feeling of occupation 59 private military companies 56, 57 state absence 56–7 Taliban in 31 US army action 58 Palast, Greg 84 Panagiotaros, Ilias 91–3 Panguna Landowners’ Association 177 Panguna mine, Papua New Guinea 154–64, 164–5, 167, 168, 177–8, 181, 182, 184–6, 191–2 Panguna town, Papua New Guinea 165–7 Papua New Guinea 11–12, 12, 117, 154–92 agricultural exports 174 aid 13, 167, 171–5, 179 and America 170–1 and Australia 154, 160, 163, 167, 169–75, 176–7, 188, 188–91 Australian exploitation of 169–75 Australian goals 172 Australian government aid 158–9, 171–5, 179, 182, 189–91 Autonomous Bougainville Government 161, 167, 178–80, 184, 346n33 average age 158 baby boom 157 BCL legacy 160–1 Bougainville mining legislation 161 and China 170 civil disturbances 175 civil war 154–5, 158–9, 161, 163–4, 178–80, 180–2, 187 constitutional planning committee 169 corruption 170, 171, 188 desire for independence 176–8 education 158, 166–7, 167–8 environmental destruction 157–8 foreign investment 186–7 forest 336n19 gold panning 164 Grasberg mine 187 independence 169–70 lack of change 167–9 life expectancy 175 maternal mortality rate 183 mining boom 13, 156, 169–76, 184–91, 344n50 mining waste 157 officials’ role 175–6 Ok Tedi Mine 157–8, 173, 188, 345n23 opposition to mining 168–9, 174, 178–80 Panguna Landowners’ Association 177 Panguna mine 154–64, 164–5, 167, 168, 177–8, 181, 182, 184–6, 191–2 Panguna reserves 186 Panguna town 165–7 pollution 157, 164, 173 poverty 175 private military companies 180 Ramu nickel mine 174 reconciliation meeting, February 2013 158–9 resource exploitation 120, 154–64, 176, 184–91, 344n19, 346n33 the Sandline controversy 180 sovereign fund 188 sovereignty 156, 175–6, 176–8, 191, 192 Task Force Sweep 188 weapons decommissioning 181–2 women in 182–4 World War II 170 Papua New Guinea Sustainable Development Program (PNGSDP) 345n23 Partners in Health 113–14 Partners Worldwide 136 Pay Any Price (Risen) 11 Peace and Security Project 98 peace building 54–5 Peck, Raoul 118–19 Penn, Sean 137–9 Pennsylvania 209 Pentagon, the, waste 34–5 people-smugglers 70, 287 Peshawar 57–9 Peter (PMC contractor) 59–60 Petraeus, David 52–3 Piketty, Thomas, Capital in the Twenty-First Century 6 Pilger, John 10, 245 Pindar, Paul 241–2 Pipiro, Moses 184 Pita, Aaron 181–2 Platform of Haitian Human Rights Organizations 140 Podur, Justin 115, 147 police militarized 203, 238 privatization 240 surveillance 6 police brutality Greece 83 United States of America 203 pollution, Papua New Guinea 157, 164, 173 Port-au-Prince 105–7, 107, 116, 118, 127, 128, 146, 149–50, 150–1 Port Moresby 166 poverty 98–9, 175 PPSS 206 predatory capitalism 11, 13–14, 162, 310–11 press freedom 74, 75 price-gouging 292 Prince, Erik 16 prisons and the prison industry 197, 202–11 abuse 216–17, 218 access 219 American Correctional Association (ACA) conference, 2014 202–11 bed mandate 226–7 children in 208 emotional impact of incarceration 207–8 employee wages 223 exploitation 227 failure of private 200–1 female population 197 food 215 green technology 204 incarceration rates 195–6, 200, 201, 204 inmate labor 205–6, 211, 213 lack of oversight 216, 228–9 lack of transparency 225–6 medical care 205, 209, 214–15, 215–16 money saving 217 occupancy quotas 226–7, 228 opposition to private 223–8 overcrowding 196 phone call costs 214 prisoner costs 200–1 privacy 208–9 private operators 196–8 privatization 13, 195–229, 240, 264–5 profits 197, 201–2 Scandinavian 208–9 solitary confinement 208, 209, 218–19 state oversight 205 Stewart immigration detention center, Lumpkin, Georgia, USA 211–22 suicide rate 209, 217 United Kingdom 240, 264–5 uprisings 208–9 visit 211–22 private military companies 12 accountability 16 Afghanistan 19–25, 33–5, 41–3, 44, 46–8, 50, 59–62, 331n69 Australian contractors 60 casualties 32, 326n27 clients 20–1 connection between 23–4 contractor motivations 59–62 employees 22, 47, 57 exploitation by 22 fees 21 future 23 hiring practices 61 influence 41–2 justifications 22–3 killings 46, 57, 60, 61 lack of state control 34, 47 locals view of 46–8 motivation 23 murders 15, 46, 57, 60, 323–4n40 and nation building 23 need for 21 numbers 20 origins 33 Pakistan 56, 57 Papua New Guinea 180 problem of 42 recruits 20 regulations 21, 22 and sovereignty 22–3 static work 21–2 transparency 34 weapons 20, 21 private power 4, 9 private security contractors, motivations 59–62 privatization asylum seeker detention network 77 Australia 361n51 border controls 241 contractor privacy 248–9 costs 236 detention centers 13, 98, 230–5, 245–51, 280–5, 289–99 disaster relief 108–9 economic logic of 289–99 failure of 239 Golden Dawn and 92–3 Greece 72, 98, 100–2, 307–8 and the IMF 4–5 intelligence gathering 51–6 justification 238–9, 245–6 Klein’s critique of 6–7 opposition to 100, 101, 102–3, 251 overcharging 240–1 prisons 13, 195–229, 240, 264–5 public services 230–68 as recent history 311 resistance to 7 revolving door 197 scale in UK 244 school teachers 4 surveillance 15 tender process 289–90 transparency 246, 290–1 United Kingdom 230–68, 310 of war 7 and waste reduction 30 profit, and poverty-level wages 117 prostitution 102 Psarras, Dimitris 85–7, 93 public services, privatization 230–68 Public Service Strategy Board 245–6 punishment, outsourcing 264–5 Putin, Vladimir 90, 93 racism 80, 259–60, 294 Raleigh, Jeff 26 Ramsbotham, David 260–1 Randers, Jørgen, The Limits to Growth 1–2 rape 47, 142–3, 183 Rau, Cornelia 289 Reagan, Ronald 238 Red Cross 342n89 refugee camps, Haiti 141–4 refugee crisis, Europe 95–8 refugees see asylum seekers Regan, Tony 159, 161 Rendon Group 26 Rene, George Andy 136 Reporters Without Borders 74 resource curse 13 resource exploitation accountability 180 Afghanistan 24, 49–50 Christmas Island 274 as entertainment 306–7 Haiti 120–1 impact 164–5, 166–7, 168 landowner rights 177 opposition to 178–80 Papua New Guinea 120, 154–64, 176, 184–91, 344n19, 346n33 regulation 120–1 responsibility 161 toxic dilemma of 162 and violence 159–60, 163–4, 167–8 “Restore Haiti” conference 136 Rhiannon, Lee 50 Rice, Susan 116 Rio Tinto 154, 157, 159, 162, 180, 186–8, 189 Risen, James, Pay Any Price 11 Roches, James Des 33 Roka, Theonila 159 Rolling Stone 41 Rompos, Antonios 78–80 Rooney, Nahau 281 Roupakias, Giorgos 90 Royal Mail 236 Roy, Arundhati 5–6, 307–8 Rubio, Marco 228 Rudd, Kevin 289, 290 Rumsfeld, Donald 26, 29–30 Saddam Hussein 25 Sae-A 130, 131, 132, 134, 135, 148 SAIC 31 Sally (case manager) 300–1, 303–4 Samaras, Antonis 94–5 Sanderson, Janet A. 115 Sandline 180 Sanon, Reyneld 150–1 Sarantou, Elina 66–7 Sarobi 38 Sassen, Saskia 99 Sassine, George 134–6 Sathi (asylum seeker) 253–4 Scahill, Jeremy 15 Scarperia, Annette 206 Schäuble, Wolfgang 75 Schofield, Josh 206 Schuller, Mark 107 Schumer, Chuck 228 Schwartz, Timothy 144–7, 342n92 Schweich, Thomas 38 Sean (Serco source) 292–4 Security and Management Services 57 security, outsourcing see private military companies Sediqqi, Sediq 41–2 sentencing reform, United States of America 198 September 11 terrorist attacks, 2001 7, 33 Serco 13, 232, 235, 240, 248, 252, 264, 270, 271, 277, 278, 279, 280, 282, 284, 289–99, 359n30 Shah, Rajiv 123 Shahshahani, Azadeh 226–7 Shah, Silky 222, 227–8 Sharon (detention center worker) 298 Sheffield 230–5, 262 Shell 186 Shield Defence Systems 204 shock doctors 8 Shock Doctrine: The Rise of Disaster Capitalism (Klein) 6–7, 11 Sideris, Christos 80–4 Simon (teacher) 272 Singer, P.


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

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Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, corporate governance, Credit Default Swap, cross-subsidies, dematerialisation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial innovation, financial intermediation, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, income inequality, index fund, inflation targeting, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, London Whale, Long Term Capital Management, loose coupling, low cost carrier, M-Pesa, market design, millennium bug, mittelstand, moral hazard, mortgage debt, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, regulatory arbitrage, Renaissance Technologies, rent control, Richard Feynman, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, Schrödinger's Cat, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, Washington Consensus, We are the 99%, Yom Kippur War

It was not only Goldman that benefited from heavenly inspiration; Jeff Skilling claimed to have been doing God’s work at Enron: McLean, B., and Elkind, P., 2003, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, New York, Penguin. p. xxv. 2. Putnam, R.D, 2000, Bowling Alone, New York, Simon and Schuster, brought the concept of social capital and the phrase into wide modern usage. 3. The data in the widely cited book by Thomas Piketty (2014, Capital in the Twenty-First Century, Cambridge, MA, The Belknap Press of Harvard University Press) relies primarily on the first of these approaches – the assessment of physical assets – although much of his discussion would seem to concern the second. 4. The quality of these estimates is not high, especially in relation to long-lived public assets. The principal method of calculation applies the ‘perpetual inventory’ method, which uses a solera principle in which reported new investment is added each year and the existing stock revalued and depreciated.

, 2012, ‘Wages and Human Capital in the US Financial Industry, 1909–2006’, Quarterly Journal of Economics, 127 (4): 1551–1609. Philips, C.B., Kinniry Jr, F.M., Schlanger, T., and Hirt, J.M., 2014, ‘The Case for Index-Fund Investing’, Vanguard Research, April, https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_InvComCase4Index. Piketty, T., 2014, Capital in the Twenty-First Century, Cambridge, MA, The Belknap Press of Harvard University Press. Porter, G.E., and Trifts, J.W., 2014, ‘The Career Paths of Mutual Fund Managers: The Role of Merit’, Financial Analysts Journal, 70 (4), July/August, pp. 55–71. Potts QC, R., Erskine Chambers, 24 June 1997, para. 5, citing Wilson v. Jones (1867) 2 Exch. Div. 150; cited in Kimball-Stanley, A., 2008, ‘Insurance and Credit Default Swaps: Should Like Things Be Treated Alike?’


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

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Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global supply chain, income inequality, income per capita, invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor

It requires a growth-and-development strategy focused on creating economic opportunities for the majority of people (including the poor), coupled with strategic investments in health, education, and infrastructure, and well-designed safety nets. That the dominant trend across developing countries has been little change in inequality will come as a surprise to those who have been following the big debates about growing income inequality in rich countries. Thomas Piketty’s blockbuster Capital in the Twenty-First Century sparked widespread debate on the nature of economic growth and income distribution in the world’s richest countries, especially the United States, France, and the United Kingdom. The debates start with the fact—and it is a well-documented fact—that income inequality improved between the end of World War II and the late 1970s but has worsened in many rich countries since then.

Abacha, Sani, 99, 113 Abdullah II, King of Jordan, 187 Abu Dhabi, 159 Abundance (Diamandis and Kotler), 300 Acemoglu, Daron, 13, 129, 140, 249 Achebe, Chinua, 72 Aden, Zheng He’s trip to, 152 Afghanistan, 9, 208, 285 education in, 215 as landlocked, 202, 205 Soviet invasion of, 134, 146 US war in, 8, 10, 118, 119, 141, 146 Africa, 37, 44, 46 agriculture in, 261 climate change and, 284 democracy in, 108, 110–11 GMOs in, 172 Green Revolution and, 170–73 growth in, 50, 189 malaria in, 211–13 megacities in, 277 mobile phones in, 157 pessimism about, 12 protests in, 102 resources in, 261 Africa Betrayed (Ayittey), 140 African National Congress Party (ANC), 143, 182, 185 agricultural productivity, 22, 25, 38, 305 agriculture, 37, 44, 45, 56–57, 166, 258, 283, 293 in Africa, 261 in Asia, 201 in China, 35 geography and, 204–5 Green Revolution and, 38, 79, 170–73, 204 growth in production of, 273–74 improvements in, 194–95 trade in, 273 AIDS, 20, 75, 81–82, 83, 94, 95, 173, 174–75, 182, 205, 214, 221, 246, 266 air defense identification zone (ADIZ), 288 air travel, 168–69, 169 Aker, Jenny, 177 Akuffo, Fred, 189 Albania, 50, 108, 159 Algeria, 114 life expectancy in, 78 poverty in, 36 Allende, Salvador, 143–44 aluminum, 53 American Association for the Advancement of Science (AAAS), 172, 281–82 American Indians, 112, 142 American Medical Association, 172 Amin, Idi, 127 Andes, University of the, 247 Andropov, Yuri, 134 Angola, 114, 145 forest loss in, 280 war in, 100 antibiotics, 77, 94, 267 antimicrobial resistance, 267 antiretroviral therapy (ART), 174, 214 apartheid, 44, 57, 68, 100, 103, 135, 141, 180, 182 Apple, 46 Aquino, Benigno, 143, 149 Aquino, Cory, 17, 104, 109, 184, 185, 186 Arabian Peninsula, 152 Arab Spring, 255, 263 Aral Sea, 285 Argentina, 100 financial crisis in, 255 slowing of progress in, 250, 262 Arias, Oscar, 18, 149, 184 Armenia, 113 and democracy, 248, 263 economic problems in, 255 Army Air Corps, US, 210 Arndt, Channing, 226, 227 Arnquist, Sarah, 176–77 Arrow, Kenneth, 62–63 artemisinin-based combination therapies (ACTs), 213, 267 Asia, 79 education in, 201 financial crisis in, 38, 39, 126, 144 health in, 201 megacities in, 277 values in, 121, 122–23 Asian Infrastructure Investment Bank (AIIB), 259 assassinations, 118 assembly, freedom of, 198–99 Australia, 25, 78, 167, 231, 281, 291 malaria in, 210 Austria, as landlocked, 202 authoritarianism, 3, 8, 22, 99, 101–3, 106, 107, 109, 120, 121–22, 125–29, 141, 146, 149, 188, 222, 224, 249–51, 255, 263–66 Ayittey, George, 140 Azerbaijan, 114 Babangida, Ibrahim, 99 Bali, 286 Bamako, 265 Banerjee, Abhijit, 14, 31 Bangladesh, 18, 37, 45, 127, 144, 159, 271 building collapse in, 162 data entry firms in, 178 democracy in, 124 education in, 87 garments from, 59 growth in, 6, 45, 238, 242, 271 inequality in, 67 jeans from, 56 MAMA in, 178 threats to gains in, 271–72 war in, 145 Zheng He’s trip to, 152 Ban Ki-moon, 284–85 banks, 56, 154, 241, 303 technology for, 175, 179 Bǎè Chuán, 152 bar associations, 110 Barlonyo camp, 287 Barre, Mohammed Siad, 99 Barro, Robert, 87 Bashir, Omar al-, 185 Batavia, 137 Bauer, Peter, 213, 220, 221 Bazzi, Sami, 225 bed nets, 94, 213 Belarus, 114, 185 Belgian Congo, 13, 140 Belize, 56, 69–70 benign dictators, 125–26 Benin, 103, 144, 216 Berlin Wall, fall of, x, 103, 123, 134, 143, 148 Bermeo, Sarah, 223 Better Angels of Our Nature, The (Pinker), 115 Bhavnani, Rikhil, 225 Bhote Koshi River, 203 Bill & Melinda Gates Foundation, 95, 161, 171, 212 biodiversity loss, 9, 63 biofuels, 281 Birdsall, Nancy, 298 Birendra Bir Bikram Shah Dev, King of Nepal, 122 Bismarck, Otto Eduard Leopold von, 146 Black Death, 276 black markets, 192 Boeing 707, 168 Boğaziçi University, 247 Bokassa, Jean-Bédel, 222 Boko Haram, 287 Bolivia, 162, 202, 205, 280 Bollyky, Thomas, 268 Boone, Peter, 225 border disputes, 288–91 Borlaug, Norman, 170 Botchwey, Kwesi, 189 Botswana, 9, 37, 207 aid to, 214, 216 as democracy, 98, 263 education in, 190 growth in, 5, 7, 15, 50, 126, 128, 141, 236 as landlocked, 202 life expectancy in, 81, 266 Bottom Billion, The (Collier), 118, 188, 202, 205, 217, 303 Bourguignon, François, 25, 27, 28 Brazil, 20, 22, 36, 38, 45, 155, 186 coastal vs. isolated areas in, 201 data entry firms in, 178 democracy in, 123 economic problems in, 186, 255 future of, 234 growth in, 6, 7, 20, 22, 45, 58, 235, 262 household income in, 50 inequality in, 66–67 infrastructure financing in, 259–60 innovation in, 302 natural capital in, 63 protests in, 263 reforms in, 186, 192 trade encouraged by, 155 universities in, 247 breast feeding, 178 British Royal Society, 172 British Shell Transport and Trading Company, 138 British South Africa Company, 180 Brown, Drusilla, 165 Brükner, Markus, 226 Brynjolfsson, Erik, 166, 300 budget deficits, 295 Buenos Aires, 201 Bulgaria, 7, 134, 143 Burkina Faso: demonstrations in, 281 education in, 87 as landlocked, 205 Song-Taaba Yalgré women’s cooperative in, 178 Burnside, Craig, 225 Burundi, 49 inequality in, 69–70 lack of growth in, 50 as landlocked, 202 Buthelezi, Mangosuthu, 185 Cabbages and Kings (O. Henry), 97 Cairo, 206, 216 California, 281 call centers, 56, 178, 262 Cambodia, 11, 36, 106, 114, 159 camels, 152 Cameroon, 281 Canada, 47, 210, 231 Cape Town, University of, 247 capitalism, 122, 146, 147–48, 149, 156, 162, 163, 250, 264, 303 in Asia, 155–57 Capital in the Twenty-First Century (Piketty), 68–69 capital markets, 164 carbon dioxide, 278, 282 carbon emissions, 297 Cardoso, Fernando, 186–87 Caribbean, 36 Carnation Revolution, 105 Carothers, Thomas, 112 Case Studies in Global Health, 214 cash transfer programs, 38 cassava, 171, 215 Castro, Fidel, 100, 144 Catholicism, 120–21, 123 cattle plague, 215 CD4 cell count, 175 Ceauşescu, Nicolae, 143 Center for Global Development, 298 Center for Systemic Peace, 107 Centers for Disease Control and Prevention (CDC), US, 210 Central Africa, 205 Central African Republic, 49, 50, 222 Central America: crime in, 264 megacities in, 277 wars in, 81, 141 Central Asia, 36, 141, 147 Central Bank, Gambia, 190 Central Military Commission, 134 Chad: child mortality in, 84 health improvements in, 93 as landlocked, 205 war in, 145 Chandy, Laurence, 42, 243–44 Chavez, Hugo, 113 Chen, Shaohua, 27, 29 Chernenko, Konstantin, 134 Chernobyl nuclear power plant, 134 childbirth, 74, 75–82 child mortality, 24, 72–96, 74, 85, 93, 246 Chile, 47, 127 coup in, 100 democracy in, 104, 123 growth in, 6, 7, 45, 128, 147 individual leadership in, 187 life expectancy in, 78 malaria in, 210 Pinochet’s rule in, 107–8, 122, 141, 143–44 trade encouraged by, 155 Chiluba, Frederick, 133 China, ix–x, 3, 7, 20, 22, 106, 126, 144, 203, 292, 298, 300 authoritarian capitalism in, 147, 265–66 Coca-Cola in, 46 in confrontations with neighbors, 273 demand in, 53 demographic dividend in, 236 and dictatorships, 222 emigration from, 284 exploration by, 151–53 exports from, 154 future of, 234, 249–52 growth in, 6, 8–9, 15, 17, 21, 35–36, 45, 50, 62, 71, 125, 128, 147, 154, 201, 232, 233, 235–37, 242, 269 health in, 201 income in, 201 individual leadership in, 187 inequality in, 66, 69–70 infrastructure financing in, 259–60 innovation and technology in, 154–55, 302 market reforms in, 35, 102, 134–35, 192 natural capital in, 63 opening of, 5 per capital income in, 153 pollution in, 62 poverty reduction in, 201, 244 savings and investment in, 235 slowdown in growth of, 235–37, 249, 255, 257, 293 universities in, 247 US relationship with, 298–99 cholera, 77 Chun Doo-hwan, 99 Churchill, Winston, 97 civil liberties, 99, 199 civil rights, 112 civil servants, 102 civil war, 7 in Africa, 12 decline in, 115–16, 116 Civil War, US, 142 Clemens, Michael, 225 climate change, 4, 9, 19, 21, 63, 233, 234, 256, 272–73, 278, 281–84, 285–86, 296–97, 301, 305 coal, 44, 53, 278 Coca-Cola, 46, 159 cocoa, 163, 189 Cold War, 4, 7, 11, 16, 44, 52, 81, 100, 103, 115, 116, 131, 135, 144, 145, 146, 150, 156, 183, 184, 214, 223 Collier, Paul, 14–15, 118, 188, 202, 205, 213, 217, 227, 292, 303 Collins, Daryl, 32, 33–34 Collor de Mello, Fernando, 186 Colombia, 22, 237 data entry firms in, 178 universities in, 247 colonialism, 43–44, 52, 140, 147, 148, 149, 156 and independence, 140–43 of Indonesia, 136–40 Columbus, Christopher, 152 Coming Anarchy, The (Kaplan), 11 Commission on Growth and Development, 86, 165–66, 188 commodities, 53–57, 55, 163 Communism, 4, 11, 124, 125, 135, 139, 143, 146, 147, 149, 150, 184, 250 demise of, 16, 183 Communist Party, China, 123, 138, 250 Communist Party, Indonesia, 138 Communist Party, Soviet, 133, 138 comprehensive capital, 62–63 conflict, see violence Confucianism, 122 Congo, 114, 144, 185, 213, 243, 285 child mortality in, 84 civil war in, 181, 206 coup in, 100 education in, 190 lack of growth in, 50 war in, 81 Congress, US, 298 construction, 37, 45 consumption, 40–41, 40 Contingent Reserve Arrangement, 259 contract enforcement, 261 Converse, Nathan, 198 copper, 53 corn, 162, 281 corruption, 112, 261, 264 in Brazil, 186 in Thailand, 254 in US, 142 Costa Rica, 18, 58, 159 aid to, 223 as democracy, 7, 98, 123 growth in, 50 costume jewelry, 56 Côte d’Ivoire, 163, 263 cotton, 25 creative destruction, 249 Cuba, 22, 141, 145 and democracy, 248 dictatorship in, 100, 106, 144 Cultural Revolution, 35, 128, 153, 185 currencies, and resource curse, 206 Cuyamel Fruit Company, 97–98 Czechoslovakia, 143 protests in, 134 Velvet Revolution in, 103 Czech Republic, 184 da Gama, Vasco, 152 dairy products, 280 Darfur, 8, 10, 206 Dasgupta, Partha, 62–63 data entry firms, 178 Davies, Sally, 267 DDT, 212 Deaton, Angus, 89, 213 debts, 11, 193 in Africa, 12 deficits, 101 dehydration, 94, 173 de Klerk, F.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

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3D printing, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, Commodity Super-Cycle, corporate governance, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, hiring and firing, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Jeff Bezos, job automation, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labor-force participation, Malacca Straits, Mark Zuckerberg, market bubble, megacity, Mexican peso crisis / tequila crisis, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, pattern recognition, Peter Thiel, pets.com, Plutocrats, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, working-age population

It is no doubt striking that multibillionaires like Bill Gates and Carlos Slim routinely see their fortunes fluctuate by hundreds of millions on any given day, but it signifies nothing in particular. Only in the broader year-to-year changes does the information get interesting. Lately some of this billionaire data has surfaced in serious economic discussions. In his generally admiring review of Thomas Piketty’s 2013 international best seller on inequality, Capital in the Twenty-First Century, former U.S. Treasury secretary Lawrence Summers questioned the French author’s claims about the enduring power of inherited wealth in the United States by pointing to the high degree of churn among American billionaires. Summers highlighted the fact that only one out of every 10 names on the original Forbes list in 1982 were still on the list in 2012.

Nuzzo, Carmen, Elga Bartsch, Paul Campbell Roberts, and Jessica Alsford. “Sustainable Economics: Mind the Inequality Gap.” Morgan Stanley Research, 2015. Pani, Marco. “Hold Your Nose and Vote: Why Do Some Democracies Tolerate Corruption?” International Monetary Fund, 2009. Parks, Ken. “Argentina Moves to Trim Costly Utility Subsidies.” Wall Street Journal, March 27, 2014. Pikkety, Thomas. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press, 2013. “Putin Publicly Humiliates Business Tycoons Solving Social Crisis in Russian Town.” Pravda, June 5, 2009. Robertson, Charles. “Will Anti-Corruption Legislation Prolong Corruption?” Renaissance Capital, December 5, 2012. Sharma, Ruchir. “For True Stimulus, Fed Should Drop QE3.” Financial Times, September 10, 2012. Sharma, Ruchir. “Liberals Love the ‘One Percent.’”


pages: 494 words: 116,739

Geek Heresy: Rescuing Social Change From the Cult of Technology by Kentaro Toyama

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Albert Einstein, Berlin Wall, Bernie Madoff, blood diamonds, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, computer vision, conceptual framework, delayed gratification, Edward Glaeser, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Francis Fukuyama: the end of history, fundamental attribution error, germ theory of disease, global village, Hans Rosling, happiness index / gross national happiness, income inequality, invention of the printing press, invisible hand, Isaac Newton, Khan Academy, Kibera, knowledge worker, libertarian paternalism, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, microcredit, mobile money, Nicholas Carr, North Sea oil, pattern recognition, Peter Singer: altruism, Peter Thiel, post-industrial society, randomized controlled trial, rent-seeking, RFID, Richard Florida, Richard Thaler, school vouchers, self-driving car, Silicon Valley, Simon Kuznets, Steve Jobs, Steven Pinker, technoutopianism, The Fortune at the Bottom of the Pyramid, Upton Sinclair, Walter Mischel, War on Poverty, winner-take-all economy, World Values Survey, Y2K

Journal of Personality and Social Psychology 99(5):771–784, http://psycnet.apa.org/journals/psp/99/5/771/. Piff, Paul K., Daniel M. Stancato, Stéphane Côté, Rodolfo Mendoza-Denton, and Dacher Keltner. (2012). Higher social class predicts increased unethical behavior. In Proceedings of the National Academy of Sciences, www.pnas.org/content/early/2012/02/21/1118373109. Piketty, Thomas. (2014). Capital in the Twenty-First Century. Arthur Goldhammer, trans. Belknap Press of Harvard University Press. Piketty, Thomas, and Emmanuel Saez. (2003). Income inequality in the United States, 1913–1998. Quarterly Journal of Economics 143(1):1–39, http://qje.oxfordjournals.org/content/118/1/1. Pinker, Steven. (2011). The Better Angels of Our Nature: Why Violence Has Declined. Viking. Plato. (1956). Great Dialogues of Plato.

Of note, self-licensing occurs even when all that a person does is make a public statement of good intention, which is particularly relevant for Toms Shoes and other purchases where apparent proof of goodness is publicly visible. 35.To be clear, I’m not against capitalism. Capitalism is a terrific economic engine, and the developing world could benefit from more for-profit companies. (One problem with firms like Toms is that the owners are rich-world people, while their workers are not.) But capitalism on its own concentrates wealth (and therefore power) in the hands of a few, as so many have noted, from Karl Marx to Thomas Piketty (2014). Other forces are needed to spread growth widely, whether it’s cooperatives, unions, progressive taxation, universal provision of basic needs, private charity, or a combination of these and other factors. Social-enterprise hype glorifies market mechanisms and therefore crowds out important approaches that come with few extrinsic rewards. We need more of what liberation theology calls a “preferential option for the poor” (Farmer 2005, p. 139). 36.Franzen (2010), p. 439. 37.Fisher (2012). 38.McNeil (2010). 39.UNESCO (2012).


pages: 388 words: 125,472

The Establishment: And How They Get Away With It by Owen Jones

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anti-communist, Asian financial crisis, bank run, battle of ideas, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, don't be evil, Edward Snowden, Etonian, eurozone crisis, falling living standards, Francis Fukuyama: the end of history, full employment, glass ceiling, hiring and firing, housing crisis, inflation targeting, investor state dispute settlement, James Dyson, laissez-faire capitalism, market fundamentalism, Monroe Doctrine, Mont Pelerin Society, moral hazard, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, open borders, Plutocrats, plutocrats, profit motive, quantitative easing, race to the bottom, rent control, road to serfdom, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, stakhanovite, statistical model, The Wealth of Nations by Adam Smith, transfer pricing, union organizing, unpaid internship, Washington Consensus, Winter of Discontent

Wealthy individuals shell out cash to think tanks who promote their economic interests, after all, and the rise of the New Right has purged dissidents from economic faculties, ensuring that climbing the academic ranks depends on conforming to the line. Yet there remains a diverse range of economists and other experts – some of whom I have interviewed in the course of this book – who refuse to adhere to the status quo. In 2014 the French economist Thomas Piketty caused an intellectual sensation with the publication of his book Capital in the Twenty-First Century, which exposed how inequality perpetuates itself and called for higher income taxes and a global tax on wealth. The problem is that such dissidents are often all too disparate and fragmented, working on individual projects that generally do not receive the attention of a hostile media. Ironically, defenders of the British Establishment preach a doctrine of rampant individualism, yet they are often impressively disciplined about working together as a collective group with shared goals; while those of us who oppose them preach solidarity, yet too often we operate individually and act like mavericks.


pages: 823 words: 206,070

The Making of Global Capitalism by Leo Panitch, Sam Gindin

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accounting loophole / creative accounting, airline deregulation, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Big bang: deregulation of the City of London, bilateral investment treaty, Branko Milanovic, Bretton Woods, BRICs, British Empire, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collective bargaining, continuous integration, corporate governance, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, Deng Xiaoping, disintermediation, ending welfare as we know it, eurozone crisis, facts on the ground, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, floating exchange rates, full employment, Gini coefficient, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, land reform, late capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, structural adjustment programs, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, very high income, Washington Consensus, Works Progress Administration, zero-coupon bond

Yet it was especially notable that the fissures the crisis produced did not take the form of conflicts between capitalist states, but of social conflict within them. The significance of the fact that the political fault-lines of global capitalism run within states rather than between them is, we suggest, replete with implications for the American empire’s capacity to sustain global capitalism in the twenty-first century. It is also pregnant with possibilities for the emergence of new movements to transcend capitalist markets and states. I PRELUDE TO THE NEW AMERICAN EMPIRE 1 The DNA of American Capitalism The role that the United States came to play in the making of global capitalism was not inevitable, but nor was it accidental. The American empire did not appear from nowhere.

Only in this sense can it also be said that with the fall in the rate of profit the system collapses, since the profit rate falls because the mass of profit relatively decreases.” Quoted in Russell Jacoby, “Politics of the Crisis Theory,” Telos, Spring 1975, p. 35. 97 See Simon Mohun, “Distributive Shares in the US Economy 1964–2001,” Cambridge Journal of Economics 30: 3 (2006). 98 For wages and labor compensation, see Economic Report of the President, Washington, DC, 2002, Tables, B-47, B-48, and B-60. For CEO compensation, see Emmanuel Saez and Thomas Piketty, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118: 1 (2003), Table b4, column 6, updated at elsa.berkeley.edu. 99 US Bureau of Labor Statistics, International Labor Comparisons: Productivity and unit labor costs in manufacturing, Table 1, available at bls.gov. Note as well that productivity measures in manufacturing are much more reliable than in the service sector, where difficulties in measuring output understate the numbers. 100 For a convincing empirical link between the recovery in the rate of profit after the early 1980s and trends in the output per unit of capital stock (capital productivity), see Gerard Duménil and Dominique Lévy, “The Profit Rate: Where and How Much Did It Fall?