Gini coefficient

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pages: 775 words: 208,604

The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century by Walter Scheidel

agricultural Revolution, assortative mating, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, collective bargaining, colonial rule, Columbian Exchange, conceptual framework, confounding variable, corporate governance, cosmological principle, CRISPR, crony capitalism, dark matter, declining real wages, democratizing finance, demographic transition, Dissolution of the Soviet Union, Downton Abbey, Edward Glaeser, failed state, Fall of the Berlin Wall, financial deregulation, fixed income, Francisco Pizarro, full employment, Gini coefficient, global pandemic, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, John Markoff, knowledge worker, land reform, land tenure, low skilled workers, means of production, mega-rich, Network effects, nuclear winter, offshore financial centre, plutocrats, race to the bottom, recommendation engine, rent control, rent-seeking, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, Simon Kuznets, synthetic biology, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, transatlantic slave trade, universal basic income, very high income, working-age population, zero-sum game

424 Appendix: The Limits of Inequality 445 Bibliography 457 Index 495 FIGURES AND TABLES FIGURES I.1Top 1 percent income share in the United States (per year) and references to “income inequality” (three-year moving averages), 1970–2008 1.1General form of the social structure of agrarian societies 3.1Inequality trends in Europe in the long run 3.2Gini coefficients of wealth distribution in Italy and the Low Countries, 1500–1800 3.3Ratio of mean per capita GDP to wages and real wages in Spain, 1277–1850 3.4Inequality trends in Latin America in the long run 3.5Inequality trends in the United States in the long run 4.1Top income shares in Japan, 1910–2010 5.1Top 1 percent income shares in four countries, 1935–1975 5.2Top 0.1 percent income shares in Germany and the United Kingdom 5.3Top 1 percent wealth shares in ten countries, 1740–2011 5.4Ratios of private wealth to national income in France, Germany, the United Kingdom, and the world, 1870–2010 5.5Capital income share in total gross income for top 1 percent of incomes in France, Sweden, and the United States, 1920–2010 5.6The share of government spending in national income in seven countries, 1913–1918 5.7Top marginal tax rates in nine countries, 1900–2006 5.8Average top rates of income and inheritance taxation in twenty countries, 1800–2013 5.9World War I and average top rates of income taxation in seventeen countries 5.10Top 1 percent income share in Germany, 1891–1975 5.11Top 1 percent income share in Sweden, 1903–1975 5.12State marginal income tax rates in Sweden, 1862–2013 5.13Trade union density in ten OECD countries, 1880–2008 6.1Military size and mobilization rates in years of war in great power states, 1650–2000 6.2Gini coefficients of income and top 0.01 percent income share in Spain, 1929–2014 9.1Median house sizes in Britain from the Iron Age to the Early Middle Ages 9.2House size quartiles in Britain from the Iron Age to the Early Middle Ages 9.3Gini coefficients of house sizes in Britain from the Iron Age to the Early Middle Ages 10.1Real wages of urban unskilled workers in Europe and the Levant, 1300–1800 10.2Real wages of urban skilled workers in Europe and the Levant, 1300–1800 10.3Rural real wages measured in terms of grain in England, 1200–1869 10.4Top 5 percent wealth shares and Gini coefficients of wealth distribution in the cities of Piedmont, 1300–1800 10.5Gini coefficients of wealth in Poggibonsi, 1338–1779 10.6Top 5 percent wealth shares in Tuscany, 1283–1792 10.7Top 5 percent wealth shares and Gini coefficients of wealth distribution in Lucca, 1331–1561 11.1Real wages expressed in multiples of bare-bones consumption baskets in central Mexico, 1520–1820 11.2Daily wheat wages of unskilled rural and urban workers in Egypt, third century BCE to fifteenth century CE 11.3Changes in real prices and rents between 100–160s and 190s–260s CE in Roman Egypt 11.4Wealth inequality in Augsburg: number of taxpayers, average tax payments, and Gini coefficients of tax payments, 1498–1702 13.1Gross National Income and Gini coefficients in different countries, 2010 13.2Estimated and conjectured income Gini coefficients for Latin America, 1870–1990 (population-weighted averages for four, six, and sixteen countries) 14.1Counterfactual inequality trends in the twentieth century 15.1Top 1 percent income shares in twenty OECD countries, 1980–2013 A.1Inequality possibility frontier A.2Estimated income Gini coefficients and the inequality possibility frontier in preindustrial societies A.3Extraction rates for preindustrial societies and their counterpart modern societies A.4Inequality possibility frontier for different values of the social minimum A.5Different types of inequality possibility frontiers TABLES 2.1The development of the largest reported fortunes in Roman society and the population under Roman control, second century BCE to fifth century CE 5.1The development of top income shares during the world wars 5.2Variation in the rate of reduction of top 1 percent income shares, by period 6.1Property in 1870 relative to 1860 (1860 = 100), for Southern whites 6.2Inequality of Southern household incomes 8.1Income shares in France, 1780–1866 11.1Share and number of taxable households in Augsburg by tax bracket, 1618 and 1646 15.1Trends in top income shares and income inequality in select countries, 1980–2010 ACKNOWLEDGMENTS The gap between the haves and the have-nots has alternately grown and shrunk throughout the course of human civilization.

Despite these difficulties, the compilation and online publication of a growing amount of information on top income shares in the “World Wealth and Income Database” has put our understanding of income inequality on a more solid footing and redirected attention from somewhat opaque single-value metrics such as the Gini coefficient to more articulated indices of resource concentration.12 All these problems pale in comparison to those we encounter once we seek to extend the study of income and wealth inequality farther back in time. Regular income taxes rarely predate the twentieth century. In the absence of household surveys, we have to rely on proxy data to calculate Gini coefficients. Prior to about 1800, income inequality across entire societies can be estimated only with the help of social tables, rough approximations of the incomes obtained by different parts of the population that were drawn up by contemporary observers or inferred, however tenuously, by later scholars.

APPENDIX: THE LIMITS OF INEQUALITY How far can inequality rise? In one important respect, measurements of income inequality differ from those of wealth inequality. There is no limit to how unequally wealth can be distributed within a given population. In theory, one person could own everything there is to own, with everybody else owning nothing but surviving on income from labor or transfers. This distribution would produce a Gini coefficient of ~1 or a top wealth share of 100 percent. In purely mathematical terms, income Ginis might also run from 0, for perfect equality, to ~1, for complete inequality. However, ~1 can never be reached in practice, because everyone needs a minimum amount of income just to stay alive.


pages: 221 words: 55,901

The Globalization of Inequality by François Bourguignon

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, Glass-Steagall Act, income inequality, income per capita, labor-force participation, liberal capitalism, low interest rates, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, 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

See also emerging economies development aid, 148–53, 157 development gap, 34–35, 83 Di Bao program, 166 discrimination: ghettos and, 66– 67; immigrants and, 64, 66, 127; labor and, 64–66, 69, 132, 142, 180–81; non-­material inequalites and, 64–66, 69; racial, 65; women and, 64–65, 103 disinflation, 95, 102, 110 distribution, 10n1, 186; capital-­ labor split and, 55–58, 60; efficiency and, 142–45; evolution of inequality and, 41, 42t, 44t, 45, 46t, 48–59, 64, 71–72; fairer globalization and, 148, 153, 156–73, 175, 178; geographical disequilibria and, 83; Gini coefficient and, 18 (see also Gini coefficient); global, 18–19, 25, 29, 39, 41, 46t, 121, 124–38, 141– 45, 156; growth and, 49–50, 188; international, 17–18, 30, 148; median of, 31; OECD countries and, 10–11, 12n3; policy and, 26, 72, 135, 188; range of, 16; real earnings loss and, 78; redistribution and, 4, 7, 37 (see also redistribution); rise in inequality and, 74, 77–79, 82, 85, 90–92, 94–96, 99, 103–4, 106–7, 112, 114–15; Southern perspective on, 82–85; standard of living and, 16, 18 (see also standard of living); taxes and, 37, 92–94 (see also taxes); Theil coefficient and, 18–19, 37–38, 194 distribution (cont.) 52; transfers and, 4, 14, 48, 105, 110, 130, 135–36, 142, 148, 153, 158–67, 170, 175, 181, 183, 187; wage, 3, 78–79, 107 Divided We Stand report, 52 Doha negotiations, 154 drugs, 66, 133 Dubai, 127 Economic Partnership Agreements (EPAs), 156 education, 34, 187; college, 132; evolution of inequality and, 61, 65–68; fairer globalization and, 149, 152, 167–73, 180–81; globalization and, 132, 140, 143; labor and, 168, 180; Millennium Development Goals and, 149– 50; national inequality and, 167–73; poverty and, 24; preschool, 169–70; redistribution and, 149, 152, 167–73; rise in inequality and, 111; taxes and, 167–73; tuition and, 170 efficiency: data transfer technology and, 78; deregulation and, 94, 96, 105, 108; economic, 1, 4, 6, 111, 116, 119, 129–33, 135, 140–45, 158, 164, 167, 171, 181; emerging economies and, 78; equality and, 116, 129–31; fairness and, 8, 129– 31; globalization and, 1, 4, 6, 8, 36, 78, 94, 96, 105, 108, 111, 116, 118–19, 129–35, 140–45, 157–58, 164, 167, 170–71, 175, 180–81, 188; human capital and, 175; import substitution and, 34, 180; inefficiency and, 105, 129–30, 132–33, 135, 140, 170–71, 180, 188; labor Index and, 175; loss of, 142, 164; opportunity and, 142–45; Pareto, 130n5; privatization and, 94, 96, 105, 108; redistribution and, 142–45; rents and, 180; social tensions and, 188; spontaneous redistribution and, 133; taxes and, 170; technology and, 78; weak institutions and, 36; wealth of nations and, 1 elitism, 182; fairer globalization and, 151, 165; globalization and, 127n4, 136, 138; rise in inequality and, 4, 6–7 emerging economies: Africa and, 122–23 (see also Africa); competition and, 178, 187–88; conditional cash transfers and, 165– 66; credit cards and, 165; domestic markets and, 120, 125; efficient data transfer and, 78; evolution of inequality and, 57; fairer globalization and, 147, 154, 158, 165–66, 177–78, 182; global inequality and, 40, 77– 80, 82, 109, 113, 115, 188–89; globalization and, 117, 119–22, 125–27; institutions and, 109– 12; Kuznets curve and, 113; labor and, 77; natural resources and, 127; profits and, 117; rise in inequality and, 109–12; structural adjustment and, 109– 12; taxes and, 165; trends in, 57; Washington consensus and, 109–10, 153 entrepreneurs, 83, 92, 96, 131–32, 135, 143, 170–71, 188 equality: efficiency and, 116, 129– 31; policy for, 184–89; relative gap and, 18, 28, 30, 31–32, 36 Ethiopia, 21–22, 46t, 155 Index195 European Union (EU), 24, 156, 174, 177 Everything But Arms (EBA) initiative, 155 evolution of inequality: Africa and, 46t, 54–55; Brazil and, 46t, 55, 59, 70; capital and, 55–58, 60, 73; China and, 47, 53, 57–60; consumption and, 42t, 44t; convergence and, 65, 69; credit and, 61; crises and, 48, 50, 54, 57, 73–74; developed countries and, 47, 52–53, 56, 59–64, 66; developing countries and, 47, 53–55, 57, 63, 68; distribution and, 41, 42t, 44t, 45, 46t, 48–59, 64, 71– 72; education and, 61, 65–68; elitism and, 4, 6–7, 46t; emerging economies and, 57; exceptions and, 52–53; France and, 46t, 51f, 52–53, 55, 58, 59n8, 62–63, 66, 70–71; ghettos and, 66–67; Gini coefficient and, 39, 42t, 44t, 48, 50, 51f, 53, 58–59; Great Depression and, 48; growth and, 33, 49–50, 54; India and, 54, 57, 59–60; institutions and, 55, 69; investment and, 56; labor and, 55–58, 60; markets and, 48–50, 53–54, 64, 69; national income inequality and, 48–52; non-­monetary inequalities and, 49, 60–70; normalization and, 41, 43–44; opportunity and, 61–62, 68, 70–71; perceptions of inequality and, 69–73; policy and, 55, 72; primary income and, 48–50, 58; production and, 57; productivity and, 63; profit and, 56; reform and, 54, 72; rise in inequality in, 48–52, 73, 77–80, 91–95, 97–98, 102–8; risk and, 63, 66; standard of living and, 41, 43– 45, 46t, 53–55, 58, 60–62, 67, 69, 73; surveys and, 42t, 43–45, 56, 68n17, 69–71; taxes and, 12–14, 37, 48, 50, 56n5; Theil coefficient and, 42; United Kingdom and, 46t, 50, 51f, 59, 67, 68n17; United States and, 2, 4–6, 9, 11, 21, 33, 46t, 47–50, 51f, 58, 59n9, 66–70, 73; wealth and, 58–60 executives, 73, 88–89, 97, 174 expenditure per capita, 13, 15, 42t, 44t exports: deindustrialization and, 76, 82; fairer globalization and, 147, 154–55, 176, 178; globalization and, 124, 128; rise in inequality and, 76, 82–84 fairer globalization: Africa and, 147, 151, 154–56, 179, 183; African Growth Opportunity Act (AGOA) and, 155; Bolsa Familia and, 166; Brazil and, 150, 154, 166–68, 173; capital and, 158–62, 167, 171, 175, 182; China and, 150, 154, 165–66, 172, 178; competition and, 155, 169, 173, 176–79, 182; consumers and, 177–78; consumption and, 159, 177; convergence and, 146–47, 157; correcting national inequalities and, 158–80; credit and, 164–65, 172, 180; crises and, 163, 176; deregulation and, 173; developed countries and, 150, 154–57, 160, 162, 164, 168–72, 176, 178–79, 181; developing countries and, 154, 166; development aid and, 196 fairer globalization (cont.) 148–53, 157; Di Bao program and, 166; distribution and, 148, 153, 156–73, 175, 178; Economic Partnership Agreements (EPAs) and, 156; education and, 149, 152, 167–73; 180–81; elitism and, 151, 165; emerging economies and, 147, 154, 158, 165–66, 177–78, 182; Everything But Arms (EBA) initiative and, 155; exports and, 147, 154–55, 176, 178; France and, 147, 159–61, 164, 169, 175, 177; Gini coefficient and, 156, 166; goods and services sector and, 180; growth and, 147–52, 155, 162, 167–68, 171, 177, 180, 183; health issues and, 152, 166; imports and, 154, 177–78, 180; India and, 150, 154, 165– 66, 172; inheritance and, 170– 73; institutions and, 151, 168, 174–75; international trade and, 176–77; investment and, 150, 155, 157, 160, 170, 174, 179; liberalization and, 156, 179; markets and, 147–48, 154–58, 168, 173–75, 178–81; Millennium Development Goals and, 149–50; national inequality and, 147, 158; opportunity and, 155, 167, 170, 172; policy and, 147–53, 157, 167–73, 175, 177, 179–83; poverty and, 147–52, 164, 166, 175; prices and, 147– 48, 176, 178, 182; primary income and, 158, 163n10, 167, 173; production and, 155–57, 167, 176, 178–79; productivity and, 155, 177–78; profit and, 173, 176; Progresa program and, Index 166; protectionism and, 7, 147, 154, 157, 176–79; redistribution and, 148, 153, 156–73, 175, 178; reform and, 151, 161, 163, 168–69; regulation and, 152, 173–76, 181–82; risk and, 148, 154, 156, 159, 164, 171, 174–75, 178; standard of living and, 146–48, 154, 156–58, 160, 165, 168–69; surveys and, 169; taxes and, 148, 158–73, 175, 181–83; technology and, 156, 173; TRIPS and, 156; United Kingdom and, 163, 169; United States and, 155, 159–61, 163– 64, 169, 174–75, 182; wealth and, 162, 164, 167, 170–73 Fitoussi, Jean-­Paul, 14 France: evolution of inequality and, 46t, 51f, 52–53, 55, 58, 59n8, 62–63, 66, 70–71; fairer globalization and, 147, 159–61, 164, 169, 175, 177; Gini coefficient of, 20; global inequality and, 2, 9, 11, 20–21; offshoring and, 81; rise in inequality and, 80, 88, 92–93, 95, 97, 99, 103; soccer and, 87; wage deductions and, 159 G7 countries, 56 G20 countries, 182 Garcia-­Panalosa, Cecilia, 107 Gates, Bill, 5–6, 70, 150 Germany, 2, 21, 46t, 50, 51f, 80, 88, 92 Ghana, 46t, 54 ghettos, 66–67 Giertz, Seth, 160–61 Gini coefficient: Brazil and, 22; Current Population Survey and, 21; evolution of inequality and, Index197 39, 42t, 44t, 48, 50, 51f, 53, 58– 59; fairer globalization and, 156, 166; France and, 20; historical perspective on, 27–28; meaning of, 18–19; purchasing power parity and, 28; rise in inequality and, 110; United States and, 21; wealth inequality and, 58–60 Glass-­Steagall Act, 174n15 global distribution, 18–19, 25, 29, 39, 41, 46t, 121, 156 global inequality: Africa and, 16, 21, 23, 30–31, 34, 36; between countries, 2–3, 5, 7, 9, 16–19, 23, 33, 36, 38–39, 42–45, 47, 53, 58, 68, 90–91, 107, 117–19, 123, 128, 153; Brazil and, 21– 23; crises and, 20, 38–41; cross-­ country heterogeneity and, 13; definition of, 3–4, 9–10, 25–26, 30–32, 39; developed countries and, 10–11, 21, 34–39; developing countries and, 10–11, 13, 21, 32, 34–39; effects of, 38–40; emerging economies and, 40, 77–80, 82, 109, 113, 115, 188– 89; at the end of the 2000s, 20– 25; evolution of inequality and, 41 (see also evolution of inequality); expenditure per capita and, 13, 15, 42t, 44t; France and, 2, 9, 11, 20–21; globalization and, 117–18, 121–23, 128; great gap and, 33–36; historic turning point for, 25–32; Human Development Report and, 25; institutions and, 36; measuring, 10– 20; Millennium Development Goals and, 149–50, 185; normalization and, 13, 15, 22–23, 26, 29; OECD Database on Household Income Distribution and Poverty and, 11–12; policy and, 185–89; Povcal database and, 10, 12, 42t, 43, 44t; prices and, 27–28, 74, 80, 84, 91–92, 94, 97, 110; profit and, 13; reduction of, 2, 185–86; relative gap and, 18, 28, 30–32, 36; rise of, 2–4, 7; risk and, 20; standard of living and, 10–26, 29, 31–33, 36, 39; surveys on, 10, 12–15, 20n10, 21–22, 29, 42t, 43–45; technology and, 3–4, 34–35; trend reversal in, 37–38; within countries, 2, 5–7, 9, 16, 30, 33, 35–45, 47, 113–14, 118, 124– 29, 184–85, 189 globalization: Africa and, 122–23, 126–27; Asian dragons and, 34, 82; Brazil and, 127, 133; capital and, 117, 125–26, 132, 137; China and, 120–22, 128; competition and, 117–18, 130, 186 (see also competition); as complex historical phenomenon, 1–2; consumption and, 137–39; convergence and, 120–22, 125; credit and, 131–32, 137–40; crises and, 119–22, 125, 135–39, 142; debate over, 1; deindustrialization in developed countries and, 75–82; democratic societies and, 135–36; deregulation and, 95–99; developed countries and, 117, 119, 121, 127n4, 128, 133, 143; developing countries and, 121, 127n4, 128, 132, 143; education and, 132, 140, 143; efficiency and, 1, 4, 6, 8, 36, 78, 94, 96, 105, 108, 111, 116, 118–19, 129–35, 140–45, 157–58, 164, 167, 170–71, 175, 180–81, 188; elitism and, 127n4, 136, 138; 198 globalization (cont.) emerging economies and, 117, 119–22, 125–27; exports and, 124, 128; fairer, 146–83 (see also fairer globalization); future of inequality between countries and, 119–22; global inequality and, 117–18, 121–23, 128; goods and services sector and, 127, 130; growth and, 118–29, 134–39; health issues and, 140– 41, 144; Heckscher-­Ohlin model and, 76; imports and, 119, 124; inequality within countries and, 124–29; inheritance and, 144–45; institutions and, 124; as instrument for modernization, 1; international trade and, 3, 75–76, 78–79, 83, 112, 114, 176–77; investment and, 119, 130, 134–35, 143; laissez-­faire approach and, 118, 129; markets and, 118, 120–21, 124–37, 140, 143–44; as moral threat, 1; national inequality and, 119; negative consequences of inequality and, 131–42; opportunity and, 133–34, 139, 142–44; as panacea, 1; policy and, 118–19, 124, 126, 128–31, 139, 143–44; poverty and, 117, 123, 126–27, 134, 144; prices and, 118, 122, 126, 136–38; primary income and, 135, 143–44; production and, 119, 124, 126, 129, 131, 133, 137; productivity and, 120, 125, 127, 144; profit and, 117; redistribution and, 121, 124–38, 141–45; reform and, 124, 126–27, 138; regulation and, 136; rise in inequality and, 117–18; risk and, 127–28, Index 137–39, 144; shocks and, 38, 55, 91–92, 175; Southern perspective on, 82–85; standard of living and, 120–23, 126, 138, 143; surveys and, 127n4, 141n15; taxes and, 74, 89n10, 91–94, 104, 114–15, 129–30, 135–36, 142–45; technology and, 86–91, 118–20, 125; trends and, 118; United States and, 135–39; wealth and, 74, 95, 98, 125, 127, 129, 131–32, 139, 143–45 Great Depression, 48 Greece, 46t, 135 gross domestic product (GDP) measurement: Current Population Survey and, 21; evolution of inequality and, 41–45, 56–57; fairer globalization and, 123, 127, 165–66, 176; global inequality and, 13–15, 20–21, 23, 26, 27f, 29–30, 39; normalization and, 29, 41, 43–45; rise in inequality and, 94; Sen-­Stiglitz-­ Fitoussi report and, 14 Gross National Income (GNI), 148–49 Growing Unequal report, 52 growth, 4; African Growth Opportunity Act (AGOA) and, 155; constraints and, 35; consumption and, 13–15, 42t, 44t, 80, 137–39, 159, 177; convergence and, 16; determinants of, 34; distribution and, 49–50, 188; emerging economies and, 125 (see also emerging economies); evolution of inequality and, 33, 49–50, 54; fairer globalization and, 147–52, 155, 162, 167–68, 171, 177, 180, 183; GDP mea- Index199 surement of, 30, 39 (see also gross domestic product (GDP) measurement); globalization and, 118–29, 134–39; great gap in, 33–36; import substitution and, 34, 180; inflation and, 50, 95, 102, 110; negative, 31; political reversals and, 36; poverty and, 28–29; production and, 3, 34–35, 57, 74, 76–81, 84–86, 119, 124, 126, 129, 131, 133, 137, 155–57, 167, 176, 178–79; rate of, 15, 29–35, 79, 125, 185; recession and, 6, 31, 99, 120; relative gap and, 18, 20, 30–32, 36; rise in inequality and, 75, 79, 82, 84, 109–12; trends in, 40, 121 health issues, 24, 187; fairer globalization and, 152, 166; globalization and, 140–41, 144; public healthcare and, 37, 111, 140 Heckscher-­Ohlin model, 76 Hong Kong, 34, 82, 174 housing, 12, 61, 137 human capital, 74, 167, 175 Human Development Report, 25 Ibrahimovich, Zlata, 87 IKEA, 172 immigrants, 64, 66, 127 imports: fairer globalization and, 154, 177–78, 180; globalization and, 119, 124; import substitution and, 34, 180; rise in inequality and, 80 income: average, 9, 18, 21, 29–30, 43, 72; bonuses and, 87, 174; convergence and, 16; currency conversion and, 11; definition of, 45; deindustrialization and, 75–82; developed/developing countries and, 5, 36; disposable, 20, 22, 24, 48, 50, 51f, 74, 91, 163; distribution of, 3 (see also distribution); executives and, 73, 88–89, 97, 174; family, 10; financial operators and, 87–88, 90–91; gap in, 3, 5–6, 27f, 33– 36, 42t, 44t, 149; GDP measurement and, 13–15, 20–21, 23, 26, 27f, 29–30, 39, 41–45, 56–57, 94, 123, 127, 165–66, 176; high, 50, 52, 56, 85–93, 97–99, 140, 143, 158–62, 164, 189; household, 10–12, 43, 45, 50, 58, 105, 107, 137, 163, 177; inequality in, 2, 4, 41, 48–50, 56–64, 68, 70, 72–73, 83, 98, 102–3, 107–8, 114, 125, 132– 34, 137, 140–41, 143–44, 163; inflation and, 50, 95, 102, 110; international scale for, 17–18, 23, 30; lawyers and, 89–90; mean, 17, 20n10, 27f, 42t, 44t; median, 6, 49, 71, 102–3, 106; minimum wage and, 52–53, 100, 102–8, 175, 177; national, 7, 16–19, 30, 43, 48–52, 60, 73, 84n6, 125, 149, 153, 172; OECD Database on Household Income Distribution and Poverty and, 11; opportunity and, 5; payroll and, 53, 93, 100, 104, 107, 175; pension systems and, 167; per capita, 20, 25, 29–30, 42t, 45, 48, 55–56, 120; portfolios and, 88; poverty and, 1, 11, 15n6, 19–20, 22–25, 28–29, 32, 44t, 109, 117, 123, 126–27, 134, 144, 147–52, 164, 166, 175; primary, 48–50, 58, 135, 143–44, 158, 163n10, 167, 173; 200 income (cont.) purchasing power and, 11, 13, 19–24, 27f, 28, 50, 80, 144, 158, 178; real earnings loss and, 78; relative gap and, 18, 28, 30, 31– 32, 36; superstars and, 85–87, 89–90; taxes and, 37, 89n10, 92–93, 145, 159, 161–65, 170 (see also taxes); technology and, 34, 180; virtual, 12; wage inequality and, 51–53, 79, 101–3, 106, 108; wage ladder effects and, 78–79; wealth inequality and, 58–60; women and, 64– 65, 103 India: evolution of inequality and, 54, 57, 59–60; fairer globalization and, 150, 154, 165– 66, 172; household consumption and, 15; international trade and, 75; Kuznets hypothesis and, 113; rise in inequality and, 2, 15–16, 19, 30, 34, 46t, 75, 83, 90, 112–13; taxes and, 165 Indonesia, 30, 46t, 54, 111, 127 industrialization: deindustrialization and, 1, 75–82, 102, 120, 188; labor and, 1, 26, 29, 33, 35, 54, 82, 84, 102, 113, 120, 127, 179, 188 Industrial Revolution, 26, 29, 33, 35 inequality: between countries, 2–3, 5, 7, 9, 16–19, 23, 33, 36, 38– 39, 42–45, 47, 53, 58, 68, 90– 91, 107, 117–19, 123, 128, 153; efficiency and, 1, 4, 6, 8, 36, 78, 94, 96, 105, 108, 111, 116, 118– 19, 129–35, 140–45, 157–58, 164, 167, 170–71, 175, 180–81, 188; Gini coefficient and, 18 (see Index also Gini coefficient); income, 2, 4, 41, 48–50, 56–64, 68, 70, 72–73, 83, 98, 102–3, 107–8, 114, 125, 132–34, 137, 140–41, 143–44, 163; international, 17; inverted U curve and, 54, 113; measurement of, 18; negative consequences of, 131–42; non-­ monetary, 49, 60–70; perceptions of, 69–73; social tensions and, 188; standard of living and, 18 (see also standard of living); Theil coefficient and, 18–19, 37–38, 42; wealth, 58–60; within countries, 2, 5–7, 9, 16, 30, 33, 37–45, 47, 113–14, 118, 124–29, 184–85, 189 infant mortality, 150 inflation, 50, 95, 102, 110 inheritance: fairer globalization and, 170–73; globalization and, 144–45; rise in inequality and, 93 institutions: deregulation and, 91– 112 (see also deregulation); disinflation and, 95, 102, 110; emerging economies and, 109– 12; evolution of inequality and, 55, 69; fairer globalization and, 151, 168, 174–75; global inequality and, 36; globalization and, 124; markets and, 91–92; privatization and, 94–109; reform and, 91–112; rise in inequality and, 91–112, 114; structural adjustment and, 109– 12; taxes and, 92–94; “too big to fail” concept and, 174–75; Washington consensus and, 109–10, 153 International Development Association, 149 Index201 international income scale, 17–18, 23, 30 International Labor Organization, 51 International Monetary Fund (IMF), 54, 57, 84, 90, 109–10 international trade: capital mobility and, 74; China and, 75; de­ industrialization and, 75–76, 78–79; effect of new players, 75–76; Heckscher-­Ohlin model and, 76; India and, 75; offshoring and, 81–82; rise in inequality and, 75–76, 78–79, 83, 112, 114; Soviet Union and, 75; theory of, 76; wage ladder effects and, 78–79 inverted U curve, 54, 113 investment: direct, 76, 79; evolution of inequality and, 56; fairer globalization and, 150, 155, 157, 160, 170, 174, 179; foreign, 83, 85, 112, 155, 157, 160, 179; globalization and, 119, 130, 134– 35, 143; production and, 119; public services and, 143; re-­ investment and, 56; rise in inequality and, 76, 79, 82–83, 85, 92, 97–98, 112; taxes and, 92 Ivory Coast, 54 Japan, 34, 46t, 51f, 103 job training, 34, 181, 187 Kenya, 46t, 54 kidnapping, 133 Kuznets, Simon, 113, 126 labor: agriculture and, 12, 82, 84, 122–23, 127–28, 132, 155; artists and, 86–87; bonuses and, 87, 174; capital and, 3–4, 55– 58, 60, 158, 161n7, 185; capital mobility and, 3; cheap, 77, 117; costs of, 81, 100, 104–5, 117, 176, 187; decline in share of national income and, 73; deindustrialization and, 75–82; demand for, 168; deregulation and, 99– 109; discrimination and, 64–66, 69, 132, 142, 180–81; distribution of income and, 175 (see also distribution); education and, 168, 180; efficiency and, 96–97, 175; emerging economies and, 77; entrepreneurs and, 83, 92, 96, 131–32, 135, 143, 170–71, 188; evolution of inequality and, 55–58, 60; excess, 81, 83; executives and, 73, 88–89, 97, 174; goods and services sector and, 13, 73, 80, 85, 91, 102, 127, 130, 180; growth and, 154, 179; immigrant, 64, 66, 127; increased mobility and, 90–91; industrialization and, 1, 26, 29, 33, 35, 54, 80, 82, 84, 102, 113, 120, 127, 179, 188; inflation and, 50, 95, 102, 110; International Labor Organization and, 51; job training and, 34, 181, 187; manufacturing and, 57, 80–82, 84, 123, 154–55, 157; median wage and, 49, 71, 102– 3, 106; minimum wage and, 52– 53, 100, 102–8, 175, 177; mobility of, 185; offshoring and, 81–82; payroll and, 53, 93, 100, 104, 107, 175; pension systems and, 167; portfolios and, 88; poverty and, 1, 11, 15n6, 19– 20, 22–25, 28–29, 32, 44t, 109, 117, 123, 126–27, 134, 144, 147–52, 164, 166, 175; 202 labor (cont.) privatization and, 99–109; productivity and, 63, 79, 81–82, 89, 100, 102, 104, 114, 120, 125, 127, 144, 155, 177–78; protectionism and, 7, 147, 154, 157, 176–79; real earnings loss and, 78; reserve, 84; security and, 133; skilled, 76–78, 82–83, 86, 90, 114, 117, 126, 176; standard of living and, 69 (see also standard of living); superstars and, 85, 87, 89–90; supply of, 130– 31, 164; taxes and, 159–60, 171; technology and, 85–91 (see also technology); unemployment and, 37, 39, 53, 62–63, 66, 69, 77, 94, 100–108, 164, 175–76; unions and, 100–106, 108, 156, 179; unskilled, 3, 76–77, 79, 83, 105, 117, 154; wage inequality and, 51–53, 79, 101–3, 106, 108; wage ladder effects and, 78–79; women and, 64–65, 103, 114; writers and, 86–87 Lady Gaga, 5–6 laissez-­faire approach, 118, 129 Latin America, 9, 34, 36, 54–55, 58, 109–11, 155, 165–66, 168, 180 lawyers, 89–90 liberalization: capital and, 96; customs, 156; deregulation and, 96–99, 108–9, 112 (see also deregulation); fairer globalization and, 156, 179; mobility of capital and, 115; policy effects of, 97–99; Reagan administration and, 91; recession and, 6, 31, 99, 120; rise in inequality and, 76, 91, 93, 96–99, 108–9, 112, 115; tax rates and, 93 Luxembourg, 16, 19 Index Madonna, 71 Malaysia, 127 manufacturing: deindustrialization and, 75–82, 84, 123; emerging economies and, 57, 84; fairer globalization and, 154–55, 157; France and, 81; offshoring and, 81–82; United Kingdom and, 80; United States and, 80 markets: competition and, 76–77, 79–82, 84, 86, 94–98, 102, 104, 115–18, 130, 155, 169, 173, 176–79, 182, 186–88; credit, 131; deindustrialization and, 1, 75–82, 102, 120, 188; deregulation and, 91–92, 99–109 (see also deregulation); development gap and, 34–35, 83; Economic Partnership Agreements (EPAs) and, 156; effect of new players, 75–76; emerging economies and, 120 (see also emerging economies); entrepreneurs and, 83, 92, 96, 131–32, 135, 143, 170–71, 188; evolution of inequality and, 48–50, 53–54, 64, 69; exports and, 76, 82–84, 124, 128, 147, 154–55, 176, 178; fairer globalization and, 147–48, 154–58, 168, 173–75, 178–81; GDP measurement and, 13–15, 20–21, 23, 26, 27f, 29–30, 39, 41–45, 56–57, 94, 123, 127, 165–66, 176; globalization and, 35, 118, 120–21, 124–37, 140, 143–44; Heckscher-­Ohlin model and, 76; housing, 12, 61, 137; imports and, 1, 34, 80, 119, 124, 154, 177–78, 180; institutions and, 91–112; international trade and, 3, 75–76, 78–79, 83, 112, 114, 176–77; labor and, Index203 144 (see also labor); liberalization and, 112 (see also liberalization); monopolies and, 94, 111, 127, 136; offshoring and, 81– 82; protectionism and, 7, 147, 154, 157, 176–79; purchasing power and, 11, 13, 19–24, 27f, 28, 50, 80, 144, 158, 178; reform and, 54 (see also reform); regulation and, 74 (see also regulation); rise in inequality and, 74, 76– 79, 83, 86, 90–112, 114; shocks and, 38, 55, 91–92, 175; single market and, 76; South-­South exchange and, 35; TRIPS and, 156 median wage, 49, 71, 102–3, 106 Mexico, 46t, 57, 59, 109–10, 133, 166, 172 middle class, 51, 71, 93, 109, 133– 34, 136, 140 Milanovic, Branko, 4–5, 17n8, 29n16 Millennium Development Goals, 149–50, 185 minerals, 84, 127 minimum wage, 52–53, 100, 102– 8, 175, 177 monopolies, 94, 111, 127, 136 Morocco, 173 Morrisson, Christian, 28 movies, 87 Murtin, Fabrice, 28 national inequality, 2–4; correcting, 158–80; education and, 167–73; fairer globalization and, 147, 158; Gini coefficient and, 27 (see also Gini coefficient); globalization and, 119; market regulation and, 173–75; protectionism and, 147, 157, 176–79; redistribution and, 158–73, 175, 178; rise in, 6, 48– 52, 115, 204; taxes and, 158–73, 175, 181–83 natural resources, 84–85, 92, 122, 126–28, 127, 151 Netherlands, 46t, 50, 66, 70, 102 Nigeria, 9, 46t, 54, 127, 151 non-­monetary inequalities: access and, 61, 67–68; capability and, 61; differences in environment and, 66–68; discrimination and, 64–66, 69; employment precariousness and, 63–64; evolution of inequality and, 49, 60–70; intergenerational mobility and, 68; opportunities and, 49, 60– 70; social justice and, 60, 70; unemployment and, 62–63 normalization: evolution of inequality and, 41, 43–44; GDP measurement and, 29, 41, 43– 45; global inequality and, 13, 15, 22–23, 26, 29 Occupy Wall Street movement, 6, 135 OECD countries, 27t; evolution of inequality and, 42t, 43, 44t, 50– 52, 64, 65n13; fairer globalization and, 149, 159, 162, 164– 65; Gini coefficient and, 51; income distribution and, 51; relaxation of regulation and, 99; restrictive, 64; rise in inequality and, 50–51, 94, 99, 102, 106n18, 107; social programs and, 94; standard of living and, 11–12, 43, 50–52, 64, 94, 99, 102, 107, 120, 149, 159, 162, 164–65; U-­shaped curve on income and, 50 OECD Database on Household 204 Income Distribution and Poverty, 11–12 offshoring, 81–82 oil, 92, 127 opportunity, 5; African Growth Opportunity Act (AGOA) and, 155; as capability, 61; efficiency and, 142–45; evolution of inequality and, 61–62, 68, 70–71; fairer globalization and, 155, 167, 170, 172; globalization and, 133–34, 139, 142–44; redistribution and, 142–45; rise in inequality and, 102 Pakistan, 46t, 111 Pareto efficiency, 130n5 Pavarotti, Luciano, 86–87 payroll, 53, 93, 100, 104, 107, 175 Pearson Commission, 149 pension systems, 167 Perotti, Roberto, 134 Philippines, 46t, 111 Pickett, Kate, 140 Piketty, Thomas, 4, 48, 59n8, 60, 89n10, 125, 160n4 PISA survey, 169–70 policy, 4; adjustment, 109, 153; Cold War and, 149, 153; convergence and, 147–48; development aid and, 148–53; distributive, 26, 72, 135, 188; educational, 149, 152, 167–73; evolution of inequality and, 55, 72; fairer globalization and, 147–53, 157–58, 167–73, 175–83; Glass-­Steagall Act and, 174n15; global inequality and, 185–89; globalization and, 118–19, 124, 126, 128–31, 139, 143–44; globalizing equality and, 184–89; import substi- Index tution and, 34; Millennium Development Goals and, 149– 50, 185; poverty reduction and, 147–48; protectionist, 7, 99– 100, 107–8, 147, 154, 157, 176–79; reform and, 74 (see also reform); rise in inequality and, 34, 74–75, 85, 94, 97, 99– 100, 104, 106–11, 114–16; social, 7; standard of living and, 147–48 population growth, 28–29, 110, 183 portfolios, 88 Povcal database, 10, 12, 42t, 43, 44t poverty, 1, 44t, 109; Collier on, 23; convergence and, 147–48; criminal activity and, 133–34; definition of, 24; development aid and, 147–52; fairer globalization and, 147–52, 164, 166, 175; ghettos and, 66–67; global inequality and, 11, 15n6, 19–20, 22–25, 28–29, 32; globalization and, 117, 123, 126–27, 134, 144; growth and, 28–29; measurement of, 23–24; Millennium Development Goals and, 149– 50, 185; OECD Database on Household Income Distribution and Poverty and, 11–12; reduction policies for, 147–48; traps of, 144, 150, 164 prices: commodity, 84, 182; exports and, 178; factor, 74, 126; fairer globalization and, 147–48, 176, 178, 182; global inequality and, 27–28, 74, 80, 84, 91–92, 94, 97, 110; globalization and, 118, 122, 126, 136–38; imports and, 80; international compari- Index205 sons of, 11; lower, 94, 137; oil, 92; rise in inequality and, 74, 80, 84, 91–92, 94, 97, 110; rising, 110, 122, 178; shocks and, 38, 55, 91–92, 175; statistics on, 11, 27; subsidies and, 109–10, 175 primary income: evolution of inequality and, 48–50, 58; fairer globalization and, 158, 163n10, 167, 173; globalization and, 135, 143–44 privatization: deregulation and, 94–112; efficiency and, 94, 96, 105, 108; globalization of finance and, 95–99; institutions and, 94–109; labor market and, 99–109; reform and, 94–109; telecommunications and, 111 production: deindustrialization and, 75–82; evolution of inequality and, 57; fairer globalization and, 155–57, 167, 176, 178–79; globalization and, 119, 124, 126, 129, 131, 133, 137; growth and, 3, 34–35, 57, 74, 76–81, 84–86, 119, 124, 126, 129, 131, 133, 137, 155–57, 167, 176, 178–79; material investment and, 119; North vs.

But we can also try to take into account the differences observed at intermediate levels. Various synthetic methods of measuring inequality do this in different ways. In this book, I will use basically four measures of inequality: the share that goes to the richest (1%, 5%, or 10%), the relative gap between standards of living in the extreme deciles (the richest 10% and the poorest 10%), the Gini coefficient, and the Theil coefficient. The Gini coefficient is probably the most frequently employed measure of inequality. It takes into account the entirety of the distribution rather than just the extremes and can be defined as (half ) the average absolute difference between two individuals chosen at random in the population, in relation to the average standard of living of the population as a whole.

An almost identical rise took place in the United Kingdom, but the concentration of wealth changed only slightly in other European countries, with the notable exception of Sweden.8 When it comes to emerging and developing economies, we have periodic estimates of wealth distribution for only some of them. The numbers that we have show very high levels of inequality, comparable to developed countries. The Gini coefficient for wealth was estimated to be 0.55 in China, 0.65 in India, and 0.78 in Brazil and Mexico in the late 1990s or early 2000s. We know a lot less about its evolution over time. At the very least, we can think that, due to intra-­and intergenerational accumulation, wealth inequality will also rise in countries in which income inequality has risen significantly. Thus, a recent study found that the Gini coefficient for wealth increased by almost 10 percentage points in China between 1995 and 2002,9 but that India’s levels were quasi-­stable between 1991 and 2002.10 8 Thomas Piketty and Gabriel Zucman report a change in the top 1% share from 22% to 24% between 1970 and 2010 in France, and from 18% to 20% in Sweden (“Wealth and Inheritance in the Long-­Run,” in Anthony B.


pages: 251 words: 69,245

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality by Branko Milanovic

Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

Communist Party and economic cycles and education and employment and Gini coefficient for income distribution in innovation and interpersonal inequality and proletariat revolution and wages and workers and Society capitalism and class and intercountry inequality and Socrates Solidarity Somalia South Africa South Dakota South Korea Soviet Union collapse of communism, end of and GDP per capita in global inequality and household surveys in intercountry inequality and interpersonal inequality and interrepublican inequality in See also Russia Spain global inequality and migration and soccer clubs in Stalinism Stalinization Standard of living migration and Sudan Sussman, Nathan Sweden Switzerland Tacitus, Cornelius Taiwan Tajikstan Tanzania Taxation capitalism and direct disposable income and economic growth and education and government spending and income distribution and interpersonal inequality and investment and poor and voting and workers and Technology developed countries and economic development and economic growth and embedded globalization and Newton principle and poor countries and Tennessee Texas Thailand Thatcher, Margaret A Theory of Justice (Rawls) Third World Tianjin, China Tiberius (Emperor) Tibet, China Tocqueville, Alexis de Tolstoy, Leo Trade Trajan (Emperor) Tripoli Trotsky, Leon Tunisia Turkey Twain, Mark Ukraine Unemployment United Kingdom.

society and taxation and wages and welfare Carnegie, Andrew Cassius Dio Cavafy, Constantine Center of Reception and Emergency Aid, Italy Chad Charity Chávez, Hugo Chelsea soccer club Chiang Kai-shek Chile China direct foreign investment in economic growth in GDP per capita in Gini coefficient for global inequality and growth rate in household surveys in income distribution in intercountry inequality and interpersonal inequality and population in price level in Chongqing, China Christianization Citizenship Clark, Gregory Class income distribution and interpersonal inequality and society and solidarity and Clinton, Bill Cohen, Joshua Collins, Reverend William Colquhoun, Robert Commodus (Emperor) Communism intercountry inequality and interpersonal inequality and The Communist Manifesto (Marx) Communist Party Congo Constantine the Great (Emperor) Coprosperity sphere Corsica Cosmopolitans (in political philosophy) Crassus, Marcus Croesus, Greek King Cuba Cultural Revolution (China) Czech Republic Czechoslovakia Dalton, Hugh Darcy, Mr.

Das Kapital (Marx) De Silva, Lula Deglobalization See also Globalization Democracy Democratic Party, Democrats Deng Xiaoping Denmark Developed countries household surveys and interpersonal inequality and technology and Discrimination Disney Productions Djilas, Milovan Domestic Servant Pocket Register Dominican Republic Dostoyevsky, Fyodor Dreams from My Father (Obama) East Germany Economic development in China education and income distribution and in India interpersonal inequality and social monopoly and taxation and technology and Economics geopolitics and income distribution and neoclassical Edgeworth, Francis Education economic development and interpersonal inequality and poor and socialism and taxation and wealth and Egypt “80/20 Law,” El Salvador Elites communist income distribution and interpersonal inequality and Employment government socialism and Engels, Friedrich England. See Great Britain Epicureanism, Epicureans Equal purchasing power. See PPP Equally distributed equivalent income Estonia Ethics Ethiopia EU. See European Union Europe communism, end of and global inequality and income divergence in intercountry inequality and soccer clubs in European Court of Justice European Union (EU) GDP per capita in Gini coefficient for global inequality and income inequality in interpersonal inequality and soccer clubs and United States vs.


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, military-industrial complex, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, open immigration, Paul Samuelson, place-making, plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Robert Solow, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

Figure 2.2 shows the relationship: for a mean income level equal to subsistence, the maximum Gini coefficient is 0. It then gradually increases as mean income exceeds subsistence, and when it exceeds it by 15–20 times, the maximum Gini coefficient is close to 1 (or to 100 if expressed in percent).6 FIGURE 2.2. Inequality possibility frontier: the locus of maximum feasible Gini coefficients as a function of mean income level This graph shows the maximum feasible inequality (measured by the Gini coefficient) for various levels of average per capita income. Maximum feasible inequality is defined as maximum inequality under the condition that no person has an income lower than subsistence.

It could perhaps be said that inequality during that period followed the usual pattern of increase with capitalist development (similar to what is happening today), but that explanation implies that inequality in a capitalist system inexorably rises unless it is checked by wars, other calamities, or political action, a statement which is manifestly at odds with reality: periods of decreasing inequality driven by economic forces have occurred under capitalism. Even technically, inequality (whether estimated by top income shares or by Gini coefficients), is, unlike GDP per capita, bounded from above and cannot keep on rising forever. More realistically (not simply because the Gini coefficient ranges in value from 0 to 1), it is bounded from above by such factors as the complexity of modern societies, social norms, large social transfer systems funded by taxation, and the threat of rebellion.

This idea underlies the “inequality possibility frontier” as defined by Milanovic, Lindert, and Williamson (2011): when the mean income is just slightly above subsistence and we “require” that population not decline, then the surplus above subsistence must be small, and even if entirely taken by the elite, it cannot result in huge inequality (measured across the entire population). This is because all but a tiny elite will have the same income. But as the mean income rises, the surplus above the subsistence level increases as well, and the possible, or feasible, inequality becomes greater. The inequality possibility frontier is a locus of maximum feasible inequality levels (measured by the Gini coefficient) that obtain for different values of mean income. The frontier is concave: maximum feasible inequality increases with mean income but at a decreasing rate. Figure 2.2 shows the relationship: for a mean income level equal to subsistence, the maximum Gini coefficient is 0.


Termites of the State: Why Complexity Leads to Inequality by Vito Tanzi

accounting loophole / creative accounting, Affordable Care Act / Obamacare, Alan Greenspan, Andrei Shleifer, Andrew Keen, Asian financial crisis, asset allocation, barriers to entry, basic income, behavioural economics, bitcoin, Black Swan, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, clean water, crony capitalism, David Graeber, David Ricardo: comparative advantage, deindustrialization, Donald Trump, Double Irish / Dutch Sandwich, experimental economics, financial engineering, financial repression, full employment, George Akerlof, Gini coefficient, Gunnar Myrdal, high net worth, hiring and firing, illegal immigration, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labor-force participation, libertarian paternalism, Long Term Capital Management, low interest rates, market fundamentalism, means of production, military-industrial complex, moral hazard, Naomi Klein, New Urbanism, obamacare, offshore financial centre, open economy, Pareto efficiency, Paul Samuelson, Phillips curve, price stability, principal–agent problem, profit maximization, pushing on a string, quantitative easing, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, synthetic biology, The Chicago School, The Great Moderation, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, Tyler Cowen: Great Stagnation, universal basic income, unorthodox policies, urban planning, very high income, Vilfredo Pareto, War on Poverty, Washington Consensus, women in the workforce

The cited IMF study reported that in recent years popular support for redistribution policies has increased especially in countries, such as China, Finland, Germany, and several Eastern European countries, where the Gini coefficient has increased the most, while that support has declined in countries, such as Bulgaria, Mexico, Peru, and Ukraine, where the Gini coefficient has decreased. The evidence for the United States is more ambiguous, at least as indicated by surveys and, perhaps, by the results of the 2016 elections. If governmental intervention is called for to deal with the growing income inequality, at what costs should that intervention take place? What instruments should the government use? And what results should it aim to achieve?

., 99, 305–6 Heller, Walter, 56 Hemingway, Ernest, 399 Hicks, John, 378 High net worth individuals (HNWIs) marginal tax rates for, 373–75 taxation of, 368 tax avoidance by, 370, 382 Hitler, Adolf, 2–3, 27 Hobbes, Thomas, 7–8, 90 Hollande, François, 113–14 Hong Kong public spending in, 121–22 taxation in, 381 Hoover, Herbert, 24–25 Hoover Dam, 241, 256 Housing mortgage crisis, 107–8, 116, 140–41 as public good, 180–81 Hugo, Victor, 358–59 Hull, Cordell, 25 Human capital, income redistribution and, 193 Hume, David, 71 IBM, 347, 377 “Idea factories,” 344–45 “Image rights,” 347–49 Immigration, 262 Implementing regulations, 333 Import duties, 15–16, 34 434 Index Incentives income redistribution and, 306 intellectual property and, 362–63, 365 in Italy, 381 marginal tax rates and, 83 as policy tool, 135 public spending as disincentive, 74–75 social norms versus, 398 tax incentives, 135, 380–81 Income effect, 372–73 Income inequality generally, 205–6 overview, 315 in Argentina, 221 in bonuses, 82–83, 85–86 in Brazil, 221 in China, 221, 227, 322 conservatives and, 394–95 “crony capitalism” and, 343 debate regarding, 322 democracy and, 400 dependent workers and, 221, 316, 387 economic aristocracy and, 117–18 envy and, 319–21 in executive compensation, 82–83, 85–86, 105–6 ex post income distribution and, 118, 119 externalities and, 321 in France, 306 Gini coefficient. See Gini coefficient as government failure, 225 Hayek on, 227 importance of, 393 increase in, 316 in India, 221, 227 intellectual property, effect of, 343–45 justification of, 105, 117 Keynes on, 320 lack of confidence caused by, 387 legal rules and, 257, 323 “luck” and, 321–23 market fundamentalism and, 342–43 middle class and, 206–7 national governments, limitations of, 393–94 negative effects on, 389 “new aristocracy” resulting from, 399 Pareto Welfare Criterion and, 318–19 progressive taxes, and decline in, 343–44 psychological effects of, 319–21 public spending and, 228–29 relative income hypothesis, 319 removal of conditions of, 118–19 role of government, 317 in Russia, 306, 322 “safety nets,” 207–8 Smith on, 305, 306, 320, 321 social acceptance of, 398 social costs of, 206, 305–6 spending habits and, 216–17 taxation and, 368–69, 382 in UK, 315 undesirable effects of market on, 322 unions, and decline in, 342 urbanization and, 206 in US, 161–62, 208–9, 221, 224, 227, 315–16, 389, 391–92 working class and, 206–7 Income redistribution allocation of resources versus, 220, 224 athletes and, 204–5 basic minimum income, 212 Burke on, 215, 219, 300, 312–13 certifications and, 193 composers and, 203 debate regarding, 209, 219, 317 democracy and, 223 in Denmark, 210 dependency and, 209–10 deregulation and, 197 economic freedom and, 159–60 education and, 193 effects on, 191–92 explicit government actions, 192, 200–1.

These developments would have important economic ramifications in future years. Perhaps not unrelated to these developments, and indicating how the world was changing at that time, in 1912 an Italian statistician, Corrado Gini, had proposed a way to measure income inequality in countries. The use of the so-called Gini coefficient, which soon became a popular statistic, may indicate that income inequality had become a serious social concern by that time. Workers’ associations and labor unions were being created in various countries and were pushing for more rights and better working conditions for workers. Some of the labor unions would acquire increasing political and economic power with the passing of time, especially, but not only, in Europe.


pages: 191 words: 51,242

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

For the moment, the few studies that do make use of individual-level data do not suffice to decide the matter one way or the other.17 Even so, Wilkinson and Pickett offer a cogent explanation of the connection between inequality and public health that deserves to be taken very seriously. Figure 1.1. Income inequality and social well-being. Disposable income inequality measured in terms of the Gini coefficient. In Japan, where the level of inequality is low, health and social well-being scores are the highest among OECD countries. Data for 2005. Sources and series: Wilkinson and Pickett (2010); www.lucaschancel.info/hup. INEQUALITY, HEALTH, AND ANXIETY How does economic inequality affect the physical and mental health of individuals? Wilkinson and Pickett insist on the cardinal importance of public services. The high quality of such services in the least inegalitarian societies, especially in connection with health care, has positive effects that are almost universally felt.

A few countries have managed to resist this trend: Belgium, France, and the Netherlands have done better than most of their European neighbors—even if income and wealth differentials have widened in these same countries over the past three decades. The Gini coefficient has one advantage by comparison with other measures: its panoramic view. The Gini coefficient tells us about changes in inequality in society as a whole—or, more precisely, it yields a composite picture of inequality in the distribution of income in a given society. It has the disadvantage, however, of failing to capture deepening inequality at the bottom and the top of the social pyramid. Moreover, it can mask significant developments in the middle, notably the inability of middle-class incomes in recent decades to keep pace with the gains registered by other segments of society.

The Historical Evolution of Inequality The Gini coefficient is a composite measure of inequality having a value of zero when there is perfect equality and a value of one (or 100 percent) when there is perfect inequality, that is, when only one person owns all available resources. Let us begin by considering Gini coefficients of income inequality for different countries, which since the beginning of the twentieth century have never fallen below 20 percent and never exceeded 68 percent. Changes in the coefficient’s value over the past thirty years reveal a sustained rise in income inequality in almost all developed countries, with the most pronounced increases occurring in the United States and in Scandinavia, a region that had a low level of inequality at the beginning of the 1980s.


pages: 385 words: 111,807

A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

"there is no alternative" (TINA), Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, antiwork, AOL-Time Warner, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Bear Stearns, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, Charles Babbage, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial engineering, financial innovation, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, Great Leap Forward, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land bank, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Neal Stephenson, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, proprietary trading, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, search costs, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

In many societies, people with a ‘wrong’ caste, ethnicity, religion, gender, sexuality or ideology have been denied access to things like political office, university places or high-status jobs. Measuring inequality: the Gini coefficient and the Palma ratio Of all these inequalities, only income and wealth inequalities are readily measurable. Of these two, the data on wealth are much poorer, so most of the information on inequality we see is in terms of income. Income inequality data are sometimes derived from surveys on consumption, rather than actual incomes, which are harder to capture. There are number of different ways of measuring the extent to which income is unequally distributed.5 The most commonly used measure is known as the Gini coefficient, named after the early twentieth-century Italian statistician Corrado Gini.

REAL-LIFE NUMBERS In theory, the Gini coefficient can be anything between 0 and 1. In practice, these extreme values are impossible. No society, however egalitarian it may be in spirit and policies, can make everyone exactly equal, which is what is needed for a Gini coefficient of 0. In a society with a Gini of 1, everyone except one person who has everything will soon be dead.* In real life, no country has a Gini coefficient below 0.2 and none has one above 0.75. Lowest and highest inequalities: Europe vs. Southern Africa and Latin America Gini coefficients can differ quite a lot even for the same country, depending on the estimate you look at.

Known as the Palma ratio, this number overcomes the Gini coefficient’s over-sensitivity to the changes in the middle of the income distribution, where it is more difficult to make a difference through policy intervention anyway.8 Inequality among whom? Most inequality figures, like the Gini coefficient, are calculated for individual countries. However, with increasing integration of national economies through globalization, people have become more interested in the changes in the income distribution for the world as a whole. This is known as the global Gini coefficient and calculated by treating each individual in the world as if they are the citizens of the same country. Some people, myself included, think that the global Gini coefficient is really not terribly relevant, as the world is not (at least yet) a true community. Income inequality matters only because we have feelings – positive, negative, solidaristic, murderous – in relation to those others who are included in the statistics; this is known as the reference group.


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99%: Mass Impoverishment and How We Can End It by Mark Thomas

"there is no alternative" (TINA), "World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, additive manufacturing, Alan Greenspan, Albert Einstein, anti-communist, autonomous vehicles, bank run, banks create money, behavioural economics, bitcoin, business cycle, call centre, Cambridge Analytica, central bank independence, circular economy, complexity theory, conceptual framework, creative destruction, credit crunch, CRISPR, declining real wages, distributed ledger, Donald Trump, driverless car, Erik Brynjolfsson, eurozone crisis, fake news, fiat currency, Filter Bubble, full employment, future of work, Gini coefficient, gravity well, income inequality, inflation targeting, Internet of things, invisible hand, ITER tokamak, Jeff Bezos, jimmy wales, job automation, Kickstarter, labour market flexibility, laissez-faire capitalism, Larry Ellison, light touch regulation, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, Modern Monetary Theory, Money creation, money: store of value / unit of account / medium of exchange, Nelson Mandela, Nick Bostrom, North Sea oil, Occupy movement, offshore financial centre, Own Your Own Home, Peter Thiel, Piper Alpha, plutocrats, post-truth, profit maximization, quantitative easing, rent-seeking, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, smart cities, Steve Jobs, The Great Moderation, The Wealth of Nations by Adam Smith, Tyler Cowen, warehouse automation, wealth creators, working-age population

This is the concept behind the Gini coefficient, which is defined as the area between the grey cumulative wealth curve and the black equal distribution line divided by the area of the triangle. The Gini coefficient for a population with perfect equality would be zero, and the coefficient for a population with perfect inequality would be 1.00. The lower the Gini coefficient the lower the inequality and vice versa. Figure 9: Wealth distribution in a population of 10 people The levels of income (as opposed to wealth) inequality, as measured by the Gini coefficient, for some of the leading countries in the world are shown in the table below.

This difference goes some way to explaining the large disparity between average wealth and median wealth in the United States. GINI COEFFICIENT One of the most widely-used measures of inequality is the Gini coefficient. The Gini coefficient is best understood graphically: Figure 9 overleaf shows the same data as Figure 6 above. The black line represents a perfectly equal distribution of wealth, and the grey line represents the actual distribution taken from the table above. The gap between the two is a measure of inequality. Perfect inequality would see the line run flat along the bottom until we reach Person 10 at which point it would shoot up vertically. The lines of perfect equality and perfect inequality together make a triangle.

Figure 9: Wealth distribution in a population of 10 people The levels of income (as opposed to wealth) inequality, as measured by the Gini coefficient, for some of the leading countries in the world are shown in the table below. Figure 10: Income inequality by country Country Gini Coefficient USA 0.39 UK 0.351 Greece 0.34 Spain 0.335 Italy 0.327 France 0.306 Germany 0.289 Switzerland 0.285 Sweden 0.274 Finland 0.26 Norway 0.253 Denmark 0.249 Source: OECD8 Clearly no country has perfect income equality – which would correspond to a Gini coefficient of zero. In fact, almost all countries have a Gini coefficient of above 0.25. Equally, no country has perfect inequality – which would correspond to a Gini coefficient of 1.0 and mean that one person had all the wealth.


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Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Big Tech, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, clean tech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, confounding variable, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, general purpose technology, gentrification, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, middle-income trap, mirror neurons, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, radical decentralization, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, tacit knowledge, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, the strength of weak ties, too big to fail, trade liberalization, union organizing, urban decay, vertical integration, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

Indeed, we argue in this book that the reforms that enabled the knowledge economy to take off created huge inequalities, yet were supported by a majority of voters. Those left out of the new economy are generally also weak in the political system. Indeed, a recurrent theme of this book is that democracy, not capitalism, is to blame for the rise of low-end inequality. Phrased positively, greater equality is a democratic choice, which is little constrained by capital. FIGURE 1.1. Measures of distribution of income, 2010 vs. 1985. (a) Gini coefficients of market (circles) and disposable (squares) household income; (b) Disposable income of median relative to disposable income of mean (working-age population).

No matter what measure is used, inequality has risen significantly since the 1980s across all ACDs. For example, Piketty shows that the top decile share of US national income rose from about thirty-five percent in 1980 to about forty-seven percent in 2010 (Piketty 2014, 24). Goldin and Katz (2007) show a similar rise in US wage inequality. Across twenty-two ACDs the Gini coefficient of market household income has risen an average of eleven percent from 1985 to 2014, according to data from Solt (2016), and the disposable income Gini (after taxes and transfers) increased a more modest seven percent. (The pattern is illustrated in figure 1.1, panel a.) Yet there has been no corresponding decline in the YD/Ȳ ratio if we proxy YD by median disposable income and Ȳ by mean disposable income.

., 223, 226 Hong Kong, 4, 26, 279n3 housing, 41, 79, 177, 197, 200, 201, 203, 206, 225–26, 231, 275 Hovenkamp, Herbert, 153 human capital, 3, 53, 58, 101, 206, 229, 281n18 IBM, 175, 186 immigrants: closing access to, 43; democracy and, 88–89, 275; education and, 45, 89, 194, 217, 223, 226, 283n13; knowledge economies and, 136, 160, 193–94, 206, 215–17, 223, 226–27, 234, 237, 249; outsourcing and, 118, 193–94, 222; populism and, 45, 216–17, 223, 226–27, 234, 237, 239, 249; squattocracy and, 88 income distribution, 21, 25, 56, 116, 181, 221, 252, 274 industrialization: capitalism and, 4, 37–38, 53, 58, 60, 101, 124, 203; deindustrialization and, 18, 43, 103, 117–20, 124, 134–35, 180, 203, 224; democracy and, 4, 37, 53–62, 65–66, 79, 83, 88–92, 98, 101; feeder towns and, 108–9, 224; Fordism and, 103, 108, 117–20, 124, 134–35; growth and, 68, 92, 111, 115, 177, 181; knowledge economies and, 180–81, 203, 224; Nazism and, 75, 77; populism and, 224; protocorporatist countries and, 60–62, 65, 79, 89–90, 98, 101; urban issues from, 83–84 Industrial Relations and European State Traditions (Crouch), 58 industrial revolution, 5, 12, 58, 293, 295 inequality: capitalism and, 1, 5, 9, 20, 22, 24–26, 40–41, 125, 139, 261, 268, 273–74, 282n22; fall in, 5, 35; Fordism and, 107, 116–20, 125, 213; globalization and, 1, 3, 22, 26; Italy and, 36; knowledge economies and, 41–45, 139–41, 192, 197, 219–23, 228; majoritarianism and, 22; middle class and, 3, 20, 22–23, 41–43, 140, 222–23, 228, 273, 281; populism and, 219–23, 228; poverty and, 3, 5, 18–19, 25, 43, 47, 109, 117, 142, 221, 237; redistribution and, 1, 3, 20, 40–46, 140, 220, 222, 273; rise in, 1, 3, 9, 23, 40–46, 282n25; Robin Hood Paradox and, 220; undeserving poor and, 43, 142, 160, 216, 222, 227; United Kingdom and, 36; upper class and, 41, 158, 261; welfare and, 3, 8, 18–21, 31, 39–40, 42, 43, 115, 123–25, 128, 131, 137, 223, 261, 273, 282n22 inflation: capitalism and, 253, 285n9; Fordism and, 120–21; knowledge economies and, 151–52, 153, 163, 168–73, 176, 178, 202, 207, 234 Information and Communication Technology (ICT): capitalism and, 261, 266, 276; decentralization and, 3, 163, 186, 190, 276; democracy and, 261, 266, 276; Denmark and, 175; Fordism and, 102, 118; France and, 182; Germany and, 176, 180; globalization and, 198; knowledge economies and, 136–44, 156, 163, 171, 175–76, 180–90, 193, 195, 198, 214, 238, 249; outsourcing and, 118, 193–94, 222; physical skills and, 193; populism and, 238, 249; revolution of, 3, 5, 102, 136–43, 156, 163, 171, 176, 182–88, 193, 195, 198, 214, 238, 249, 276; routine tasks and, 193; shocks and, 136, 138, 214; skilled labor and, 41, 102, 185–86, 190, 193, 195, 198, 218, 276; smart cities and, 194–95; societal transformation and, 138–43 Inglehart, Ronald, 235, 246, 287n1 innovation: assembly lines and, 104, 108; capitalism and, 2, 6–12, 19, 31–34, 47, 128, 131, 157, 206, 258, 281n18; competition and, 6, 10–12, 31–35, 47, 128, 131, 173, 182–83, 258, 285; democracy and, 87, 258, 262, 267, 271; Fordism and, 104, 128, 131; knowledge economies and, 141, 152, 157–58, 173–75, 180–83, 196, 198, 205–7; manufacturing and, 33; middle-income trap and, 27; multinational enterprises (MNEs) and, 2, 40, 279n1; patents and, 7, 12–15, 26, 27, 145, 201, 281n15, 285n6; political economy and, 2, 7–8, 34, 183; production and, 10, 40, 262, 271; productivity and, 19, 34; public goods and, 35, 258; research and, 2, 12, 40; skilled labor and, 2, 6–12, 19, 27, 31–34, 104, 128, 141, 174, 196, 198, 258, 262, 271, 281n18; specialization and, 8, 14, 198, 267, 271 institutional frameworks: capitalism and, 31–34, 47–49, 128–29, 131, 146; comparative advantage and, 31, 33, 49, 51, 131; democracy and, 97; Fordism and, 128–31; knowledge economies and, 138, 146, 150, 156; unions and, 32–33 intellectual property, 31, 128, 131, 145 Internal Revenue Service (IRS), 42 International Accounting Standards Board (IASB), 208 International Monetary Fund (IMF), 38, 149–50 Ireland: capitalism and, 4; democracy and, 62, 282n2; Fordism and, 106, 121; Gini coefficients and, 36; knowledge economies and, 147–48, 150, 154, 166, 170, 230, 233; laborist unionism and, 62; middle-income trap and, 26; patents and, 27; taxes and, 17 Israel, 4, 25, 26, 28, 36, 81, 85, 96, 166 ISSP data, 165, 168 Italy: capitalism and, 4, 77, 148; democracy and, 77, 91, 99, 276, 282n2; education and, 166, 248; Five Star Movement and, 248, 276; Fordism and, 106, 120–21, 132; Gini coefficents for, 25, 36; inequality and, 36; knowledge economies and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245, 248; Lega and, 248, 276; median income and, 25; Mussolini and, 77; populism and, 221, 233, 236, 242, 245, 248; postwar, 4; taxes and, 17 Iversen, Torben, 124, 135, 168, 211, 229, 251, 281n14 Japan: Abe and, 218; authoritarianism and, 279n2; capitalism and, 4, 11, 49, 55, 148, 282n2; education and, 166, 232, 241, 284n4; Fordism and, 106, 109, 284n4; Gini coefficients and, 25, 36; Keiretsu and, 182; knowledge economies and, 147–48, 150, 154, 166, 182, 207, 209, 218, 221, 232, 233, 236, 239, 241, 242, 244, 284n4; LDP and, 218; median income and, 25; populism and, 218, 221, 232, 233, 236, 239, 241, 242, 244; postwar, 4; tertiary educational spending and, 231–32 Johnson, Simon, 282n22 journeymen, 61, 65 Kalyvas, Stathis N., 92, 95 Katz, Jonathan N., 133 Katznelson, Ira, 62–63, 70, 283n13 Kees Koedijk, Jeroen Kremers, 154–55 Keynesianism, 115, 121, 145, 201, 207, 286n12 Kitschelt, Herbert, 234 knowledge economies: analytic skills and, 186; Asia and, 142, 144, 222, 229, 235, 241, 243; Australia and, 147–48, 150, 153, 166, 221, 233, 236, 242; Austria and, 230, 233, 245; Belgium and, 147–48, 150, 154, 233, 245; big-city agglomerations and, 194–200; Canada and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245; centralization and, 146, 151–52, 156, 173, 186, 202, 209, 231, 243, 252; changing skill sets and, 184–94; colocation and, 159, 185–88; competition and, 139, 146, 149, 152–56, 162–63, 166–69, 173, 177, 181–82, 186, 194, 198, 208, 218, 222–23, 226, 236, 285n5, 285n6, 285n9; conservatism and, 169–72, 218–19; cooperative labor and, 152–56; Coordinated Market Economies (CMEs) and, 152, 169, 171–81, 198, 232; decentralization and, 3, 18, 138, 144, 146–52, 156, 163, 172–74, 180, 183–84, 186, 190, 193, 196, 212, 217, 225, 234, 275; Denmark and, 147–48, 150, 154, 166, 169, 171–76, 181, 203, 221, 233, 245; deregulation and, 145, 173, 183; economic geography and, 138, 140, 144–47, 159, 161, 185, 188, 191–92, 195–97, 200–6; education and, 138–48, 156–68, 174–81, 184–86, 191–200, 204, 214, 217, 219, 222–25, 228–47, 250–52, 255–56, 284n2, 284n4, 285n9, 286n11, 286n12, 287n1; electoral systems and, 163–68, 212, 217–18, 228; elitism and, 9, 141, 158, 179, 184, 214, 216, 226, 235, 243–44, 248–51, 287n3; embedded, 137–38, 143–56, 161–83, 185, 188, 191–92, 195, 205, 214, 225, 251; financial crisis and, 177, 206–14; financialization and, 149–51; Finland and, 147–48, 150, 154, 166, 221, 233, 236, 241, 242, 245; first-order effects and, 120, 129, 132–33, 216; Fordism and, 140, 142–43, 146–49, 152, 154, 160, 169, 181–82, 189, 192, 194, 200–1, 214, 216, 219–25, 237–38, 240, 248–49, 277; foreign direct investment (FDI) and, 139, 145, 147, 148, 154, 163, 193, 198–99, 200, 284n3, 285n5, 285n9; France and, 147–48, 150, 154, 166, 169, 177, 181–83, 202, 221, 233, 236, 239, 242, 245, 248; Germany and, 142, 147–48, 150, 154, 166, 169, 176–81, 191, 207, 209, 219, 221, 230, 232, 233, 236, 242, 245; globalization and, 137, 142–44, 148–49, 151, 156, 198, 206, 234, 245; Great Gatsby Curve (GGC) and, 220–23, 227–28, 247, 259, 275–76; growth and, 51, 142, 156, 162–64, 168, 170–71, 177, 179, 181, 192, 194, 218, 221, 226, 237, 247–48, 285n8, 285n9; human capital and, 206, 229; immigrants and, 136, 160, 193–94, 206, 215–17, 223, 226–27, 234, 237, 249; industrialization and, 180–81, 203, 224; inequality and, 41–45, 139–41, 192, 197, 219–23, 228; inflation and, 151–52, 153, 163, 168–73, 176, 178, 202, 207, 234; Information and Communication Technology (ICT) and, 3, 5, 136–43, 156, 163, 171, 175–76, 180–90, 193, 195, 198, 214, 238, 249; innovation and, 141, 152, 157–58, 173–75, 180–83, 196, 198, 205–7; institutional frameworks and, 138, 146, 150, 156; Ireland and, 147–48, 150, 154, 166, 170, 230, 233; Italy and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245, 248; Japan and, 147–48, 150, 154, 166, 182, 207, 209, 218, 221, 232, 233, 236, 239, 241, 242, 244, 284n4; Korea and, 284n4; labor market and, 140, 152, 173–78, 183, 186, 190, 223, 229; liberalism and, 137–38, 141–56, 159, 161–83, 207–14, 228–29, 232, 241, 243, 250, 284n3, 286n11; Liberal Market Economies (LMEs) and, 152, 169, 181, 198, 230, 232; low-skilled labor and, 180, 194, 200, 212–13, 218, 223, 238, 249; macroeconomic management and, 151–52; majoritarianism and, 213, 217, 243–44, 251; manufacturing and, 142, 169, 182, 194, 197, 200–3, 224, 241; middle class and, 140, 142, 158, 163, 168, 201, 203, 218–28, 234–51; mobility and, 145, 207, 214, 217–23, 227–32, 239–42, 247, 249; modernization and, 174; multinational companies (MNCs) and, 7, 145, 147, 193, 200, 267–68, 271; multinational enterprises (MNEs) and, 2–3, 15, 40, 139, 154, 192; nation-states and, 139, 159, 161, 206, 213, 215; Netherlands and, 147–48, 150, 154, 166, 230, 232, 233, 236, 242, 245; Norway and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245; OECD countries and, 153–54, 175, 196, 230–32, 233, 250; open financial markets and, 152; outsourcing and, 118, 193–94, 222; party system and, 21, 44, 51–52; physical skills and, 193; political construction of, 161–83; political decisions leading to, 156–61; political economy and, 51, 164–68, 181, 220, 226, 235; populism and, 136, 138, 140–42, 146, 161, 171, 175, 181–85, 195, 202, 205, 214–23, 226–28, 235–53, 254–56; privatization and, 154, 173; production and, 143, 152, 161, 180, 183, 224–25, 234–35, 247, 249; proportional representation (PR) systems and, 132–34, 135, 212, 217, 229, 251; public goods and, 52, 143–48, 152, 157, 167, 225; reconfigurability and, 185, 191, 214, 224; redistribution and, 48, 137, 140, 158, 168, 220, 222, 225, 234–37, 241; regulation index and, 285n5; relational skills and, 187; reputation and, 158, 163–64, 182–83, 188, 190–91; research and, 139, 146, 159, 164–65, 179, 187, 189, 196, 200, 204, 234, 285n9; routine tasks and, 193; second-order effects of, 129, 216; segregation and, 43, 107, 140, 161, 185, 192, 195, 197, 200–6, 214, 231; semiskilled labor and, 142, 172–73, 212, 238–40; shocks and, 136–40, 143, 156–59, 181, 185, 194, 214; skill clusters and, 139, 141, 144–48, 183, 185, 190–98, 200, 223; skilled labor and, 137–49, 157–58, 172–200, 211–13, 217–35, 238–41, 246, 249–52, 255–56; smart cities and, 194–95; socialism and, 137, 181–82, 215, 218; social networks and, 139, 145, 185, 188, 191–92, 195–97, 200, 204–6, 217, 225, 246; societal transformation from, 138–43; socioeconomic construction of, 183–99; South Korea and, 147–48, 150, 154, 156, 166, 232, 233, 236, 239, 241, 242; Spain and, 154, 166, 201, 221, 233, 236, 242, 248; specialization and, 139, 144–47, 161, 190–93, 198, 200, 281n21; Sweden and, 147–48, 150, 153–54, 166, 173, 221, 233, 236, 242, 245; Switzerland and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245; tacit knowledge and, 2, 39, 145, 263; taxes and, 141, 157–58, 165, 167, 172, 206, 221–22, 225, 231, 281n21; technology and, 138–44, 147, 154–62, 175–76, 184–86, 192–94, 198–99, 214, 222, 226, 232, 234, 238, 246, 249, 284n1, 284n3, 285n6; trade and, 142, 145, 153–55, 163, 172–73, 180, 211–13, 218, 250; unemployment and, 170–72, 174, 178, 180, 207, 248–49, 255–56, 285n8; unions and, 152, 169–83, 212, 228, 251; United Kingdom and, 142, 147–48, 150, 152, 154, 161–63, 166, 169–77, 180–81, 194, 200–1, 204, 206, 209, 218, 232, 233, 236, 242, 245, 250; United States and, 141–42, 147–56, 162, 166, 169, 171, 177, 186, 194–95, 198, 202, 209, 215, 218–23, 230, 232, 236, 241, 244, 277; unskilled workers and, 193, 246, 255; voters and, 24, 138, 140, 158–59, 163–64, 167–68, 183, 213–19, 234–36, 245, 247; wages and, 151, 160, 172–76, 181, 196, 211–12, 219, 222–23, 227, 229; welfare and, 137, 146, 167, 176, 214, 223, 234, 249, 285n6, 285n8, 287n1; women and, 141, 151, 174, 176, 184, 195, 238; working class and, 201, 225, 231, 239, 251; World Values Survey (WVS) and, 168, 235–36, 245 knowledge-intensive businesses (KIBs), 187–90, 190 Kristal, Tali, 119 Krueger, Alan B., 220 Kulturkampf, 94–95 Kurzweil, Raymond, 264 Labor and Monopoly Capitalism: The Degradation of Work in the Twentieth Century (Braverman), 186 labor market: active labor market programs (ALMPs) and, 126–27, 135, 284n1; analytic skills and, 186; apprentices and, 61, 64–65, 68, 71, 104, 110, 127, 179–80, 230; artificial intelligence (AI) and, 260–72; artisans and, 61, 63–65, 70, 79, 94–95, 98; assembly lines and, 104, 108; big-city agglomerations and, 194–200; capitalism and, 1, 6, 12, 31, 38, 46–47, 122, 125, 128, 152, 186, 229, 258; Catholicism and, 56, 61, 63, 68, 77, 83, 87, 92, 94–95; collective bargaining and, 67, 69, 73, 92, 103, 107, 137, 176, 179; comparative advantage and, 31, 49, 51, 128, 131, 268; competition and, 12 (see also competition); craft skills and, 32, 53, 61–71, 79, 82, 90–91, 96, 98, 101, 104, 172; democracy and, 64, 66, 96–98, 260, 266, 268, 273; deregulation and, 1, 96, 122, 183; dualism and, 282n25; education and, 12, 28, 31, 41, 53–54, 60, 70, 72, 83, 89–90, 96, 98, 104, 128, 165, 174, 177, 191, 223, 225, 229, 260; flexicurity and, 174; Fordism and, 103, 118, 122–28; globalization and, 162–63 (see also globalization); guild systems and, 59, 63–64, 69–70, 90–91, 93, 96, 98; immigrants and, 45, 88–89, 136, 160, 193–94, 206, 215–17, 223, 226–27, 234, 237, 249, 275, 283n13; journeymen and, 61, 65; knowledge economies and, 140, 152, 173–78, 183, 186–90, 223, 229; laziness and, 222, 237, 254; manual jobs and, 76, 78, 226, 238–40, 246, 255–56, 264–65; mobility and, 8, 13, 59 (see also mobility); monopolies and, 6, 24, 47, 54, 64, 68, 87, 99, 114, 155, 186; outsourcing and, 118, 193–94, 222; pensions and, 41, 92, 178–79; politics of future and, 272–77; populism and, 223, 229; relational skills and, 187; retirement and, 110, 151, 201; revisionist history and, 283n9; robots and, 18, 141, 143, 184, 193, 260–66, 273; rules for, 6, 10, 12, 28, 38; semiskilled labor and, 12 (see also semiskilled labor); September Compromise and, 66; skilled labor and, 2–3, 12 (see also skilled labor); strikes and, 73, 75, 108, 116; tacit knowledge and, 2, 39, 145, 263; trade and, 17, 155 (see also trade); training and, 7, 10, 14, 31, 44, 82, 89–90, 101, 104, 109, 111, 128, 131, 174, 176, 179, 181, 204, 223, 228–29, 232–33, 241–43, 252, 257, 275, 277, 280n10; undeserving poor and, 43, 142, 160, 216, 222, 227; unemployment and, 16, 282n22, 284n2, 285n8 (see also unemployment); unions and, 6 (see also unions); vocational learning and, 31, 44, 68, 82, 89, 92, 104, 109, 113, 127–28, 131, 174, 176, 179, 228–30, 233, 242–43, 251–52, 257; welfare and, 31, 46, 96, 118, 120, 122–23, 125, 128, 176, 223, 279n5; women and, 5, 174, 176 Labour Party, 68, 169, 171 Landesbanken, 176–77 landowners, 38, 57, 80–89, 95, 98, 158 Lange, David, 171 Lapavitsas, Costas, 150 Latin America, 29, 56, 257 laziness, 222, 237, 254 Lega, 248, 276 Lehmann Brothers, 210 Le Pen, Marine, 183 Lewis-Black, Michael S., 164, 167, 285n8 liberalism: capitalism and, 1–2, 32, 49, 60, 97, 100–1, 137, 143, 213–14, 228; democracy and, 56–62, 67–71, 79–90, 96–101, 282n3, 283n14; education and, 45, 60, 71, 79, 82–83, 89–90, 101, 104, 138, 143, 156, 175, 208, 212–14, 228–29, 232, 241, 243, 284n3, 286n11; embedded, 51, 97, 137–38, 143–56, 159–83, 214; financial crisis and, 207–13; Fordism and, 103–5, 115, 125, 127; globalization and, 1, 51, 142, 155, 162–63, 208, 213; knowledge economies and, 137–38, 141–56, 159, 161–83, 207–14, 228–29, 232, 241, 243, 250, 284n3, 286n11; majoritarianism and, 33, 49, 60, 71, 97, 100–3, 125, 213, 243; middle class and, 2, 60, 71–72, 90, 96–97, 100–1, 115, 286n11; neoliberalism and, 1–2, 286n11; populism and, 228–29, 232, 241, 243, 250; protoliberal countries and, 59–61, 68, 90, 97, 100–1, 228; public goods and, 79–90; regulated, 143, 149; trade, 51, 62, 142, 155, 163, 173, 213, 250, 284n3; United Kingdom and, 32 Liberal Market Economies (LMEs): Fordism and, 103, 112, 125, 127–29; knowledge economies and, 152, 169, 181, 198, 230, 232; populism and, 230, 232 libertarians, 45, 225, 234, 237, 240, 249 Lib-Lab political parties, 62–63 Lindblom, Charles, 5–6, 11, 19, 34, 280n9 Lindert, Peter H., 81, 220, 283n11 Lipset, Seymour Martin, 4, 37, 55, 71–72, 79, 113 Lizzeri, A., 79–80, 86 LO, 19, 66, 108 loans, 110, 148, 173, 209–11 Local Government Act, 86 Louca, Francisco, 5 low-skilled labor: capitalism and, 265–66; democracy and, 97–98, 265–66; Fordism and, 119–20, 126; knowledge economies and, 180, 194, 200, 212–13, 218, 223, 238, 249; populism and, 218, 223, 238, 249; robots and, 18; unions and, 19, 47, 50, 66, 70–71, 96, 98–99, 119, 127, 181 low-wage countries, 18–19, 28 Luddites, 226 Luebbert, Gregory, 62, 69, 282n3 Lutheran Church, 72 Maastricht Treaty, 122 McAfee, A., 260 machine-based technological change (MBTC), 262 Macron, Emmanuel, 183 majoritarianism: capitalism and, 22; cross-class parties and, 125; decommodification and, 9; democracy and, 60, 71, 91–93, 97–98, 100–1; Fordism and, 103, 112–13, 124–32; inequality and, 22; institutional patterns and, 33, 49, 132, 251; knowledge economies and, 213, 217, 243–44, 251; liberalism and, 33, 49, 60, 71, 97, 100–3, 125, 213, 243; populism and, 217, 243–44, 251; proportional representation (PR) systems and, 19, 44–45, 60, 93, 100–1, 124–26, 128, 132, 217, 251; taxes and, 24, 44, 113, 124; Westminster systems and, 19 Manning, Alan, 193 Manow, Philip, 44, 92–93, 95–96, 124 manual labor, 76, 78, 226, 238–40, 246, 255–56, 264–65 manufacturing: Asian, 5, 14, 241; capitalism and, 2, 14, 33, 142, 203; democracy and, 80; feeder towns and, 108–9, 224; Fordism and, 103, 108–9, 118; innovation and, 33; knowledge economies and, 142, 169, 182, 194, 197, 200–3, 224, 241; populism and, 200–3, 224, 241; research and, 15, 200; skilled labor and, 15, 33, 44–45, 109, 118, 194, 224 Marketcraft: How Governments Make Markets Work (Vogel), 11 Marks, Gary, 68 Martin, Cathie Joe, 63 Marxism, 11, 34, 46, 62, 279n4, 280n8, 280n9 materialism, 217, 234–35, 238 median income, 23, 25 Medicare, 24, 42 Melitz model, 211–12 Meltzer-Richard model, 3 Mezzogiorno, 93 microprocessors, 14, 140, 284n1 Microsoft, 155, 186, 262 middle class: capitalism and, 2–3, 20, 22, 41, 53, 97, 101, 162, 225, 227, 257–58, 273; democracy and, 3, 20, 22–23, 35, 44, 53–55, 60, 63, 71–74, 84–85, 90, 96–101, 115, 158, 163, 168, 257–58, 273–74; education and, 3, 20, 24, 41–43, 53–55, 60, 71, 84, 90, 98, 101, 128, 158, 168, 203, 222–25, 235, 238–40, 243–44, 249, 251, 257–58, 273–74, 286n11, 287n1; encapsulation and, 227, 243, 249; Fordism and, 43, 112, 115, 117, 123, 125, 128, 142, 160, 201, 219, 222–25, 238, 248; Gini coefficients and, 23; Great Gatsby Curve (GGC) and, 220, 221, 227–28, 247, 259, 275–76; growth and, 2–3, 97, 115, 163, 168, 226; hollowing out of, 160, 219, 222, 238; inequality and, 3, 20, 22–23, 41–43, 140, 222–23, 228, 273, 281; knowledge economies and, 24, 140, 142, 158, 163, 168, 201, 203, 218–28, 234–51; liberalism and, 2, 60, 71–72, 90, 96–97, 100–1, 115, 286n11; lower, 22, 35, 42, 63, 72, 90, 98, 124, 128, 142, 158, 201, 223, 235, 238, 244, 248, 251, 273; Medicare and, 42; middle-income trap puzzle and, 8, 26–30; neoliberalism and, 2; new, 3, 43, 218, 222, 224–27, 234, 238–41, 246, 247; old, 3, 43, 140, 142, 203, 219, 222–28, 234, 237–40, 243–44, 247, 249, 287n1; populism and, 218–28, 234–51; rebirth of cities and, 224–27; redistribution and, 3, 20, 35, 42, 60, 71, 90, 98, 100, 112, 115, 123–25, 140, 158, 168, 220, 222, 225, 234, 237, 241, 273–74; skilled labor and, 3, 20, 27, 30, 35, 41–44, 71, 85, 90, 96–101, 112, 115, 123, 125, 142, 158, 193, 222, 224, 235, 239–41, 249; Social Security and, 42; taxes and, 21, 42, 124, 158, 222, 225; technology and, 3, 21, 29–30, 41, 117, 139, 222, 226, 249; upper, 2, 41–44, 72, 125, 158, 168; voters and, 2–3, 20–22, 44, 90, 96–100, 125, 140, 158, 168, 273 military, 8, 28, 33, 73, 75, 86–87, 279n2, 281n18 Mittelstand, 68, 92, 95, 179, 191 Mitterrand, François, 182 mobility: capital, 8, 16, 30, 35, 50, 145, 280n11; democracy and, 59, 258, 275–76; economic geography and, 2, 8, 18, 20, 39–40; Fordism and, 16, 118, 124, 221; France and, 59; Great Gatsby Curve (GGC), 220–23, 227–28, 247, 259, 275–76; growth and, 13, 30, 247, 276; implicit social contract and, 221–22; income classes and, 220–22; intergenerational, 13, 21, 124, 219–22, 228, 230, 232, 241–42, 275–76; knowledge economies and, 145, 207, 214, 217–23, 227–32, 239–42, 247, 249; populism and, 217–32, 239–42, 247, 249; skilled labor and, 8, 13, 20–21, 39, 124, 217, 222, 228, 232, 239, 249; as strengthening state, 50–51; taxes and, 221 modernization, 19; democracy and, 55, 57, 66, 70, 79–83, 87, 89, 98; elitism and, 38, 57, 79–80, 83, 89, 98; Fordism and, 104, 109, 114; knowledge economies and, 174; protocorporatist countries and, 79, 83; Whigs and, 80 monarchies, 72–73, 81, 87 monopolies, 6, 24, 47, 54, 64, 68, 87, 99, 114, 155, 186 Morrison, Bruce, 80 mortgages, 151, 173, 209 Muldon, Rob “Piggy”, 171 multinational companies (MNCs): artificial intelligence (AI) and, 267–68, 271; democracy and, 267–68, 271; knowledge economies and, 7, 145, 147, 193, 200, 267–68, 271; technology and, 48 multinational enterprises (MNEs): changing roles of, 279n1; competition and, 154; economic geography and, 2–3, 40, 192, 279n1; globalization and, 2–3, 15, 18, 25, 28, 40, 139, 154, 192, 279n1; immobility of, 2; innovation and, 1, 40, 279n1; knowledge economies and, 2–3, 15, 40, 139, 154, 192; skill clusters and, 192–93; skilled labor and, 28; specialization and, 192–93 Municipal Corporations Act, 86 Mussolini, Benito, 77 Nannestad, Peter, 164 nanotechnology, 141, 184 nationalism, 216, 218, 227 National Reform League, 86 nation-states: advanced capitalist democracies (ACD) and, 9–11; capitalism and, 4–13, 30, 46–50, 77, 136, 139, 159, 161, 206, 249, 261, 267–68, 272, 279n4; democracy and, 4–5, 8, 13, 46, 136, 159, 161, 213, 215, 249, 261, 267–68, 272, 279; FDI globalization and, 40; knowledge economies and, 139, 159, 161, 206, 213, 215; skilled labor and, 8, 30, 48, 139, 261; strong role of, 9–11; symbiotic forces and, 5–9, 20, 32, 53–54, 130–31, 159, 206, 249–53, 259 Nazism, 75, 77, 99, 219, 279n2 neoliberalism, 1–2, 286n11 Netherlands: democracy and, 56, 57, 61, 62–63; Fordism and, 106, 121; Gini coefficients and, 25, 36; knowledge economies and, 147–48, 150, 154, 166, 230, 232, 233, 236, 242, 245; median income and, 25; populism and, 230, 232, 233, 236, 242, 245; protocorporatist countries and, 62–63; taxes and, 17; tertiary educational spending and, 231–32 New South Wales, 94–95 New Zealand: Acts of Parliament and, 88; democracy and, 38, 56–57, 61, 62, 87–89, 283n8; Douglas and, 171; Education Act and, 89; Fordism and, 106, 132; Gini coefficients and, 25, 36; knowledge economies and, 147–48, 150, 153, 166, 171, 221, 233, 236, 242; Lange and, 171; male suffrage and, 89; Muldoon and, 171; as outlier, 23; patents in, 27 Nolan, Mary, 65–66 Nord, Philip, 59 Norris, Pippa, 235, 246, 287n1 North American Free Trade Agreement (NAFTA), 155 Norway: democracy and, 56, 57, 61, 62, 282n3; Fordism and, 106, 130; Gini coefficients and, 25, 36; knowledge economies and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245; median income and, 25; populism and, 221, 233, 236, 242, 245; taxes and, 17 October Revolution, 75–76 OECD countries, 25, 38; education and, 14; Fordism and, 107, 117, 125, 133; knowledge economies and, 153–54, 175, 196, 230–32, 233, 250, 286n13; populism and, 230–32, 233, 250; taxes and, 17, 280n13 Oesch, Daniel, 234 oil crisis, 120, 171, 181 ordinary least squares (OLS) regression, 132 Osborne, Michael A., 260 outliers, 23, 232, 241 outsourcing, 118, 193–94, 222 overlapping generation (OLG) logic, 7 Paldam, Martin, 164 Panduro, Frank, 203 Paris Commune, 86 parliamentarianism, 58 partisanship, 32, 47, 91, 112, 129, 164, 171, 174 party system: democracy and, 93, 101; Fordism and, 113, 123–24; knowledge economies and, 21, 44, 51, 51–52; voters and, 21 (see also voters) patents, 7, 12–15, 26, 27, 145, 201, 281n15, 285n6 pegging, 121 pensions, 41, 92, 178–79 Persico, N., 80, 86 physical skills, 193 Pierson, Paul, 282n22 Piketty, Thomas, 1, 16, 20, 22, 30, 41–42, 117, 137, 139, 141, 163, 261, 273, 280n11, 282n22 PISA scores, 196 plantations, 38, 84 police, 96, 173–75 political economy: broad concepts of markets and, 46; capitalism and, 2–9, 12, 17, 24, 34, 45–48, 97, 112, 129, 131, 137, 160, 167, 214, 227, 251, 275; democracy and, 59, 97; economic geography and, 2–3, 8, 48–49, 140; innovation and, 2, 7–8, 34, 183; knowledge economies and, 51, 164–68, 181, 220, 226, 235; literature on, 2, 4, 6–8, 48, 114, 164, 167, 281n19; populism and, 45; spatial anchors and, 48–49 Politics Against Markets (Esping-Andersen), 30 populism: Austria and, 230, 233, 245; Belgium and, 233, 245; centralization and, 231, 243, 252; competition and, 218, 222–23, 226, 236; conservatism and, 218–19; Coordinated Market Economies (CMEs) and, 232; cross-national variance and, 241–44; decentralization and, 217, 225, 234; democracy and, 13, 45, 129, 136, 215, 217, 226, 228, 248–51, 275; Denmark and, 221, 233, 245; economic geography and, 224; education and, 217, 219, 222–25, 228–47, 250–52, 287n1; electoral systems and, 217–18, 228, 251; elitism and, 216, 226, 235, 243–44, 248–51, 287n3; Fordism and, 113, 130, 216, 218–25, 237–40, 248–49; France and, 183, 221, 233, 236, 239, 242, 245, 248; Germany and, 181, 219, 221, 230, 232, 233, 236, 242, 245; globalization and, 234, 245; Great Gatsby Curve (GGC) and, 220–23, 227–28, 247, 259, 275–76; growth and, 218, 221, 226, 237, 247–48; immigrants and, 45, 216–17, 223, 226–27, 234, 237, 239, 249; importance of economic progress and, 247–48; industrialization and, 224; inequality and, 219–23, 228; Information and Communication Technology (ICT) and, 238, 249; Italy and, 221, 233, 236, 242, 245, 248; Japan and, 218, 221, 232, 233, 236, 239, 241, 242, 244; knowledge economies and, 136, 138, 140–42, 146, 161, 171, 175, 181–85, 195, 202, 205, 214–23, 226–28, 235–53, 254–56; labor market and, 223, 229; laziness and, 222, 237, 254; liberalism and, 228–29, 232, 241, 243, 250; Liberal Market Economies (LMEs) and, 230, 232; libertarians and, 45, 225, 234, 237, 240, 249; low-skilled labor and, 218, 223, 238, 249; majoritarianism and, 217, 243–44, 251; manufacturing and, 200–3, 224, 241; materialism and, 217, 234–35, 238; middle class and, 218–28, 234–51; mobility and, 217–23, 227–32, 239–42, 247, 249; nationalism and, 216, 218, 227; national variation and, 228–34; Netherlands and, 230, 232, 233, 236, 242, 245; new materialism and, 234–35; Norway and, 221, 233, 236, 242, 245; OECD countries and, 230–32, 233, 250; political alignment and, 219–27; political cleavage and, 146, 181, 183, 228, 236–39, 241; political economy and, 45; postmaterialism and, 234–35; proportional representation (PR) systems and, 217, 229, 251; public goods and, 225; rebirth of cities and, 224–27; redistribution and, 220, 222, 225, 234–37, 241; regression analysis and, 236, 239–40, 246, 254–55; Republicans and, 218, 244–45; research and, 234; Robin Hood Paradox and, 220; root cause of, 13; rural areas and, 218, 224, 238–41, 287n1; semiskilled labor and, 238–40; sexuality and, 216–18, 225, 237, 243, 249, 254; skilled labor and, 52, 217–35, 238–41, 246, 249–52, 255–56; social contract and, 221–27; socialism and, 218; social networks and, 217, 225, 246; South Korea and, 232, 233, 236, 239, 241, 242; Sweden and, 221, 233, 236, 242, 245; Switzerland and, 221, 233, 236, 242, 245; symbiotic forces and, 249–53; taxes and, 221–22, 225, 231; technology and, 222, 226, 232, 234, 238, 246, 249; trade and, 218, 250; Trump and, 215, 218–20, 237, 243–45, 248; undeserving poor and, 43, 142, 160, 216, 222, 227; unemployment and, 248–49, 255–56; unions and, 228, 251; United Kingdom and, 13, 218, 232, 233, 236, 242, 245, 250; United States and, 13, 130, 171, 195, 215, 218–23, 230, 232, 236, 241, 244, 275; unskilled workers and, 246, 255–56; upper class and, 222, 227, 237, 253; values and, 239–41; voters and, 217–19, 234–36, 244–47, 250, 256; wages and, 219, 222–23, 227, 229; welfare and, 45, 223, 234, 249, 287n1; women and, 238; working class and, 225, 231, 239, 251; World Values Survey (WVS) and, 235–36, 245 postmaterialism, 234–35 Poulantzas, Nicos, 6, 9, 11, 19, 39, 279n4 poverty, 3, 5, 18–19, 25, 43, 47, 109, 117, 142, 221, 237 Power, Anne, 200 privatization, 1, 18, 154, 173 production: artificial intelligence (AI) and, 263; assembly lines and, 104, 108; broad market notions and, 46; clusters and, 40, 49, 183, 270–71; democracy and, 54, 60, 64–66, 69, 72–73, 83, 93–94, 258, 262–63, 267–71; feeder towns and, 108–9, 224; Fordism and, 43, 103–4, 108–11, 115–17, 123, 127; globalization and, 5, 40, 51, 258; innovation and, 10, 40, 262, 271; knowledge economies and, 143, 152, 161, 180, 183, 224–25, 234–35, 247, 249; skilled labor and, 10, 18, 35, 43, 49–50, 60, 64–65, 69, 104–5, 115, 123, 127, 180, 183, 225, 249, 258, 262, 267, 271; specialization and, 51, 108, 161, 258, 267–71; Vernon’s life-cycle and, 18 productivity, 19, 34, 118–19, 247, 261, 272 proportional representation (PR) systems: Christian democratic parties and, 44; democracy and, 19, 34, 44–45, 60–61, 91, 93, 97, 100–1, 112–13, 125–28, 132, 134, 135, 212, 217, 229, 251; Fordism and, 112–13, 124–28; green parties and, 45; knowledge economies and, 132–34, 135, 212, 217, 229, 251; liberalism and, 97; majoritarianism and, 19, 101; multiparty, 34, 44; negotiation-based environment and, 93; populism and, 217, 229, 251; redistribution and, 91; Westminster system and, 19 protectionism, 28, 41, 169 Protestantism, 61, 68 protocorporatist countries: Austria, 59, 62–63, 77, 99; Belgium, 62–63; Catholicism and, 56, 61, 63, 68, 77, 83, 87, 92, 94–95; democracy and, 59–72, 74, 77, 79, 82–83, 89–92, 98–101, 228, 283n11; entrepreneurs and, 65; France and, 59, 62; Germany and, 62–63, 65, 68 71, 74, 77, 99, 238n11; industrialization and, 60–62, 65, 79, 89–90, 98, 101; Marx and, 62; modernization and, 79, 83; Netherlands, 62–63; skilled labor and, 60, 64–66, 79, 90, 98, 101; Ständestaat group and, 59–60, 65–66, 70, 90–91, 93; Switzerland, 62–63; working class and, 60–79 protoliberal countries, 59–61, 68, 90, 97, 100–1, 228 Prussia, 72, 93 public goods: democracy and, 54, 60, 79–90, 98, 258, 275; Fordism and, 113; innovation and, 35, 258; knowledge economies and, 52, 143–48, 152, 157, 167, 225; liberalism and, 79–90; populism and, 225; role of state and, 10 Public Health Acts, 86 race to the bottom, 51, 122 Rasmussen, Poul Nyrup, 173 recession, 5, 206, 214, 247–50, 276 reconfigurability, 185, 191, 214, 224 redistribution: capitalism and, 1, 18–20, 31–32, 35, 37, 39–40, 47, 51, 55, 124, 128–31, 137, 261, 273; democracy and, 1, 8, 18–20, 32, 35, 37, 40, 55–56, 60, 69–71, 74–79, 90–91, 95–100, 115, 124, 158, 221, 259–62, 273–74, 282n3, 284n2; Fordism and, 103, 111–12, 115, 123–25, 128–29; Gini coefficients and, 22–23, 25, 36, 117, 118, 141, 221; inequality and, 1, 3, 20, 40–46, 140, 220, 222, 273; knowledge economies and, 48, 137, 140, 158, 168, 220, 222, 225, 234–37, 241; middle class and, 3, 20, 35, 42, 60, 71, 90, 98, 100, 112, 115, 123–25, 140, 158, 168, 220, 222, 225, 234, 237, 241, 273–74; populism and, 220, 222, 225, 234–37, 241; proportional representation (PR) systems and, 91; skilled labor and, 8, 20, 31, 35, 37, 47, 71, 90, 98–100, 103, 115, 123, 125, 128, 158, 220, 222, 241, 259, 261; social insurance and, 8; taxes and, 35, 40, 51, 124, 158, 221–22, 225; voters and, 3, 19–21, 32, 43, 90, 98, 100, 125, 140, 158, 273; welfare and, 3, 8, 18–21, 31, 39–40, 43, 115, 123–24, 128, 131, 137, 261, 273 Reform Acts, 56, 80–81, 85–86 Reform Crisis 1865–7, The (Searle), 85 Reform League, 86 Reform Party, 88 regional theory, 11 regression, 99–100, 132–35, 236, 239–40, 246, 254–55 Rehn-Meidner model, 19 relational skills, 187 Republicans, 38, 57, 59, 87, 218, 244–45, 282n24 reputation: colocation and, 267; consultants and, 286n15; Fordism and, 112–13; knowledge economies and, 158, 163–64, 182–83, 188, 190–91; Liberal Market Economies (LMEs) and, 112; political, 4, 12, 29, 32, 34, 112–13, 158, 163–64, 182–83, 188, 190, 258, 259, 280n9; skill clusters and, 190–91; social networks and, 191; subconscious signals and, 190 research: capitalism and, 2, 10, 12, 37, 48, 139, 159, 165, 234; democracy and, 55, 66–67, 72, 262, 264, 268, 287n1; education and, 10, 12, 20–21, 28, 48, 55, 72, 146, 159, 165, 234, 262; Fordism and, 103, 108, 110; innovation and, 2, 12, 40; knowledge economies and, 139, 146, 159, 164–65, 179, 187, 189, 196, 200, 204, 234, 285n9; manufacturing and, 15, 200; populism and, 234; skilled labor and, 2, 12, 21, 28, 37, 39, 48, 66–67, 139, 179, 187, 196, 268 retirement, 110, 151, 201 Robin Hood Paradox, 220 Robinson, James, 9, 35, 37, 56, 58, 71–72, 74, 76, 85–86, 99, 282n3 robots, 18; artificial intelligence (AI) and, 260–62; great technology debate and, 260–66; knowledge economies and, 141, 143, 184, 193; politics of future and, 273 Rodrik, Dani, 16, 22, 128 Rokkan, Stein, 66, 94, 97, 100, 113 Rueda, D., 45, 282n25 Rueschemeyer, Dieter, 56, 72–73, 75, 77, 280n6, 283n7 Ruggie, John G., 51, 143 rust belt, 224 Scheve, Kenneth, 221 Schlüter, Poul, 172 Schumpter, Joseph A., 6, 9, 11, 279n4 Scotland, 283n12 Searle, G., 85 segregation: centripetal and centrifugal forces in, 200–6; cultural choices and, 205–6; educational, 43, 119, 140, 161, 192, 195, 197, 200–6, 214, 231; Fordism and, 109, 119; geographic, 109, 140, 161, 185, 195, 197, 200–6; health and, 204–5; knowledge economies and, 43, 140, 161, 185, 195, 197, 200–6, 214, 231; private services and, 203–4; social networks and, 205–6; transport systems and, 201–3 semiskilled labor: capitalism and, 261; democracy and, 61, 64–65, 68–69, 261; Fordism and, 12, 102–5, 112, 115, 118–20, 123–24, 127, 129; knowledge economies and, 142, 172–73, 212, 238–40; populism and, 238–40; segmentation of, 43–44; technology and, 41, 43, 65, 102–5, 118–19, 127, 238, 261; undeserving poor and, 43; unions and, 61, 64–65, 68–69, 105, 119–20, 123, 172–73 September Compromise, 66 service sectors, 16, 31, 44, 51, 119, 157, 194, 200, 204, 219, 285n5 settler colonies, 84–90 sexuality, 52, 216–18, 225, 237, 243, 249, 254, 269 Sherman Act, 153 shocks: capitalism and, 6, 10, 30, 54, 125, 136, 138, 140, 156, 159, 214; democracy and, 54; Fordism and, 125–27, 132–35; Information and Communication Technology (ICT) and, 136, 138, 214; knowledge economies and, 136–40, 143, 156–59, 181, 185, 194, 214; supply, 30; technology and, 6, 30, 136, 138, 140, 143, 159, 185, 194 Simmons, Beth, 161 Singapore, 4, 26–28, 221, 282n3 Single European Act, 145, 170–71 Single Market, 122 skill-biased technological change (SBTC), 41, 238, 262, 265–66 skill clusters: big-city agglomerations and, 194–200; capitalism and, 2, 7, 49, 145, 185, 192, 261; colocation and, 2–3, 7, 15–16, 185, 261; democracy and, 261; education and, 2–3, 7, 139, 141, 145, 148, 185, 190–95, 198, 223, 261; knowledge economies and, 139, 141, 144–48, 183, 185, 190–98, 200, 223; multinational enterprises (MNEs) and, 2, 192–93; reputation and, 190–91; social networks and, 28, 139, 191–92; specialization and, 190–91; sub-urbanization and, 141 skilled labor: analytic skills and, 186; artificial intelligence (AI) and, 261–62, 265–68, 271–72; capitalism and, 2–3, 6–8, 12–15, 19–20, 30–34, 37–38, 47–50, 53–54, 58, 60, 97, 101–2, 128, 137, 139, 144–47, 157–58, 172, 185–86, 192, 218, 250–51, 258, 261, 280n6; centralization and, 53, 58, 67, 69, 96, 99, 101, 110, 119–20, 173, 186, 279n1; colocation and, 2, 7, 261, 272; competition and, 6, 12, 18, 21, 30–34, 66, 96, 119, 128, 146, 157, 181, 186, 194, 198, 218, 222–23, 258; cospecificity and, 7–15, 20, 37, 47–50, 69, 99, 101, 115, 123, 196, 259, 261; craft skills and, 32, 53, 61–71, 79, 82, 90–91, 96, 98, 101, 104, 172; decentralization and, 96, 123, 138, 144, 146, 148, 172, 183–86, 190, 193, 212, 225, 262, 276; democracy and, 3, 6, 8, 12, 20, 31, 37–38, 44, 53–54, 58–71, 79, 84–85, 90, 96–101, 115, 158, 185–86, 250, 258–62, 265–68, 271–72, 276–77; economic geography and, 2–3, 7–8, 15, 20, 31, 48, 109, 116, 144–47, 185, 191–92, 195–96, 276–77; education and, 7, 12, 20–21, 31, 37–38, 41, 54, 60, 70–71, 79, 84, 90, 101–4, 119, 127–30, 139, 142, 158, 174–76, 179–81, 184–85, 191–95, 198, 217, 222–25, 228–35, 238–40, 246, 250–52, 266; Fordism and, 12, 14, 16, 102–5, 109–12, 115–30, 222–25, 277; foreign direct investment (FDI) and, 3, 139, 145, 147, 193, 198; growth and, 8, 13, 31, 68, 97, 110, 115–16, 218, 261; Information and Communication Technology (ICT) and, 41, 102, 185–86, 190, 193, 195, 198, 218, 276; innovation and, 2, 6–12, 19, 27, 31–34, 104, 128, 141, 174, 196, 198, 258, 262, 271, 281n18; knowledge economies and, 137–49, 157–58, 172–200, 211–13, 217–35, 238–41, 246, 249–52, 255–56; manufacturing and, 15, 33, 44–45, 109, 118, 194, 224; middle class and, 3, 20, 27, 30, 35, 41–44, 71, 85, 90, 96–101, 112, 115, 123, 125, 142, 158, 193, 222, 224, 235, 239–41, 249; mobility and, 8, 13, 20–21, 39, 124, 217, 222, 228, 232, 239, 249; nation-states and, 8, 30, 48, 139, 261; overlapping generation (OLG) logic and, 7; physical skills and, 193; politics of future and, 272–77; populism and, 52, 217–35, 238–41, 246, 249–52, 255–56; production and, 10, 18, 35, 43, 49–50, 60, 64–65, 69, 104–5, 115, 123, 127, 180, 183, 225, 249, 258, 262, 267, 271; protocorporatist countries and, 60, 64–66, 79, 90, 98, 101; rebirth of cities and, 224–27; redistribution and, 8, 20, 31, 35, 37, 47, 71, 90, 98–100, 103, 115, 123, 125, 128, 158, 220, 222, 241, 259, 261; relational skills and, 187; research and, 2, 12, 21, 28, 37, 39, 48, 66–67, 139, 179, 187, 196, 268; social insurance and, 8, 35, 50, 67, 123, 125, 127, 192; social networks and, 2, 28, 48, 139, 145, 185, 191–92, 195, 197, 225, 258, 261, 267–68, 271; specialization and, 14 (see also specialization); tacit knowledge and, 2, 39, 145, 263; technology and, 3, 7, 10–14, 20, 30–31, 37, 41, 43, 48, 50, 70, 96, 102–5, 118–19, 127–28, 138–40, 144, 147, 157, 175–76, 185–86, 192–94, 198–99, 222, 232, 238, 261, 268, 277; unions and, 6, 19, 33, 47, 50, 53, 58, 60–71, 96–101, 105, 110, 119–20, 123, 127, 172–73, 176, 181, 186, 251; upper class and, 43–44, 125; upskilling and, 102, 123, 129, 174–75, 178, 228, 232, 250–51; wages and, 6, 18, 33, 41, 50, 61, 64, 67, 104–5, 110, 115, 118–24, 127, 172–76, 181, 212, 222–23, 229, 266 Slomp, Hans, 62 smart cities, 194–95 social contract, 161, 221–27 social democratic parties: Denmark and, 76–77, 181; Germany and, 62–63, 68, 72–77, 181; Norway and, 282n3; Sweden and, 19, 72, 74, 76; unions and, 6, 19, 61–63, 67–68, 72, 74, 76, 114, 181, 282n3 Social Democratic Party (SPD) [Germany], 68, 74, 76–77, 78 Social Democratic Party (Sweden), 19 social insurance, 21; democracy and, 67; Fordism and, 111; skilled labor and, 8, 35, 50, 67, 123–25, 127, 192 socialism: competition and, 11; democracy and, 11, 56, 61–63, 68, 71, 75, 94, 97, 100, 137, 181–82, 215, 218; knowledge economies and, 137, 181–82, 215, 218; populism and, 218 social justice, 115, 237 social networks: cultural choices and, 205–6; democracy and, 258, 261, 268, 270–71, 274–75; economic geography and, 48–49, 185, 195, 274; education and, 2, 51–52, 139, 145, 185, 191–99, 204–5, 217, 225, 234, 261, 270–71, 274–75; growth and, 51, 92; knowledge economies and, 139, 145, 185, 188, 191–92, 195–97, 200, 204–6, 217, 225, 246; populism and, 217, 225, 246; reputation and, 191; segregation and, 205–6; skilled labor and, 2, 28, 48, 139, 145, 185, 191–92, 195, 197, 225, 258, 261, 267–68, 271 Social Security, 24, 42, 50, 118, 174, 184 socio-optimists, 260, 266, 275 socio-pessimists, 260, 266 Sokoloff, Kenneth L., 80, 84, 89 Soskice, David, 124, 135, 211 South Korea: capitalism and, 4, 26, 148; democracy and, 78; education and, 26, 28, 166, 231–32, 241, 284n4; Gini coefficients and, 36; knowledge economies and, 147–48, 150, 154, 156, 166, 232, 233, 236, 239, 241, 242, 284n4; middle-income trap and, 26; military and, 28; patents and, 27; populism and, 232, 233, 236, 239, 241, 242; skilled labor and, 28 Soviet Union, 139, 142, 156, 186, 241, 285n7 Spain: Gini coefficients and, 36; knowledge economies and, 154, 166, 201, 221, 233, 236, 242, 248; patents and, 27; taxes and, 17 Sparkassen, 176–77 specialization: advanced capitalist democracies (ACD) and, 14–17; Asia and, 267; capitalism and, 2, 6, 8, 17, 40, 139, 145, 147, 161, 192, 258, 267, 270–71, 276–77; cospecificity and, 14–17; cross-country comparison and, 39; democracy and, 67, 258, 267, 270–71, 276–77; economic geography and, 8, 14–17, 39, 144, 146–47, 192, 276–77; education and, 14, 191, 271; Fordism and, 108; globalization and, 3, 8, 17, 40, 51, 198, 258; heterogenous institutions and, 6; innovation and, 8, 14, 198, 267, 271; knowledge economies and, 2–3, 139, 144–47, 161, 190–93, 198, 200, 281n21; location cospecificity and, 14–17; multinational enterprises (MNEs) and, 192–93; patterns of, 192–93; production and, 51, 108, 161, 258, 267–71; skill clusters and, 190–91; as strengthening state, 50–51 Ständestaat group, 59–60, 65–66, 70, 90–91, 93 Standing, Guy, 142 Stasavage, David, 221 Stegmaier, Mary, 164, 167, 285n8 Steinmo, Sven, 16 Stephens, Evelyne Huber, 56, 229 Stephens, John, 56, 229, 280n6 Streeck, Wolfgang, 1, 16, 22, 30, 137, 163, 206, 281n17, 282n22 strikes, 73, 75, 108, 116 suffrage, 72–74, 76, 80, 87–89 Susskind, Daniel, 260 Susskind, Richard, 260 Swank, Duane, 16, 39, 101 Sweden: capitalism and, 19, 39, 49, 148; democracy and, 56, 57, 61, 62, 67, 71–76, 78; Fordism and, 106, 107, 117, 120, 129; Gini coefficients and, 25, 36; knowledge economies and, 147–48, 150, 153–54, 166, 173, 221, 233, 236, 242, 245; median income and, 25; populism and, 221, 233, 236, 242, 245; Social Democratic Party and, 19; taxes and, 17 Swenson, Peter, 108 Switzerland: democracy and, 56, 57, 61, 62–63, 282n3; Gini coefficient of, 36; knowledge economies and, 147–48, 150, 154, 166, 221, 233, 236, 242, 245; populism and, 221, 233, 236, 242, 245; protocorporatist countries and, 62–63; taxes and, 280n13; unions and, 106 symbiotic forces: democracy and, 5–9, 14, 20, 32, 53–54, 102, 130–31, 159, 165, 206, 249–53, 258, 259, 270, 272; Fordism and, 102, 130–31; knowledge economies and, 159, 165, 206, 249–53; populism and, 249–53 tacit knowledge, 2, 39, 145, 263 Taiwan, 4, 26–28, 78, 156 tariffs, 89, 114, 285n5 taxes: capitalism and, 16–17, 24, 34–35, 40, 51, 73, 167, 206, 261, 280n12; democracy and, 73, 261, 267–68, 271; Fordism and, 110–13, 124; Gini coefficients and, 22, 141; government concessions and, 18; Internal Revenue Service and, 42; knowledge economies and, 141, 157–58, 165, 167, 172, 206, 221–22, 225, 231, 281n21; majoritarianism and, 24, 44, 113, 124; middle class and, 21, 42, 124, 158, 222, 225; mobility and, 221; populism and, 221–22, 225, 231; redistribution and, 35, 40, 51, 124, 158, 221–22, 225; Republican reform and, 282n24; rich and, 22, 24, 261, 280n13; shelters and, 280n13; transfer systems and, 21–22, 112, 158; United Kingdom and, 17, 141, 206; United States and, 16–17, 24, 42, 141; upper class and, 42; value added, 34, 206; welfare and, 16–17, 21, 40, 42, 167 technology: artificial intelligence (AI) and, 260–72; assembly lines and, 104, 108; biotechnology and, 141, 175, 184; change and, 5, 13, 40–45, 50, 124, 138–41, 155, 162, 192, 199, 222, 232, 246, 249, 259, 262; codifiable, 7, 12, 14–15, 238; colocation and, 261, 266–72; cospecificity and, 7, 12, 14, 20, 37, 48, 50, 103, 159, 261–66; debates over future, 259–72; democracy and, 70, 92, 259–63, 267–72, 277; Fordism and, 5, 7, 14–15, 50, 102–6, 109, 117–19, 124, 127–28, 131, 140–43, 154, 192, 194, 222, 277; growth and, 3, 5, 13, 38, 162, 194, 226, 261; ICT and, 3 (see also Information and Communication Technology (ICT)); income distribution and, 21, 40; industrial revolution and, 5, 12, 58, 293, 295; investment in, 3, 20, 30, 37–38, 50, 109, 142, 147, 156, 175, 272; knowledge economies and, 138–44, 147, 154–62, 175–76, 184–86, 192–94, 198–99, 214, 222, 226, 232, 234, 238, 246, 249, 284n1, 284n3, 285n6; Luddites and, 226; manual jobs and, 264–65; microprocessors and, 14, 140, 284n1; middle class and, 3, 21, 29–30, 41, 117, 139, 222, 226, 249; multinational companies (MNCs) and, 48; nanotechnology, 141, 184; outsourcing and, 118, 193–94, 222; overlapping generation (OLG) logic and, 7; patents and, 7, 12–15, 26, 27, 145, 201, 281n15, 285n6; populism and, 222, 226, 232, 234, 238, 246, 249; robots and, 18, 141, 143, 184, 193, 260–66, 273; self-driving vehicles and, 265; semiskilled labor and, 41, 43, 65, 102–5, 118–19, 127, 238, 261; shocks and, 6, 30, 136, 138, 140, 143, 159, 185, 194; skilled labor and, 3, 7, 10–14, 20, 30–31, 37, 41, 43, 48, 50, 70, 96, 102–5, 118–19, 127–28, 138–40, 144, 147, 157, 175–76, 185–86, 192–94, 198–99, 222, 232, 238, 261, 268, 277; smart cities and, 194–95; trade and, 3, 7, 31, 50, 128, 131, 142, 284n3; transfer and, 18, 31, 38, 48, 128, 131; vocational training and, 31, 44, 68, 82, 89, 92, 104, 109, 113, 127–28, 131, 174, 176, 179, 228–30, 233, 242–43, 251–52, 257; voters and, 6, 13, 20, 159, 234, 260, 272 techno-optimists, 260, 269–70, 275, 277 techno-pessimists, 260–61 Teece, David J., 7, 12 Thatcher, Margaret, 33, 149, 163, 169–71, 182, 209 Thelen, Kathleen, 62–64, 219 Third Republic, 57, 81, 86–87 Tiebout, Charles M., 252 Tories, 87 trade: barriers to, 50, 114, 154, 285n5; competition and, 26, 31, 128, 131, 153–55, 218, 285n5, 285n9; democracy and, 258, 267; FDI and, 154, 163, 284n3, 285n5, 285n9; Fordism and, 114, 128, 131; free, 17, 155; knowledge economies and, 142, 145, 153–55, 163, 172–73, 180, 211–13, 218, 250; liberalism and, 51, 62, 142, 155, 163, 173, 213, 250, 284n3; NAFTA and, 155; open, 27, 154; populism and, 218, 250; protectionism and, 28, 41, 169; technology and, 3, 7, 31, 50, 128, 131, 142, 284n3 Trans-Pacific Partnership Agreement (TPP), 155–56 transport systems, 201–3 Trump, Donald, 130, 156, 211, 215, 218–20, 237, 243–45, 248, 276 Über, 265 undeserving poor, 43, 142, 160, 216, 222, 227 unemployment: automatic disbursements and, 133, 284n2; capitalism and, 51, 117, 172, 282n22; countercyclical policies and, 16; democracy and, 74–77, 92, 96; Fordism and, 105, 107, 110, 117, 120–21, 124–27, 133, 135, 284n2; knowledge economies and, 170–72, 174, 178, 180, 207, 248–49, 255–56, 285n8; social protection and, 51 unions: centralization and, 49, 53, 58, 63, 67, 69–70, 73, 96, 99, 101, 105, 107–10, 113, 116, 119, 122–23, 152, 156, 172, 174, 283n8; centralization/decentralization issues and, 49–50, 53, 58, 63, 67–70, 73, 96, 99, 101, 105–10, 113, 116, 119, 122–23, 152, 172, 174, 186, 283n8; competition and, 6, 33, 66, 68, 80, 96, 119, 152, 169–72, 177, 181, 186; craft, 61, 63, 67–71, 101, 172; democracy and, 53, 58–80, 90–92, 95–101, 274, 282n3, 283n8; exclusion of, 67, 70, 98; Fordism and, 105–16, 119–23, 127, 284n3; hostile takeovers and, 33; institutional frameworks and, 32–33; knowledge economies and, 152, 169–83, 212, 228, 251; laborist unionism and, 62; low-skilled labor and, 19, 47, 50, 66, 70–71, 96, 98–99, 119, 127, 181; polarized unionism and, 62; populism and, 228, 251; power and, 32, 66–67, 69, 73–76, 99, 105, 108, 112–13, 119, 169, 172, 186; predatory, 6; Rehn-Meidner model and, 19; segmented, 62, 105, 113; semiskilled labor and, 61, 64–65, 68–69, 105, 119–20, 123, 172–73; September Compromise and, 66; skilled labor and, 6, 19, 33, 47, 50, 53, 58, 60–71, 96–101, 105, 110, 119–20, 123, 127, 172–73, 176, 181, 186, 251; social democratic parties and, 6, 19, 61–63, 67–68, 72, 74, 76, 114, 181, 282n3; solidaristic, 62, 105, 172; strikes and, 73, 75, 108, 116; trade, 62–64, 170 United Kingdom: Blair and, 33, 171, 209; Brexit and, 130, 245, 248, 250, 276; British disease and, 172; British North American Act and, 87–88; Callaghan and, 169, 171; capitalism and, 10, 13, 19, 32, 38, 148, 152, 172, 206, 209; centralization and, 49; Confederation of British Industry (CBI) and, 169–70; Conservative Party and, 32, 81, 85, 88, 169, 218–19; democracy and, 38, 54–65, 73, 80–90, 277, 283n9; Disraeli and, 81, 85, 96; education and, 38, 130, 166, 177, 231–32, 277; enfranchisement and, 84–90; Fordism and, 105–8, 120, 123, 130; Forster Elementary Education Act and, 86; Gini coefficents for, 25, 36; Healey and, 169; health and, 204–5; Hyde Park Riots and, 85; inequality and, 36; knowledge economies and, 142, 147–48, 150, 152, 154, 161–63, 166, 169–77, 180–81, 194, 200–1, 204, 206, 209, 218, 232, 233, 236, 242, 245, 250; labor co-operation and, 152; laborist unionism and, 62; Labour Party and, 68, 169, 171; Liberals and, 32; Local Government Act and, 86; median income and, 25; modernization and, 19; Municipal Corporations Act and, 86; patents and, 27; populism and, 13, 218, 232, 233, 236, 242, 245, 250; postwar, 11; Prior and, 169–70; Public Health Acts and, 86; Reform Acts and, 56, 80–81, 85–86; Reform Party and, 88; segregation and, 200–3; settler colonies and, 84–90; taxes and, 17, 141, 206; Thatcher and, 33, 149, 163, 169–71, 182, 209; Tories and, 87; Victorian reformers and, 82; Whigs and, 80 United States: capitalism and, 13, 16–17, 24–25, 38, 47, 148, 152, 186, 209, 275, 277; Civil War and, 57; Clayton Act and, 153; Cold War and, 78, 111; decentralization and, 49; democracy and, 13, 24, 38, 55–57, 59, 62–64, 70, 83, 88, 96, 107, 147–48, 186, 215, 220, 275, 277; education and, 24, 38, 55, 70, 83, 109, 127, 130, 166, 177, 195, 223, 230–32, 241, 275; Fordism and, 105–9, 117–20, 123, 127, 130; inequality and, 24, 36, 42, 107, 117, 118, 123, 220, 282n22; knowledge economies and, 141–42, 147–56, 162, 166, 169, 171, 177, 186, 194–95, 198, 202, 209, 215, 218–23, 230, 232, 236, 241, 244, 277; labor market and, 56 (see also labor market); NAFTA and, 155; populism and, 13, 130, 171, 195, 215, 218–23, 230, 232, 236, 241, 244, 275; Sherman Act and, 153; taxes and, 16–17, 24, 42, 141; Trans-Pacific Partnership Agreement (TPP) and, 155–56 unskilled workers: democracy and, 62–63, 67–71, 96–97, 101; Fordism and, 104–5, 118; knowledge economies and, 193, 246, 255; populism and, 246, 255–56 upper class: capitalism and, 4, 6; democracy and, 35; education and, 43; as gaming the system, 222; global distribution and, 27–29; Great Gatsby Curve (GGC) and, 220, 221, 227–28, 247, 259, 275–76; inequality and, 41, 158, 261; political influence of, 24, 41–43, 253; populism and, 222, 227, 237, 253; skilled labor and, 43–44, 125; taxes and, 22, 42, 261, 280n13; voters and, 2 upskilling, 102, 123, 129, 174–75, 178, 228, 232, 250–51 urbanization, 37, 92; big-city agglomerations and, 194–200; effects of, 83–84; feeder towns and, 108–9, 224; knowledge economies and, 141, 194–95, 201–3, 224–27, 239, 241; rebirth of cities and, 224–27; segregation and, 200–6 (see also segregation); smart cities and, 194–95; transport systems and, 201–3 US Patent and Trademark Office, 26–27 value-added sectors, 206–9 Van Kersbergen, Kees, 44, 92, 95, 124 Verily Life Sciences, 262 Vernon, Raymond, 18 VET system, 176, 179–80 Vliet, Olaf van, 133 Vogel, Steven, 11 Von Hagen, Jürgen, 121, 151 Von Papen, Franz, 77 voters: advanced capitalism and, 2, 6, 11–14, 19–22, 30–32, 38, 46–47, 112, 158–59, 167, 215, 247, 273; aspirational, 6, 12–13, 20–21, 32, 167, 214, 219, 272; decisive, 2–3, 6, 11–14, 19–23, 32, 38, 43, 158–59; democracy and, 75, 81, 90, 96–100, 111–13, 125, 129–30, 133, 260, 272–73; economic, 164; education and, 12–13, 21, 38, 45, 90, 158, 164, 167–68, 219, 234, 247, 273; electoral politics and, 21–22, 46, 100, 111, 158, 183, 217, 272; growth and, 2, 13, 23, 32, 111, 113, 164, 168, 247; knowledge economies and, 24, 138, 140, 158–59, 163–64, 167–68, 183, 213–19, 234–36, 245, 247; median, 3, 21, 23, 44, 96–97, 100, 125, 168, 213; Meltzer-Richard model and, 3; middle class, 2–3, 20–22, 44, 90, 96–100, 125, 140, 158, 168, 273; mobilizing, 75; neoliberalism and, 2; politics of the future and, 272–73; populism and, 217–19, 234–36, 244–47, 250, 256; prospective, 164; PR systems and, 19, 34, 100, 217; redistribution and, 3, 19–21, 32, 43, 90, 98, 100, 125, 140, 158, 273; retrospective, 164; suffrage and, 72–74, 76, 80, 87–89; technology and, 6, 13, 20, 159, 234, 260, 272; upper class and, 2; welfare and, 3, 21–22, 43, 45–46, 111, 167, 214, 234, 273 wages: bargaining and, 49–50, 61, 105–10, 119–21, 127, 151, 172, 176; coordination and, 49–50, 106–7, 120, 123, 172, 229; cospecificity and, 49–50; democracy and, 266, 268, 273; Fordism and, 104–24, 127, 284n2; Great Gatsby Curve (GGC) and, 220, 221, 227–28, 247, 259, 275–76; knowledge economies and, 151, 160, 172–76, 181, 196, 211–12, 219, 222–23, 227, 229; monopoly, 6; populism and, 219, 222–23, 227, 229; restraint and, 18, 110, 113, 120–21, 151, 176, 211–12; skilled labor and, 6, 18, 33, 41, 50, 61, 64, 67, 104–5, 110, 115, 118–24, 127, 172–76, 181, 212, 222–23, 229, 266 Wajcman, Judy, 260 Wallerstein, Michael, 105 Washington Consensus, 38 Waymo, 265 Weimar Republic, 75–77 welfare: Bismarckian, 176; capitalism and, 8, 16–19, 31, 39–40, 46, 122, 125, 128, 131, 137, 167, 234, 261, 279n5, 282n22; cash transfers and, 21; competition and, 31, 40, 52, 122, 128, 131, 223, 285n6; cospecificity and, 49–50; democracy and, 94, 96, 261, 273; education and, 31, 42, 45, 52, 94, 96, 116, 128, 131, 146, 167, 223, 234, 261, 287n1; Fordism and, 110–11, 115–28, 131; free riders and, 127; Golden Age of, 127; inequality and, 3, 42, 125, 223, 282n22; Keynesianism and, 115; knowledge economies and, 137, 146, 167, 176, 214, 223, 234, 249, 285n6, 285n8, 287n1; labor market and, 31, 46, 96, 118, 120, 122–23, 125, 128, 176, 223, 279n5; populism and, 45, 223, 234, 249, 287n1; power resources theory and, 280n6; public services and, 21; redistribution and, 3, 8, 18–21, 31, 39–40, 43, 115, 123–24, 128, 131, 137, 261, 273; skilled labor and, 45; social insurance and, 21; taxes and, 16–17, 21, 40, 42, 167; trade protectionism and, 51; undeserving poor and, 43; voters and, 3, 21–22, 43, 45–46, 111, 167, 214, 234, 273; wage coordination and, 49–50 Westminster systems, 19 Whigs, 80 Winters, J.


pages: 428 words: 103,544

The Data Detective: Ten Easy Rules to Make Sense of Statistics by Tim Harford

Abraham Wald, access to a mobile phone, Ada Lovelace, affirmative action, algorithmic bias, Automated Insights, banking crisis, basic income, behavioural economics, Black Lives Matter, Black Swan, Bretton Woods, British Empire, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Charles Babbage, clean water, collapse of Lehman Brothers, contact tracing, coronavirus, correlation does not imply causation, COVID-19, cuban missile crisis, Daniel Kahneman / Amos Tversky, data science, David Attenborough, Diane Coyle, disinformation, Donald Trump, Estimating the Reproducibility of Psychological Science, experimental subject, fake news, financial innovation, Florence Nightingale: pie chart, Gini coefficient, Great Leap Forward, Hans Rosling, high-speed rail, income inequality, Isaac Newton, Jeremy Corbyn, job automation, Kickstarter, life extension, meta-analysis, microcredit, Milgram experiment, moral panic, Netflix Prize, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, opioid epidemic / opioid crisis, Paul Samuelson, Phillips curve, publication bias, publish or perish, random walk, randomized controlled trial, recommendation engine, replication crisis, Richard Feynman, Richard Thaler, rolodex, Ronald Reagan, selection bias, sentiment analysis, Silicon Valley, sorting algorithm, sparse data, statistical model, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, survivorship bias, systematic bias, TED Talk, universal basic income, W. E. B. Du Bois, When a measure becomes a target

But moving a dollar from a richer person to a poorer person, no matter how rich or poor either of them might be, will reduce the Gini coefficient. One big problem with the Gini coefficient, however, is getting an intuitive feel for what it actually means. It’s easy enough to picture a country with a Gini coefficient of zero—there, everyone gets exactly the same income. Likewise, we can readily imagine a country in which the Gini coefficient is 100 percent—there, the despotic president has cornered all the income and everyone else gets precisely nothing. But what would it be like to live in a country where the Gini coefficient of income is, say, 34 percent? As it happens, if you live in the UK, you can answer that question.7 But even a specialist in income distribution would probably understand a Gini coefficient of 34 percent only in reference to the Gini coefficients of other countries.

We can get useful context from other kinds of comparison, too. Let’s return to our case study of income inequality from the previous chapter, where we learned there are many plausible ways to measure it—such as the 50/10 ratio, or the income share of the top 1 percent. What if we could produce some sort of composite measure that summarizes the whole of the income distribution? These composite measures exist, and we’ve already mentioned the most famous—the Gini coefficient, named after the early-twentieth-century Italian statistician Corrado Gini. Like any other measure of inequality, the Gini coefficient doesn’t tell us everything. On a global scale, the coefficient has been falling—that is, incomes are becoming more equal.

It’s unclear whether counting state pensions as assets would increase measured inequality (since many of the poorest people lack them) or reduce measured inequality (since a state pension represents a substantial asset for the poorer people in richer countries). I’m guessing things would look less unequal if state pensions were included, but it is just a guess. I might be quite wrong. Around the world, a third of older people have no pension of any kind. *Another popular measure of inequality—one we’ll encounter in the next chapter—is the Gini coefficient. This measure was telling the same story of falling inequality in the wake of the crisis.


pages: 346 words: 90,371

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane

agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, book value, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, foreign exchange controls, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land bank, land reform, land tenure, land value tax, Landlord’s Game, low interest rates, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, Minsky moment, Money creation, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, Post-Keynesian economics, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Robert Solow, Second Machine Age, secular stagnation, shareholder value, subprime mortgage crisis, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

Table 6.2 Net property wealth between 1995 and 2005, selected percentiles (Great Britain) Source: Bastagli and Hills (2012) Note: Figures in 2005 prices. In all of these studies housing wealth inequality as measured by the Gini coefficient is found to have declined slightly over the relevant time periods, largely driven by the increase in the proportion of housing assets held by households in the middle part of the distribution.3 However, measuring the effect of these trends on inequality using conventional measures of inequality such as the Gini coefficient is problematic. As noted previously, the Gini coefficient indicates the spread of the wealth distribution or deviation from the mean, and is therefore very sensitive to changes in the middle of the distribution and less sensitive to changes at the very top and the very bottom of the distribution.

Another common way to measure income inequality is the Gini coefficient. The Gini coefficient is a measure of statistical dispersion intended to represent the income distribution of a nation’s residents. It is represented as a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income and everyone else has zero income). On this measure the UK is currently the fifth most unequal country in the OECD (2016). However, because the Gini coefficient indicates the spread of the income distribution or deviation from the mean, it is particularly sensitive to income changes in the middle of the income distribution and less sensitive to changes at the very top and the very bottom of the income distribution.

However, in the late 1980s the cost of renting increased sharply relative to incomes, whereas the cost of owning with a mortgage remained broadly stable (Belfield et al., 2014). As a result, the cost of housing has increased disproportionately for those in rented accommodation, which tend to be households on lower incomes.5 This has had the effect of exacerbating inequalities in ultimate spending power and living standards. Figure 6.8 shows the Gini coefficient for income inequality both before and after housing costs. It shows that income inequality was largely unaffected by housing costs during the 1960s and 1970s, but from 1979 onwards there has been a growing divergence between the two measures. This indicates that over the past thirty years housing costs have become a significant contributor towards widening gaps in ultimate spending power and, therefore, living standards.


pages: 352 words: 107,280

Good Times, Bad Times: The Welfare Myth of Them and Us by John Hills

Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, credit crunch, Donald Trump, falling living standards, full employment, Gini coefficient, income inequality, income per capita, longitudinal study, meritocracy, mortgage debt, pension reform, plutocrats, precariat, quantitative easing, Right to Buy, unpaid internship, very high income, We are the 99%, working-age population, World Values Survey

2.4 ‘Should government spend more money on welfare benefits for the poor, even if it leads to higher taxes?’ 2.5 Pen’s parade of incomes in the UK, 2012–13 2.6 Inequality in disposable incomes in industrialised countries, 2013 (Gini coefficients, %) 2.7 Distribution of household incomes, 2013–14 2.8 Inequality of market incomes in industrialised countries, 2013 (Gini coefficients, %) 2.9 Inequality before and after redistribution in the UK and Sweden, 2013 (Gini coefficients, %) 2.10 Taxes and benefits by household income group, 2013–14 2.11 Preferences for taxation and cash benefits, 2008 (%) 2.12 The poor cost more?

Only Ireland, Greece and Portugal had more inequality before the state intervened. Figure 2.8: Inequality of market incomes in industrialised countries, 2013 (Gini coefficients, %) The difference between inequality in market incomes and in disposable incomes gives one measure of how much redistribution the direct tax and benefit systems achieve. In these terms the UK does quite a lot. The difference in inequality between the indexes shown in Figures 2.8 and 2.6 was greater in the UK than the average for the 35 countries shown, with only 15 of them doing more.34 Taxes and benefits narrowed income inequality in the UK more than in archetypal egalitarian countries such as Sweden and Norway.

As Figure 2.9 comparing the UK and Sweden shows, inequality ends up much higher in the UK than in Sweden, because it starts so much higher, despite the UK’s somewhat greater redistributive effort. Figure 2.9: Inequality before and after redistribution in the UK and Sweden, 2013 (Gini coefficients, %) Our problem as a country is that, if we want to achieve a relatively equal result, the inequality in market incomes means that so much redistribution is needed. Despite our greater than average redistributive effort, we still end up as one of the most unequal countries in the rich world because there is so much inequality in the incomes people receive from the market compared with elsewhere.


pages: 237 words: 72,716

The Inequality Puzzle: European and US Leaders Discuss Rising Income Inequality by Roland Berger, David Grusky, Tobias Raffel, Geoffrey Samuels, Chris Wimer

"World Economic Forum" Davos, Bear Stearns, Branko Milanovic, business cycle, Caribbean Basin Initiative, Celtic Tiger, collective bargaining, corporate governance, corporate social responsibility, double entry bookkeeping, equal pay for equal work, fear of failure, financial innovation, full employment, Gini coefficient, hiring and firing, illegal immigration, income inequality, invisible hand, Long Term Capital Management, long term incentive plan, microcredit, military-industrial complex, Money creation, offshore financial centre, principal–agent problem, profit maximization, proprietary trading, rent-seeking, shareholder value, Silicon Valley, Silicon Valley startup, time value of money, very high income

Wimer We begin, then, by examining the overall level of income inequality within 30 OECD countries. As shown in Figure 1, there’s substantial variability across these countries in the extent of income inequality, with of course the Nordic countries, especially Denmark and Sweden, registering the lowest levels of inequality. The middling ranks include such countries as France, Germany, Austria, Canada, and Japan, while the most extreme inequality appears in such countries as Italy, the United States, Turkey, and Mexico. The Gini coefficient, a commonly used indicator of inequality, has been applied in Figure 1,3 but much the same conclusions would be reached with other measures. 0.50 0.45 0.40 0.35 0.30 0.20 Denmark Sweden Luxembourg Austria Czech Republic Slovakia Finland Belgium Netherlands Switzerland Norway Iceland France Hungary Germany Australia OECD-30 Korea Canada Spain Japan Greece Ireland New Zeeland Great Britain Italy Poland USA Portugal Turkey Mexico 0.25 Figure 1: Gini coefficients of income inequality in OECD countries, mid-2000s (Source: OECD income distribution questionnaire) What about trends in income inequality?

7 point since the 1980s, although there are of course important differences across countries in the timing and extent of such change.5 Mid-1980s to Mid-1990s Mid-1990s to Mid-2000s Cumulative change Mid-1980s to Mid-2000s -0.08 -0.04 0.00 0.04 0.08 -0.08 -0.04 0.00 0.04 0.08 -0.08 -0.04 0.00 0.04 0.08 Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Luxembourg Mexico Netherlands New Zeeland Norway Portugal Spain Sweden Turkey Great Britain USA OECD-24 OECD-22 Figure 2: Trends in income inequality: Point changes in the Gini coefficient over different time periods (Source: Computations from OECD income distribution questionnaire) These overall inequality trends cannot tell us whether certain sectors of the income distribution account for most of the changes when inequality rises or falls. We can better understand why income inequality has risen in cer- 5 Brandolini, A., and T.M. Smeeding, “Patterns of Economic Inequality in Western Democracies: Some Facts on Levels and Trends,” Political Science and Politics (January 2006), pp. 21-26.

The Gini coefficient, a commonly used indicator of inequality, has been applied in Figure 1,3 but much the same conclusions would be reached with other measures. 0.50 0.45 0.40 0.35 0.30 0.20 Denmark Sweden Luxembourg Austria Czech Republic Slovakia Finland Belgium Netherlands Switzerland Norway Iceland France Hungary Germany Australia OECD-30 Korea Canada Spain Japan Greece Ireland New Zeeland Great Britain Italy Poland USA Portugal Turkey Mexico 0.25 Figure 1: Gini coefficients of income inequality in OECD countries, mid-2000s (Source: OECD income distribution questionnaire) What about trends in income inequality? In the same report, the OECD observed that income inequality rose at a “moderate but significant” pace, with the data suggesting an average increase across countries of approximately two Gini points in the last 20 years (see Figure 2). Likewise, data from the Luxembourg Income Study,4 perhaps the best comparative resource on income and inequality in rich countries, show that most countries have experienced at least a modest rise in income inequality at some 3 The Gini coefficient for income measures the dispersion or spread of income across a society.


pages: 237 words: 64,411

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

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

Census Bureau uses it to measure income inequality.41 In 1970, the Gini coefficient for income stood at .394. By 2011, it had climbed to .477. That doesn’t have an intuitive ring to it, but it’s pretty bad. The same objective measure can be applied to the beneficial ownership of any asset. Suppose you and three friends decide to go in together on a rental property. If you each have one-quarter ownership, that’s a Gini coefficient of 0. On the other hand, suppose you put up all the money but decide to cut in your friends for 1 percent each because you’re a nice person. That’s a Gini coefficient close to 1. But suppose that the arrangement doesn’t work out because your friends act like they own the place, when for all practical purposes you do.

Institutional Shareholder Services (ISS) issues a widely used measure of corporate governance covering board structure, shareholder rights, compensation practices, and audit quality. What we need to lay the groundwork for addressing income inequality is a new government measure of just how broadly assets are owned. Luckily, we can take one off the shelf, dust it off, and polish it up a bit. In 1912, an Italian statistician named Corrado Gini published a paper titled “Variabilità e mutabilità” or, in English, “Variability and Mutability.”40 In it, he proposed a clever measure of dispersion which has come to be known as the Gini coefficient. Basically, you feed in a bunch of data, and the Gini coefficient will tell you just how “even” the series is, expressed as 0 for smooth and equal, and 1 for incredibly skewed.

But suppose that the arrangement doesn’t work out because your friends act like they own the place, when for all practical purposes you do. So you buy out their interests. The Gini coefficient goes back to 0, because all the owners (that is, just you) have equal shares. As you can see, just applying the Gini coefficient to an asset doesn’t get at what we want to measure. Instead, we have to make a small adjustment. First we need to define some population, say, adult U.S. citizens. Then assume for calculation purposes that people in the group who don’t own any of the assets have a 0 percent interest. Now the Gini coefficient reflects how widely owned the asset is across the population of interest.


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The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

air traffic controllers' union, Alan Greenspan, assortative mating, autonomous vehicles, Bear Stearns, blue-collar work, Bonfire of the Vanities, Branko Milanovic, business cycle, call centre, carbon tax, collective bargaining, compensation consultant, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, easy for humans, difficult for computers, Erik Brynjolfsson, Everybody Ought to Be Rich, feminist movement, Ford Model T, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, independent contractor, industrial robot, invisible hand, It's morning again in America, job automation, Joseph Schumpeter, longitudinal study, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, proprietary trading, purchasing power parity, refrigerator car, rent control, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, subprime mortgage crisis, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

The most common measure, the Gini coefficient, is named for an Italian statistician named Corrado Gini (1884–1965).3 It measures distribution—of income or anything else—on a scale that goes from 0 to 1. Let’s imagine, for instance, that we had fifty marbles to distribute among fifty children. Perfect equality of distribution would be if each child got one marble. The Gini coefficient would then be 0. Perfect inequality of distribution would be if one especially pushy child ended up with all fifty marbles. The Gini coefficient would then be 1.4 As of 2005, the United States’ Gini coefficient was 0.38, which on the income-equality scale ranked this country twenty-seventh of the thirty OECD nations for which data were available. The only countries with more unequal income distribution were Portugal (0.42), Turkey (0.43), and Mexico (0.47).

We already know from census data that in 2010 income share for the bottom 40 percent fell and that the poverty rate climbed to its highest point in nearly two decades.7 In addition to having an unusually high level of income inequality, the United States has seen income inequality increase at a much faster rate than most other countries. Among the twenty-four OECD countries for which Gini-coefficient change can be measured from the mid-1980s to the mid-aughts, only Finland, Portugal, and New Zealand experienced a faster growth rate in income inequality. Of these, only Portugal ended up with a Gini rating worse than the United States’. Another important point of comparison is that some OECD countries saw income inequality decline during this period. France, Greece, Ireland, Spain, and Turkey all saw their Gini ratings go down (though the OECD report’s data for Ireland and Spain didn’t extend beyond 2000).

A 2008 report by the Organisation for Economic Co-operation and Development, which represents thirty-four market-oriented democracies, concluded that since the mid-1980s, income inequality had increased in two thirds of the twenty-four OECD countries for which data were available, which included most of the world’s leading industrial democracies.2 But the level and growth rate of income inequality in the United States has been particularly extreme. There are various ways to measure income distribution, and by all of them the United States ranks at or near the bottom in terms of equality. The most common measure, the Gini coefficient, is named for an Italian statistician named Corrado Gini (1884–1965).3 It measures distribution—of income or anything else—on a scale that goes from 0 to 1.


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, airline deregulation, Alan Greenspan, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Berlin Wall, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, electricity market, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, Great Leap Forward, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Bogle, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low interest rates, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, Paul Volcker talking about ATMs, payday loans, Phillips curve, price stability, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, search costs, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, Tragedy of the Commons, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

Of course, what he meant was not that the taxes themselves led to higher growth but that the taxes financed public expenditures—investments in education, technology, and infrastructure—and the public expenditures were what had sustained the high growth—more than offsetting any adverse effects from the higher taxation. Gini coefficient One standard measure of inequality is the Gini coefficient. If income were shared in proportion to the population—the bottom 10 percent getting roughly 10 percent of the income, the bottom 20 percent getting 20 percent, and so forth—then the Gini coefficient would be zero. There would be no inequality. On the other hand, if all the income went to the top person, the Gini coefficient would be one, in some sense “perfect” inequality. More-equal societies have Gini coefficients of .3 or below. These include Sweden, Norway, and Germany.96 The most unequal societies have Gini coefficients of .5 or above.

See Institute of Directors press release, “The Answer to High Executive Pay Lies with Shareholders and Boards, Says IoD,” October 28, 2011, available at http://press.iod.com/2011/10/28/the-answer-to-high-executive-pay-lies-with-shareholders-says-iod/ (accessed March 6, 2012). 92. OECD, “Divided We Stand.” Among OECD countries, Turkey and Mexico both have substantially greater inequality as measured by the Gini coefficient. See the discussion of this measure below. 93. These comparisons are based on Gini coefficient data provided by the United Nations International Human Development Indicators, but are also supported by other databases. The Gini coefficient is an imperfect measure of inequality, but is useful for general international comparisons such as this one. I discuss some of the difficulties of comparing Gini data in subsequent footnotes in this chapter. 94.

These include Sweden, Norway, and Germany.96 The most unequal societies have Gini coefficients of .5 or above. These include some countries in Africa (notably South Africa with its history of grotesque racial inequality) and Latin America—long recognized for their divided (and often dysfunctional) societies and polities.97 America hasn’t made it yet into this “elite” company, but it’s well on the way. In 1980 our Gini coefficient was just touching .4; today it’s .47.98 According to UN data, we are slightly more unequal than Iran and Turkey,99 and much less equal than any country in the European Union.100 We end this international comparison by coming back to a theme we raised earlier: measures of income inequality don’t fully capture critical aspects of inequality.


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The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

According to the latest global income estimates from Branko Milanovic, the global Gini coefficient (a widely used measure of inequality that goes from 0 to 1, the former being perfectly equal and the latter perfectly unequal societies) came in at 0.63 in 2013 (Figure 6.12). This would put it around the levels of Haiti and South Africa, the only countries in the world with Gini coefficients over 0.60. And that’s the good news: the global Gini has been gradually declining since hitting a peak of 0.69 in 1988. This decline in global inequality is also a recent phenomenon. Historic estimates (with less robust data than the post-1988 figures) show that global inequality stood at 0.43 in 1820 when capitalism and industrialization were in their infancy.

Despite the rapid growth of many developing economies in the post-war era, not only did global inequality continue to increase but the share of inequality caused by between-country (as opposed to within-country) differences also grew. Like poverty, global inequality only began to decline when two countries that together account for around one third of the global population began converging: China and India. In fact, the component of the Gini coefficient that is accounted for by within-country inequality has risen since 1988 and now accounts for around one-third of global inequality, compared to around one-fifth in 1988.31 Tellingly, both China and India have become considerably more unequal (depending on the source, China’s Gini is now around the same or even higher than that of the US32), which illustrates how country-level and global inequality dynamics can vary dramatically.

Under this measurement, inequality today is worse than in 1988. Figure 6.12: A very unequal world Notes: The Gini coefficient (or index) is the most commonly used indicator for inequality and ranges from 0 (perfect equality; all people have equal income) to 1 (perfect inequality; one person receives all income). Historic data for 1820–1980 is provided by Bourguignon and Morrison (2002), with more recent data from Lakner and Milanovic (1988–2008) and Milanovic (2013). Decomposition of between- and within-country inequality in the L-M / M series is based on Thiel’s L, a different inequality indicator and thus, actual shares of the Gini coefficient may vary slightly.


Exploring Everyday Things with R and Ruby by Sau Sheong Chang

Alfred Russel Wallace, bioinformatics, business process, butterfly effect, cloud computing, Craig Reynolds: boids flock, data science, Debian, duck typing, Edward Lorenz: Chaos theory, Gini coefficient, income inequality, invisible hand, p-value, price stability, Ruby on Rails, Skype, statistical model, stem cell, Stephen Hawking, text mining, The Wealth of Nations by Adam Smith, We are the 99%, web application, wikimedia commons

Given that all roids are the same, our Utopia simulation simply shows that over time, the rich get richer and the poor get poorer (in this case, the poor die), and the gap of inequality widens. Isn’t this simply guessing? Let’s do a second analysis. Inequality is frequently measured using the Gini coefficient, so we’ll analyze the distribution of energy levels with the Gini coefficient and Lorenz curves (for more information, see the sidebar ). Gini Coefficient and Lorenz Curve The Gini coefficient is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper “Variability and Mutability.” It is a measure of the inequality of a distribution, a value of 0 expressing perfect equality and a value of 1 expressing perfect inequality.

It is a measure of the inequality of a distribution, a value of 0 expressing perfect equality and a value of 1 expressing perfect inequality. Although commonly used as a measure of inequality of income or wealth, the Gini coefficient has also been applied in many other fields, including ecology, health science, and chemistry. Associated with the Gini coefficient is the Lorenz curve, a graphical representation of the cumulative distribution function of a probability distribution. It was developed by Max O. Lorenz in 1905 to represent inequality of the wealth distribution. If there is perfect equality, the curve will be a line y = x. If there is perfect inequality, it will be a line y = 0 (i.e., a horizontal line).

If there is perfect inequality, it will be a line y = 0 (i.e., a horizontal line). The Gini coefficient is the area between the line of perfect equality and the Lorenz curve, as a percentage of the area between the line of perfect equality and the line of perfect inequality. For this analysis, we’ll use the ineq library, which conveniently provides all the necessary functions for us to do this analysis. Let’s apply the same data points we used for graphing to some new R code that calculates the coefficience of inequality (Example 8-13). Example 8-13. Analyzing inequality over time library(ineq) data <- read.table("money.csv", header=F, sep=",") points = c(1,5,15,30,50,75,100,125,150,200,300,500) pdf("inequality.pdf") par(mfcol=c(4,3)) for (i in 1:12) { p <- Lc(as.vector(as.matrix(data[points[i],]))) ie <- ineq(data[points[i],]) plot(p, main=paste("t =", points[i], "/ Gini = ", round(ie, 3)), font.main=1) } dev.off() Although we use the same data as before (of course) and the same sample points, instead of generating histograms, this time we generate Lorenz curves and print out the Gini coefficient in the title of the chart as well (Figure 8-4).


Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, Great Leap Forward, high net worth, household responsibility system, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Robert Solow, Silicon Valley, single-payer health, special economic zone, Tax Reform Act of 1986, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

That superiority was most evident in colonial conquests, but it was also reflected in income gaps between the two parts of the world and thus in global income inequality among all citizens of the world, which we can estimate with relative precision from 1820 onward, as illustrated in Figure 1.1. In this graph, and throughout the book, inequality is measured using an index called the Gini coefficient, which ranges in value from 0 (no inequality) to 1 (maximum inequality). (The index is often expressed as a percentage, ranging from 0 to 100, where each percentage point is called a Gini point.) Before the Industrial Revolution in the West, global inequality was moderate, and nearly as much of it was due to differences among individuals living in the same nations as among the mean incomes of individuals in different nations.

In short, it is a systemic feature of liberal meritocratic capitalism that capital income is extremely concentrated and is received mostly by the rich.24 Note too that inequality in labor income (before taxes) in these countries has increased during this period, from a Gini coefficient of under 0.5 to about 0.6. Looking at a snapshot of capital and labor income inequalities in rich countries from around 2013, we see that with the exception of Taiwan, all the countries shown have extremely concentrated income from capital, with Gini coefficients above 0.86 (Figure 2.2). Labor income Ginis are much lower, generally between 0.5 and 0.6, and even lower for Taiwan. I will return to the case of Taiwan later in the chapter. The curse of wealth To see how important the combination of rising capital income and heavy concentration of capital ownership is to total income inequality, one has to look at it dynamically.

Around the turn of the twenty-first century, China was joined in that role by India, which, because of its large population, relative poverty, and high growth rate, now also contributes significantly to a decline in both global income inequality and global poverty. FIGURE 5.1. GDP per capita for China and India as a percentage of British GDP, and for Indonesia as a percentage of Dutch GDP, from the Industrial Revolution to today Data source: Calculated from the Maddison Project (2018); all GDP per capita data in 2011 PPPs (variable cgdppc, which is the real GDP variable used for cross-country comparisons at a given point in time). The importance of reduced global inequality does not reside in a decrease in a single number (the Gini coefficient of inequality), but rather in the convergence in real incomes across vast groups of people.


pages: 247 words: 43,430

Think Complexity by Allen B. Downey

Benoit Mandelbrot, cellular automata, Conway's Game of Life, Craig Reynolds: boids flock, discrete time, en.wikipedia.org, Frank Gehry, Gini coefficient, Guggenheim Bilbao, Laplace demon, mandelbrot fractal, Occupy movement, Paul Erdős, peer-to-peer, Pierre-Simon Laplace, power law, seminal paper, sorting algorithm, stochastic process, strong AI, Thomas Kuhn: the structure of scientific revolutions, Turing complete, Turing machine, Vilfredo Pareto, We are the 99%

Agents who own a large proportion of the total wealth leave behind larger amounts of sugar, making an investment into the sugarscape and increasing the total wealth. The Gini Coefficient To compare the effect of taxation on wealth distribution, we need a metric that measures how distributed or flat a certain wealth distribution is. We use the Gini coefficient, which is often used in economics to measure the wealth gap (see http://en.wikipedia.org/wiki/Gini_coefficient). The Gini coefficient is between 0 and 1, with 0 the measurement of a perfectly uniform distribution and 1 the measurement of a distribution with complete inequality. Figure 11-1 shows a histogram describing the wealth distribution when there is no tax system in place.

The agents have a similar amount of sugar, and the economy has a low Gini coefficient, 0.02. Figure 11-3 shows that higher taxes in general result in lower Gini coefficients. This makes sense, since the point of our tax system is to redistribute wealth. In this model, perfect equality comes at a price. With no taxation, the mean wealth was 358; with a 20% tax rate, it drops to 157. Figure 11-4 shows the effect of tax rate on wealth; mean wealth gets smaller as taxes get higher. Figure 11-2. Histogram of wealth with tax system Figure 11-3. The Gini coefficient versus the tax rate Figure 11-4. Mean wealth versus tax rate Conclusion It’s up to a society to determine its ideal wealth distribution.

Self-Organized Criticality Sand Piles Spectral Density Fast Fourier Transform Pink Noise Reductionism and Holism SOC, Causation, and Prediction 10. Agent-Based Models Thomas Schelling Agent-Based Models Traffic Jams Boids Prisoner’s Dilemma Emergence Free Will 11. Case Study: Sugarscape The Original Sugarscape The Occupy Movement A New Take on Sugarscape Pygame Taxation and the Leave Behind The Gini Coefficient Results with Taxation Conclusion 12. Case Study: Ant Trails Introduction Model Overview API Design Sparse Matrices wx Applications 13. Case Study: Directed Graphs and Knots Directed Graphs Implementation Detecting Knots Knots in Wikipedia 14. Case Study: The Volunteer’s Dilemma The Prairie Dog’s Dilemma Analysis The Norms Game Results Improving the Chances A.


pages: 268 words: 89,761

Unhealthy societies: the afflictions of inequality by Richard G. Wilkinson

attribution theory, business cycle, clean water, correlation coefficient, experimental subject, full employment, fundamental attribution error, Gini coefficient, income inequality, income per capita, Indoor air pollution, invisible hand, land reform, longitudinal study, means of production, purchasing power parity, rising living standards, twin studies, upwardly mobile

It is included here only for the sake of its Japanese data.) The measure of income distribution used in figure 5.6 is the Gini coefficient, which measures inequality across the whole population rather than by just comparing the rich and poor. Its value varies between 0, which would mean everyone had the same income, and 1, which would mean all income went to one individual and no one else would have any. This means that a value of 0.4 (to the right on the Figure 5.6: Life expectancy (M&F) and Gini coefficients of post-tax income inequality (standardised for household size) Sources: Data from M. Sawyer, Income distribution in OECD countries, OECD Economic Outlook, Occasional Studies, 1976, 3–36, Table 11; and World Bank Income distribution and health 85 horizontal axis) represents greater inequality than 0.3.

Both the Gini coefficient and the ratio of incomes of the bottom and top 20 per cent of the population shown in the figure record a slow widening of income differences until the mid-1980s and then, from about 1985 onwards, a more rapid widening. The rate at which inequality increased during this period is almost unprecedented. Among the OECD countries only New Zealand saw a faster Income distribution and health 95 Figure 5.9: Widening income differences: distribution of disposable income adjusted for household size, UK Note: The Gini coefficient measures the degree of income inequality—not just between rich and poor, but across the whole population.

RA418.W45 1996 306.4´61–dc20 96–21560 ISBN 0-203-42168-X Master e-book ISBN ISBN 0-203-72992-7 (Adobe eReader Format) ISBN 0-415-09234-5 (hbk) ISBN 0-415-09235-3 (pbk) Contents List of illustrations Preface 1 Introduction: the social economy of health vii ix 1 Part I The health of societies 2 Health becomes a social science 13 3 Rising life expectancy and the epidemiological transition 29 Part II Health inequalities within societies 4 The problem of health inequalities 53 5 Income distribution and health 72 Part III Social cohesion and social conflict 6 A small town in the USA, wartime Britain, Eastern Europe and Japan 113 7 An anthropology of social cohesion 137 8 The symptoms of disintegration 153 Part IV How society kills 9 The psychosocial causes of illness 10 Baboons, civil servants and children’s height 175 193 vi Contents Part V Redistribution, economic growth and the quality of life 11 Social capital: putting Humpty together again 211 Bibliography Name index Subject index 233 247 251 Illustrations FIGURES 3.1 3.2 4.1 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Life expectancy and income per capita for selected countries and periods Increases in life expectancy in relation to percentage increase in GDPpc Relative risk of death from coronary heart disease according to employment grade, and proportions of differences that can be explained statistically by various risk factors Income and mortality among white US men GDP per capita and life expectancy in OECD countries in 1990 The cross-sectional relationship between income distribution and life expectancy (M&F) at birth in developed countries, c. 1981 The annual rate of change of life expectancy in twelve European Community countries and the rate of change in the percentage of the population in relative poverty, 1975–85 The relationship between income distribution and mortality among fifty states of the USA in 1990 Life expectancy (M&F) and Gini coefficients of posttax income inequality (standardised for household size) Social class differences in infant mortality in Sweden compared with England and Wales Social class differences in mortality of men 20–64 years: Sweden compared with England and Wales 34 37 65 73 74 76 77 79 84 87 88 viii Illustrations 5.9 Widening income differences: distribution of disposable income adjusted for household size, UK 5.10 Indices showing changes in death rates among young adults, children and infants (M&F combined, England and Wales, 1975–92) 5.11 Trends in life expectancy among blacks and whites in the USA (M&F combined) 5.12 Three measures of self-reported health in relation to income (M&F combined) 65 years and over living alone or in two-person households 8.1 The relationship between income distribution and homicide among the states of the USA in 1990 8.2 The decline in reading standards.


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A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, AlphaGo, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, Big Tech, blue-collar work, Boston Dynamics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, driverless car, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, financial innovation, flying shuttle, Ford Model T, fulfillment center, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Kevin Roose, Khan Academy, Kickstarter, Larry Ellison, low skilled workers, lump of labour, machine translation, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, tacit knowledge, technological solutionism, TED Talk, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

Exploring existing inequalities, then, is useful because it shows us how a world with insufficient work can emerge from what we already see around us. In a sense, today’s inequalities are the birth pangs of tomorrow’s technological unemployment. INCOME INEQUALITY How can we see the current trends in inequality? One way is to look at inequality of overall incomes, and in particular something known as the Gini coefficient. This is a number that captures how incomes are spread out: if everyone has the same income in a particular society, then its Gini coefficient is zero, and if only one person earns everything, then the Gini coefficient is one.9 In most developed countries, this number has risen significantly over the last few decades.10 (In less-developed countries the story is somewhat ambiguous: their Gini coefficients were usually very high to begin with, but have remained relatively stable.)

In the United States, for example, from 1981 to 2017, the income share of the top 0.1 percent increased more than three and a half times from its already disproportionately high level, and the share of the top 0.01 percent rose more than fivefold.16 The three measures of income inequality do diverge sometimes, of course, and it is possible to point to particular instances where some measurement departs from an upward trend. The Gini coefficient in the UK, for instance, has not really risen for twenty-five years.17 But it is rare to find a country where none of the three measurements show rising inequality; in the UK, as Figure 8.3 shows, the income share of the 1 percent has soared. And when all the measures, applied to lots of different countries, are taken together, the big picture is clear: in the most prosperous parts of the world, we are seeing a move toward societies with greater income inequality.

See both Era Dabla-Norris, Kalpana Kochhar, Frantisek Ricka, et al., “Causes and Consequences of Income Inequality: A Global Perspective,” IMF Staff Discussion Note (2015); and Jan Luiten van Zanden, Joerg Baten, Marco Mira d’Ercole, et al., “How Was Life? Global Well-Being Since 1820,” OECD (2014), p. 207: “It is hard not to notice the sharp increase in income inequality experienced by the vast majority of countries from the 1980s. There are very few exceptions to this…” 11.  See, for instance, Piketty, Capital in the Twenty-First Century, p. 266. 12.  These are post-tax and transfer Gini coefficients for 2017, or latest available year. This is an updated version of Figure 1.3 in OECD, “In It Together: Why Less Inequality Benefits All” (2015), using OECD (2019) data; http://www.oecd.org/social/income-distribution-database.htm (accessed April 2019). 13.  


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, classic study, clean water, collapse of Lehman Brothers, collective bargaining, company town, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, gentrification, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, Glass-Steagall Act, global macro, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Savings and loan crisis, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

And if we broaden the range of metrics we consider, we see that even after two decades of “malaise,” Japan’s performance is far superior to that of the United States. Consider, for instance, the Gini coefficient, the standard measure of inequality. Zero represents perfect equality, and 1 stands for perfect inequality. While Japan’s Gini coefficient stands today at around 0.33, the number for the United States is 0.38, according to the Organization for Economic Cooperation and Development. (Other data sources put the United States’ level of inequality at even higher levels.) In the United States, the average income of the top 10 percent is 15.9 times that of the bottom 10 percent—compared with 10.7 times for Japan.

At the same time, while Africa has finally started to grow, creating an increasing number of middle-class African families, the number of people in poverty has remained very high, with some 415 million people living on less than $1.25 per day. Putting all of this together, one reaches a disappointing result: overall inequality, in the way it is conventionally measured (the Gini coefficient, a number ranging from zero, with perfect equality, to one, with perfect inequality), has barely budged. The Piketty Phenomenon The final two articles of this section are, in part, a response to the enormous success of the economist Thomas Piketty’s book Capitalism in the Twenty-First Century. The success of that book echoed the growing concern about inequality, a concern expressed in Davos by the world’s elite, and consistent with the way my own article “Of the 1 percent, by the 1 Percent, for the 1 Percent” had gone viral.

In the United States, the average income of the top 10 percent is 15.9 times that of the bottom 10 percent—compared with 10.7 times for Japan. The reasons for these differences are political choices, not economic inevitability. Also according to the OECD, the Gini coefficient before taxes and transfer payments is about the same in the two countries: 0.499 for the United States, and 0.488 for Japan. But the United States does only a little to modulate its inequality, bringing it down to .38. Japan does much more, reducing the Gini coefficient to 0.33. To be sure, Japan’s situation is not perfect. The country needs to do better in caring for its “older old,” those over 75. This cohort constitutes a growing share of the world’s aging population.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

"World Economic Forum" Davos, Admiral Zheng, Alan Greenspan, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, foreign exchange controls, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, Great Leap Forward, guns versus butter model, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, junk bonds, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low interest rates, low skilled workers, market clearing, Martin Wolf, mass immigration, Meghnad Desai, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, Savings and loan crisis, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, We are all Keynesians now, women in the workforce, working-age population, Y2K, Yom Kippur War

Nationalism, in part, was a protest against an empire that had unfairly kept the benefits of economic progress residing with a privileged minority. EMERGING NATIONS AND THE RISE OF INCOME INEQUALITY IN THE DEVELOPED WORLD According to the World Bank’s World Development Indicators, the US and China have roughly equivalent income distributions, as measured by Gini coefficients. (The Gini coefficient is typically expressed as a ratio between 0 and 1, where 0 represents a precisely equal income distribution and a figure of 1 implies that one person has made off with all the income. It’s no great surprise that countries ruled by despots tend to have very high Gini coefficients.) By Western European or Japanese standards, both the US and China are very unequal societies.

This is an intriguing result given that the US is regarded as the arch-capitalist economy whereas China still, publicly, hangs on to its communist credentials. Figure 6.1: Gini coefficients Source: World Development Indicators 2009, World Bank There are three key problems with this data, at least for the purposes of my argument. First, there may be no statistical consistency across countries, leading to an apples and pears problem. Second, the source years for the data vary enormously, from 1993 in Japan to 2007 in Brazil. Third, because the World Bank offers no consistent time series, it’s difficult to work out how globalization may have affected income inequality over time. Nevertheless, other sources are very much consistent with the idea that both the US and China have seen big increases in income inequality in recent decades.

Nevertheless, other sources are very much consistent with the idea that both the US and China have seen big increases in income inequality in recent decades. The US Census Bureau calculates that, between 1967 and 2007, the Gini coefficient for American household income rose from 0.397 to 0.463. The share of household income delivered to the highest quintile rose over the same period from around 43 per cent to 50 per cent. Meanwhile, the ratio between the richest 5 per cent of households and the poorest 10 per cent jumped from 11.7 to 14.6. Chinese data are far more difficult to obtain and offer nothing like the wealth of information provided by the US statisticians.


pages: 332 words: 89,668

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

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, 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, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

Then one measures the way the actual curve compares with both a “perfect equality” scenario (one in which all households have the same income or wealth) and a “perfect inequality” scenario (one in which one household has 100 percent of the income or wealth and the other households have 0). A Gini coefficient of zero represents perfect equality; a coefficient of 1 represents perfect inequality.16 Peter Lindert and Jeffrey Williamson, the most-cited economic historians to write about American inequality, claim that inequality followed this trajectory: a period of relative equality during the American Revolution was followed by growing inequality before the Civil War, high levels of inequality at the turn of the century, and then finally a leveling off of inequality in the middle decades of the twentieth century. While this is the dominant view, economic historian Carole Shammas showed that Williamson and Lindert omitted from their calculations married women (subject to laws that excluded them from ownership of most property, so without a claim to income in most cases) and African Americans (the vast majority of them slaves, and thus without income at all).

The United States supplied 99 percent of all of the raw cotton used by Great Britain’s massive textile industry in 1851, and cotton represented 60 percent of American exports.9 The Gini coefficient of wealth inequality, which had been 0.694 in 1774, increased to 0.832 in 1860. Even incremental changes in the economy were producing significant inequality.10 The inequality of the antebellum period is even more acute when we consider the plight of enslaved people, who are excluded from the above Gini coefficient calculation. The inequality of the antebellum period had physical effects. Over the period between 1780 and 1850, life expectancies at age 10 declined in the United States from a high of almost 56 years to a low of 48, and mean heights dropped from 5 feet 7 inches for white men to 5 feet 6 inches.

Whatever “equality” means, it cannot mean a nation in which over half the population has no claim to income or to wealth.17 Shammas argued that historians of inequality should focus on wealth rather than income, since in her estimation wealth is even more likely to be lopsided than income, and more likely to confer political power. She recalculated Gini coefficients for the period from 1774 to 1986 and showed that throughout that entire period, the Gini coefficient was at least 0.72, rising to 0.83 during the 1850s and 1860s. For the purposes of comparison, the Gini coefficient of wealth for the United States in 2015 was 80.56, making it the most unequal country in the developed world.18 Moreover, consistently, the wealth of the first, second, and third quintiles of the population combined—that is, the poorest 60 percent of the population—never exceeded 11 percent of the nation’s total wealth.


pages: 408 words: 108,985

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, Airbnb, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, behavioural economics, benefit corporation, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, Glass-Steagall Act, hiring and firing, housing crisis, Hyman Minsky, income inequality, independent contractor, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low interest rates, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, Paris climate accords, patent troll, pension reform, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, vertical integration, zero-sum game

International Evidence,” Journal of the European Economic Association 12, no. 4 (2014): 949–68, https://doi.org/10.1111/jeea.12083. 8. The Gini coefficient is a common measurement of inequality; the higher the number, the greater the inequality. Typically, Gini coefficients change little from year to year, so these large changes in a span of eight years are unusual. See Eurostat, “Gini Coefficient of Advertised Disposable Income,” European Commission, Feb. 15, 2019, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di12b&lang=en. 9. Eurostat, “Gini Coefficient of Equivalized Disposable Income,” European Commission, Aug. 17, 2018, https://ec.europa.eu/eurostat/tgm/table.do?

When there is a high level of unemployment and excess capacity, what limits output is aggregate demand. If demand grew more rapidly, then output and incomes would also grow more quickly. Far graver developments in inequality have followed the crisis and recession in southern European countries than elsewhere. Indeed, part of the argument for austerity was that it would contribute to internal devaluation by forcing wages down and making exports more competitive. In fact, all measures of inequality now show widening gaps. For instance, from 2007 to 2015, the Gini coefficient (before any transfers of income) increased from 49.4 to 60.7 for Greece and from 45.4 to 50.8 for Spain.8 And the pressure on state finances meant that Greece, Spain, and others could not cushion the losses through the standard welfare state; even after-transfer Gini coefficients rose.9 Indeed, in many countries, there were cutbacks in the provision of public services, which hit those in the middle and bottom of the income scale particularly hard.

For instance, from 2007 to 2015, the Gini coefficient (before any transfers of income) increased from 49.4 to 60.7 for Greece and from 45.4 to 50.8 for Spain.8 And the pressure on state finances meant that Greece, Spain, and others could not cushion the losses through the standard welfare state; even after-transfer Gini coefficients rose.9 Indeed, in many countries, there were cutbacks in the provision of public services, which hit those in the middle and bottom of the income scale particularly hard. In turn, rising inequality in the EU chipped away at aggregate demand and, by extension, employment. It was part of the vicious cycle into which Europe had fallen. Of course, there are well-known fiscal and monetary policies that governments could have used to respond to the decrease in aggregate demand caused by growing inequality. For example, if governments spend more and tax less or if interest rates fall and credit availability increases, aggregate demand can be restored to a level that ensures full employment.


The Economics Anti-Textbook: A Critical Thinker's Guide to Microeconomics by Rod Hill, Anthony Myatt

American ideology, Andrei Shleifer, Asian financial crisis, bank run, barriers to entry, behavioural economics, Bernie Madoff, biodiversity loss, business cycle, cognitive dissonance, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, different worldview, electricity market, endogenous growth, equal pay for equal work, Eugene Fama: efficient market hypothesis, experimental economics, failed state, financial innovation, full employment, gender pay gap, Gini coefficient, Glass-Steagall Act, Gunnar Myrdal, happiness index / gross national happiness, Home mortgage interest deduction, Howard Zinn, income inequality, indoor plumbing, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, liberal capitalism, low interest rates, low skilled workers, market bubble, market clearing, market fundamentalism, Martin Wolf, medical malpractice, military-industrial complex, minimum wage unemployment, moral hazard, Paradox of Choice, Pareto efficiency, Paul Samuelson, Peter Singer: altruism, positional goods, prediction markets, price discrimination, price elasticity of demand, principal–agent problem, profit maximization, profit motive, publication bias, purchasing power parity, race to the bottom, Ralph Nader, random walk, rent control, rent-seeking, Richard Thaler, Ronald Reagan, search costs, shareholder value, sugar pill, The Myth of the Rational Market, the payments system, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, ultimatum game, union organizing, working-age population, World Values Survey, Yogi Berra

The most commonly used measure that summarizes the entire income distribution is the Gini ­coefficient. This is the ratio of the area between the Lorenz curve and the 199 9  |  Government, taxation table 9.2 Measures of income inequality 45-degree line (marked ‘A’ in Figure 9.1) and the entire area under the 45-degree line (A + B in the figure). So the Gini coefficient = A/(A + B). It’s zero if income is equally distributed; it’s 1 if one household has everything. Table 9.2 also shows estimates of the Gini coefficient for a selection of countries. With the exception of India, the developing countries shown have much higher income inequality than the developed countries.

This is not surprising in light of our discussion in Chapter 2 of the difficulties of conclusive empirical testing. She points out that ideas about the growth-retarding effects of inequality centre around inequality at the bottom of the income distribution, while inequality at the top end of the distribution is sometimes seen as facilitating growth. Testing the effects of income inequality using a single measure of inequality such as the Gini coefficient misses these differences and looks only at some average of the effects (ibid.: 273–4). Instead, she examines a group of relatively high-income countries using data on their income distributions.

The gap between the points showing actual household incomes (called the Lorenz curve) and this reference line indicates the nature and extent of income inequality. Income inequality is usually summarized in a single number to aid in comparing inequality over time and across countries. One simple way is to calculate the ratio of the shares of total income held by the top 10 or 20 per cent of 198 Country Top 10% to bottom 10% Top 20% to bottom 20% Gini coefficient 8.1 4.5 6.2 6.1 5.6 5.5 6.9 6.9 9.2 7.8 9.4 9.1 8.2 9.4 8.8 10.3 12.5 11.6 13.8 12.5 15 15.9 24.6 4.3 3.4 4 3.9 3.8 3.8 4.3 4.4 5.1 4.7 5.5 5.6 4.9 5.6 5.6 6 7 6.5 7.2 6.8 8 8.4 12.8 0.247 0.249 0.250 0.258 0.269 0.269 0.283 0.291 0.309 0.316 0.326 0.327 0.330 0.343 0.345 0.347 0.352 0.360 0.360 0.362 0.385 0.408 0.461 8.6 12.7 17.8 21.6 48.3 33 51.3 33.1 63.8 5.6 7.6 9.7 12.2 16 15.7 21.8 17.9 25.3 0.368 0.399 0.437 0.469 0.482 0.549 0.570 0.578 0.586 Some OECD countries Denmark Japan Sweden Norway Finland Hungary Germany Austria Netherlands Korea, South Canada France Belgium Ireland Poland Spain Australia Italy United Kingdom New Zealand Portugal United States Mexico Some non-OECD countries India Russia Nigeria China (excluding Hong Kong) Venezuela Chile Brazil South Africa Colombia Note: Values are for income or expenditure shares.


pages: 438 words: 84,256

The Great Demographic Reversal: Ageing Societies, Waning Inequality, and an Inflation Revival by Charles Goodhart, Manoj Pradhan

asset-backed security, banks create money, Berlin Wall, bonus culture, Boris Johnson, Branko Milanovic, Brexit referendum, business cycle, capital controls, carbon tax, central bank independence, commodity super cycle, coronavirus, corporate governance, COVID-19, deglobalization, demographic dividend, demographic transition, Deng Xiaoping, en.wikipedia.org, Fall of the Berlin Wall, financial independence, financial repression, fixed income, full employment, gig economy, Gini coefficient, Greta Thunberg, housing crisis, income inequality, inflation targeting, interest rate swap, job automation, Kickstarter, long term incentive plan, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, middle-income trap, non-tariff barriers, offshore financial centre, oil shock, old age dependency ratio, open economy, paradox of thrift, Pearl River Delta, pension reform, Phillips curve, price stability, private sector deleveraging, quantitative easing, rent control, savings glut, secular stagnation, shareholder value, special economic zone, The Great Moderation, The Wealth of Nations by Adam Smith, total factor productivity, working poor, working-age population, yield curve, zero-sum game

There are two main databases, the World Bank’s PovcalNet database and the World Inequality Database. Out of the many potential measures of inequality we initially select four, (but they all tend in the same directions), to wit (i) the Gini coefficient,3 Diagram 7.1, for a number of OECD countries, (ii) for a few selected countries the share of income of the top 10 and 1% of the distribution, Tables 7.1 and 7.2, and (iii) the share of wealth for the top 10%, Table 7.3. We show these latter data points for the income inequality data at five-year intervals for the USA, UK, Germany, France, Sweden, Italy Japan, China, Brazil, Egypt and India, and the wealth inequality data for four countries, USA, China, France and UK.

In their paper ‘The Great Divide’; ‘Regional Inequality and Fiscal Policy’, the authors, Gbohoui et al., state that: Redistributive fiscal policies have helped reduce, but not fully offset, rising nationwide income inequality (IMF 2017; Immervoll and Richardson 2011). For advanced OECD countries, the average redistributive effect of fiscal policy—measured by the difference in Gini coefficients on household income before and after taxes and transfers—is about one-third (from 0.49 Gini points from market income inequality to 0.31 Gini points for disposable income inequality in 2015) (Figure 6 top left panel).

George, Henry Geriatricians German pension reform German retirees react to pension reforms Germany Germany’s dependency ratio Gig economy ‘Gilets jaunes’ Gini coefficient Gini coefficient, measure of income dispersion Global ageing Global demographic headwinds Global disinflation Global dominance Global economy, ageing of Global environment, changing Global Financial Crisis (GFC) Global forces, dominant Global growth, driven by now ageing economies Global growth, India beat China Global inequality Global inequality, falling Globalisation Globalisation, effect underestimated Globalisation, its Great Reversal Globalisation, result of, a triumph for macro-economics Globalisation, slowing Globalisation effects, not significant in short run Global resources Global savings glut Gold discoveries Gold standard Goodhart, C.A.E.


pages: 261 words: 57,595

China's Future by David Shambaugh

Berlin Wall, capital controls, demographic dividend, demographic transition, Deng Xiaoping, facts on the ground, financial intermediation, financial repression, Gini coefficient, Great Leap Forward, guns versus butter model, high net worth, high-speed rail, Kickstarter, knowledge economy, low skilled workers, market bubble, megacity, middle-income trap, Mikhail Gorbachev, military-industrial complex, New Urbanism, offshore financial centre, open economy, Pearl River Delta, rent-seeking, secular stagnation, short selling, South China Sea, special drawing rights, too big to fail, urban planning, Washington Consensus, working-age population, young professional

While not as high and acute as South Africa, Brazil, or Nigeria, China’s Gini rating ranks it fourth in the world (Figure 3.2). Inequality is not simply a statistical measure of income. As scholars Jane Duckett and Guohui Wang point out, inequality involves access by individuals and households to public services such as housing, healthcare, and education; it biases people in their search for employment, and it involves discrimination and unequal opportunities for women and minorities.14 Figure 3.1 China’s Gini Coefficient Source: China National Bureau of Statistics. Figure 3.2 China’s Gini Coefficient in Comparison Sources: China National Bureau of Statistics; OECD; World Bank.

Another study by the Asian Development Bank is even more bullish about China’s middle class potential, arguing that by 2030 it will account for 80 percent of the total population.12 This magnitude and rapidity of growth is probably unlikely, but it still points toward the dramatic social transformation that lies ahead in China. A particularly acute social problem in China, now and into the future, is inequality. China is now among the top ten countries of the world’s highest Gini Coefficient rankings, the main measure of social inequality in societies worldwide, although the official estimates are not in agreement. The World Bank’s most recent estimate was .37 in 2011, and is the lowest, while the Chinese government’s own calculation (Figure 3.1) puts it higher, at .47 for the same year, while others put it in between at .42.13 While high, China’s Gini ranking peaked around 2009 and has fallen since (paralleling a global pattern).

China’s Growing Military Capabilities China’s Future Impact on the World Notes Index End User License Agreement List of Figures 1.1 Possible Pathways for China’s Future 1.2 Pathways and Likely Results for China’s Future 1.3 The J-Curve 2.1 China’s Development Strategy 2.2 China’s GDP Growth Rates 2.3 China’s Alternative GDP Projections 3.1 China’s Gini Coefficient 3.2 China’s Gini Coefficient in Comparison 3.3 China’s Reported Incidents of Mass Unrest 3.4 Xinjiang and Tibet 3.5 Hong Kong’s “Umbrella Revolution” 3.6 Taiwan’s Sunflower Movement 3.7 China’s Urbanization Growth 3.8 China’s Demographic Projections 4.1 China’s Political Orientation 1985–2015 4.2 Zeng Qinghong 4.3 Xi Jinping 5.1 China’s Trade in Asia 5.2 Asian Perceptions of China’s Territorial Disputes 5.3 Perceptions of China as a Global Power 5.4 American Views of China 2005–2015 5.5 Presidents Xi Jinping and Vladimir Putin 5.6 China’s Soft Power Appeal in the Developing World 5.7 China’s Military Spending 2000-2014 Dedicated to Harry Harding China’s Future David Shambaugh polity Copyright © David Shambaugh 2016 The right of David Shambaugh to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.


pages: 935 words: 267,358

Capital in the Twenty-First Century by Thomas Piketty

accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, book value, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, central bank independence, centre right, circulation of elites, 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, Future Shock, German hyperinflation, Gini coefficient, Great Leap Forward, 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, Kenneth Arrow, low interest rates, market bubble, means of production, meritocracy, Money creation, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, power law, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Robert Solow, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, Suez canal 1869, Suez crisis 1956, The Nature of the Firm, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

By construction, it ranges from 0 to 1: it is equal to 0 in case of complete equality and to 1 when inequality is absolute, that is, when a very tiny group owns all available resources. In practice, the Gini coefficient varies from roughly 0.2 to 0.4 in the distributions of labor income observed in actual societies, from 0.6 to 0.9 for observed distributions of capital ownership, and from 0.3 to 0.5 for total income inequality. In Scandinavia in the 1970s and 1980s, the Gini coefficient of the labor income distribution was 0.19, not far from absolute equality. Conversely, the wealth distribution in Belle Époque Europe exhibited a Gini coefficient of 0.85, not far from absolute inequality.22 These coefficients—and there are others, such as the Theil index—are sometimes useful, but they raise many problems.

If this happens, the future could hold in store a new world of inequality more extreme than any that preceded it.21 Problems of Synthetic Indices Before turning to a country-by-country examination of the historical evolution of inequality in order to answer the questions posed above, several methodological issues remain to be discussed. In particular, Tables 7.1–3 include indications of the Gini coefficients of the various distributions considered. The Gini coefficient—named for the Italian statistician Corrado Gini (1884–1965)—is one of the more commonly used synthetic indices of inequality, frequently found in official reports and public debate.

Indeed, it is impossible to summarize a multidimensional reality with a unidimensional index without unduly simplifying matters and mixing up things that should not be treated together. The social reality and economic and political significance of inequality are very different at different levels of the distribution, and it is important to analyze these separately. In addition, Gini coefficients and other synthetic indices tend to confuse inequality in regard to labor with inequality in regard to capital, even though the economic mechanisms at work, as well as the normative justifications of inequality, are very different in the two cases. For all these reasons, it seemed to me far better to analyze inequalities in terms of distribution tables indicating the shares of various deciles and centiles in total income and total wealth rather than using synthetic indices such as the Gini coefficient.


pages: 232

Planet of Slums by Mike Davis

barriers to entry, Branko Milanovic, Bretton Woods, British Empire, Brownian motion, centre right, clean water, company town, conceptual framework, crony capitalism, declining real wages, deindustrialization, Deng Xiaoping, disinformation, Dr. Strangelove, edge city, European colonialism, failed state, gentrification, Gini coefficient, Hernando de Soto, housing crisis, illegal immigration, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, jitney, jobless men, Kibera, labor-force participation, land reform, land tenure, Lewis Mumford, liberation theology, low-wage service sector, mandelbrot fractal, market bubble, megacity, microcredit, Nelson Mandela, New Urbanism, Pearl River Delta, Ponzi scheme, RAND corporation, rent control, structural adjustment programs, surplus humans, upwardly mobile, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor

Conspicuous consumption reached hallucinatory levels in Latin America and Africa during the 1980s as the nouveaux riches went on spending sprees in Miami and Paris while their shantytown compatriots starved. Indices of inequality reached record heights in the 1980s. In Buenos Aires the richest decile's share of income increased from 10 times that of the poorest in 1984 to 23 times in 1989. In Rio de Janeiro, inequality as measured in classical GINI coefficients climbed from 0.58 in 1981 to 0.67 in 1989 26 Indeed, throughout Latin America, the 1980s deepened the canyons and elevated the peaks of the world's most extreme social topography. According to a 2003 World Bank report, GINI coefficients are 10 points higher in Latin America than Asia; 17.5 points higher than the OECD; and 20.4 points higher than Eastern Europe.

percent in 1992 to 28 percent in 1999, despite the much-hyped "success stories" of the border maquiladoras and NAFTA.47 Likewise in Colombia, where urban wages declined, but coca acreage tripled during the regime of Cesar Gaviria (elected in 1990), the drug cartels, according to an OECD report, "were among the most consistently favorable to his neoliberal policies."48 Global inequality, as measured by World Bank economists across the entire world population, reached an incredible GINI coefficient level of 0.67 by the end of the century — this is mathematically equivalent to a situation where the poorest twothirds of the world receive zero income, and the top third receives everything.49 Global turmoil at the the end of the decade, moreover, could be mapped with uncanny accuracy to cities and regions that experienced the sharpest increases in inequality. Throughout the Middle East and Muslim South Asia, a widening gulf between urban rich and poor corroborated the arguments of Islamists and even more radical Salafists about the irreformable corruption of ruling regimes.

," World Bank working paper (November 2003), p. 17. 52 Soliman, Possible Way Out, p. 9. chronic underinvestment in irrigation. As a result, the wages of casual and informal labor fell, poverty soared at a pace which the National Human Development Report characterized as "unprecedented in Pakistan's history," and urban income inequality, as measured by the GINI coefficient, increased from 31.7 percent in 1992 to 36 percent in 1998.53 The biggest event of the 1990s, however, was the conversion of much of the former "Second World" - European and Asian state socialism — into a new Third World. In the early 1990s those considered to be living in extreme poverty in the former "transitional countries," as the UN calls them, rocketed from 14 million to 168 million: an almost instantaneous mass pauperization without precedent in history.54 Poverty, of course, did exist in the former USSR in an unacknowledged form, but according to World Bank researchers, the rate did not exceed 6 to 10 percent.55 Now, according to Alexey Krasheninnokov; in his report to UN-HABITAT, 60 percent of Russian families live in poverty, and the rest of the population "can only be categorized as middle class by a considerable stretch."


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

Alan Greenspan, balance sheet recession, banking crisis, basic income, Bear Stearns, Bernie Sanders, Bretton Woods, business climate, business cycle, carbon tax, Carmen Reinhart, central bank independence, circular economy, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, degrowth, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, Ford Model T, forward guidance, full employment, G4S, general purpose technology, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, low interest rates, low skilled workers, Martin Wolf, mass incarceration, military-industrial complex, Modern Monetary Theory, Money creation, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, ocean acidification, paradox of thrift, Paul Samuelson, planned obsolescence, Post-Keynesian economics, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Solyndra, Steve Jobs, stock buybacks, systems thinking, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, Tragedy of the Commons, transaction costs, trickle-down economics, universal basic income, vertical integration, very high income

For instance, in the UK the income share of the top 1 per cent went up from 5.7 per cent in 1978 to 14.7 per cent in 2010, while the share of wealth owned by the top 1 per cent surged from 22.6 per cent in 1970 to 28 per cent in 2010 and the top 10 per cent’s wealth share increased from 64.1 per cent to 70.5 per cent over the same period.17 Figure 3: Income share of the richest 1 per cent in some major industrialised countries Source: The World Wealth and Income Database (latest data available at http://www.wid.world/ (accessed 12 May 2016)) Also disturbing are the patterns that have emerged in transition economies, which at the beginning of their movement to a market economy had low levels of inequality in income and wealth (at least according to available measurements). Today, China’s inequality of income, as measured by its Gini coefficient, is roughly comparable to that of the United States and Russia.18 Across the OECD, since 1985 the Gini coefficient has increased in seventeen of twenty-two countries for which data is available, often dramatically (Figure 2). Moreover, recent research by Piketty and his co-authors has found that the importance of inherited wealth has increased in recent decades, at least in the rich countries for which we have data.

In 2013 almost three in ten part-time workers across the OECD were ‘involuntary’, meaning that they wanted to work full-time but could only find part-time jobs.28 The result of these trends has been a rise in inequality across the developed world. Between 1985 and 2013, the Gini coefficient measuring income inequality increased in seventeen OECD countries, was little changed in four and decreased in only one (Turkey).29 Wealth inequality has grown even more than that of income, a result both of the shift in the distribution of earnings away from wages and towards profits and of the huge increase in land and property values.

Some caution should be exercised in comparing different countries’ Gini coefficients: in addition to the well-known flaws in the measure, different databases have used slightly different methodologies or income data to arrive at their respective figures, and thus figures are different depending on the data source. Nevertheless, many different studies confirm these broad trends. One should also be particularly cautious in interpreting differences in Gini coefficients between developed and developing countries: Kuznets (‘Economic growth and income inequality’, The American Economic Review, vol. XLV, no. 1, March 1955, pp. 1–28) put forward a persuasive set of reasons why one might expect inequality to increase in the initial stages of development, as some parts of the country and some groups in the country are better able to seize new opportunities and pull away from others.


Battling Eight Giants: Basic Income Now by Guy Standing

basic income, Bernie Sanders, carbon tax, centre right, collective bargaining, decarbonisation, degrowth, diversified portfolio, Donald Trump, Elon Musk, Extinction Rebellion, full employment, future of work, Gini coefficient, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, labour market flexibility, Lao Tzu, longitudinal study, low skilled workers, Martin Wolf, Mont Pelerin Society, moral hazard, North Sea oil, offshore financial centre, open economy, pension reform, precariat, quantitative easing, rent control, Ronald Reagan, selection bias, universal basic income, Y Combinator

But today there are eight more giants stalking the land. Slaying the eight modern giants (1) Inequality The first giant blocking the road to a Good Society is inequality. Britain is far more unequal today than in the 1970s and more unequal than any other major industrialized country barring the United States. The Gini coefficient – a summary measure of income inequality – has risen from under 0.25 in the late 1970s to 0.34 in 2017–18, a huge increase. However, according to the conventional statistics, this increase took place primarily in the 1980s under the Thatcher government. The Gini coefficient has hardly budged since the 1990s, leading many commentators to claim that wealth and income gaps have been broadly stable since then.4 Yet other evidence indicates that the growth of inequality in recent years has been far greater than the conventional statistics suggest.

Reportedly the richest man in the country, with a self-revealed wealth of over £22 billion, Jim Ratcliffe (a Brexit advocate), just after receiving a knighthood, announced he was off to live in the tax haven of Monaco, so as to avoid paying tax. It is not just the top 1% of incomes that is at issue here. The top 5% has also bounded ahead to take a growing share of total income.15 The researchers in this study claimed that the relative stability of the Gini coefficient therefore implied that inequality had fallen ‘across the large majority of the income distribution’ over the previous decade. Even if true, which is moot, the same may have prevailed in France in the years before 1789; if attention had focused on just the middleincome groups, nobody would have predicted the revolution.16 Moreover, the analyses based on the DWP’s household survey exclude not only the top 3% but also the bottom 3%.17 While the top 3% have gained, the omission of the bottom 3% is also distorting.

See also individual entries definition 1, 4–8 reasons for need 8–9 security 98, 113, 114 system 1, 20, 23, 26, 32, 37, 52, 70, 84, 90–1, 122 n.7 Basic Income Earth Network (BIEN) 94 behavioural conditionality 70, 73, 77, 114 behaviour-testing 4, 39, 70, 84 benefits 5, 7, 27 conditional schemes 41 social assistance 23 BET365 11 Beveridge, William 8–9, 38 Beveridge model 21 Big Bang liberalization 18 BJP 92 black economy 40, 60 B-Mincome 99–100 Booker, Cory 101 brain development 98–9 132 Branson, Richard 54 Brexit 53 Britain 6, 8–10, 12–18, 20, 23–4, 26–7, 30–1, 33–4, 37–8, 40–2, 55, 57, 59, 90, 101, 104, 112 British Columbia 95 British Constitution 1 Buck, Karen 57 bureaucracy 40, 49, 100, 102 Bureau of Economic Analysis 16 Business Property Relief 58 California 69, 96–7 Canada 35 capacity-to-work tests 6, 104 cap-and-trade approach 34 Capita 50 capital dividend 59 capital fund 89–90 capital grants 59, 75, 76, 92 carbon dividends 37 carbon emissions 33–4 carbon tax 34–5, 37 care deficit 53 care work 36, 53, 67, 74, 84 cash payments 111 cash transfers 99 ‘casino dividend’ schemes 88 charities 48 The Charter of the Forest (1217) 1 Chicago 99 Child Benefit 57, 58, 72, 123 n.4 childcare 99, 110–11 child development 88 Child Tax Credits 81 chronic psychological stress 26 Citizens Advice 46–8 Citizen’s Basic Income Trust 7, 122 n.7, 123 n.4 citizenship rights 1, 29 civil society organizations 79 Index climate change 34 Clinton, Hillary 126 n.4 Clinton, Bill 105 Coalition government 41, 50 cognitive performance 33 collateral damage 53 common dividends 7, 20, 21, 59–60, 69, 73, 75, 83, 84, 85 Commons Fund 8, 35, 57, 59, 89 community cohesion 3 resilience 23 work 84 ‘community payback’ schemes 102 Compass 59 compensation 2, 7, 16, 104 ‘concealed debt’ 24–5 conditional cash transfer schemes 90 Conservative government 9, 85 Conservatives 23 consumer credit 24 consumption 23 contractual obligations 46 Coote, Anna 113 cost of living 25, 49, 52, 83 council house sales 76 council tax 25 Crocker, Geoff 122 n.15 cross-party plans 80 crowd-funded schemes 100 deadweight effects 102 ‘deaths of despair’ 27 Deaton, Angus 10 debt 23–6, 67, 85 debt collection practices 24–5 decarbonization 34 dementia 33 democratic values 69 Democrats 37 demographic changes 15 Index 133 Department for Work and Pensions (DWP) 11–12, 42–8, 50–2, 73, 81, 92, 129 n.6 depression 28, 94 direct taxes 56, 58 disability benefits 6, 49–52, 83 Disability Living Allowance (DLA) 49–51 Disabled People Against Cuts 52 Dividend Allowance 58 ‘dividend capitalism’ 8 domestic violence 29, 87 Dragonfly 92 due process 46, 49 ecological crisis 33, 37, 39, 114 ecological developments 21 ecological disaster 35 ecological taxes and levies 37 economy benefits 20, 60 crisis 106 damage 34 growth 20, 36, 106 industrialized 20 insecurity 21, 35, 39, 89 security 75, 80, 84, 88 system 15, 27, 38 tax-paying 60 uncertainty 8, 22–3, 31 ‘eco-socialism’ 8 ecosystems 33 Edinburgh 80 education 88, 108 Elliott, Larry 122 n.15 employment 16, 22, 39, 60–1, 81, 89, 93–4, 102, 106, 107, 110, 114 Employment Support Allowance (ESA) 27, 41, 49–51 England 28, 63, 110–11 Enlightenment 85 Entrepreneurs’ Relief 18 equality 31, 85 Europe 37 European Foundation for the Improvement of Living and Working Conditions (Eurofound) 120 n.1 European Heart Journal 33 European Union 6, 17, 41 euthanasia 113 extinction 33–7 ‘Extinction Rebellion’ 33 Fabian Society 57–8 Facebook 97 family allowances 56 family benefits 56 family insecurity 23 federal welfare programs 106 Fife 24, 80 financial crash (2007–8) 23, 26, 34 financialization 116 n.22 financial markets 18 Financial Services Authority 123 n.15 Financial Times 19, 123 n.15 financial wealth 18 Finland 28, 61, 93–5 food banks 10, 29–30, 43, 109 food donations 29 food insecurity 108–9 fossil fuels 33–4 France 12, 17, 18, 32, 38, 57 free bus services 112 freedom 8, 30, 84, 85, 101, 114 ‘free food’ 108–9, 129 n.6 ‘free’ labour market 106 free trade 13 Friends Provident Foundation 75 fuel tax 35 fund and dividend model 89 funding 29, 59, 62, 69, 71–2, 112 134 G20 (Group of 20 large economies) 15 Gaffney, Declan 57 Gallup 105 GDP 14, 17–18, 23–4, 34, 36, 59, 89, 108 General Election 91–2, 94 ‘genuine progress indicator’ 36 Germany 17–18, 38, 100 Gillibrand, Kirsten 101 Gini coefficient 9, 12 GiveDirectly 91 Glasgow City 80 globalization 14 Global Wage Report 2016/17 14 global warming 33, 37 Good Society 75, 106 The Great British Benefits Handout (TV series) 92 Great Depression 9 Great Recession 23 greenhouse gas emissions 34, 36 gross cost 110 The Guardian 101, 103, 122–3 n.15 Hansard Society 37 Harris, Kamala 101 Harrop, Andrew 57 Hartz IV 100 HartzPlus 100 health 67, 87, 100 human 33 insurance premiums 35 services 60 healthcare costs 28 hegemony 14 help-to-buy loan scheme 76 Her Majesty’s Revenue and Customs (HMRC) 64, 73, 81 Hirschmann, Albert 56 household debt 24 Index household earnings 16 household survey 12 House of Commons 110–11 housing allowance 95 Housing Benefit 24, 41, 53, 71 housing policy 53 hub-and-spoke model 112 Hughes, Chris 97 humanity 33 human relations 3 ‘immoral’ hazard 109 ‘impact’ effects 78 incentive 62 income 81 assistance 88 average 83 components 11 distribution system 4, 13–14, 38, 67, 84, 107, 114 gap 9 growth 16 insecurity 27 men vs. women 15–16 national 14, 36 pensioners’ 16 rental 13–15, 20 social 14, 16–17 support payments 110 tax 1, 7, 57, 89, 111 transfer 85 volatility 22 India 68, 80, 90–2 Indian Congress Party 91 inequality 2, 4, 9–13, 21, 29, 31, 33, 35, 37, 38, 39, 54, 80, 85, 114 growth 17 income 9–10, 15–17, 19 living standard 20 wealth 18–19, 76 informal care 111 Index 135 inheritance tax 58 in-kind services 111 insecurity 21–3, 29, 38, 39, 47, 67, 85, 106 Institute for Fiscal Studies (IFS) 10 Institute for Public Policy Research 125 n.17 Institute for Public Policy Research (IPPR) 75, 111 Institute of New Economic Thinking 123 n.15 Institute of Public Policy Research 59 insurance schemes 8 intellectual property 14–15 Intergovernmental Panel on Climate Change (IPCC) 34 International Labour Organization (ILO) 14, 122 n.4 International Monetary Fund (IMF) 31, 34 international tax evasion 18 interpersonal income inequality 83 inter-regional income inequalities 83 intra-family relationships 3 involuntary debt 26 in-work benefits 22 Ireland 35 Italy 18 labour 31, 107 inefficiency 106 law 101 markets 8, 14, 32, 39, 40, 60, 62–3, 96, 100, 106 regulations 13 supply 67, 95 Labour governments 85 labourism 106 Lansley, Stewart 59 Latin America 90 Left Alliance 94 Lenin, Vladimir Ilyich 113 Liberal government 35 life-changing errors 51 life-threatening illness 33 Liverpool 80 living standards 20, 23, 33, 36, 53, 59, 92 Local Housing Allowances 24 London Homelessness Project 92–3 low-income communities 33 low-income families 21 low-income households 17 low-income individuals 86 Low Pay Commission 63 low-wage jobs 60, 107 Luddite reaction 32 lump-sum payments 35, 59, 76 Jackson, Mississippi 99 JobCentrePlus 47 job guarantee policy 101–7 job-matching programs 106 Jobseeker’s Allowance (JSA) 41, 46 Joseph Rowntree Foundation 21 McDonnell, John 129 n.13 McKinsey Global Institute 31 Macron, Emmanuel 35 Magna Carta 1 ‘Making Ends Meet’ 97 ‘mandatory reconsideration’ stage 51 Manitoba 87–8 Manitoba Basic Annual Income Experiment (Mincome) 87 market economy 105, 114 master-servant model 101 Kaletsky, Anatole 123 n.15 Kenya 90–2 Khanna, Ro 103 Kibasi, Tom 113 136 Index Maximus 50 means-testing 4, 39, 42, 48, 58, 61–2, 70, 84, 88, 90, 109–10, 114 benefits 5, 7, 27, 40, 46, 56, 71–3, 81, 129 n.6 social assistance 23, 41, 95, 122 n.7 system 6 medical services 28 Mein Grundeinkommen (‘My Basic Income’) 100 mental health 26, 28, 94 disorders 88 trusts 28 mental illness 33, 68 migrants 7, 113 ‘minimum income floor’ 45 Ministry of Justice 51 modern insecurity 22 modern life 31 monetary policy 59 Mont Pelerin Society 13 moral commitment 75 moral hazard 109 mortality 27, 76 multinational investment funds 34 Musk, Elon 31, 54 Namibia 90–2 National Audit Office (NAO) 24, 43–4, 46, 76 National Health Service (NHS) 8, 24, 27–8, 44, 68, 80, 108, 111 National Insurance 18, 22, 124 n.4 nationalism 37 National Living Wage 63 National Minimum Wage 63–4 national solidarity 3 Native American community 88 negative income tax (NIT) 23, 87, 95, 100 neo-fascism 37–8 neoliberalism 13, 84 Netherlands 96 New Economics Foundation (NEF) 57, 113, 122 n.15 non-resident citizens 113 non-wage benefits 16 non-wage work 74 North America 67 North Ayrshire 80 North Carolina 88 North Sea oil 89–90 Nyman, Rickard 23 Oakland 96–7 Office for National Statistics (ONS) 14–15, 17, 36 Ontario, Canada 95–6 open economy 84 open ‘free’ markets 13, 15 opportunity dividend 59 Organization for Economic Co-operation and Development (OECD) 18, 23, 27, 31 Ormerod, Paul 23 Osborne, George 19 Paine, Thomas 2, 75 Painian Principle 2 panopticon state 55 Paris Agreement (2015) 34 participation income 74–5 paternalism 42, 55 pauperization 63 Pawar, Alderman Ameya 99 pay contributions 21 pension contributions 18, 58 Pension Credit 41 Pericles Condition 75 permanent capital fund 71 personal care services 110–11 Index 137 personal income tax 35 Personal Independence Payment (PIP) 49–51 personal insecurity 23 Personal Savings Allowance 58 personal tax allowances 17, 58, 59 perverse incentives 50 physical health 26, 94 piloting in Britain 67–81 applying 80–1 rules in designing 70–80 policy development 3, 69 political decision 78 political discourse 92 political instability 35 political system 38 populism 37–8, 75 populist parties 37 populist politics 39 Populus survey 55 post-war system 8 poverty 2, 4, 10–12, 22, 27, 29, 36, 38, 40, 60–1, 89, 100, 108–9, 114, 125 n.17, 129 n.6 precarity 29–30, 38, 39, 60–1, 85, 103, 129 n.6 Primary Earnings Threshold 124 n.4 private debt 23–4, 39 private inheritance 2 private insurance 85 private property rights 13 private wealth 18 privatization 13, 17, 112 property prices 76 prostitution 43 Public Accounts Committee (PAC) 51 public costs 28 public debt 23 public inheritance 61 public libraries 47 public policy 97 public sector managers 103 public services 4, 17, 62, 108, 112, 114 public spending 89 public wealth 18 ‘quantitative easing’ policy 59 quasi-basic income 89, 98 quasi-universal basic services 30 quasi-universal dividends 35 quasi-universal system 61, 70, 90 Randomised Control Trial (RCT) 124–5 n.14 rape 44 Ratcliffe, Jim 12 Reagan, Ronald 13 Reed, Howard 59 refugees 7 regressive universalism 57 regular cash payment 7 rent arrears 24 controls 53 rentier capitalism 13–21, 107, 116 n.22 republican freedom 2–3, 30, 84 Republicans 37 Resolution Foundation 10, 15, 19, 25, 76 ‘revenue neutral’ constraint 7 right-wing populism 37–8 robot advance 31–3 Royal College of Physicians 33 Royal Society of Arts 55, 59, 124 n.12 RSA Scotland 125 n.17 Rudd, Amber 9 Russia 113 138 Sanders, Bernie 101 scepticism 31 schooling 67, 89 Scotland 69, 80, 111 Second World War 19, 21 security 8, 38, 55, 68, 84 economic 3, 4, 49, 56 income 73–4 social 8, 22, 49 Self-Employed Women’s Association (SEWA) 68 self-employment 45 Shadow Chancellor of the Exchequer 3, 115 n.3 Smith, Iain Duncan 42 ‘snake oil’ 113 social assistance 3, 28 social benefit 20 social care 102, 104, 110–11 social crisis 106 social dividend scheme 92 Social Fund 29 social inheritance 2 social insecurity 21 social insurance 22, 85 social integration 44 social justice 2, 8, 20, 69, 84, 101, 114 social policy 8, 23, 26, 30, 42, 53, 84–5, 96 social protection system 32 social relation 100 social security 10, 70–1, 95 social solidarity 3, 8, 39, 61, 84–5, 91 social spending 17 social status 104 social strife 35 social value 29 ‘something-for-nothing’ economy 19–20, 61 Index Speenhamland system 63 State of the Global Workplace surveys 105 statutory minimum wages 106 stigma 47, 55 stigmatization 41, 109 Stockton 97–9 Stockton Economic Empowerment Demonstration (SEED) 97 stress 26–9, 39, 51, 67, 68, 85, 93 student loans 24 substitution effects 102–3 suicides 26–7 Summers, Larry 105–6 Sweden 113 Swiss bank Credit Suisse 12 Switzerland 35 tax advantages 49 and benefit systems 17, 18, 69, 110 credits 3, 17, 24, 63, 105, 106 policies 16 rates 72 reliefs 17–18, 57–8, 61 tax-free inheritance 19 technological change 105 technological revolution 14, 31, 114 ‘teething problems’ 42 Thatcher, Margaret 13 Thatcher government 9, 18 The Times 92 Torry, Malcolm 122 n.7 Trades Union Congress 24 tribal casino schemes 76 ‘triple-lock’ policy 16 Trump, Donald 37 Trussell Trust 29, 43 Tubbs, Michael 97–8 Index 139 Turner, Adair 123 n.15 two-child limit 44 UK.


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Buying Time: The Delayed Crisis of Democratic Capitalism by Wolfgang Streeck

"there is no alternative" (TINA), "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, air traffic controllers' union, Alan Greenspan, banking crisis, basic income, Bretton Woods, business cycle, capital controls, Carmen Reinhart, central bank independence, collective bargaining, corporate governance, creative destruction, currency risk, David Graeber, deindustrialization, Deng Xiaoping, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial repression, fixed income, full employment, Garrett Hardin, Gini coefficient, Growth in a Time of Debt, income inequality, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, means of production, moral hazard, Myron Scholes, Occupy movement, open borders, open economy, Plutonomy: Buying Luxury, Explaining Global Imbalances, profit maximization, risk tolerance, shareholder value, too big to fail, Tragedy of the Commons, union organizing, winner-take-all economy, Wolfgang Streeck

Shareholder Value, Managerherrschaft und Mitbestimmung in Deutschland, Frankfurt/Main: Campus, 2003. 55 Fig. 1.3 shows the evolution of the Gini coefficient, the most commonly used measure of income inequality, in the seven countries used as examples (see fn. 15 in this chapter). The Gini coefficient measures the deviation of the actual distribution from equal distribution. Another measure of inequality is the share of wages – as opposed to profits – in national income. Here the picture for the sixteen main OECD countries between 1960 and 2005 is as devastating as for the Gini coefficient: ‘Labour’s share increased when capital’s relative bargaining power was threatened by the ascendancy of social democratic projects in the aftermath of World War II. The last two decades have seen a new swing of the pendulum toward a restoration of bargaining power to the capitalist class … Neo-liberalism is … an attempt to restore the capitalist class’s share of income to its pre-World War II levels’ (T.

While governments hoped that this would bring faster growth and in any case relieve them of political responsibilities, employers invoked the expansion of markets and sharper competition to justify the degrading of wages and work conditions or the widening of wage differentials.53 At the same time, capital markets were transformed into markets for corporate control, which made of ‘shareholder value’ the supreme maxim of good management.54 In many places, even in Scandinavia, citizens were referred to private education and insurance markets as a supplement or even alternative to public providers, with the option of taking up credit to pay the bills. Economic inequality grew everywhere by leaps and bounds (Fig. 1.3).55 In this way and others, responding in more or less the same way to the pressure coming from the owners and managers of their ‘economy’, the developed capitalist countries shed the responsibility they had taken on in mid-century for growth, full employment, social security and social cohesion, handing the welfare of their citizens more than ever over to the market. FIGURE 1.3. Evolution of income inequality: Gini coefficients, seven countries Sources: OECD Database on Household Income Distribution and Poverty, OECD Factbook 2008; Economic, Environmental and Social Statistics 2008; OECD Factbook 2010: Country Indicators, OECD Factbook Statistics In the rich countries of the West, the long turn to neoliberalism encountered remarkably weak resistance.

., The Age of Dualization: The Changing Face of Inequality in Deindustrializing Countries, Oxford: Oxford University Press, 2012; J. Goldthorpe (ed.), Order and Conflict in Contemporary Capitalism, Oxford: Clarendon Press, 1984; B. Palier and K. Thelen, ‘Institutionalizing Dualism: Complementarities and Change in France and Germany’, Politics and Society, vol. 38/1, 2010, pp. 119–48. 54 See Martin Höpner, Wer beherrscht die Unternehmen? Shareholder Value, Managerherrschaft und Mitbestimmung in Deutschland, Frankfurt/Main: Campus, 2003. 55 Fig. 1.3 shows the evolution of the Gini coefficient, the most commonly used measure of income inequality, in the seven countries used as examples (see fn. 15 in this chapter).


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Inequality and the 1% by Danny Dorling

Affordable Care Act / Obamacare, banking crisis, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, Branko Milanovic, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, collective bargaining, conceptual framework, corporate governance, credit crunch, David Attenborough, David Graeber, delayed gratification, Dominic Cummings, double helix, Downton Abbey, en.wikipedia.org, Etonian, family office, financial deregulation, full employment, gentrification, Gini coefficient, high net worth, housing crisis, income inequality, land value tax, Leo Hollis, Londongrad, longitudinal study, low skilled workers, lump of labour, mega-rich, Monkeys Reject Unequal Pay, Mont Pelerin Society, mortgage debt, negative equity, Neil Kinnock, Occupy movement, offshore financial centre, plutocrats, precariat, quantitative easing, race to the bottom, Robert Shiller, Russell Brand, TaskRabbit, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, trickle-down economics, unpaid internship, very high income, We are the 99%, wealth creators, working poor

He argues this is not an accident, but a function of how the coalition views growth can be achieved.’43 Such carefully worded statements are more than a generation away from Denis Healey’s promise of February 1974 to ‘squeeze property speculators until the pips squeak’ – and Healey was to the right of Labour at the time.44 When you hear of slow progress in the UK and US, it may surprise you to learn that income inequality may not be rising everywhere. Globally, according to the World Bank, inequality has been falling since 2000. In Brazil income inequality peaked in the 1980s. In the US it is currently at a peak, but in Sweden it appears to have been falling again just as it has fallen worldwide (see Figure 6.5).45 Such claims for falling worldwide inequality are, of course, disputed; and measures of inequality that are more sensitive to the 1 per cent taking an ever greater share may not be as forgiving of extreme greed as the Gini coefficient; but inequalities within the middle of the distribution can nonetheless fall.

Source: Branko Milanovic, 2012 Figure 6.5 Global and selected countries’ income inequality Gini coefficients 1966–2006 Shortly after the release of the 2012 World Bank report suggesting that global income inequality was falling, another organisation published its major findings, stating: ‘Poverty has not declined to the extent claimed and inequity has risen.’46 It may be that, between the mildly rich and the relatively poor, some equalisation is occurring. Whatever the precise global trend is, it remains the case that inequality has risen more in the US and the UK than elsewhere, and that, because other places have had more success in preventing this trend, it is not inevitable that it should continue.

Fortunately there is a strong correlation between the complex Gini coefficient of income inequality (measured after tax and benefits and adjusting for household size) and the simple measure of how much of total income the best-off 1 per cent receives each year. When the 1 per cent receives a low proportion of national income, inequality for the rest of the population is forced to be lower, because no other group can receive more than the best-off 1 per cent. Simply concentrating on the share taken by the 1 per cent is enough. It may even be one of the best measures of inequality to consider in terms of how simple a target it may be for effective social policy.12 Economists have measured the fortunes of the best-off 1 per cent for decades.


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The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, back-to-the-city movement, basic income, Bernie Sanders, bike sharing, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, gentrification, Gini coefficient, Google bus, high net worth, high-speed rail, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, megaproject, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, off-the-grid, opioid epidemic / opioid crisis, Paul Graham, plutocrats, RAND corporation, rent control, rent-seeking, restrictive zoning, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, SimCity, sovereign wealth fund, streetcar suburb, superstar cities, tech worker, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Tyler Cowen, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

In New York City, for example, the 1 percent hauls in more than forty times the average income of the bottom 99 percent; in Los Angeles, San Francisco, and San Jose, they make about thirty times as much.8 The overall level of income inequality in the United States as a whole is bad enough—it is 0.450 on the Gini coefficient index, the standard for measuring income inequality. (Gini coefficient values range from 0 to 1, with 0 indicating zero inequality and 1 indicating the most extreme inequality.) The US value is about the same as Iran’s, and worse than Russia’s, India’s, or Nicaragua’s. But within many US cities and metro areas, the Gini coefficient is even worse, rivaling some of the most unequal countries on earth. New York City’s inequality is similar to that of Swaziland. Los Angeles’s matches up with Sri Lanka’s.

The data for the three major classes are from the US Department of Labor, Bureau of Labor Statistics (BLS), 2010. Inequality Income inequality: Income inequality is based on the conventional measure of the Gini coefficient and is from the US Census Bureau’s American Community Survey (ACS) for 2010. Wage inequality: This measure concerns the wage gap between creative-, working-, and service-class workers and is calculated based on the Theil index, which is a commonly used metric for measuring wage inequality.1 The data are from the BLS’s information for 2010. Composite Inequality Index: This index combines the above measures of income and wage inequality weighted equally into a single index.

Data on metro areas, as well as the more recent data on national trends, are from Estelle Sommeiller, Mark Price, and Ellis Wazeter, Income Inequality in the U.S. by State, Metropolitan Area, and County (Washington, DC: Economic Policy Institute, 2016), www.epi.org/publication/income-inequality-in-the-us/#epi-toc-8. 9. The Gini coefficient for nations is from the Central Intelligence Agency, The World Factbook (Washington, DC: US Government Publishing Office, 2015), www.cia.gov/library/publications/the-world-factbook; for metros it is from the US Census Bureau, “American Community Survey,” www.census.gov/programs-surveys/acs. 10. On the worsening trend in inequality across metros, see Richard Florida, “Where the Great Recession Made Inequality Worse,” CityLab, August 4, 2014, www.citylab.com/politics/2014/08/where-the-great-recession-made-inequality-worse/375480/T; US Conference of Mayors, U.S.


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Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone by Satya Nadella, Greg Shaw, Jill Tracie Nichols

3D printing, AlphaGo, Amazon Web Services, anti-globalists, artificial general intelligence, augmented reality, autonomous vehicles, basic income, Bretton Woods, business process, cashless society, charter city, cloud computing, complexity theory, computer age, computer vision, corporate social responsibility, crowdsourcing, data science, DeepMind, Deng Xiaoping, Donald Trump, Douglas Engelbart, driverless car, Edward Snowden, Elon Musk, en.wikipedia.org, equal pay for equal work, everywhere but in the productivity statistics, fault tolerance, fulfillment center, Gini coefficient, global supply chain, Google Glasses, Grace Hopper, growth hacking, hype cycle, industrial robot, Internet of things, Jeff Bezos, job automation, John Markoff, John von Neumann, knowledge worker, late capitalism, Mars Rover, Minecraft, Mother of all demos, Neal Stephenson, NP-complete, Oculus Rift, pattern recognition, place-making, Richard Feynman, Robert Gordon, Robert Solow, Ronald Reagan, Salesforce, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, Snow Crash, special economic zone, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, subscription business, TED Talk, telepresence, telerobotics, The Rise and Fall of American Growth, The Soul of a New Machine, Tim Cook: Apple, trade liberalization, two-sided market, universal basic income, Wall-E, Watson beat the top human players on Jeopardy!, young professional, zero-sum game

But when only 1 percent earn $1 million while everyone else earns nothing, we’re approaching absolute inequality. Gini’s work provides a way of measuring the degree to which the income distribution in a given society approaches or diverges from perfect equality. The Gini coefficient for a particular population is generally expressed as a fraction. Perfect equality would be represented by a value of zero, while maximum inequality would be represented by a value of one. In the real world, the Gini coefficient for any given country or region is expressed by a fraction somewhere in between those two extremes. The Gini coefficient for an advanced European country like Germany has hovered around .3 for decades, while the figure for the United States has risen for years, now matching that of China and Mexico at over .4.

And yet I see this mindset everywhere—in the Middle East, Asia, Africa, Latin America, and even in struggling communities in G20 nations like the United States. The resulting failure of governments to encourage rapid and intensive use of new technologies means that the trend toward growing economic inequality between the haves and the have-nots of the world has continued unabated. To get a measure of how equitable or inequitable our world is, economists turn to the work of an Italian economist named Corrado Gini who in 1912 published his formula for calculating what has become known as the Gini coefficient, which measures the difference between a society’s division of income and a perfectly equal division of income. It’s really quite elegant. If 100 percent of a given population were to earn $1 per day, that would be absolute equality.

., 177 Carroll, Pete, 4 Case, Anne, 236 Cavium Networks, 20 CD-ROM, 28 CEO as curator of culture, 100, 241 “disease,” 92 panoramic view of, 118 cerebral palsy, 8–10 Chang, Emily, 129 charter city, 229 Cheng, Lili, 197 chess, 198–99 Chik, Joy, 58 child exploitation, 190 Chile, 223, 230 China, 86, 195, 220, 222, 229, 232, 236 chip design, 25 CIA, 169 Cisco, 174 civil liberties, 172–73 civil rights, 24 civil society, 179 Civil War, 188 clarity, 119 Clayton, Steve, 155 client/server era, 45 climate change, 142, 214 Clinton, Hillary, 230 cloud, 13, 41–47, 49, 51–62, 68, 70, 73, 81, 88, 110, 125, 129, 131, 137, 140, 150, 164, 166, 172, 180–81, 186, 189–92, 216, 219, 223–25, 228 cloud-first mission and, 57–58, 70, 76, 79, 83 public, 42–43, 57 Cloud for Global Good, 240–41 Codapalooza, 104 cognition, 89, 150, 152–53 Cohen, Leonard, 10 collaboration, 88, 102–3, 106–8, 126, 135, 163–64, 166, 200 collaborative robots (co-bots), 204 collective IQ, 142, 143 Colombia, 78 Columbia University, 165 Comin, Diego, 216–17, 226 commitment, shared, 77, 119 Common (hip hop artist), 71 Common Objects in Context challenge, 151 communication, 76–77 Compaq, 29 comparative advantage, 222, 228 competition, internal, 52 competitive zeal, 38–39, 70–71, 102 competitors, 39 partnerships and, 78, 125–38 complexity, 25, 224 computers early, 21–22, 24–26 future platforms, 110–11 programs by, 153–54 computing power, massive, 150–51 Conard, Edward, 220 concepts, 122–23, 141 consistency, 77–78, 182 Constitution Today, The (Amar), 186–87 constraints, 119 construction companies, 153 consumers, 49–50, 222 context, shared, 56–57 Continental Congress, 185 Continuum, 73 Convent of Jesus and Mary (India), 19 Cook, Tim, 177 cook stoves, 43 coolness, 75–76 core business, 142 Cortana, 125, 152, 156–58, 195, 201 Couchbase company, 58 counterintuitive strategy, 56–57 Coupland, Douglas, 74 Courtois, Jean-Philippe, 82 courts, 184–85 Covington and Burling lawyers, 3 Cranium games, 7 creativity, 58, 101, 119, 201, 207, 242 credit rating, 43, 204–5 Creed (film), 44–45 cricket, 18–22, 31, 35–40, 115 Cross-country Historical Adoption of Technology (CHAT), 217 culture bias and, 205 “live site first,” 61 three Cs and, 122–23, 141 transforming, 2, 11, 16, 40, 76–78, 81–82, 84, 90–92, 98–103, 105, 108–10, 113–18, 120, 122–23, 241–42 Culture (Eagleton), 91 Curiosity (Mars rover), 144 customer needs, 42, 59, 73, 80, 83, 88, 99, 101–2, 108, 126, 138 customization, 151 cybersecurity, 171, 190 cyberworld, rules for, 184 data, 60, 151 data analytics, 50 databases, 26 Data General company, 68 data management, 54 data platform, 59 data security, 175–76, 188–89 Deaton, Angus, 236 Deep Blue, 198–99 deep neural networks, 153 Delbene, Kurt, 3, 81–82 Delhi, India, 19, 31, 37 Dell, 63, 87, 127, 129–30 Dell, Michael, 129 democracy, 180 democratization, 4, 13, 69, 127, 148, 151–52 Deng Xiaoping, 229 Depardieu, Gerard, 33 design, 50, 69, 141, 239 desktop software, 27 Detroit, 15, 225, 233 developed economies, 99–100 share of world income, 236 developing economies, 99–100, 217, 225 device management solutions, 58 digital assistants, 142, 156–58, 195–98, 201 digital cable, 28 digital evidence, 191–92 Digital Geneva Convention, 171–72 digital ink, 142 digital literacy, 226–27 digital publishing laws, 185 digital transformation, 70, 126–27, 132, 235 dignity, 205 disabilities, 103, 200 disaster relief, 44 Disney, 150 disruption, 13 distributed systems, 49 diversity, 101–2, 108, 111–17, 205–6, 238, 241 Donne, John, 57 drones, 209, 226 Drucker, Peter, 90 dual users, 79 Dubai, 214, 228 Duke University, 3 Dupzyk, Kevin, 147 D-Wave, 160 Dweck, Carol, 92 dynamic learning, 100 Dynamics, 121 Dynamics 365, 152 dyslexia, 44, 103–4 Eagleton, Terry, 91 earthquakes, 44 EA Sports, 127 economic growth, 211–34 economic inequality, 12, 207–8, 214, 219–21, 225, 227, 236–41 Edge browser, 104 education, 42–44, 78, 97, 104, 106–7, 142, 145, 206–7, 224, 226–28, 234, 236–38 Egypt, 218–19, 223, 225 E-health companies, 222–23 8080 microprocessor, 21 elasticity, 49 electrical engineering (EE), 21–22 elevator and escalator business, 60 Elop, Stephen, 64, 72 email, 27, 169–73, 176 EMC, 129 emotion, 89, 197, 201 emotional intelligence (EQ), 158, 198 empathy, 6–12, 16, 40, 42–43, 93, 101, 133–34, 149, 157, 182, 197, 201, 204, 206, 226, 239, 241 employee resource groups (ERGs), 116–17 employees, 66–68, 75, 138 diversity and, 101, 111–17 empowerment and, 79–80, 126 global summit of, 86–87 hackathon, 10–11 talent development and, 117–18 empowerment, 87–88, 98–99, 106, 108–10, 126 encryption, 161–62, 175, 192–93 energy, generating across company, 119 energy costs, 237 Engelbart, Doug, 142 Engelbart’s Law, 142–43 engineers, 108–9 Enlightiks, 222–23 Enterprise Business, 81 entertainment industry, 126 ethics, 195-210, 239 Europe, 193 Excel, 121 experimental physicists, 162–64 eye-gaze tracking, 10 Facebook, 15, 44, 51, 125, 144, 174, 200, 222 failures, overcoming, 92, 111 Fairfax Financial Holdings, 20 fairness, 236 Federal Bureau of Investigation (FBI), 170, 177–78, 189 Federal Communications Commission (FCC), 28 fear of unknown, 110–11 feedback loop, 53 fertilizer, 164 Feynman, Richard, 160 fiefdoms, 52 field-programmable gate arrays (FPGAs), 161 Fields Medal, 162 firefighters, 43, 56 First Amendment, 185, 190 Flash, 136 focus, 135–36, 138 Foley, Mary Jo, 52 Ford Motor Company, 64 foreign direct investment, 219, 225, 229 Foreign Intelligence Surveillance Act (FISA), 173 Fourth Amendment, 185–88, 190, 193 France, 223, 236 Franco, James, 169 Franklin, Benjamin, 186 Freedman, Michael, 162, 166 free speech, 170–72, 175, 179, 185, 190, 238 Fukushima nuclear plant, 44 G20 nations, 219 Galaxy Explorer, 148 game theory, 123–24 Gandhi, Mohandas Mahatma, 16 Gartner Inc., 145 Gates, Bill, 4, 12, 21, 28, 64, 46, 67–69, 73–75, 87, 91, 127, 146, 183, 203 Gavasker, Sunil, 36 GE, 3, 126–27, 237 Gelernter, David, 143, 183 Geneva Convention, Fourth (1949), 171 Georgia Pacific, 29 Germany, 220, 223, 227–36 Gervais, Michael, 4–5 Gini, Corrado, 219 Gini coefficient, 219–21 GLEAM, 117 Gleason, Steve, 10–11 global competitiveness, 78–79, 100–102, 215 global information, policy and, 191 globalization, 222, 227, 235–37 global maxima, 221–22 goals, 90, 136 Goethe, J.W. von, 155 Go (game), 199 Goldman Sachs, 3 Google, 26, 45, 70–72, 76, 127, 160, 173–74, 200 partnership with, 125, 130–32 Google DeepMind, 199 Google Glass, 145 Gordon, Robert, 234 Gosling, James, 26 government, 138, 160 cybersecurity and, 171–79 economic growth and, 12, 223–24, 226–28 policy and, 189–92, 223–28 surveillance and, 173–76, 181 Grace Hopper, 111–14 graph coloring, 25 graphical user interfaces (GUI), 26–27 graphics-processing unit (GPU), 161 Great Convergence, the (Baldwin), 236 Great Recession (2008), 46, 212 Greece, 43 Green Card (film), 33 Guardians of Peace, 169 Gutenberg Bible, 152 Guthrie, Scott, 3, 58, 60, 82, 171 H1B visa, 32–33 habeas corpus, 188 Haber, Fritz, 165 Haber process, 165 hackathon, 103–5 hackers, 169–70, 177, 189, 193 Hacknado, 104 Halo, 156 Hamaker, Jon, 157 haptics, 148 Harvard Business Review, 118 Harvard College, 3 Harvey Mudd College, 112 Hawking, Stephen, 13 Hazelwood, Charles, 180 head-mounted computers, 144–45 healthcare, 41–42, 44, 142, 155–56, 159, 164, 198, 218, 223, 225, 237 Healthcare.gov website, 3, 81, 238 Heckerman, David, 158 Hewlett Packard, 63, 87, 127, 129 hierarchy, 101 Himalayas, 19 Hindus, 19 HIV/AIDS, 159, 164 Hobijn, Bart, 217 Hoffman, Reid, 232, 233 Hogan, Kathleen, 3, 80–82, 84 Holder, Eric, 173–74 Hollywood, 159 HoloLens, 69, 89, 125, 144–49, 236 home improvement, 149 Hong Kong, 229 Hood, Amy (CFO), 3, 5, 82, 90 Horvitz, Eric, 154, 208 hospitals, 42, 78, 145, 153, 223 Hosseini, Professor, 23 Huang, Xuedong, 151 human capital, 223, 226 humanistic approach, 204 human language recognition, 150–51, 154–55 human performance, augmented by technology, 142–43, 201 human rights, 186 Hussain, Mumtaz, 36, 37 hybrid computing, 89 Hyderabad, 19, 36–37, 92 Hyderabad Public School (HPS), 19–20, 22, 37–38, 136 hyper-scale, cloud-first services, 50 hypertext, 142 IBM, 1, 160, 174, 198 IBM Watson, 199–200 ideas, 16, 42 Illustrator, 136 image processing, 24 images, moving, 109 Imagine Cup competition, 149 Immelt, Jeff, 237 Immigration and Naturalization Act (1965), 24, 32–33 import taxes, 216 inclusiveness, 101–2, 108, 111, 113–17, 202, 206, 238 independent software vendor (ISV), 26 India, 6, 12, 17–22, 35–37, 170, 186–87, 222–23, 236 immigration from, 22–26, 32–33, 114–15 independence and, 16–17, 24 Indian Administrative Service (IAS), 16–17, 31 Indian Constitution, 187 Indian Institutes of Technology (IIT), 21, 24 Indian Premier League, 36 IndiaStack, 222–23 indigenous peoples, 78 Indonesia, 223, 225 industrial policy, 222 Industrial Revolution, 215 Fourth or future, 12, 239 information platforms, 206 information technology, 191 Infosys, 222 infrastructure, 88–89, 152–53, 213 innovation, 1–2, 40, 56, 58, 68, 76, 102, 111, 120, 123, 142, 212, 214, 220, 224, 234 innovator’s dilemma, 141–42 insurance industry, 60 Intel, 21, 45, 160, 161 intellectual property, 230 intelligence, 13, 88–89, 126, 150, 154–55, 160, 169, 173, 239 intelligence communities, 173 intensity of use, 217, 219, 221, 224–26 International Congress of the International Mathematical Union, 162 Internet, 28, 30, 48, 79, 97–98, 222 access and, 225–26, 240 security and privacy and, 172–73 Internet Explorer, 127 Internet of Things (IoT), 79, 134, 142, 228 Internet Tidal Wave, 203 Intersé, 3 Interview, The (film), 169–71 intimidation, 38 investment strategy, 90, 142 iOS devices, 59, 72, 123, 132 iPad, 70, 141 iPad Pro, 123–25 iPhone, 70, 72, 85, 121–22, 125, 177–79 Irish data center, 176, 184 Islamic State (ISIS), 177 Istanbul, 214 Jaisimha, M.L., 18, 36–37 Japan, 44, 223, 230 Japanese-American internment, 188 JAVA, 26 Jeopardy (TV show), 199 Jha, Rajesh, 82 jobs, 214, 231, 239–40.


pages: 441 words: 113,244

Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity From Politicians by Joe Quirk, Patri Friedman

3D printing, access to a mobile phone, addicted to oil, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, barriers to entry, biodiversity loss, Biosphere 2, Branko Milanovic, British Empire, Buckminster Fuller, Burning Man, business climate, business cycle, business process, California gold rush, Celtic Tiger, Charles Lindbergh, clean water, Colonization of Mars, Dean Kamen, Deng Xiaoping, drone strike, Elon Musk, en.wikipedia.org, export processing zone, failed state, financial intermediation, Garrett Hardin, Gini coefficient, Great Leap Forward, happiness index / gross national happiness, income inequality, intentional community, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, joint-stock limited liability company, Kickstarter, low skilled workers, Machinery of Freedom by David Friedman, Mark Zuckerberg, megacity, megaproject, minimum wage unemployment, Neil Armstrong, Network effects, new economy, obamacare, ocean acidification, off-the-grid, offshore financial centre, One Laptop per Child (OLPC), open borders, Patri Friedman, paypal mafia, peak oil, Peter H. Diamandis: Planetary Resources, Peter Thiel, price stability, profit motive, radical decentralization, Ronald Coase, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, special economic zone, standardized shipping container, stem cell, TechCrunch disrupt, TED Talk, trade route, Tragedy of the Commons, UNCLOS, UNCLOS, undersea cable, young professional

Now imagine if Mauritius were mobile. Raise All Boats Let’s defy another economic stereotype. Income inequality is measured by the Gini coefficient. If your Gini coefficient is 0, every resident owns the same amount. If your Gini coefficient is 1, one resident owns everything, and everybody else owns nothing. In many cases, extremely speedy growth in developing nations corresponds to extremely inequitable income distribution. It’s such a consistent pattern, some economists consider it akin to an economic law. For instance, Hong Kong’s Gini coefficient reached 0.50 in 2011, well above the 0.40 level used by analysts to measure the potential for social unrest—and, indeed, labor strikes in Hong Kong have been increasing.

For instance, Hong Kong’s Gini coefficient reached 0.50 in 2011, well above the 0.40 level used by analysts to measure the potential for social unrest—and, indeed, labor strikes in Hong Kong have been increasing. Mauritius utterly defies this pattern. At the same time that the nation experienced stellar growth, its income inequality, as measured by the Gini coefficient, fell from 45.7 in 1980 to 38.9 in 2006. Richer and more equal? Mauritius is a new political experiment that educates nations on the other side of the Earth. Consider this 2010 report from Dr. Satish Chand, adjunct professor of economics at the Australian National University’s College of Asia and the Pacific, who visited Mauritius to research lessons that could be applied to the island nation of Fiji: The sugarcane fields, the mountains in the backdrop, the greenery, and the people look deceptively similar to Fiji . . .

See also World Bank, African Development Bank, and Mauritius Board of Investment 2009. “Investment Climate Assessment: Mauritius 2009.” World Bank, Washington, DC, http://siteresources.worldbank.org/MAURITIUSEXTN/Resources/ica-mauritius-0110.pdf. At the same time that the nation experienced stellar growth, its income inequality, as measured by the Gini coefficient, fell from 45.7 in 1980 to 38.9 in 2006: Vandemoortele and Bird, “Progress in Economic Conditions in Mauritius,” 10. “The sugarcane fields, the mountains in the backdrop”: Satish Chand, Pacific Could Learn From Prosperous Mauritius, Pacific Islands Report, October 19, 2010, http://archives.pireport.org/archive/2010/October/10-20-ft.htm.


pages: 417 words: 97,577

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

"Friedman doctrine" OR "shareholder theory", Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, Alan Greenspan, bank run, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Bob Noyce, Boston Dynamics, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, compensation consultant, computer age, Cornelius Vanderbilt, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Dunbar number, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fairchild Semiconductor, Fall of the Berlin Wall, family office, financial innovation, full employment, gentrification, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, Herbert Marcuse, income inequality, independent contractor, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, Jeremy Corbyn, Jevons paradox, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, Maslow's hierarchy, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, passive investing, patent troll, Peter Thiel, plutocrats, prediction markets, prisoner's dilemma, proprietary trading, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, SoftBank, Steve Jobs, stock buybacks, tech billionaire, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, vertical integration, very high income, wikimedia commons, William Shockley: the traitorous eight, you are the product, zero-sum game

Table of Contents Cover Introduction Chapter One: Where Buffett and Silicon Valley Billionaires Agree Key Thoughts from the Chapter Chapter Two: Dividing Up the Turf Key Thoughts from the Chapter Chapter Three: What Monopolies and King Kong Have in Common Lower Wages and Greater Income Inequality Higher Prices Fewer Startups and Jobs Lower Productivity Lower Investment Localism and Diversity Key Thoughts from the Chapter Chapter Four: Squeezing the Worker Key Thoughts from the Chapter Chapter Five: Silicon Valley Throws Some Shade Key Thoughts from the Chapter Chapter Six: Toll Roads and Robber Barons Monopolies (and Local Monopolies) Duopolies Oligopolies Key Thoughts from the Chapter Chapter Seven: What Trusts and Nazis Had in Common Key Thoughts from the Chapter Chapter Eight: Regulation and Chemotherapy Key Thoughts from the Chapter Chapter Nine: Morganizing America Key Thoughts from the Chapter Chapter Ten: The Missing Piece of the Puzzle Key Thoughts from the Chapter Conclusion: Economic and Political Freedom Principles for Reform Solutions and Remedies And Finally, What You Can Do … Notes Introduction Chapter 1: Where Buffett and Silicon Valley Billionaires Agree Chapter 2: Dividing Up the Turf Chapter 3: What Monopolies and King Kong Have in Common Chapter 4: Squeezing the Worker Chapter 5: Silicon Valley Throws Some Shade Chapter 6: Toll Roads and Robber Barons Chapter 7: What Trusts and Nazis Had in Common Chapter 8: Regulation and Chemotherapy Chapter 9: Morganizing America Chapter 10: The Missing Piece of the Puzzle Conclusion: Economic and Political Freedom Acknowledgments About the Authors Index End User License Agreement List of Tables Chapter 2 Table 2.1 The Largest Highly Concentrated Industries List of Illustrations Chapter 1 Figure 1.1 Merger Manias: 1890–2015 Figure 1.2 Collapse in the Number of US Public Companies Since 1996 Figure 1.3 Collapse in Initial Public Offerings (IPOs) Figure 1.4 Frequency of the Words “Competition,” “Competitors,” and “Pressure” in Annual Reports Chapter 2 Figure 2.1 Zero and Negative Central Bank Rates Promote Cartels Chapter 3 Figure 3.1 The US Economy Has Become Less Entrepreneurial over Time Figure 3.2 New Firms Play a Decreasing Role in the Economy Figure 3.3 Growth Phases of Organisms and Companies Figure 3.4 Lower Productivity Growth as Fewer Firms Enter Figure 3.5 Investment Significantly Lagging Profitability Chapter 4 Figure 4.1 Variant Perception US Wages Leading Indicator Figure 4.2 Percentage of Workers with Noncompete Agreements, by Group Figure 4.3 States That Do Not Enforce Noncompetes Have Higher Wages Figure 4.4 Rural Areas Are Lagging (aggregate wage growth, year-over-year, third quarter 2016) Figure 4.5 Monopsonies in Labor Markets: Commuting Zones with High Labor Concentration Figure 4.6 Maslow's Hierarchy of Needs Figure 4.7 Union Membership versus Income Distribution to Top 10% Figure 4.8 Wage Growth Closely Associated with Strikes Figure 4.9 The Great Suppression: Falling Unions and Increasing Licensing, 1950s–Today Chapter 6 Figure 6.1 Rail Mergers: Making of the Big Four Figure 6.2 Airline Mergers in Today's Oligopoly Figure 6.3 Banking Mergers in the United States Figure 6.4 Life Expectancy versus Health Expenditure over Time (1970–2014) Figure 6.5 Leading Global Meat Processing Firms Timeline of Ownership Changes, 1996–2016 Chapter 7 Figure 7.1 The First and Second Merger Waves (1890–1903, 1920–1930) Figure 7.2 Antitrust Enforcement Budget Figure 7.3 Twenty Years of Industry Consolidation Figure 7.4 Three Mega Merger Waves in the Past Three Decades Figure 7.5 Proportion of Completed Mergers and Acquisitions Chapter 8 Figure 8.1 Total US Patents Issued Annually, 1900–2014 Figure 8.2 Pages in the Federal Register (1936–2015) Figure 8.3 Companies That Lobby Extensively Have Higher Returns Figure 8.4 Revolving Door between Goldman Sachs and the Federal Government Figure 8.5 Revolving Door between Monsanto and the Federal Government Chapter 9 Figure 9.1 Largest Owners of US Banks (as of 2016 Q2) Figure 9.2 Share of Passively Managed Assets in US Markets Figure 9.3 S&P 500 Ownership by “Big 3” Figure 9.4 Net Investment by Nonfinancial Businesses Figure 9.5 Buybacks Zoom to Record Highs Chapter 10 Figure 10.1 Income Inequality in the United States, 1910–2015 Figure 10.2 The Global Wealth Pyramid, 2017 Figure 10.3 Rising Inequality. Selected Gini Coefficients Figure 10.4 Rising CEO-to-Worker Compensation Ratio, 1965–2014 Figure 10.5 Worker Pay Is Not Keeping Up with Worker Productivity Figure 10.6 Corporate Profits versus Employee Compensation Figure 10.7 Income Inequality in the United States versus Antitrust Enforcement Figure 10.8 Higher Markups Lead to Lower Wages Figure 10.9 Markups in Advanced Economies Have Been Rising since the 1980s Figure 10.10 US Net Wealth Shares: Top 0.1% versus Bottom 90% “I think the book is too hard on some companies and CEOs.

It would have been more efficient if central banks had simply wired money directly to the bank accounts of the very wealthy. While wealth inequality is interesting, the standard way economists look at income disparities is by looking at something called a Gini coefficient. This measure shows the variation between the actual distribution of income in a country and what would apply if it were distributed perfectly evenly. It ranges from zero, indicating perfect equality, to a value of one, indicating perfect inequality with one household receiving all income. Globally, we have seen a steadily rising trend in inequality in emerging market countries, in the United States, the UK, and Australia.

Globally, we have seen a steadily rising trend in inequality in emerging market countries, in the United States, the UK, and Australia. Europe has seen a smaller rise in income inequality, primarily due to high taxes and transfer payments to poorer households.7 Higher taxes mitigate the symptoms but do not solve the problem (Figure 10.3).8 Figure 10.3 Rising Inequality. Selected Gini Coefficients SOURCE: http://www.presidency.ucsb.edu/economic_reports/2016.pdf. SOURCE: Dr. Shane Oliver and AMP Capital.9 It is not surprising that the United States has seen a big increase in inequality over the past 30 years. The extremes in income distribution are most clearly reflected in extraordinary CEO pay. In the US CEO pay has exploded.


pages: 1,205 words: 308,891

Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey

"Friedman doctrine" OR "shareholder theory", Airbnb, Akira Okazaki, antiwork, behavioural economics, big-box store, Black Swan, book scanning, British Empire, business cycle, buy low sell high, Capital in the Twenty-First Century by Thomas Piketty, classic study, clean water, Columbian Exchange, conceptual framework, correlation does not imply causation, Costa Concordia, creative destruction, critique of consumerism, crony capitalism, dark matter, Dava Sobel, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, Deng Xiaoping, do well by doing good, Donald Trump, double entry bookkeeping, electricity market, en.wikipedia.org, epigenetics, Erik Brynjolfsson, experimental economics, Ferguson, Missouri, food desert, Ford Model T, fundamental attribution error, Garrett Hardin, Georg Cantor, George Akerlof, George Gilder, germ theory of disease, Gini coefficient, God and Mammon, Great Leap Forward, greed is good, Gunnar Myrdal, Hans Rosling, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Hernando de Soto, immigration reform, income inequality, interchangeable parts, invention of agriculture, invention of writing, invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, John Harrison: Longitude, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labor-force participation, lake wobegon effect, land reform, liberation theology, lone genius, Lyft, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, means of production, middle-income trap, military-industrial complex, Naomi Klein, new economy, Nick Bostrom, North Sea oil, Occupy movement, open economy, out of africa, Pareto efficiency, Paul Samuelson, Pax Mongolica, Peace of Westphalia, peak oil, Peter Singer: altruism, Philip Mirowski, Pier Paolo Pasolini, pink-collar, plutocrats, positional goods, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, refrigerator car, rent control, rent-seeking, Republic of Letters, road to serfdom, Robert Gordon, Robert Shiller, Ronald Coase, Scientific racism, Scramble for Africa, Second Machine Age, secular stagnation, seminal paper, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, spinning jenny, stakhanovite, Steve Jobs, tacit knowledge, TED Talk, the Cathedral and the Bazaar, The Chicago School, The Market for Lemons, the rule of 72, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, total factor productivity, Toyota Production System, Tragedy of the Commons, transaction costs, transatlantic slave trade, Tyler Cowen, Tyler Cowen: Great Stagnation, uber lyft, union organizing, very high income, wage slave, Washington Consensus, working poor, Yogi Berra

The terrible heat wave in Chicago of July 1995 killed over seven hundred people, mainly low-income.23 Yet earlier heat waves in 1936 and 1948, before air conditioning was at all common, had probably killed many more.24 The 2003 heat wave in non–air conditioned France killed 14,800 people, and 70,000 Europe-wide. Imagine what the London heat wave in June 1858 did. 6 Inequality Is Not the Problem Robert Reich argues that the problem must be measured by inequality, Gini-coefficient style, not by the absolute condition of the poor. “Widening inequality,” he declares, “challenges the nation’s core ideal of equal opportunity”: Widening inequality still hampers upward mobility. That’s simply because the ladder is far longer now. The distance between its bottom and top rungs, and between every rung along the way, is far greater.

Their chart 2 exhibits weekly income distributions in 1886 prices at 1886, 1906, 1938, and 1960, showing the disappearance of the inflation-adjusted classic line of misery for British workers, “’round about a pound a week.”8 Yet the left works overtime, out of the best of motives, to rescue its ethically irrelevant focus on Gini coefficients and the relative poverty line. A recent example of the leftish labor is the book by a French economist I have mentioned, Thomas Piketty’s Capital in the Twenty-First Century (translated 2014), which was greeted with squeals of delight by the American and British left, and rapidly rose to number one on the New York Times best-seller list. Piketty claims that relative poverty is what matters, whether or not the poorest improve. “Just as we’ve been saying!” the left cried. “Eliminate poverty and inequality.” Much of the research on the economics of inequality stumbles on this simple ethical point, focusing on measures of relative inequality such as the Gini coefficient rather than on measures of the absolute welfare of the poor, on inequality rather than poverty, having elided the two.

Much of the research on the economics of inequality stumbles on this simple ethical point, focusing on measures of relative inequality such as the Gini coefficient rather than on measures of the absolute welfare of the poor, on inequality rather than poverty, having elided the two. Speaking of the legal philosopher Ronald Dworkin’s egalitarianism, Frankfurt observed that Dworkin in fact, and ethically, “cares principally about the [absolute] value of people’s lives, but he mistakenly represents himself as caring principally about the relative magnitudes of their economic assets.”9 Dworkin and the left commonly miss the ethical point, which is the liberal, Joshua Monk one of lifting up the poor.


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A Fine Mess by T. R. Reid

accelerated depreciation, Affordable Care Act / Obamacare, Alan Greenspan, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tax Reform Act of 1986, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks

But the top earners have seen big increases in income since 2000; as of 2015, the top 1% of American families had income of $405,000. To make the top one-tenth of 1% took income of $1.9 million. Using the standard international measure of inequality, President Obama was basically correct when he said that among the advanced democracies the imbalance is “most pronounced” in the United States. The customary gauge of economic inequality is called the Gini coefficient, named for the Italian economist who thought it up. In the Gini rankings, a nation where everybody had the same amount of wealth and the same income would get a Gini score of 0; a country where one person took in all the income, and nobody else earned a cent, would get a score of 1.

Generally, the world’s poor countries—where a few families control the wealth, and tens of millions live in squalor—have high Gini coefficients. Nations like Lesotho, Botswana, Honduras, and Haiti have Gini numbers near 0.6, making them the least economically equal societies on the planet. Among the rich countries, the democracies of western Europe tend to score around 0.3; the world champions at economic equality include Sweden, Denmark, and Norway, where high wages for working people and high taxes on the rich bring the Gini index down to about 0.25. The United States had a Gini coefficient in 2014 of 0.4—the worst rating among rich countries. Among the thirty-four members of the OECD, the club of industrialized democracies, only Mexico and Chile ranked higher than the United States on the inequality scale.

The First Republic, in its zeal for new terminology, replaced the standard word for “tax” (impôt) with the French word contribution, and to this day French politicians routinely talk about taxes as “social contributions,” as a way to maintain the essential French ideal of égalité. “For most of the French left, and a chunk of the right, high taxes are a hallmark of a decent society that puts fairness before profit and public service before business,” the Economist noted. In terms of égalité, at least, this tax regime seems to have worked; France has always had a lower Gini coefficient (that is, a more even distribution of wealth) than most of its European neighbors or the United States. When the Great Recession hit France in 2008, Nicolas Sarkozy, a center-right politician, was president. (Sarkozy supports free higher education, a complete ban on handguns, and unemployment compensation that never ends, but in European terms that makes him “center-right.”)


pages: 667 words: 149,811

Economic Dignity by Gene Sperling

active measures, Affordable Care Act / Obamacare, antiwork, autism spectrum disorder, autonomous vehicles, basic income, behavioural economics, benefit corporation, Bernie Sanders, Big Tech, Cass Sunstein, collective bargaining, company town, corporate governance, cotton gin, David Brooks, desegregation, Detroit bankruptcy, disinformation, Donald Trump, Double Irish / Dutch Sandwich, driverless car, Elon Musk, employer provided health coverage, Erik Brynjolfsson, Ferguson, Missouri, fulfillment center, full employment, gender pay gap, ghettoisation, gig economy, Gini coefficient, green new deal, guest worker program, Gunnar Myrdal, housing crisis, Ida Tarbell, income inequality, independent contractor, invisible hand, job automation, job satisfaction, labor-force participation, late fees, liberal world order, longitudinal study, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass incarceration, mental accounting, meta-analysis, minimum wage unemployment, obamacare, offshore financial centre, open immigration, payday loans, Phillips curve, price discrimination, profit motive, race to the bottom, RAND corporation, randomized controlled trial, Richard Thaler, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Second Machine Age, secular stagnation, shareholder value, Sheryl Sandberg, Silicon Valley, single-payer health, speech recognition, stock buybacks, subprime mortgage crisis, tech worker, TED Talk, The Chicago School, The Future of Employment, The Wealth of Nations by Adam Smith, Toyota Production System, traffic fines, Triangle Shirtwaist Factory, Uber and Lyft, uber lyft, union organizing, universal basic income, W. E. B. Du Bois, War on Poverty, warehouse robotics, working poor, young professional, zero-sum game

If the number is moving toward 0, it means the nation is experiencing less economic inequality. While there are few economic goals as important as reducing economic inequality, even a measure like reducing the Gini coefficient cannot be seen as an ultimate end goal in itself. For example, imagine if the United States implemented a set of policies that reduced the income of the very richest Americans by 30 percent while reducing the income of everyone else by 20 percent. The Gini coefficient would have gotten better, but no one would likely be celebrating. A version of this actually happened: the World Bank estimates that the United States’ Gini coefficient declined from 2007 to 2010 during the severe economic hardship of the Great Recession.9 The point here is that even a metric that measures something as unobjectionably good as reducing inequality is still not an ultimate end goal in itself, if it is not in the context of serving a larger end goal of lifting up people’s lives and well-being while reducing economic inequality.

For many years, I bought into the notion that the way to get beyond GDP as the end goal of the economic policy world was simply to push our focus toward other economic metrics that were better proxies for shared growth and shared prosperity. Measures like the Gini coefficient, median income, unemployment rates, and job growth paint a more accurate picture of whether a rising tide is in fact lifting all boats than examining GDP or the value of the stock market. Yet even those metrics are still means to larger economic ends—and have shortcomings when they are considered ends in themselves. Consider the Gini coefficient, which is named after an Italian statistics whiz named Corrado Gini (I promise it is not as complicated as it sounds). The Gini coefficient measures how much inequality there is in an economy, with a measure between 0 and 1.

See SNAP Ford, Henry, 237 Ford, Martin, 128 Ford Motor Company, 140, 229, 237, 244, 254 for-profit schools, 111–14, 275–76 foster care, 40 Fournier, Ron, 195 Fourteenth Amendment, 17–18 Fox News, 92, 103 franchise workers, 252–55 Frankfurter, Felix, 19, 176 fraud, 43, 85, 187, 335n Frederiksen, Mette, 294 Free Application for Federal Student Aid (FAFSA), 210 “freedom to contract,” 19–20 Freeman, Morgan, 13 free markets, 106–7, 119, 173 Frey, Carl Benedikt, 128, 130 Friedman, John, 278 Friedman, Milton, 119 Frontline, “Rape on the Night Shift,” 79 full-employment policies, 265–68, 281 Funke, Manuel, 295 Furman, Jason, 115, 128, 183–84, 247 gainful employment regulations, 113–14 Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), 289 Gascón, George, 59 Gates, Bill, 7, 150 Gaye, Marvin, 41 GDP (gross domestic product), xv, xix, 3, 4–6 gender wage gap, 245, 275 General Electric, 119, 137 Geneva Convention, 17 Genghis Khan, 116 Gephardt, Dick, 123 Gerard, Leo, 251 Germany caregiving credits, 162 works councils, 250 Germino, Laura, 256 Geronimus, Arline, 61 Getting Back to Full Employment (Baker and Bernstein), 267 gig economy, 9–10, 63–64, 191–92, 230–33, 251–52 Gillard, Julia, 131 Gillibrand, Kirsten, 34–35 Gilmer v. Interstate/Johnson Lane Corp., 260 Gini, Corrado, 6–7 Gini coefficient, 6–7 Ginsburg, Ruth Bader, 20, 248, 260 Glenn-Leistikow, Sarah, 215 globalization, 139–41, 145–46, 247 GM (General Motors), 140, 231, 237, 253–54 Godoey, Anna, 178 Goldin, Claudia, 270, 273 Gompers, Samuel, 15, 82, 308–9n Goodwin, Doris Kearns, 21 Google, 230, 259–60 Google Play, 117 Gore, Al, 145 government regulations, 106–11 government role, 89–105 automation and AI, 146–50 compact of contribution vs. punitive test, 90–94 economic dignity compact, 137 during economic downturns, 137–39 encouraging risk-taking and entrepreneurship, 97–98 era of big government responsibility, 101–5 health care economics, 99–101 innovation and, 98–99 jobs and globalization, 139–41 lack of intensive government investment, 94–96 in providing meaningful work, 229–33, 234–36 public options and guarantee of economic dignity, 104–5 role in economic change, 136–50 “second-chance” policies, 141–46 graduation rates, 275–76, 312n Graham, Carol, 60 Granholm, Jennifer, 137–38 Great Chicago Fire of 1871, 67 Great Depression, xiii, 20 Great Gatsby Curve, 42 Great Recession, xiii, 7, 191, 201, 213, 266–67, 270, 273 Great Society, 25–26, 190 Greenhouse, Steven, 256 Green New Deal, 141, 220 Groundwork of the Metaphysics of Morals (Kant), 14, 15, 136 Gruber, Jonathan, 98–99, 100, 138 Guendelsberger, Emily, 236–37 Gurrola, Alejandra, 216 H-1B visas, 262–63 H-2A visas, 261–62 Hacker, Jacob, 176, 274 Hackman, Richard, 226–27 Halpern-Meekin, Sarah, 180 Hamermesh, Daniel S., 52 Hamilton (musical), 127 Hamilton, Alexander, 16 Hamilton, Darrick, 15, 104 Hanauer, Nick, 193, 273–74 Hand, Learned, 251–52 Hansen, Bradley, 49 Harris, Alexes, 56 Harris, Kamala, 184 “Harry Potter divide,” 287–88 Head Start, 350n health care policy, xiii–xiv, xv–xvi, 99–101, 102–3 conservatives and, 99–101, 166–67 government’s role, 99–101 preexisting conditions, 97, 100, 101, 103, 166–67, 356 universal health care security, xiii–xiv, xv–xvi, 35, 40, 100–101, 102–3, 168, 200, 236 “health coaches,” 147 health insurance.


pages: 381 words: 101,559

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, buy and hold, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, deal flow, Deng Xiaoping, diversification, diversified portfolio, Dr. Strangelove, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, Great Leap Forward, guns versus butter model, high net worth, income inequality, interest rate derivative, it's over 9,000, John Meriwether, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, Network effects, New Journalism, Nixon shock, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, one-China policy, open economy, paradox of thrift, Paul Samuelson, power law, price mechanism, price stability, private sector deleveraging, proprietary trading, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, short squeeze, sovereign wealth fund, special drawing rights, special economic zone, subprime mortgage crisis, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, vertical integration, War on Poverty, Washington Consensus, zero-sum game

One of the best measures of the rent seeking relationship between elites and citizens in a stagnant economy is the Gini coefficient, a measure of income inequality; a higher coefficient means greater income inequality. In 2006, shortly before the recent recession began, the coefficient for the United States reached an all-time high of 47, which contrasts sharply with the all-time low of 38.6, recorded in 1968 after two decades of stable gold-backed money. The Gini coefficient trended lower in 2007 but was near the all-time high again by 2009 and trending higher. The Gini coefficient for the United States is now approaching that of Mexico, which is a classic oligarchic society characterized by gross income inequality and concentration of wealth in elite hands.

The Gini coefficient for the United States is now approaching that of Mexico, which is a classic oligarchic society characterized by gross income inequality and concentration of wealth in elite hands. Another measure of elite rent seeking is the ratio of amounts earned by the top 20 percent of Americans compared to amounts earned by those living below the poverty line. This ratio went from a low of 7.7 to 1 in 1968 to a high of 14.5 to 1 in 2010. These trends in both the Gini coefficient and the wealth-to-poverty income ratio in the United States are consistent with Tainter’s findings on civilizations nearing collapse. When society offers its masses negative returns on inputs, those masses opt out of society, which is ultimately destabilizing for masses and elites.

Gates, Robert Gazprom Geithner, Timothy General Agreement on Tariffs and Trade (GATT) General Electric (GE) General Motors (GM) Genoa Conference of 1922 Germany bilateral trade relations with China currency collapse in 1920s and European sovereign debt crisis of 2010 and G20 gold reserves and gold standard and panic of 1931 reichsmark rentenmark rise of Nazi party support for euro trade deficits during 1980s and U.S. in London Gold Pool Weimar hyperinflation and World War I reparations Gertz, Bill Gini coefficient global corporations globalization gold and Bretton Woods system China’s 2009 five hundred metric tons of gold transfer classical gold standard of 1870 to 1914 as currency anchor FDR’s gold confiscations flaws in 1920s gold exchange standard flexible gold standard France and desire to return to gold standard Genoa Conference and return to gold standard gold clauses in contracts gold SDR gold standard during war time gold standard, return to and Great Depression international gold reserves London Gold Pool 1930s deflation and U.S. gold devaluation under Nixon’s New Economic Policy and Panic of 1931 vs. paper money prices during U.S. recessions, 1970s to 1980s pure gold standard stocks and two-tier system, creation of U.S. and dollar-gold parity U.S. gold reserves gold bullion and coins gold mining Gold Reserve Act of 1934 Gold Standard Acts of 1900 and 1925 Goldman Sachs Gramm, Phil Great Depression beggar-thy-neighbor devaluations during Federal Reserve role during France and gold as contributing factor to impact on U.S. economy Greece Greenspan, Alan gross domestic product (GDP) in China four components of growth in major currencies and monetarism and changes in U.S. consumer and growth of in U.S. during Kennedy-Johnson years U.S. economy and 2011 Group of Eight (G8) Group of Seven (G7) Group of Ten (G10) Group of Twenty (G20) Brazil and and Panic of 2008 and SDRs 2008 Summit on Financial Markets and the World Economy 2009 Pittsburgh G20 summit 2011 Cannes, France G20 summit U.S. rebalancing plan and Group of Two (G2) Gutfreund, John Halliwell, Steve Hamilton, Alexander hedge funds Hemingway, Ernest Herodotus heuristics, in economics Hitler, Adolf Hoover, Herbert Hu Jintao Hua Guofeng Hughes, Charles Evans Humphrey-Hawkins Full Employment Act of 1978 hyperinflation import surtax India Indonesia inflation caused by U.S.


India's Long Road by Vijay Joshi

Affordable Care Act / Obamacare, barriers to entry, Basel III, basic income, blue-collar work, book value, Bretton Woods, business climate, capital controls, carbon tax, central bank independence, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, congestion charging, Cornelius Vanderbilt, corporate governance, creative destruction, crony capitalism, decarbonisation, deindustrialization, demographic dividend, demographic transition, Doha Development Round, eurozone crisis, facts on the ground, failed state, financial intermediation, financial repression, first-past-the-post, floating exchange rates, foreign exchange controls, full employment, germ theory of disease, Gini coefficient, global supply chain, global value chain, hiring and firing, income inequality, Indoor air pollution, Induced demand, inflation targeting, invisible hand, land reform, low interest rates, Mahatma Gandhi, manufacturing employment, Martin Wolf, means of production, microcredit, moral hazard, obamacare, Pareto efficiency, price elasticity of demand, price mechanism, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, race to the bottom, randomized controlled trial, rent-seeking, reserve currency, rising living standards, school choice, school vouchers, secular stagnation, Silicon Valley, smart cities, South China Sea, special drawing rights, The Future of Employment, The Market for Lemons, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, transaction costs, universal basic income, urban sprawl, vertical integration, working-age population

For various reasons, including severe under-​reporting of and by the rich, measured consumption inequality systematically underestimates true income inequality. Some attempts have been made to measure inequality of incomes in India directly. These turn up with calculated Gini coefficients above 50 per cent, which puts India in the same ball-​park as high-​inequality Latin American countries like Brazil.22 Measures of interpersonal inequality of consumption are good enough to indicate what is happening to the trend of inequality. On this measure, from the early 1960s to the early 1990s, inequality in India was roughly flat, with a broadly stable Gini coefficient in the low thirties.23 But in the last two decades there has been a rise: the all-​India Gini coefficient has gone up by about six percentage points from 1993 to 2011, from around 30 to 36 per cent (see Table 2.4).24 This is mostly due to a rise in intra-​urban inequality, and the urban-​rural income differential; intra-​rural inequality has not increased by much.25 Other pieces of evidence are also suggestive of rising inequality, particularly in urban areas.

n.a. 31.3 (RG: 30.1; UG: 34.1) 36.0 45.3 (320 million) (404 million) 27.5 37.2 (302 million) (407 million) n.a. 32.1 (RG: 30.9; UG: 34.7) (323 million) 1993/​94 29.2 (RG: 28.5; UG: 30.8) (329 million) 1983 31.5 (RG: 30.3; UG: 35.3) (321 million) 1977/​78 35.0 (RG: 33.7; UG: 38.2) (262 million) 1973/​74 Inequality: Gini Coefficient (%) n.a. 30.7 (RG: 28.5; UG: 34.4) n.a. 34.7 (RG: 28.1; UG: 36.4) 21.9 29.5 35.9 (269 million) (363 million) (RG:28.7; UG:37.7) Notes: In the “Headcount Poverty Ratio” part of the table, the figures in brackets show the absolute number of poor people in millions. In the “Inequality: Gini Coefficient” part of the Table, RG means Rural Gini and UG means Urban Gini. Sources: Poverty, 1950s and 1960s: Datt (1997); poverty, 1973/​74 to 2011/​12 (except Rangarajan poverty in 2011/​12): Planning Commission (2014a) and Planning Commission (2014c); poverty, 2011/​ 12 (Rangarajan definition): Planning Commission (2014a); inequality, 1950s to 1993/​94: Datt (1997); inequality, 2004/​5 and 2011/​12: Himanshu (2015). 1 9 4 7 –​2 0 1 6 : A T O U R D ’ H O R I Z O N [ 21 ] 22 PARTIAL REFORM SINCE 1980: THE POLITICAL BACKDROP Congress (I) and Mrs.

On this measure, from the early 1960s to the early 1990s, inequality in India was roughly flat, with a broadly stable Gini coefficient in the low thirties.23 But in the last two decades there has been a rise: the all-​India Gini coefficient has gone up by about six percentage points from 1993 to 2011, from around 30 to 36 per cent (see Table 2.4).24 This is mostly due to a rise in intra-​urban inequality, and the urban-​rural income differential; intra-​rural inequality has not increased by much.25 Other pieces of evidence are also suggestive of rising inequality, particularly in urban areas. Firstly, in the last decade, National Sample Survey data show that a) per capita urban consumption increased twice as fast as per capita rural consumption and b) within the urban sector, per capita consumption in the top decile has risen much faster than in other deciles.


pages: 264 words: 76,643

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, Alan Greenspan, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, carbon tax, centre right, clean tech, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Easter island, Erik Brynjolfsson, falling living standards, financial deregulation, financial engineering, financial intermediation, financial repression, Gini coefficient, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google Hangouts, Great Leap Forward, Hans Rosling, happiness index / gross national happiness, Higgs boson, high-speed rail, income inequality, income per capita, informal economy, invisible hand, Jeremy Corbyn, job satisfaction, Mahatma Gandhi, Mahbub ul Haq, market fundamentalism, Martin Wolf, means of production, military-industrial complex, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, TED Talk, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, Tragedy of the Commons, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

One basic measure of inequality is the Gini coefficient, which is often expressed on a scale of 0 to 100.7 Invented by Italian statistician Corrado Gini in 1912, at one end of the scale 0 represents a society of perfect equality in which everyone earns the same; at the other 100 is an economy in which one person earns everything. Relatively equal societies, such as those in Scandinavia, have a Gini coefficient of below 30, with the most unequal society in the world, South Africa, at 63.8 The US has a Gini coefficient of 41, the UK 33, and Germany 30.9 One could perform the same exercise for wealth or assets—which generally reveals greater inequality still. Figure 10 A Real Household Income at Selected Percentiles, 1967–2012 (reported in 2012 dollars).10 Another way is to disaggregate income according to percentiles of the population.

If averages are skewed in America and Europe because a few people have much more, in Africa it is generally the other way around. Of course there is gross inequality, but, typically, people with jobs support an extended family, from parents, uncles, sisters, brothers, and hangers-on to anyone who can claim even the most tenuous of connections. Ryan recalls an incident when someone walked into his office at the planning ministry complaining that Kenya’s GINI coefficient—which measures inequality—was “disastrous.” “I said, ‘Yes, it’s disastrous, but it doesn’t mean what you think it means,’ ” Ryan recalls. “It so happened that the assistant minister in the planning ministry was an ex-student of mine.

“But I think there is a rising consensus in the US and other countries that it’s something we need to do.” INEQUALITY Even the notion of median income has its limits. In addition to finding out how the typical person or household is doing, it is right to shine a light on those left behind. There are several ways of doing this. After all, it took clever academic sleuthing to uncover the shocking fact that less-well-educated, middle-aged white Americans have shortening lifespans. One basic measure of inequality is the Gini coefficient, which is often expressed on a scale of 0 to 100.7 Invented by Italian statistician Corrado Gini in 1912, at one end of the scale 0 represents a society of perfect equality in which everyone earns the same; at the other 100 is an economy in which one person earns everything.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab, Peter Vanham

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

In many people's experience, it matters much more how they fare compared to their fellow citizens than to the rest of the world population. In all but a few countries, national inequality has been rising and often rather fast. The traditional measure of inequality, the Gini coefficient, doesn't do justice to the severity of the problem. The Gini coefficient translates the degree of inequality into a number from 0 (everyone has the same income) to 1 (one person has the entire economy's income). While a higher score over time tells us that inequality has risen, it's difficult to understand what that means in practice. In the US, for example, the Gini coefficient rose from its low point of 0.43 in 1971 to a post-war high of 0.58 today.40 It is an increase, of course, but precisely how good or bad is either number?

Even among urbanites, some citizens had preferential access to real estate, whereas others did not. Over time, as cities developed and so-called Tier I and Tier II cities skyrocketed, those initial inequalities widened, leading to systemic inequality and a lack of opportunities for many. (Until, Bai noted, around 2010, when the Gini coefficient of China peaked, the labor share of income GDP bottomed out, and the skill premium for educated workers started declining. These were all indicators that income inequality was at its highest level ever, despite improvements in the skills of workers.) The story of unequal access to education, health care, and housing must sound familiar to an American ear as well.

See Asian Tigers Fourth Industrial Revolution, 18, 45, 68, 71, 116, 122, 125, 142–145, 161–162, 177, 186, 201, 208, 212, 213, 237, 239 The Fourth Industrial Revolution (Schwab), 116 Foxconn (Taiwan), 59 France Compagnie de Suez join stock company of, 103 First Industrial Revolution spreading to, 131 La France Insoumise populist party of, 81 vote for right-wing populist parties (2000, 2017–2019), 84fig Yellow Vests (Gilets Jaunes) protests of, 86–87, 195 Youth for Climate movement (2017), 86 La France Insoumise (France), 81 The Freelance Isn't Free Law (New York), 243 Freelancers Union (New York), 242–243 Freelancing work, 237–238, 240–243 Freund, Caroline, 138 Frey, Carl, 116, 135 Frick Coke Company, 132 Frick, Henry, 132 Fridays for Climate strikes (2018), 149, 250 Friedman, Milton, 14, 136, 175, 205, 209 Friedrichshafen (Germany), 4–5, 6–7, 8–9, 251 Fukuyama, Francis, 15, 112 “The Future of Employment” study (2013), 116 G G7 countries, social compact breaking down in, 110–111 Gama, Vasco da, 97 Garikipati, Supriya, 224 Gates, Bill, 132 Gazivoda, Tin, 195 GDP (gross domestic product) China's increased total debt–to–GDP ratio, 62 COVID crisis impact on public debt and, 19 description and function of, 9, 24 emerging markets (2002–2019), 64–65fig formula for calculating, 24 New Zealand's COVID-19 response and impact on, 222–223 New Zealand's focus on social issues instead of, 234–236 post-World War II low level of, 105 private sector percentage of China's, 172 Simon Kuznets' warning on progress measured by, 21–25, 34, 46, 53 Singapore (1965–2019), 123–125 stakeholder model going beyond profits and, 189–193 trade globalization measured by percentage of, 16 See also GNI (gross national income); GNP (gross national product) GDP growth declining rates since the 1960s, 25–28 differentiating between global, national, and regional, 27–28 singular focus of policymaking on, 25 as “war-time metric,” 25 Gender pay equity, 243 Gender representation advocacy of, 243–244 Ireland's experiment in, 194 as stakeholder model issue, 188–189 General Data Protection Regulation (European Union), 212 General-purpose technologies (GPTs), 143 Generation Z workers, 240 German reunification, 17, 78 Germany Berlin Wall (1961–1989) dividing, 75–77, 88, 89 Christian–Democrats (CDU) political party of, 78, 79 erosion of the political center in, 80–90 extreme views replacing Volksparteien, 80, 83 female-led government leadership during COVID-19 pandemic in, 224 First Industrial Revolution spreading to, 131 following the First World War, 4 growing populism and polarizing politics (2020) in, 79, 87–88 Hartmann machine works (Chemnitz, Kingdom of Saxony), 103fig integration of East and West, 17, 78 lowering debt burden through economic growth, 31 neo-Nazi elements protesting COVID-19 responses, 87 reconstruction of post-war economy and society, 3, 7–11, 251 social reforms (1880s) in, 133 Social–Democrats (SPD) political party of, 78, 80–81 stakeholder concept adopted in, 174 “Stunde Null” (or “Zero Hour”) [May 8, 1945] ending the war, 5 vote for right-wing populist parties (2000, 2017–2019), 84fig well-managed COVID crisis response in, 79 See also East Germany; West Germany Ghana, 27, 70 Gig workers, 187–188, 237–238, 240–243 Gig Workers Rising (California), 241 Gig worker strike (2019), 187 Gig Workers United (California), 241 The Gilded Age: A Tale of Today (Twain and Warner), 133 Gini coefficient of China/India, 37fig–38, 226 Global Competitiveness Index (World Economic Forum), 189, 190 Global debt population pyramid and repayment of, 30 problem of rising, 28–31 what is included in, 28 Global economic growth ASEAN nations, 63–66, 67fig “the Asian Century,” 70–71fig Chinese economy impacting, 63–66, 70–72 declining productivity growth impact on, 33–34 Elephant Curve of Global Inequality and Growth graph, 137–138fig foundations of the post-war, 4–7 India, 66, 67–69 low GDP growth impact on, 25–28 low-interest rates and low inflation impact on, 31–33 post-World War II expansion of the, 3, 7–11, 251 rising debt impact on, 28–31 the tumultuous 1970s and 1980s, 11–15 Global economic order Davos Manifesto (1973) on new direction for, 13–14, 88, 213 impact of income inequality on the, 36–41 impact of the COVID-19 pandemic on the, 108 requirements of a post-COVID world and, 251 SARS–CoV–2 vaccines development and possible “Great Reset” of, 248 understanding the foundations of post-war, 4–7 Global financial crisis (2007–2009), 18, 34, 112–113, 122 Global Footprint Network (GFN), 19, 48fig–49 Global Infrastructure Hub, 32 Globalists, The End of Empire and the Birth of Neoliberalism (Slobodian), 181 Globalization adverse effects of, 107, 110–114 current state of, 108–114 description and implications of, 16 early beginnings and spice routes history of, 99–108 economic decline beginning in 2007, 18–19 GDP measure of trade, 16 New York Times op–ed (Schwab) on, 85 as political ideology, 108 reasons for embracing, 114 success stories from Indonesia, 93–99 three conditions required for positive, 109–110 YouGov–Bertelsmann poll (2018) on, 97 Globalization 4.0, 106–108 Globalization conditions balanced political leadership, 109–110 when functioning as social compact, 109, 110–111 when technology is congruent with economic and societal advantages, 110 Globalization history Age of Discovery (15th to 18th century), 100–102 first wave (19th century–1914), 102–105 globalization 4.0, 106–108 lessons learned from, 108–114 second and third wave (20th century), 105–106 Silk Road and spice routes, 99–102 Global population.


pages: 460 words: 107,454

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet by Klaus Schwab

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 3D printing, additive manufacturing, agricultural Revolution, air traffic controllers' union, Anthropocene, Apple II, Asian financial crisis, Asperger Syndrome, basic income, Berlin Wall, Big Tech, biodiversity loss, bitcoin, Black Lives Matter, blockchain, blue-collar work, Branko Milanovic, Bretton Woods, British Empire, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon footprint, carbon tax, centre right, clean tech, clean water, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, company town, contact tracing, contact tracing app, Cornelius Vanderbilt, coronavirus, corporate governance, corporate social responsibility, COVID-19, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, cuban missile crisis, currency peg, cyber-physical system, decarbonisation, demographic dividend, Deng Xiaoping, Diane Coyle, digital divide, don't be evil, European colonialism, Fall of the Berlin Wall, family office, financial innovation, Francis Fukuyama: the end of history, future of work, gender pay gap, general purpose technology, George Floyd, gig economy, Gini coefficient, global supply chain, global value chain, global village, Google bus, green new deal, Greta Thunberg, high net worth, hiring and firing, housing crisis, income inequality, income per capita, independent contractor, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Khan Academy, Kickstarter, labor-force participation, lockdown, low interest rates, low skilled workers, Lyft, manufacturing employment, Marc Benioff, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, means of production, megacity, microplastics / micro fibres, Mikhail Gorbachev, mini-job, mittelstand, move fast and break things, neoliberal agenda, Network effects, new economy, open economy, Peace of Westphalia, Peter Thiel, precariat, Productivity paradox, profit maximization, purchasing power parity, race to the bottom, reserve currency, reshoring, ride hailing / ride sharing, Ronald Reagan, Salesforce, San Francisco homelessness, School Strike for Climate, self-driving car, seminal paper, shareholder value, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, social distancing, Social Responsibility of Business Is to Increase Its Profits, special economic zone, Steve Jobs, Steve Wozniak, synthetic biology, TaskRabbit, The Chicago School, The Future of Employment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the scientific method, TikTok, Tim Cook: Apple, trade route, transfer pricing, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, We are the 99%, women in the workforce, working poor, working-age population, Yom Kippur War, young professional, zero-sum game

In many people's experience, it matters much more how they fare compared to their fellow citizens than to the rest of the world population. In all but a few countries, national inequality has been rising and often rather fast. The traditional measure of inequality, the Gini coefficient, doesn't do justice to the severity of the problem. The Gini coefficient translates the degree of inequality into a number from 0 (everyone has the same income) to 1 (one person has the entire economy's income). While a higher score over time tells us that inequality has risen, it's difficult to understand what that means in practice. In the US, for example, the Gini coefficient rose from its low point of 0.43 in 1971 to a post-war high of 0.58 today.40 It is an increase, of course, but precisely how good or bad is either number?

Even among urbanites, some citizens had preferential access to real estate, whereas others did not. Over time, as cities developed and so-called Tier I and Tier II cities skyrocketed, those initial inequalities widened, leading to systemic inequality and a lack of opportunities for many. (Until, Bai noted, around 2010, when the Gini coefficient of China peaked, the labor share of income GDP bottomed out, and the skill premium for educated workers started declining. These were all indicators that income inequality was at its highest level ever, despite improvements in the skills of workers.) The story of unequal access to education, health care, and housing must sound familiar to an American ear as well.

See Asian Tigers Fourth Industrial Revolution, 18, 45, 68, 71, 116, 122, 125, 142–145, 161–162, 177, 186, 201, 208, 212, 213, 237, 239 The Fourth Industrial Revolution (Schwab), 116 Foxconn (Taiwan), 59 France Compagnie de Suez join stock company of, 103 First Industrial Revolution spreading to, 131 La France Insoumise populist party of, 81 vote for right-wing populist parties (2000, 2017–2019), 84fig Yellow Vests (Gilets Jaunes) protests of, 86–87, 195 Youth for Climate movement (2017), 86 La France Insoumise (France), 81 The Freelance Isn't Free Law (New York), 243 Freelancers Union (New York), 242–243 Freelancing work, 237–238, 240–243 Freund, Caroline, 138 Frey, Carl, 116, 135 Frick Coke Company, 132 Frick, Henry, 132 Fridays for Climate strikes (2018), 149, 250 Friedman, Milton, 14, 136, 175, 205, 209 Friedrichshafen (Germany), 4–5, 6–7, 8–9, 251 Fukuyama, Francis, 15, 112 “The Future of Employment” study (2013), 116 G G7 countries, social compact breaking down in, 110–111 Gama, Vasco da, 97 Garikipati, Supriya, 224 Gates, Bill, 132 Gazivoda, Tin, 195 GDP (gross domestic product) China's increased total debt–to–GDP ratio, 62 COVID crisis impact on public debt and, 19 description and function of, 9, 24 emerging markets (2002–2019), 64–65fig formula for calculating, 24 New Zealand's COVID-19 response and impact on, 222–223 New Zealand's focus on social issues instead of, 234–236 post-World War II low level of, 105 private sector percentage of China's, 172 Simon Kuznets' warning on progress measured by, 21–25, 34, 46, 53 Singapore (1965–2019), 123–125 stakeholder model going beyond profits and, 189–193 trade globalization measured by percentage of, 16 See also GNI (gross national income); GNP (gross national product) GDP growth declining rates since the 1960s, 25–28 differentiating between global, national, and regional, 27–28 singular focus of policymaking on, 25 as “war-time metric,” 25 Gender pay equity, 243 Gender representation advocacy of, 243–244 Ireland's experiment in, 194 as stakeholder model issue, 188–189 General Data Protection Regulation (European Union), 212 General-purpose technologies (GPTs), 143 Generation Z workers, 240 German reunification, 17, 78 Germany Berlin Wall (1961–1989) dividing, 75–77, 88, 89 Christian–Democrats (CDU) political party of, 78, 79 erosion of the political center in, 80–90 extreme views replacing Volksparteien, 80, 83 female-led government leadership during COVID-19 pandemic in, 224 First Industrial Revolution spreading to, 131 following the First World War, 4 growing populism and polarizing politics (2020) in, 79, 87–88 Hartmann machine works (Chemnitz, Kingdom of Saxony), 103fig integration of East and West, 17, 78 lowering debt burden through economic growth, 31 neo-Nazi elements protesting COVID-19 responses, 87 reconstruction of post-war economy and society, 3, 7–11, 251 social reforms (1880s) in, 133 Social–Democrats (SPD) political party of, 78, 80–81 stakeholder concept adopted in, 174 “Stunde Null” (or “Zero Hour”) [May 8, 1945] ending the war, 5 vote for right-wing populist parties (2000, 2017–2019), 84fig well-managed COVID crisis response in, 79 See also East Germany; West Germany Ghana, 27, 70 Gig workers, 187–188, 237–238, 240–243 Gig Workers Rising (California), 241 Gig worker strike (2019), 187 Gig Workers United (California), 241 The Gilded Age: A Tale of Today (Twain and Warner), 133 Gini coefficient of China/India, 37fig–38, 226 Global Competitiveness Index (World Economic Forum), 189, 190 Global debt population pyramid and repayment of, 30 problem of rising, 28–31 what is included in, 28 Global economic growth ASEAN nations, 63–66, 67fig “the Asian Century,” 70–71fig Chinese economy impacting, 63–66, 70–72 declining productivity growth impact on, 33–34 Elephant Curve of Global Inequality and Growth graph, 137–138fig foundations of the post-war, 4–7 India, 66, 67–69 low GDP growth impact on, 25–28 low-interest rates and low inflation impact on, 31–33 post-World War II expansion of the, 3, 7–11, 251 rising debt impact on, 28–31 the tumultuous 1970s and 1980s, 11–15 Global economic order Davos Manifesto (1973) on new direction for, 13–14, 88, 213 impact of income inequality on the, 36–41 impact of the COVID-19 pandemic on the, 108 requirements of a post-COVID world and, 251 SARS–CoV–2 vaccines development and possible “Great Reset” of, 248 understanding the foundations of post-war, 4–7 Global financial crisis (2007–2009), 18, 34, 112–113, 122 Global Footprint Network (GFN), 19, 48fig–49 Global Infrastructure Hub, 32 Globalists, The End of Empire and the Birth of Neoliberalism (Slobodian), 181 Globalization adverse effects of, 107, 110–114 current state of, 108–114 description and implications of, 16 early beginnings and spice routes history of, 99–108 economic decline beginning in 2007, 18–19 GDP measure of trade, 16 New York Times op–ed (Schwab) on, 85 as political ideology, 108 reasons for embracing, 114 success stories from Indonesia, 93–99 three conditions required for positive, 109–110 YouGov–Bertelsmann poll (2018) on, 97 Globalization 4.0, 106–108 Globalization conditions balanced political leadership, 109–110 when functioning as social compact, 109, 110–111 when technology is congruent with economic and societal advantages, 110 Globalization history Age of Discovery (15th to 18th century), 100–102 first wave (19th century–1914), 102–105 globalization 4.0, 106–108 lessons learned from, 108–114 second and third wave (20th century), 105–106 Silk Road and spice routes, 99–102 Global population.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

3D printing, AlphaGo, Alvin Toffler, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Charles Babbage, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, Cornelius Vanderbilt, creative destruction, data science, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, driverless car, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, Fairchild Semiconductor, falling living standards, first square of the chessboard / second half of the chessboard, Ford Model T, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, general purpose technology, Gini coefficient, Great Leap Forward, Hans Moravec, high-speed rail, Hyperloop, income inequality, income per capita, independent contractor, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, Jeremy Corbyn, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, Kiva Systems, knowledge economy, knowledge worker, labor-force participation, labour mobility, Lewis Mumford, Loebner Prize, low skilled workers, machine translation, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Nick Bostrom, Norbert Wiener, nowcasting, oil shock, On the Economy of Machinery and Manufactures, OpenAI, opioid epidemic / opioid crisis, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, Robert Solow, robot derives from the Czech word robota Czech, meaning slave, safety bicycle, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Simon Kuznets, social intelligence, sparse data, speech recognition, spinning jenny, Stephen Hawking, tacit knowledge, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, warehouse automation, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

Yet to suggest that growing income inequality was entirely due to capital would be misleading. Economists tend to rely on the Gini coefficient to measure levels of inequality across time and space. One of its virtues is that it is straightforward to interpret. If every citizen of a country had the same income, the Gini coefficient would be 0. If one person captured all the income, the income Gini coefficient would be 1. As Lindert and Williamson show, the Gini coefficient for property income was naturally higher, as property ownership is typically more concentrated, but labor income inequality rose even more rapidly: between 1774 and 1870 the property Gini grew from 0.703 to 0.808, while the earnings Gini increased from 0.370 in 1774 to 0.454 in 1860.62 A large part of this can be explained by the displacement of the blue-collar artisan, which led to the hollowing out of middle-income jobs and, thus, greater earnings inequality.63 Moreover, as Kuznets conjectured, inequality rose as a result of American workers shifting from low-income agricultural jobs to high-income manufacturing jobs in the city.

Because American urbanization accelerated between 1870 and World War I, while the Second Industrial Revolution spun out new industries and raised skill demand, it stands to reason that total inequality should have accelerated as well, all else being equal. It is therefore somewhat surprising that inequality (as measured by the overall Gini coefficient) plateaued around 0.5 and even fell slightly between 1870 and 1929, even though the top 1 percent share rose dramatically from 9.8 percent to 17.8 percent.64 Was the fall in inequality the result of industrialization’s reaching its intermediate stage? While the trajectory of American inequality between the Civil War and World War I does not disprove Kuznets’s hypothesis, it does suggest that there were also other factors at work. The upsurge in private wealth relative to total private incomes between 1870 and 1913 is consistent with the idea that capital played a larger role in shaping American income distribution, leading top incomes to continue to grow.

The changing face of technology is also reflected in long-run trends in the Gini coefficient (figure 14). As Branko Milanovic has noted, “This revolution [the computer revolution], like the Industrial Revolution of the early nineteenth century, widened income disparities.”41 These periods were not only times when the profit share of income reached historical heights and the wages of ordinary citizens were stagnant. As noted above, both were episodes when technology replaced middle-income workers. In the computer era, the increase in inequality happened in large part because new technologies strongly rewarded more highly skilled symbolic analysts while driving up the capital share of national income.


pages: 976 words: 235,576

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, algorithmic management, Amazon Robotics, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, carried interest, collateralized debt obligation, collective bargaining, compensation consultant, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial engineering, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, fulfillment center, full employment, future of work, gender pay gap, gentrification, George Akerlof, Gini coefficient, glass ceiling, Glass-Steagall Act, Greenspan put, helicopter parent, Herbert Marcuse, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kiva Systems, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, Larry Ellison, longitudinal study, low interest rates, low skilled workers, machine readable, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, meritocracy, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, opioid epidemic / opioid crisis, Paul Samuelson, payday loans, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Rutger Bregman, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Stephen Fry, Steve Jobs, stock buybacks, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Theory of the Leisure Class by Thorstein Veblen, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, warehouse robotics, Winter of Discontent, women in the workforce, work culture , working poor, Yochai Benkler, young professional, zero-sum game

The line’s slight downward slope overall reveals that the median earner captures a little less income relative to the poor today than at midcentury—that the poor and the middle class are converging. FIGURE 4 U.S. Top-End, Bottom-End, and Full Gini Coefficients over Time (Five-Year Moving Averages) FIGURE 4 shows the Gini coefficients of the United States, calculated in three ways. The upward-sloping dark gray line displays the Gini for the entire U.S. economy. Its steep rise reflects the commonplace sense that inequality has shown a stark increase, from levels that resembled Norway in 1964 to levels that resemble India today. The light gray line is less familiar. It displays the Gini index for the bottom 70 percent of the U.S. income distribution, constructed not by redistributing any income but simply by discarding all income from the top 30 percent of households.

The top one-tenth of 1 percent earned, on average, 3.5 percent, less than a third of the current share. See Piketty and Saez, “Income Inequality in the United States,” Table A3, https://eml.berkeley.edu//~saez/index.html. between two-thirds and three-quarters: See Chapter 4. toward superordinate labor: See Chapter 4. Canada, Japan, and Norway: See Table 5 of Carola Grün and Stephan Klasen, “Growth, Inequality, and Well-Being: Intertemporal and Global Comparisons,” Discussion Paper no. 95, Ibero-America Institute for Economic Research, Ibero-Amerika Inst. Für Wirtschaftsforschung, Göttingen (2003), 21–23 (listing Gini coefficients for over 150 countries from 1960 to 1998). India, Morocco, Indonesia, Iran, Ukraine, and Vietnam: Recent Gini Index figures for these countries are: the United States, 41.5 (2016); India, 35.1 (2011); Morocco, 39.2 (2006); Indonesia, 39.5 (2013); Iran, 38.8 (2014); Ukraine, 25.0 (2016); Vietnam, 34.8 (2014).

See World Bank, Development Research Group, “GINI index (World Bank estimate),” World Bank Group, 2018, accessed June 13, 2018, http://databank.worldbank.org/data/reports.aspx?source=2&series=SI.POV.GINI&country=, and http://data.worldbank.org/indicator/SI.POV.GINI. Bangkok, Thailand: The U.S. Census Bureau’s American Community Survey estimates that Fairfield County had a Gini coefficient of 53.52 in 2011. Bangkok’s Gini coefficient that year, as reported by the UN, was 40.0. See U.S. Census Bureau, “2007–2011 American Community Survey,” accessed June 13, 2018, https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml, and United Nations Human Settlements Programme, Urbanization and Development: Emerging Futures, World Cities Report 2016 (2016), accessed June 13, 2018, 206–7, Table C.1, http://wcr.unhabitat.org/wp-content/uploads/2017/02/WCR-2016-Full-Report.pdf.


pages: 261 words: 81,802

The Trouble With Billionaires by Linda McQuaig

"World Economic Forum" Davos, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, British Empire, Build a better mousetrap, carried interest, Charles Babbage, collateralized debt obligation, computer age, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Douglas Engelbart, Douglas Engelbart, employer provided health coverage, financial deregulation, fixed income, full employment, Gary Kildall, George Akerlof, Gini coefficient, Glass-Steagall Act, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invention of the wheel, invisible hand, Isaac Newton, Jacquard loom, John Bogle, Joseph-Marie Jacquard, laissez-faire capitalism, land tenure, lateral thinking, low interest rates, Mark Zuckerberg, market bubble, Martin Wolf, mega-rich, minimum wage unemployment, Mont Pelerin Society, Naomi Klein, neoliberal agenda, Northern Rock, offshore financial centre, Paul Samuelson, plutocrats, Ponzi scheme, pre–internet, price mechanism, proprietary trading, purchasing power parity, RAND corporation, rent-seeking, rising living standards, road to serfdom, Robert Solow, Ronald Reagan, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, trickle-down economics, Vanguard fund, very high income, wealth creators, women in the workforce

Fig. 10 The higher the tax level, the lower the share of income going to the top 1 per cent16 In addition to making market incomes more equal, countries with high tax levels are able to provide more extensive government transfer payments (such as child allowances, pensions and employment benefits) that particularly benefit low- and middle-income families, thereby further reducing inequality in final, disposable incomes. The redistributive effect of the ‘tax-and-transfer’ system can be illustrated with a chart showing inequality, before and after taxes and transfers. To show this, we have used the Gini coefficient as a measure of inequality. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (everyone has the same amount of income) and 1 corresponds with perfect inequality (where one person has all the income). Hence, the higher the number (the closer to 1), the greater the degree of inequality. Before taxes, Italy has the greatest degree of inequality, with a Gini of 0.47.

– distinguish themselves once again with impressive tax-and-transfer systems that substantially reduce inequality. For instance, in Denmark, the tax-and-transfer system reduces the Gini coefficient by more than one-third from 0.37 to only 0.24, leaving Denmark with the most equal distribution of disposable income. Figure 11 ranks countries according to the inequality in the distribution of disposable income, but it also shows the important role of the tax-and-transfer system in achieving the final result of a more equal society. The grey bars represent a country’s Gini after taxes and transfers, with the white bars representing the reduction of inequality in a country’s Gini before taxes and transfers. ‌

Highest top 1 per cent income data since 2005 are used, except late 1990s data for Germany, the Netherlands and Switzerland due to data availability. Average tax ratio of 1975-2008 based on OECD data. ‌17 Gini coefficients for people aged 18-65 based on OECD data from the late 2000s. ‌18 As an illustration of the importance of taxes and transfers in society, representative average tax ratios and changes in inequality are correlated. The average tax ratio of 1975-2008 explains about 69 percent of the variation of differences between Gini before taxes and transfers and Gini after taxes and transfers calculated based on OECD data from the late 2000s.


pages: 289 words: 86,165

Ten Lessons for a Post-Pandemic World by Fareed Zakaria

"there is no alternative" (TINA), 15-minute city, AlphaGo, An Inconvenient Truth, anti-fragile, Asian financial crisis, basic income, Bernie Sanders, Boris Johnson, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon tax, central bank independence, clean water, cloud computing, colonial rule, contact tracing, coronavirus, COVID-19, Credit Default Swap, David Graeber, Day of the Dead, deep learning, DeepMind, deglobalization, Demis Hassabis, Deng Xiaoping, digital divide, Dominic Cummings, Donald Trump, Edward Glaeser, Edward Jenner, Elon Musk, Erik Brynjolfsson, failed state, financial engineering, Francis Fukuyama: the end of history, future of work, gentrification, George Floyd, gig economy, Gini coefficient, global pandemic, global reserve currency, global supply chain, green new deal, hiring and firing, housing crisis, imperial preference, income inequality, Indoor air pollution, invention of the wheel, Jane Jacobs, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, junk bonds, lockdown, Long Term Capital Management, low interest rates, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, means of production, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Monroe Doctrine, Nate Silver, Nick Bostrom, oil shock, open borders, out of africa, Parag Khanna, Paris climate accords, Peter Thiel, plutocrats, popular capitalism, Productivity paradox, purchasing power parity, remote working, reserve currency, reshoring, restrictive zoning, ride hailing / ride sharing, Ronald Reagan, secular stagnation, Silicon Valley, social distancing, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, Steven Pinker, Suez crisis 1956, TED Talk, the built environment, The Death and Life of Great American Cities, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tim Cook: Apple, trade route, UNCLOS, universal basic income, urban planning, Washington Consensus, white flight, Works Progress Administration, zoonotic diseases

In Latin America, legendary for its hierarchical societies, over this period, twelve of the sixteen countries studied showed more widely shared prosperity. How to measure inequality is a matter of spirited debate. I have opted for the standard measure, the so-called Gini coefficient, which has been used by the World Bank, the IMF, and most scholars for decades. It is a measure of relative inequality. So if I was earning $100 and you were earning $1,000, and then our incomes both went up by 10%, our relative inequality would be unchanged. But since 10% of $1,000 is a lot more than 10% of $100, in absolute terms, you would have gained more. That is of course also true for countries.

Viewed that way, the gap has widened dramatically, because these groups have done much better than the rest of society. In other words, there are legitimate ways of looking at inequality that show that it has increased, but using the traditional, historical measure, we can see that after a long unbroken climb upward, global inequality has recently declined. The richest and most successful countries in the world are an exception to this trend; inequality has risen sharply in many of them. That is especially true of the United States, where the Gini coefficient has climbed to its highest level since 1928, when it had soared from years of unchecked capitalism that led to the Great Depression and then the reforms of the New Deal.

TWO AMERICAS Many scholars have shown that high levels of inequality make for bad economics and politics. It means lower economic growth—fewer people who can spend—and lower levels of trust in each other and in political institutions. As we have seen, historical estimates put American inequality at the highest since the Great Depression—and government studies back this up for more recent decades. The US Census Bureau has collected data on inequality since 1967. America’s Gini coefficient has risen by 22% since then. If we focus on the top 10%, or even worse, the top 1%, the gap has grown even more sharply. These groups have seen their share of national income rise almost everywhere in the world—but among developed nations, nowhere has it spiked more than in America.


pages: 374 words: 114,660

The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, carbon tax, clean water, colonial exploitation, Columbian Exchange, compensation consultant, creative destruction, declining real wages, Downton Abbey, Easter island, Edward Jenner, end world poverty, financial engineering, financial innovation, Ford Model T, germ theory of disease, Gini coefficient, Glass-Steagall Act, Great Leap Forward, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, off-the-grid, Paul Volcker talking about ATMs, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, Tragedy of the Commons, very high income, War on Poverty, zoonotic diseases

The Distribution of Incomes in the United States The evolution of income can be looked at from three different perspectives: growth, poverty, and inequality. Growth is about the average and how it changes, poverty about the bottom, and inequality about how widely incomes are spread across families or people. The spread is often measured by the Gini coefficient, named after Corrado Gini, an Italian economist who worked in the first half of the twentieth century. Gini’s coefficient, or simply the Gini, is a number that lies between 0 (perfect equality—everyone has the same) and 1 (perfect inequality, with one person having everything). It measures how far people are apart on average.

Even so, taxes have not played a very large part in shaping the changes in inequality since the 1970s, most of which have been driven by pretax income. In the 1980s tax policy widened disparities somewhat, by means of tax reductions that favored the better-off, while in the 1990s the opposite was true, with tax increases at the top and expansions in the Earned Income Tax Credit, which provides benefits at the bottom. Since 2001, tax cuts have once again favored high-income taxpayers. The Congressional Budget Office estimates that, between 1979 and 2007, income inequality (measured by the Gini coefficient, though on a slightly different basis) increased by about a quarter for pretax income and by about a third for after-tax income (including the value of Medicare).

See also men; women gender roles, 133 Germany: cholera in, 96; foreign aid of, 275; POW camps of, 2–3 germ theory of disease: development of, 10, 96–97; effects of application of, 126, 239, 319; inequalities resulting from, 98, 140; practices based on, 93, 94, 99–100, 133, 239; spread of, 101, 127, 133, 150–51 Ghana: commodity exports of, 286; foreign aid received by, 300–301, 315; incomes in, 284 Gilens, Martin, 212 Gini coefficient, 187–88. See also income inequalities givewell.org, 271 givingwhatwecan.org, 269, 271 Glass-Steagall Act, 211, 213 Global Alliance for Vaccines and Immunisation (GAVI Alliance), 104, 321 Global Fund to Fight AIDS, Tuberculosis and Malaria, 276, 307–8, 309 globalization: economic growth and, 231–32; health effects of, 149–52; impact on wages, 195, 257; impacts on labor, 194–96; inequality as consequence of, 5, 41–42, 195, 257–59, 260; inequality reductions from, 257; in past, 150; politics and, 10–11; of production, 10, 195, 246 global poverty: amounts needed to eliminate, 268–70, 271–73; economic growth and, 233–35, 312; inequalities, 4–5, 41–46, 257–59, 261–63; poverty lines, 220, 223–24, 249, 256; reduction of, 44–46, 45f, 167, 247, 249–51.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

accounting loophole / creative accounting, affirmative action, Alan Greenspan, An Inconvenient Truth, bank run, banking crisis, behavioural economics, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, carbon tax, Cass Sunstein, central bank independence, classic study, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, general purpose technology, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Paradox of Choice, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Robert Solow, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, social contagion, South Sea Bubble, Steven Pinker, tacit knowledge, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, the strength of weak ties, Tragedy of the Commons, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, vertical integration, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

Other European countries are in between these two in the extent of the inequality in incomes and in the recent trend. There are several ways to measure inequality numerically. The most thorough is using a measure such as the Gini coefficient, an index running from zero (fully equal) to one (all the income goes to the top people), which is calculated in a way that takes account of the middle sections of the income distribution. It is therefore a good measure of the kinds of change in income taking place in India and China where, as discussed above, there has been a big increase in incomes in the middle. The Gini coefficient has two drawbacks: the calculations have not been done for all countries and all time periods of interest; and it is not intuitively easy to understand.

See distribution Inconvenient Truth, An (Gore), 60 Index of Sustainable Economic Welfare (ISEW), 36 India, 212; emerging middle class of, 125; fairness and, 122–26, 133; inequality and, 125–26; nature and, 63, 65, 81; posterity and, 108; purchasing power parity (PPP) and, 306n19; Satyam and, 146; trust and, 146, 149, 163, 172; wage penalties and, 133; World Bank influence and, 163 Industrial Revolution, 27, 149, 290, 297 inequality, 4–5, 11, 17, 84, 306n19, 308n34; Bush and, 127–28; consequences for growth, 135–36; decline in trust and, 139–44; dramatic increase in, 126–27, 131; extraction ratio for, 124; fairness and, 114–16, 122–43; fractal character of, 134; Gini coefficient and, 126; globalization and, 122–24, 127, 131, 155; happiness and, 25, 36, 42, 44, 53; high salaries and, 130, 143–44, 193, 223, 277–78, 286, 296; historical perspective on, 126–27; institutions and, 116, 127–31, 141; measurement of, 126; policy recommendations for, 267, 276, 295–97; poverty and, 43, 55–56, 100, 125, 128, 138, 142, 168–69, 261, 267; reduction of, 276–77; Republican administrations and, 127–28; social corrosiveness of, 139–44; structural causes of, 131–35; superstar effect and, 134; taxes and, 115–16, 123, 127–28, 131, 135–36; trends in, 125–30; unequal countries and, 124–30; United Kingdom and, 125–30; United States and, 122, 125–31, 135, 276; values and, 223–24, 234–36; well-being and, 137–43; within/between countries, 123–24 inflation, 37, 43, 61, 89, 102–5, 110–11, 189, 281, 305n17 information and communication technology (ICT), 6–7, 15, 17; data explosion and, 205, 291; decreased cost of, 254; fairness and, 133; happiness and, 24–25; institutional impacts of, 252–53; structural effects of, 194–98; trust and, 156–60, 165–67, 174 innovation, 6–7, 12; consumer electronics and, 36–37; fairness and, 121, 134; growth and, 271–73, 281, 290–92; happiness and, 37; institutions and, 244, 258, 263, 290–91; measurement and, 183, 196, 201–8, 273–74; musicians and, 195; nature and, 69–70, 81; policy recommendations for, 290–91; posterity and, 102; statistics and, 201–7; trust and, 157; values and, 210, 216, 220, 236 In Praise of Slowness, 27 institutions, 18; anomie and, 48, 51; balance and, 12–17; blindness of to financial crises, 87–88; broad framework for, 249–52; capitalism and, 240; consumption and, 254, 263; decentralization and, 246; democracy and, 242–43, 251–52, 262; downsizing and, 175, 246, 255; economies of scale and, 253–58; efficiency and, 245–46, 254–55, 261; extinction crisis and, 288; face-to-face contact and, 7, 147, 165–68; failures of, 240–44, 257, 262–63, 267, 289–90; fall of communism and, 226, 239–40, 252; freedom and, 244, 262; globalization and, 244; governance and, 242, 247, 255–58, 261–62; government and, 240–63; growth and, 258, 261, 263; health care and, 247, 252–53; high salaries and, 130, 143–44, 193, 223, 277–78, 286, 296; impact of new technologies and, 252–54; importance of, 261–63; inequality and, 116, 127–31, 141; innovation and, 244, 258, 263, 290–91; legitimacy and, 8, 16, 50, 66, 68–69, 162–63, 213, 226, 269, 274, 292, 296–97; managerialism and, 259; morals and, 254; nature and, 66–69, 82–84; New Public Management and, 245–47; outsourcing and, 159, 161, 175, 219, 287; policy recommendations for, 269, 284–91; politics and, 239–48, 251, 256–63; pollution and, 15, 35, 228; productivity and, 244–47, 257, 263; public choice theory and, 242–43; public deliberation and, 258–60; reform and, 245–48, 256, 285, 288–91, 296–97; responsibility to posterity and, 296; shareholders and, 145, 248, 257–58, 277; statistics and, 245; technology and, 244–46, 251–54, 257–63 (see also technology); values and, 240–42, 246–47, 258–60 intangible assets: measurement and, 199–201, 204–6; satellite accounts and, 38, 81, 204–6, 271; social capital and, 149–52, 157, 161, 199–201 InterAcademy Council, 66–67 interbank market, 1–2 Intergovernmental Panel on Climate Change (IPCC), 59, 66–69, 82, 297 International Monetary Fund (IMF), 90, 101–3, 111, 162–64, 176, 211, 287, 297 International Price Comparison, 124 International Telecommunications Union, 219 Internet, 155, 195, 245, 260, 273, 287–89, 291, 296 invisible hand, 209 iPods, 195 Ipsos Mori poll, 66, 247 Ireland, 172 Iron Curtain, 183, 239, 252 Italy, 95, 97–98, 146, 152 Jackson, Michael, 198 Japan, 42; debt of, 102; equal income distribution in, 125; fairness and, 125–26, 140–41; inequality and, 126; lost decade of, 102; posterity and, 91–92, 95, 97–98, 102; savings rates in, 280; trust and, 169, 175; voter turnout and, 175 Jazz Age, 127 Jefferson, Thomas, 184, 253–54 Johns, Helen, 41 Johnson, Simon, 256–57 Johnson, Steven, 187 Justice (Sandel), 237 Kahneman, Daniel, 215 Kamarck, Elaine, 247–48 Kay, John, 139, 245–46, 257 Kennedy School of Government, 247 Keynes, John Maynard, 101, 183–84, 190 Kleinwort, Dresdner, 87 knowledge economy, 191 Kobayashi, Keiichiro, 102 Korea, 126 Krugman, Paul, 100–103, 127–29, 232, 282 Kyoto Protocol, 62–64 labor: absorbing work and, 10, 48–49; call centers and, 131, 133, 161; creativity and, 166–68, 205–7; downsizing and, 175, 246, 255; global cities and, 165–70; globalization and, 131, 149 (see also globalization); human capital and, 81, 203–4, 282; measurement and, 189–99; migration and, 108–10, 172; outsourcing and, 159, 161, 175, 219, 287; pensions and, 4, 25, 85–86, 90, 92–100, 103–7, 111–13, 174–76, 191, 203, 243, 269–71, 275, 280, 286, 289–90, 293; Protestant work ethic and, 13–14, 236; retirement age and, 94, 97–99, 106–7, 112; skilled, 132–33, 159, 166–67, 276; specialization and, 160–61; technology and, 131–33; unemployment and, 3, 10, 43, 51, 56, 89, 107, 169, 207, 212–13, 243; unions and, 15, 51, 224, 249; unskilled, 132–33, 158, 172, 193; well-being and, 137–39; Whitehall Studies and, 139 lack of control, 47, 138–39 Lawson, Neal, 26 Layard, Richard, 31, 39–40, 43 Lehman Brothers, 1, 85, 87–88, 145, 211, 275–76 Leipzig marches, 239 Leviathan (Hobbes), 114 light bulbs, 59–61 Linux, 205 Lipsky, John, 102, 111 List, John, 117 literacy, 36 Live Nation, 197 living standards, 78–79, 106, 113, 136, 151, 162, 190, 194, 267 lobbyists, 15, 71, 247, 257, 276, 285, 289, 296 Lolapaloozza, 197 Louis Vuitton, 150 Luxury Fever (Frank), 40 Mackenzie, Donald, 221 Madonna, 194 Malthusianism, 95 Mama Group, 197 managerial competence, 2, 16, 150, 209, 259 Manzi, Jim, 231–32 Mao Zedong, 10 markets: asymmetric information and, 17, 186, 214, 219–20, 229, 248, 254, 262–63; black, 225; boom–bust cycles and, 4, 22, 28, 93, 102, 106–9, 136–37, 145, 147, 213, 222–23, 233, 277, 280, 283; capitalism and, 182, 230–38 (see also capitalism); culture and, 230–38; declining population and, 86, 89–90, 95–99, 103, 113; democracy and, 230–38; deregulation and, 7, 212; evidence–based policy and, 233–34; exchange advantage and, 214; externalities and, 15, 70, 80, 211, 228–29, 249, 254; failures of, 226–30, 240–44, 257, 262–63, 267, 289–90; Fama hypothesis and, 221–22; flaws of, 215–16; fractal character of, 134; free market model and, 14, 121, 129, 182–83, 210–11, 218–24, 232, 240, 243, 251; fundamentalism for, 213; gift economy and, 205–7; interbank, 1–2; international trade and, 110, 148, 159, 163; invisible hand and, 209; mathematical models of, 214; merits of, 211–17; missing, 229; moral, 210, 213, 220–25, 230–33; music, 194–98; network effects and, 253, 258; options, 222; as organizing economy, 218; performativity and, 224–25; Protestant work ethic and, 13–14, 236; public choice theory and, 220, 242–45; public domain and, 196; rational calculation and, 214–15; satellite accounts and, 81; shorting of, 86; social, 217–20; stability issues and, 2–4, 25, 70, 101, 124, 135, 140–41, 174, 176, 218, 296; trilemma of, 230–38; values and, 209–10 (see also values); winner take all, 134 Marx, Karl, 14, 28, 131, 221 McDonalds, 27 McKitrick, Ross, 68 Mean Fiddler Group, 197 Measuring Australia’s Progress, 274 measurement: asymmetric information and, 17, 186, 214, 219–20, 229, 248, 254, 262–63; Australian model and, 271, 274; balance and, 12–17; bankers and, 193, 200; capitalism and, 182; challenges of, 188–93; consumption and, 181–82, 198; distribution and, 191–99; evidence–based policy and, 233–34; GDP, 10 (see also gross domestic product [GDP]); Gini coefficient and, 126; governance and, 183, 186; government and, 182–88, 191, 193, 196, 202–3, 206; growth and, 181–85, 188–90, 194, 201–5, 208; happiness and, 35–39; health issues and, 181, 188–93, 200, 207; hedonic techniques and, 274; importance of, 184–85, 187–89; of inequality, 126; innovation and, 183, 196, 201–8, 273–74; intangible assets and, 199–201, 204–6; labor and, 189–99; less publication of, 271–72; living standards and, 13, 65, 78–79, 106, 113, 136, 139, 151, 162, 190, 194, 267; Measuring Progress exercise and, 294; policy recommendations for, 270–74; politics and, 182–84, 191, 193, 203, 208; productivity and, 189–90, 194, 199–201, 206–7; resources for, 294; social capital and, 154; statistics and, 187–89, 198–208; technology and, 181–85, 188–91, 194–201, 204–6; time constraints and, 204–7; trust and, 152–57; uncertainty of accuracy and, 273; unmeasurable entities and, 187; values and, 209, 212–13, 224 Medicare, 93–94 Meek, James, 26 metrification, 184 Metropolitan Museum of Art symposium, 100–101 Mexico, 226 Microsoft, 253, 258 migration, 108–10, 172 Milanovic, Branko, 123–24 Mill, John Stuart, 31–32 Minsky, Hyman, 226 monopolies, 196, 245, 252, 254 Montreal Protocol, 59 Moore’s Law, 156 morals: bankers and, 90, 277–78; criticism of poor and, 142; fairness and, 116–20, 127, 131, 142, 144; greed and, 221 (see also greed); growth and, 275–76, 279, 293, 295, 297; happiness and, 22, 26, 30, 34, 43, 48–49; institutions and, 254; nature and, 55, 70–72, 76, 78; performativity and, 224–25; posterity and, 90; trust and, 149, 174; values and, 185, 210, 213, 220–25, 230–33 MP3 players, 195 music, 11, 194–98, 204, 208, 229, 254 nature: Brundtlandt Report and, 77; carbon prices and, 70–71; climate change and, 57–84 (see also climate change); consumption and, 58–61, 71–76, 79, 82; Copenhagen summit and, 62, 64–65, 68, 162, 292; democracy and, 61, 66, 68; efficiency and, 61–62, 69, 82; environmentalists and, 29, 55–59, 69–70, 99; freedom and, 79; future and, 75–83; global warming and, 57, 64, 66, 68; government and, 58–62, 65–71, 82–84; greenhouse gases and, 23, 29, 35, 59, 61–63, 68, 70–71, 83; green lifestyle and, 55, 61, 76, 289, 293; gross domestic product (GDP) and, 56–60, 75–76, 80–82; growth and, 56–59, 62–66, 69–72, 76, 79–82; happiness and, 56–59, 75–76, 80–84; health issues and, 81; hybrid cars and, 61; innovation and, 69–70, 81; institutions and, 66–69, 82–84; InterAcademy Council and, 66–67; Intergovernmental Panel on Climate Change (IPCC) and, 59, 66–69, 82, 297; Kyoto Protocol and, 62–64; light bulbs and, 59–61; Montreal Protocol and, 59; morals and, 55, 70–72, 76, 78; natural capital and, 79–81, 151, 271, 273; philosophy and, 69–70; plastic and, 61; politics and, 57–71, 75, 77, 82–84; population issues and, 99; productivity and, 78, 82; satellite accounts and, 81; self-interest and, 65; squandered natural wealth and, 181–82; statistics and, 66, 81–82; stewardship and, 78, 80; technology and, 69–72, 76–77, 80, 84; TEEB project and, 78–79 network effects, 253, 258 New Deal, 129 New Economics Foundation, 36 New Public Management theory, 245–47 Newton, Isaac, 214–15 Niger, 122 Nobel Prize, 18, 60, 102, 215, 220, 236, 250, 261 noise, 47 No Logo (Wolf), 34 Nordhaus, William, 37, 70, 73, 156 North, Douglass, 261 Northern Rock, 1, 146 Obama, Barack, 62–63, 87, 173, 260, 285, 288 Oberholzer-Gee, Felix, 197 obesity, 137–38, 279 Office for National Statistics, 274 Olson, Mancur, 242 opinion formers, 61 option pricing theory, 222 Orchestra of the Age of Enlightenment, 194 Organization for Economic Cooperation and Development (OECD), 4, 11, 201, 305n11; happiness and, 38, 52; inequality in, 125–26; nature and, 60, 68; policy recommendations for, 273–74, 281, 283, 287, 291, 293; posterity and, 87, 93–94, 97–99, 112; trust and, 160, 171; values and, 212, 243–44, 246 organized crime, 277 Ormerod, Paul, 41 Orwell, George, 56 Ostrom, Elinor, 17, 220, 250–51, 261–63 Pakistan, 81, 226 Paradox of Choice, The (Schwartz), 10–11, 40 Parmalat, 146 partisanship, 2, 16, 101, 128, 269, 285 Peake, Mervyn, 9 pensions, 4, 25, 243; burden of, 92–95; Chinese savings and, 94; measurement and, 191, 203; policy recommendations for, 269–71, 275, 280, 286, 289–90, 293; posterity and, 85–86, 90–100, 103–7, 111–13; retirement age and, 92, 97–99, 106–7, 112; trust and, 174–76 performativity, 224–25 Persson, Torsten, 136 Pew surveys, 140 philanthropy, 33 philosophy, 16; fairness and, 114–15, 123; freedom and, 237; happiness and, 21, 27, 31–32, 49–50; nature and, 69–70; utilitarian, 31–32, 78, 237; values and, 237–39 Pickett, Kate, 137–40 Piereson, James, 183 Piketty, Thomas, 127, 129 Pimco, 287 Pinch (Willetts), 98–99 Pinker, Steven, 118, 305n4 Poland, 239 police service, 5, 35, 163, 193, 200, 247 policy: Commission on the Measurement of Economic Performance and Social Progress and, 37–38; deregulation and, 7, 212; errors in standard, 8; evidence–based, 233–34; first ten steps for, 294–98; future and, 75–83, 291–98; Intergovernmental Panel on Climate Change (IPCC) and, 59, 66–69, 82, 297; legitimacy and, 8, 16, 50, 66, 68–69, 162–63, 213, 226, 269, 274, 292, 296–97; measurement and, 187–89; OECD countries and, 4, 11, 38, 52, 60, 68, 87, 93–94, 97–99, 112, 125–26, 160, 171, 201, 212, 243–44, 246, 273–74, 281, 283, 287, 291, 293; population growth and, 95–100; practical recommendations for, 269–91; reform and, 8, 82–83, 85 (see also reform); stability issues and, 2–4, 25, 70, 101, 124, 135, 140–41, 174, 176, 218, 296; stimulus packages and, 91, 100–103, 111; sustainability and, 57 (see also sustainability); tradition and, 9; transparency and, 83, 164, 288, 296; trilemma of, 13–14, 230–36, 275; World Forum on Statistics, Knowledge, and Policy and, 38 political correctness, 173, 231 political economy, 27–28 pollution, 15, 35, 228 Population Bomb, The (Ehrlich), 70 population issues: aging, 4, 95–100, 106, 109, 206, 267, 280, 287, 296; baby boomers and, 4, 106, 109; declining population and, 86, 89–90, 95–99, 103, 113; demographic implosion and, 95–100; environmentalists and, 99; global cities and, 165–70; Malthusianism and, 95; migration and, 108–10; one-child policy and, 95–96; posterity and, 89–90, 94–95, 105–6, 109, 112–13; retirement age and, 94, 97–99, 106–7, 112 Porter, Roy, 184 Portugal, 126, 287 posterity, 298; aging population and, 89–90, 94–95, 105–6, 109, 112–13; bankers and, 85–91, 94, 99–102; consumption and, 86, 104–6, 112–13; current generation’s debt to, 90–92, 112–13; declining population and, 86, 89–90, 95–99, 103, 113; default and, 110–12; democracy and, 106; demographic implosion and, 95–100; freedom of investors and, 108; globalization and, 108; government and, 84–95, 98–113; gross domestic product (GDP) and, 91–94, 98–99, 103, 108, 111; growth and, 90, 95, 97, 99, 102, 105–8, 111; health issues and, 89, 93–94, 97–99, 103, 106, 111–13; higher retirement age and, 94–98, 106–7, 112; innovation and, 102; institutional responsibility and, 296; less leisure and, 106–7; Medicare and, 93–94; migration and, 108–9; morals and, 90; pensions and, 85–86, 90, 92–100, 103–7, 111–13; politics and, 86–94, 98, 101–8, 111–13; poverty and, 100; productivity and, 88, 97–99, 102, 105–8, 112; public debt and, 85–86; reform and, 85–86, 98, 111–12; savings and, 86–87, 94, 98, 100–101, 105–8, 112; Social Security and, 93–94; social welfare and, 85, 100, 112; sustainability and, 79 (see also sustainability); taxpayer burden and, 85–91, 94, 99, 103–5; technology and, 107; welfare burden and, 92–95 poverty, 261, 267; desire to spend and, 55–56; fairness and, 125, 128, 138, 142; happiness and, 43; posterity and, 100; trust and, 168–69 printing press, 7 productivity, 16; balance and, 268, 271, 273–76, 281, 287; bureaucratic obstacles to, 285–86; Commission on the Measurement of Economic Performance and Social Progress and, 37–38; fairness and, 131, 135; globalization and, 131 (see also globalization); governance and, 173–77; happiness and, 27, 38, 42, 51; improvements in, 107–8; institutions and, 244–47, 257, 263; measurement and, 189–90, 194, 199–201, 206–7; nature and, 78, 82; posterity and, 88, 97–99, 102, 105–8, 112; public services and, 257; Soviet method and, 246; technology and, 107–8, 157–59, 268; trilemma of, 13–14, 230–36, 275; trust and, 156–59, 162, 166–67, 170, 174 property rights, 80, 174, 195–96, 261 Protestant work ethic, 13–14, 236 psychology: altruism and, 118–22; anomie and, 48, 51; anxiety and, 1, 25, 47–48, 136–38, 149, 174; behavioral economics and, 116–17, 121, 282; choice and, 10–11; coherence and, 49; commuting and, 47; conflict in relationships and, 47; Easterlin Paradox and, 39–44; face-to-face contact and, 7, 147, 165–68; freedom and, 237 (see also freedom); game theory and, 116–18, 121–22; gift economy and, 205–7; greed and, 26, 34, 54, 88, 129, 150, 221–23, 248, 277–79; happiness and, 9–12, 44–50 (see also happiness); lack of control and, 47; noise and, 47; paradox of prosperity and, 174; positive, 9–10, 49–50, 303n51; public choice theory and, 220, 242–45; rational choice theory and, 214–15; shame and, 47; Slow Movement and, 27–28, 205; thrift education and, 283–84, 294–95; well-being and, 137–43 Ptolemy, 274 public choice theory, 220, 242–45 Public Domain, The (Boyle), 196 public goods, 185–86, 190, 199, 211, 229, 249, 261 purchasing power parity (PPP), 306n19 Putnam, Robert, 140–41, 152–54 Quiet Coup, The (Johnson), 256–57 Radio Corporation of America (RCA), 195 Rajan, Raghuram, 136 Rank, Robert, 40 rational choice theory, 214–15 Rawls, John, 31 Reagan, Ronald, 93, 121, 127, 211, 240, 243, 247–48 recession, 9, 11–12, 275; happiness and, 22, 24, 41, 54; nature and, 55–56, 66; plethora of books following, 55; posterity and, 85, 88, 91–93, 100–101, 108, 110; recovery from, 3, 103; trust and, 182; values and, 209–10, 213, 222 reciprocal altruism, 118–22 reform, 8; benchmark for, 218; bankers and, 277–79; bonus taxes and, 278; collective assent to, 269; courage needed for, 203; first ten steps for, 294–98; health care, 285; improving statistics and, 271; institutions and, 245–48, 256, 285, 288–91, 296–97; nature and, 82–85; New Public Management and, 245–46; politics and, 287–88; posterity and, 98, 111–12; public sector, 288–90; trust and, 162–64, 176–77; values and, 218, 233, 275–78, 295 Reinhardt, Carmen, 111 religion, 10; happiness and, 32–33, 43, 50; nature and, 76, 78; Protestant work ethic and, 13–14, 236; trust and, 147 Renaissance, 7 retirement age, 94, 97–99, 106–7, 112 revalorization, 275 Road to Wigan Pier, The (Orwell), 56 Rodrik, Dani, 136 Rogoff, Kenneth, 111 Romantic Economist, The (Bronk), 28 Romanticism, 27 Rothschilds, 147 Rousseau, Jean–Jacques, 114 Royal Bank of Scotland, 146 runs, 1 Ruskin, John, 27–28 Russia, 97–98, 123; Cold War and, 93, 112, 147, 209, 213, 239; Iron Curtain and, 183, 239, 252; production targets and, 246; as Soviet Union, 228, 246 Saez, Emmanuel, 127, 129 salaries: high, 130, 143–44, 193, 223, 277–78, 286, 296; measurement and, 191–99; paradox of, 193; superstar effect and, 134; technology and, 2, 89 Sandel, Michael, 224–25, 237 Sarkozy, Nicolas, 37, 202, 274 satellite accounts, 38, 81, 204–6, 271 Satyam, 146 savings, 1, 280–82, 293; China and, 87, 94, 100, 108; necessary increasing of, 105–6; negative, 105; policy recommendations for, 280–84; posterity and, 86–87, 94, 98, 100–101, 105, 108, 112; thrift education and, 283–84, 294–95 savings clubs, 283 Schumpeter, Joseph, 14 Schwartz, Barry, 10–11, 40 Seabright, Paul, 148–49, 170, 213–14, 228 self-interest: fairness and, 114–22; greed and, 26, 34, 54, 88, 129, 150, 221–23, 248, 277–79; moral sentiments and, 119–20, 142, 221; nature and, 65; reciprocal altruism and, 118–22; values and, 214, 221 Selfish Gene, The (Dawkins), 118 Sen, Amartya, 18, 37, 43, 82, 202, 237, 274, 310n25 shame, 47 shareholders, 88, 145, 248, 257–58, 277 Silicon Valley, 166 Simon, Herbert, 249–50, 254, 261, 270 Simon, Julian, 70 Singapore, 126 Sloan School, 256 Slow Food, 27 Slow Movement, 27–28, 205 smart cards, 252–53 Smith, Adam, 119–20, 209, 221, 255 Smith, Vernon, 215 social capital, 8, 12, 17; definition of, 152–53; fairness and, 116, 121, 139–43; intangible assets and, 149–52, 157, 161, 199–201; measurement of, 154, 185; policy recommendations for, 267, 271, 273, 276; Putnam on, 152–54; trust and, 5, 151–57, 168–74, 177; values and, 223–25, 231, 257 social justice, 31, 43, 53, 65, 123, 164, 224, 237, 286 Social Limits to Growth, The (Hirsch), 190, 231 social markets, 217–20 social networks, 260, 270, 288–89 Social Security, 93–94 social welfare.

Scott, 33, 127 food shortages, 111 Forbes Rich List, 123 “For Richer,” (Krugman), 232 France, 27, 37, 123, 125, 202, 226, 274 Frank, Robert, 43 fraud, 146–47, 150, 248 freedom: of choice, 11; happiness and, 10, 13, 26, 42–44, 50–53; institutions and, 244, 262; of investors, 108; nature and, 79; philosophies of, 237; trilemma of, 13–14, 230–36, 275; values and, 237–38 free market, 14; fairness and, 121, 129; institutions and, 240, 243, 251; measurement and, 182–83; values and, 210–11, 218–24, 232 Fuggers, 147 Fukuyama, Francis, 239 Galbraith, John Kenneth, 190, 193, 230–31, 243 Gallup Poll, 66 game theory, 116–18, 121–22 Gardner, Howard, 48 Gaskell, Mrs., 131 Gates, Bill, 33 “G” countries, 162–65, 177 Gdansk, 239 General Social Survey, 140 Germany, 87, 89, 95, 97–98, 99, 112, 125, 280 gift economy, 205–7 Gini coefficient, 126 Glaeser, Edward, 128, 171 Glastonbury Festival, 197 globalization: call centers and, 131, 133, 161; cities and, 165–70; face-to-face contact and, 7, 147, 165–68; happiness and, 24; inequality and, 122, 127, 131, 155; institutions and, 244; international trade and, 110, 148, 159, 163; manufacturing and, 148–49, 160–61; outsourcing and, 159, 161, 175, 219, 287; posterity and, 108; specialization and, 160–61; technology and, 7; trust and, 149–51, 157, 160–65, 170; values and, 210–11, 235; voter turnout and, 175 global warming, 57, 64, 66, 68 Golden Rule, 93 Goldman Sachs, 145 goods and services, 7, 10, 282; experience, 229; government budget and, 191, 193; happiness and, 24, 35–36, 40; intangible assets and, 199–201; luxury, 190–91; measurement and, 188, 191, 198; missing markets and, 229; music and, 194–98; nature and, 82; positional, 190; posterity and, 99; status and, 190; teachers and, 191–93; trust and, 161; unnecessary, 216; values and, 214, 218, 228–29.


pages: 164 words: 44,947

Socialism Sucks: Two Economists Drink Their Way Through the Unfree World by Robert Lawson, Benjamin Powell

Airbnb, anti-communist, Berlin Wall, Bernie Sanders, Black Lives Matter, business cycle, cognitive dissonance, crony capitalism, Deng Xiaoping, Donald Trump, en.wikipedia.org, equal pay for equal work, Fall of the Berlin Wall, Gini coefficient, Great Leap Forward, hiring and firing, illegal immigration, income inequality, indoor plumbing, invisible hand, Kickstarter, means of production, Mont Pelerin Society, profit motive, road to serfdom, Ronald Reagan, single-payer health, special economic zone, The Wealth of Nations by Adam Smith

Most of what we heard seemed factually accurate, but they failed to discuss the difference between North and South Korea’s economic systems. Diana mistakenly claimed that “South Korea today is among the most unequal countries in the world” as a result of capitalism. But it’s not. Economists use something called a Gini coefficient to measure income inequality across countries. In 2015, South Korea’s Gini coefficient of 33.5 ranked it the fifth most equal country out of the eighty-two countries in the world with reported data.2 More generally, research with Bob’s index has shown that there is really no relationship between how capitalist a country is and how unequal its incomes are.

Michael, 48 Coyne, Chris, 135 Crisis and Leviathan (Higgs), 136 Cristal (beer), 35 Cuba effects of central planning in, 34–41, 45 health care in, 16, 52–53 import restrictions, 49–50 private businesses in, 42–43, 45–47 travel restrictions, 33 Cuban Revolution, 131 Cúcuta, 17, 25, 30 Cultural Revolution, 75–76, 79 Current Affairs, 137 D Dandong, 61–62, 66 Dean, Andrea, 56 deBoer, Fredrik, 138 demilitarized zone (DMZ), 65, 69 Democratic Party, 9–10, 144 Democratic People’s Republic of Korea, 59 democratic socialism, 2, 9, 16, 32, 126–27, 138–39, 146 Deng Xiaoping, 76, 79 Denmark, 10 Dikötter, Frank, 73–75, 150 Duranty, Walter, 92–95 Duvel Café, 5, 10–11 E Eastern Bloc, 85, 126 economic freedom index, 6, 10–11, 20, 63, 79, 99–100, 110, 136 Economic Freedom Network (EFN), 99, 102 Economic Freedom of the World report, 99, 151 economic freedom, 4, 11, 13, 20, 30, 56, 78–80, 105, 108, 110, 112–14, 117, 150 Ecuador, 17 Egypt, 15 El Guajirito, 45–47 Empresas Polar, 26 Erekle (king), 104 Expert Failure (Koppl), 136 F Federal Reserve, 2–3 Fisher, Michelle, 9 Florida State University, 6 Forbidden City, 72 Foreign Policy, 27 foreign-market prices, 37 Fortune Global 500, 64 Fox News, 134 Fraser Institute, 6 Free Market Institute, 7 free markets, 7, 21, 78, 116, 133, 136 Free the People, 141 free-market prices, 21, 37, 48, 88 FreedomWorks, 142 Friedman, Milton, 6–7, 30, 82, 148 G George Mason University, 7 Georgetown University, 137 Georgia (country) Law on Economic Freedom, 114 liberal reforms in, 99, 106–110, 113 ranking on economic freedom index, 110 Ukrainian government in, 101–102 winemaking in, 111–12 Georgian Soviet Socialist Republic, 105 Ghodsee, Kristen, 96 Gini coefficient, 124 Glover, Danny, 1 Gohmann, Steve, 64 grassroots movements, 141–43 Gray, Francine du Plessix, 96–98 Great Britain, 73 Great Leap Forward, 13, 73–76 Grier, Kevin, 28 gross domestic product (GDP), 2, 12–13, 49, 63, 114, 134 Guardian, The, 94 Guevara, Che, 9, 54 Guiadó, Juan, 31 Gwartney, James, 6 H Hall, Joshua, 11 Han River, 65 Harvard, 8 Harvest of Sorrow, The (Conquest), 95 Haverhill, 6 Hayek, Friedrich, 7, 30, 150 Hierta, Lars Johan, 11–12 Higgs, Robert, 136 Hobbs, Brad, 12 Hotel Caribbean, 44, 47 Hotel Ibis, 77 Hotel Metropol, 92 Hotel Nacional, 34, 71 Hotel Neptuno Tritón, 34 Huangpu River, 77 HuffPost, 53 Human Action (von Mises), 100 Hyundai-Kia, 64 I immigration, 122, 134–35, 146 In Order to Live (Yeonmi Park), 60 Incheon International Airport, 63 Independence Square, 101 International Black Sea University, 112 International Monetary Fund, 109 International Socialist Organization (ISO), 123, 125–26 Intourist Hotel, 107 invisible hand, 21 J Jandieri, Gia, 105, 116 Jones, Gareth, 94 K KGB, 89 khachapuri, 116 Khevsureti, 110 khinkali, 116 Khomassuridze, Archil, 97–98 Khrushchev, Nikita, 73 Kibbe, Matt, 141–48 Kiev, 98–102, 117 Kim Il-Sung, 125 Koppl, Roger, 136 Korean War, 63, 65 Kremlin, 89 L La Cabaña prison, 54 La Habana Vieja (Old Havana), 38, 40 Lada, 38, 50 Le Cabernet, 72 Leeson, Peter, 56 Lenin, Vladimir, 9, 16, 89–91, 114–15, 125, 128, 131 Leningrad, 98 LG, 64 libertarianism, 59, 106, 123, 144–47 Lipovskaya, Olga, 97 Little Havana, 56 Little Red Book, 73 Lujiazui Finance and Trade Zone, 80 Luxemburg, Rosa, 125 M Ma Junjie, 81 Macasa, Diana, 123 Maduro, Nicolás, 30–32, 127 Major, John, 120 Maldonado, Víctor, 25 Malecón, 43, 53 Mao Yushi, 82 Mao Zedong, 9, 73–76, 81, 95, 115, 125 Mao’s Great Famine (Dikötter), 73, 150 Marginal Revolution, 86 market prices, 18, 21, 37, 88 Martin, Sabrina, 24–25 Marx, Karl, 86–88, 122, 125, 131, 139 Marxism alienation, 87 labor theory of value, 86–87 theory of history, 88 means of production, 13, 37, 87–88, 90, 121, 124, 126, 128–29, 137–39, 147 Mediterranean, 103 Mendoza, Lorenzo, 26 Mi Amigo Hugo, 27 Miami, 33, 52, 56–57, 134, 155 millennials, 8–10, 120, 138 Milton Friedman Prize for Advancing Liberty, 82 Mises, Ludwig von, 37, 100, 150 Mont Pelerin Society, 7, 64 Mont Pelerin, 7 Moore, Michael, 1, 13, 27 Moscow, 85, 92, 100, 111, 154 Moskvitch, 50 Muggeridge, Malcolm, 94 N Nation, The, 121 National Assembly (Venezeula), 31 National Bank of Cuba, 55 Nazi Germany, 37 New Economic Policy (NEP), 91, 93 New Economic School, 104–105, 116 New Hampshire, 15 New York Times, 9–10, 30, 92, 94–96 Nobel Prize, 6–7 Norberg, Johan, 11 North American Free Trade Agreement (NAFTA), 133 North Korea border with South Korea, 65 contrast between China and, 59, 69 contrast between South Korea and, 62–63, 69, 124 poverty in, 68 refugees from, 60–61 socialism in, 13, 16, 31, 63, 67, 125 Norway, 10–11 Novotel Beijing Peace Hotel, 72 O O’Neil Center for Global Markets and Freedom, 6 Obama, Barack, 33, 55 Ocasio-Cortez, Alexandria (AOC), 143–44, 147 OECD, 13 Oriental Pearl Tower, 77 Orwell, George, 102 P PanAm Post, 18 Parajanov, Sergei, 111 Park, Yeonmi, 60, 68 Patriots, 7 Paul, Rand, 145 Paul, Ron, 142–47 Peng, Dean, 59, 72 Penn, Sean, 1, 27, 128 People’s Republic of China, 59, 73 Pessin, Haley, 121 Petroleos de Venezuela SA, 31 Peugeot, 51–52 Plaza de la Revolución, 54 Plaza Mayor, 43 private property, 10, 13, 21, 37, 45, 78–79, 87, 108–110, 121, 128, 130, 138–39 proletariat, 88, 92 Pudong, 77–78, 80 Puerto Esperanza, 50, 52 Putin, Vladimir, 102 Pyongyang, 65, 69, 85 R Rand, Ayn, 81 Reagan, Ronald, 120 Red Army, 104 Red Century column, 9, 92, 95 Red Guard, 76 Red Spots, 31 Red Square, 89 Red Terror, 89 Republican Party, 142–44 Reuters, 23, 31 Revolution Brewing, 130 Revolutionary Committee of the Don, 90 Río Táchira, 17 Road to Serfdom, The (Hayek), 30, 150 Robinson, Nathan, 137–38 Romanchuk, Jaroslav, 99 Romero, Denise, 121, 132, 135 Rose Revolution, 105, 113 Russia agricultural collectivization in, 93–95 life for women in Soviet, 96–98 Russian Civil War, 89 Russian famine, 90, 93–95 S Saakashvili, Mikheil (Misha), 101–102, 105–106, 114–15, 117 Salon, 1, 17 Salt Lake City, 7 Samsung, 64 San Jose State University, 7 Sanders, Bernie, 9–10, 17, 28, 137, 143–44, 147 Santander Bridge, 18, 22 Schoolland, Li, 60, 75 Scientific Research Mises Center, 99 Seoul, 62–65, 69 Serralde, Daniel, 120, 131 Shanghai Tower, 77 Shanghai World Financial Center, 77 Shawnee State University, 6 Shcheglov, Lev, 98 Sheng Hong, 83 Sheshelidze, Paata, Simón Bolívar Bridge, 23, Sino-Korean Friendship Bridge, 104–105 Sinuiju, 59, 61, 66 Sirota, David, 1 Smith, Adam, 21, 86, 133 Sobel, Russell, 56 Socialism Conference, 120–22, 125, 128–31, 136–39, 146 Socialist International, 32 South America, 17, 135 South China Morning Post, 82 South Korea, 62–64, 68–69, 123–24 South Ossetia, 113 Southern Methodist University (SMU), 6, 48, 77–79 Soviet Ministry of Health, 97 Soviet Women (Gray), 96 special economic zone (SEZ), 80 St.

In a recent review of nearly two hundred academic studies, Bob and his co-author Joshua Hall concluded, “Over two-thirds of these studies found economic freedom to correspond to a ‘good’ outcome such as faster growth, better living standards, more happiness, etc. Less than four percent of the sample found economic freedom to be associated with a ‘bad’ outcome such as increased income inequality.”8 Although Sweden is still mostly free today, it used to be even freer. Our Swedish friend, Johan Norberg, has told the story of how laissez-faire economic reforms made Sweden rich.9 In his telling, back in the early 1860s his ancestors were so poor that they had to mix tree bark into their bread recipe when they were short on flour.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"there is no alternative" (TINA), "World Economic Forum" Davos, 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Alan Greenspan, Albert Einstein, Alfred Russel Wallace, Anthropocene, Anton Chekhov, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, bitcoin, bond market vigilante , Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, digital divide, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial engineering, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, geopolitical risk, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, Great Leap Forward, Greenspan put, happiness index / gross national happiness, high-speed rail, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), it is difficult to get a man to understand something, when his salary depends on his not understanding it, It's morning again in America, Jane Jacobs, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, Kevin Roose, knowledge economy, knowledge worker, Les Trente Glorieuses, light touch regulation, liquidity trap, Long Term Capital Management, low interest rates, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, middle-income trap, Mikhail Gorbachev, military-industrial complex, Minsky moment, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, PalmPilot, passive income, peak oil, peer-to-peer lending, pension reform, planned obsolescence, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Robert Solow, Ronald Reagan, Russell Brand, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, Stephen Fry, systems thinking, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

The book challenges the mythology central to liberal societies of an egalitarian meritocracy based on skill, hard work, entrepreneurship, and competition. As with GDP, measuring inequality is difficult. One measure is the Gini coefficient, developed by Italian statistician and sociologist Corrado Gini. A measure of zero represents perfect equality, with everyone having the same income, while a hundred represents perfect inequality, with one person receiving all the income. Another measure is concentration, which uses the percentage of income or wealth controlled by the top 1 percent of the population. Both measures indicate rising inequality. The Gini coefficient for the world rose to 68 in 2005, from 49 in 1820. Based on the latest statistics, the US scored 41.

George Orwell was prescient when he wrote that “we all live by robbing Asiatic coolies, and those of us who are ‘enlightened’ all maintain that those coolies ought to be set free; but our standard of living, and hence our ‘enlightenment,’ demands that the robbery shall continue.”12 Economic apartheid, in the shape of inequality, now threatens growth.13 The newfound focus on inclusive capitalism highlights the exclusion of significant portions of the population from the benefits of economic expansion. Greater income inequality increasingly constrains an already weak recovery. Empirical research suggests that an increase in income inequality by one Gini coefficient point decreases the annual growth in GDP per capita by around 0.2 percent. Higher income households have a lower marginal propensity to consume, spending a lower portion of each incremental dollar of income than those with lower incomes.

Brazil, Russia, India, China, and South Africa recorded 53, 40, 34, 37, and 65 respectively.2 The concentration of income indicates similar patterns of inequality to the Gini coefficient. In 2012, the top 1 percent of American households received around 19 percent of US income. The percentages for Canada, Australia, and New Zealand were measured at 12, 9, and 8 respectively. The UK, Germany, France, and Italy scored 13, 13, 8, and 9. Japan came in at 10. Inequality increased significantly between 1980 and 2002. In the US since 1977, the top 1 percent of earners received 47 percent of all income growth. In Canada, it was 37 percent.


pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

airline deregulation, Alan Greenspan, Albert Einstein, bank run, barriers to entry, behavioural economics, Bretton Woods, business cycle, butterfly effect, capital controls, carbon tax, Carmen Reinhart, central bank independence, collective bargaining, congestion pricing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price elasticity of demand, price stability, prisoner's dilemma, profit maximization, public intellectual, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

The specific example I will consider here is the theories behind the rise in inequality in the United States and some other advanced economies since the late 1970s. Even if widely accepted, these theories are not meant to apply to other settings. The explanations I will consider do not attempt to account also for, say, the rise of inequality in this country during the gilded age before World War I or the decline in inequality in many Latin American countries since the 1990s. They are sui generis. The steep rise in US inequality that began in the mid-1970s is well documented. The Gini coefficient, a widely used measure of inequality that varies from 0 (no inequality) to 1 (maximum inequality, with all income going to a single household), rose from 0.40 in 1973 to 0.48 in 2012—a 20 percent increase.15 The country’s richest 10 percent raised their share of national income from 32 to 48 percent over the same period.16 What caused this dramatic change?

., 13n Hunting Causes and Using Them: Approaches in Philosophy and Economics (Cartwright), 22n import quotas, 149 incentives, 7, 170, 172, 188–92 income: functional distribution of, 121 military service and, 108 personal distribution of, 121 income inequality, 117, 124–25, 138–44, 147–49 deregulation in, 143 factor endowments theory in, 139–40 Gini coefficient and, 138 globalization in, 139–41, 143 in manufacturing, 141 offshoring in, 141 skill premium in, 138–40, 142 skill upgrading in, 140, 141, 142 technological change in, 141–43 trade in, 139–40 India, 107, 154 Indonesia, 166 industrial organization, 201 industrial revolution, 115 industry: developing economies and policies on, 75–76, 87, 88 government intervention and, 34–35 inflation, 185 in business cycles, 126–27, 130–31, 133, 135, 137 public spending and, 114 infrastructure, 87, 91, 111, 163 Institute for Advanced Study (IAS), xii–xiii, xiv School of Social Science at, xii Institute for International Economics, 159 institutions: development economics and, 98, 161, 202, 205–7 labor productivity and, 123 insurance, banking and, 155 interest rates, 39, 64, 110, 129–30, 156, 161 internal validity, 23–24 International Bank for Reconstruction and Development, 2 see also World Bank international economics, 201–2 International Monetary Fund (IMF), 1n, 2 Washington Consensus and, 160, 165 Internet, big data and, 38 “Interview with Eugene Fama” (Cassidy), 157n investment: business cycles and, 129–30, 136 foreign markets and, 87, 89, 90, 92, 165–67 income inequality and, 141 savings and, 129–30, 165–67 Invisible Hand Theorem, 48–50, 51n, 182, 186 Israel, 103, 188 day care study in, 71, 190–91 Japan: city growth models and, 108 income inequality and, 139 Jenkins, Holman W., Jr., 135n Jevons, William Stanley, 119 Kahneman, Daniel, 203 Kenya, 106–7 Keynes, John Maynard, 1–2, 31, 46, 165 on business cycles, 127–37 on liquidity traps, 130 see also models, Keynesian types of Klemperer, Paul, 36n Klinger, Bailey, 111n Korea, South, 163, 164, 166 Kremer, Michael, 106–7 Krugman, Paul, 136, 148 Kuhn, Thomas, 64n Kupers, Roland, 85 Kydland, Finn E., 101n labor markets, 41, 52, 56, 57, 92, 102, 108, 111, 119, 163 labor productivity, 123–24, 141 labor theory of value, 117–19 Lancaster, Kelvin, 59 Latin America, Washington Consensus and, 159–63, 166 Leamer, Edward, 139 learning, rule-based vs. case-based forms of, 72 Leijonhufvud, Axel, 9–10 Lepenies, Philipp H., 211n leverage, 154 Levitt, Steven, 7 Levy, Santiago, 3–4, 105–6 Lewis, W.

., 134–35, 151n, 158 Feenstra, Rob, 141 field experiments, 23–24, 105–8, 173, 202–5 financial costs, 70 financial industry: globalization of, 164–67 in Great Recession, 152–59, 184 financial markets, deregulation and, 143, 155, 158–59, 162 “Fine Is a Price, A” (Gneezy and Rustichini), 71n fines, 71 First Fundamental Theorem of Welfare Economics, 47–51, 54 fiscal policies, 75–76, 87, 88, 147–48, 149, 160–61, 171 Fischer, Stanley, 165–66 forward causation, 115 Foundations of Economic Analysis (Samuelson), 125 Fourcade, Marion, 79n, 200n France, comparative advantage principle and, 59–60 Freakonomics (Levitt and Dubner), 7 Free to Choose, 49 free trade, 11, 54, 141, 169, 170, 182–83, 194 Friedman, Milton: on assumptions in modeling, 25–26 on cigarette taxes, 27–28 on invisible hand theorem, 49 on liquidity and Great Depression, 134 on model complexity, 37 fuel subsidies, 193 functional distribution of income, 121 Galbraith, John Kenneth, 184 Galileo Galilei, 29 Gambetta, Diego, 34 game theory, 5, 14–15, 33, 36, 61–62, 103–4, 133 simultaneous vs. sequential moves in, 68 garment industry, general-equilibrium effects in, 57–58 Gelman, Andrew, 115 general-equilibrium interactions, 41, 56–58, 69n, 91, 120 General Theory of Second Best, 58–61 Germany, comparative advantage principle and, 59–60 Gibbard, Allan, 20 Gilboa, Itzhak, 72, 73 Gini coefficient, 138 globalization, 139–41, 143, 164–67, 184 Gneezy, Uri, 71n Gold Standard, 2, 127 goods and services, economic models and, 12 Gordon, Roger, 151n Grand Theory of Employment, Interest, and Money, The (Keynes), 128 greenback era, 127n Greenspan, Alan, 158, 159 gross domestic product (GDP), 151n labor productivity and, 123 growth diagnostics, 86–93, 90, 97, 110–11 Haldane, Andrew, 197 Hamilton, Alexander, 187 Hanna, Rema, 107 Hanson, Gordon, 141 Harvard University, xi, 111, 136, 149, 197, 198 Hausmann, Ricardo, 111 health care: in antipoverty programs, 4, 105–7 models and, 5, 36–37, 105–7 Heckscher, Eli, 139 Herndon, Thomas, 77 Hicks, John, 128, 133 Hiebert, Stephanie, xv Hirschman, Albert O., 144–45, 195, 210n–11n housing bubble, 153–54, 156 human capital, 87, 88, 92 Humphrey, Thomas M., 13n Hunting Causes and Using Them: Approaches in Philosophy and Economics (Cartwright), 22n import quotas, 149 incentives, 7, 170, 172, 188–92 income: functional distribution of, 121 military service and, 108 personal distribution of, 121 income inequality, 117, 124–25, 138–44, 147–49 deregulation in, 143 factor endowments theory in, 139–40 Gini coefficient and, 138 globalization in, 139–41, 143 in manufacturing, 141 offshoring in, 141 skill premium in, 138–40, 142 skill upgrading in, 140, 141, 142 technological change in, 141–43 trade in, 139–40 India, 107, 154 Indonesia, 166 industrial organization, 201 industrial revolution, 115 industry: developing economies and policies on, 75–76, 87, 88 government intervention and, 34–35 inflation, 185 in business cycles, 126–27, 130–31, 133, 135, 137 public spending and, 114 infrastructure, 87, 91, 111, 163 Institute for Advanced Study (IAS), xii–xiii, xiv School of Social Science at, xii Institute for International Economics, 159 institutions: development economics and, 98, 161, 202, 205–7 labor productivity and, 123 insurance, banking and, 155 interest rates, 39, 64, 110, 129–30, 156, 161 internal validity, 23–24 International Bank for Reconstruction and Development, 2 see also World Bank international economics, 201–2 International Monetary Fund (IMF), 1n, 2 Washington Consensus and, 160, 165 Internet, big data and, 38 “Interview with Eugene Fama” (Cassidy), 157n investment: business cycles and, 129–30, 136 foreign markets and, 87, 89, 90, 92, 165–67 income inequality and, 141 savings and, 129–30, 165–67 Invisible Hand Theorem, 48–50, 51n, 182, 186 Israel, 103, 188 day care study in, 71, 190–91 Japan: city growth models and, 108 income inequality and, 139 Jenkins, Holman W., Jr., 135n Jevons, William Stanley, 119 Kahneman, Daniel, 203 Kenya, 106–7 Keynes, John Maynard, 1–2, 31, 46, 165 on business cycles, 127–37 on liquidity traps, 130 see also models, Keynesian types of Klemperer, Paul, 36n Klinger, Bailey, 111n Korea, South, 163, 164, 166 Kremer, Michael, 106–7 Krugman, Paul, 136, 148 Kuhn, Thomas, 64n Kupers, Roland, 85 Kydland, Finn E., 101n labor markets, 41, 52, 56, 57, 92, 102, 108, 111, 119, 163 labor productivity, 123–24, 141 labor theory of value, 117–19 Lancaster, Kelvin, 59 Latin America, Washington Consensus and, 159–63, 166 Leamer, Edward, 139 learning, rule-based vs. case-based forms of, 72 Leijonhufvud, Axel, 9–10 Lepenies, Philipp H., 211n leverage, 154 Levitt, Steven, 7 Levy, Santiago, 3–4, 105–6 Lewis, W.


pages: 497 words: 123,778

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, An Inconvenient Truth, Andrew Keen, basic income, battle of ideas, Black Lives Matter, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, classic study, clean water, cognitive bias, conceptual framework, critical race theory, David Brooks, deindustrialization, demographic transition, desegregation, disinformation, Donald Trump, en.wikipedia.org, Evgeny Morozov, fake news, Francis Fukuyama: the end of history, gentrification, German hyperinflation, gig economy, Gini coefficient, Herbert Marcuse, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, Jeremy Corbyn, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, microaggression, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, Rutger Bregman, secular stagnation, sharing economy, Steve Bannon, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

Different measures of equality paint a slightly divergent picture of just how strong the increase in inequality has been. In this case, I have been referring to the Gini coefficient for earned income. See, for example, Anthony B. Atkinson, J. Hasell, Salvatore Morelli, and M. Roser, Chartbook of Economic Inequality, 2017, http://www.chartbookofeconomicinequality.com/inequality-by-country/usa/. But similar findings also hold true about other ways of measuring income inequality, or indeed about wealth inequality. See for example Piketty, Capital. 8. See note 28 in the Introduction. 9. Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang, “The Fading American Dream: Trends in Absolute Income Mobility since 1940,” Science 356, no. 6336 (2017): 398–406.

There was only one problem: the bulk of these gains went to the richest members of society—and the times of the most rapid growth often coincided with the times of the greatest inequality. Between 1827 and 1851, for example, the English economy grew by about 80 percent. But during that same time period, the Gini coefficient, the standard measure of income inequality, increased just as rapidly. In effect, England had, in the span of a quarter century, gone from the level of income inequality recorded in today’s Iceland to the level of income inequality recorded in today’s India.3 Then another big aberration in human history set in: a period of unprecedented economic equality.

Broadberry and Bas van Leeuwen, “British Economic Growth and the Business Cycle, 1700–1870: Annual Estimates,” Working Paper, Department of Economics, University of Warwick, Coventry, UK, February 2011, CAGE Online Working Paper Series, vol. 2010 (20), http://www2.warwick.ac.uk/fac/soc/economics/events/seminars-schedule/conferences/venice3/programme/british_economic_growth_and_the_business_cycle_1700-1850.pdf. 3. According to Jeffrey Williamson, the Gini coefficient for male earners rose from .293 to .358 between 1827 and 1851. By comparison, the Gini coefficient of today’s Iceland is .280 while that of today’s India is .352. See Jeffrey G. Williamson, “Earnings Inequality in Nineteenth-Century Britain,” Journal of Economic History 40, no. 3 (1980): 457–475, 467; as well as the World Factbook, 2017: Distribution of Family Income—Gini Index, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html. 4.


pages: 868 words: 147,152

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, foreign exchange controls, Gini coefficient, glass ceiling, Great Leap Forward, high-speed rail, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, low interest rates, market fragmentation, megaproject, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, TSMC, urban sprawl, Washington Consensus, working-age population

When the share of property income in a society falls (here because fewer people were renting out land), income from current work is relatively more important and overall incomes diverge less. Household income surveys in Taiwan showed that the country moved from a Gini coefficient – the standard measure of equality, where 0 is perfect equality and 1 is perfect inequality – on a par with Brazil in the early 1950s (scoring 0.56) to a level in the mid 1960s that was unprecedented for a developing country (0.33).50 Greater equality was welcomed by the average Taiwanese, but it was the impact of land reform and a more incentivising market structure on output which was truly revolutionary.

In Deininger’s data set, long-term growth refers to the period from 1960 to 1992. The only other developing countries he found that grew an average of more than 2.5 per cent with very unequal land distribution (defined as having a land distribution Gini coefficient of more than 70) are Puerto Rico (a small and anomalous part of the United States) and Israel. See Klaus Deininger and Lyn Squire, ‘New Ways of Looking at Old Issues: Inequality and Growth’, Journal of Development Economics, vol. 57, no. 2 (1998), pp. 259–87. 13. Tang land management was in fact more complex than stated here because small parcels of land were also granted to farmers in perpetuity.

No country bears this out more painfully than the Philippines. Journey 2: Negros Occidental Out on the runway of Manila’s Ninoy Aquino airport, a large private jet comes in to land in the afternoon sun. It is a useful reminder, if you have travelled down from north-east Asia, that you have left the world of 0.3 Gini coefficients and entered the world of 0.5 Gini coefficients – that is, a different kind of ‘developing’ economy. The plane I am on is travelling to Bacolod, the dominant city in Negros Occidental, the western half of the island of Negros. It is an area of the Philippines sometimes referred to as ‘Sugarlandia’, because of its historical role as the epicentre of the plantation sugar industry.


pages: 98 words: 27,609

The American Dream Is Not Dead: (But Populism Could Kill It) by Michael R. Strain

Bernie Sanders, business cycle, centre right, creative destruction, deindustrialization, Donald Trump, feminist movement, full employment, gig economy, Gini coefficient, income inequality, job automation, labor-force participation, market clearing, market fundamentalism, new economy, opioid epidemic / opioid crisis, public intellectual, Robert Gordon, Ronald Reagan, social intelligence, Steven Pinker, The Rise and Fall of American Growth, Tyler Cowen, upwardly mobile, working poor

The CBO uses the three household income measures described above and computes a “Gini coefficient” for each. This is a standard inequality statistic that summarizes income dispersion between households for the entire distribution of income. The CBO found that income inequality between 1979 and 2006 increased by between 24 and 27 percent, depending on the definition of income. But things look very different between 2007 and 2016. Using market income, inequality has only grown by 2 percent. Using income after taxes and transfers, inequality has actually decreased by 7 percent (figure 12). FIGURE 12. GINI COEFFICIENTS. Looking at the usual weekly earnings of workers tells a similar story.

Between 2007 and 2019, the ratio of the 90th percentile of weekly earnings to the 10th percentile—a more conceptually straightforward measure of the rich-poor gap—increased by only 1 percent. So even if you believe that income inequality is one of the most serious challenges facing the United States, at least over the past decade or so, there seems to be a lot more heat than light. Very recently, the public debate has become interested in wealth inequality, in addition to income inequality. I focus on inequality of income here for a few reasons. It has received the most attention during the post-Great Recession period—much more than wealth inequality. It is the more relevant measure for assessing disparities in the ability of different groups to consume and to save.

It is the more relevant measure for assessing disparities in the ability of different groups to consume and to save. It is hard to know what to make of changes in wealth inequality over time. To see why, consider this example: Expanded social insurance and safety net programs for lower- and middle-income households reduce the need for those households to accumulate assets. This exacerbates wealth inequality because it increases the gap in asset holdings between high-wealth and low-wealth households. Or consider that innovation can increase wealth inequality while reducing income inequality. In addition, wealth inequality is a difficult metric because it is much harder to measure wealth than to measure income.


pages: 215 words: 59,188

Seriously Curious: The Facts and Figures That Turn Our World Upside Down by Tom Standage

"World Economic Forum" Davos, agricultural Revolution, augmented reality, autonomous vehicles, Big Tech, blood diamond, business logic, corporate governance, CRISPR, deep learning, Deng Xiaoping, Donald Trump, Dr. Strangelove, driverless car, Elon Musk, failed state, financial independence, gender pay gap, gig economy, Gini coefficient, high net worth, high-speed rail, income inequality, index fund, industrial robot, Internet of things, invisible hand, it's over 9,000, job-hopping, Julian Assange, life extension, Lyft, M-Pesa, Mahatma Gandhi, manufacturing employment, mega-rich, megacity, Minecraft, mobile money, natural language processing, Nelson Mandela, plutocrats, post-truth, price mechanism, private spaceflight, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, ransomware, reshoring, ride hailing / ride sharing, Ronald Coase, self-driving car, Silicon Valley, Snapchat, South China Sea, speech recognition, stem cell, supply-chain management, transaction costs, Uber and Lyft, uber lyft, undersea cable, US Airways Flight 1549, WikiLeaks, zoonotic diseases

This trend, though disconcerting, is not unique to the modern era. A study by Timothy Kohler of Washington State University and 17 others found that inequality may well have been rising for several thousand years, at least in some parts of the world. The scholars examined 63 archaeological sites and estimated the levels of wealth inequality in the societies whose remains were dug up, by studying the distributions of house sizes. As a measure they used the Gini coefficient (a perfectly equal society would have a Gini coefficient of zero; a society where one person owns all the wealth would have a coefficient of one). It rose from about 0.2 around 8000BC in Jerf el-Ahmar, on the Euphrates in modern-day Syria, to 0.5 in around 79AD in Pompeii.

Horses and oxen greatly improved farm productivity – but livestock were mainly owned by the rich (who could also rent them out). In traditional African societies, livestock remain an important store of value. The agricultural revolution was good for humanity, because it supported a larger population and paved the way for modern civilisation. But it was awful for egalitarians. Nice digs Gini coefficient of house sizes at archaeological sites 1=perfect inequality, 0=perfect equality Source: “Greater post-Neolithic wealth disparities in Eurasia than in North America and Mesoamerica” by Timothy A. Kohler et al What makes something a commodity? A commodity, said Karl Marx, “appears at first sight an extremely obvious, trivial thing.

The extra housework such men do comes in the form of DIY or managing the family finances. The economists debunk the idea that women spend fewer hours on paid work – even when they account for differences, the chore inequality persists. It’s not that women have more time; they just do more housework. If people in couples choose to do more housework than singletons, that is their business. Perhaps it is harder to be messy when there is someone watching over your shoulder. Well-cooked meals may be more enjoyable consumed as a pair. The gender inequality this research suggests is more concerning, however, not only in itself, but also because it could be holding back women in the workplace.


pages: 366 words: 94,209

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

activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, bank run, banking crisis, barriers to entry, benefit corporation, bitcoin, blockchain, Burning Man, business process, buy and hold, 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, corporate raider, creative destruction, crowdsourcing, cryptocurrency, data science, deep learning, disintermediation, diversified portfolio, Dutch auction, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, fiat currency, Firefox, Flash crash, full employment, future of work, gamification, Garrett Hardin, gentrification, gig economy, Gini coefficient, global supply chain, global village, Google bus, Howard Rheingold, IBM and the Holocaust, impulse control, income inequality, independent contractor, index fund, iterative process, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joseph Schumpeter, Kickstarter, Large Hadron Collider, loss aversion, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, Marshall McLuhan, means of production, medical bankruptcy, minimum viable product, Mitch Kapor, Naomi Klein, Network effects, new economy, Norbert Wiener, Oculus Rift, passive investing, payday loans, peer-to-peer lending, Peter Thiel, post-industrial society, power law, profit motive, quantitative easing, race to the bottom, recommendation engine, reserve currency, RFID, Richard Stallman, ride hailing / ride sharing, Ronald Reagan, Russell Brand, Satoshi Nakamoto, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, social graph, software patent, Steve Jobs, stock buybacks, TaskRabbit, the Cathedral and the Bazaar, The Future of Employment, the long tail, trade route, Tragedy of the Commons, transportation-network company, Turing test, Uber and Lyft, Uber for X, uber lyft, unpaid internship, Vitalik Buterin, warehouse robotics, Wayback Machine, Y Combinator, young professional, zero-sum game, Zipcar

If corporations convert too many assets from the working and business economies into pure capital, then the whole system seizes up for lack of fuel. The main figure they cite, the Gini coefficient of income inequality, measures how much income has been monopolized by the shareholders at the top. A Gini coefficient of 0 would mean that everyone has the same amount of money; a coefficient of 1 means that all the income is being taken by just one person or corporation. According to Beth Ann Bovino, chief economist at S&P, once that coefficient goes above 0.4 or 0.45—where we are as of this writing—it hurts growth for everyone. “It’s good for a market economy to have income inequality but to extremes, it can actually damage growth long term and make it less sustainable.”19 Bovino showed that it’s not just the extreme of inequality that’s to blame but the decline of labor and business income in the face of rising capital gains.

., 229 Circuit City, 90 Citizens United case, 72 Claritas, 32 click workers, 50 climate change, 135, 227–28, 237 coin of the realm, 128–29 collaboration as corporate strategy, 106–7 colonialism, 71–72 commons, 215–23 co-owned networks and, 220–23 history of, 215–16 projects inspired by, 217–18 successful, elements of, 216–17 tragedy of, 215–16 worker-owned collectives and, 219–20 competencies, of corporations, 79–80 Connect+Develop, 107 Consumer Electronics Show, 19 Consumer Reports,33 contracting with small and medium-sized enterprises, 112 cooperative currencies, 160–65 favor banks, 161 LETS (Local Exchange Trading System), 163–65 time dollar systems, 161–63 co-owned networks, 220–23 corporations, 68–82 acquisition of startups, growth through, 78 amplifying effect of, 70, 73 Big Shift and, 76 cash holdings of, 76, 77–78 competency of, 79–80 cost reduction, growth through, 79–80 decentralized autonomous corporations (DACs), 149–50 Deloitte’s study of return on assets (ROA) of, 76–77 distributive alternative to platform monopolies, 93–97 evaluation of, 69–74 extractive nature of, 71–72, 73, 74, 75, 80–82 growth targets, meeting, 68–69 income inequality and, 81–82 limits to corporate model, 75–76, 80–82 managerial and financial methods to deliver growth by, 77–79 monopolies (See monopolies) obsolescence created by, 70–71, 73 offshoring and, 78–79 personhood of, 72, 73–74, 90, 91 recoding of, 93–97, 125–26 repatriation and, 80 retrieval of values of empire and, 71–72, 73 as steady-state enterprises, 97–123 Costco, 74 cost reduction, and corporate growth, 79–80 Couchsurfing.com, 46 crashes of 1929, 99 of 2007, 133–34 biotech crash, of 1987, 6 flash crash, 180 Creative Commons, 215 creative destruction, 83–87 credit, 132–33 credit-card companies, 143–44 crowdfunding, 38–39, 198–201 crowdsharing apps, 45–49 crowdsourcing platforms, 49–50 Crusades, 16 Cumbrian Pounds, 156 Curitiba, Brazil modified LETS program, 164–65 Daly, Herman, 184 data big, 39–44 getting paid for our own, 44–45 “likes” economy and, 32, 34–36 in pre-digital era, 40 Datalogix, 32 da Vinci, Leonardo, 236 debt, 152–54 decentralized autonomous corporations (DACs), 149–50 deflation, 169 Dell, 115–16 Dell, Michael, 115–16 Deloitte Center for the Edge, 76–77 destructive destruction, 100 Detroit Dollars, 156 digital distributism, 224–39 artisanal era mechanisms and values retrieved by, 233–34 developing distributive businesses, 237–38 digital industrialism compared, 226 digital technology and, 230–31 historical ideals of distributism, 228–30 leftism, distinguished, 231 Pope Francis’s encyclical espousing distributed approach to land, labor and capital, 227–28 Renaissance era values, rebirth of, 235–37 subsidiarity and, 231–32 sustainable prosperity as goal of, 226–27 digital economy, 7–11 big data and, 39–44 destabilizing form of digitally accelerated capitalism, creation of, 9–10 digital marketplace, development of, 24–30 digital transaction networks and, 140–51 disproportionate relationship between capital and value in, 9 distributism and, 224–39 externalizing cost of replacing employees in, 14–15 industrialism and, 13–16, 23–24, 44, 53–54, 93, 101–2, 201, 214, 226 industrial society, distinguished, 11 “likes” and similar metrics, economy of, 30–39 platform monopolies and, 82–93, 101 digital industrialism, 13–16, 23–24, 101–2, 201 digital distributism compared, 226 diminishing returns of, 93 externalizing costs and, 14–15 growth agenda and, 14–15, 23–24 human data as commodity under, 44 income disparity and, 53–54 labor and land pushed to unbound extremes by, 214 “likes” economy and, 33 reducing bottom line as means of creating illusion of growth and, 14 digital marketplace, 24–30 early stages of e-commerce, 25–26 highly centralized sales platforms of, 29 initial treatment of Internet as commons, 25 “long tail” of widespread digital access and, 26 positive reinforcement feedback loop and, 28 power-law dynamics and, 26–29 removal of humans from selection process in, 28 digital transaction networks, 140–51 Bitcoin, 143–49, 150–51, 152 blockchains and, 144–51 central authorities, dependence on, 142 decentralized autonomous corporations (DACs) and, 149–50 PayPal, 140–41 theft and, 142 direct public offerings (DPOs), 205–6 discount brokerages, 176–78 diversification, 208, 211 dividends, 113–14, 208–10 dividend traps, 113 Dorsey, Jack, 191–92 Draw Something, 192, 193 Drexler, Mickey, 116 dual transformation, 108–9 dumbwaiter effect, 19 Dutch East India Company, 71, 89, 131 eBay, 16, 26, 29, 45, 140 education industry, 95–97 Eisenhower administration, 52–53, 63, 75 Elberse, Anita, 28 employee-owned companies, 116–18 Enron, 133, 171n Eroski, 220 eSignal, 178 EthicalBay, 221 E*Trade, 176, 177 Etsy, 16, 26, 30 expense reduction, and corporate growth, 78–79 Facebook, 4, 31, 83, 93, 96, 201 data gathering and sales by, 41, 44 innovation by acquisition of startups, 78 IPO of, 192–93, 195 psychological experiments conducted on users by, 32–33 factors of production, 212–14 Fairmondo, 221 Family Assistance Plan, 63 family businesses, 103–4, 231–32 FarmVille, 192 favor banks, 161 Febreze Set & Refresh, 108 Federal Reserve, 137–38 feedback loop, and positive reinforcement, 28 Ferriss, Tim, 201 feudalism, 17 financial services industry, 131–33, 171–73, 175 Fisher, Irving, 158 flash crash, 180 flexible purpose corporations, 119–20 flow, investing in, 208–10 Forbes,88, 173, 174 40-hour workweek, reduction of, 58–60 401(k) plans, 171–74 Francis, Pope, 227, 228, 234 Free, Libre, Open Knowledge (FLOK) program, 217–18 Free (Anderson), 33 free money theory, local currencies based on, 156–59 barter exchanges, 159 during Great Depression, 158–59 self-help cooperatives, 159 stamp scrip, 158–59 tax anticipation scrip, 159 Wörgls, 157–58 frenzy, 98–99 Fried, Jason, 59 Friedman, Milton, 64 Friendster, 31 Frito-Lay, 80 front running, 180–81 Fulfillment by Amazon, 89 Fureai Kippu (Caring Relationship Tickets), 162 Future of Work initiative, 56n Gallo, Riso, 103–4 Gap, 116 Gates, Bill, 186 General Electric, 132 General Public License (GPL) for software, 216 Gesell, Silvio, 157 GI Bill, 99 Gimein, Mark, 147 Gini coefficient of income inequality, 81–82, 92 global warming, 135, 227–28, 237 GM, 80 Goldman Sachs, 133, 195 gold standard, 139 Google, 8, 48, 78, 83, 90–91, 93, 141, 218 acquisitions by, 191 business model of, 37 data sales by, 37, 44 innovation by acquisition of startups, 78 IPO of, 194–95 protests against, 1–3, 5, 98–99 grain receipts, 128 great decoupling, 53 Great Depression, 137, 158–59 Great Exhibition, 1851, 19 Greenspan, Alan, 132–33 growth, 1–11 bazaars, and economic expansion in late Middle Ages, 16–18 central currency and, 126, 129–31, 133–36 digital industrialism, growth agenda of, 14–15, 23–24 highly centralized e-commerce platforms and, 29 startups, hypergrowth expected of, 187–91 as trap (See growth trap) growth trap, 4–5, 68–123 central currency as core mechanism of, 133–34 corporations as program and, 68–82 platform monopolies and, 82–93, 101 recoding corporate model and, 93–97 steady-state enterprises and, 98–123 guaranteed minimum income programs, 62–65 guaranteed minimum wage public jobs, 65–66 guilds, 17 Hagel, John, 76–77 Hardin, Garrett, 215–16 Harvard Business Review,108–9 Heiferman, Scott, 196–97 Henry VIII, King, 215, 229 Hewlett-Packard UK, 112 high-frequency trading (HFT), 179–80 Hilton, 115 Hobby Lobby case, 72 Hoffman, Reid, 61 Holland, Addie Rose, 205–6 holograms, 235 Homeport New Orleans, 121 housing industry, 135 Huffington, Arianna, 34, 35, 201 Huffington Post, 34, 201 human role in economy, 13–67 aristocracy’s efforts to control peasant economy, 17–18 bazaars and, 16–18 big data and, 39–44 chartered monopolies and, 18 decreasing employment and, 30–39 digital marketplace, impact of, 24–30 industrialism and, 13–16, 18–24, 44 “likes” economy and, 30–39 reevaluation of employment and adopting policies to decrease it and, 54–67 sharing economy and, 44–54 Hurwitz, Charles, 117 IBM, 90–91, 112 inclusive capitalism, 111–12 income disparity corporate model and, 81–82 digital technology as accelerating, 53–54 Gini coefficient of, 81–82, 92 growth trap and, 4 power-law dynamics and, 27–28, 30 public service options for reducing, 65–66 IndieGogo, 30, 199 individual retirement accounts (IRAs), 171 industrial farming, 134–35 industrialism, 18–24 branding and, 20 digital, 13–16, 23–24, 44, 53–54, 93, 101–2, 201, 214, 226 disempowerment of workers and, 18–19 human connection between producer and consumer, loss of, 19–20 isolation of human consumers from one another and, 20–21 mass marketing and, 19–20 mass media and, 20–21 purpose of, 18–19, 22 value system of, 18–19 inflation, 169 Instagram, 31 Intercontinental Exchange, 182 interest, 129–31 investors/investing, 70, 72, 168–223 algorithmic trading and, 179–84 bounded, 210–15 commons model for running businesses and, 215–23 crowdfunding and, 198–201 derivative finance, volume of, 182 digital technology and, 169–70, 175–84 direct public offerings (DPOs) and, 205–6 discount brokerages and, 176–78 diversification and, 208, 211 dividends and, 208–10 flow, investing in, 208–10 high-frequency trading (HFT) and, 179–80 in low-interest rate environment, 169–70 microfinancing platforms and, 202–4 platform cooperatives and, 220–23 poor performance of do-it-yourself traders and, 177–78 retirement savings and, 170–75 startups and, 184–205 ventureless capital and, 196–205 irruption, 98 i-traffic, 196 iTunes, 27, 29, 34, 89 J.

., 229 Circuit City, 90 Citizens United case, 72 Claritas, 32 click workers, 50 climate change, 135, 227–28, 237 coin of the realm, 128–29 collaboration as corporate strategy, 106–7 colonialism, 71–72 commons, 215–23 co-owned networks and, 220–23 history of, 215–16 projects inspired by, 217–18 successful, elements of, 216–17 tragedy of, 215–16 worker-owned collectives and, 219–20 competencies, of corporations, 79–80 Connect+Develop, 107 Consumer Electronics Show, 19 Consumer Reports,33 contracting with small and medium-sized enterprises, 112 cooperative currencies, 160–65 favor banks, 161 LETS (Local Exchange Trading System), 163–65 time dollar systems, 161–63 co-owned networks, 220–23 corporations, 68–82 acquisition of startups, growth through, 78 amplifying effect of, 70, 73 Big Shift and, 76 cash holdings of, 76, 77–78 competency of, 79–80 cost reduction, growth through, 79–80 decentralized autonomous corporations (DACs), 149–50 Deloitte’s study of return on assets (ROA) of, 76–77 distributive alternative to platform monopolies, 93–97 evaluation of, 69–74 extractive nature of, 71–72, 73, 74, 75, 80–82 growth targets, meeting, 68–69 income inequality and, 81–82 limits to corporate model, 75–76, 80–82 managerial and financial methods to deliver growth by, 77–79 monopolies (See monopolies) obsolescence created by, 70–71, 73 offshoring and, 78–79 personhood of, 72, 73–74, 90, 91 recoding of, 93–97, 125–26 repatriation and, 80 retrieval of values of empire and, 71–72, 73 as steady-state enterprises, 97–123 Costco, 74 cost reduction, and corporate growth, 79–80 Couchsurfing.com, 46 crashes of 1929, 99 of 2007, 133–34 biotech crash, of 1987, 6 flash crash, 180 Creative Commons, 215 creative destruction, 83–87 credit, 132–33 credit-card companies, 143–44 crowdfunding, 38–39, 198–201 crowdsharing apps, 45–49 crowdsourcing platforms, 49–50 Crusades, 16 Cumbrian Pounds, 156 Curitiba, Brazil modified LETS program, 164–65 Daly, Herman, 184 data big, 39–44 getting paid for our own, 44–45 “likes” economy and, 32, 34–36 in pre-digital era, 40 Datalogix, 32 da Vinci, Leonardo, 236 debt, 152–54 decentralized autonomous corporations (DACs), 149–50 deflation, 169 Dell, 115–16 Dell, Michael, 115–16 Deloitte Center for the Edge, 76–77 destructive destruction, 100 Detroit Dollars, 156 digital distributism, 224–39 artisanal era mechanisms and values retrieved by, 233–34 developing distributive businesses, 237–38 digital industrialism compared, 226 digital technology and, 230–31 historical ideals of distributism, 228–30 leftism, distinguished, 231 Pope Francis’s encyclical espousing distributed approach to land, labor and capital, 227–28 Renaissance era values, rebirth of, 235–37 subsidiarity and, 231–32 sustainable prosperity as goal of, 226–27 digital economy, 7–11 big data and, 39–44 destabilizing form of digitally accelerated capitalism, creation of, 9–10 digital marketplace, development of, 24–30 digital transaction networks and, 140–51 disproportionate relationship between capital and value in, 9 distributism and, 224–39 externalizing cost of replacing employees in, 14–15 industrialism and, 13–16, 23–24, 44, 53–54, 93, 101–2, 201, 214, 226 industrial society, distinguished, 11 “likes” and similar metrics, economy of, 30–39 platform monopolies and, 82–93, 101 digital industrialism, 13–16, 23–24, 101–2, 201 digital distributism compared, 226 diminishing returns of, 93 externalizing costs and, 14–15 growth agenda and, 14–15, 23–24 human data as commodity under, 44 income disparity and, 53–54 labor and land pushed to unbound extremes by, 214 “likes” economy and, 33 reducing bottom line as means of creating illusion of growth and, 14 digital marketplace, 24–30 early stages of e-commerce, 25–26 highly centralized sales platforms of, 29 initial treatment of Internet as commons, 25 “long tail” of widespread digital access and, 26 positive reinforcement feedback loop and, 28 power-law dynamics and, 26–29 removal of humans from selection process in, 28 digital transaction networks, 140–51 Bitcoin, 143–49, 150–51, 152 blockchains and, 144–51 central authorities, dependence on, 142 decentralized autonomous corporations (DACs) and, 149–50 PayPal, 140–41 theft and, 142 direct public offerings (DPOs), 205–6 discount brokerages, 176–78 diversification, 208, 211 dividends, 113–14, 208–10 dividend traps, 113 Dorsey, Jack, 191–92 Draw Something, 192, 193 Drexler, Mickey, 116 dual transformation, 108–9 dumbwaiter effect, 19 Dutch East India Company, 71, 89, 131 eBay, 16, 26, 29, 45, 140 education industry, 95–97 Eisenhower administration, 52–53, 63, 75 Elberse, Anita, 28 employee-owned companies, 116–18 Enron, 133, 171n Eroski, 220 eSignal, 178 EthicalBay, 221 E*Trade, 176, 177 Etsy, 16, 26, 30 expense reduction, and corporate growth, 78–79 Facebook, 4, 31, 83, 93, 96, 201 data gathering and sales by, 41, 44 innovation by acquisition of startups, 78 IPO of, 192–93, 195 psychological experiments conducted on users by, 32–33 factors of production, 212–14 Fairmondo, 221 Family Assistance Plan, 63 family businesses, 103–4, 231–32 FarmVille, 192 favor banks, 161 Febreze Set & Refresh, 108 Federal Reserve, 137–38 feedback loop, and positive reinforcement, 28 Ferriss, Tim, 201 feudalism, 17 financial services industry, 131–33, 171–73, 175 Fisher, Irving, 158 flash crash, 180 flexible purpose corporations, 119–20 flow, investing in, 208–10 Forbes,88, 173, 174 40-hour workweek, reduction of, 58–60 401(k) plans, 171–74 Francis, Pope, 227, 228, 234 Free, Libre, Open Knowledge (FLOK) program, 217–18 Free (Anderson), 33 free money theory, local currencies based on, 156–59 barter exchanges, 159 during Great Depression, 158–59 self-help cooperatives, 159 stamp scrip, 158–59 tax anticipation scrip, 159 Wörgls, 157–58 frenzy, 98–99 Fried, Jason, 59 Friedman, Milton, 64 Friendster, 31 Frito-Lay, 80 front running, 180–81 Fulfillment by Amazon, 89 Fureai Kippu (Caring Relationship Tickets), 162 Future of Work initiative, 56n Gallo, Riso, 103–4 Gap, 116 Gates, Bill, 186 General Electric, 132 General Public License (GPL) for software, 216 Gesell, Silvio, 157 GI Bill, 99 Gimein, Mark, 147 Gini coefficient of income inequality, 81–82, 92 global warming, 135, 227–28, 237 GM, 80 Goldman Sachs, 133, 195 gold standard, 139 Google, 8, 48, 78, 83, 90–91, 93, 141, 218 acquisitions by, 191 business model of, 37 data sales by, 37, 44 innovation by acquisition of startups, 78 IPO of, 194–95 protests against, 1–3, 5, 98–99 grain receipts, 128 great decoupling, 53 Great Depression, 137, 158–59 Great Exhibition, 1851, 19 Greenspan, Alan, 132–33 growth, 1–11 bazaars, and economic expansion in late Middle Ages, 16–18 central currency and, 126, 129–31, 133–36 digital industrialism, growth agenda of, 14–15, 23–24 highly centralized e-commerce platforms and, 29 startups, hypergrowth expected of, 187–91 as trap (See growth trap) growth trap, 4–5, 68–123 central currency as core mechanism of, 133–34 corporations as program and, 68–82 platform monopolies and, 82–93, 101 recoding corporate model and, 93–97 steady-state enterprises and, 98–123 guaranteed minimum income programs, 62–65 guaranteed minimum wage public jobs, 65–66 guilds, 17 Hagel, John, 76–77 Hardin, Garrett, 215–16 Harvard Business Review,108–9 Heiferman, Scott, 196–97 Henry VIII, King, 215, 229 Hewlett-Packard UK, 112 high-frequency trading (HFT), 179–80 Hilton, 115 Hobby Lobby case, 72 Hoffman, Reid, 61 Holland, Addie Rose, 205–6 holograms, 235 Homeport New Orleans, 121 housing industry, 135 Huffington, Arianna, 34, 35, 201 Huffington Post, 34, 201 human role in economy, 13–67 aristocracy’s efforts to control peasant economy, 17–18 bazaars and, 16–18 big data and, 39–44 chartered monopolies and, 18 decreasing employment and, 30–39 digital marketplace, impact of, 24–30 industrialism and, 13–16, 18–24, 44 “likes” economy and, 30–39 reevaluation of employment and adopting policies to decrease it and, 54–67 sharing economy and, 44–54 Hurwitz, Charles, 117 IBM, 90–91, 112 inclusive capitalism, 111–12 income disparity corporate model and, 81–82 digital technology as accelerating, 53–54 Gini coefficient of, 81–82, 92 growth trap and, 4 power-law dynamics and, 27–28, 30 public service options for reducing, 65–66 IndieGogo, 30, 199 individual retirement accounts (IRAs), 171 industrial farming, 134–35 industrialism, 18–24 branding and, 20 digital, 13–16, 23–24, 44, 53–54, 93, 101–2, 201, 214, 226 disempowerment of workers and, 18–19 human connection between producer and consumer, loss of, 19–20 isolation of human consumers from one another and, 20–21 mass marketing and, 19–20 mass media and, 20–21 purpose of, 18–19, 22 value system of, 18–19 inflation, 169 Instagram, 31 Intercontinental Exchange, 182 interest, 129–31 investors/investing, 70, 72, 168–223 algorithmic trading and, 179–84 bounded, 210–15 commons model for running businesses and, 215–23 crowdfunding and, 198–201 derivative finance, volume of, 182 digital technology and, 169–70, 175–84 direct public offerings (DPOs) and, 205–6 discount brokerages and, 176–78 diversification and, 208, 211 dividends and, 208–10 flow, investing in, 208–10 high-frequency trading (HFT) and, 179–80 in low-interest rate environment, 169–70 microfinancing platforms and, 202–4 platform cooperatives and, 220–23 poor performance of do-it-yourself traders and, 177–78 retirement savings and, 170–75 startups and, 184–205 ventureless capital and, 196–205 irruption, 98 i-traffic, 196 iTunes, 27, 29, 34, 89 J.


pages: 371 words: 98,534

Red Flags: Why Xi's China Is in Jeopardy by George Magnus

"World Economic Forum" Davos, 3D printing, 9 dash line, Admiral Zheng, AlphaGo, Asian financial crisis, autonomous vehicles, balance sheet recession, banking crisis, Bear Stearns, Bretton Woods, Brexit referendum, BRICs, British Empire, business process, capital controls, carbon footprint, Carmen Reinhart, cloud computing, colonial exploitation, corporate governance, crony capitalism, currency manipulation / currency intervention, currency peg, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, full employment, general purpose technology, Gini coefficient, global reserve currency, Great Leap Forward, high net worth, high-speed rail, hiring and firing, Hyman Minsky, income inequality, industrial robot, information security, Internet of things, invention of movable type, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land reform, Malacca Straits, means of production, megacity, megaproject, middle-income trap, Minsky moment, money market fund, moral hazard, non-tariff barriers, Northern Rock, offshore financial centre, old age dependency ratio, open economy, peer-to-peer lending, pension reform, price mechanism, purchasing power parity, regulatory arbitrage, rent-seeking, reserve currency, rising living standards, risk tolerance, Shenzhen special economic zone , smart cities, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, speech recognition, The Wealth of Nations by Adam Smith, total factor productivity, trade route, urban planning, vertical integration, Washington Consensus, women in the workforce, working-age population, zero-sum game

The growth in services should be actively encouraged, both in megacities such as Beijing or Shanghai, which are already well -served, but also and importantly in other cities, especially those inland, which are not.28 Modern service industries, which remain relatively closed, could be deregulated and opened up, for example in a wide range of communication, professional, business, entertainment and information services. Income inequality should be lowered across both income groups and regions. China has a relatively high Gini coefficient (a measure of income inequality between 0 and 1, where, theoretically, a reading of 0 means that income is equally shared by all, and a reading of 1 means income accrues to just 1 person). The latest data from official sources in China revealed a Gini coefficient of 0.47 in 2015, compared with 0.3 in the 1980s. Gini coefficients around 0.3–0.4 are generally thought to be high. Another measure of income inequality shows that 1 per cent of Chinese households own a third of the country’s wealth, while just 1 per cent of wealth is owned by the bottom 25 per cent.29 Rebalancing is complex and Xi’s China will be unwilling to adopt many of the reform proposals and suggestions that Western thinking normally urges.

(i) Butterfield and Swire Group (i) C929 (i) Cairncross, Sir Alec (i) Calcutta (i) Calomiris, Charles (i) Cambodia (i), (ii), (iii), (iv) Cameroon (i) Canada Chinese investment (i) immigration rates and WAP (i) TPP (i), (ii) US steel imports (i) Canton (i) Canyon Bridge Capital Partners (i) capital, movement of Asian crisis (i), (ii) insecurity manifested (i) problems with (i) reasons for and control of (i) Shanghai free trade zone (i) vigilance and restrictions (i) Caribbean (i) cars (i), (ii) Carter, Jimmy (i) Caucasus Mountains (i) Census Bureau (US) (i) Central Asia (i), (ii), (iii) central bank (i) see also banks Central Commission for Discipline Inspection (i), (ii), (iii) Central Military Commission (i), (ii), (iii) centralisation (i), (ii) ‘century of humiliation’ (i), (ii), (iii), (iv) CFIUS (Committee on Foreign Investment in the United States) (i) Chamber of Commerce (US) (i) Chengdu (i) Chiang Kai-shek (i) children (i) Chile (i), (ii) China (under Xi Jinping) economic contradictions (i) international relations divergence (i) politics back in command (i) Socialism with Chinese Characteristics for a new Era (i) technology divergence from the West (i) ‘China 2030’ (World Bank and Chinese State Council) (i) China Banking Regulatory Commission (CBRC) created (i) merger (i), (ii) national financial security campaign (i) new rules issued (i) WMPs (i) China Construction Bank (i), (ii), (iii) China Development Bank (i), (ii) China Development Forum (i) ‘China Financial Markets: A US Retreat on Global Trade Will Not Lead to a Shift in Power’ (Michael Pettis) (i) n12 China Foreign Exchange Trade System (i) China–Hong Kong Bond Connect Scheme (i) China Household Finance Survey (i) China Insurance Regulatory Commission (i), (ii), (iii), (iv) China Investment Corporation (i), (ii) n7 China Labour Bulletin (i) China Minsheng Bank (i) China Mobile (i) China–Pakistan Economic Corridor (i), (ii), (iii) China Railway Group (i) China Securities Regulatory Commission chief of dismissed (i) corporate governance guidance by (i) created (i) local government financing and (i) national financial security campaign (i) new rules issued (i) permission to use homes as security (i) stock market crash (i) China Telecom (i) China Unicom (i) ChinaChem (i) Chinalco (i) Chinese Academy of Social Sciences (i) Chinese Dream (i), (ii), (iii), (iv) Chinese People’s Political Consultative Conference (i) Chongqing (i), (ii), (iii), (iv) Christchurch (Dorset) (i) Christians (i), (ii), (iii) Cirque du Soleil (i) Cisco (i) Clinton, Bill (i) Clinton, Hillary (i) cloud, the (i), (ii), (iii) Club Med (i) CNR (i) Coalbrookdale (Shropshire) (i) colonialism (i) Columbus, Christopher (i) Comac C919 (i) Commerce, Department of (i), (ii), (iii) Commercial Bank of China (i) Communist Party see also Party Congresses in numerical order at head of index Belt and Road Initiative promises (i) Cultural Revolution’s effect (i) Deng’s commitment to (i) Department of Propaganda (i) destructive policy under Mao (i) embryo of (i) founding members (i) grip on power (i), (ii) legitimacy of (i), (ii), (iii) primacy of (i) movement towards (i) social and economic model of (i) SOEs and (i) state control, maintenance of (i) usurping machinery of government (i) vested interest opposed to reform (i) Xi and: anti-corruption campaigns (i); centralisation of power (i); National Financial Work Conference (i); position as head of (i); power derived from (i); socialism Chinese style (i); Xi reboots (i) Comprehensive and Progressive Agreement for Trans-Pacific Partnership (i), (ii) Comprehensive Economic Dialogue (i), (ii) Conference Board (i) Confucius (i), (ii), (iii), (iv) Congress (US) (i) Connaught Street (Hong Kong) (i) constitution (i) consumption trends (i), (ii) cooperatives (i) Corporation Law (1993) (i) Corruption Perception Index (i) see also anti-corruption campaigns credit gaps (i) credit intensity (i) CSR (i) Cultural Revolution cause of instability and suffering (i) macroeconomic effects (i) Mao’s legacy (i) Western mission following (i) Xi and (i) currencies (i), (ii), (iii), (iv) see also Renminbi currency reserves (i) current accounts (i) Czech Republic (i) Dalai Lama (i) Dalian (i), (ii) Dalian Wanda (i), (ii) data protection (i) Davos (i), (ii), (iii), (iv) de Gaulle, Charles (i) debt and finance (i) see also banks; shadow banks bad debt (i) bank assets and liabilities (i), (ii) debt crisis (i) debt trap (i), (ii) efficiency of investment (i), (ii) GDP and debt (i) government debt (i) growth and size of debt (i), (ii), (iii) household debt (i) LGFVs (i) systemic risk (i) ‘Decision on Major Issues Concerning Comprehensively Deepening Reforms, The’ (18th Congress of the Central Committee) (i) Democratic Republic of Congo (i) demographics age-related spending (i) demographic dividends (i), (ii) effects of one-child policy abandonment (i) fertility and one-child policy (i) labour force trends (i) macroeconomic essence of ageing (i) Dempsey, Martin (i) Deng Xiaoping cat quotation (i) commitment to Communist Party (i) Cultural Revolution comment (i) economic reforms (i), (ii), (iii), (iv) enrichment under (i) inspirational but ageing (i) ‘last action’ of (i) low profile for China (i) market-based systems (i) Party and state (i) ‘Reform and Opening Up’ (i), (ii) Southern Tour (i), (ii), (iii) Xi, Mao and (i) Denmark (i), (ii) Design of Trade Agreements Database (i) Deutsche Bank (i) Deutschmark (i) Development Research Center (State Council) (i), (ii) Diamer-Bhasha dam (i) Diaoyu islands (i), (ii), (iii) dim sum bonds (i) disease (i) Djibouti (i), (ii), (iii), (iv) Document 9 (2013) (i) Doha round (i) Duterte, Rodrigo (i) East Africa (i) see also Africa East China Sea (i), (ii) East India Company (i) East Wind Train (i) eastern Europe (i), (ii) economic freedom (i) economic traps (i), (ii) education (i), (ii), (iii) EEC (i) see also European Union Egypt (i) energy (i) Enlightenment, the (i) environment, the (i) Environmental Protection, Ministry of (i) Equatorial Guinea (i) Ericsson (i) ‘Essay on Universal History, The Manners and Spirit of Nations, An’ (Voltaire) (i) Estonia (i) Ethiopia (i) Euro (i) Europe (i), (ii) see also European Union; individual countries; West, the European Central Bank (i) European Commission (i) European Union Chinese investment (i) currencies (i) data protection regulation (i) frictions and insecurities (i), (ii) MES (i) pensions and healthcare spending (i) renewable energy comparison (i) TTIP (i) Eurozone (i) exchange rates (i), (ii), (iii) Export–Import Bank of China (i), (ii) exports (i), (ii) external surpluses (i) Facebook (i) failures, banks (i) family structures (i) Federal Reserve (i) Fenby, Jonathan (i) fertility rates (i), (ii), (iii) Finance Ministry (i), (ii) financial innovation (i) financial policy (i) financial stability (i) Finland (i) First Five-Year Plan (1953–57) (i) First Opium War (i), (ii), (iii) First World War (i), (ii), (iii) fiscal control (i) Fists of Righteous Harmony (i) Five-Year Plans see 1st Five-Year Plan; 13th Five-Year Plan Florida (i) Foochow (i), (ii) Ford, Henry (i) Foreign Affairs, Ministry of (i), (ii) foreign trade and investment (i) investment tensions (i) standing up for globalisation (i) TPP and US withdrawal (i) trade tensions with US (i) Forsea Life Insurance (i) Fort Meyers, Florida (i) Fosun International (i), (ii) four economic traps (i), (ii) Four Seasons Hotel (Hong Kong) (i) Foxconn (i) Fragile by Design (Charles Calomiris and Stephen Haber) (i) France Boxer Rebellion (i) early attempts in China (i), (ii) falling fertility (i) immigration rates (i) Qing dynasty and (i) treaty ports controlled by (i) Frankfurt (i) Fraser Institute (i) Free and Open Indo-Pacific Strategy (i) free trade agreements (FTAs) (i) Freedom House (i) freight trains (i) see also high-speed rail; transport Friedman, Milton (i) FTZs (free trade zones) (i) Fu Chengyu (i) Fujian (i), (ii), (iii) Fuzhou (i) see also Foochow G20 (i) Gate of Heavenly Peace (i) Gateway terminal (London) (i) GATT (General Agreement on Trade and Tariffs) (i) GDP 1st century to 18th century (i) 19th century (i) 2017 (i) assets and liabilities (i) bank assets and (i) budgetary revenues (i) changes in production (i) consumption share (i) credit growth and (i) credit intensity of (i) data bias (i) debt (i), (ii), (iii) economic stimulus package (i) education spending (i) Eurasia (i) exports and imports (i) external surpluses (i) government revenues (i) growth of financial assets (i) industrial investment share (i) investment rate (i) local government and (i) pensions and health care (i), (ii) problem with targeting (i) productivity increases (i) public sector debt (i) real estate (i) research and development (i) residential housing investment (i) service sector (i) shadow sector (i) SOEs (i) stimulus package (i) trade surplus (i) TVEs share (i) General Data Protection Regulation (EU) (i) General Motors (i) geo-economics (i) geography (i) Geography of Peace, The (Nicholas John Spykman) (i) George III, King (i) Germany Boxer Rebellion (i) claims and spheres of influence (i) control of treaty port (i) Deutschmark (i) research and development (i) robots (i) Gewirtz, Julian (i), (ii) n16 Gilgit-Baltistan (i) Gill, Indermit (i) Gini coefficients (i) Global Innovation Index (i) global leadership (i) global reserves (i) Global Trade Alert (i) globalisation (i), (ii), (iii), (iv) Goldman Sachs (i) Google (i) governance (i), (ii), (iii) ‘Governance Indicators’ (World Bank) (i) government departments see under name of department GPs (medical general practitioners) (i) GPT (general purpose technology) (i), (ii) Grand Canal (i), (ii) Grand Chip GmbH (i) Great Divergence (i) Great Divergence, The: China, Europe and the Making of the Modern World Economy (Kenneth Pomeranz) (i) Great Leap Forward (i), (ii), (iii), (iv) Great Wall of China (i) Greece (i), (ii), (iii), (iv) Green, Michael (i) Groningen Growth and Development Centre (i) growth (i) see also GDP Guangdong (i), (ii), (iii) Guangxi (i) Guangzhou free trade zone (i) growing importance of (i) real estate prices (i) SOEs in (i) Sun Zhigang (i) treaty ports (i) ‘Guidelines on AI Basic Research Urgent Management Projects’ (National Natural Science Foundation) (i) ‘Guiding Opinions of the Central Committee of the Communist Party of China and the State Council on Deepening State-Owned Enterprise Reform’ (i) Guizhou-Cloud Big Data (i) Guo Shuqing (i), (ii) Gutenberg, Johannes (i) Gwadar (i), (ii) Haber, Stephen (i) Hague, The (i) Hambantota (i) healthcare (i) Hebei province (i), (ii), (iii) Hewlett Packard (i) high-speed rail (i) see also freight trains; transport Hilton Hotels (i) Himalayas (i) HNA (i), (ii) Holland (i) Hong Kong ageing population (i) Asian Tiger economies (i) development of Western technology by (i) exports and insurance (i) fertility rates (i) handover anniversary (i) high growth maintained (i) importance of British era (i) middle- to high-income (i) Mutual Fund Connect (i) Renminbi bonds (i) separatism issue (i), (ii) Shanghai and China Hong Kong Bond Connect Schemes (i) Shanghai stock market and (i) trade with China (i) Treaty of Nanking (i) Hong Kong and Shanghai Bank (i) housing (i), (ii), (iii) Hu Jintao eruption of economy under (i) focus of (i) ‘lost decade’?

Its leaders have been cognisant of them for a while. In 2007, former premier Wen Jiabao said at the National People’s Congress that the Chinese economy was becoming unstable, unbalanced, uncoordinated and unsustainable.6 Wen was worried by a long list of concerns including over-investment, unbalanced trade, inequality of incomes between cities and the countryside, wasteful and inefficient use of energy and other resources, and environmental damage. A decade on, most of these problems are still awaiting effective solutions. In May 2016, the People’s Daily published an 11,000-word, front-page interview with an ‘authoritative source’ – widely believed but never confirmed to be Liu He, a close economic adviser to President Xi Jinping – that warned that China was on a dangerous and unstable path, and needed to extensively reform its economic model with urgency.7 The interview appeared in the wake of a turbulent economic and financial period in China, encompassing a 40 per cent plunge in the value of the Shanghai composite stock market index, an unexplained, albeit minor, devaluation of the Renminbi, and capital flight that contributed a loss of about $1 trillion to China’s prized foreign exchange reserves.


pages: 267 words: 79,905

Creating Unequal Futures?: Rethinking Poverty, Inequality and Disadvantage by Ruth Fincher, Peter Saunders

barriers to entry, classic study, ending welfare as we know it, financial independence, full employment, gentrification, Gini coefficient, income inequality, income per capita, labour market flexibility, labour mobility, longitudinal study, low skilled workers, low-wage service sector, marginal employment, minimum wage unemployment, New Urbanism, open economy, pink-collar, positional goods, purchasing power parity, shareholder value, spread of share-ownership, The Bell Curve by Richard Herrnstein and Charles Murray, urban planning, urban renewal, very high income, women in the workforce, working poor, working-age population

The Economist (November 5–11, 1994, pp. 19–23) cited similar figures, giving the United States, Australia, New Zealand and Switzerland the highest level of income inequality among thirteen countries, and Sweden and Japan the lowest inequality. Table 2.2 presents the results of a survey by Atkinson (1994), which shows income inequality in seventeen OECD countries in the late 1980s. The level of income inequality, as measured by the Gini coefficient, was highest in the United States, with Australia being ranked as the sixth most unequal of these countries, with a Gini coefficient 15 per cent higher than the mean. As emphasised by Atkinson (1994), however, these rankings are based on individual studies from each country and the figures may therefore not be comparable across countries.

Table 2.2 Income inequality in OECD countries, late 1980s Country Year Gini coefficent Gini as % of mean Rank Australia Belgium Canada Denmark Finland France Germany Ireland Italy Japan Netherlands New Zealand Norway Portugal Sweden United Kingdom United States Mean 1989 1988 1983 1987 1985 1984 1990 1987 1989 1989 1989 1989 1989 1989 1989 1989 1989 – .322 .234 .382 .209 .200 .372 .260 .352 .297 .296 .296 .295 .244 .312 .210 .324 .431 .279 115 84 137 75 72 133 93 126 106 106 106 106 87 112 75 116 154 100 6 14 2 15 17 3 12 4 8 8 8 8 13 7 15 5 1 – Source: Atkinson 1994, pp. 41–2. differences in income inequality in selected countries in the middle of the 1980s, measured using identical analytical procedures for all countries.10 The Gini coefficient is greatest in the United States, followed by Italy, Australia and then France. Inequality is lower in Sweden than in any other country, followed by Belgium, Luxembourg and then Germany. A further measure of income inequality is shown in Table 2.3. This is the ratio of the income share of the highest equivalent income quintile to the share of the lowest quintile, which is a measure of the distance between the highest and lowest income groups.11 The range is widest in the United States, followed by Australia and then Canada and Italy.

Most of these studies have used a poverty line set at 50 per cent of equivalent median income. Thus, these are studies of the extent of relative low income rather than deprivation, and as such they measure one aspect of inequality rather than poverty (Veit-Wilson 1993). Nevertheless, they are very pertinent 58 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 58 UNDERSTANDING POVERTY AND SOCIAL EXCLUSION Table 2.3 Income inequality in countries in LIS database, mid-1980s Year Gini coefficient Income share ratio a 1985–86 1985 1987 1984 1984 1986 1985 1987 1987 1986 1986 .31 .23 .28 .30 .25 .31 .23 .26 .21 .29 .34 5.07 3.19 4.33 4.55 3.49 4.86 3.22 3.85 3.04 4.54 6.46 Country Australia Belgium Canada France Germany Italy Luxembourg Netherlands Sweden United Kingdom United States Note: Source: a This is the ratio of the income share of the highest quintile of the income distribution to the share of the lowest quintile.


pages: 440 words: 108,137

The Meritocracy Myth by Stephen J. McNamee

Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, American ideology, antiwork, Bernie Madoff, British Empire, business cycle, classic study, collective bargaining, computer age, conceptual framework, corporate governance, deindustrialization, delayed gratification, demographic transition, desegregation, deskilling, Dr. Strangelove, equal pay for equal work, estate planning, failed state, fixed income, food desert, Gary Kildall, gender pay gap, Gini coefficient, glass ceiling, helicopter parent, income inequality, informal economy, invisible hand, job automation, joint-stock company, junk bonds, labor-force participation, longitudinal study, low-wage service sector, marginal employment, Mark Zuckerberg, meritocracy, Michael Milken, mortgage debt, mortgage tax deduction, new economy, New Urbanism, obamacare, occupational segregation, old-boy network, pink-collar, plutocrats, Ponzi scheme, post-industrial society, prediction markets, profit motive, race to the bottom, random walk, Savings and loan crisis, school choice, Scientific racism, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, the strength of weak ties, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, upwardly mobile, We are the 99%, white flight, young professional

One standard measurement of the extent of inequality is the Gini coefficient, which measures the extent of the discrepancy between the actual distribution of income and a hypothetical situation in which each quintile of the population receives the same percentage of income. Values of the Gini coefficient range between zero and one, where zero indicates complete equality and one indicates complete inequality. Thus, the higher the number, the greater the degree of inequality. Using reports from the U.S. Census Bureau, Levine (2012b) demonstrates that the Gini coefficient for the United States has steadily and incrementally increased from 0.386 in 1968 to 0.469 in 2010—representing a 21.5 percent increase over a forty-two-year span. Increases in wealth inequality are even more dramatic. The ratio of wealth of the top 1 percent of wealth holders to median wealth had increased from 125 times the median in 1962 to 225 times by 2009 (Mishel et al. 2012, 383).

Because of the amount of ownership highly concentrated in this group, the top 1 percent of wealth holders are often referred to as “the ownership class” and are used as a proxy threshold for inclusion in the American “upper class.” In short, the degree of economic inequality in the United States is substantial by any measure. In fact, the United States now has greater income inequality and higher rates of poverty than other industrial countries (Wilkinson and Pickett 2009; Grusky and Krichell-Katz 2012; Mishel et al. 2012; Kerbo 2006; Smeeding, Ericson, and Jantti 2011; Salverda, Nolan, and Smeeding 2009; Sieber 2005). Moreover, the extent of this inequality is increasing. One standard measurement of the extent of inequality is the Gini coefficient, which measures the extent of the discrepancy between the actual distribution of income and a hypothetical situation in which each quintile of the population receives the same percentage of income.

., 1 , 2.1-2.2 entrepreneurial capitalists, 1 , 2 , 3 entrepreneurial traits, 1 , 2 franchisees not considered as entrepreneurs, 1 irregular economy, participation in, 1.1-1.2 luck as part of success, 1 , 2 random-walk hypothesis, 1 social capital, use of, 1 , 2 , 3 upward mobility, aiming for, 1 , 2 See also self-employment Etcoff, Nancy, 1.1-1.2 ethics See moral character F Forbes magazine income listings, 1.1-1.2 , 2.1-2.2 , 3 franchises, 1.1-1.2 , 2 free-market economy, 1.1-1.2 , 2 T The Frontier in American History (Turner), 1.1-1.2 F frontier influence in America, 1 , 2 , 3 , 4 functional theory of inequality, 1 G gambling, 1 , 2 , 3 , 4.1-4.2 , 5 Gates, Bill, 1 , 2 , 3 , 4.1-4.2 , 5 Gendall, Murray, 1 Gilded Age, 1 , 2 , 3 Gini coefficient, 1.1-1.2 Gladwell, Malcolm, 1 , 2 glass ceiling, 1 , 2 , 3.1-3.2 , 4 government programs education funding, 1 , 2 , 3 health care, 1 , 2 highway subsidies and suburb development, 1 , 2 home ownership, encouraging, 1 , 2 land giveaways, 1 the poor as targets of, 1 , 2 , 3 proposed asset-building policies, 1.1-1.2 “thousand points of light” as alternative, 1 transfer payment, 1 Granovetter, Mark, 1.1-1.2 Great Depression, 1 , 2 , 3 Great Recession African Americans affected by, 1 , 2 age discrimination during, 1 class issues resulting from, 1 debt and bankruptcies, rise of, 1.1-1.2 factors leading to, 1.1-1.2 home ownership during, 1.1-1.2 , 2 mortgage debt as contributor, 1 retirement delays caused by, 1 self-employment increase, 1 white-collar crime leading to, 1 H Hamermesh, Daniel S., 1.1-1.2 , 2 hard work beauty achieved through, 1 capitalism, associated with, 1 , 2 consumption as reward, 1 as determinant of inequality, 1 increased work hours as a coping strategy, 1.1-1.2 modest effects of, 1 self-made men and, 1 as a success factor, 1 , 2 , 3.1-3.2 , 4 , 5 , 6 health health care plans, 1.1-1.2 , 2 , 3 , 4.1-4.2 , 5 , 6 older workers, 1 wealth affecting, 1 , 2 , 3.1-3.2 , 4 , 5 Herrnstein, Richard, 1.1-1.2 , 2 hierarchy-of-needs theory, 1 , 2 higher education See college hiring practices, 1.1-1.2 , 2 , 3 Hispanics, 1 , 2 , 3 , 4 , 5 , 6 , 7 Hochschild, Jennifer, 1 hockey player success, 1.1-1.2 Home Advantage (Lareau), 1.1-1.2 home ownership, 1.1-1.2 , 2.1-2.2 , 3 , 4.1-4.2 homosexuality and discriminatory practices, 1.1-1.2 , 2 human capital, 1 , 2.1-2.2 , 3 , 4 , 5 , 6 I IBM, 1.1-1.2 immigrants, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 , 7 individualism as culturally dominant, 1 democracy, expressed through, 1 , 2.1-2.2 as greatly valued, 1 , 2 immigrants and, 1.1-1.2 as part of the entrepreneurial personality, 1 pioneer spirit reinforcing, 1 through self-employment, 1 self-help books promoting, 1 inequalities charitable giving as a means of reducing, 1.1-1.2 conflict and functional theories of, 1.1-1.2 economic inequalities, 1 , 2 , 3 , 4.1-4.2 , 5 , 6 , 7 , 8 educational system and, 1 , 2.1-2.2 , 3.1-3.2 , 4 , 5 , 6 , 7 , 8 , 9 gender inequality, 1.1-1.2 government spending as a factor, 1 , 2 ideologies of, 1.1-1.2 labor unions working to reduce, 1 matrix of domination, 1 residential inequalities, 1 , 2 taxes and, 1.1-1.2 , 2 in wages and income, 1.1-1.2 , 2.1-2.2 , 3.1-3.2 , 4 , 5 , 6.1-6.2 in wealth, 1 , 2 , 3.1-3.2 , 4 , 5 , 6 , 7 , 8 , 9 inheritance advantages of wealth inheritance, 1 , 2.1-2.2 , 3 attitudes towards, 1 , 2 baby boomers and, 1.1-1.2 , 2 conflict theories, within, 1 cultural capital and, 1 , 2.1-2.2 , 3 , 4 domestic partnerships and, 1 estate and inheritance taxes, 1.1-1.2 , 2 of estates, 1 , 2 Forbes magazine, heirs listed in, 1.1-1.2 inequalities, perpetuating, 1 , 2 , 3 luck and, 1 as a natural right, 1 nepotism and, 1.1-1.2 as a nonmerit factor, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 , 7 , 8 old money and, 1.1-1.2 parental motivation, 1.1-1.2 , 2 primogeniture, 1 relay race, compared to, 1 , 2.1-2.2 , 3 , 4 , 5 wealth distribution through, 1 women and inheritance of wealth, 1 In Praise of Nepotism: A Natural History (Bellow), 1.1-1.2 A An Inquiry into the Nature and Causes of the Wealth of Nations (Smith), 1 I integrity, 1 , 2.1-2.2 inter vivo transfers, 1.1-1.2 , 2 , 3 , 4 investments, economic, 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11.1-11.2 , 12 , 13 IQ and IQ tests, 1.1-1.2 , 2.1-2.2 , 3 , 4 , 5 , 6 irregular economy, 1 , 2.1-2.2 , 3 , 4 J Jencks, Christopher, 1 , 2 jobs See occupations Jones, Janelle, 1.1-1.2 K Kildall, Gary, 1.1-1.2 Kozol, Jonathan, 1 L labor unions, 1 , 2 , 3.1-3.2 Lareau, Annette, 1.1-1.2 Lears, Jackson, 1 Lewis, Oscar, 1.1-1.2 Livingstone, David W., 1 , 2 lookism, 1 , 2 , 3 , 4 , 5 , 6 lottery, 1 , 2 , 3.1-3.2 , 4 lower class See working class luck denial of, 1.1-1.2 , 2 with gambling, 1 getting ahead, as a factor in, 1 , 2 , 3.1-3.2 lottery and, 1 , 2 as a nonmerit factor, 1 as part of capitalism, 1 in striking it rich, 1 , 2 wealth attainment and, 1 , 2.1-2.2 , 3 M marriage career interruptions due to, 1 marrying into money, 1 , 2 the poor and, 1 , 2.1-2.2 sexual discrimination and, 1.1-1.2 , 2 trailing partners and hiring practices, 1 upper class and, 1 , 2 , 3 , 4.1-4.2 , 5 Marx, Karl, 1 Maslow, Abraham, 1 , 2 Massey, Douglas S., 1 , 2 Matthew effect, 1 , 2 matrix of domination, 1.1-1.2 Medicare, 1 , 2.1-2.2 mentors, 1 , 2.1-2.2 , 3 , 4 , 5.1-5.2 meritocracy affirmative action and, 1 American promotion of merit, 1.1-1.2 , 2 , 3.1-3.2 , 4 , 5 , 6 coping strategies, 1 , 2 credentials, lack of as a barrier, 1.1-1.2 as a desired outcome, 1 discrimination as the antithesis of merit, 1.1-1.2 , 2.1-2.2 , 3 , 4 , 5 , 6 , 7.1-7.2 , 8 , 9.1-9.2 , 10 , 11 education as a merit filter, 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 employment opportunities, 1.1-1.2 , 2.1-2.2 , 3 entrepreneurial success, 1 fairness of the system, 1 , 2.1-2.2 , 3 , 4 , 5 folklore of, 1 government spending and, 1.1-1.2 , 2 in the hiring process, 1.1-1.2 , 2 human capital factors, 1 , 2 , 3 income based on merit, 1 inheritance as a nonmerit factor, 1 , 2.1-2.2 , 3 , 4 , 5.1-5.2 , 6 , 7.1-7.2 , 8 , 9 , 10 , 11 , 12 , 13.1-13.2 intergenerational wealth transfers, 1.1-1.2 legacy preferences as nonmerit based, 1.1-1.2 , 2 luck as a nonmerit factor, 1 , 2 , 3 , 4 , 5.1-5.2 market trends, 1.1-1.2 meritocratic aristocracy, 1.1-1.2 nepotism as nonmeritorious, 1.1-1.2 the new elite as extra-meritorious, 1 noblesse oblige increasing potential for, 1 nonmerit factors suppressing merit, 1 , 2 , 3 , 4 , 5 Barack Obama as example of, 1.1-1.2 , 2 the past, reverence for, 1 physical attractiveness as a nonmerit factor, 1 , 2 pure merit system, 1.1-1.2 reform movements and, 1 , 2 self-employment as an expression of, 1 social and cultural capital as nonmerit factors, 1.1-1.2 , 2 , 3 , 4.1-4.2 , 5.1-5.2 , 6 , 7 , 8.1-8.2 , 9 , 10 , 11 structural mobility and, 1.1-1.2 talents and abilities of the merit formula, 1 , 2 , 3 , 4 , 5 , 6 taxes and nonmerit advantages, 1.1-1.2 Mexican Americans and Mexican immigrants, 1 , 2 , 3 , 4 Microsoft, 1.1-1.2 middle class America as not middle class, 1 asset building, 1 cultural capital, 1.1-1.2 deferment of gratification, 1 education and, 1 , 2 , 3 Great Recession affecting, 1 home ownership, 1 inner cities, flight from, 1 , 2 Barack Obama, background of, 1.1-1.2 old class vs. new, 1.1-1.2 precarious status of, 1.1-1.2 sports choices of, 1 upper-middle class, 1 , 2 T The Millionaire Mind (Stanley), 1 M millionaires, 1 , 2 , 3 minority groups affirmative action, 1.1-1.2 , 2.1-2.2 asset accumulation, 1.1-1.2 core employment, underrepresentation in, 1 disadvantages of, 1 discrimination experiences, 1 , 2.1-2.2 , 3 , 4.1-4.2 , 5 , 6.1-6.2 , 7 , 8 , 9 , 10 education issues, 1.1-1.2 as inner city dwellers, 1 opportunities expanding, 1 , 2 , 3 self-employment and, 1 social capital, lack of, 1 , 2 , 3 moral character, 1.1-1.2 , 2 Mormons, 1 Murray, Charles, 1.1-1.2 , 2 , 3.1-3.2 Muslims, 1.1-1.2 N National College Athletic Association (NCAA), 1 nepotism, 1.1-1.2 , 2 net worth affirmative action and, 1 defined, 1 by income group, 1 of minority groups, 1 of Barack Obama family, 1 of one percenters, 1 , 2 , 3 of Walton heirs, 1.1-1.2 wealth scale, 1.1-1.2 new elite, 1 , 2.1-2.2 noblesse oblige, 1.1-1.2 O Obama, Barack, 1.1-1.2 , 2 , 3 , 4 Obama, Michelle, 1.1-1.2 occupations attitude as a factor, 1 , 2 blue-collar jobs, 1 , 2 , 3 , 4 , 5 CEO salaries, 1.1-1.2 , 2 changes in opportunities, 1.1-1.2 , 2 cultural capital and, 1.1-1.2 , 2 the disabled and employment difficulties, 1 discrimination, 1 , 2 , 3.1-3.2 , 4 , 5 , 6 , 7 downsizing, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 education linked to, 1 , 2.1-2.2 , 3.1-3.2 , 4.1-4.2 , 5 , 6.1-6.2 , 7.1-7.2 , 8 , 9.1-9.2 , 10.1-10.2 , 11 , 12.1-12.2 , 13 , 14.1-14.2 fastest growing jobs, 1.1-1.2 , 2.1-2.2 health hazards, 1 nepotism and, 1 , 2 occupational mobility, 1.1-1.2 , 2 occupational segregation, 1 , 2.1-2.2 outsourcing, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 physical attraction and occupational success, 1 self-employment and, 1 self-made men, 1.1-1.2 social capital and occupational opportunities, 1 , 2 , 3 , 4 wages, 1.1-1.2 , 2 , 3 , 4 , 5.1-5.2 , 6.1-6.2 , 7.1-7.2 , 8 white-collar jobs, 1 , 2 , 3 , 4 , 5 , 6 Occupy Wall Street (OWS), 1 old boy networks, 1 , 2 , 3.1-3.2 old money, 1.1-1.2 , 2.1-2.2 Outliers: The Story of Success (Gladwell), 1 , 2 outsourcing, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 ownership class, 1 , 2 , 3 , 4 P Paterson, Tim, 1 Peale, Norman Vincent, 1.1-1.2 pensions, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 pink-collar ghetto, 1.1-1.2 poverty children affected by, 1 , 2 culture-of-poverty theory, 1.1-1.2 , 2 full-time work below poverty level, 1 as a matter of attitude, 1 meritocracy and, 1 , 2 minority rates of, 1 , 2 poverty threshold, 1 regional variations in poverty rates, 1.1-1.2 , 2 senior citizens and poverty rates, 1 U.S. poverty rates, 1 T The Power of Positive Thinking (Peale), 1.1-1.2 P Protestants and the Protestant ethic, 1.1-1.2 , 2 , 3 , 4 , 5 Puritan values, 1.1-1.2 R racism and racial issues affirmative action, 1.1-1.2 athletes and, 1 crime and the legal system, 1.1-1.2 disabilities, disproportionate experience of, 1 discrimination and, 1 , 2.1-2.2 , 3.1-3.2 , 4 , 5.1-5.2 , 6 , 7 , 8 in education, 1.1-1.2 employment, affecting, 1 Great Recession worsening racial equality, 1 home ownership, 1 ideologies of inequality, as part of, 1 income gaps, 1 language skills and, 1 Obama, election of, 1 , 2 scientific racism, 1.1-1.2 segregation, 1 , 2.1-2.2 , 3 social capital and, 1 , 2 , 3 , 4 white flight, 1 , 2 random-walk hypothesis, 1 recession See Great Recession references, 1 , 2 , 3 retirement as part of the American Dream, 1 , 2 delayment as a coping strategy, 1 , 2.1-2.2 , 3 home ownership and funding of, 1 as jeopardized, 1 , 2.1-2.2 proposed supplementation, 1 self-employment and, 1 , 2 , 3 right attitude, 1 , 2.1-2.2 , 3 , 4 , 5 , 6 , 7 T The Rise of Meritocracy, 1870–2033:An Essay on Education and Equality (Young), 1 , 2 R Rivera, Lauren, 1 Rosenau, Pauline Vaillancourt, 1.1-1.2 S Schmitt, John, 1.1-1.2 schools See education segregation educational, 1 , 2 , 3 occupational, 1 , 2 , 3 , 4.1-4.2 racial, 1 , 2.1-2.2 , 3 , 4 , 5 residential, 1 , 2 , 3.1-3.2 of the wealthy, 1.1-1.2 white flight, 1 See also discrimination self-employment American Dream, as exemplifying, 1 franchises, 1 freelancing, 1 , 2 income, 1.1-1.2 irregular economy and, 1.1-1.2 , 2 , 3 , 4 petty bourgeoisie and, 1 psychological characteristics, 1 rates of, diminished, 1 , 2 , 3 , 4.1-4.2 , 5 , 6 , 7.1-7.2 , 8 risk, 1 , 2 , 3.1-3.2 , 4 subcontractors, 1 taxes, 1.1-1.2 , 2 women and minorities, 1.1-1.2 self-help books, 1 , 2 self-made individuals, 1 , 2 , 3 , 4.1-4.2 , 5 , 6 sexual harassment, 1.1-1.2 Shapiro, Thomas, 1 , 2.1-2.2 slaves and slavery, 1 , 2 , 3 , 4 , 5 , 6 , 7 small businesses, 1 , 2 , 3 , 4 , 5.1-5.2 , 6 , 7.1-7.2 , 8 , 9 Smith, Adam, 1 social capital benefits of, 1.1-1.2 , 2 defined, 1 , 2 , 3 discrimination and, 1 , 2 economic opportunities, having access to, 1 , 2 , 3 education and, 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 mentorship as a form of, 1 nepotism and, 1.1-1.2 , 2 racism and lack of, 1 , 2 , 3 , 4 restricted access, effects of, 1.1-1.2 , 2.1-2.2 social climbing, 1 , 2 , 3.1-3.2 , 4 of U.S. presidents, 1.1-1.2 weak ties, 1.1-1.2 social climbing, 1 , 2 , 3.1-3.2 , 4 social clubs, 1 , 2 , 3.1-3.2 social mobility athletic and artistic abilities, associated with, 1 , 2.1-2.2 , 3 cultural capital as a factor in, 1 education link, 1 , 2 , 3 hard work as a factor, 1 individual merit, 1 integrity hindering, 1.1-1.2 marrying for money, 1 reduction of opportunities, 1 , 2 during Republican administrations, 1 role of government, 1 , 2 social climbing, 1.1-1.2 , 2 status attainment, 1 through self-employment, 1 social reform movements, 1.1-1.2 Social Register, 1 social reproduction theory, 1.1-1.2 , 2 Social Security, 1.1-1.2 , 2 , 3 , 4 , 5.1-5.2 Something for Nothing: Luck in America (Lears), 1.1-1.2 T the South, 1 , 2.1-2.2 , 3 , 4 , 5 S Stanley, Thomas, 1 status-attainment theory, 1.1-1.2 Stevens, Mitchell, 1 stock market, 1 , 2 , 3 , 4 student loans, 1 , 2.1-2.2 success athletic success, 1 , 2.1-2.2 attitudes associated with, 1 , 2 , 3.1-3.2 birth timing and, 1.1-1.2 , 2 cultural capital, 1 , 2 , 3 , 4 discrimination, achieving success through, 1 education, as a factor in, 1 , 2 , 3 , 4 , 5 entrepreneurial success, 1 , 2 , 3 God’s grace, success as sign of, 1 , 2 hard work and, 1 , 2 , 3.1-3.2 , 4 , 5 human capital factors, 1 individualism as key to, 1 intelligence as a determinant, 1 luck as important, 1 meritocracy myth and, 1 mind-power ethic as success formula, 1.1-1.2 moral character and, 1 , 2 , 3.1-3.2 , 4 parental involvement, 1.1-1.2 , 2 , 3.1-3.2 the right stuff, being made of as key, 1.1-1.2 , 2.1-2.2 , 3 , 4 small businesses and, 1 social capital increasing likelihood of, 1 , 2 , 3 suburban living as marker of, 1 10,000 hour rule, 1 women and, 1 , 2 supply side, 1 , 2 , 3 , 4 , 5 , 6.1-6.2 Survival of the Prettiest (Etcoff), 1.1-1.2 Swift, Adam, 1.1-1.2 T talent and abilities American aristocracy, 1 American Dream, leading to, 1 of athletes and celebrities, 1 education enhancing, 1 , 2 , 3.1-3.2 functional theory of inequality, 1 jobs matched to talent, 1 success achieved through, 1 , 2 , 3 , 4 , 5 , 6 talent-use gap, 1 upward mobility and, 1 , 2.1-2.2 , 3.1-3.2 taxes capital gains, 1.1-1.2 estate taxes, 1 , 2 , 3.1-3.2 government policies linked with, 1 , 2 incentives and credits, 1.1-1.2 income taxes, lowered by Republicans, 1 irregular economy, avoiding, 1.1-1.2 progressive taxation, 1.1-1.2 , 2 , 3 , 4 property taxes and school funding, 1.1-1.2 self-employment and, 1.1-1.2 , 2 Social Security affected by, 1 , 2 the South and lower taxes, 1 tax breaks for the wealthy, 1 , 2 , 3 , 4.1-4.2 of urban areas, 1 , 2 Thurow, Lester, 1 , 2.1-2.2 Tocqueville, Alexis de, 1.1-1.2 , 2 tracking, 1 , 2.1-2.2 , 3 , 4 Turner, Frederick Jackson, 1.1-1.2 U Unequal Childhoods (Lareau), 1 upper class charitable giving and, 1 cultural capital, holders of, 1 , 2 , 3.1-3.2 , 4.1-4.2 , 5 deferred gratification, capability of, 1 distinctive lifestyle, 1.1-1.2 , 2 education, 1 , 2 endogamy, tendency towards, 1.1-1.2 as exclusive, 1.1-1.2 , 2 as isolated, 1.1-1.2 one percenters as members, 1 Plymouth Puritans as wellspring, 1 political power, 1.1-1.2 social clubs, frequenting, 1.1-1.2 virtues found in, 1 WASP background of, 1 women of, 1 , 2 , 3 upward mobility attitudes as affecting, 1 barriers to, 1 through college education, 1 credentialism and, 1 downward mobility, vs., 1 through entrepreneurialism, 1 glass ceiling as limiting, 1 integrity as suppressing, 1.1-1.2 irregular economy, as avenue, 1 marriage as a means of, 1.1-1.2 Michelle Obama as example, 1 slowing rates of, 1 See also social climbing See also social mobility V Vedder, Richard, 1 , 2 virtue, 1.1-1.2 , 2 , 3 , 4 , 5 , 6 , 7 W Walmart, 1 Walton, Sam, 1 , 2 , 3 wealth accumulation gaps, 1 , 2 , 3 advantages of wealth inheritance, 1 , 2.1-2.2 capital investments, 1 charitable giving and the wealthy, 1 , 2.1-2.2 culture of, 1 , 2 discrimination and, 1 , 2 distribution as skewed, 1.1-1.2 Forbes magazine listings, 1.1-1.2 gambling, attainment through, 1 government intervention, 1.1-1.2 , 2 Great Recession affecting, 1 guilt feelings, 1.1-1.2 hard work as negligible, 1 inequalities of, 1 , 2 , 3.1-3.2 , 4 , 5 , 6 , 7 , 8 , 9 lottery, wealth attainment through, 1 luck as a factor, 1 , 2.1-2.2 , 3 marriage rates, affecting, 1 nepotism aiding in transference of, 1 old money, 1.1-1.2 , 2.1-2.2 one percenters, 1 , 2 , 3 , 4 , 5 ostentatious displays of, 1 political power, 1.1-1.2 property ownership producing, 1 , 2 pursuit of as a moral issue, 1.1-1.2 , 2 race affecting, 1 social and cultural capital, converted to, 1 , 2 the superwealthy, 1 , 2 , 3 , 4.1-4.2 tax breaks for the wealthy, 1 taxes on, 1.1-1.2 transfers of, 1.1-1.2 , 2 , 3.1-3.2 women and, 1 See also inheritance See also self-employment Weber, Max, 1.1-1.2 welfare, 1 , 2 , 3 , 4 , 5 , 6 , 7 white Anglo-Saxon Protestants (WASPs), 1.1-1.2 , 2 white-collar crime, 1.1-1.2 , 2 Wilson, William Julius, 1 , 2 Winfrey, Oprah, 1.1-1.2 Wisconsin school, 1.1-1.2 women attractiveness as a success factor, 1 , 2 , 3.1-3.2 discrimination against, 1 , 2 , 3 , 4 , 5.1-5.2 , 6.1-6.2 , 7.1-7.2 , 8.1-8.2 , 9.1-9.2 , 10 economic disparities, 1 , 2 , 3.1-3.2 educational attainment, 1.1-1.2 , 2 family concerns, 1.1-1.2 , 2.1-2.2 , 3.1-3.2 glass ceiling, experiencing, 1 , 2 , 3.1-3.2 , 4 inferiority, feelings of, 1.1-1.2 labor force participation, increasing, 1.1-1.2 , 2 mentorships, access to, 1 , 2.1-2.2 occupational disparities, 1 , 2 , 3.1-3.2 , 4.1-4.2 , 5.1-5.2 political underrepresentation, 1.1-1.2 self-employment and, 1.1-1.2 as trailing partners, 1 of the upper class, 1 , 2 , 3 working class American Dream and, 1 cultural capital, lack of, 1.1-1.2 , 2 economic instability, 1.1-1.2 education issues, 1 , 2 , 3 hard work and, 1 health risks, 1 home ownership, 1 lower class value stretch, 1 nepotism, effect of, 1 the new lower class, 1 women and incomes, 1 work See hard work See occupations Y Young, Michael, 1 , 2 About the Authors Stephen J.


pages: 355 words: 63

The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

Andrei Shleifer, business climate, business cycle, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, foreign exchange controls, Gini coefficient, government statistician, Gunnar Myrdal, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, low interest rates, manufacturing employment, Money creation, Network effects, New Urbanism, open economy, PalmPilot, Productivity paradox, purchasing power parity, rent-seeking, Robert Solow, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, Tragedy of the Commons, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

Let’s look at the relationship between land inequality and economic growth. I am measuring inequality with the Gini coefficient, which goes from 0 (everyone has equal land) to 1 (1person has all the land). The fourth of the sample with the lowest inequality (average Gini coefficient of .45) hadthe highest average growth. This fourth includes such growth superstars as South Korea, Japan, and Taiwan. (Korea had the highest growth rate and the most equal land distribution in the sample.) The fourth of the sample with the highest land inequality (average Gini coefficient of 35)had the lowest growth. This highly unequal fourth includes such growth disasters as Argentina, Peru, and V e n e ~ u e l a .In ~ Argentina, for example, it was the policies of Juan and Eva Peron to redistribute income toward the descamisados (shirtless ones) that sent the Argentine economy spiraling downward until recently.

See Hunger Foreign Assistance, 9, 25, 26,28, 31-35, 37, 38, 43, 58, 79, 101, 109, 110, 118, 274 aid contests, 119 Foreign direct investment, 131 Foreign exchange, 82, 106,114, 129, 130 France, 110,157,268 337 Frankel, Jeffrey, 231 Freedom from expropriation, 250 Freedom from government repudiation of contracts, 250 Free market, 152, 178 Free trade, 230-231,239 Gabon, 201 Gambia, 73,164 Gates, Bill, 185 Geneva, 289 Georgia, 12,233 Germany, 54,65,268 Ghana, 214,219,222-223,229,251-252, 256-257,259-261,264,267 adjustment loans, 103, 104 Ashanti Empire, 256-257,264 cocoa, 222,256-257,261,264 famine, 28 growth and aid, 5 , 2 6 , 2 7 , 4 4 , 74, 119 infrastructure, 7, 107, 108, 111, 112, 113 Rawlings government, 28 Gini coefficient, 265 Government, 148,154, 168, 177,179,181, 217-219,221,234,241,249,252,255258,261,277,279,285-286,290-291 budget deficits, 218-219, 239, 260 leaders (officials), 181, 241, 247, 250, 258,263 policies, 158, 168, 169, 213, 218, 234235,251,259 programs, 169 welfare payments, 168 Gramm-Rudman, 113 Great Depression, 30, 95 Greece, 267-268 Growth disasters, 42, 59, 60, 74 Growth theories Harrod-Domar Model, 2 8 , 2 9 , 3 6 minimum standard model (revised), 34, 35 population pressure principle, 94 Solow model with diminishing returns to investment, 50, 51, 52, 53, 54,57, 68, 69,78 surplus labor model, 30, 31,40,41 Growth Oriented Adjustment Programs, 102.

The source for the Ghana storyis Easterly and Levine 1997;consult them for further references. 6. Leith 1974. 7.The measure of inequality is the Ginicoefficient.The data and results on land inequality and growth are from Deininger and Squire 1998; others who have found a negative relationship between inequality and growth include Alesina and Rodrik 1994; Persson and Tabellini 1994; Perotti 1996; and Clarke 1995. A contrarian positive inequality and growthresult is found by Forbes 1998,2000, using fixed effects to remove country averages; however, Deininger and Olinto 2000 find a negative effect of lnnd inequality on growth even using fixed effects. 8. Easterly, 1999b.


pages: 1,324 words: 159,290

Grand Transitions: How the Modern World Was Made by Vaclav Smil

8-hour work day, agricultural Revolution, AltaVista, Anthropocene, Any sufficiently advanced technology is indistinguishable from magic, biodiversity loss, Biosphere 2, Boeing 747, caloric restriction, caloric restriction, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, circular economy, clean water, complexity theory, correlation does not imply causation, COVID-19, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic dividend, demographic transition, Deng Xiaoping, disruptive innovation, energy transition, European colonialism, Extinction Rebellion, Ford Model T, garden city movement, general purpose technology, Gini coefficient, Google Hangouts, Great Leap Forward, Haber-Bosch Process, Hans Rosling, hydraulic fracturing, hydrogen economy, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of movable type, Johann Wolfgang von Goethe, Just-in-time delivery, knowledge economy, Law of Accelerating Returns, manufacturing employment, mass immigration, megacity, meta-analysis, microplastics / micro fibres, ocean acidification, oil shale / tar sands, old age dependency ratio, peak oil, planetary scale, planned obsolescence, power law, precision agriculture, purchasing power parity, RAND corporation, Ray Kurzweil, Republic of Letters, Robert Solow, Silicon Valley, Simon Kuznets, Singularitarianism, Skype, Steven Pinker, Suez canal 1869, the built environment, The Rise and Fall of American Growth, total factor productivity, urban decay, urban planning, urban sprawl, working-age population

Subsequently, China has seen a sharp reduction of poverty, but also a substantial increase of inequality. By 2010 China’s Gini coefficient reached 0.53–0.55, considerably higher than the US value of 0.45 and ranking among the highest recorded inequalities worldwide, particularly in comparison with countries that have comparable or higher standards of living (Xie and Zhou 2014). For comparison, the Standardized World Income Inequality Database put China’s Gini coefficient at 0.5 in 2013 (Solt 2018). China also faces considerable inequality of opportunities (gaps in access to certain financial services and unemployment insurance coverage), regional disparities, and continuing rural-urban gap.

As a result, since 1980 income inequalities (commonly measured by the Gini coefficient) have increased in every affluent economy, as well as globally. When this trend is seen on the national basis its most notable outcome has been the emptying of the middle, with most of the national means falling below the threshold of the middle class (Milanovic 2012). The world’s fastest-growing economy has also experienced the fastest shift in inequality. Inequality in Maoist China, with its shared miseries, was low and it remained so during the first years of economic modernization: in 1985 the Gini coefficient was 0.24. Subsequently, China has seen a sharp reduction of poverty, but also a substantial increase of inequality.

Benefits of cities continue to be shared much less equitably than they should be in societies whose main concern would be a modicum of a decent quality of life for all (especially for children) rather than the unending quest for individual riches. Excessive urban inequalities have much in common with high crime rates: they are not direct functions of city size but rather reflections of many historical, economic, social, and cultural realities. Disparities in Tokyo are obvious but not revolting; Hong Kong, despite its strong social net, has a high level of inequality; and Africa and Latin America have cities with immense gaps between poverty and affluence. Johannesburg has an exceptionally high Gini coefficient in excess of 0.75; other capitals of inequality include Ethiopia’s Addis Ababa (Gini at about 0.6), Colombia’s Bogotá, Kenya’s Nairobi, Mexico City, Peru’s Quito, and Ghana’s Accra (Hugo 2015).


pages: 717 words: 150,288

Cities Under Siege: The New Military Urbanism by Stephen Graham

"hyperreality Baudrillard"~20 OR "Baudrillard hyperreality", addicted to oil, airport security, Alan Greenspan, Anthropocene, anti-communist, autonomous vehicles, Berlin Wall, call centre, carbon footprint, clean tech, clean water, congestion charging, creative destruction, credit crunch, DARPA: Urban Challenge, defense in depth, deindustrialization, digital map, disinformation, Dr. Strangelove, driverless car, edge city, energy security, European colonialism, export processing zone, failed state, Food sovereignty, gentrification, Gini coefficient, global supply chain, Global Witness, Google Earth, illegal immigration, income inequality, knowledge economy, late capitalism, Lewis Mumford, loose coupling, machine readable, market fundamentalism, mass incarceration, McMansion, megacity, military-industrial complex, moral panic, mutually assured destruction, Naomi Klein, New Urbanism, offshore financial centre, one-state solution, pattern recognition, peak oil, planetary scale, post-Fordism, private military company, Project for a New American Century, RAND corporation, RFID, Richard Florida, Scramble for Africa, Seymour Hersh, Silicon Valley, SimCity, smart transportation, surplus humans, The Bell Curve by Richard Herrnstein and Charles Murray, urban decay, urban planning, urban renewal, urban sprawl, Washington Consensus, white flight, white picket fence

Many economists would concur with Giovanni Andrea Cornia when he argues that ‘most of the recent surge in income polarization [within nations] would appear to be related to the policy drive towards domestic deregulation and external liberalization.’19 This has tended to concentrate wealth within social classes, corporations and locations that are capable of profiting from privatization and the extension of finance capital, while undermining wages, wealth and security for more marginalized people and places. In the US, for example, the Gini coefficient – the best measure of social inequality – rose from an already high level of 0.394 in 1970 to 0.462 in 2000. (A Gini score of 0 indicates perfect equality, with everyone having the the same income; a score of 1 represents perfect inequality, with one person collecting all the income and everyone else having an income of zero. A score above 0.3 implies an extremely unequal society.) Social polarization in the US is thus now exceeded by only a handful of very poor countries in Africa and Latin America.20 By 2007, the income of the wealthiest fifth of the US population averaged $168,170 a year, while the poorest fifth scraped by on an average of $11,352.

Its income inequality – again measured by the Gini coefficient – has risen dramatically since the early 1960s, with the remodelling of the economy through radical re-regulation, privatization and neoliberalization (Figure 1.3). For the richest 10 per cent of the UK population, incomes rose in real terms by 68 per cent between 1979 and 1995. Their collective income now matches that of the nation’s poorest 70 per cent. During the same period, incomes for the poorest 10 per cent of UK households actually fell by 8 per cent (not considering housing costs). This rapidly reversed reductions in inequality achieved during the post-war Keynesian boom in the UK.

At the same time, according to Philip Bond in the Independent, ‘the speculative capital that could be deployed or invested by the bottom 50 per cent of the British population fell from 12 per cent to just 1 per cent’.24 1.3 Radical growth in income inequality in the UK between 1961 and 2002/3 for income before housing costs (BHC) and after housing costs (AHC), as measured by the Gini coefficient. The imposition of market fundamentalism had particularly spectacular effects on the ex-Communist Comecon block after the collapse of communism in the late 1980s. Not only did this create a handful of billionaires and oligarchs but, at the same time, it increased the number of people living in poverty and deep insecurity from three million in 1988 to 170 million in 2004.25 Globally, by 2007, well over a billion people – a third of all urban dwellers – were leading a highly precarious existence in fast-growing slums and informal settlements.26 Increasingly, the developing world has come to be dominated by immiserized shanty-town populations whose daily insecurities encourage a receptivity to radical, violently anti-Western ideologies and movements.


pages: 309 words: 86,909

The Spirit Level: Why Greater Equality Makes Societies Stronger by Richard Wilkinson, Kate Pickett

"Hurricane Katrina" Superdome, basic income, Berlin Wall, classic study, clean water, Diane Coyle, epigenetics, experimental economics, experimental subject, Fall of the Berlin Wall, full employment, germ theory of disease, Gini coefficient, God and Mammon, impulse control, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, labor-force participation, land reform, longitudinal study, Louis Pasteur, meta-analysis, Milgram experiment, mirror neurons, moral panic, Murray Bookchin, offshore financial centre, phenotype, plutocrats, profit maximization, profit motive, Ralph Waldo Emerson, statistical model, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, ultimatum game, upwardly mobile, World Values Survey, zero-sum game

We use the ratio of the income received by the top to the bottom 20 per cent whenever we are comparing inequality in different countries: it is easy to understand and it is one of the measures provided ready-made by the United Nations. When comparing inequality in US states, we use the Gini coefficient: it is the most common measure, it is favoured by economists and it is available from the US Census Bureau. In many academic research papers we and others have used two different inequality measures in order to show that the choice of measures rarely has a significant effect on results. DOES THE AMOUNT OF INEQUALITY MAKE A DIFFERENCE? Having got to the end of what economic growth can do for the quality of life and facing the problems of environmental damage, what difference do the inequalities shown in Figure 2.1 make?

2 There are lots of ways of measuring income inequality and they are all so closely related to each other that it doesn’t usually make much difference which you use. Instead of the top and bottom 20 per cent, we could compare the top and bottom 10 or 30 per cent. Or we could have looked at the proportion of all incomes which go to the poorer half of the population. Typically, the poorest half of the population get something like 20 or 25 per cent of all incomes and the richest half get the remaining 75 or 80 per cent. Other more sophisticated measures include one called the Gini coefficient. It measures inequality across the whole society rather than simply comparing the extremes.

It measures inequality across the whole society rather than simply comparing the extremes. If all income went to one person (maximum inequality) and everyone else got nothing, the Gini coefficient would be equal to 1. If income was shared equally and everyone got exactly the same (perfect equality), the Gini would equal 0. The lower its value, the more equal a society is. The most common values tend to be between 0.3 and 0.5. Another measure of inequality is called the Robin Hood Index because it tells you what proportion of a society’s income would have to be taken from the rich and given to the poor to get complete equality. To avoid being accused of picking and choosing our measures, our approach in this book has been to take measures provided by official agencies rather than calculating our own.


pages: 756 words: 120,818

The Levelling: What’s Next After Globalization by Michael O’sullivan

"World Economic Forum" Davos, 3D printing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Toffler, bank run, banking crisis, barriers to entry, Bernie Sanders, Big Tech, bitcoin, Black Swan, blockchain, bond market vigilante , Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, business process, capital controls, carbon tax, Celtic Tiger, central bank independence, classic study, cloud computing, continuation of politics by other means, corporate governance, credit crunch, CRISPR, cryptocurrency, data science, deglobalization, deindustrialization, disinformation, disruptive innovation, distributed ledger, Donald Trump, driverless car, eurozone crisis, fake news, financial engineering, financial innovation, first-past-the-post, fixed income, gentrification, Geoffrey West, Santa Fe Institute, Gini coefficient, Glass-Steagall Act, global value chain, housing crisis, impact investing, income inequality, Intergovernmental Panel on Climate Change (IPCC), It's morning again in America, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", junk bonds, knowledge economy, liberal world order, Long Term Capital Management, longitudinal study, low interest rates, market bubble, minimum wage unemployment, new economy, Northern Rock, offshore financial centre, open economy, opioid epidemic / opioid crisis, Paris climate accords, pattern recognition, Peace of Westphalia, performance metric, Phillips curve, private military company, quantitative easing, race to the bottom, reserve currency, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Scramble for Africa, secular stagnation, Silicon Valley, Sinatra Doctrine, South China Sea, South Sea Bubble, special drawing rights, Steve Bannon, Suez canal 1869, supply-chain management, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, tulip mania, Valery Gerasimov, Washington Consensus

In fact, there is a weak correlation between the extent to which a country is globalized and its level of inequality, and many of the more highly globalized countries have decent social welfare systems that mitigate inequalities. For instance, Ireland is more globalized than its close neighbor England but has a lower inequality score. The most commonly used measurement of inequality is the Gini coefficient, which measures how skewed or unequal the distribution of income is across a society. It has a value of zero if there is complete equality and of one if a single household has all the income. Typically, a score of above 0.31 signals higher inequality. According to the OECD website, the United States has a score of 0.39, which is very high compared to other countries.

According to the OECD website, the United States has a score of 0.39, which is very high compared to other countries. Mexico has a Gini of 0.46. In contrast, Canada has a lower inequality score (Gini coefficient of 0.31) partly because it has a very different approach to policy making. Inequality is a concern in the developed world because it is persistent. In the context of low growth in incomes and wealth, the tensions associated with inequality are exacerbated. In emerging countries, inequality in income seems to be much less of a political and social issue, because with incomes and wealth growing at a relatively fast pace, people continue to expect to do better in the longer run, which is not the case in developed countries.

Evidence from a range of sources—the World Bank, OECD, and Branko Milanovic, a leading academic in the areas of development economics and inequality—shows that across the developed world inequality is high, with the United States and South Africa in the lead in this respect, followed by Turkey, Chile, Israel, the United Kingdom, and Spain.17 Among other countries, Sweden has become slightly less equal though its Gini coefficient is nonetheless at a very low level, close to that of France, the Netherlands, and Canada. There are other ways of examining differences in income distribution. For example, according to the Economic Policy Institute,18 income inequality as captured by the share of income of the top 1 percent is now back to levels not seen since the 1920s.


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

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, asset allocation, Basel III, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, blood diamond, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collective bargaining, commoditize, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Dava Sobel, David Graeber, disintermediation, double entry bookkeeping, en.wikipedia.org, estate planning, fear index, financial engineering, financial innovation, Flash crash, forward guidance, Garrett Hardin, Gini coefficient, Glass-Steagall Act, global reserve currency, high net worth, High speed trading, hindsight bias, hype cycle, income inequality, inflation targeting, interest rate swap, inverted yield curve, Isaac Newton, Jaron Lanier, John Perry Barlow, joint-stock company, joint-stock limited liability company, junk bonds, Kodak vs Instagram, Kondratiev cycle, Large Hadron Collider, liquidity trap, London Interbank Offered Rate, London Whale, loss aversion, low interest rates, margin call, McJob, means of production, microcredit, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, negative equity, neoliberal agenda, New Urbanism, Nick Leeson, Nikolai Kondratiev, Nixon shock, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, oil shock, open economy, paradox of thrift, plutocrats, Ponzi scheme, precautionary principle, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, random walk, rent-seeking, reserve currency, Richard Feynman, Right to Buy, road to serfdom, Ronald Reagan, Satoshi Nakamoto, security theater, shareholder value, Silicon Valley, six sigma, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Jobs, survivorship bias, The Chicago School, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tragedy of the Commons, trickle-down economics, two and twenty, Two Sigma, Tyler Cowen, Washington Consensus, wealth creators, working poor, yield curve

Canada Speaking purely for myself, quite a few places high on the left-hand list are places I have no desire to live, which probably reflects the fact that the per capita GDP figures are skewed towards small countries that either are rich in resources or are tax havens. Gini coefficient A numeric technique for measuring a society’s inequality. It’s used to measure income inequality in particular. A Gini coefficient of 0 would mean perfect equality, in which everyone had the same income; a Gini coefficient of 1 would be perfect inequality, in which one person had all the money and everybody else had nothing. Here are the top ten least-equal countries in the world, as measured by the CIA, with the most unequal at the top:39 1.

The promise of neoliberalism is that that doesn’t matter, as long as the poor are getting richer too. A rising tide lifts all boats, as the cliché has it. It lifts the rich boats quicker, but in the neoliberal scheme of things that’s not a problem. Inequality isn’t just the price you pay for rising prosperity; inequality is what makes rising prosperity possible. The increase in inequality therefore isn’t just some nasty accidental side effect of neoliberalism; it’s the motor driving the whole economic process. During the third of a century in which neoliberalism has been the dominant economic model, almost nobody has been willing to face this reality about the philosophical underpinnings of the system.

The median is the person in the middle, with 50 percent above and 50 percent below. When the mean goes up and the median stays still, that is a sign of rising inequality. Imagine a football team whose star player gets a $1,000,000 pay raise. The team’s average pay will go up, but the median—the bloke in the middle—will be paid the same. That’s proof that inequality in the team has risen. In the Anglo-American world, the mean and the median have diverged sharply in the last few decades, as inequality has measurably increased. Only the people at the top are better-off; everyone else is finding life harder. In the United States there has been no increase in the median wage in the last three decades, even as average earnings have gone up sharply.


Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano

banking crisis, banks create money, barriers to entry, business cycle, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, fixed income, floating exchange rates, Future Shock, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, Money creation, money: store of value / unit of account / medium of exchange, offshore financial centre, old-boy network, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce

Inequality and Poverty Ecuador’s recent crises have come in a context of high poverty and income inequality. Although Latin America as a whole has extremely high income inequality compared with other regions of the world, especially Europe and East Asia, Ecuador’s record is unenviable even within Latin America. Moreover, unlike some other Latin American countries, which combine high inequality with relatively high per-capita income, Ecuador’s inequality is accompanied by low per-capita income. As noted above, Ecuador’s Gini coefficient has worsened in recent years. Table 4.1 indicates that the headcount index of extreme poverty increased from 12 percent in 1995 to 17 percent in 1998, peaking at 21 per- ECUADOR: CRISIS, POVERTY, AND SOCIAL PROTECTION 131 cent in 1999.

Unemployment has fallen heavily on the poorest groups: Among the poorest 20 percent of the population, the unemployment rate in November 1998 was 21 percent, which was almost double the then national average. In real terms, the income of a typical worker earning the minimum wage in the formal sector declined 10 percent from March 1998 to March 1999. Inequality also increased in a country that already had one of the highest levels of inequality in Latin America. The Gini coefficient increased more than 4 percentage points from 0.42 in 1994–95 to 0.47 in 1998 (Coraggio, Larrea, and Sánchez Maria Correia is a Lead Specialist on gender issues at the World Bank. The author gratefully acknowledges Wendy Cunningham and Maria Elena Ruiz Abril, both of the World Bank, for providing valuable unputs and feedback. 177 178 CRISIS AND DOLLARIZATION IN ECUADOR 2000).

Poverty and inequality increased substantially during the crisis. The poverty headcount Suhas Parandekar is an Education Economist at the World Bank. Rob Vos is Deputy Rector and Professor of Finance and Development at the Institute of Social Studies, The Hague, and Professor of Economics at the Free University of Amsterdam. A consultant at the World Bank, Donald Winkler is affiliated with Inter-American Dialogue. 127 128 CRISIS AND DOLLARIZATION IN ECUADOR increased by 12 percentage points between 1995 and 1998 and by another 9 percentage points during 1999. The Gini coefficient of income inequality increased from 0.52 to 0.54 during the same period.1 The bottom quintile’s share of total consumption decreased from 5.3 percent in 1995 to 5.0 percent in 1999.2 Using a consumption-based poverty measure for 1999, the extreme poor—those who fall below the food poverty line— accounted for 20 percent of the total population, or 2.2 million people, and the poor accounted for 55 percent of the population, or 5.9 million people.


pages: 165 words: 45,129

The Economics of Inequality by Thomas Piketty, Arthur Goldhammer

affirmative action, basic income, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, conceptual framework, deindustrialization, endogenous growth, Gini coefficient, income inequality, low skilled workers, means of production, middle-income trap, moral hazard, Pareto efficiency, purchasing power parity, Robert Solow, Simon Kuznets, Tax Reform Act of 1986, The Bell Curve by Richard Herrnstein and Charles Murray, very high income, working-age population

See also Taxes Flat tax, on capital, 64–65 France: attitudes toward inequality, 99; average and marginal rates of redistribution, 102, 102f; capital and labor shares of value added, 41t; effective minimum wage, 110–111; Generalized Social Contribution, 34, 38; household income sources, 6t; income inequality, 12–15, 12t, 24–25; income inequality (1870–1994), 16–17, 16t; income inequality, historical evolution of, 18–19, 22; minimum wage, 91; percentage of obligatory taxes, 101; profit share in, 49–55, 50t; social charges, 46–48; taxes receipts as percent of GDP, 44; unions in, 91–92; wage inequality, 8–11, 11t, 72–73 Freeman, Richard, 87–88 Friedman, Milton, 1, 3, 112 Generalized Social Contribution (CSG), in France, 34, 38 Geographic mobility, wage inequality and human capital, 96 Germany: employment, 24, 25; income inequality, 14; percentage of obligatory taxes, 101; profit share, 53; unions, 91–92; wage inequality, 10, 91, 99 Gini coefficient, 10 Globalization: market integration, 59–60; wage inequality, 73–74 Goolsbee, Austen, 107 Grameen Bank, 63 Grenelle Accords (1968), 49 Gross operating surplus (GOS), 42 Guaranteed basic income, 3, 23, 104, 112–113 Hamermesh, Daniel, 49 Health insurance: adverse selection and, 115; justifications for compulsory, 115–117; as percentage of social charges in 1966 France, 103 Herrnstein, Richard, 82, 87 Hidden underemployment, 25 Household size, income and, 12, 14, 22 Human capital: elasticity of supply of, 78–79, 82–83, 87, 107; measuring types of productivity and, 98; unequal distribution of, 58–60; wage inequality and, 88–89, 92–99 Human capital, structural causes of inequality, 78–79; affirmative action versus fiscal transfers, 86–88; discrimination in labor market and, 85–86; efficiency and, 79–81; inefficient social integration and, 83–84; role of family and education expenses, 81–83 Human capital theory, 66–68; globalization and wage inequality, 73–74; historical inequalities and, 68–69; rise of wage inequality since 1970, 70–71; skill-biased technological change and, 71–73, 76–77, 92; supply and demand and, 69–70 Incentives: basic income and, 113; credit markets and, 60, 62, 114; effects of redistribution on, 105–110; of households to save and invest, 35; human capital and investments, 78–88, 90, 93; of owners to accumulate capital and invest, 28–29 Income: distribution by deciles and centiles, 5–8, 6t; household size and, 12; inequality of, 12–16, 12t, 15t; inequality of, historical evolution, 17–25, 19f, 21t; left-right debate about inequality of, 1–3; types and distribution of, 5–8, 6t.

Other indicators are also used in order to capture the overall inequality of the distribution and not just the gap between the extreme deciles: for instance, the Gini coefficient or the Theil and Atkinson indices (Morrisson, 1996, pp. 81–96). Nevertheless, interdecile indicators (such as P90/P10, D10/D1, P80/P20, etc.) are by far the simplest and most intuitive. The P90/P10 indicator has the merit of being available in reliable numbers for many countries, hence it will be cited frequently in this chapter. For a more complete view of wage inequality, one would need to include figures for public-sector wages in addition to private-sector wages.

These very large disparities of wealth, much greater than wage and income inequalities, are also much less well known. Inequalities of wealth cannot be explained solely by inequalities of present and past income. Behavioral differences with respect to savings and accumulation also play a part (accounting for nearly half of wealth inequality in 1992, according to Lollivier and Verger [1996]). These specific difficulties of accounting for wealth inequality explain why measures of inequality are often limited to inequalities of wages and income. But the main reason why income inequality is always significantly greater than wage inequality is totally different: it comes from the fact that a majority of low-income households are households living on small pensions, often consisting of one person, whereas high-income households are generally couples, often with two earners and children living at home.


pages: 515 words: 142,354

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

"there is no alternative" (TINA), "World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, barriers to entry, battle of ideas, behavioural economics, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low interest rates, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

We don’t have good data to see how these citizens are faring, but for a few countries, we do have data on what has been happening to inequality. These data suggest that indeed, many are facing hardship. In Spain, for instance, in the years before the crisis, inequality had been coming down, but by 2014, the Gini coefficient, a standard measure of income inequality, was about 9 percent over its 2007 level. In the case of Greece, the Gini coefficient increased by 5 percent from just 2010 to 2014. It usually takes years and years to move the Gini coefficient by a few percentage points. Data on poverty reinforce the conjecture that those in the middle and bottom have suffered particularly from the crisis.

It does not, for instance, take into account the distribution of the benefits of growth: even in Germany, large fractions of the population have seen stagnation or even decreases in their incomes.26 From 1992 to 2010, the income share of the top 1 percent increased by about 24 percent;27 and from the mid-1980s until the mid-2000s, Germany’s Gini coefficient and poverty rates climbed steadily—the latter ultimately exceeding the average for the OECD countries.28 Germany’s success in achieving competitiveness came partly at the expense of those at the bottom, though it does a much better job of protecting those at the bottom than the United States does.29 While Germany is hardly the success that it would like to claim for itself, its modest success does not even provide a template for others.

Indeed, central banks may have played an important role in increasing inequality. INCREASING INEQUALITY Today, in most countries around the world, inequality is viewed as one of the greatest threats to future prosperity. At Davos, where the world’s economic leaders come together every January, recent surveys of global risks have consistently placed inequality at or toward the top of the list.20 Inequality is important because divided societies don’t function well; it leads to a lack of cohesiveness that has political, economic, and social consequences. In my book The Price of Inequality, I explained the mechanisms by which greater inequality leads to poorer economic performance—lower growth and more instability.


pages: 297 words: 89,206

Social Class in the 21st Century by Mike Savage

Bullingdon Club, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clapham omnibus, Corn Laws, deindustrialization, deskilling, Downton Abbey, emotional labour, financial independence, gender pay gap, gentrification, Gini coefficient, income inequality, liberal capitalism, Mark Zuckerberg, megacity, meritocracy, moral panic, New Urbanism, Occupy movement, old-boy network, precariat, psychological pricing, Sloane Ranger, The Spirit Level, the strength of weak ties, unpaid internship, upwardly mobile, very high income, winner-take-all economy, young professional

In their highly influential book The Spirit Level, Richard Wilkinson and Kate Pickett use the standard metric to measure inequality between countries – the Gini coefficient – in the fifteen states who were members of the European Union prior to its major enlargement in 2004 and also the major industrial English-speaking countries of Australia, Canada and the USA.2 Figure 2.1 gives an indication of the inequalities within nations as they reflect the relative differences between countries in terms of earnings. The UK is a country of high gross income inequalities between households, coming second only to Ireland in the list of eighteen nations. Figure 2.1 shows also that those inequalities increased between 2008 and 2010 in the UK, as indeed they did in the vast majority of countries surveyed by the Organization for Economic Cooperation and Development (OECD).

Mike Savage, Gaynor Bagnall and Brian Longhurst, Globalization and Belonging (London: 2005). CHAPTER 2: ACCUMULATING ECONOMIC CAPITAL 1. John Hills, Good Times, Bad Times: The Welfare Myth of Them and Us (Bristol: 2015), p. 37. 2. The Gini coefficient measures household income within a nation and reports a score between 0 (perfect equality) and 100 (complete inequality). For precise definition, see http://www.ons.gov.uk/ons/guide-method/method-quality/specific/social-and-welfare-methodology/the-gini-coefficient/index.html. 3. For overviews, see Peter Nolan, ‘Shaping the Future: The Political Economy of Work and Employment’, Industrial Relations Journal, 35(5), 2004, 378–87, and ‘The Changing World of Work’, Journal of Health Services Research and Policy, 9(suppl. 1), 2004, 3–9. 4.

We will show that if we look at class in this way, we can detect a very different structure, one in which a small, wealthy elite class is pitted against a precariat with few resources, and between these two extremes there exist a patchwork of several other classes, all of which have their own distinctive mixes of capital, but none of which comes close to reaching the boundary which demarcates the top rank of the class hierarchy. The paradox of inequality We live with a fundamental paradox. The growth of economic inequality has been dramatic in recent decades. Britain is now more unequal than most comparable nations. Before taxation and welfare transfers, only Portugal and Ireland were more unequal among developed nations. Even after the mildly redistributive effect of taxation and welfare provision, Britain is still more unequal than most of its peers. Surveys show that this shift does not reflect popular perceptions about the legitimacy of inequality. Most people tend to be critical of inequality: 78 per cent of Britons are in favour of at least some forms of redistribution.1 However, when it comes to viewing their own lives, British people do not straightforwardly, or even at all, place themselves as winners and losers in this intense economic competition.


pages: 829 words: 187,394

The Price of Time: The Real Story of Interest by Edward Chancellor

"World Economic Forum" Davos, 3D printing, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, asset allocation, asset-backed security, assortative mating, autonomous vehicles, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, bitcoin, blockchain, bond market vigilante , bonus culture, book value, Bretton Woods, BRICs, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cashless society, cloud computing, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, commodity super cycle, computer age, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cryptocurrency, currency peg, currency risk, David Graeber, debt deflation, deglobalization, delayed gratification, Deng Xiaoping, Detroit bankruptcy, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, double entry bookkeeping, Elon Musk, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, everywhere but in the productivity statistics, Extinction Rebellion, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global reserve currency, global supply chain, Goodhart's law, Great Leap Forward, green new deal, Greenspan put, high net worth, high-speed rail, housing crisis, Hyman Minsky, implied volatility, income inequality, income per capita, inflation targeting, initial coin offering, intangible asset, Internet of things, inventory management, invisible hand, Japanese asset price bubble, Jean Tirole, Jeff Bezos, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, land bank, large denomination, Les Trente Glorieuses, liquidity trap, lockdown, Long Term Capital Management, low interest rates, Lyft, manufacturing employment, margin call, Mark Spitznagel, market bubble, market clearing, market fundamentalism, Martin Wolf, mega-rich, megaproject, meme stock, Michael Milken, Minsky moment, Modern Monetary Theory, Mohammed Bouazizi, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, Northern Rock, offshore financial centre, operational security, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, peer-to-peer lending, pensions crisis, Peter Thiel, Philip Mirowski, plutocrats, Ponzi scheme, price mechanism, price stability, quantitative easing, railway mania, reality distortion field, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk free rate, risk tolerance, risk/return, road to serfdom, Robert Gordon, Robinhood: mobile stock trading app, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, Second Machine Age, secular stagnation, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, stock buybacks, subprime mortgage crisis, Suez canal 1869, tech billionaire, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Haywood, time value of money, too big to fail, total factor productivity, trickle-down economics, tulip mania, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, Walter Mischel, WeWork, When a measure becomes a target, yield curve

Ordinary households deprived of a fair return on savings and small businesses forced to borrow at high rates financed this great wealth transfer. From the early 1980s onwards, the rising incomes of hundreds of millions of Chinese workers contributed to a decline in global inequality. But during this period, China itself transformed from one of the world’s most egalitarian nations into one of the least equal. After 2008, the Gini coefficient for Chinese incomes climbed to 0.49 – an indicator of extreme inequality and more than twice the level at the start of the reform era.fn15 The inequality problem was worse than the official data suggested.132 A 2010 report from Credit Suisse claimed that ‘illegal or quasi-legal’ income amounted to nearly a third of China’s GDP.133 Much of this grey income derived from rents extracted by Party members.

Pettis argues that China’s bezzle includes the real estate market, where market values exceeding fundamental values created what Galbraith called a ‘net increase in psychic wealth’, and wasteful infrastructure projects that are entered at cost in the national income accounts. The total size of China’s bezzle, Pettis suggests, is roughly indicated by the country’s rising stock of unpayable debt. fn15 In 1978, China’s Gini coefficient was 0.22. In 2001, Premier Zhu Rongji suggested that it would be intolerable for the Gini coefficient to exceed 0.4. When inequality passed this threshold in 2012, Beijing stopped publishing the data. (Evan Osnos, Age of Ambition: Chasing Fortune, Truth, and Faith in the New China (New York, 2014), p. 18.) Conclusion fn1 Even though US public debt climbed by over 40 per cent of GDP (2007–18), the government’s debt-service ratio was held at just over 2 per cent of GDP.

Steve Randy Waldman, ‘Inequality and Demand’, Interfluidity, January 2013. 36. Wolff, Century of Wealth, p. 208. 37. World Inequality Database. 38. Wolff, Century of Wealth, p. 682. The Gini coefficient for US wealth was at 0.871 in 2013 (a score of 1 signifying one person owning all wealth). See Scheidel, Great Leveler, p. 309. 39. The top 1 per cent saw its income share fall by around 5 percentage points during the crisis (declining from 22.5 to 17.5 per cent of total income), but it soon recouped most of these losses. 40. Wolff, Century of Wealth, p. 29. Wolff claims that inequality measures are more strongly correlated with profitability, which drives share prices and senior executive pay, than with the profit share of GDP. 41.


pages: 327 words: 88,121

The Vanishing Neighbor: The Transformation of American Community by Marc J. Dunkelman

Abraham Maslow, adjacent possible, Affordable Care Act / Obamacare, Albert Einstein, assortative mating, Berlin Wall, big-box store, blue-collar work, Bretton Woods, Broken windows theory, business cycle, call centre, clean water, company town, cuban missile crisis, dark matter, David Brooks, delayed gratification, different worldview, double helix, Downton Abbey, Dunbar number, Edward Jenner, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, gentrification, George Santayana, Gini coefficient, glass ceiling, global supply chain, global village, helicopter parent, if you build it, they will come, impulse control, income inequality, invention of movable type, Jane Jacobs, Khyber Pass, Lewis Mumford, Louis Pasteur, Marshall McLuhan, McMansion, Nate Silver, obamacare, Occupy movement, off-the-grid, Peter Thiel, post-industrial society, Richard Florida, rolodex, Saturday Night Live, Silicon Valley, Skype, social intelligence, Stanford marshmallow experiment, Steve Jobs, TED Talk, telemarketer, The Chicago School, The Death and Life of Great American Cities, the medium is the message, the strength of weak ties, Tyler Cowen, Tyler Cowen: Great Stagnation, urban decay, urban planning, Walter Mischel, War on Poverty, women in the workforce, World Values Survey, zero-sum game

Between 1979 and 2007, the disposable income of the top 1 percent rose three times over, while the figure for the bottom fifth of income earners rose only 40 percent.35 Just as jaw-dropping: the top 1 percent of Americans saw their share of national income grow from 10 to 20 percent between 1980 and 2012, while the share going to the top .01 percent of American families grew from 1 to 5 percent.36 Nobel-laureate economist Joseph Stiglitz drove the point home recently when he wrote that beginning roughly during the Reagan era, “those with low wages (in the bottom 90 percent) have seen a growth of only around 15 percent in their wages, while those at the top 1 percent have seen an increase of almost 150 percent and the top .01 percent of more than 300 percent.”37 And this has wildly skewed the figures designed to measure economic inequality: the so-called Gini coefficient rose by almost a third between 1980 and 2012, after having reached a postwar low in the mid-1970s.38 The trend hasn’t been uniform across the decades: it attenuated by several measures during the Clinton years. But the effect over the long term, as many have noted, has been to hollow out America’s middle class.

In fact, changing the economics of American mobility has been accompanied by an even more momentous shift: the removal of many of the limitations that once precluded Americans from going where they wanted to go, being who they wanted to be, and doing what they wanted to do. Indeed, much as it may be harder today to jump from one class to another, it’s gotten significantly easier to make all sorts of other leaps. So whatever the dire state of America’s Gini coefficient, the nation’s social mobility, properly understood, has grown in ways most Americans have come to treasure.43 Nothing speaks more powerfully to the expansion of American mobility than the civil rights movement. Less than fifty years after Martin Luther King delivered his “I Have a Dream” speech amid the injustices of Jim Crow, the United States elected an African-American president.

., 15, 50, 56, 187, 190 Chinatown Bus effect and, 47 gerrymandering and, xvi, 182–87, 189 of 2012, 7, 37–38, 184–85 Elks Lodges, 44, 116 e-mail, xi, 8, 109–10, 125, 145 End of History, The (Fukuyama), 230–31 England, xii, 81, 82, 157, 158, 166–67, 179, 194 entrepreneurialism, 82, 164 ethnicity, 32, 79, 147, 148, 231, 237 ethnic tensions, 4, 39 Europe, 81, 226, 230, 232 evangelism, 42, 71 evolution, 90–91 expectations, 30, 60, 70–71, 82 Facebook, 37–38, 45, 48, 108, 114, 124–25, 140, 145, 148–49, 152, 190, 194, 219 faith, loss of, xv, xvii, xviii, 14, 181–82, 193, 195 family, 70, 119, 125, 129, 139, 194 affirmation and, 104–7 extended (traditional), 12, 15, 16, 26–27, 68, 97, 106 health care and, 201, 210 income inequality and, 21–22 nuclear, 16, 26, 32, 84, 145 in Saturn model, 95, 96 single-parent, 26, 30–31, 43, 105, 216 Farmer, Paul, 64 fathers, 12, 106, 131 of author, 132–33, 134, 240 fax machines, 16, 35, 74 fear, 71, 84, 119, 128, 157, 233, 235 of hitchhiking, 133, 134, 135 homosexuality and, 42 quality of life and, 50–52, 55–57, 60 Federal Express, 147–48 Ferguson, Niall, 229 Fiddler on the Roof (musical), 69–70 filibuster, xvi, 182, 185, 188, 191, 248n Filter Bubble, The (Pariser), 37 Fiorina, Morris, 139 First Wave society, 16, 20, 31–32, 233 Fischer, Claude, 87, 88, 105, 106, 128–29, 237–38 Fishkin, James, 192–93 Florida, Richard, 83, 175 food, 51, 58, 62, 79, 136–37, 202 brain and, 90–91 see also agriculture Ford, Gerald, 47 Fortune, 4–5, 14 Fowler, James, 96 Fox News, 184, 187–88 France, 80 Franklin, Rosalind, 161 Freakonomics (Levitt and Dubner), 7, 133–34 freedom, 25, 26, 43, 49, 52, 60, 67, 82, 102, 161, 207 French and Indian War, 157 Friedman, Thomas, xiv, 17–21, 24, 141–42, 151–52, 240 friends, 8, 12, 24, 25, 91, 95, 99–100, 101, 119, 120, 122, 124, 152, 194 affirmation from, 102–3, 104, 107, 110, 111 agreement of, 148–49 health care and, 201, 210 Fukuyama, Francis, 230–31 Galbraith, John Kenneth, 52 Gans, Herbert, 144–45 Gates, Bill, 10 gay marriage, 42, 50, 69 GDP (gross domestic product), 17, 53, 99, 180, 198, 227, 230 gemeinschaft, 86 General Social Survey, 105, 119–20, 260n–61n generational succession, 135 genetics, 160–62 genius, 159, 160, 162 Genovese, Kitty, 84–85 Georgetown University, 118 gerrymandering, xvi, 182–87, 189 ghettos, 128 Gingrich, Newt, 14, 15 Gini coefficient, 22, 23 Girls (TV show), 30 Gladwell, Malcolm, 6, 91–92 globalization, 17–18, 20, 50, 138, 141, 152, 221 global village, 16, 142–43 Google, 37, 194 government, U.S., xii–xviii, 52, 67, 200, 234 dysfunction of, 181–90 French government compared with, 80 health care and, 201–5 public frustration with, xiv–xvii, 181–83, 195 urban decay and, 127 Graduate, The (movie), 4, 28, 30, 248n Granovetter, Mark, 168–69, 266n Great Depression, 60, 68, 85, 202–6, 210, 226 Greatest Generation, 51, 70 Great Migration, 40–41, 43, 137 Great Recession, xv, 54, 55, 62, 106 Great Society, 210, 255n Gresens, Mr., 220–22, 225 grit, 5, 6, 216–25 Grove, Andy, 10 Guest, Avery, 118 Gutenberg, Johann, 162 “habits of the heart,” 81, 89, 115, 138, 258n Habits of the Heart (Bellah), 65–66, 141, 258n Hampton, Keith, 118–19 Harlem Children’s Zone (HCZ), 222, 224 health, health care, 101, 197–211 costs of, 198–200, 204–5, 206, 209–10 public, 197, 199, 204 quality of life and, 31, 51, 52, 57–60, 204 Hearst, William Randolph, 188 heart attack, 58, 200, 207 Heckman, James, 223 helicopter parent, 106 Henry, Peter Blair, 179–81 history, 51, 59, 67, 68, 230–34 affirmation and, 109, 110 of American community, 79–89 Dunbar’s number and, 94 Tofflers’ view of, 15–16 hitchhiking, 132–35 Hoffman, Dustin, 28 homogeneity, 46–47, 135, 147–48, 189, 191 homophobia, 42, 43, 51 homosexuality, 42–43, 87, 88 hospitals, 197, 199–204, 206–7 House of Representatives, U.S., xvi, 182, 184–85, 186 Hout, Mike, 237–38 Hughes, Charles Evans, 187 Hunter, James Davison, 69 hunter-gatherers, 16, 92, 142, 144–45 Hussein, Saddam, 67 Hutterites, 94 identity, 20, 42, 74, 130, 146 immigrants, 79, 82–83, 88, 232 income, xv, 21, 147, 180, 216, 227 discretionary, 55 inequality and, 21–24, 31 national, 21–22, 54 online communities and, 250n working women and, 27, 28 independence, 28–29, 30, 52, 57, 60, 106, 138, 151 of elderly, 197, 203, 207, 208–9 individualism, 65–66, 73, 74, 102 networked, 111 industrial paradigm, 14–15, 26, 82, 84–87, 170–71, 233 Industrial Revolution, xiii, 4, 16, 85, 86, 127, 138, 166, 201 inequality, economic, 21–24, 26, 31 information, 6–8, 18, 21, 26, 138, 260n brought together in a new way, 159–66, 209 Chinatown bus effect and, 35–38 information technology, 13, 16, 125, 141–43, 187, 209 affirmation and, 103–4, 108, 109–10 online communities and, 114–15 infrastructure, xiv, xv, xvi, 11, 25, 45, 194, 236 decay of, 229, 230 health, 200–201, 203–4, 206, 210 Inglehart, Ronald, 67–69, 73 inner directedness, 5–7 inner-ring relationships, see intimate relationships innovation, xiii, xvii, xviii, 158–75, 209 intellectual cross-fertilization, 158–68 interdependence, 17, 85–86 intermarriage: educational, 43–44 racial, 68 Internet, 10, 18, 36, 37, 121, 125, 146, 250n interracial marriage, 68 intimate relationships (inner-ring relationships), 92, 93, 96, 119–20, 137, 138–39, 145, 238 affirmation and, 103–7, 110, 112, 115 Chinatown Bus effect and, 42–46 health care and, 201, 204, 210 see also marriage iPhones, 160, 231 Iraq, 67 isolation: intellectual, 176 social, 73, 87, 113, 115, 118–19, 122, 127, 149, 207 Issacson, Walter, 164 Italy, 17, 163 It Gets Better Project, 43 Jackson, Kenneth, 40 Jacobs, Jane, 85–88, 127, 166–68, 170, 176 Jamaica, 179–81, 191 James, LeBron, 8–9 Japan, 226, 233 Jews, Orthodox, 98–99 jobs, 18–20, 23, 24, 27, 29, 30, 131, 139, 170–71, 235–36, 260n–61n affirmation and, 104–5, 107 assembly line, 53, 85 exporting of, 197–98 service, 18–19, 53, 132, 138, 236 Jobs, Steve, 10, 64, 160, 164–65 Johansson, Frans, 163, 168, 172 Johnson, Lyndon B., 127, 187, 210 Johnson, Steven, 159 Kahneman, Daniel, 13 Kelling, George, 150 Kelly, Mervin, 164 Kennedy, Robert, 206 Kenner, Edward, 158, 159 Kentucky, 147–48 Kerry, John, 47 Keynes, John Maynard, 53 Khrushchev, Nikita, 56 King, Martin Luther, Jr., 24, 46, 108–9, 128, 238 King, Stephen, 123 Kiwanis Club, 44, 45, 116 “Knowledge Is Power Program” (KIPP), 222, 223, 224 Koestler, Arthur, 158–60, 162, 166 Krebs cycle, 220–22 Ku Klux Klan, 111, 146 labor, labor unions, 14, 19, 20, 23, 53, 180, 181 leadership, xv, xvii, 23, 101, 108–9, 182, 186, 191 Leave It to Beaver (TV show), 34–35, 51 legislative districts, manipulation of (gerrymandering), xvi, 182–86, 189 Lehigh Valley, 170, 171 leisure, 53, 104–5, 139 Levin, David, 223 Levitt, Steven, 133–34 Lexus and the Olive Tree, The (Friedman), 141, 151–52 LGBT rights, 24, 42–43 libraries, 18, 36, 37 lifespan, longevity, 17, 31, 57–60, 62, 199, 204–5 Lincoln, Abraham, 228 Ling, Richard, 122–23 Lipset, Seymour Martin, 231 LISTSERVs, 114, 151 Little House on the Prairie (TV show), xii, 247n lobbyists, 183, 187, 229 Locke, Richard, 165, 172 Lonely Crowd, The (Riesman), 5–6, 7, 65, 141 Loose Connections (Wuthnow), 239 Lorain, Ohio, 79–80, 135 “lord of the manor” community, xii–xiii, 81 Lowery, Rev.


pages: 299 words: 92,782

The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing by Michael J. Mauboussin

Amazon Mechanical Turk, Atul Gawande, Benoit Mandelbrot, Black Swan, Boeing 747, Checklist Manifesto, Clayton Christensen, cognitive bias, commoditize, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, disruptive innovation, Emanuel Derman, fundamental attribution error, Gary Kildall, Gini coefficient, hindsight bias, hiring and firing, income inequality, Innovator's Dilemma, John Bogle, Long Term Capital Management, loss aversion, Menlo Park, mental accounting, moral hazard, Network effects, power law, prisoner's dilemma, random walk, Richard Thaler, risk-adjusted returns, shareholder value, Simon Singh, six sigma, Steven Pinker, transaction costs, winner-take-all economy, zero-sum game, Zipf's Law

Pink, Drive: The Surprising Truth About What Motivates Us (New York: Riverhead Books, 2009), 29–32. 20. Powell measured parity using a Gini coefficient. The coefficient was developed by Corrado Gini, an Italian statistician, to measure income inequality. Zero represents perfect parity and 1.00 reflects maximum disparity. Powell found that the average Gini coefficient for U.S. companies was 0.60, with a standard deviation of 0.24. He found that the nonindustrial domains had an average Gini coefficient of 0.56, with a standard deviation exactly the same as the industrial sample. See Thomas C. Powell, “Varieties of Competitive Parity,” Strategic Management Journal 24, no. 1 (January 2003): 61–86; and Thomas C.

The researchers show that if 10 percent of the companies want to pay their CEOs twice as much as their competitors, then compensation eventually doubles for all CEOs. So the skewed pay may be the result of contagion, not competition.20 We have seen that path dependence and social interaction lead to inequality. Technology and competition also contribute to this phenomenon. But there is a crucial assumption underlying all of these models of superstardom: that we know exactly who is most skillful.21 That assumption, as we will see, is false. Social influence leads not just to inequality, but to a fundamental lack of predictability as well. More skill gives people an edge in attaining success, but like the red marbles that started out in the majority, that edge offers no assurance that they will end up on top.

Songs that were ranked as inferior by the independent group tended to perform poorly before the other groups as well. Likewise, songs that the independent group ranked high were among the most popular in the other groups. But in the groups where social influence was at work, there was also substantial inequality. The market shares of the best songs were much higher in the social worlds than in the independent world. This is all consistent with the research on inequality done by Sherwin Rosen, Robert Frank, and Philip Cook. In what was perhaps the most significant finding, MusicLab showed that while quality is roughly correlated with commercial success, there is little predictability with hits.


pages: 583 words: 182,990

The Ministry for the Future: A Novel by Kim Stanley Robinson

"World Economic Forum" Davos, agricultural Revolution, airport security, Anthropocene, availability heuristic, basic income, bitcoin, blockchain, Bretton Woods, cakes and ale, carbon tax, centre right, clean tech, clean water, cryptocurrency, dark matter, decarbonisation, degrowth, distributed ledger, drone strike, European colonialism, failed state, fiat currency, Food sovereignty, full employment, Gini coefficient, global village, green new deal, happiness index / gross national happiness, High speed trading, high-speed rail, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, Jevons paradox, Kim Stanley Robinson, land reform, liberation theology, liquidity trap, Mahbub ul Haq, megacity, megastructure, Modern Monetary Theory, mutually assured destruction, nuclear winter, ocean acidification, off grid, off-the-grid, offshore financial centre, place-making, plutocrats, Ponzi scheme, post-oil, precariat, price stability, public intellectual, quantitative easing, rewilding, RFID, Robert Solow, seigniorage, Shenzhen special economic zone , Silicon Valley, special economic zone, structural adjustment programs, synthetic biology, time value of money, Tragedy of the Commons, universal basic income, wage slave, Washington Consensus

The spread between the richest and the poorest is an important consideration, but when everyone in that spread is pretty well off, this is a different situation than when everyone across the spread is poor. Thus other rubrics to think about inequality have been devised. One of the best is the “inequality-adjusted Human Development Index,” which is no surprise, because the Human Development Index is already a powerful tool. But it doesn’t by itself reveal the internal spread of good and bad in the country studied, thus the inequality adjustment, which gives a more nuanced portrait of how well the total population is doing. While discussing inequality, it should be noted that the Gini coefficient for the whole world’s population is higher than for any individual country’s, basically because there are so many more poor people in the world than there are rich ones, so that cumulatively, globally, the number rises to around 0.7.

In our real world of the mid-twenty-first century, countries with a low Gini coefficient, like the social democracies, are generally a bit below 0.3, while highly unequal countries are a bit above 0.6. The US, China, and many other countries have seen their Gini coefficients shoot up in the neoliberal era, from 0.3 or 0.4 up to 0.5 or 0.6, this with barely a squeak from the people losing the most in this increase in inequality, and indeed many of those harmed often vote for politicians who will increase their relative impoverishment. Thus the power of hegemony: we may be poor but at least we’re patriots! At least we’re self-reliant and we can take care of ourselves, and so on, right into an early grave, as the average lifetimes of the poorer citizens in these countries are much shorter than those of the wealthy citizens.

What’s the point? we asked. No more fishing. Good, we said. 20 The Gini coefficient, devised by the Italian sociologist Corrado Gini in 1912, is a measure of income or wealth disparity in a population. It is usually expressed as a fraction between 0 and 1, and it seems easy to understand, because 0 is the coefficient if everyone owned an equal amount, while 1 would obtain if one person owned everything and everyone else nothing. In our real world of the mid-twenty-first century, countries with a low Gini coefficient, like the social democracies, are generally a bit below 0.3, while highly unequal countries are a bit above 0.6.


pages: 598 words: 150,801

Snakes and Ladders: The Great British Social Mobility Myth by Selina Todd

assortative mating, Bletchley Park, Boris Johnson, collective bargaining, conceptual framework, coronavirus, COVID-19, deindustrialization, deskilling, DIY culture, emotional labour, Etonian, fear of failure, feminist movement, financial independence, full employment, Gini coefficient, greed is good, housing crisis, income inequality, Jeremy Corbyn, Kickstarter, Mahatma Gandhi, manufacturing employment, meritocracy, Nick Leeson, offshore financial centre, old-boy network, profit motive, rent control, Right to Buy, school choice, social distancing, statistical model, The Home Computer Revolution, The Spirit Level, traveling salesman, unpaid internship, upwardly mobile, urban sprawl, women in the workforce, Yom Kippur War, young professional

A small number of people certainly did grow very rich in the 1980s, but they tended to be from relatively wealthy backgrounds – and their success did not benefit others. Instead, the gap between Britain’s richest people and the rest grew dramatically. The Gini coefficient is the most reliable means of assessing income distribution. It measures the distribution of income on a scale from 0 (if all incomes are equal) to 100 (if all income is concentrated in the hands of a single person). During the 1980s, the Gini coefficient increased in favour of the rich. In 1984, it was 49 per cent for income before tax, but on taxed income it was 30 per cent. By 1990, the Gini coefficient for pre-tax income had risen by 3 percentage points to 51 – but for post-tax income it had risen by 10 percentage points to 40.6 Conservative tax cuts for Britain’s richest people helped them to get richer still.

., 108, 124 Barbados, 183 Barings bank, 280 Battersea, London, 21–2 Beard, Charles, 24 Beatles, The, 225, 234, 278 Beesley, Ian, 227, 228–9, 239 Behan, Brendan, 229 Bell, Colin, 151, 162, 163, 165, 167 Belle Vue photography, 186 Benn, Anthony ‘Tony’, 241, 247, 251 Benson, Frank, 46 Benzie, Isa, 87 Bernstein, Sidney, 223 Berwickshire, Scotland, 44–5 Bevan, Aneurin, 137 Beveridge Report (1942), 125–6, 156 Bevin, Ernest, 19–20, 26, 28, 36, 72 World War II (1939–45), 105, 109, 110, 111, 113, 116, 118 Beynon, Huw, 234 Billy Liar (Waterhouse), 145 Birmingham University, 152, 233 Black British people, 306–7, 314, 320, 325, 340–44, 365 Black, Milda, 175 Black, Neil, 286, 288–9, 294–5 Blair, Anthony ‘Tony’, 300, 303, 308, 322, 329 Bletchley Park, Buckinghamshire, 109, 116 ‘blind-alley’ jobs, 72 Board of Education, 18, 22, 33, 34, 73, 81, 117, 133 Bone, Joseph, 60 Booth, Charles, 48, 50, 54, 56 Border Country (Williams), 145, 147 Bowley, Arthur, 71 Braddock, Bessie, 20–21, 37, 38 Bradford College of Art, 229 Bragg, Melvyn, 205 Braine, John, 145, 146 Branson, Richard, 256 breakthrough generation (1920–34), 6, 105–27, 128–41, 142–71, 172–88 academia, 149–55, 164 armed forces, 107–8, 120–25, 131–2 conservatism and, 146, 157, 159 downward mobility, 110, 137, 197, 203, 204–5 education, 105–7, 118, 122–5, 131–5, 142–6, 148, 158, 160–61 emigration, 172–3, 178–80 housing, 127, 137, 145, 154, 155, 176, 183, 184 immigration, 172, 173–8, 180–88 managers, 156–71 meritocracy and, 125–6, 135, 140, 146–50, 155, 157 publishing, 144, 145 socialism and, 134, 139, 146, 147 welfare, 117, 125, 127, 129, 136, 140, 141, 142, 144, 154–5, 164 World War II (1939–45), 105–27 Brexit, 350, 362, 363, 367, 368 Bridges, Samantha, 305–6, 316, 324–5, 337, 347 Brierley, Walter, 78, 88–9 Bristol, England, 77, 80, 329 Bristol Polytechnic, 237, 290 British Airways, 256 British Broadcasting Corporation (BBC), 86–7, 223, 327, 363 British Medical Journal, 276 Brittain, Vera, 86 Brown, Clara, 183 Brown, James Gordon, 300, 322, 323, 329 Butler, Richard Austen ‘Rab’, 194 Callaghan, Leonard James, 247, 248 Cambridge University breakthrough generation (1920–34), 108, 109, 113, 116, 134, 135, 150, 152, 154 golden generation (1935–55), 205, 206, 207, 208, 209, 223, 226, 233 millennial generation (1986–99), 340 pioneer generation (1880–99), 23, 24 precarious generation (1900–19), 86 Thatcher’s children (1972–85), 305, 315, 340 Cameron, David, 300 Campaign for Nuclear Disarmament (CND), 225 Campbell, Richard, 312, 340–41, 342–3 Canada, 172, 179, 180 capital punishment, 225 Carey, Ella, 169 celebrity, 309–10 censuses, 4, 15, 32, 44 Certificate of Secondary Education, 195 Chamberlain, Neville, 101, 109 Chartists, 42 Chavs (Jones), 348 Cheltenham School of Art, 220 child labour, 34 childcare, 4, 9, 32, 269, 277, 365 Children’s Society, 339 Christianity, 20, 29 Church, Richard, 52, 57, 58 Churchill, Winston, 28, 109, 127, 141, 248 Citizen’s Advice Bureau, 117 City Technology Colleges, 291 civil rights movement (1954–68), 222, 225, 232 Civil Service breakthrough generation (1920–34), 114, 116, 121, 122, 135 golden generation (1935–55), 197, 211, 212, 256, 287 magpie generation (1956–71), 271, 272, 287 millennial generation (1986–99), 332 pioneer generation (1880–99), 22, 42–3, 44, 45, 48, 52, 57, 58, 59 precarious generation (1900–19), 82, 86, 101 Thatcher’s children (1972–85), 332 cleaning, 4–5, 367 Cleary, Emma, 75 Clegg, Alec, 193, 194–5, 208 Clegg, Nicholas, 323 Clements, Roger, 158, 159, 160, 161, 166, 168, 169 clerical work, 5, 8–9 breakthrough generation (1920–34), 111, 118, 129, 136, 138, 140, 142, 144, 152, 157, 158 golden generation (1935–55), 196, 201, 202, 203, 206, 212, 213, 222, 242, 249–50, 291 magpie generation (1956–71), 272, 273, 276 millennial generation (1986–99), 323 pioneer generation (1880–99), 16, 21, 32, 33, 36, 37, 40, 41–66, 91, 269, 287 precarious generation (1900–19), 69, 72, 74, 75, 77, 80, 82, 85 Thatcher’s children (1972–85), 301, 323, 324–5 climate change, 354 Co-op movement, 22, 27, 361 co-operative working, 361 coalition government (2010–15), 300, 322–3, 324, 326, 329–32 Cockburn High, Leeds, 204 Cohen, Isaac, 174, 176–7, 209 Cohen, Sue, 176–7, 209 Commonwealth, 173, 180, 182 Communist Party of Great Britain, 38, 88, 225–6, 228, 235, 236 comprehensive schools, 148, 150, 356 golden generation (1935–55), 192–3, 195, 198–9, 214, 230, 237–8, 240, 246, 256, 260, 262 magpie generation (1956–71), 267, 269, 270, 273, 287, 292, 293, 303 Thatcher’s children (1972–85), 303, 305, 306, 308, 316, 320, 326, 327, 330, 340 Comrades’ Circles, 19 conservatism breakthrough generation (1920–34), 146, 157, 159 golden generation (1935–55), 260 magpie generation (1956–71), 286, 288, 292 pioneer generation (1880–99), 40, 63, 65, 91, 92 Conservative Party, 18–19, 346 Baldwin government, second (1924–9), 39, 76, 80, 92 Cameron government (2010–16), 300, 322–3, 324, 326, 329–32 child labour and, 34–5 Churchill government (1951–5), 137, 141, 191, 198–9 City Technology Colleges, 291 Eden government (1955–7), 191 education and, 96, 194 Education Act (1902), 19 general election (1918), 62–3, 74 general election (1922), 39, 91 general election (1945), 127 general election (1951), 137, 141 general election (1955), 157 general election (1959), 147 general election (1970), 238 general election (1979), 247–8 general election (2017), 349–50 General Strike (1926), 39, 76 Heath government (1970–74), 234, 235 hereditary rights and, 19 inflation and, 163, 235 Johnson government (2019–), 300 Macmillan government (1957–63), 145, 191, 207, 210, 213 Major government (1990–97), 300, 303, 315, 327 May government (2016–19), 300 private enterprise and, 140, 146, 156, 163, 249, 268, 272, 283, 301 privatisation, 255, 256, 257, 258, 273 public sector marketization, 281–2 Robbins’ Report (1963), 207–8, 313 secondary-school scholarships and, 96 Spens Committee (1933–8), 194 technological innovation and, 149 Thatcher government (1979–90), 247–63, 273, 280–82, 291, 301, 303, 313, 327, 354 unemployment and, 73, 74, 75, 80 Unemployment Act (1922), 75 Cooper, Joan, 117, 135 Corbyn, Jeremy, 349–50 Coronation Street, 224 Cosgrove, Paul, 291–2, 293, 294–5 Coutts bank, 256, 273–4 Coventry City FC, 310 COVID-19 pandemic (2019–20), 4, 5, 354, 358–9, 368 Craig, Ryan, 310 Crosland, Charles Anthony ‘Tony’, 146–7, 148, 150, 157, 214 Czechoslovakia, 232, 235 Daily Express, 248, 250 Daily Mail, 63, 250–51, 275 Daily Mirror, 91, 225 Davies, Ann, 166–7, 202 Davies, Hunter, 224 democracy, 125, 126, 233 Democratic Unionist Party (DUP), 350 depression, 317, 318 Dewdney, Andrew, 220–21, 225, 231, 239–40, 245 do it yourself, 268, 270, 279 Dobson, Barry, 204–5, 210 Dockers’ Union, 26 doctors, see medicine, careers in domestic servants, 50–51, 79 Donovan Commission (1968), 234 Dorling, Danny, 348, 354 downward mobility, 8 breakthrough generation (1920–34), 110, 137, 197, 203, 204–5 fear of, 63, 91, 137, 263, 344, 351 golden generation (1935–55), 191, 201–2, 203, 204–5, 249–55, 263 magpie generation (1956–71), 267, 285–96 millennial generation (1986–99), 299, 329, 344, 348 precarious generation (1900–19), 69, 70, 75, 79, 83, 86, 88, 92, 197 shame and, 8, 78, 271 Thatcher’s children (1972–85), 299, 312, 319, 329, 344, 348 Duncan, Carlton, 181, 182, 187–8 Duncan, Isadora, 32 Dunkirk evacuation (1940), 109 Dupree, Jack, 229 Durant, Henry, 366 Durham University, 207, 224 Durham, County Durham, 25 Dyer, Geoff, 278 East Anglia University, 208 East Denholm, Scottish Borders, 66 East India Company, 42 eating disorders, 230, 317 education, 2, 3, 5, 6, 9, 354–7 breakthrough generation (1920–34), 105–7, 118, 122–5, 131–5, 142–6, 148, 158, 160–61 golden generation (1935–55), 9, 191–215, 220, 226–36, 256 magpie generation (1956–71), 267–73, 276, 278, 280, 282, 283, 287, 292, 293 millennial generation (1986–99), 300, 307, 312–20, 324, 325, 330–31, 332 pioneer generation (1880–99), 16, 18, 20, 22–7, 29–31, 33–7, 45–6 precarious generation (1900–19), 73–4, 81–3, 86, 92, 93–8 Thatcher’s children (1972–85), 300, 302, 303–6, 309, 312–20, 323–5, 326, 328, 332, 333–4 Education Act 1902 19, 29 1918 35–6, 63, 82 1944 122, 132, 145, 192 1988 293 Education (Scotland) Act 1872 45 1918 35, 192 1945 192 Education and the Working Class (Willmott and Young), 144, 151 Education Reform Act (1988), 303, 304 Educational Maintenance Allowance, 308 Edwards, John, 20, 21, 25–6 Edwards, Mary, 165–6 elections 1906 general election, 19, 27 1910 general elections, 28–9 1918 general election, 62 1922 general election, 39, 75, 91 1934 LCC election, 93 1945 general election, 5, 38, 127, 192 1951 general election, 137, 141 1955 general election, 157 1959 general election, 147 1966 general election, 214 1970 general election, 238 1974 general election, 241–2 1979 general election, 247–8 2017 general election, 349–50, 362 Elementary Education Act (1870), 16 eleven-plus exam golden generation (1935–55), 121, 148, 192–204, 212–15, 220, 230, 260, 262, 267, 271 magpie generation (1956–71), 267, 271, 278 Eliot, Thomas Stearns, 58 Elizabeth II, Queen, 225 Ellis, Bill, 158 Emergency Teacher Training Scheme, 132–4, 135 emigration, 172–3, 178–80 Empire Windrush, 173, 181 employment levels breakthrough generation (1920–34), 125, 127, 129, 130, 145, 163, 180 golden generation (1935–55), 191, 214, 222, 228, 234, 246, 250, 252–4 magpie generation (1956–71), 267, 277–8, 284 millennial generation (1986–99), 330 precarious generation (1900–19), 70–71, 73, 74–80, 88, 89, 100 Thatcher’s children (1972–85), 303, 321, 330 Equal Pay Act (1970), 243 equality breakthrough generation (1920–34), 110, 125–7, 135, 140, 150 golden generation (1935–55), 207, 209, 211, 213, 214, 217, 232, 240, 242, 244, 246, 248, 251 pioneer generation (1880–99), 17, 18, 24, 29, 31 precarious generation (1900–19), 93, 95 Esperanto, 225 Essex University, 208 etiquette, 99 European Economic Community, 247 European Union, 350 European Voluntary Workers’ Scheme, 175 Every Child Matters, 307 Fabian Society, 18 Falconer, Mary, 60 Farooq, Abdul, 186 fascism, 88, 92, 101–2, 127, 134 feminism, 31, 216, 232, 243, 311, 317 Ferguson, Robert, 47 finance, careers in breakthrough generation (1920–34), 112, 158, 165, 166 golden generation (1935–55), 206, 212, 235, 249, 250, 256, 259 magpie generation (1956–71), 273–5, 280, 281, 291 pioneer generation (1880–99), 41, 43–60, 62, 64, 65 precarious generation (1900–19), 96 Thatcher’s children (1972–85), 322 financial crash (2007–08), 3, 322, 324, 326, 329–31, 338, 347–8, 350, 357 Financial Times, 343 flexible work, 321, 360 Floud, Jean, 142–3, 148, 151, 153, 196, 205, 213 Foot, Karen, 317–18, 325, 333, 345 football, 309, 310–11, 320 Forbes Adam, Ronald, 121, 124 Foreign Labour Committee, 173 Forster, Edward Morgan, 41, 50 Fox, Tom, 74 France, 222, 232, 235 Further Education and Training Scheme, 131 Future of Socialism, The (Crosland), 146–7 Gaitskell, Hugh, 157 Gandhi, Mohandas ‘Mahatma’, 70 Garnett, Walter, 106 de Gaulle, Charles, 232 Gay Liberation Front, 236 GCSEs, 302, 307, 312 General Nursing Council (GNC), 84 General Strike (1926), 39, 76, 93 geographic mobility, 80, 118, 151, 163, 326–8 Germany, 34, 38, 199 Nazi Germany (1933–45), 101, 105, 109, 174, 177, 209 West Germany (1949–90), 199, 234 Gini coefficient, 250 Girton College, Cambridge, 116 Gissing, George, 50, 61 Gladstone, William, 19, 42 Glass, David, 129–30, 153, 158 golden generation (1935–55), 6, 10, 191–246, 247–63 activism, 225, 232–6, 238, 246, 251 downward mobility, 191, 201–2, 203, 204–5, 249–55, 263 education, 9, 191–215, 220, 226–36, 256 eleven-plus exam, 121, 148, 192–204, 212–15, 220, 230, 260, 262 housing, 208, 218, 219, 257–9, 263 meritocracy and, 196, 206, 207, 213, 215, 217 public sector work, 212, 213, 235, 236–9 socialism and, 217, 218, 219, 221, 225–6, 228, 229, 232, 251 unemployment and, 201, 235, 240, 241, 246, 250, 252–4 welfare and, 191, 213, 217, 218, 247, 248–9, 256, 260, 262, 263 Goldman, Emma, 28, 32 Goldthorpe, John, 60, 151, 157–8, 248, 250–51 Gollancz, Victor, 88 Gorb, Peter, 122 Gove, Michael, 330 gradualism, 27 Grafflin, Anne, 24 grammar schools breakthrough generation (1920–34), 108, 122, 134, 179 golden generation (1935–55), 192–6, 202–9, 211–14, 221–2, 230, 236, 262, 300 magpie generation (1956–71), 278 Thatcher’s children (1972–85), 304, 305, 306 Granada Television, 223 Gray, Isabella, 58–61, 66 Gray, John, 44–61, 64–6, 144, 164, 269, 287 Gray, Patrick, 62, 66 Great Depression (1929–39), 3, 39, 70, 78, 79–80 Greater London Council, 278, 335, 354 Greene, Oscar, 306, 328, 334, 338, 348 Greenwich, London, 80 Greenwood, Arthur, 126 Greenwood, Walter, 88, 89 Grier, Nick, 268–9, 271, 285–6 Guardian, 33, 196, 233 Gypsies, 267, 268, 269, 273, 279, 280, 282, 285, 288, 289 Haileybury School, Hertfordshire, 139 Hakim, Ahmed, 186 Hall, Amanda, 270, 272, 273, 280–81, 285, 287, 288, 289 Hall, Edith, 84–5 Halsey, Albert, 132, 142–5, 149, 150, 153, 196, 205, 213 ABCA lecturer, 124 doctorate, 148 Floud, relationship with, 143, 148, 153 Liverpool lecturer, 152 LSE, studies at, 131, 142 Oxford lecturer, 150 RAF service, 107, 108, 127 Halsey, Margaret, 152 Hampson, John, 89 Hankey, Maurice Pascal Alers, 1st Baron, 113 Hannam, June, 218–19, 221–2, 226–9, 233, 235–7, 244, 259–60, 290 Hannington, Wal, 78 Harris, Chris, 269, 285–6 Harris, Jose, 38 Harrisson, Tom, 125 Hawkins, Annabel, 325 Heath, Edward, 234, 235, 241 Henderson, Arthur, 34 higher education breakthrough generation (1920–34), 109, 113–19, 122, 124, 131–4, 136, 149–55 golden generation (1935–55), 208, 213, 217, 226–36, 242 magpie generation (1956–71), 271, 272, 280, 282, 292 millennial generation (1986–99), 324, 325, 332 precarious generation (1900–19), 73–4, 81, 83, 86, 97–8, 100 pioneer generation (1880–99), 23–6, 30, 35, 36, 46 Thatcher’s children (1972–85), 305–6, 309, 312–20, 324, 326, 328, 332, 333–4 Hilton, Jack, 88 Hirst, Ruth, 218, 219, 220, 222, 226, 227, 230, 239 Hitler, Adolf, 101, 105 Hodges, Ann, 61, 62, 95, 97 Hoggart, Richard, 124, 134, 144–6, 148–9, 151–2, 204, 218, 231, 233 homosexuality, 236, 259, 288–9, 294 Hookway, E.

Mothers’ work in support of their children’s schooling’, Sociological Review, vol. 53, no. 2, supplement, 2005, pp. 104–15. 24 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, D4736. 25 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, A3623. 26 Mike Savage et al, Social Class in the 21st Century, Penguin, 2015, pp. 227–9. 27 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, A3623. 28 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, D4736. 29 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, A3623. 30 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, D4736. 31 Ibid. 32 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, D4127. 33 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, A3623. Chapter Fifteen: The Pursuit of Excellence and Inequality 1 Social Mobility and Child Poverty Commission, State of the Nation in 2015, HMSO, 2015, p. 2. 2 ‘Blair pledges “opportunity society”’, Guardian, 11 October 2004, https://www.theguardian.com/politics/2004/oct/11/labour.uk, consulted 5 July 2017. 3 Danny Dorling, Inequality and the 1%, Verso, 2015, p. 6.; Jonathan Cribb et al., Living Standards, Poverty and Inequality in the UK: 2013, Institute of Fiscal Studies, 2013. 4 Tony Blair, quoted in ‘Full text of Tony Blair’s speech on education’, Guardian, 23 May 2001, https://www.theguardian.com/politics/2001/may/23/labour.tonyblair, consulted 4 September 2018. 5 Mass Observation Archive: Replies to Autumn 2014 Directive on Working Families, R5429. 6 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, N5744. 7 Mass Observation Archive: Replies to Spring 2016 Directive on Social Mobility, R5429.


pages: 338 words: 104,684

The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy by Stephanie Kelton

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Alan Greenspan, American Society of Civil Engineers: Report Card, Apollo 11, Asian financial crisis, bank run, Bernie Madoff, Bernie Sanders, blockchain, bond market vigilante , book value, Bretton Woods, business cycle, capital controls, carbon tax, central bank independence, collective bargaining, COVID-19, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, decarbonisation, deindustrialization, discrete time, Donald Trump, eurozone crisis, fiat currency, floating exchange rates, Food sovereignty, full employment, gentrification, Gini coefficient, global reserve currency, global supply chain, green new deal, high-speed rail, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, Jeff Bezos, liquidity trap, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, Mason jar, Modern Monetary Theory, mortgage debt, Naomi Klein, National Debt Clock, new economy, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, open economy, Paul Samuelson, Phillips curve, Ponzi scheme, Post-Keynesian economics, price anchoring, price stability, pushing on a string, quantitative easing, race to the bottom, reserve currency, Richard Florida, Ronald Reagan, San Francisco homelessness, shareholder value, Silicon Valley, Tax Reform Act of 1986, trade liberalization, urban planning, working-age population, Works Progress Administration, yield curve, zero-sum game

And in the US in recent decades, as the government deficit has increased, dollars have flowed disproportionately into the pockets of the wealthy, creating vast distances between them and the rest of America. Such economic inequality is hardly new to America, but in recent years, it’s risen to heights not seen since the Gilded Age and the robber barons. Consider the Gini coefficient, a measure of income inequality that economists often rely on. A Gini coefficient of zero would mean a perfectly egalitarian economy, while a coefficient of one means that one person literally gets all the income generated. No country experiences either extreme. But the World Economic Forum reports that, among the advanced and long-term developed countries, none has a higher Gini coefficient than the United States.

Extreme concentrations of wealth also have a corrosive effect on our political process and our democracy. Just as tax cuts can be used to exacerbate inequities, governments can exercise their taxing authority to reverse these dangerous trends. Stepping up enforcement, closing loopholes, raising rates, and establishing new forms of taxation are all important levers to enable the government to achieve a more sustainable distribution of income and wealth. So, MMT sees taxes as an important means to help redress decades of stagnation and rising inequality. Finally, governments can use taxes to encourage or discourage certain behaviors. To improve public health, battle climate change, or deter risky speculation in financial markets, governments might levy a cigarette tax, a carbon tax, or a financial transactions tax.

And our rapidly expanding disparities show no signs of abatement.67 Yet many might ask, what’s the problem? The US economy seems to be doing well by any number of other measures. Isn’t inequality just the way of the world? Isn’t it a natural outgrowth of the dynamism and creative power in our land of opportunity? Doesn’t the lure of princely sums spur people to heights of creativity and achievement, benefiting us all in the process? In short, does inequality really matter? Yes, it does. The economic realm is not separable from the social realm and the political realm. Income and wealth are both measures of the political power and social clout human beings possess—if the first is unequally distributed, the second is unequally distributed as well.


pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

Alan Greenspan, Albert Einstein, American Society of Civil Engineers: Report Card, An Inconvenient Truth, banking crisis, Bear Stearns, Berlin Wall, Bob Geldof, business logic, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, disinformation, Easter island, ending welfare as we know it, facts on the ground, Gini coefficient, Glass-Steagall Act, haute cuisine, high-speed rail, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, military-industrial complex, minimum wage unemployment, mittelstand, offshore financial centre, Paul Samuelson, payday loans, pensions crisis, plutocrats, Prenzlauer Berg, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

Even so, the decline is small; and for a long-term comparison, the best evidence I can find is from a 2007 study by Thomas Harjes, an economist at the International Monetary Fund. One can look it up online: “Globalization and Income Inequality: A European Perspective.” Generally, from the late 1970s to the early 2000s, Harjes found that on the Continent—in contrast to the U.S. and the UK—“inequality rose modestly or even declined.” The Gini coefficient, which measures inequality, has actually dropped in many advanced European countries as globalization of production has increased. For example, in France, even in the past few years, inequality has not gone up; over the last twenty years, it’s even dropped—yes, dropped through the storm of globalization.

For example, in France, even in the past few years, inequality has not gone up; over the last twenty years, it’s even dropped—yes, dropped through the storm of globalization. Meanwhile, in the same twenty years, in the U.S. and the UK inequality has soared. In the UK, for example, which has almost as much “labor flexibility” as the U.S., the Gini coefficient has shot up 30 percent. And even in these countries, modestly well-to-do people like Barbara do not have high savings rates: when there is huge inequality, such people have to maintain their relative position by spending, not saving. But is it true that in Germany the percentage of the population that is middle class is dropping? Yes, I admit, it seems so. But even the alarmists (and I’m thinking of European economists like Stefan Bach, Giacomo Corneo, and Viktor Steiner) end up describing what is only a modest decline, at least in the old West Germany.

Army strikes union resorts/ex-spas unionization rates in the manufacturing sector wage-setting and works councils youth membership The Germans (Craig) Gerschenkron, Alexander Ghilarducci, Teresa Gibbon, Edward Gibbons, James Gini coefficient Giscard d’Estaing, Valery Glass-Steagall Act globalization and German capitalism and labor market flexibility “Globalization and Income Inequality” (Harjes) “Glühwein Festival” (Hamburg) Goethe-Institute Goldman Sachs Gordon, Robert Gramm, Phil Grass, Günter Green Party and European social democracies German coalition government and Agenda 2010 German coalition government and wages/unemployment German coalition government and welfare German coalition government and works councils Germany green technology Greenspan, Alan Guardian (UK) gun ownership Guns, Germs, and Steel: The Fates of Human Societies (Diamond) Gutteres, António Habermas, Jürgen Halliburton Hamburg, Germany Harjes, Thomas health care spending Heine, Heinrich Heinz (retired German labor leader) Hemingway, Ernest Herodotus Hesbaugh, Ted Hitler, Adolf Hitler’s Willing Executioners (Goldhagen) Hobsbawm, Eric Holocaust hours worked and GDP leisure time and standard-of-living How to Lie with Statistics (Huff) Huff, Darrell human capital Humboldt University (Berlin) IBZ Guest House (Berlin) IG Metall (German union) and CDU’s 2009 victory over SDP foreign-born members Frankfurt May Day parade (2001) works councils youth membership “Incentive for Working Hard” (Conference Board, May 2001) income equality/inequality An Inconvenient Truth (film) International Labor Organization (ILO) International Monetary Fund Iraq war Jesuits and papal social democracy jobs/employment artists big business employees cross-subsidies European social democracies and German unemployment Germany high-skill jobs and high-end precision goods manufacturing workforce and percent of adults holding an associate degree public employees (public-sector civil service jobs) self-employment skilled-labor shortage small business employees types of jobs available unemployment rates for college graduates U.S.


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The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey by Michael Huemer

Cass Sunstein, Chelsea Manning, cognitive dissonance, cuban missile crisis, Daniel Kahneman / Amos Tversky, en.wikipedia.org, Eratosthenes, experimental subject, framing effect, Garrett Hardin, Gini coefficient, illegal immigration, impulse control, Isaac Newton, Julian Assange, laissez-faire capitalism, land bank, Machinery of Freedom by David Friedman, Milgram experiment, moral hazard, Phillip Zimbardo, profit maximization, profit motive, Ralph Nader, RAND corporation, rent-seeking, Ronald Coase, Stanford prison experiment, systematic bias, The Wealth of Nations by Adam Smith, Tyler Cowen, unbiased observer, uranium enrichment, WikiLeaks

For an excellent introduction to microeconomics, see David Friedman’s (1990) textbook, available at http://www.daviddfriedman.com/Academic/Price_Theory/PThy_ToC.html. 17 See Huemer ‘Why People Are Irrational about Politics’ (n.d.) and Caplan 2007b. 18 It is also unclear how equal communist societies in the twentieth century actually were. Vinokur and Ofer (1987, 193) estimate the Gini coefficient for the Soviet Union in 1973 at 0.31. For the United States, the Gini coefficient was approximately 0.38. The Gini coefficient is a standard measure of inequality, where 0 represents perfect equality, and 1 represents the most extreme possible inequality (that is, one person’s receiving all the income). The Jamestown experience discussed in the text represents a much purer communism. 19 The account in the text is based on Schmidtz 2008, Contoski 2010, Wadhwa 2005, and Smith 1986.

Filburn, 224 court packing, 225 courtrooms, 118, 119–20 courts costs of using, 282 delays, 282 privatization of, 325–6 and wrongful convictions, 270, 276, 278–80 see also arbitration Cowen, Tyler, 258–9 credit reporting, 270–1 crime attitudes of victims toward, 275 exonerations, 278–80 government protection from, 81–2 uncompensable, 273–4 criminal justice system, prospects for reform, 284–6 criminal record reporting, 270–1, 273–4 criminals character of, 277 protected by government, 240 unprofitability of protecting, 239 Cthulhu, 92 culture, 115 death penalty, 324 defense, societal, 82, 144 see also military; war deliberative democracy defined, 60–1 as fantasy, 61–4 irrelevance of, 64–5 Delli Carpini, Michael, 211 DeLue, Steven, 101n2 democracy advantages of, 79, 185, 228–9 and legitimacy, 77–9 problems of, 208–13, 219–21 not supported by obedience, 70–1 spread of, 321–2, 330 democratic law, 65 democratic peace, 303–5 deterrence, 306–10 developing world, as target for social programs, 152–4 diffidence, 198, 201 diminishing marginal utility, 150 disagreement, sources of, 49–50 diseconomies of scale, 255–6 disobedience and acceptance of punishment, 164–6 justified, 163–4 as threat to social order, 83–4, 91, 173–4 dissenters, 91–3 distance, emotional, 122–3 distributive justice, see social welfare programs doing/allowing distinction, 142–3 drug laws, 89, 139–40, 172, 173–4, 330 effect on organized crime, 248 Duane, James, 168n36 Dugard, Jaycee Lee, 124 duty to do good, 83–4 Dworkin, Ronald, 37n2 economies of scale, 254–5 Edmundson, William, 9n6, 128n48 egalitarianism, 148–9, 192–3, 244 egoism, ethical, 176 egoism, psychological, see selfishness Egypt, 293–4 elections influences on, 218, 242–3 probability of tie, 210 see also democracy; voting Ellsberg, Daniel, 216 emigration, 252 eminent domain, 29 emotional distance, 122–3 equal advancement of interests, 67–70 equality and argument for authority, 65–7 incompatible with coercion, 75–7 interpretation of, 71–3 of judgment, 74–5 of power, 202 Eratosthenes, 103n6 Estonia, 293, 330 ethics, 14–15 knowledge of, 170–1, 172–3 necessary conditions for reliability, 55–7 principles independent of government, 84 procedural versus substantive constraints, 54–5 progress in, 332 sufficient conditions for reliability, 52–5 examples Abel, 200–1, 205, 206 Alastair, 55 Amnesty International, 78–9 Archer Midland, 142 bar tab, 59, 64–5, 75–7 board meeting, 22, 25–6, 26–7 cabin in the woods, 160 car sale, 51 car theft, 94, 95 charitable tax-evader, 93 Charity Case, 69–70 charity mugging, 154–9 child-beating chauffeur, 161–2 child retrieving cat, 187–9 cigarette prohibition, 139–40 class lottery, 23 cold child, 152 diamond, 51 disrespecting colleagues, 78 dog hit by car, 183–4 drowning child, 83, 84–5, 149, 154–9 gardener, 175–6 Gumby and Pokey, 98–9 examples – continued homophobic gang, 166, 169 incompetent bystander, 149–50 landmines on lawn, 316 lifeboat, 87–8, 90–1, 92, 94–5, 97, 98 Lindsey Lohan, 217 lost keys, 54 man on ship, 28 mom against drunk driving, 184 overworked philanthropist, 157 painter, 42 party, 26 private party hostile to foreign government, 301 private security failure, 219 prostitution, 138–9 protection cartel, 259 reasonable employment offer, 44, 51 restaurant, 22–3, 26, 27 Sally’s widgets, 257–8, 268 Sam’s gang, 163–4 self-flagellation, 90–1 shipwreck, 44–5 Sneaku ad agency, 93–4 soldier/unjust war, 171 starving Marvin, 142–3 stealing from company, 170 suicide, 140 Superior/Inferior election, 217–9 Tannahelp/Murbard, 250–2 Target return, 269 Tax Case, 69–70 traffic violation, 9 unconscious patient, 37–8 vigilante, 3–4, 7–8, 144 exonerations, 278–80 extortion, 249–53 extremism, 337 fairness, 51–2 and argument for authority, 171 and argument for political obligation, 86–93 conditions for obligation based on, 87–8 farm bill, 212–13, 214–15 fixed costs, 255 food crisis, 213 force, see coercion foreign policy, 209, 312–13 foreigners, 209, 237 Freud, Anna, 126n45 Friedman, David, 192n16, 200n6, 250n25, 251n26 Friedman, Milton, 191n14 Gandhi, Mohandas K., 292 Gaus, Gerald, 42n12 gay marriage, 96, 208 generality, 12 genocide, 207 gerrymandering, 72–3 Gini coefficient, 193n18 gladiators, 323 glory, 198 Goodin, Robert, 154n22 Gorbachev, Mikhail, 293 government benefits of, 18, 81–3 differentiated from anarchy, 232–3 functions of, 4, 20, 45, 197 has incentives to fail, 220, 285 lack of competition, 262 private, 261n44 as threat to human species, 318–19 government leaders, motives, 237 Grenada, 308–9 Gross, Samuel, 278–9 Grossman, Dave, 235 guerilla warfare, 289–91 gulags, 132 Habermas, Jürgen, 61, 64 Hamas, 314 Hamilton, Alexander, 221n39 Harsanyi, John, 46n15, 51n28, 56n35 Hearst, Patricia, 123–4 Hitler, Adolf, 108–10, 297, 300–1 Hobbes, Thomas, 20n1, 198–200 Hoffman, Elizabeth, 190n9 homeowners associations, 261–2 Hong Kong, 330 Honoré, Tony, 101n1 horses, 277 Huckabee, Mike, 216 Huemer, Michael, 50n26 human nature, 187–94, 241, 242 humanity, history of, 321–2 Hume, David, 21–2, 28, 102n3, 102n5 hypothetical consent, 36 conditions for validity of, 37–9 invalidity of, 38–9, 43–5, 51–7, 64 and reasonableness, 39–40 unattainability of, 40–3, 48–50, 64 hypothetical examples, see examples idealization, 191–2 ideas, as agents of social change, 331–4 identification with the aggressor, 126, 128 identification with government, 128n47 ideology, 191–2 ignorance, 189 illusions, 135–6 immigration, 96, 142–3, 209 imprisonment, 283–4 Indian independence movement, 292 indigenous people, 91 individualism, 83 insurance for arsonists, 239 intergovernmental disputes, 299–302 interstate commerce, 223, 224–5 investment, affected by wealth distribution, 151 Iran, 317 Iran-Iraq War, 297, 298, 300, 302 Iraq-U.S.

The number of people killed by their own governments in the twentieth century was more than four and a half times greater than the number killed by nongovernmental murderers16 – which raises the question of whether a strong government should be counted more a source of security or a source of danger. Hobbes was right to highlight human selfishness, though he overstates the point. He was right also to recognize the essential equality of the state of nature and the inequality created by government. But the political implications of these facts are the opposite of what Hobbes claimed. Equality of power breeds respect and peaceful cooperation; vast inequality breeds contempt and abuse. The more cynical one is about human nature, the more important it is to avoid great differences of power. 9.4 Predation under democracy Fortunately, totalitarianism is not the only form of government.


pages: 372 words: 107,587

The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

3D printing, agricultural Revolution, Alan Greenspan, Anthropocene, Apollo 11, back-to-the-land, banking crisis, banks create money, Bear Stearns, biodiversity loss, Bretton Woods, business cycle, carbon footprint, Carmen Reinhart, clean water, cloud computing, collateralized debt obligation, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, degrowth, dematerialisation, demographic dividend, Deng Xiaoping, Elliott wave, en.wikipedia.org, energy transition, falling living standards, financial deregulation, financial innovation, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, global village, green transition, happiness index / gross national happiness, I think there is a world market for maybe five computers, income inequality, intentional community, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jevons paradox, Kenneth Rogoff, late fees, liberal capitalism, low interest rates, mega-rich, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, naked short selling, Naomi Klein, Negawatt, new economy, Nixon shock, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, price stability, private military company, quantitative easing, reserve currency, ride hailing / ride sharing, rolling blackouts, Ronald Reagan, short selling, special drawing rights, systems thinking, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, tulip mania, WikiLeaks, working poor, world market for maybe five computers, zero-sum game

The most widely used metric of economic inequality is the Gini coefficient, developed by Italian statistician Corrado Gini in 1912. A value of 0 reflects total equality, while a value of 1 shows maximal inequality. In the world currently, Gini coefficients for income within nations range from approximately 0.23 (Sweden, with the lowest level of economic inequality) to 0.70 (Namibia, with the highest). The US weighs in at 0.45 — between Cote d’Ivoire at 0.446 and Uruguay at 0.452 (some agencies arbitrarily shift the decimal point two places to the right for all scores, giving the US a score of 45 instead of 0.45). Inequality among nations can also be tracked with the Gini coefficient; it turns out that, in recent decades, the richest countries have pulled ahead while the poorest countries fell further behind, with a few in the middle (including China and India) playing a rapid game of catch-up.

Inequality among nations can also be tracked with the Gini coefficient; it turns out that, in recent decades, the richest countries have pulled ahead while the poorest countries fell further behind, with a few in the middle (including China and India) playing a rapid game of catch-up. However, “catching up” has meant increasing wealth inequality within those “developing” nations. Current research shows that global income inequality peaked in the 1970s when there was little overlap between “rich” and “poor” countries. Since then, the rapid industrialization of nations like China, India, Indonesia, and Malaysia has complicated the picture.48 The absolute number of people living in poverty — across a range of definitions — has consistently declined globally during the past 50 years, and the percentage of people living in poverty has fallen even faster.49 Nevertheless, according to a study by the World Institute for Development Economics Research at United Nations University, the richest one percent of adults has continued to pull ahead, owning 40 percent of global assets in the year 2000, with the wealthiest ten percent of adults accounting for 85 percent of the world total.

The bottom half of the world adult population owns barely one percent of global wealth.50 The reasons for change in wealth inequality within and among nations are varied: tax policies, capital investment, culture, education, natural resources, trade, and history all play roles. Moreover, there is controversy between those who say inequality within nations is good because it stokes more growth (governments should aim for equality of opportunity, not equality in incomes, according to free-market advocates), and those who say too much income inequality is inherently unfair and tends to become structural and to foreclose economic opportunity for the majority of the world’s people.


pages: 401 words: 112,784

Hard Times: The Divisive Toll of the Economic Slump by Tom Clark, Anthony Heath

Affordable Care Act / Obamacare, Alan Greenspan, British Empire, business cycle, Carmen Reinhart, classic study, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, deindustrialization, Etonian, eurozone crisis, falling living standards, full employment, Gini coefficient, Greenspan put, growth hacking, hedonic treadmill, hiring and firing, income inequality, interest rate swap, invisible hand, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, low interest rates, low skilled workers, MITM: man-in-the-middle, mortgage debt, new economy, Northern Rock, obamacare, oil shock, plutocrats, price stability, quantitative easing, Right to Buy, Ronald Reagan, science of happiness, statistical model, The Wealth of Nations by Adam Smith, unconventional monetary instruments, War on Poverty, We are the 99%, women in the workforce, working poor

The White House Great Gatsby Curve interactive is at: www.whitehouse.gov/blog/2013/06/11/what-great-gatsby-curve 67. For the elasticity estimates, see Miles Corak, ‘Inequality from generation to generation: The United States in Comparison’, in Robert Rycroft (ed.), The Economics of Poverty, Inequality and Discrimination in the 21st Century, ABC-CLIO, Santa Barbara, CA, 2013, pp. 107–25, Table 2. For the Gini coefficients, see OECD, ‘An overview of growing income inequalities in OECD countries: Main findings’, in OECD, Divided We Stand: Why inequality keeps rising, OECD, Paris, 2011, pp. 21–45, at: www.oecd.org/els/soc/49499779.pdf The underlying data is at: http://dx.doi.org/10.1787/888932535185 68.

It happens, but not often.64 Through an innovation he christened the ‘Great Gatsby Curve’, Krueger also attempted to nail one particular lie – peddled by, among others, Nick Clegg, the Liberal Democrat deputy prime minister in Britain's Coalition – that rough justice about who gets what today will be righted by equal opportunities for the future.65 The Great Gatsby Curve (in reality more of a straight line) traces the connection across different countries between, on the one hand, historic inequality, and on the other, class rigidity. The former is measured by a summary statistic (the Gini coefficient) of the gap in household incomes in 1985; the latter by the strength of the link between what a father earns and what his son goes on to bring home – the so-called ‘elasticity’ of intergenerational income. The graph opposite plots the two things together and reveals that, in countries where income is more unequally spread, the next generation enjoys less mobility; it also shows that Britain is a rare western country where opportunities are almost as unequal as in the US.

The precise BSA question asked what the government should do when forced ‘to choose between the three options’: ‘Reduce taxes and spend less on health, education and social benefits’; ‘Keep taxes and spending on these services at the same level as now’; ‘Increase taxes and spend more on health, education and social benefits’. The proportions preferring the last option rose from 54% to 63% between 1990 and 1994. 39. See statistics collated by the Institute for Fiscal Studies at: www.ifs.org.uk/fiscalFacts/povertyStats Using an ‘After Housing Costs’ income definition, all summary measures of inequalityGini coefficient, mean log deviation, coefficient of variation, and the 90/10, 50/10 and 90/50 percentile ratios – increased between the start of the 1990 downturn and 2008/09; the same is true if the peak of unemployment in 1993 is compared with that in 2011/12. 40. The exact BSA question asked is: ‘Opinions differ about the level of benefits for unemployed people.


pages: 437 words: 115,594

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

Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, biodiversity loss, Boeing 747, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, export processing zone, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low interest rates, low skilled workers, M-Pesa, megacity, middle-income trap, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, Shenzhen special economic zone , Sheryl Sandberg, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, three-masted sailing ship, trade route, women in the workforce, working poor

Figure 3.5, constructed by economist Branko Milanovic, depicts both stories.23 The bottom line shows intercountry inequality based on unweighted averages (every country counts the same), and the top line represents the weighted average (proportional to population size). Each measures inequality using the Gini coefficient in which 0 means perfect equality and 1 means perfect inequality. The two lines show very different patterns—at least until around 2000. FIGURE 3.5: GLOBAL INEQUALITY—GETTING BETTER Source: Branko Milanovic, “Global Income Inequality by the Numbers: In History and Now—An Overview,” policy research working paper 6259, World Bank, Development Research Group, Poverty and Inequality Team, Washington, DC, November, 2012. In the unweighted measure, inequality did not change much from 1960 until around 1980.

It is true that within some countries, inequality has gotten worse—such as in China—but inequality has improved in others—such as in Brazil. For the majority of developing countries, income inequality hasn’t changed much at all, even alongside the acceleration in growth. There are around seventy-five developing countries for which decent data on income distribution are available over several decades (measured by the Gini coefficient, a widely used index of inequality that measures the extent to which income distribution deviates from perfect equality). In about half, inequality hasn’t changed much either way.

., 293, 294 Gang of Four, 185 Gap, 164 garments, 56, 59 gas, 44, 139 Gates, Bill, 83–84, 213, 217 Gates, Robert, 20 Gdańsk, 103 Gelb, Alan, 205 General Agreement on Tariffs and Trade (GATT), 156, 258 General Electric, 159 genetically modified foods (GMOs), 171–73 genocide, 142 Georgia, 50, 143 growth in, 128, 238 Germany, 250, 298 germ theory, 77 Gerring, John, 129, 248 Getting Better (Kenny), 93 Ghana, 37, 127 aid to, 223 coastal vs. isolated areas in, 201 data entry firms in, 178 democracy in, 106, 122, 188–90 growth in, 6, 7, 22, 45, 50, 128, 261 oil exported by, 53 reforms in, 192 trade encouraged by, 155 Gill, Indermit, 261 Gini coefficient, 66, 70 glasnost, 134 Global Alliance for Vaccines and Immunizations (GAVI), 95, 161 global financial crisis, 12, 52–53, 113, 191, 233, 235, 257, 264, 269, 295, 305 global food crisis, 12, 280–81 Global Fund to Fight AIDS, Tuberculosis and Malaria, 95, 212 Global Health 2035 Commission, 91, 245, 267, 284, 306 global integration, 52 globalization, 17, 19, 131, 150, 158–61, 160, 162, 163–66, 183, 200, 207, 264, 287–88 technology and, 166 Global Malaria Eradication Program, 211–12 gold, 139, 152, 206 Golden Rice, 172 Gorbachev, Mikhail, 133, 134, 143 Gordon, Robert, 257–58 governance, 4, 5, 8, 17, 184, 197–99, 199, 201, 292–93, 294, 304, 307, 309 aid and, 214 and poverty traps, 15 and resource curse, 206 see also democracy Great Britain, 47, 68 colonialism of, 140 Zimbabwe’s independence from, 180 Great Depression, 126, 146 Great Famine, 284 Great Leap Forward, 35, 81, 128, 153 Greece, 105 Green Bay, Wisc., 60 Greenland, 280 Green Revolution, 38, 79, 170–73, 204, 214, 215, 274, 302 Guatemala, 18, 36 coup in, 100 war in, 145 Guinea: demonstrations in, 281 Ebola in, 82 health system in, 266 violence in, 206 Guinea-Bissau, 49, 50 guinea worm, 214 Guns, Germs, and Steel (Diamond), 13 Guntur, 31 H1N1 flu, 20, 82, 267, 269 Hafizibad, 178–79 Haiti, 8, 10, 11, 49, 50, 185, 213 aid to, 224 child mortality in, 82 and democracy, 248 demonstrations in, 281 dictatorship in, 100, 114, 127, 141, 222 earthquake in, 224 health improvements in, 93 lack of growth in, 50 poor governance in, 106, 114 Hansen, Henrik, 226 Harris, Gardiner, 270 Hartwick’s rule, 62 Havel, Václav, 143, 149, 184 Haves and the Have-Nots, The (Milanovic), 65 health, 3, 4, 5, 6, 7–8, 16, 17, 24, 94–96, 154, 161, 164, 166, 178, 232, 233, 234, 245–46, 248, 258, 260–61, 262, 266–69, 303, 306, 307 aid and, 226 in Asia, 201 in Brazil, 187 in China, 201 conflict and, 118–19 education and, 89–93, 205 and poverty traps, 15 technology and, 173–75, 179, 293 health care, 86 health services, 248 Heath, Rachel, 59 He Fan, 298 Henry, O., 97 Hindu nationalists, 287 Hitler, Adolf, 127, 146 HIV/AIDS, 20, 75, 81–82, 83, 94, 95, 173, 174–75, 182, 205, 214, 221, 246, 266 Hobbes, Thomas, 24 Honduras: coup in, 97–98 crime in, 264 war in, 145 Hong Kong: British control of, 153 and globalization, 155 growth in, 147 hookworm, 205 housing, 24, 307 humanitarian relief, 213 human rights groups, 110 Hungary, 7, 143 illiberalism in, 255, 263 protests in, 134 trade encouraged by, 155 Huntington, Samuel, 104, 105, 112, 121, 122, 146, 197, 265, 296 Hussein I, King of Jordan, 187 illiberal democracy, 264 immunization, 94, 178 income, 3, 5, 8, 17, 25, 31, 32, 40, 77, 94, 294 in Africa, 12 in China, 201 climbing, 240–41, 240 doubling of, 4, 5–6, 44 education, health and, 89–93 falling, 11, 49 income inequality, 65–71 between countries, 69–71, 70 within countries, 65–69 incubators, 175 independence from colonialism, 140–43 India, 3, 7, 22, 32–33, 37, 127, 159, 203, 289, 292, 297 colonialism in, 140 data entry firms in, 178 demand in, 53 as democracy, 98, 122, 123, 126 economic reforms in, 192 emigration from, 284 floods in, 281 future of, 234 growth in, 6, 8–9, 17, 21, 45, 50, 71, 128, 235, 237 inequality in, 69–70 infrastructure financing in, 259–60 innovation in, 302 malaria in, 211 natural capital in, 63 Pakistan’s wars with, 141, 145 poverty reduction in, 244 slowdown in growth of, 237, 255, 257, 262 software companies in, 56 terrorism in, 287 trade encouraged by, 155 universities in, 247 water demand in, 279 Zheng He’s trip to, 152 Indian Institute of Technology, 247 Indonesia, 10, 36, 124, 127, 184, 289 agriculture in, 58–59, 204 aid for schools in, 216 aid to, 214, 223 benign dictatorship in, 126 child mortality in, 85 colonial legacy in, 136–40 demand in, 53 democracy in, 106, 112, 114, 115, 122, 123, 124, 250 demonstrations in, 281 as dictatorship, 99, 122 factories in, 201 fertility rates in, 85, 85 growth in, 6, 7, 22, 38–39, 50, 71, 125–26, 128, 147, 233, 238, 242, 262 healthcare in, 95 individual leadership in, 187 Nikes from, 56 population growth in, 85 rice yields in, 215–16 terrorism in, 286 timber, 223 Zheng He’s trip to, 152 industrial equipment, 165 industrial revolution, 24, 25, 77, 135, 166, 300 industry, 45, 56, 260 inequality, 258 infant mortality, 92, 118, 175, 306 in South Africa, 183 infectious diseases, 92 inflation, 11, 192 in Africa, 12 information, 166, 234 information revolution, 175–79, 176 infrastructure, 164, 201, 207, 262 aid projects for, 216 Inkatha Freedom Party, 182, 185 innovation, 234, 258, 292, 294 in China, 236 Institute of World Economics and Politics, 298 institutions, 200, 294, 297–98, 303–4 and resource curse, 206 insurance companies, 241 insurance markets, 305 interest rates, 233, 305 Intergovernmental Panel on Climate Change (IPCC), 282 International Maize and Wheat Improvement Center (CIMMYT), 171 International Monetary Fund (IMF), 102, 235, 237, 239, 258, 259, 260, 298, 309 International Rice Research Institute (IRRI), 171, 215–16 internet, 162, 175, 233, 300 investment, 6, 20, 22, 52, 156, 157, 166, 301, 304–5, 306 in Africa, 12 in technology, 234, 246 Iran, 114, 124 coup in, 100 Zheng He’s trip to, 152 Iraq, 8, 114, 118, 124, 285 US invasion of, 8, 118, 124, 146 Ireland, 284 iron, 25, 53, 159 Islam, 124 fundamentalist, 265 Islamabad, 287 Israel, 106, 285 Istanbul, 201, 206 Istanbul Technical University, 247 Italy, 47, 104 ivory, 152, 206 Jakarta, 137 Jamaica, 49, 50 Jamison, Dean, 246 Japan, 19, 20, 21, 146, 167, 201, 288, 290, 292, 298, 300 as democracy, 122, 123, 126, 250, 296 colonialism in Indonesia, 137 industrialization of, 25–26 leadership needed by, 234 post–World War II boom in, 262 reforms in, 295 slowing of progress in, 250, 255, 257 Jarka, Lamine Jusu, 104 Java, 152, 204 Jensen, Robert, 177 job training, 38 Johannesburg, 58 Johnson, Simon, 13 Johnson Sirleaf, Ellen, 3, 120, 184, 185, 209, 217 Jordan, 285 growth in, 45 individual leadership in, 187 life expectancy in, 78 poverty in, 36 JSI Research and Training Institute, 173 Kabila, Laurent, 185 Kagan, Robert, 253 Kampala, 177 Kaplan, Robert, 11 Kapstein, Ethan, 198 Karimov, Islam, 8, 127, 144, 185 Kathmandu, 203, 206 Kazakhstan, 36, 106, 115, 285 Kelly, James, 254 Kenny, Charles, 11, 93 Kenya, 18, 169 accounting firms in, 56 data entry firms in, 178 horticulture in, 169 Zheng He’s trip to, 152 Kerekou, Mathieu, 144 Kharas, Homi, 240–41, 261 Khatun, Jahanara, 270, 272 Khmer Rouge, 114 Khrushchev, Nikita, 250 Kim, Jim Yong, 231, 242 Kim Il Sung, 100, 144, 184 Kirkpatrick, Jeanne, 124 Kissinger, Henry, 271 Kodari, 203 Kolkata, 203 Korean War, 81, 100, 141, 145 Kosovo, and democracy, 248 Kotler, Steven, 300 Kraay, Aart, 65 Kufuor, John, 189–90 Ku Klux Klan, 124, 265 Kurlantzick, Josh, 263 Kuwait, 47 Kuznets, Simon, 66 KwaZulu-Natal, 182 Kyrgyzstan, 205, 285 labor unions, 102 Lancet, 91, 245, 267, 284, 306 Landes, David, 13 Laos, 184 Latin America, 11, 36, 146 colonialism in, 140 economic growth in, 255 growth in, 50, 141 inequality in, 67–68 megacities in, 277 reforms in, 192 Latvia, growth in, 128 Laveran, Alphonse, 211 leadership, 16, 17–18, 131, 184–87, 200, 201, 234, 303–4 Lebitsa, Masetumo, 57 Lee, Jong-Wha, 87 Lee Kuan Yew, 7, 121, 122, 123, 125, 127 Lensink, Robert, 226 Lesotho, 57, 103 Levine, Ruth, 214 Levi Strauss & Co., 165 Lewis, Arthur, 66 Liberia, 3, 11, 18, 159, 184, 185, 285 aid to, 217 democracy in, 106, 145 Ebola in, 82 growth in, 7, 50 health system in, 266 infrastructure investment in, 216 violence in, 120, 145, 146, 206, 209, 217 Libya, 115 life expectancy, 78–79, 79, 92, 93, 232, 266, 271, 294 Lipset, Seymour Martin, 121 literacy programs, 161, 162, 176, 178–79 literacy rates, 87 Liu Yingsheng, 153 London, 24, 201 Lord’s Resistance Army, 287 Lukashenko, Alexander, 85 Maathai, Wangari, 18 McAfee, Andrew, 166, 300 Macapagal-Arroyo, Gloria, 264 McLean, Malcolm, 167 Madagascar, 49, 50, 263 Mahbubani, Kishore, 241 malaria, 6, 10, 14, 73, 75, 92, 94, 205, 209–13, 221, 246, 302 Malawi, 103, 122, 175, 208 Malaysia, 136 benign dictatorship in, 126 and democracy, 248, 250 forest loss in, 280 malaria in, 211 Zheng He’s trip to, 152 Maldives, 152, 284 Mali, 206 child mortality in, 84 coup in, 114, 264–65 democracy in, 103, 108, 122, 123, 263 economic problems in, 255 as landlocked, 205 poverty in, 122 malnutrition, 73, 80 Malthus, Thomas, 270, 273–74, 275 Mandela, Nelson, 17, 149, 180, 182–83, 184, 198, 309 released from jail, 103, 143, 148 Mandelbaum, Michael, 11 manufacturing, 25, 37–39, 45, 56, 67, 156, 260, 261–62 in China, 235–36 Mao Tse-tung, ix, 35, 81, 102, 123, 127, 134, 185 Maputo, 44 Marcos, Ferdinand, 11, 100, 103, 104, 109, 127, 141, 143, 148, 222 Mariam, Mengistu Haile, 144 Marrakesh, 206 Marshall Islands, 284 Maseru Tapestries and Mats, 57 Massmart Holdings Ltd., 46 Matela Weavers, 57 maternal mortality rates, 246 Mauritania, 281 Mauritius: aid to, 216 child mortality in, 84 as democracy, 98 growth in, 5, 37, 50, 126, 128 Mbasogo, Teodoro Obiang Nguema, 184 Mearsheimer, John, 290–91 measles, 92, 94, 161 Mecca, Zheng He’s trip to, 152 medical equipment, 20, 165 medicine, 21, 31 megacities, 277 Meiji Restoration, 25–26, 146 Melaka, 136 Menchú Tum, Rigoberta, 18 Mexico, 159, 162 default by, 101–2 democracy strengthening in, 115 demonstrations in, 281 emigration from, 284 growth in, 235 Micklethwait, John, 295 middle class, 20, 240–41 Middle East, 36, 184, 256, 265 conflict in, 146 democracy and, 265 financing in, 259 growth in, 50 life expectancy in, 82–83 oil from, 201 trade and, 159 middle-income trap, 261 Milanovic, Branko, 65, 70 Millennium Challenge Corporation, 216 Millennium Development Goals (MDGs), 18, 30–31, 95, 217, 242 Millennium Summit, 217 Mills, John Atta, 189 minerals, 22, 152, 205–6 Ming China, 151–53 minimum wage, 165 mining, 278 Ministry of Finance, Gambia, The 190 Mitteri Bridge, 203 Mobarak, Mushfiq, 59 Mobile Alliance for Maternal Action (MAMA), 178 mobile devices, 47 mobile phones, 157, 175–78, 176 Mobilink-UNESCO, 179 Mobutu Sese Seko, 11, 100, 127, 141, 143, 145, 222 Moi, Daniel Arap, 103 Moldova, 6, 7, 36, 143 Mongolia, 108 aid to, 223 coal and iron ore exported by, 53 democracy in, 104, 122, 123, 144 growth in, 6, 7, 45, 128 Moran, Ted, 164–65 Moreira, Sandrina Berthault, 226 Morocco: demonstrations in, 281 growth in, 6, 50 individual leadership in, 187 inequality in, 67 poverty in, 36 Morrisson, Christian, 25, 27, 28 mosquitoes, 212 Moyo, Dambisa, 12 Mozal aluminum smelter, 44 Mozambique, 11, 18, 43–45, 159 aid to, 214, 216 aluminum exported by, 53 and democracy, 248 demonstrations in, 281 growth in, 6, 50, 261 inequality in, 67 infrastructure investment in, 216 reforms in, 192 state-owned farms in, 195 war in, 100, 145 M-Pesa, 47 Mubarak, Hosni, 113, 125, 185 Mugabe, Robert, 8, 106, 113, 127, 144, 181, 182, 185, 221 Mumbai, 287 Museveni, Yoweri, 112, 187 Musharraf, Pervez, 113 Mussolini, Benito, 104, 146 Myanmar, 9, 22, 112, 144, 184, 208, 263 child mortality in, 82 cyclones in, 281 health improvements in, 93 Namibia, ix, x, 37 democracy in, 135 growth in, 50 life expectancy in, 266 war in, 100, 145 National Academy of Sciences, US, 172 National Constituent Assembly, Tunisia, 124 National Institutes of Health, US, 302 natural capital, 62–63 Natural Resource Governance Institute, 306 Nazarbayev, Nursultan, 106 Nazism, 124, 146, 265, 309 Ndebele tribe, 180 Nepal, 37, 174, 203–4, 208 democracy in, 107, 122, 123 demonstrations in, 281 as landlocked, 202, 205 poverty in, 122 Netherlands, 47 Indonesian colonialism of, 136–37, 138, 139 New Development Bank, 259 New Orleans, La., 201 New York, N.Y., 201, 277 New York Times, 104, 176–77, 270 New Zealand, 25, 78, 167, 202, 231 Nicaragua, 11, 36 democracy in, 104 war in, 100, 145 Niger, 208 agriculture in, 204 democracy in, 124, 263 as landlocked, 202, 205 mobile phones in, 177–78 Nigeria, 115, 159, 243, 245, 287 dictatorship in, 99, 113 health technology in, 175 oil in, 285 per capita wealth in, 62 Nike, 165, 202 Nkomo, Joshua, 181 noncommunicable diseases (NCDs), 268 non-governmental organization (NGOs), 110, 221 Noriega, Manuel, 144 North Africa, 36 growth in, 50 life expectancy in, 82–83 trade and, 159 North American Free Trade Agreement (NAFTA), 156, 162 North Korea, 8, 9, 100, 144, 184, 192, 208, 243 nutrition, 232 Obama, Barack, 297 Obama administration, 297 O’Hanlon, Michael, 299 oil, 44, 53, 62, 67, 114–15, 201, 205, 285 in Equatorial Guinea, 223 in Indonesia, 138, 139 oil crises, 10 open markets, 131 Opium Wars, 153 oral rehydration therapy (ORT), 94, 173, 215 overfishing, 61 overtime regulations, 165 Paarlberg, Rob, 172 Pakistan, 37, 162, 243, 245, 285–86 conflict in, 118, 119 coup in, 113 and democracy, 263 emigration from, 284 factories in, 58 India’s wars with, 141, 145 terrorism in, 287 violence in, 146 Panama, 9 growth in, 50, 128, 238 US invasion of, 144 Panama Canal, 211 Panasonic, 202 Papua New Guineau, 50, 213 Paraguay, 50, 280 Park Chung-hee, 99, 122 patents, 157 Peace Corps, 75, 90, 202 pensions, 38, 241 People Power Revolution, 186 Perkins, Dwight, 235 pertussis, 94, 161 Peru, 159, 185, 285, 287 agriculture in, 56–57 copper exported by, 53 demonstrations in, 281 pharmaceuticals, 20, 165 Philippines, 7, 11, 17, 18, 100, 103, 121, 127, 184, 185, 201, 222, 289, 290, 297 call centers in, 178 corruption in, 264 democracy in, 104, 106, 109, 122, 123, 250, 263 growth in, 242 inequality in, 67 nickel exported by, 53 rice yields in, 215–16 transcribers in, 56 Piketty, Thomas, 68–69 Pinker, Steven, 115 Pinochet, Augusto, 107–8, 122, 141, 143–44, 187 Plano Real (“Real Plan”), 187 Plundered Planet, The (Collier), 292 pneumonia, 73 Poland, 6, 18, 36, 103, 143, 184, 186 protests in, 134 trade encouraged by, 155 universities in, 247 polio, 94, 119, 161, 215 Polity IV Project, 107, 109 pollution, 302 Population Bomb, The (Ehrlich), 274 population growth, 21, 80–81, 84, 95, 233, 234, 272, 273–77, 276 Portfolios of the Poor (Collins et al.), 32, 33–34 Port of Cotonou, 216 Portugal, 105, 123, 136 poverty, 94, 294 definitions and terminology of, 26–27 democracy and, 121 as exacerbated by conflicts, 119, 119 as man-made, 180 poverty, extreme, 5, 8, 25, 26, 27–30, 30, 31–35, 36, 41, 42, 118, 231, 232, 240, 241–45, 244, 256, 271 in China, 35, 36, 242 in Indonesia, 136 in South Africa, 183 poverty, reduction of, 3, 4, 5, 8, 17, 21, 27–31, 28, 30, 34–35 in Africa, 12 in China, 201 after global food crisis (2007), 12 ignorance of, 10 lack of attention to, 10 poverty traps, 14–16 pregnancy, 178 press, freedom of, 198–99 Preston, Samuel, 92 Preston curves, 92 Pritchett, Lant, 89, 235, 262 Programa Bolsa Família, 38, 67 progress in developing countries, x, 3–5, 45–53, 46, 49, 229, 237–39, 238 democratization and, see democracy factors for, 16–19 future of, 21–23 as good for West, 19–21 income growth in, 240–41, 240 investment in, 238 and long historical perspective, 13 and microlevel studies, 13–14 middle class emergence in, 240–41 pessimism about, 9–12 possible stalling of, 255–56 possible tripling of incomes in, 277–78 and poverty traps, 14–16 reduction of poverty in, see poverty, reduction of threats to, 291–92 transforming production in, 262–63 property rights, 142, 303 protein, 280 Protestant work ethic, 120–21 Publish What You Pay, 305 Punjab, 178–79 Putin, Vladimir, 224, 255 Radelet, John, 60 Rahman, Ziaur, 271 Rajan, Raghuram, 225, 237 Rajasthan, 33 Ramos, Fidel, 103 Ramos-Horta, José, 184 Ravallion, Martin, 27, 29, 64, 227, 243 Rawlings, Jerry, 188–89 Rebirth of Education, The (Pritchett), 89 recession (1980s), 10, 191 Reebok, 164 religion, freedom of, 198–99 religious bodies, 110 Reserve Bank, Zimbabwe, 181 resource curse, 54, 163, 206 resource demand, 21, 233, 272, 281 resource extraction, 162–63 resources, 275 in Africa, 261 resource wars, 284–86 retail trade, 37, 45 Return of History and the End of Dreams, The (Kagan), 253 Reuveny, Rafael, 272 Rhodes, Cecil, 180 Rhodesia, 43 rice, 139, 215–16 rickshaw drivers, 32–33 Ridley, Matt, 11 rights, 131, 161, 198–99 rinderpest, 215 Rio de Janeiro, 46, 58, 159, 201 river blindness, 214 roads, 169, 233, 235 aid for, 216 in South Africa, 202 Robinson, James, 13, 140, 249 robotics, 261, 301 Rockefeller Foundation, 170 Rodrik, Dani, 261, 263 Roll Back Malaria Partnership, 212 Romania, 36, 50, 134, 143 Romero, Óscar, 100 Roosevelt, Franklin, 100 Roosevelt, Theodore, 169 Ross, Ronald, 211 Royal Economic Society, 226 Russia, 47, 146, 222, 256 democracy in, 113, 263, 264 infrastructure financing in, 259–60 slowing of progress in, 250, 264 Ukraine invaded by, 192, 233 US aid banned by, 224 Rutagumirwa, Laban, 176–77 Rwanda, 144, 159 aid to, 214, 216, 224 China’s example followed by, 266 growth in, 6, 7, 45, 50, 125, 128, 261 individual leadership in, 187 as landlocked, 207 Sachs, Jeffrey, 14–15, 175, 205, 210, 213, 219 Safaricom, 47 salinity, 171, 215 Sall, Macky, 114 Samoa, 202 sanitation, 73, 77, 216, 303 Sargsyan, Vazgen, 113 Saudi Arabia, 115 savings rate, 201 schistosomiasis, 205 Schlesinger, Arthur, Jr., 121 Schumpeter, Joseph, 249 Second Machine Age, The (Brynjolfsson and McAfee), 166, 300 secular stagnation, 257 seed drill, 25 seeds, 171 semiconductors, 20 Sen, Amartya, 19, 123, 127, 128 Sendero Luminoso, 287 Senegal, 7, 37 aid to, 223, 224 corruption in, 114 democracy in, 123, 124, 263 demonstrations in, 281 growth in, 261 inequality in, 67 Senkaku islands, 288 Seoul, 201 September 11, 2001, terrorist attacks of, 269 services, 67, 260, 261–62 severe acute respiratory syndrome (SARS), 82, 267 Seychelles, 284 Shanghai, 201 Shenzhen, 91 Sherpas, 203 Shikha, 33–34 Shinawatra, Thaksin, 254–55, 264 Shinawatra, Yingluck, 255 Shining Path, 287 shipping, 202 shipping containers, 167–68 shock therapy, 219 shoes, 56, 139, 162, 262 Sierra Leone, 220, 285 democracy in, 104, 107 Ebola in, 82 growth in, 50 health system in, 266 violence in, 146, 206 Silk Road, 206 silks, 152 silver, 152 Simon, Julian, 294 Sin, Jaime, 18, 103 Singapore, 7, 16, 184 benign dictatorship in, 126 and democracy, 122, 248, 250 and globalization, 155 growth in, 125, 139, 147 universities in, 247 Singh, Manmohan, 192 Six-Day War, 285 skills and capabilities, 16, 190–92 slavery, 142, 156, 180, 206 smallpox, 214, 215 Smith, Adam, 151, 156, 200–201 Smith, David, 43 Smith, Marshall, 178–79 SMS text messages, 47, 178 Snow, John, 77 social safety net, 38, 39, 68, 164, 307 Sogolo, Nicéphore, 144 soil, 171, 215 Solow, Robert, 165 Somalia, 8, 9, 99, 119, 213, 243 aid to, 224 power vacuum in, 184 Zheng He’s trip to, 152 Somoza García, Anastasio, 100, 127 Song-Taaba Yalgré women’s cooperative, 178 South Africa, 7, 17, 18, 20, 22, 37, 43, 46, 127, 143, 145, 155, 182–83, 207 aid to, 223 apartheid in, 44, 57, 68, 100, 103, 135, 141, 180, 182 banks in, 56 corruption in, 264 economic growth in, 183, 235, 262 future of, 234 HIV in, 174 inequality in, 68 infrastructure financing in, 259–60 life expectancy in, 266 political turmoil in, 57 roads in, 202 universities in, 247 South Asia, 37, 50 Southeast Asia, 5, 12, 167 colonialism in, 140 growth in, 141 Southern Rhodesia, 180 South Jakarta, 286 South Korea, 36, 127, 159, 184, 201, 288, 290 aid to, 214, 216 benign dictatorship in, 126 democracy in, 104, 122, 126, 250 as dictatorship, 99, 122 and globalization, 155 growth in, 7, 16, 29, 71, 125, 139, 147, 236, 262 individual leadership in, 187 inequality in, 68 lack of resources in, 205 land redistribution in, 68 Soviet Union, x, 50, 126, 133–34, 145, 148, 298, 309 Afghanistan invaded by, 134, 146 collapse of, 16, 81, 103, 131, 135, 142, 156, 250, 251 countries controlled by, 141 dictatorships supported by, 100 malaria in, 210 Spain, 105, 123, 140 speech, freedom of, 198–99 Spence, Michael, 86, 165 Spratly Islands, 289 Sputnik, 147, 250 Sri Lanka, 11, 37 economic problems in, 255 engineers from, 56 malaria in, 211 Zheng He’s trip to, 152 Stalin, Joseph, 127 state-owned farms, 195 Stavins, Robert, 297 steam engine, 25, 300 Steinberg, James, 299 Stern, Nicholas, 213, 292 Stiglitz, Joseph, 213, 227 stock exchanges, 241 Strait of Malacca, 201 student associations, 110 Subic Bay Naval Station, 201 Subramanian, Arvind, 225 Sudan, 114, 115, 185, 206, 208, 285 aid to, 224 China’s example followed by, 266 violence in, 285 Suharto, 99, 112, 122, 126, 138–39, 144 Sumatra, 152 Summers, Lawrence, 88, 227, 235, 246, 257 Sustainable Development Goals, 217 Swaziland, life expectancy in, 266 sweatshops, 58 Sweden, 159 Switzerland, 27, 202 Sydney, 201 Syria, 8, 285 aid to, 224 conflict in, 118, 119, 146, 233, 255 in Six-Day War, 285 Taiwan, 29, 153, 201, 289, 290 aid to, 216 benign dictatorship in, 126 democracy in, 122, 126, 250 and globalization, 155 growth in, 125, 139, 147, 236, 262 individual leadership in, 187 lack of resources in, 205 Tajikstan, 205, 208 Tanzania: aid to, 214, 216 and democracy, 248 fruit markets in, 58 growth in, 45, 50, 238, 240, 261 purchasing power in, 27 reforms in, 192 Zheng He’s trip to, 152 tariffs, 44, 102, 155, 167, 193, 263, 305 Tarp, Finn, 226 tax revenues, 241, 247 Taylor, Charles, 99, 145 technology, x, 17, 19, 22, 94–96, 135, 150, 151–79, 183, 200, 206–7, 234, 245, 258, 294, 301 for agriculture, 170–71 for banking, 175, 179 in China, 154–55, 236 for education, 178–79 globalization and, 156, 166 for health, 173–75, 179, 293 terrorism and, 287–88 telecommunications, 158 Terai, 211 terms-of-trade ratio, 54 terrorism, 19, 20, 21, 146, 286–88 tetanus, 94, 161 textiles, 25, 56, 139, 152 Thailand, 9, 22, 36, 253–55, 265 benign dictatorship in, 126 child mortality in, 84 corruption in, 254, 264 and democracy, 248, 253–54, 255, 263 growth in, 139, 147, 262 protests in, 255, 263 Zheng He’s trip to, 152 Theroux, Paul, 12 Things Fall Apart (Achebe), 72 think tanks, 110 Third Wave, The (Huntington), 121 Thomas, Brendon, 90–91 Tiananmen Square, 148 Tibet, 203 Tigris, 285 timber, 61, 139, 206, 223, 285 Timbuktu, 206 Timor-Leste, 36, 139, 144, 184, 220 aid to, 223 democracy in, 106, 122 infrastructure investment in, 216 poverty in, 122 tin, 139 Tokyo, 201, 277 totalitarianism, 10–11, 16 tourism, 45 toys, 56, 139 trade, x, 6, 17, 20, 22, 52, 156, 157, 162–63, 193, 203, 204–5, 234, 257, 303 in agriculture, 273 Asian economic miracle and, 170, 201 growth of, 157, 158–59, 160 sea-based, 200–201 shipping containers and, 167–68 trade unions, 110 transportation, 166, 261 Truth and Reconciliation Commission, 182 T-shirts, 159, 164 Tuareg, 265 tuberculosis, 75, 94, 161, 205, 214 Tull, Jethro, 25 Tunisia: democracy in, 7, 106, 124, 255, 263 growth in, 50, 238 Turkey, 36, 127, 285 aid to, 223 authoritarian rule in, 255 demand in, 53 democracy in, 106, 123, 124, 263 future of, 234 growth in, 6, 7, 22, 235, 238 protests in, 263 trade encouraged by, 155 universities in, 247 Turkmenistan, 114, 266, 285 Tutu, Desmond, 18, 103, 185 Uganda, 106, 112, 144, 159, 287 aid to, 216 and democracy, 263, 264 growth in, 50 horticulture producers in, 169 individual leadership in, 187 inequality in, 67 infrastructure investment in, 216 mobile phones in, 176–77 Ukraine, 143, 192, 233 Ultimate Resource, The (Simon), 294 unemployment benefits, 38, 164 United Fruit Company, 223 United Nations, 79, 212, 217, 258, 275, 298, 309 United Nations’ International Labour Organization, 57 United States, 19, 47, 68, 148, 231, 292, 300 China’s relationship with, 298–99 countries controlled by, 141 coups supported by, 100 democracy criticized in, 126 democracy in, 112, 296 and dictatorships, 139, 222 Iraq invasion by, 8, 118, 124, 146 leadership needed by, 234 natural capital in, 63 Panama invaded by, 144 post–World War II boom in, 262 protection provided by, 289–90 in World War II, 137 universities, 247 urbanization, 4, 22, 233, 268, 276–77, 279 US Agency for International Development (USAID), 95, 170, 171, 216, 308 Uyuni Sal Flat, 205 Uzbekistan, 8, 145, 185, 281, 285 vaccines, 77, 94, 161, 214, 233, 302 Velvet Revolution, 103 Venezuela, 22, 47, 106, 115 and democracy, 248, 263, 264 economic problems in, 255 natural capital in, 63 Vereenigde Oostindische Compagnie (VOC), 136–37 Vietnam, 36, 106, 144, 289 aid to, 214, 224 China’s example followed by, 266 growth in, 7, 45, 50, 125, 128, 147, 262 individual leadership in, 187 inequality in, 67 life expectancy in, 78 rice yields in, 215–16 textiles from, 56 Zheng He’s trip to, 152 Vietnam War, 100, 138, 141, 145, 289 Vincent, Jeffrey, 61 violence, 6, 20, 290 decline in, 4, 115–20, 116, 117, 119, 145–46 poverty deepened by, 119, 119 and poverty traps, 15 over resources, 284–86 Vitamin A deficiency, 173–74 Viviano, Frank, 152 Wade, Abdoulaye, 114, 224 Wałesa, Lech, 18, 103, 143, 149, 184, 186 Walls, Peter, 181 Walmart, 46 Wang Huan, 90–91 war, 5 attention to, 10 and poverty traps, 15 reduction of, 3, 4, 6 watchdog groups, 110 water, 77, 80, 161, 216, 275, 277–80, 307 water conservation, 233 water pollution, 8 water shortages, 22, 73 Watt, James, 25 Wealth and Poverty of Nations, The (Landes), 13 Wealth of Nations, The (Smith), 200–201 Weber, Max, 120 West Africa, 8, 10, 22, 205 colonialism in, 140 West Bengal, 31 Western Samoa, 75, 202 What We Know (AAAS report), 281–82 “When Fast Growing Economies Slow Down” (Eichengreen et al.), 236 White, Howard, 226 white supremacy, 124 “Why Isn’t the Whole World Developed?”


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How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, 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, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, 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, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

The second, associated with the first, is an equally persistent rise in overall indebtedness in leading capitalist states, where governments, private households and non-financial as well as financial firms have, over forty years, continued to pile up financial obligations (for the U.S., see Figure 1.2). Third, economic inequality, of both income and wealth, has been on the ascent for several decades now (Figure 1.3), alongside rising debt and declining growth. Figure 1.1: Annual average growth rates of twenty OECD countries, 1972–2010* *Five-year moving average Source: OECD Economic Outlook. Figure 1.2: Liabilities as a percentage of U.S. GDP by sector, 1970–2011 Source: OECD National Accounts. Figure 1.3: Increase in GINI coefficient, OECD average Source: OECD Income Distribution Database. Steady growth, sound money and a modicum of social equity, spreading some of the benefits of capitalism to those without capital, were long considered prerequisites for a capitalist political economy to command the legitimacy it needs.

CHAPTER 10 On Fred Block, ‘Varieties of What? Should We Still Be Using the Concept of Capitalism?’ CHAPTER 11 The Public Mission of Sociology Index Notes Index List of Figures 1.1Annual average growth rates of twenty OECD countries, 1972–2010 1.2Liabilities as a percentage of U.S. GDP by sector, 1970–2011 1.3Increase in GINI coefficient, OECD average 1.4Government debt as a percentage of GDP, 1970–2013 1.5Total tax revenue as a percentage of GDP, 1970–2011 1.6Top marginal income tax rates, 1900–2011 1.7The broken social contract, U.S., 1947 to present 2.1Inflation rates, 1970–2014 2.2Unemployment rates, 1970–2014 2.3Strike days per 1,000 employees, 1971–2007 2.4Fiscal consolidation and private debt, as percentage of GDP, 1995–2008 2.5Four crises of democratic capitalism in the U.S., 1970–2014 4.1Liabilities (excluding financial corporations) as a percentage of GDP, by sector, six countries, 1995–2011 4.2Long-term interest rates on government bonds, selected OECD countries, 1998–2014 4.3Total central bank assets A Note on the Text Apart from the Introduction, the chapters in this collection have all been previously published: five out of eleven in New Left Review, one as a discussion paper of the research institute of which I served as director for almost two decades, and the rest in various books and journals.

See also corruption freedom, empire of, 46 G Galbraith, John Kenneth, 95, 99 General Theory (Keynes), 250 German Economics Ministry, 154 Germany allocation economy of, 97 commitment to public expenditure cuts by, 92–3 inflation rates (1970–2014), 80f introduction of concept of capitalism in, 3 liabilities as percentage of GDP (1995–2011), 118f long-term interest rates on government bonds (1998–2014), 120f news watching in, 109 political parties in, 110–11 renaming of Arbeitsamt (Labour Office), 105 rise of anti-euro party (AfD) in, 133 television channels in, 104 unemployment rates (1970–2014), 80f workers’ co-determination in, 74 Gerth, Hans, 38 GINI coefficient, increase in, 48f global anarchy, 28, 65, 71–2 global governance, 23 global hegemony, 6 global inflation, 16, 47 globalization, 22, 23, 116, 121, 144 global mobility, 63 global political confrontation, 6 Goldman Sachs, 32, 144, 198 Goldscheid, Rudolf, 115 Goldthrope, John, 79 Gordon, Robert, 65, 66 Götterdämmerung, 57 governance, as not enough to keep capitalism from going too far and undermining itself, 25 government debt, 50, 53, 54f, 66, 88, 89, 91, 121, 137, 214 government goods, 95–6, 106, 107 governments, as increasingly perceived as not agent of citizens but agent of other states/international organizations, 92 Graeber, David, 234 Gramsci, Antonio, 36 Great Depression (1930s), 7–8, 62, 87, 90 Great Recession (2008), 8, 18, 73, 119.


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Cities Are Good for You: The Genius of the Metropolis by Leo Hollis

Airbnb, Alvin Toffler, banking crisis, Berlin Wall, Big Tech, Boris Johnson, Broken windows theory, Buckminster Fuller, call centre, car-free, carbon footprint, cellular automata, classic study, clean water, cloud computing, complexity theory, congestion charging, creative destruction, credit crunch, Credit Default Swap, crowdsourcing, Deng Xiaoping, digital divide, digital map, Disneyland with the Death Penalty, Donald Shoup, East Village, Edward Glaeser, Elisha Otis, Enrique Peñalosa, export processing zone, Firefox, Frank Gehry, General Motors Futurama, Geoffrey West, Santa Fe Institute, Gini coefficient, Google Earth, Great Leap Forward, Guggenheim Bilbao, haute couture, Hernando de Soto, high-speed rail, housing crisis, illegal immigration, income inequality, informal economy, Internet of things, invisible hand, Jane Jacobs, Jevons paradox, Kickstarter, knowledge economy, knowledge worker, Leo Hollis, Lewis Mumford, Long Term Capital Management, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, Masdar, mass immigration, megacity, negative equity, Neil Armstrong, new economy, New Urbanism, Occupy movement, off-the-grid, openstreetmap, packet switching, Panopticon Jeremy Bentham, place-making, power law, Quicken Loans, Ray Oldenburg, Richard Florida, sharing economy, Silicon Valley, Skype, smart cities, smart grid, spice trade, Steve Jobs, technoutopianism, the built environment, The Chicago School, The Death and Life of Great American Cities, The Great Good Place, the High Line, The Spirit Level, the strength of weak ties, The Wisdom of Crowds, Thomas Malthus, trade route, traveling salesman, urban planning, urban renewal, urban sprawl, walkable city, white flight, Y2K, Yom Kippur War

Therefore the top 1 per cent of the US population owned 22 per cent of the whole economy.27 The city can magnify inequality: it is here that wealth is made and it is also the place that the poor come to; and often they have to live desperately close to each other. In order to measure this many economists use something called the Gini Coefficient. On a scale between 0.0 (being the most equal) and 1.0 (total inequality), one expects a developed country to be somewhere between 0.3 and 0.4, the top figure considered to be the ‘international alert line’ when levels of inequality become a global concern. Very high inequality can be found between 0.5 and 0.6 and includes countries such as Chile, Zimbabwe, Ethiopia and Kenya.

However, cities offer a more extreme picture than countries. In Asia and Africa, the Gini Coefficient ratios for cities are higher and growing faster than the nation, showing that just because cities are becoming richer, this wealth is not evenly distributed. This same phenomenon can be found in the US: while the national Gini Coefficient is 0.38, more than 40 American cities have a ratio of above 0.5. The most unequal city in the US – Atlanta, Georgia, at 0.57 – is at a similar level of inequality as Nairobi, Kenya, which includes the largest slum in the world, and Mexico City.28 Yet income inequality within the city is more than just a register of varying levels of wealth.

The city is a place of liberty, where we are free to pursue our own individual fortunes, but it is also a place that crams many different people together, threatening conflict and inequality. Today there are places in the world where the slums of the very poorest who cannot afford clean water are within yards of the palaces of the super-rich with crystal-blue swimming pools. As a result we often write the city’s story in terms of the tensions between the top and the bottom, between the haves and the have-nots, the powerful and the weak. Because of this we assume that inequality is hard-wired into the city – that there has to be those who prosper and those who are desperate, that power will always be in the hands of the few who run the city from above.


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Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global pandemic, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, language acquisition, Lao Tzu, life extension, longitudinal study, low skilled workers, low-wage service sector, machine readable, Malacca Straits, mass immigration, microcredit, Nelson Mandela, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, social distancing, spice trade, trade route, transaction costs, transatlantic slave trade, women in the workforce, working-age population

Although incomes in all countries have risen over the long term, economists have found that “virtually all of the observed rise in world inequality has been driven by widening gaps between nations.”23 Figure 7.2. Gini coefficient: unweighted intercountry inequality 1950-1998. Each country is one observation. Branko Milanovic. 2003. “The Two Faces of Globalization: Against Globalization as We Know It,” World Development 31(4): 667-683, p. 675, figure 3. © Elsevier Branko Milanovic, a World Bank economist, illustrates this phenomenon by applying the Gini coefficient measure of inequality to the GDP per capita for 144 countries between 1950 and 1998 (see figure 7.2).

Share of temporary employment by birth status, 2007 Figure 6.5. Gains in schooling: comparing gross enrollments at origin and abroad Figure 6.6. Comparing the educational attainment of migrant fathers and their children in Canada, by source region, 2008 Figure 7.1. Falling tariffs in three regions, 1950-2000 Figure 7.2. Gini coefficient: Unweighted intercountry inequality, 1950-1998 Figure 7.3. Percentage of regional and world populations living in cities, 1950-2050 Figure 7.4. Long-term trend in size of the working-age population in sub-Saharan Africa by level of educational attainment, 1970-2050 Figure 7.5. Population aged 15-64, medium variant projections, 1950-2050 Figure 7.6.

Each country is treated as one unit, so China is given equal weighting to Fiji. This approach illustrates how economic conditions and opportunities differ dramatically from one country to another. While inequality remained relatively stable between 1960 and the mid-1970s, it has risen by about 20 percent since 1978. Whereas for much of history, inequality was greatest within countries, today inequality between countries is far more significant. As a corollary of rising intercountry inequality, wages are higher in rich countries than in poor ones. Millions of Europeans left for the Americas in the late nineteenth century to seek, among other things, wages that were two to four times higher than those at home.


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Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup by Andrew Zimbalist

airline deregulation, business cycle, carbon footprint, East Village, en.wikipedia.org, full employment, gentrification, Gini coefficient, income inequality, longitudinal study, megaproject, Nelson Mandela, New Urbanism, price elasticity of demand, principal–agent problem, race to the bottom, selection bias, Suez crisis 1956, urban planning, young professional

They also present an aesthetic issue, for they are ultramodern facilities surrounded by a sea of parking lots anomalously situated in open areas or in communities with older, more modest construction. These massive sports facility and infrastructure expenditures are taking place against a backdrop of sharp income inequality, a relatively low level of economic development, poor social services, increasing prices, and rising expectations. At $11,300, Brazil's per capita income is approximately one-fifth that of the United States. Measured by the Gini coefficient, Brazil's income distribution is roughly 40 percent more unequal than in the United States.28 Approximately 20 percent of Brazil's 200 million-plus people live in poverty. The Brazilian GDP, which grew at close to 6 percent per year during 2000–10, slowed to a 2 percent rate during 2011–13.

Batista is under investigation by the federal police for alleged financial wrongdoings. His $60 billion EBX empire, including interests in oil, mining, and logistics, crumbled in 2013. See SportsPro Magazine, June 2014, p. 31. 27. Panja, “Brazil's Flamengo Won't Make ‘Stupid’ Deal.” 28. The Gini coefficient measures actual inequality relative to perfect equality. It ranges from 0 to 1, with lower numbers representing more equality. 29. Aragão and Maennig, “Mega Sporting Events,” p. 18. 30. More precisely, the housing deficit was calculated by the João Pinheiro Foundation at 522,607 units in 2008. See Aragão and Maennig, “Mega Sporting Events,” p. 12.

In light of the recent trend for developing countries, in particular the BRICS (Brazil, Russia, India, China, and South Africa), to host the Olympics and World Cup—countries where resources are scarcer, the fiscal balance is more fragile, hosting costs are far greater, and the income distribution is more lopsided—the potential for explosive protests seems imminent. While hosting a sport mega-event is hardly a seminal force behind a country's inequality, there is little question that it contributes to and reinforces existing patterns of inequality. That the Olympics and World Cup are so heavily publicized and so visible only increases the likelihood that wasteful spending will catch the attention and scorn of the population. With Olympics bidding, the typical pattern is for a country's National Olympic Committee (NOC) to call for bids from prospective host cities eleven years before the games.


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Breakout Nations: In Pursuit of the Next Economic Miracles by Ruchir Sharma

"World Economic Forum" Davos, 3D printing, affirmative action, Alan Greenspan, Albert Einstein, American energy revolution, anti-communist, Asian financial crisis, banking crisis, Berlin Wall, book value, BRICs, British Empire, business climate, business cycle, business process, business process outsourcing, call centre, capital controls, Carmen Reinhart, central bank independence, centre right, cloud computing, collective bargaining, colonial rule, commodity super cycle, corporate governance, creative destruction, crony capitalism, deindustrialization, demographic dividend, Deng Xiaoping, eurozone crisis, financial engineering, Gini coefficient, global macro, global supply chain, Goodhart's law, high-speed rail, housing crisis, income inequality, indoor plumbing, inflation targeting, informal economy, junk bonds, Kenneth Rogoff, knowledge economy, labor-force participation, land reform, low interest rates, M-Pesa, Mahatma Gandhi, Marc Andreessen, market bubble, Masayoshi Son, mass immigration, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Nelson Mandela, new economy, no-fly zone, oil shale / tar sands, oil shock, open economy, Peter Thiel, planetary scale, public intellectual, quantitative easing, reserve currency, Robert Gordon, rolling blackouts, Shenzhen was a fishing village, Silicon Valley, software is eating the world, sovereign wealth fund, The Great Moderation, Thomas L Friedman, trade liberalization, Tyler Cowen, Watson beat the top human players on Jeopardy!, working-age population, zero-sum game

Meanwhile urban professionals have no unemployment problem at all (0.4 percent). The income gap is just as wide today as it was when the ANC finally toppled the apartheid government nearly two decades ago; the standard measure of inequality, the Gini coefficient, is still stuck at 0.7 percent—one of the highest rates in the world. (At zero on the Gini scale, everyone has the same income, and at 1, just one person has all the income.) Few other countries, including Zimbabwe and Namibia, have a Gini coefficient of more than 0.6. Thus the surreal calm of South Africa grows more difficult to explain every year. The Indian Honeymoon The peace and quiet defies the momentum of an age when the Internet is accelerating the pace of social revolts, even in repressive dictatorships.

Kospi,” 153, 164 drug cartels, 74, 79–80 Dubai, 188, 214, 218–19 Dubai World, 214 Dubrovnik, 97 Dun Qat refinery, 201 DuPont, 9 “Dutch disease,” 179, 220 earnings, corporate, 3 East African Community (EAC), 208–9 East Asia, 8, 10, 46, 131–32, 146, 196–97, 208, 245 “East Asian tigers,” 8, 10, 146 “easy money,” 5–6, 11, 13–14, 38, 105, 133, 176–77, 182–83 economic transformation program (ETP), 151 economies: agrarian, 9, 17–18, 21, 22, 27 business cycles in, 2, 5–6, 11, 223 command-and-control, 29–30, 39, 156, 199–200 commodity, 133–34, 137–38, 223–39 counter-cyclical, 120–21 developing, see developing countries diversified, 165–66 emerging markets in, vii–x, 2–11, 37–38, 47, 64, 94, 185–91, 198–99, 242–49, 254–55, 259–62 forecasting on, x, 1–14, 17, 18, 31–32 global, 1–2, 4–5, 6, 7–8, 9, 12, 14, 18–19, 37, 38, 51–52, 68–71, 153–55, 158–59, 161, 167–69, 170, 176, 178, 183–91, 222–24, 228–31, 233–36, 241–42, 249–54 growth rates in, 8–11, 185–91, 244–49, 254–55 historical trends in, ix–x, 2, 9, 10–11 knowledge, 236–37 parallel, 79–80 recessions in, 5–6, 9, 11, 18, 34, 80, 101, 109, 131, 132, 144, 225, 244, 249–51 “tiger,” 8, 10, 46 volatility of, 249–51 see also specific countries Economist, 207 education, x, 5, 12, 22, 63, 65, 76, 121, 168–69, 206, 218, 220 efficiency, 63–64 “efficient corruption,” 135–37 Egypt: author’s visit to, ix corruption in, 217 economic reform in, 27, 28, 126–27, 217–18 as emerging market, 204, 235 foreign investment in, ix, 92 inflation rate in, 88 revolts in, 127, 216 stock market of, 190 Eighth Malaysian Plan, 151 Einstein, Albert, 238 El Beblawi, Hazem, 128 el dedazo (“the big finger”), 76–77 election cycles, 2 electromagnetic radiation, 17 “electronic wallet,” 208 Elle, 53 emerging markets, vii–x, 2–11, 37–38, 47, 64, 94, 185–91, 198–99, 242–49, 254–55, 259–62 energy efficiency, 226–27 energy sector, 5, 13, 51–52, 67–68, 82, 125, 170, 212–13, 215, 223, 224–29 English language, 37, 52–53, 141, 196, 203–4 entrepreneurship, 38, 43, 58, 96, 144, 166, 186, 225 entry point projects (EPPs), 151 environmental issues, 17, 135 Equatorial Guinea, 210 Erbakan, Necmettin, 114–15 Erdogan, Recep Tayyip, 111, 112, 113–14, 116–18, 123, 124–28, 210, 245 “errors and omissions,” 150 Eskom, 177 Estonia, 109 euro, 100, 105, 107, 108 Eurocentrism, 206 Europe: agriculture in, 231–32 banking system of, 12 Central and Eastern, 8, 11, 97–110, 121, 170, 203, 247 debt levels in, 57, 97, 100, 121–22, 252 economy of, 7, 12, 107–8, 230, 241, 245 foreign investment by, 2, 7, 20, 100, 104–8 foreign trade of, 145, 159 GDP in, 20, 100 government deficits in, 100 growth rate of, 6, 241, 242 manufacturing sector of, 247 political unity of, 11, 49, 53, 97–98, 208–9 recessions in, 101, 132 unemployment in, 101, 126 welfare states in, 63 see also specific countries European Community (EC), 208–9 European Union (EU), 11, 97–98, 101, 105, 106–8, 109, 115–16, 118, 121–22, 159, 253–54 Eurozone, 11, 99–100, 105, 106–8, 109, 121–22, 254 expatriate workers, 219 Facebook, 41 factories, 17–18, 22–23, 28, 43, 67, 68, 132, 230 “fairness creams,” 54 family enterprises, 125–26, 134–38, 155, 160, 161–63, 167–69, 254 “farmhouses,” vii–viii fast-food outlets, 53 Federal Palace Hotel, 212 Federal Reserve Board, 5–6, 222 feeder ships, 200 Femsa, 75 Fiat, 120 fiber-optic cables, 207–8 Fidesz Party, 104–5 Fiji, 4 film industry, 44, 47, 167, 186, 211 “financialization of commodities,” 227–28 Finland, 238, 251 First Coming, 243 fishing industry, 193 five-year plans, 20, 27, 150–51 Forbes, 47, 91 “forced listing,” 188 Ford, 75, 120 foreign investment, vii–x, 2, 7–8, 9, 18, 20, 32, 35–36, 37, 43–44, 49–50, 59, 63, 64, 66, 68–72, 86, 87, 91–94, 100, 104–8, 118, 119–20, 133–35, 137, 139, 140–41, 144, 146–50, 151, 183–84, 198–200, 201, 203–5, 206, 225 foreign trade, vii, x, 6, 7, 13, 18, 20–21, 23, 26, 28, 29, 31, 32–33, 43, 59, 61, 62, 67–68, 72, 75, 80, 83, 85, 86, 90, 117, 120, 122, 132, 133–34, 144–45, 147, 148, 157, 158–59, 162, 178, 183, 196–97, 198, 206, 220, 223, 226, 232, 233–34 Four Seasons Hotel, 111, 232, 233 Four Seasons Index, 232, 233 “$4,000 barrier,” 7–11 Fourth World, 185–91, 204–9, 220, 221 Fox, Vicente, 77 Fraga, Arminio, 72 France, 63, 100, 121, 123–24 Franklin, Benjamin, 214 Freedom House, 205 “free float,” 188 free markets, x, 8–9, 96, 104 French, Patrick, 47 French Riviera, 59–61 frontier markets, 89, 185–91, 213, 261–62 Fujian Province, 164 futures contracts, 5 Gandhi, Indira, 55 Gandhi, Rahul, 48 Gandhi, Sanjay, 55 Gandhi, Sonia, 39 Gandhi family, 39, 47–48, 55, 57 gas, natural, 13, 85, 179, 214, 215, 217, 225, 235 gasoline, 126, 215 GaveKal Dragonomics, 229 Gaziantep, 125 General Electric, 9 generators, electric, 212–13 Germany: billionaires in, 45 economy of, 103 as EU member, 107, 121 GDP of, 247 low-context society of, 40 manufacturing sector in, 157, 158–59, 247 population of, 37 public transportation in, 16 South Korea compared with, 168–69 Germany, East, 102 Gertken, Matthew, 29 Ghana, 187 Gibson, Mel, 129 Gini coefficient, 173 Girl’s Generation, 167 glass manufacturing, 221 Globo, 61 GM, 75, 163 “go-go stocks,” 3 gold, 3, 141, 176, 178, 179–80, 192, 202, 205, 224, 229–30 “Goldilocks economy,” 4, 5–6 gold shares, 179–80 gold standard, 178 Goldstone, Jack, 217 Goodhart, Charles, 11 Goodhart’s law, 11 Google, 41, 237–38 Gorbachev, Mikhail, 103 “Goulash Communism,” 101 government paper, 116 government spending, 41–42, 63, 65, 66–67, 70–71, 72, 86, 87–88, 109, 133, 181–83, 190 government transformation program (GTP), 151 graft, 43–44 see also corruption Great Britain: auto industry in, 31 empire of, 49, 118, 192 foreign investment by, 206 government of, 89 labor force of, 100 public transportation in, 16 socialism in, 150 Great Depression, 101, 109, 252–53 Great Moderation, 250–51 Great Recession (2008), 5–6, 9, 59, 66, 76, 80–81, 88, 92–93, 100, 101, 102, 103, 109, 119, 122, 131, 144, 180, 189, 225, 243, 247–49, 250, 254 Greece, 11, 27, 30, 99, 100, 107–8, 121, 181, 252 green revolution, 231–32 Greenspan, Alan, 6 gross domestic product (GDP), 1, 3–4, 6, 17, 18, 20, 26, 32, 43, 49, 57, 63, 65, 66, 67, 72, 85, 92, 100, 107, 110, 116, 117, 119, 120, 121, 131, 133, 139, 140, 141, 142, 144–45, 147, 149, 155, 157, 158, 159, 161, 165, 170, 173, 178–79, 180, 191, 206, 208, 210, 214, 215, 217, 218, 219, 228, 236, 243, 247, 252 Group of Twenty (G20), 215 growth corridors, 151 Gül, Abdullah, 118, 123–24, 127 Gulf States, 214–21, 244, 245 see also specific states Gupta, Anil K., 237 Habarana, 196 Hall, Edward, 39–40 Hallyu, 167 Hambantota, 197 Hanoi, 198, 200 Han people, 53 Harmony Gold, 180 Harvard School of Public Health, 241 Havel, Václav, 111 Hayek, Friedrich, 109 Hazare, Anna, 42–43 headscarves, 123–24 health care, 63 helicopters, 60, 64, 72 herd behavior, 8, 228–31 high-context societies, 39–40, 41, 47 high-speed trains, 15–16, 20, 21 highways, 17, 20, 21, 65, 231 Hindi language, 52–53, 56 “Hindu rate of growth,” 174 Hindustan Times, 53 Hirsch, Alan, 178 Ho Chi Minh City, 200, 201, 203 Honda, 161 Hong Kong, 9, 141, 235 “Hopeless Continent,” viii Hotel Indonesia Kempinksi, 129 hotels, 12, 31, 59–61, 65, 111, 232, 233 “hot money,” 149–50 housing prices, 5–6, 16, 18, 24–25, 28–29, 31, 32, 61, 92, 103–4 HP, 158 Huang, Yukon, 28 Huang Guangyu, 46 Hu Jintao, 29 Humala, Ollanta, 66–67 human-rights violations, 193 Hungary: banking in, 105 as breakout nation, 99–100, 101 economic growth of, 99, 104–6, 109 as emerging market, 104–6 as EU candidate, 100, 105 foreign investment in, 104, 105 GDP of, 100 growth rate of, 244 income levels of, 8 industrial production in, 101 political situation in, 104–5, 109 population of, 106 post-Communist era of, 101, 104 welfare programs of, 106 Hussein, Saddam, 195 Huxley, Aldous, x hyperinflation, 39, 42, 62, 66 “hypermarkets,” 90–91 Hyundai, 90, 156, 158, 161–63, 168 identification cards, 213 immigration, 79, 82, 85, 95 income: national levels of, 4, 8, 11, 16–21, 24–25, 31–32, 38, 58, 61, 63, 72, 75, 83, 86–87, 88, 97–98, 113, 116, 121, 138, 139–40, 141, 144, 145, 148, 153–55, 157, 173, 176–77, 182–83, 204 per capita, ix, 7–8, 11, 13, 19–21, 41, 58, 61, 63, 72, 73–75, 76, 88, 97–98, 109, 116, 127, 131–32, 138, 148, 176–77, 204, 207, 216, 244, 245–46 taxation of, 44, 51, 63, 76, 86, 106, 126–27, 182, 214, 221 India, 35–58 agriculture of, 38, 44, 54, 57 auto industry of, 54, 161, 162, 173 baby-boom generation in, 37–38 billionaires in, viii, 25, 44–47, 79, 254 Brazil compared with, 10, 39–43, 61, 70 as breakout nation, 38–39, 49 capitalism in, 38–39, 42, 46–47, 49, 50–51, 58 China compared with, 1, 10, 19, 25, 36, 37–38, 41, 45, 47, 52, 53, 56, 57, 58 consumer prices in, 38, 39, 49, 52–54, 57 corruption in, 42, 43–44, 45, 46–47, 49–51, 58 credit market in, 38, 51 debt levels in, 57–58 democracy in, 30, 48–49, 50, 55–56, 58 “demographic dividend” for, 37–38, 55–56, 58 domestic market of, 36, 43 economic reforms in, 28, 38–39, 49 economy of, 28, 35–58, 174, 204 elections in, 48–49, 50, 55 “Emergency” period of, 55–56 as emerging market, 3–4, 10, 30, 35–39, 43, 49, 106, 253 English spoken in, 37, 52–53 entrepreneurship in, 38, 43, 58 film industry of (Bollywood), 44, 47, 167, 211 forecasts about, 35–36, 37, 39–40 foreign investment in, vii–viii, 7, 35–36, 37, 43–44, 49–50, 183, 225 foreign trade of, vii, 43, 157 Gandhi family in, 39, 47–48, 55, 57 GDP of, 1, 3–4, 43, 49, 57 as global economy, 1, 37, 38, 51–52 government of, 30, 38–39, 41–43, 47–52, 55–58 government spending in, 41–42 growth rate of, 3–4, 9, 30, 35–58, 61, 64, 87, 88, 174, 241, 244 high-context society in, 39–40, 47 income levels of, 8, 19, 54, 58 independence of, 174, 175, 176 Indonesia compared with, 135, 136 inflation rate in, 39, 43–44, 248 infrastructure of, 10, 43, 51 investment levels in, 43–44, 49–50 labor market in, 38, 55 leadership of, 38–39, 41–42, 47–52, 57–58, 174 License Raj of, 38 middle class of, 42–43, 52–56 mining industry of, 44, 254 natural resources of, 51–52, 235 northern vs. southern, 49–52, 54, 58 outsourcing industry in, 141 parliament of, 43, 44, 47–49 political situation in, 30, 37, 38–39, 47–49, 50, 55–58, 174 population of, 19, 37–38, 52–56, 57, 58, 95 poverty in, 41–42, 52–53, 57–58 price levels in, 53 productivity in, 64 real estate market in, 44, 254 “rope trick” in, 35–36, 36, 37, 58 rural areas of, 38, 57 Russia compared with, 36–37, 44–45, 46, 87, 88, 95 social unrest in, 42–43, 55–56 Sri Lanka’s relations with, 196, 197 state governments of, 37, 44, 48–52 sterilization (vasectomy) program in, 55–56 stock market of, 36–37, 38, 70, 189, 243, 244 taxation in, 44, 51 technology sector of, 141, 166, 254 unemployment in, 41–42 wealth in, vii–viii, 25, 44–47, 57, 79 welfare programs of, 10, 41–42 India: A Portrait (French), 47 Indian Ocean, 197 Indonesia, 129–38 in Asian financial crisis, 131–35 banking in, 133–34, 135 billionaires in, 131–32 China compared with, 132–33, 135, 136 Chinese community in, 129 consumer prices in, 137–38, 232 corruption in, 134–35 currency of (rupiah), 131 economic reforms in, 132–38, 147 economy of, 28, 132–38, 147, 174, 254 elections in, 136–37 as emerging market, 133, 232 family enterprises in, 134, 138, 254 foreign investment in, 7, 133–35, 137 foreign trade of, 132, 133–34, 157, 159 GDP of, 131, 133 government of, 30, 132–37 growth rate of, 132–33, 136, 137, 245, 246, 254 income levels of, 8, 131–32, 138 India compared with, 135, 136 inflation rate of, 137–38, 249 labor market in, 23, 203 land development in, 135–36 national debt of, 134–35 natural resources of, 133–34, 159, 235 Philippines compared with, 132, 138, 140 political situation in, 129, 132, 133, 134, 135, 136, 137, 210 population of, 133, 136 Russia compared with, 137–38 urban decentralization in, 136–37 wealth of, 131–38 industrialization, 10, 67, 68, 101 inflation rate, x, 4, 5, 17, 22, 23, 24, 25, 31, 33, 39, 42, 43–44, 62, 66, 68–69, 88, 104, 115, 116, 118, 137–38, 176, 177, 179, 202, 226, 228, 247–49, 250, 254 Infosys, 37 infrastructure, x, 10, 15–16, 20–21, 43, 51, 61, 62, 64, 65, 69, 84–85, 88, 90–91, 116, 120–21, 199, 200–201, 239 inheritance taxes, 44 insider trading, 46, 187 Institutional Revolutionary Party (PRI), 76–78 Intel, 164, 203–4 intellectual property, 238 interbank loans, 150 interest rates, 6, 11, 62, 67, 68–70, 105, 106, 107, 115, 119, 120, 228–29, 247–49, 250 internal devaluation, 108, 109 International Finance Corporation, 214 International Monetary Fund (IMF), 101, 115, 160, 173, 208, 216–17 Internet, 2, 85, 173, 175, 177, 207–8, 220, 225, 230, 237–39 interregional exports, 206–7 investment, viii, x, 2–8, 19, 37, 90, 96, 131, 144, 146–50, 156, 160–61, 165, 190, 212–13, 220, 223–29, 231, 235, 236–38, 244 see also foreign investment Ipanema Beach, 21, 61, 65, 66 Iran, 10, 123, 189, 190 Iraq, 10, 122, 189, 195 iron, 51–52, 59, 67, 69, 180, 232 Iron Curtain, 101 Iskandar region growth agenda, 151 Islam, 111, 113–17, 119, 121, 122, 123–24, 127, 146, 162, 211, 219, 220, 246 Islamic Museum, 219 Israel, 122, 127 Istanbul, 111, 115, 122, 125, 146 Italy, 40, 99 Ivory Coast, 208 Izmir, 115, 124, 125, 146 Jaffna Peninsula, 193, 195 Jakarta, 129–31, 135, 136, 137, 232 Jalan Sudirman, 129 Japan: in Asian financial crisis, 155–56 auto industry of, 139, 144, 161 China compared with, 18, 20, 22, 24, 31, 32–33 currency of (yen), 32–33 democratic government of, 30 economic slowdown of, 22, 254 economy of, 8, 20, 22, 81, 90, 197, 230, 235, 242, 253, 254 foreign trade of, 7, 32–33, 144–45, 157, 159 GDP of, 144–45 growth rate of, 6, 32–33, 44, 235 income levels of, 20, 138, 144 inflation rate in, 31 manufacturing sector of, 157, 159, 170, 230, 235 pop culture in, 167 population of, 169 property values in, 24, 252 public transportation in, 20 real estate market in, 3 recession in, 109 research and development (R&D) in, 160–61, 237 social conformity in, 200 South Korea compared with, 153, 155–56, 157, 159, 160–61, 163, 164, 167, 168, 169, 170 stock market of, 156, 235 Taiwan’s relations with, 163–64 technology industry of, 160–61, 236–38 Thailand compared with, 139, 144–45 Java, 137 “Jeepneys,” 130, 138 Jews, 118, 149 Jharkhand, 46 Jiang Zemin, 29 Jobbik (Movement for a Better Hungary), 105 Jockey underwear, 54 Johannesburg, 181, 204 Jonathan, Goodluck, 209–11, 213 Jordan, 122 J-pop, 167 junk bonds, 228 “just-in-time” supply chains, 80 Kabila, Laurent, 205 Kagame, Paul, 206 Kano, 213 Kaohsiung, 136 Kapoor, Ekta, 41 Karachi, 190 Karnataka, 50, 51 Kashmir, 49, 50 Kasimpasa neighborhood, 125 Kayseri, 124 Kazakhstan, 30, 89, 93, 123, 212 Kazan, 85 Kennedy, John F., 129 Kenya, 191, 205, 209 Keynes, John Maynard, 109 KGB, 86 Khodorkovsky, Mikhail, 87 Kia, 161, 162–63 kidnappings, 78–79, 190–91 Kim Jong Il, 170 Kinshasa, 205 Kirchner, Cristina, 89 Kirchner, Nestor, 89 Klaus, Vaclav, 108 Koç family, 125 “Korea Discount,” 167–69 “Korean Wave,” 122, 167 KOSPI index, 70, 153, 155, 156, 164, 165 K-pop, 122, 154, 167 Kuala Lumpur, 147, 148, 151 Kumar, Nitish, 50–51 Kuwait, 187–88, 214, 216, 218, 219 Kuznets curve, 76 labor market, 7, 17, 21–23, 27, 32, 38, 47, 55, 64, 65, 76, 77, 102, 103, 104, 164, 169–70, 174–75, 179, 180–81, 199, 203–4, 246–47 Lada, 86 Lafarge, 213 Lagos, 211, 212, 213 landlines, 207 land-use laws, 25, 168 Laos, 188 laptop computers, 158, 164 large numbers, law of, 7 Last Train Home, The, 22–23 Latin America, viii, 40–41, 42, 73–75, 81, 89, 246 see also specific countries Latvia, 101 Lavoisier, Antoine, 235–36 law, rule of, x, 50–51, 89, 96, 127, 181–82 lead, 19 Leblon neighborhood, 61 Lee Kwan Yew, 118, 148, 193 Lehman Brothers, 164 Le Thanh Hai, 203 Lewis, Arthur, 21 “Lewis turning point,” 21 LG, 158, 163 “Liberation Tigers” of Tamil Eelam, 192–93, 197 Liberty, 178 Libya, 127, 216 Limpopo River, 171 Linux, 238 liquidity, 9, 228–30 liquor stores, 126 literacy rate, 52 Lithuania, 101, 109 Lixin Fan, 22–23 loans, personal, 12, 24, 116, 125, 150 long-run forecasting, 1–14 L’Oréal, 31 Louis Vuitton, 31 Lugano, 40 Lula da Silva, Inácio, 59, 61, 66, 70, 210, 226, 248 luxury goods, vii–viii, 12, 25, 31, 236 Macao, 201 macroeconomics, 7–8, 13, 66, 67, 145–46, 188 “macromania,” 7–8, 188 Made in America, Again, 246–47 “made in” label, 155, 246–47 Madhya Pradesh, 52 maglev (magnetic levitation) trains, 15–16, 231 Magnit, 90–91 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 41–42 Malaysia, 146–52 in Asian financial crisis, 18, 131–32, 146–47, 149–50 banking in, 146, 149–50, 151, 252 currency of (ringgit), 131, 146–47, 149 economic planning in, 150–52, 161 economy of, 18, 118, 150–52, 161, 235 electronics industry of, 147–48 as emerging market, 10, 45, 118, 149, 161, 235 foreign investment in, 146–50, 151 foreign trade of, 6, 144, 147, 157 GDP of, 145, 147, 149 government of, 146, 148–52 growth rate of, 9, 147–48, 149, 244 income levels of, 138, 148 manufacturing sector in, 147–48, 150 political situation in, 146–49 Singapore compared with, 118 stock market of, 131, 235 Thailand compared with, 144, 145, 147 wealth of, 148 Mali, 208 Malta, 30, 106 Malthus, Thomas, 225, 231–32 Mandela, Nelson, 171, 172, 176 Manila, 130, 138, 139, 140, 141 Manuel, Trevor, 176 manufacturing sector, 17–18, 22–23, 28, 43, 54, 75, 80, 88–89, 90, 110, 124, 132, 147–48, 150, 155, 157, 158–59, 160, 161–66, 168, 170, 180, 221, 230, 235, 246–47, 265 Maoism, 37, 47 Mao Zedong, 21, 27, 29 Marcos, Ferdinand, 138, 139, 210 markets: black, 13–14, 96, 126 capital, 69, 70–71; see also capital flows commodity, 12, 13–14, 223–39 currency, 4, 9, 13, 28 domestic, 36, 43, 183 emerging, vii–x, 2–11, 37–38, 47, 64, 94, 185–91, 198–99, 242–49, 254–55, 259–62 free, x, 8–9, 96, 104 frontier, 89, 185–91, 213, 261–62 housing, 5–6, 16, 18, 24–25, 28–29, 31, 32, 61, 92, 103–4 labor, 7, 17, 21–23, 27, 32, 38, 47, 55, 64, 65, 76, 77, 102, 103, 104, 164, 169–70, 174–75, 179, 180–81, 199, 203–4, 246–47 see also stock markets Mato Grosso, 232 Mayer-Serra, Carlos Elizondo, 78 MBAs, 225 Mbeki, Thabo, 176, 206 Medellín drug cartel, 79 Medvedev, Dmitry, 95–96 Mercedes-Benz, 86, 144 Merkel, Angela, 108 Mexican peso crisis, 4, 9 Mexico, 73–82 antitrust laws in, 81–82 banking in, 81, 82 billionaires in, 45, 47, 71, 78–80 Brazil compared with, 71, 75 China compared with, 80, 82 consumer prices in, 75–76 corruption in, 76–77 currency of (peso), 4, 9, 73, 80, 131 drug cartels in, 79–80 economy of, 4, 12, 28, 73–82, 178, 183 emigration from, 79, 82 foreign exports of, 6, 75, 80, 158 GDP of, 76, 77, 81 government of, 76–78 growth rate of, 73–82, 244 income levels of, 8, 73–75, 76, 113 labor unions in, 76, 77 national debt of, 76, 80–81 nationalization in, 77–78 oil industry of, 75, 77–78, 82 oligopolies in, 73, 75, 76–82, 178 parliament of, 76–77 political situation in, 76–78, 82 population of, 73 stock market of, 73, 75, 76, 81 taxation in, 76 U.S. compared with, 75, 79, 80 Mexico City, 75 micromanagement, 151 middle class, 10, 19–20, 33, 42–43, 52–56, 182, 211, 236 Middle East, 38, 65, 68, 113, 116, 122, 123, 125, 166, 170, 189, 195, 214–21, 234, 246 middle-income barrier, 19–20, 144–45 middle-income deceleration, 20 Miller, Arthur, 223 minimum wage, 29, 63, 126, 137 mining industry, 44, 93, 154, 175, 176, 178–80 Miracle Year (2003), 3–6 misery index, 248–49 Mittal, Sunil Bharti, 204–5, 206, 209 mobile phones, 53, 86, 204–5, 207–8, 212, 237 Mohammed, Mahathir, 146–47, 148, 151 Moi, Daniel arap, 205 monetization, 225 Money Game, The (Smith), 234 Mongolia, 191 monopolies, 13, 73, 75–76, 178–79 Monroe, Marilyn, 129 Monte Carlo, 94 “morphic resonance,” 185 mortgage-backed securities, 5 mortgages, 5, 92, 105–6 Moscow, 12, 83, 84, 90, 91, 96, 136, 137, 232 mosques, 111 Mou Qizhong, 46 Mozambique, 184, 194–95, 198, 206 M-Pesa, 208 MTN, 212–13 Mubarak, Gamal, 218 Mubarak, Hosni, 92, 127, 218 Mugabe, Robert, 176, 181 Multimedia Supercorridor, 151 multinational corporations, 53, 73, 75, 81, 151, 158–59, 160, 184, 230 Mumbai, 43, 44, 79, 214, 244 Murder 2, 167 Murphy’s law, 11 Muslim Brotherhood, 127 Mutual, 178 mutual funds, 178–79 Myanmar, 30 Myspace, 41 Naipaul, V.

Normally, rising inequality is a necessary but temporary downside of rapid development, but in Mexico the oligopoly culture is creating a self-perpetuating form of inequality. Mexico is a troubling outlier on the Kuznets curve, which shows that in the early stages of a country’s development, a rising tide normally lifts all boats, but it lifts incomes of the upper class much faster than those of the working class. There are a few nations, including Taiwan and South Korea, that managed to beat the curve and produce fast growth with growing equality for many decades. Mexico has produced high inequality with little growth: indeed the entrenched power and wealth of its elite are major impediments to growth.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Bernie Madoff, Big bang: deregulation of the City of London, Black Monday: stock market crash in 1987, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, Bullingdon Club, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial engineering, financial innovation, Flash crash, Ford Model T, Frank Gehry, Gini coefficient, Glass-Steagall Act, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Max Levchin, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, seminal paper, Sheryl Sandberg, short selling, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, starchitect, stem cell, Steve Jobs, TED Talk, the long tail, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

a study by Mexican and American political scientists Isabel Guerrero, Luis-Felipe López-Calva, and Michael Walton, “The Inequality Trap and Its Links to Low Growth in Mexico,” in No Growth Without Equity: Inequality, Interests, and Competition in Mexico, ed. Santiago Levy and Michael Walton (World Bank, 2009). “When it came to spectrum” “All Lines Are Busy,” Outlook, November 29, 2010. “India has been overwhelmed” CF interview with Kiran Bedi, November 11, 2011. “Corruption is endemic” CF interview with Rajiv Lall, November 13, 2011. “The Gini coefficient” CF interview with Arun Maira, November 13, 2011. “The tendency is that people” CF interview with Kris Gopalakrishnan, November 12, 2011.

“Corruption is endemic,” Rajiv Lall, the chief executive officer of the Infrastructure Development Finance Company, a partly state-owned financial institution, and the official who invited Rajan to give his Bombay Chamber of Commerce lecture, told me. “I don’t think anybody here is pretending that there’s no corruption in the country. And corruption can take on a new dimension, especially in this time of great transformation.” “The Gini coefficient [an economic measure of income inequality] always rises whenever growth takes off,” Arun Maira, a former industrialist and now a member of the country’s influential planning commission, told me. “When you open more opportunity, like more free markets and the opportunity for people to do their own thing, those who already have some capital, or they have some education, or they have access to people in power so that they could help get access to the new opportunities more easily, they will first grow themselves, their own wealth.

” — The dramatic denouement of the March 2012 NPC is that now the biggest monkey is directly in the state’s sights, too. Bo Xilai, the charismatic former chief of the thirty-four-million-strong Yangtze River megalopolis of Chongqing, was one of the leading elite critics of China’s rising inequality: on the eve of the NPC he told reporters in Beijing that the country’s Gini coefficient had exceeded 0.46 (it is 0.45 in the United States) and warned: “If only a few people are rich, then we’ll slide into capitalism. We’ve failed. If a new capitalist class is created then we’ll really have turned into a wrong road.” But at the same time, Bo was a princeling—his father was Bo Yibo, one of the Eight Immortals of the Communist Party—and the patriarch of a clan with wealth as well as political power.


pages: 233 words: 71,775

The Joy of Tax by Richard Murphy

banking crisis, banks create money, carbon tax, carried interest, correlation does not imply causation, en.wikipedia.org, failed state, full employment, Gini coefficient, Global Witness, green new deal, high net worth, Jeremy Corbyn, land value tax, means of production, Modern Monetary Theory, Money creation, offshore financial centre, price elasticity of demand, quantitative easing, race to the bottom, savings glut, seigniorage, The Spirit Level, The Wealth of Nations by Adam Smith, transfer pricing

Galbraith, in Money: Whence it came, where it went, Houghton Mifflin, 1975, p. 29 9 It can be argued that there is a cost in paying interest at bank rate (currently 0.5%) on the new reserves created at the Bank of England as a result of the funds injected into the economy by the quantitative easing process, but as (Lord) Adair Turner has pointed out, the payment of this interest is optional and a choice by the Bank of England. http://www.socialeurope.eu/2014/03/monetization 10 http://budgetresponsibility.org.uk/pubs/March_2014_EFO_Charts_and_Tables.xls table T1.4 accessed 21 August 2014 11 Some of the author’s work on the issue of shadow economies worldwide is available at http://www.tackletaxhavens.com/Cost_of_Tax_Abuse_TJN%20Research_23rd_Nov_2011.pdf 12 Abstract of Lincoln’s Monetary Policy; Library of Congress No. 23, 76th Congress, 1st session, page 91; quoted at http://cpe.us.com/?article=famous-monetary-quotes. The rest is worth reading as well. 13 Sample measures of inequality – called the Gini coefficient – for a range of countries both before and after tax are available at http://en.wikipedia.org/wiki/List_of_countries_by_income_equality accessed 21 August 2014 Chapter 4: Dealing with the naysayers 1 http://www.iea.org.uk/sites/default/files/publications/files/upldbook350pdf.pdf 2 http://www.adamsmith.org/blog/liberty-justice/democracys-not-all-its-cracked-up-to-be-you-know 3 http://www.adamsmith.org/blog/politics-government/democracy-must-restrain-the-mob-against-the-minority 4 http://www.2020tax.org 5 http://www.theguardian.com/business/2013/jan/08/climate-change-debt-inequality-threat-financial-stability 6 http://www.ons.gov.uk/ons/dcp171778_317365.pdf 7 http://www.ifs.org.uk/bns/bn43.pdf page 4 shows spending has not fallen below 36 per cent of GDP since 1948. 8 http://services.parliament.uk/bills/2009-10/fiscalresponsibility.html 9 http://www.publications.parliament.uk/pa/cm200910/cmhansrd/cm100105/debtext/100105-0012.htm 10 http://web.stanford.edu/~rabushka accessed 1 September 2014 11 Quoted at http://www.taxresearch.org.uk/Blog/2011/10/25/it-is-possible-to-have-a-flat-tax-or-to-have-democracy-but-not-both accessed 1 September 2014 12 Governor of the Bank of England Mark Carney suggested at the TUC Congress on 9 September 2014 that on average incomes had declined by 10 per cent in the UK since 2009. 13 http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf page 21 accessed 26 August 2014 14 Ibid., page 14 15 Ibid., page 15 16 From David Copperfield by Charles Dickens: ‘[Mr Micawber] solemnly conjured me, I remember, to take warning by his fate; and to observe that if a man had twenty pounds a year for his income, and spent nineteen pounds nineteen shillings and sixpence, he would be happy, but that if he spent twenty pounds one [shilling] he would be miserable.’ http://www.bartleby.com/380/prose/553.html 17 http://www.bankofengland.co.uk/about/pages/history/default.aspx#2 18 Current household savings ratio at the time of writing is about 6 per cent of income, which is well above the rate from 1997 to 2008 on average: http://www.tradingeconomics.com/united-kingdom/personal-savings 19 http://www.theguardian.com/business/2015/feb/26/uk-business-investment-falls-at-fastest-rate-since-financial-crisis 20 http://www.ft.com/cms/s/2/1e1b9952-794f-11e3-91ac-00144feabdc0.html#axzz3d6hyf79D 21 http://www.theguardian.com/business/2015/feb/06/uk-trade-deficit-widens-four-year-high 22 http://www.tradingeconomics.com/united-kingdom/personal-savings accessed 27 August 2014 23 http://www.ons.gov.uk/ons/rel/elmr/an-examination-of-falling-real-wages/2010-to-2013/art-an-examination-of-falling-real-wages.html accessed 27 August 2014 24 http://budgetresponsibility.org.uk/economic-fiscal-outlook-march-2014/ accessed 28 August 2014 25 http://cdn.budgetresponsibility.independent.gov.uk/March2015EFO_18-03-webv1.pdf page 73 accessed 16 June 2015 26 http://cdn.budgetresponsibility.independent.gov.uk/March2015EFO_18-03-webv1.pdf page 55 27 http://www.tradingeconomics.com/united-kingdom/balance-of-trade 28 http://www.telegraph.co.uk/finance/budget/11465497/Budget-2015-There-are-two-versions-of-George-Osborne-and-the-radical-one-must-prevail.html accessed 16 June 2015 29 http://www.taxresearch.org.uk/Documents/Intheshade.pdf accessed 1 September 2014 30 Ibid. 31 http://www.taxresearch.org.uk/Documents/PCSTaxGap2014Full.pdf accessed 16 June 2015 32 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345370/140819_Tackling_offshore_tax_evasion_-_A_new_criminal_offence.pdf 33 Scott Dyreng, Jeffrey L.

K. 51 GDP 171 debt and 213 and economy 84 fiscal policy and 58–9 government spending as proportion of 76+n, 77, 81–2 taxation as proportion of 34–5 General Anti-Abuse Rule 112, 113, 224 General Anti-Avoidance Principle, proposed 224 Generally Accepted Accounting Principles, UK 222 gifts 183, 184 gilts 49–52 Gini coefficient 63n global warming see climate change global wealth tax 190 Global Witness 124 Google 135 government(s) 27, 39–40 balancing books/budget 52, 60–1, 76, 86–7, 94–5, 212–13, 238 borrowing 89 businesses, mistaken analogy with 86–7, 89 and creation of money 49, 209–10 demand for services to be supplied by 157–60 and the economy 104, 156–60, 170, 210 (see also austerity) intervention following 2008 crash 78, 79 and ownership 59 participation and 31, 37–44 spending see government spending states without 32 surpluses 58, 59, 60, 76–8, 130 and ‘taxpayers’ money’ 39–44 see also democracy government debt 46, 49–52, 59–60, 87, 213–14 government spending and business success 185 effects of cutting 89–90 flat taxes and 75 need for 95–6, 210 relationship to taxation 45, 52–5, 80–4, 162, 210, 211–12, 214 Greece 148 Green New Deal Group 9, 10 Green parties 84, 94 growth 83, 84, 90, 104, 158, 170, 171–2, 215 Guernsey 124 harmonization, international 133 health services 64, 158, 168 see also NHS Heritage Foundation 35 HM Treasury 109, 110–11, 114, 117 HMRC 112–14, 116, 119–21 access to 118–21, 202–3 and accountability 116–18, 203, 204–6, 218–20 attitudes 119–20 on compliance 33–4, 35, 67 and data exchange 123–4, 127 and research 108, 110 staff and resources 113, 120–1, 202–4 structure and governance 203–4, 219, 220 Hodge, Margaret 114, 117 horizontal equity 138–9, 197 House of Commons Library 109 House of Commons Select Committees 205, 220–1 see also Public Accounts Committee and Treasury Committee house prices 185–6, 214, 225–6, 229 housing 159, 175–6, 186, 225–7, 228–9, 238 housing support 192, 194, 229 identity theft 201 ignorance 68, 108 illegitimate economic activity 56 imports 88 income(s) 180–1 falling in real terms 83, 90 sources of 138–9 taxation and 31 under-declaration of 98–9 income tax 14, 16, 65, 163–5, 230 citizen’s income and 193–4 higher rates 73 as proportion of tax paid 28, 29, 30, 72 schedular form 152 tithing and 15 as universal 235 voting and 65 inequality 63n, 74 see also equity/equality and redistribution inflation 46, 53, 54, 57, 59, 61, 182, 210 flat taxes and 75 house prices and 185–6 influence 31, 37 information exchange 123–4, 127, 184 infrastructure 158–9, 229 inheritance taxes 15, 29, 31, 73, 183, 226 innovation 136–7 Institute of Directors 68–9, 72 Institute of Economic Affairs 68–9, 70–1, 101 Institute for Fiscal Studies 109 insurance premiums 29, 223 interest 51, 52n, 58, 181–2 banks and 49, 50 monetary policy and 59 money and 51 tax and 30, 196, 223, 228–9, 231 interests 69, 70, 71, 109, 113, 116 conflicts of 115 government and 19, 44 intergenerational contract 143 International Financial Reporting Standards 222 International Financial Reporting Standards Foundation 199 international issues 133–6, 197–8 see also tax havens interpretation 111–12, 153 investment 89, 176, 234 savings and 209, 231 investment income 72, 98, 99, 138, 163, 180, 224, 231–2 Ireland 126, 134, 146, 163 ISAs 175, 231 Jersey 10, 124, 126 Jesus 16 Joffe, Lord 114–15 Kennedy, John F. 32n labour, taxing 190 see also national insurance land ownership 185 land value tax, proposed 186–7, 227–8 land-based taxes 15, 16, 21, 163, 164, 185–7 landfill tax 31 landlords 228, 229 language 115–16, 153, 196, 218 law 36–7, 39, 148, 153 complexity 154, 217 letter and spirit of 112, 153, 154, 218 purposive basis 112, 217–18 law and order 132, 159 Lawson, Nigel 182 lawyers 69, 102, 114, 116, 217 liability 184, 221, 225, 226 see also companies libertarians and libertarian views 39–40, 42, 68–80, 132 life expectancy 167n, 168 Lincoln, Abraham 61+n living standards/needs 35, 57, 61, 141–4, 168 loans 47–8+nn, 49–52, 208, 209 repayment of 49, 50, 53 local government 65, 186 see also council tax London, City of 18–19, 187 loopholes 97, 112, 153–4, 168, 187, 196, 197 Luxembourg 126, 134–5, 146 macroeconomics 85, 87–8, 161, 165, 170–1 Magna Carta 18–19, 22, 37, 131 Man, Isle of 124, 126 marginal tax rates 145, 172–3, 174, 192, 194, 235 markets, government policy/taxation and 58–9, 61, 63–4, 170–1, 187–8, 191, 212, 215, 236 marriage 24–5, 225 Mazzucato, Mariana 136 Meacher, Michael 153–4 media comment 157, 158 microeconomics, misapplication to government 86–7 middle ground in politics 157–8 minimal-state ideology 155–6, 158 Mirrlees Review 109 misconceptions 86 mistrust 152, 154 Mitchell, Dan 134 monarchy 20–2, 117, 219 monetary policy 58, 59–60 money 46–7 creation of 45–52+nn, 53, 86–7, 181–2, 208–9, 214 debt and 213 decreasing value to individuals 144–5, 181 destruction of 48n, 49, 53, 213 and the economy 209 equivalence 181, 224, 233 importance of 57 profit and 48–9 promises and 49, 51, 56 tax and 14, 56–7, 85–8, 180 value of 56–7, 66 see also bank transactions and financial transactions mortgages 89, 228–9 MPs, resources available to 109–10, 112 multinational companies 124–7, 150–2, 198, 201, 222 Murphy, Richard 110, 112, 113, 126, 131n, 153–4, 192, 203n mutuality 133 nation states 23, 24, 25–7, 35 National Audit Office 205 national debt 46, 52, 76, 213 national insurance 167–9, 172–3, 189, 232 and benefits system 189, 191 as proportion of tax paid 29, 161, 169, 189 proposals for replacing 72, 164, 189, 190, 194, 232–3 and unearned income 231–2 needs 57, 141–4 see also sufficiency Netherlands, the 126, 135, 146 NGOs 110 NHS 158, 167, 189 Northern Ireland 166 objectivity 105 OECD 125, 126, 134n, 150, 151 Office for Budget Responsibility 52, 91–3, 205 Office for Tax Responsibility, proposed 205, 220–1 offshore arrangements 99–100, 190 oil 35, 63 opacity see secrecy Osborne, George 59, 76–8, 82, 90–1, 174 overdrafts 48 ownership, tax and 38–44 Oxford Centre for Business Taxation 108–9, 110 Oxford Dictionary, definition of tax 30–2, 35–6, 37, 43 Paine, Thomas 24 parties, political 84, 94 partnerships, business 42 partnerships (marriage) 24–5, 225 Paul, St 16 Pay As You Earn 167, 173 PCS (Public and Commercial Services Union) 203n peace 131–3, 136, 137 Peasants’ Revolt (1381) 20, 37 pension funds 50, 60 pensioners 72, 232 pensions 143, 167, 168, 174–5, 189, 192, 235 citizen’s income and 192 personal allowances 72, 193, 230, 235 Pickett, Kate 145 Piketty, Thomas 190 Plaid Cymru 84, 94 plutocracy 71 politicians 84–5 poll taxes 15, 16, 20, 33, 37, 186 pollution 63, 191, 212 poverty 192, 194 power 17, 20, 23 price elasticity of demand 64 product safety 159 profit, banking and 48–9 profit-shifting 134–5 proof, onus of 196, 217, 224 property taxation and 31, 39–44, 54, 71 see also council tax, housing and land property rights 39, 41, 42–3, 132 protest 33, 37 see also conflict Public Accounts Committee, House of Commons 109, 114, 117, 204 public spending see government spending Quaker beliefs 10, 131n quantitative easing 46, 47n, 49–52, 58, 60, 229–30, 238 Rabushka, Alvin 78–9 recession 78, 79–80, 191 reciprocal rights and double tax treaties 223 reclamation see under tax/taxation redistribution 62–3, 66, 144, 185, 230, 238 Reed, Howard 192 representation, taxation and 19–20, 22–7, 31, 37–8, 65, 66, 70–1 repricing, tax as 64, 66 research 108–10, 135–6, 236 responsibility 39 retirement, saving for 174–5, 231 see also pensions right-wing views 68–80, 156–7, 158 rioting 33 road use 191 Roman Empire 15–16 Rousseau, Jean-Jacques 26–7 royalties 181, 223 sales taxes 15–16, 163, 187 see also VAT saving 59, 87, 89+n, 90–1, 172 investment and 209 tax and 175, 231 schools 108 Scotland 33, 37, 166 independence referendum (2014) 23, 24, 26, 128–9 Scottish National Party 84, 94 secrecy 69, 99, 122, 151, 152, 201 secrecy jurisdictions 135 seigniorage 182 self-employed people 98, 167, 168, 173 shadow economy 55–6, 146–8 shareholders 200–1, 233 simplicity 133, 152–5, 218, 230, 236 of money creation 51 see also flat taxes Singapore 126 skills, funding 136–7 Smith, Adam 24, 70, 129–31, 137 smuggling 14, 163 social contract 26–7, 132–3 social mores, taxation and 24–7 social security systems 191–2 see also welfare benefits socialism 157 speculation 171, 185, 187, 214, 224 Spirit Level, The 145 stamp duty 29, 73, 187, 228 Starbucks 135 states and statehood 23, 24, 25–7 extent of role 156–60 see also government(s) stigma 194, 235 student loans 173–4 subjectivity 105 sufficiency 141–4 sustainability 57, 215 Switzerland 135 tax/taxation acceptance of 25–6, 32–8, 67–8, 96 administration of 16, 123, 219–21 (see also HMRC) alternatives to 45–7 and choice 68, 96, 103, 106, 126–9 as counterbalance 53–5 definitions and perceptions of 30–2, 35–6, 37, 40–4 education concerning 102, 106–8 efficient 160–1 embracing 25, 27, 44, 238 functions 55–66 history 13–26 inclusivity and default 196, 217 indirect 74 ownership 38–44, 216 payment in kind 14, 15, 16 political context 37–9, 105 process, stages of 122–3 progressive 15, 139, 145, 181, 189, 230 and property 39–44, 54 as proportion of income 74–5 range of and proportions of revenue raised in UK 28, 29 reasons and purposes for 52–66, 160, 178 as reclamation of money spent 52–5, 75, 81, 180, 210 regressive 139, 189–90, 227, 237 responsibility for 219 right to spend 39 scope of 196, 217 unacceptable 33, 37 see also under government spending tax abuse 14, 16, 96–102, 103, 168, 195–6 victims of 101 see also tax avoidance and tax evasion tax avoidance 43, 96–7, 99–102, 103, 110, 173, 198 anti-avoidance principle 112, 113, 196 flat taxes and 74 proposed legislation against 153–4, 224, 236 tax base(s) 16, 31, 122, 179, 222–3 defining 179, 196 finding 197, 201 inclusive 195–7, 217 inconsistent 183 tax competition 133–4, 135–6 tax design 169 tax evasion 43, 69, 96–9, 100–1, 103, 110 tax gap 110, 220 tax havens 35, 69, 99–102, 123–4, 126, 134, 135–6, 201–2 registration of companies in 151 and secrecy 149–50 UK and 146, 174 wealth taxes and 184 tax justice 220 tax justice movement 149, 151, 184, 201 Tax Justice Network 9, 124 tax offices 118–21 tax policy 156, 229–30 tax reliefs 25, 97, 165, 175, 176, 196 Tax Reporting Standards Board, proposed 222 Tax Research Network 109 Tax Responsibility, Office for, proposed 205, 220–1 Tax Select Committee, proposed 205 tax systems 129–55, 168–9, 171, 178–80, 224 Taxation, Department of, proposed 219–21, 227 Taxation and State-Building in Developing Countries (Brautigam et al.) 26n Taxpayers’ Alliance 68–9, 70, 72 ‘taxpayers’ money’ 39–44, 216 Teather, Richard 101 technology 135–6, 176 temporary residence rule, proposed 197, 222 tenants 228, 229 Thatcher, Margaret 33, 68, 70, 86, 101 theft 36, 43, 44 tithing 15 tobacco 64, 74, 191 trade deficit 89 transparency 123–7, 216 transport 158–9, 176, 191 Treasury Committee, House of Commons 117 tribunals 118 trust 119–20, 148–9, 152, 154 trusts 42, 184 truth 30, 52, 84, 133, 146–52 Turner, Adair 52n 2020 Tax Commission 72, 75, 76 Tyler, Wat 20 UK aggregate tax rate 35 proportion of tax taken by different taxes 28, 29, 139 right to leave 32 shadow economy 146 and tax havens 146, 174 tax paid by income decile 139–40 UK GAAP 222 ‘UK plc’ 86 UK political parties 84, 94, 157–8 unemployment, effects 83, 89 universal credit 174 universities 107–9 US dollar 55–6 USA, Declaration of Independence 22–3, 24, 26 VAT 64, 74, 174, 187, 189, 236–7 exemptions 64, 236 as proportion of tax paid 29, 161 vertical equity 139 Virgin Islands, British 124 voting rates 42, 65 Walmart 150 Walmsley, Brad 70–1 wars 18, 53, 131–2 wealth concentration of 185 taxation and 28–30, 31, 73–4, 180–7, 190–1 Wealth of Nations, The (Smith) 24, 129–31 wealth taxes 16, 123, 163, 165, 183–7 global 190, 226–7 proposed 226–7, 228 see also financial transactions tax welfare benefits 62–3, 167 interaction/integration with tax 142, 174, 191–5, 234–6 national insurance and 189 unclaimed 194 as universal 235 welfare state 142–3 well-being, taxation and 35, 61 Wilkinson, Richard 145 work 194–5, 238 see also employment World Economic Forum 74 Worstall, Tim 71 Zimbabwe 35 About the Author Richard Murphy is a UK chartered accountant.

That is the complete antithesis of a progressive tax system. In that case the so-called simplicity of flat taxes actually encourages and permits tax avoidance by a wealthy few, while making sure that most of the rest pay any tax they owe. The result would be that flat taxes would considerably increase inequality of wealth and of after-tax income. Almost all research now shows both those inequalities to be profoundly harmful to the health of any society, as even the World Economic Forum (hardly a den of left-wing thinking) has now recognized.5 This is an outcome that the think tanks promoting flat taxes seldom seem to mention. Another odd feature of flat taxes rarely mentioned by their proponents when they claim that everyone will benefit from them is that VAT and other so-called indirect taxes – alcohol and tobacco duties, fuel duties and the like – all seem to be ignored by these proposed reforms, and yet it is these taxes that hit many of the people with lowest incomes in this country hardest of all, whereas income taxes have little impact on them at present.


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Progress: Ten Reasons to Look Forward to the Future by Johan Norberg

agricultural Revolution, anti-communist, availability heuristic, Bartolomé de las Casas, Berlin Wall, bread and circuses, British Empire, business climate, carbon tax, classic study, clean water, continuation of politics by other means, Daniel Kahneman / Amos Tversky, demographic transition, desegregation, Donald Trump, Edward Jenner, Flynn Effect, germ theory of disease, Gini coefficient, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Island, Hans Rosling, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, Isaac Newton, Jane Jacobs, John Snow's cholera map, Kibera, Louis Pasteur, Mahatma Gandhi, meta-analysis, Mikhail Gorbachev, more computing power than Apollo, moveable type in China, Naomi Klein, Nelson Mandela, open economy, place-making, Rosa Parks, sexual politics, special economic zone, Steven Pinker, telerobotics, The Wealth of Nations by Adam Smith, transatlantic slave trade, very high income, working poor, Xiaogang Anhui farmers, zero-sum game

One result of the rapid growth in the developing world is a historically unique reduction in global inequality. Since 1820, when the Western world began to grow, the gaps between countries expanded. But since poor countries now grow faster than rich, we see convergence for the first time in modern economic history. A study from the Peterson Institute tries to measure inequality between all the world’s citizens, by looking at inequality both between countries and within countries. Their conclusion is that global income inequality started to decline significantly at the turn of the century. According to their estimates, the Gini coefficient, a measure where 0 means everyone has the same wealth and 1 means one person has all the wealth, fell from 0.69 in 2003 to 0.65 in 2013.

Index abolitionism 146–7 abortion 176–7 acid rain 111 adultery 171–2, 176 Afghanistan 83, 101, 102, 136, 156 Africa 25, 52, 154 and child labour 193, 195 and education 133–4 and HIV/AIDS 59, 60 and homosexuality 187 and malnutrition 21, 23–4 and poverty 79–80, 81 and slavery 140, 142, 143–4, 145 and water 38–40 and women 179 African Americans 162, 163, 167–9 agriculture 13, 14–16, 17–19, 20, 21, 89 and children 190–1 and China 27–9 and land use 22–3, 112 and water 38 Albert, Prince Consort 32 alcohol 31 algae 15 Algerian War of Independence 94 Amazon rainforest 112 American Civil Liberties Union (ACLU) 182–3, 185 American Revolution 149 ammonia 14, 15 An Lushan Revolt 95 Ancient Greece 31–2, 44, 84, 140–1, 183 Angell, Norman 103 Angola 21, 83 anti-Semitism 162 antibiotics 2, 50 apartheid 153 Arab Spring 155, 156 Argentina 133 artificial fertilizers 14–15, 18, 22–3, 108 Asal, Victor 170 Asia 67–70, 133, 187, 195 Auld, Hugh 137, 138 Australia 114 Ausubel, Jesse 112 authoritarianism 156 Bacon, Francis 217 bad news 207–12 Bailey, Ronald 205 Bales, Kevin 148–9 Bangladesh 37, 81, 117 Barbary States 143–4 Basu, Kaushik 135 bathing 34, 47 Beccaria, Cesare 93 Bentham, Jeremy 172, 184 Berg, Lasse 68–9, 129, 130, 202–3, 214–15 Berlin Wall 152 Bible, the 84–5, 86, 140, 183 bigotry 188 bio-fuels 125 birth weight 11 Black Death 42 Blackstone, William 184 bloodletting 44, 47 Boko Haram 148 Bolling, Anders 211 Borlaug, Norman 17–19, 23–4 Bosch, Carl 14 Boschwitz, Rudy 23 Bosnia 102 Botswana 27 Brandt, Willy 151 Braudel, Fernand 9, 10, 63 Brazil 153 Britain, see Great Britain Buggery Act (1533) 184 Bure, Anders 132 bureaucracy 216 Burger, Oskar 45 Bush, George W. 187 Caesar, Julius 141 calories 12, 16, 19–20 Cambodia 38 Cameroon 21 Canada 105 cancer 58, 115 cannibalism 8, 10 capital punishment 93–4, 185, 197–8 capitalism 66–7 carbon dioxide 119, 120, 123–4, 127 cardiovascular disease 58 Carter, Jimmy 24 caste system 72–3 Ceauşescu, Nicolae 153 censorship 157 Chad 83 Charlemagne 216 Charta 77: 151 chemical warfare 15 childbirth 4, 48, 49, 53–4, 197 children 11, 12 and education 133–4 and labour 189–96 and malnutrition 22 and mortality 32, 39–40, 45–6, 51, 53, 56 Chile 132, 153 China 27–9, 112, 200, 216–17 and child labour 193 and governance 153, 158 and homosexuality 187 and pollution 117, 119 and poverty 67–8, 69–71, 81 and slavery 148 and war 95, 104 and women 171, 177 chlorine 36–7 cholera 32, 35–6, 45, 55, 197 Churchill, Winston 163 civil rights movement 167–9 civilians 100–1 Clean Air Act (1956) 114 climate change 108, 119–21 Club of Rome 110, 115, 116 codes of honour 91–2 Cold War 99, 182 colonialism 103, 163 combine harvesters 16 communism 25, 26, 28, 102, 151–3, 182 Condorcet, Marquis de 172 Congress of Vienna (1815) 145 contraception 176, 177 crime 93, 207–8, 211 Cronin, Audrey 103 crop failure 7–8, 18 Cuba 132 Czechoslovakia 151, 152 dalits 72–3, 129 Darwin, Charles 45 De Gaulle, Gen Charles 161 ‘dead zones’ 15 death penalty 93–4, 185 Deaton, Angus 12, 52, 61 Declaration of Independence 144–5 Defoe, Daniel 192 deforestation 111–12 dehydration 54–5 democracy 26–7, 104–5, 150–7 Democratic Republic of Congo 26, 81 Dempsey, Gen Martin 2 Denmark 105 diarrhoea 32, 37–8, 54–5 Dickens, Charles 173 dictatorships 150–1, 153, 154, 155, 158 Diderot, Denis 143 discrimination 167–70, 173 Disraeli, Benjamin 36 Divine Comedy (Dante) 183–4 divorce 176 domestic violence 179 Douglass, Frederick 137–8, 139–40, 174 Dublin, Louis 60 dysentery 40 East Germany 152 Ebola 53, 209–10 Economic Freedom of the World 157–8 economics 67–9, 79, 165–6 education 17, 38–9, 135–7, 173, 197; see also literacy Egypt 133, 155, 156 Eisenhower, Dwight D. 168, 182 Eisner, Manuel 90 Ekman, Freddie 208 Elizabeth I, Queen 33, 34 energy 123–8 Engels, Friedrich 165–6 Enlightenment, the 4, 13, 66, 93, 184 and slavery 142–3 and women 172 environment, the 23–4, 108–12, 113–17 and climate 119–20 and energy 123–8 and poverty 117–19, 120–3 equality 143, 178–9, 188; see also inequality Equatorial Guinea 37 Ethiopia 24 ethnic minorities 161–71 Europe 216, 217–18 extinctions 112–13 extreme poverty 75–8, 79, 80–1 Factory Acts 193 famine 7–10, 13, 14, 17, 25–7, 46, 197 farming, see agriculture fascism 102 female genital mutilation 179 feminism 173 fertility rates 16–17, 24–5, 56 First World War 14, 15, 99, 104 fish stocks 112 Fitzhugh, George 147 Fleming, Alexander 50 flying toilets 39–40 Flynn Effect 164–5 food 2, 10–14, 13, 16, 17, 19; see also famine Food and Agricultural Organization (FAO) 20–1 forests 111–12 fossil fuels 108 France 9–10, 11–2, 42–3, 63–4, 161–2, 184 Francis, Pope 2 Frederick II, Emperor 32 Free the Slaves 148 freedom 138, 157–9 Friedan, Betty 183 Friedman, Benjamin 166 Friedman, Milton 158–9 Gandhi, Mahatma 168 Garrison, William Lloyd 146 Gates Foundation 52, 125 Gay Pride 185–6 gay rights 181–8 GDP (gross domestic product) 22, 56–7, 64, 67, 74–5 gender gap 178–9 genetically modified crops 23 genocide 101–2 George V, King 104 germ theory 48–9 Germany 114, 152, 183 Gini coefficient 82 globalization 4, 5, 45, 57, 74–5, 82, 218 Glorious Revolution 149 Golden Bull 149 Gorbachev, Mikhail 151 governance 90–1, 92; see also democracy graphene 126 Gray, John 2 Great Ascent 67 Great Britain 12, 114, 145, 192–4 and homosexuality 184, 185, 186 Great Powers 98–9 Great Smog 107–8, 114 ‘Great Stink, The’ 36 Green Revolution 17–20, 22, 23, 24 greenhouse gases 119 Guan Youjiang 29 Guangdong 70–1 H1N1 virus 59 Haber, Fritz 14, 15 Hagerup, Ulrik 208 Haiti 38, 57, 81, 114 Hans Island 105 happiness 199 Harrington, Sir John 33 Harrison, Dick 140 hate crimes 170 Havel, Václav 151, 152 height 16, 21–2 Helvétius, Claude Adrien 172 Hesiod 213–14 Hilleman, Maurice 54 Hitler, Adolf 94, 95 HIV/AIDS 52–3, 59, 60 Hobbes, Thomas 213 Holocaust, the 102, 170 homicide 85, 89, 90 homosexuality 181–8 Honecker, Erich 152 Hong Kong 67, 70 hookworm 40 human rights 142 human sacrifice 88–9 humanitarianism 93 Hungary 149, 151–2 hunter-gatherers 88 Hutcheson, Francis 143 hygiene 48, 49 India 10, 18–19, 27, 37, 38, 67–9 and child labour 193, 195 and governance 151, 154 and literacy 129–30, 133, 135 and pollution 117, 119 and poverty 71–3, 81 and slavery 145 and war 104 individualism 92 Industrial Revolution 2, 4, 66, 82 inequality 81–2, 178–9 influenza 58–9 Inglehart, Ronald 166–7 inoculation 47–8 intelligence 164–5 International Labour Organization (ILO) 195–6 International Union for the Conservation of Nature 112–13 Iraq 83, 102 irrigation 18, 22, 38 IS 148 Islamists 216 Italy 184, 193 Jang Jin-sung 25–6 Japan 21, 68, 180–1 Japanese Americans 163 Jefferson, Thomas 144, 145, 147 Jenner, Edward 48 Jews 162 Jim Crow laws 162 John, King 149 Johnson, Lyndon B. 169 Kant, Immanuel 201 Karlsson, Stig 68–9, 129, 202–3, 214–15 Kenny, Charles 134 Kenya 39–40 Kibera 39–40 King, Martin Luther, Jr. 168, 181 Klein, Naomi 2 knights 88 knowledge 200–2, 216–18 Korean War 94, 98 Ku Klux Klan 163, 169 land use 22 Las Casas, Bartolomé de 142–3 Latin America 150, 177, 187 law, the 90–1, 92 Lecky, William E.

Globally, almost ninety-six per cent of the gap in health outcomes between men and women has closed, and ninety-five per cent of the gap in educational attainment. But only fifty-nine per cent of the economic outcomes gap and twenty-three per cent of the political outcomes gap have been closed.19 The influence that wealth and development has on equality can be glimpsed from the Gender Inequality Index, which is the United Nations Development Programme’s way of measuring inequality between men and women in health, literacy, politics and the labour market. Countries with ‘very high human development’ – the Western world, basically – have an index of 0.197 (where 0 means that men and women fare equally). By contrast, countries with ‘high human development’ have 0.315; those with ‘medium human development’ have 0.513; and those with ‘low human development’ – mostly countries in sub-Saharan Africa – stand at 0.587.20 In some regions, very little progress has been made.


Money and Government: The Past and Future of Economics by Robert Skidelsky

"Friedman doctrine" OR "shareholder theory", Alan Greenspan, anti-globalists, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, barriers to entry, Basel III, basic income, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, constrained optimization, Corn Laws, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Graeber, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, Donald Trump, Eugene Fama: efficient market hypothesis, eurozone crisis, fake news, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, forward guidance, Fractional reserve banking, full employment, Gini coefficient, Glass-Steagall Act, Goodhart's law, Growth in a Time of Debt, guns versus butter model, Hyman Minsky, income inequality, incomplete markets, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kondratiev cycle, labour market flexibility, labour mobility, land bank, law of one price, liberal capitalism, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, long and variable lags, low interest rates, market clearing, market friction, Martin Wolf, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mobile money, Modern Monetary Theory, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, new economy, Nick Leeson, North Sea oil, Northern Rock, nudge theory, offshore financial centre, oil shock, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, Phillips curve, placebo effect, post-war consensus, price stability, profit maximization, proprietary trading, public intellectual, quantitative easing, random walk, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, rising living standards, risk/return, road to serfdom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, shareholder value, short selling, Simon Kuznets, structural adjustment programs, technological determinism, The Chicago School, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, tontine, too big to fail, trade liberalization, value at risk, Washington Consensus, yield curve, zero-sum game

Edward Luttwak, writing in the Times Literary Supplement, claims that the service economy is in fact becoming a servant economy: ‘toobusy-to-live high-techies employ retinues of nannies, housekeepers, dog walkers, cat-minders, pool boys and personal shoppers’.31 Automation of manufacturing will make more and more servants available to serve the rich. The Gini coefficient for the UK in Figure 55 shows the spurt in inequality from 1979 to 1990. A second chart from the USA (Figure 56) shows the growing gap between mean and median income. (If only the rich are getting richer, mean incomes will rise while median incomes stagnate.) An important reason for this divergence has been the fall in wage 299 M ac roe c onom ic s i n t h e C r a s h a n d A f t e r , 2 0 0 7 – Figure 55.

., pp. 376–7. Ibid., p. 374. Eccles (1951), p. 76. Devine (1994). 419 No t e s 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 Piketty (2014 (2013)). Mishel, et al. (2012). Luttwak (2015). Data: Institute for Fiscal Studies (2016). Gini coefficient calculated using net equivalized household income before deduction of housing costs. Absolute equality is zero; absolute inequality (one person owning all the income) is 1. Graph: author’s own. Data: Federal Reserve Bank of St Louis (2015). Graph: author’s own. Data: ILOSTAT (2017). Graph: author’s own. Piketty (2014 (2013)). This is also the argument of Walter Scheidel (2017), for whom war is history’s ‘Great Leveller’.

Oil prices and UK CPI inflation, 2004–2016 272 51. Distribution of UK household financial assets, 2011 272 52. Post-crash outcomes: UK, USA and Eurozone 273 53. Bank of England estimates of effect of QE on UK growth rates, 2006–2011 276 54. Share of US income going to richest 1%, 1920–2010 289 55. UK Gini coefficient, 1961–2016 300 56. Median family income as a proportion of mean family income, USA, 1953–2013 300 57. Labour income share in GDP, 1960–2016 301 58. Share of US income going to the top 302 59. The Bank of England’s main economic model 310 60. VaR modelling 315 61. Securitization trends in the UK, 2000–2007 327 62.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

anti-globalists, Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, export processing zone, Gini coefficient, Great Leap Forward, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, income per capita, informal economy, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, prediction markets, profit motive, race to the bottom, rising living standards, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, Tyler Cowen, union organizing, zero-sum game

Once we shift our focus to people rather than nations, the evidence is overwhelming that the past 30 years have witnessed a global equalization.26 Comparing just the richest and poorest tenths, inequality has increased, suggesting that a small group has lagged behind (we shall be returning to see which countries and why), but a study of all countries clearly points to a general growth of equality. If, for example, we compare the richest and poorest fifth or the richest and poorest third, we find the differences diminishing. Economists usually measure the degree of inequality by means of the ‘‘Gini coefficient.’’ If that number is zero, complete equality prevails, and everyone owns the same amount. If it is one, there is total inequality, with one person owning everything.

If it is one, there is total inequality, with one person owning everything. The Gini coefficient for the whole world declined from 0.6 in 1968 to 0.52 in 1997, a reduction of more than 10 percent. Because equality between the rich and poor within these countries appears to have been roughly constant during this time (having increased in half and diminished in half), global equality, quite contrary to popular supposition, is increasing. The 1998/99 World Bank report reviews among other things the difference in incomes going to the richest and poorest 20 percent in the developing countries. The review shows, of course, that the difference is very great, but it also shows that the difference is diminishing on all continents!

When the UNDP’s own numbers are adjusted for purchasing power, Sala-i-Martin found that world inequality declined sharply by any of the common ways of measuring it.25 Bhalla and Sala-i-Martin also independently found that if we focus on inequality between persons, rather than inequality between countries, global inequality at the end of 2000 was at its lowest point since the end of World War II. Estimates that compare countries rather than individuals, as both authors note, grossly overestimate real inequality because they allow gains for huge numbers of people to be outweighed by comparable losses for far fewer.


The Dawn of Everything by David Graeber, David Wengrow

"World Economic Forum" Davos, agricultural Revolution, Anthropocene, Atahualpa, British Empire, Columbian Exchange, conceptual framework, cryptocurrency, David Graeber, degrowth, European colonialism, founder crops, Gini coefficient, global village, Hernando de Soto, Hobbesian trap, income inequality, invention of agriculture, invention of the steam engine, Isaac Newton, labour mobility, land tenure, Lewis Mumford, mass immigration, means of production, Murray Bookchin, new economy, New Urbanism, out of africa, public intellectual, Scientific racism, spice trade, spinning jenny, statistical model, Steven Pinker, theory of mind, trade route, Tragedy of the Commons, urban planning, urban renewal, urban sprawl

The term ‘inequality’ is a way of framing social problems appropriate to an age of technocratic reformers, who assume from the outset that no real vision of social transformation is even on the table. Debating inequality allows one to tinker with the numbers, argue about Gini coefficients and thresholds of dysfunction, readjust tax regimes or social welfare mechanisms, even shock the public with figures showing just how bad things have become (‘Can you imagine? The richest 1 per cent of the world’s population own 44 per cent of the world’s wealth!’) – but it also allows one to do all this without addressing any of the factors that people actually object to about such ‘unequal’ social arrangements: for instance, that some manage to turn their wealth into power over others; or that other people end up being told their needs are not important, and their lives have no intrinsic worth.

There are inequality indexes, institutes for the study of inequality, and a relentless stream of publications trying to project the current obsession with property distribution back into the Stone Age. There have even been attempts to calculate income levels and Gini coefficients for Palaeolithic mammoth hunters (they both turn out to be very low).1 It’s almost as if we feel some need to come up with mathematical formulae justifying the expression, already popular in the days of Rousseau, that in such societies ‘everyone was equal, because they were all equally poor.’ The ultimate effect of all these stories about an original state of innocence and equality, like the use of the term ‘inequality’ itself, is to make wistful pessimism about the human condition seem like common sense: the natural result of viewing ourselves through history’s broad lens.

The varna system is about as ‘unequal’ as any social system can possibly be, yet where one ranks within it has less to do with how many material goods one can pile up or lay claim to than with one’s relation to certain (polluting) substances – physical dirt and waste, but also bodily matter linked to birth, death and menstruation – and the people who handle them. All this creates serious problems for any contemporary scholar seeking to apply Gini coefficients or any other property-based measure of ‘inequality’ to the society in question. On the other hand, and despite the great gaps in time between our sources, it might allow us to make sense of some of Mohenjo-daro’s otherwise puzzling features, such as the fact that those residential buildings most closely resembling palaces are not located on the Upper Citadel but crammed into the streets of the Lower Town – that bit closer to the mud, sewage pipes and paddy fields, where such jostling for worldly status seems to have properly belonged.95 Clearly, we can’t just project the social world evoked in Sanskrit literature indiscriminately on to the much earlier Indus civilization.


pages: 295 words: 87,204

The Capitalist Manifesto by Johan Norberg

AltaVista, anti-communist, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, business climate, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charles Babbage, computer age, coronavirus, COVID-19, creative destruction, crony capitalism, data is not the new oil, data is the new oil, David Graeber, DeepMind, degrowth, deindustrialization, Deng Xiaoping, digital map, disinformation, Donald Trump, Elon Musk, energy transition, Erik Brynjolfsson, export processing zone, failed state, Filter Bubble, gig economy, Gini coefficient, global supply chain, Google Glasses, Greta Thunberg, Gunnar Myrdal, Hans Rosling, Hernando de Soto, Howard Zinn, income inequality, independent contractor, index fund, Indoor air pollution, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, invisible hand, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, lockdown, low cost airline, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, means of production, meta-analysis, Minecraft, multiplanetary species, Naomi Klein, Neal Stephenson, Nelson Mandela, Network effects, open economy, passive income, Paul Graham, Paul Samuelson, payday loans, planned obsolescence, precariat, profit motive, Ralph Nader, RAND corporation, rent control, rewilding, ride hailing / ride sharing, Ronald Coase, Rosa Parks, Salesforce, Sam Bankman-Fried, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, Snapchat, social distancing, social intelligence, South China Sea, Stephen Fry, Steve Jobs, tech billionaire, The Spirit Level, The Wealth of Nations by Adam Smith, TikTok, Tim Cook: Apple, total factor productivity, trade liberalization, transatlantic slave trade, Tyler Cowen, Uber and Lyft, uber lyft, ultimatum game, Virgin Galactic, Washington Consensus, working-age population, World Values Survey, X Prize, you are the product, zero-sum game

However, if you include all the taxes that mostly reduce incomes at the top and the transfers that add more at the bottom, the difference is reduced from 16.7 to just four times as much.20 Globally, of course, inequality is more conspicuous, but thanks to the fact that low- and middle-income countries have grown faster than rich countries during the era of trade liberalization and international supply chains, global income inequality has decreased for the first time since the Industrial Revolution. This is a monumental change, and it has been dizzyingly quick. Betwee n 2000 and 2018 the global Gini coefficient (a measure of income inequality, rated from 1 to 100) decreased from seventy to sixty points, thus erasing a hundred-year build-up of global inequality in less than two decades.21 Nor have we seen a rapid increase in global inequality in assets. I’m not overly pleased with Credit Suisse’s popular annual compilations of global assets. A lot of it is pure guesswork and, because they do not use adjusted figures for the purchasing power of the local currency, they underestimate the prosperity of poor countries.

INDEX NB Page numbers in italics indicate illustrations Afghanistan, 160–61, 256 Africa, 30–35, 70, 267, 282 colonisation, 31 independence, 31–4 Sub-Saharan Africa, 30–31 AIM (AOL Instant Messenger), 170 Albania, 50 Algeria, 251 Alphabet, 179 AltaVista, 169, 174 Amazon, 169–72, 178–9 Amazon Prime, 179 Andersson, Magdalena, 8 Angola, 239 Annan, Kofi, 3 Ant Group, 227 AOL (America Online), 169–71, 174 Apple, 107–8, 159, 163, 169–73, 179 Apple TV, 179 Arab Spring, 215 Aristophanes, 73 Aristotle, 70 ARPA, 183–6 ARPANET, 184–5 Asia, 267, 282 Asp, Anette, 287 Attac, 2–3, 6 Australia, 11, 258, 267, 282, 285 Ayittey, George, 31 Bangladesh, 235 Bank for International Settlements (BIS), 144 Bankman-Fried, Sam, 153 Bao Tong, 212 Baran, Paul, 184, 186–7 Bastiat, Frédéric, 114 Beijing, China, 209 Belgium, 285 Berggren, Niclas, 62 Bergh, Andreas, 56, 103 Bezos, Jeff, 127 Biden, Joe, 76, 217 big companies, 141, 146–50, 176–7, 292 BioNTech, 177 biotechnology, 195 Björk, Nina, 263, 265, 272, 274–5, 278 BlackBerry, 174 Blair, Tony, 170 Blockbuster, 151 Blue Origin, 202 Bolivia, 47 Bolt, Beranek and Newman, 184 Bono, 4, 170 Botswana, 34–5 Boudreaux, Donald, 125 Boulevard of Broken Dreams (Lerner), 190 Brazil, 11, 29, 239, 258 Brexit, 116–18 Bullshit Jobs: A Theory (Graeber), 86, 98–9 business regulation, 139–41 Callaghan, James, 10 Canada, 102, 267, 283 Capital in the Twenty-First Century (Piketty), 128 capital income, 130–31 Carbon Engineering, 255 Cardoso, Fernando Henrique, 29 Carlson, Tucker, 146 cars, 158 Carter, Jimmy, 10 Case Deaton, Anne, 108–11, 136 Castillo, Pedro, 30 Chávez, Hugo, 43, 135 child labour, 20 child mortality, 19–20, 20 Chile, 11, 29–30 China, 5, 7, 11, 19, 24–5, 76, 78–80, 83–4, 104–7, 204–29, 239, 258 agricultural productivity, 206–7, 209 Communist Party, 182, 204–9, 211–12, 215–18, 221–3, 226–8 deindustrialization, 84 economic development, 205–29 environmental issues, 251–3, 257 exports, 209–10 industrial policy, 205, 212–13, 217, 223–4, 296 innovation strategy, 182, 192 innovation, 226–8 poverty, 213, 214 Reform and Opening Up programme, 212 state-owned companies, 208 WTO and, 205, 209, 211 China’s Leaders (Shambaugh), 215 Chirac, Jacques, 191 Chomsky, Noam, 49 Christianity, 264–5 Churchill, Winston, 135 Clark, Daniel, 87 climate change, 5–7, 230–60, 293 carbon border tariffs, 258 carbon tax, 256–7, 259 energy supplies, 233–5, 253–6, 259 greenhouse gas emissions, 231, 233–5, 238, 240–41, 244, 253–9 see also environmental issues Climeworks, 255 Clinton, Hillary, 140 Coase, Ronald, 206 Cohen, Linda, 189 communism, 2, 25–6, 241–3, 290–91 Communist Manifesto, The, 1848, 2 community, 267 Compaq, 174 Concorde, 191 Confucianism, 22, 25 Congo-Brazzaville, 30 Congo, 239 consumer culture, 160–62, 287–8 Cook, Tim, 173 cooperation, 278–9 Coopersmith, Jonathan, 188–9 Corbyn, Jeremy, 43 coronavirus see Covid-19 pandemic Council of Economic Advisers, 147, 152 Covid-19 pandemic, 8, 21, 76–81, 223, 232–3, 270 Cowen, Tyler, 154 Credit Suisse, 132–3 crony capitalism, 139–40, 291 culture wars, 12–13 Czechoslovakia, 26 Dalits, 63–4 dating profiles, 154 ‘deaths of despair’, 7, 108–10, 136, 271, 293 Deaths of Despair (Deaton and Case Deaton), 136 Deaton, Angus, 19, 108–119, 136 DeepMind, 177 degrowth, 232–5, 254–5 ‘deindustrialization’, 83–5 democracies, 26, 37, 46 Deneen, Patrick, 262–5 Deng Xiaoping, 24, 46, 205, 212–13 Denmark, 91, 285 ‘dependency theory’, 27–8 Detroit, Michigan, 87–8 dictatorships, 11, 24, 29, 32, 42–8 Digital Equipment Corporation, 174 disability-adjusted life years (DALY), 237 dishonesty, 153–6 Disney, 178 Dominican Republic, 225 Easterlin, Richard, 279 ‘Easterlin paradox’, 279–80 Easterly, William, 39 Ecclesiazusae (Aristophanes), 73 Economic Freedom of the World index, 35–7 economic freedom, 35–42, 36, 57, 58–62, 58, 77–8 Economist, The, 179, 192 education, 20, 94 Energiewende, 191, 192–3 Engels, Friedrich, 2, 277, 290–91 Enlightenment, 73 entrepreneurship, 123–4, 128–9, 152–4 ‘welfare entrepreneurs’, 197 environmental issues, 236–41, 245–52, 293 agriculture, 239–40 air pollution, 237–8 biodiversity, 238–9, 249–50 deforestation, 239 health and, 236–8, 237 plastics, 247–8 prosperity and, 245–52, 249 transportation, 250–51, 254–5 Environmental Performance Index (EPI), 248, 252 Estonia, 26 Ethiopia, 277 Europe, 22, 239, 267, 282 European Centre for International Political Economy, 79 European Union (EU), 4, 68, 79, 116, 164, 258–9 Everybody Lies (Stephens-Davidowitz), 155 Facebook, 163, 167–75, 179–80 Fallon, Brad, 192 famine, 29 Fanjul, Alfonso and José, 140 fascism, 75 Federal Communications Decency Act (USA), 174 Feldt, Kjell-Olof, 11 feudalism, 73, 75 Financial Fiasco (Norberg), 142 financial markets, 141–3 Financial Times, 8, 267 Finland, 76, 78, 268, 285 Foodora, 102 Forbes’ list, 129–30 forced technology transfers, 211 Foroohar, Rana, 8 Fortune 500 list, 151 Fortune magazine, 169 France, 79–80, 97, 159, 192, 281, 285 Fraser Institute, 35 free markets, 2–4, 6, 23, 58–62, 65–82, 83, 290–97 happiness and, 279–89, 282, 284, 286 human values and, 261–89 Friedman, Thomas, 204 ‘friendshoring’, 79 Friendster, 170 GAFAM (Google, Amazon, Facebook, Apple, Microsoft), 169–70 Gallup World Poll, 267 Gandhi, Indira, 245 Gapminder, 18 Gates, Bill, 124–7, 274 GDP (Gross Domestic Product), 5, 23, 26, 33, 35, 49–56 General Data Protection Regulation (EU GDPR), 164 generosity, 274–7 Georgia, 26, 215 Germany, 26, 84, 97, 101, 192–3, 196, 268 gig economy, 101–3 Gingrich, Newt, 191–2 Gini coefficient, 132 global financial crisis, 2008, 4–5, 142–3 global supply chains, 41–2, 58–61, 76, 81 Global Thermostat, 255 global warming see climate change globalization, 3–8, 17, 19, 80, 103–10, 117 Google, 163, 169–73, 179–80 Gorbachev, Mikhail, 215 Graeber, David, 86, 98–9 Grafström, Jonas, 240 Greece, 26, 254 Green Revolution, 239–40 green technology, 243, 251–5 Greider, Göran, 50, 241 growth, 49–57 degrowth, 232–5, 254–5 government and, 55–6 health and, 52–3 poverty and, 53–4 Guangdong, China, 207–8 Guardian, 3, 169 Halldorf, Joel, 262, 265 happiness, 279–89, 282, 284, 286 Hawkins Family Farm, 140 Hawkins, Zach, 140 Hayden, Brian, 161 Hayek, Friedrich, 66 Helm, Dieter, 193 Henrekson, Magnus, 56 Hertz, Noreena, 261, 262, 265, 268, 272, 274–5, 278 Hillbilly Elegy (Vance), 87 Hinduism, 22, 25 Hong Kong, 23, 205, 207 Horwitz, Steven, 294 housing market, 131, 142–3, 208–9 How China Became Capitalist (Wang and Coase), 206 How Innovation Works (Ridley), 188 Hsieh, Chang-Tai, 148–9 Hu Jintao, 215–16 Hugo, Victor, 25 Hume, David, 284 Hungary, 26, 283 IBM, 151 Iceland, 285 IKEA, 119, 141, 147 illiteracy, 20, 20 ‘import substitution’, 27–8 In Defence of Global Capitalism (Norberg), 3, 17, 33, 38, 42, 146, 151, 156, 169, 204, 214, 230–31 income, 22, 55, 88–96, 95, 134–5, 285, 291 low-income earners, 136–8 minimum wage, 90 wage stagnation, 89, 92–3 see also inequality India, 11, 24–5, 63–4, 70, 234, 239, 251, 258 caste system, 63–4 Indonesia, 239 industrial policy, 182, 188–203 Industrial Revolution, 22 inequality, 7, 27, 42, 54–5, 110, 131–8, 133, 285–7 happiness inequality, 131–2 income, 285–7 life expectancy and, 136–8 infant mortality, 19–20, 235, 291 Infineon, 196 inflation, 8, 10–11, 69 innovation, 65–6, 122–3, 125, 151, 181–203 government policy and, 181–203 innovation shadow, 169, 176 prizes and, 199 research, 199–200 subsidies and grants, 196–7 Instagram, 168, 177 integrity, 164 intellectual property, 41, 210–11 International Disaster Database, 235 International Union for the Conservation of Nature (IUCN), 238 internet, 162–8, 183–7 IPCC (Intergovernmental Panel on Climate Change), 231 iPhone, 107–8, 156, 159 Iran, 220 Iraq, 251 Ireland, 285 Italy, 97, 285 Jackson, Jesse, 43 Jacobs, A.

We also have to remind ourselves of grandpa’s grandma’s grandpa’s grandma’s time machine. Inequality in dollars and cents is not the same as inequality in access to the good things in life. A sign of this is that the increased economic inequality in the Western world has not been followed by increased inequality in the subjective feeling of well-being. On the contrary: inequality in happiness has actually decreased significantly in fast-growing Western countries, even where income inequality has increased at the same time.19 Another reason why happiness inequality does not increase might simply be that we have exaggerated even inequality in dollars and cents, since most studies look at market income and exclude the taxes and most of the transfers that are partly implemented to reduce inequality.


pages: 263 words: 80,594

Stolen: How to Save the World From Financialisation by Grace Blakeley

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, basic income, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Big Tech, bitcoin, bond market vigilante , Bretton Woods, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, cryptocurrency, currency peg, David Graeber, debt deflation, decarbonisation, democratizing finance, Donald Trump, emotional labour, eurozone crisis, Extinction Rebellion, extractivism, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, full employment, G4S, gender pay gap, gig economy, Gini coefficient, global reserve currency, global supply chain, green new deal, Greenspan put, housing crisis, Hyman Minsky, impact investing, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Jeremy Corbyn, job polarisation, junk bonds, Kenneth Rogoff, Kickstarter, land value tax, light touch regulation, low interest rates, low skilled workers, market clearing, means of production, Modern Monetary Theory, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, Nixon triggered the end of the Bretton Woods system, Northern Rock, offshore financial centre, paradox of thrift, payday loans, pensions crisis, Phillips curve, Ponzi scheme, Post-Keynesian economics, post-war consensus, price mechanism, principal–agent problem, profit motive, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Right to Buy, rising living standards, risk-adjusted returns, road to serfdom, Robert Solow, savings glut, secular stagnation, shareholder value, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, the built environment, The Great Moderation, too big to fail, transfer pricing, universal basic income, Winter of Discontent, working-age population, yield curve, zero-sum game

All in all, business’ stock of outstanding debt has grown from 25% of GDP in 1979 to 101% by 2008.48 As a ratio of profits, this means that UK corporations owe 6.5 times more in debt than they earn in profits each year, making them some of the most indebted corporations in the global North.49 As well as investing less and taking out more debt, companies have also been reducing workers’ pay and making their employment conditions more precarious. The ratio of CEO pay to the pay of the average worker increased from 20:1 in the 1980s to 149:1 by 2014.50 This has driven up income inequality: the UK’s GINI coefficient — a measure of income inequality in which countries closer to zero are more equal and those closer to one more unequal — rose from 0.26 at the start of the 1980s to 0.34 by the start of the 1990s. In fact, there has been a secular decoupling of productivity (the value of what workers produce) and wages.

Modelling from the TUC suggests that the wage share of national income has fallen from a peak of 64% in the mid-1970s to around 54% in 2007.24 Whilst pay was increasing in absolute terms in this period, most of these increases went to the top of the income spectrum, and inequality increased substantially. The UK’s GINI coefficient rose from 3 at the start of the 1980s to 3.4 by the start of the 1990s, a rise which been driven primarily by increases in pay at the top.25 Whilst overall increases in income for the top 10% averaged 2.5% between 1980–2000, they increased at just 0.9% for the bottom 10%.26 The ratio of CEO pay to the pay of the average worker increased from 20:1 in the 1980s to 149:1 by 2014.27 Secondly, and relatedly, investment in fixed capital — in the physical machinery and infrastructure needed for production — began to fall substantially from the end of the 1980s onwards.

As John Hills argues in his survey of inequality in Britain during the Blair years, New Labour’s policies did marginally reduce the large inequities that had resulted from the advent of finance-led growth.11 On average, in the middle of the distribution, income differences narrowed. Child and pensioner poverty fell and there were notable improvements in geographical inequality in some areas as Blair attempted to keep voters in traditional Labour seats on side. His hallmark focus on education meant that there was a marked reduction in attainment gaps between the wealthiest and the poorest children. But Hills also points out that, despite the then widespread view that New Labour reduced inequality throughout society, the picture is actually much more complex.


pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, AlphaGo, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, benefit corporation, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, Cambridge Analytica, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, deep learning, DeepMind, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Ford Model T, Francis Fukuyama: the end of history, general purpose technology, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, high-speed rail, holacracy, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, low interest rates, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, robo advisor, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Skinner box, Snapchat, speech recognition, streetcar suburb, Stuxnet, surveillance capitalism, synthetic biology, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, two and twenty, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, vertical integration, warehouse automation, zero day, zero-sum game, Zipcar

If those solutions do not lessen inequality, we are going to have to use other systems for redistributing wealth, such as higher taxes, free universal health care, and universal basic income (UBI). One consequence of all of this is that we may end up with even bigger government. Countries like Sweden spend about 10 to 15 percent more of their GDP on government than we do.13 Not coincidentally, Sweden’s Gini coefficient—the lower the number, the greater the income equality—is 0.259, less than a third of that of the United States.14 If the solution to income inequality comes in the form of high tax rates, universal health care, and UBI we will have moved closer to socialism—a very big value change.

Since 1979, the incomes of the middle 60 percent have grown at about half the rate of the top 20 percent and even more slowly than those in the bottom quintile. That should be good news for the members of that bottom quintile—until you dig more deeply and discover that their average income in 2016 was less than $13,000 per year.20 The Gini coefficient that measures income inequality now stands at historically high levels of more than 0.4 for the United States.21 The decline of the good job has left white Americans especially pessimistic. Just 24 percent of them believe their children will be better off than they are.22 Economic insecurity is also on the rise.

“Labor Unions in the United States,” Wikipedia, https://en.wikipedia.org/wiki/Labor_unions_in_the_United_States#/media/File:United_States_union_membership_and_inequality,_top_1%25_income_share,_1910_to_2010.png (accessed June 26, 2019). 37. Ibid., https://en.wikipedia.org/wiki/Labor_unions_in_the_United_States#/media/File:Union_membership_in_us_1930-2010.png (accessed June 26, 2019). 38. “Income Inequality in the United States,” Inequality.org, https://inequality.org/facts/income-inequality/ (accessed June 26, 2019). 39. Jennifer 8. Lee, “When Horses Posed a Public Health Hazard,” City Room (blog), New York Times, June 9, 2008, https://cityroom.blogs.nytimes.com/2008/06/09/when-horses-posed-a-public-health-hazard/?


pages: 334 words: 82,041

How Did We Get Into This Mess?: Politics, Equality, Nature by George Monbiot

Affordable Care Act / Obamacare, Alfred Russel Wallace, Anthropocene, bank run, bilateral investment treaty, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, creative destruction, credit crunch, David Attenborough, dematerialisation, demographic transition, drone strike, en.wikipedia.org, first-past-the-post, full employment, Gini coefficient, hedonic treadmill, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, invisible hand, land bank, land reform, land value tax, Leo Hollis, market fundamentalism, meta-analysis, Mont Pelerin Society, moral panic, Naomi Klein, Northern Rock, obamacare, oil shale / tar sands, old-boy network, peak oil, place-making, planned obsolescence, plutocrats, profit motive, rent-seeking, rewilding, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, urban sprawl, We are all Keynesians now, wealth creators, World Values Survey

But between 1979 and 2009, productivity rose by 80 per cent, while the income of the bottom fifth fell by 4 per cent.4 In roughly the same period, the income of the top 1 per cent rose by 270 per cent.5 In the UK, the money earned by the poorest tenth fell by 12 per cent between 1999 and 2009, while the money made by the richest tenth rose by 37 per cent.6 The Gini coefficient, which measures income inequality, climbed in this country from twenty-six in 1979 to forty in 2009.7 In his book The Haves and the Have-Nots, Branko Milanovic tries to discover who was the richest person who has ever lived.8 Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots’ labour a rich man could buy.

See soil subsidies for, 121, 122, 124, 125, 127, 128, 133, 276 in Turkey, 140, 142 in Wales, 121 yields from, 140–1 in Zimbabwe, 139 The Farming Forum, 126 Farming Regulation Task Force, 127 Farrar, Frederick, 234 Ffos-y-fran (South Wales), 147, 148 finance, jobs in, 48, 49 financial sector, and the illusion of skill, 189 Financial Times, 20, 223 Fiorina, Carly, 186 Fire Brigades Union (FBU), 267 flood defence, 130, 132–8 Food and Agriculture Organisation (UN), 142 food security, 139 Food Summit (2008), 139, 142 Forest Industries, 177 Forsyth, Michael, 215 Forty-Two Reasons to Support Scottish Independence (Ramsay), 273 fossil fuels absence of official recognition of role of in causing climate change, 155 economic growth as artefact of use of, 175 exploration and extraction of, 153, 157 impact of unchecked consumption of, 87 lack of talk about constraining production of, 153 leaving them in the ground, 147–51 silence about, 154–6, 158 Four Lions (film), 238 Fox News, 212 Fraser, Stuart, 192 freedom acting as if we don’t enjoy greater freedom than preceding generations, 23 as championed by neoliberals, 4 deprivation of, 26 market freedom, 45, 198, 218 negative freedom, 4 political freedom, 5 surrender of, 12 think tank freedoms, 24 as use it or lose it, 26 Free Enterprise Group, 215 free market, 3, 198, 199–200, 213, 224 free-range production, 114 Friedman, Milton, 220 Friel, Howard, 200 Fritzon, Katarina, 189 Frum, David, 213 Fukushima nuclear catastrophe, 164, 168, 169–70 G Galton, Francis, 234 General, Municipal, Boilermakers and Allied Trade Union (GMB), 264, 266 genocide, 227–31 ghost psyche, 89, 111 Gillis, John, 59, 60, 61 Gini coefficient, 191 global agreements, 102 global consumption, 177 global economy, 177 global food market, 143 global growth rate, 178 global warming, 86, 101, 104, 105–6, 155, 159 global wealth, 12, 176 Glooskap, 90 Gloucester, 132 Godhaven, Merrick, 261 godly household, 59 Goldsmith, James, 213, 214 Google, 205 Grantham, Jeremy, 175 Great Leap Backwards, 141 green consumerism, 288 green energy production, 167 greenhouse gases attention paid to, 153 emissions of, 87, 104, 159 grazing animals as increasing production of, 86 impact of wildlife protection on, 87 as topic of official interest in global meetings, 154 Greenpeace, 169, 171, 260 Green Revolution, 140 Greenwald, Glenn, 56 Griffiths, Jay, 43 grouse estates, subsidies for, 137, 275 Guantanamo Bay, detainees in, 256 Guardian, 33, 62, 68, 224, 230, 250 guiding intelligence, belief in, 19 Guttmacher Institute, 74 H Harbin, particulate concentrations in, 171 Harbour, Peter, 258, 260 hard work, outcomes as based on (or not based on), 16, 188 Hare, Robert, 190 Harvey, David, 218, 220 Hastings, Max, 222, 235 The Haves and the Have-Nots (Milanovic), 191 Hayek, Friedrich von, 218, 220 Health and Environment Alliance, 171 heating fuel, 165, 167 Heritage Foundation, 219 heroin use, 33, 34–5 Hewlett-Packard, 186 Heywood, Colin, 60 hill farming, 121, 122, 131, 133, 134 Hispaniola, 228 A History of Childhood (Heywood), 60 Hitler, Adolph, 234 Hobbes, Thomas, 9, 13 Holder, Eric, 255 Holocaust, 230, 233 homosexuality, 59 Hoover Institute, 219 Household, Geoffrey, 211 housing estates, play spaces for children in, 44–5 HSBC, 238 Human Plant (BBC series), 90 humans ability of to compartmentalise, 91, 92, 93, 94 hunting/gathering of early humans, 91 impact of development of farming on, 92 as wired to respond to nature, 89 Humphreys, Margaret, 64 Hunger Games (film), 90 Hunter’s Pride, 110 hunting/gathering, of early humans, 91 I I=CAT, 104 I=PAT, 104 imperialism, 233, 235 Imperial University, 50 income inequality, 191, 205, 209–10 incomes, rise and fall of, 191 Independent, 282 Independent Age, 10 individual effort, 16 individualism, 10 Infrastructure Act, 155 infrastructure of persuasion, 1, 2 Injunctions to Prevent Nuisance and Annoyance (IPNAs), 29–30 Innospec, 163 Institute of Economic Affairs, 214 Institute for Public Policy Research, 281 Intergovernmental Panel on Climate Change, 148 International Assessment of Agriculture Knowledge, 142 international conferences, 154, 158.

It has been demonstrated in a large body of experimental work, which has produced the following surprising results. System justification becomes stronger when social and economic inequality are more extreme. This is because people try to rationalise their disadvantage by seeking legitimate reasons for their position.6 In some cases disadvantaged people are more likely than the privileged to support the status quo. One study found that US citizens on low incomes were more likely than those on high incomes to believe that economic inequality is legitimate and necessary.7 It explains why women in experimental studies pay themselves less than men; why people in low-status jobs believe their work is worth less than those in high-status jobs, even when they’re performing the same task; and why people accept domination by another group.8 It might help to explain why so many people in Scotland are inclined to vote no.


pages: 288 words: 86,995

Rule of the Robots: How Artificial Intelligence Will Transform Everything by Martin Ford

AI winter, Airbnb, algorithmic bias, algorithmic trading, Alignment Problem, AlphaGo, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, Automated Insights, autonomous vehicles, backpropagation, basic income, Big Tech, big-box store, call centre, carbon footprint, Chris Urmson, Claude Shannon: information theory, clean water, cloud computing, commoditize, computer age, computer vision, Computing Machinery and Intelligence, coronavirus, correlation does not imply causation, COVID-19, crowdsourcing, data is the new oil, data science, deep learning, deepfake, DeepMind, Demis Hassabis, deskilling, disruptive innovation, Donald Trump, Elon Musk, factory automation, fake news, fulfillment center, full employment, future of work, general purpose technology, Geoffrey Hinton, George Floyd, gig economy, Gini coefficient, global pandemic, Googley, GPT-3, high-speed rail, hype cycle, ImageNet competition, income inequality, independent contractor, industrial robot, informal economy, information retrieval, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jeff Bezos, job automation, John Markoff, Kiva Systems, knowledge worker, labor-force participation, Law of Accelerating Returns, license plate recognition, low interest rates, low-wage service sector, Lyft, machine readable, machine translation, Mark Zuckerberg, Mitch Kapor, natural language processing, Nick Bostrom, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, Ocado, OpenAI, opioid epidemic / opioid crisis, passive income, pattern recognition, Peter Thiel, Phillips curve, post scarcity, public intellectual, Ray Kurzweil, recommendation engine, remote working, RFID, ride hailing / ride sharing, Robert Gordon, Rodney Brooks, Rubik’s Cube, Sam Altman, self-driving car, Silicon Valley, Silicon Valley startup, social distancing, SoftBank, South of Market, San Francisco, special economic zone, speech recognition, stealth mode startup, Stephen Hawking, superintelligent machines, TED Talk, The Future of Employment, The Rise and Fall of American Growth, the scientific method, Turing machine, Turing test, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, very high income, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y Combinator

In the United States the trend has been especially dramatic and is demonstrated vividly by the rise of the Gini coefficient. This index is a measure of the concentration of wealth. At the extremes, a Gini value of zero would indicate that everyone in a country has an equal share of wealth, and a value of 100 would mean that a single individual owns all the nation’s wealth. Realistic values generally fall between roughly 20 and 50, with a higher number indicating more inequality. In the U.S., the Gini coefficient rose from 37.5 in 1986 to 41.4 in 2016—a level higher than any previously recorded.10 Figure 3. Productivity vs. Compensation This trajectory toward rising income inequality has been driven in part by a general decline in the quality of jobs on offer in the United States.

AI has the potential to create economic value that will be indispensable as we look toward digging ourselves out of the massive economic hole in which we now find ourselves. On the other hand, it is virtually certain to eliminate or deskill millions of jobs while driving economic inequality to even higher levels. Aside from the social and political implications of unemployment and ever-rising inequality, there is another important economic consequence: a vibrant market economy depends on vast numbers of consumers who are able to purchase the products and services being produced. If these consumers do not have jobs, and thus income, how will they create the demand necessary to drive continued economic growth?

This decoupling of productivity and compensation leads directly to increased income inequality. As technology displaces or diminishes the value of labor, a larger share of business profits is captured by capital. This decline in labor’s share of national income has been found over the last two decades in the United States as well as in a variety of other developed countries. Because capital ownership is highly concentrated in the hands of the wealthy, a redirection of income from labor to capital amounts to a redistribution from the many to the few, and this increases income inequality. In the United States the trend has been especially dramatic and is demonstrated vividly by the rise of the Gini coefficient.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Alan Greenspan, Andrei Shleifer, anti-communist, Apollo 11, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Bear Stearns, Berlin Wall, Black Monday: stock market crash in 1987, Bletchley Park, Bob Noyce, Boeing 747, bond market vigilante , Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carl Icahn, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Babbage, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, cotton gin, credit crunch, Credit Default Swap, crony capitalism, cross-border payments, currency peg, currency risk, debt deflation, DeepMind, Deng Xiaoping, discovery of the americas, Donald Trump, driverless car, Easter island, Erik Brynjolfsson, European colonialism, eurozone crisis, Fairchild Semiconductor, falling living standards, financial engineering, financial innovation, financial intermediation, floating exchange rates, flying shuttle, Ford Model T, Fractional reserve banking, Frederick Winslow Taylor, full employment, general purpose technology, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, global value chain, Gordon Gekko, Great Leap Forward, greed is good, Greenspan put, guns versus butter model, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, hydroponic farming, Ignaz Semmelweis: hand washing, income inequality, income per capita, independent contractor, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Jon Ronson, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, Les Trente Glorieuses, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low interest rates, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, Modern Monetary Theory, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, Paul Volcker talking about ATMs, Phillips curve, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, savings glut, scientific management, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, TaskRabbit, techlash, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, Tragedy of the Commons, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, world market for maybe five computers, Yom Kippur War, you are the product, zero-sum game

Nearly nine out of ten of the people in the median group lived in the emerging Asian economies, notably China, India and Indonesia. The global Gini coefficient (the standard measure of inequality) declined from 0.72 in 1988 to 0.67 in 2011.41 The picture looks very different in the Western world. Between 1945 and 1979, inequality was declining. But things then changed. In 2015, the average income of the richest 10% of the population in OECD countries was about nine times that of the poorest 10%, up from seven times in 1990.42 In the US, the Gini coefficient rose from just under 0.35 in 1980 to 0.41 in 2013.43 Between 1979 and 2011, the top 1% of Americans saw their income rise by 4.9% a year, while the bottom 20% gained only 1.2%.

James McBride and Mohammed Aly Sergie, “NAFTA’s economic impact”, https://www.cfr.org/backgrounder/naftas-economic-impact 41. Milanovic, Global Inequality, op. cit. The Gini coefficient measures the concentration of income. The nearer the figure gets to 1, the more unequal the distribution. 42. Brian Keeley, “Income inequality: The gap between rich and poor”, December 15th 2015, https://www.oecd-ilibrary.org/social-issues-migration-health/income-inequality_9789264246010-en 43. Source: https://fred.stlouisfed.org/series/SIPOVGINIUSA 44. Gordon, The Rise and Fall of American Growth, op. cit. 45. David Card and John DiNardo, “Skill-biased technological change and rising wage inequality: some problems and puzzles”, 2002, http://davidcard.berkeley.edu/papers/skill-tech-change.pdf 46.

The great compression The post-war era was marked by a sharp reduction in inequality within the Western economies. Inequality has been a part of society ever since mankind shifted its economic focus from hunter-gathering to farming. Walter Scheidel’s bleak assessment was that a reduction in inequality normally required one of four shocks: mass mobilisation warfare, revolution, state failure, and lethal pandemics.26 In other words, the cures for inequality are worse than the disease. In its early stages, industrialisation seemed to increase inequality. When the overall economy grew, most of the gains were made by the owners of capital, the factories that churned out textiles, and the mines that dug out coal.


pages: 290 words: 84,375

China's Great Wall of Debt: Shadow Banks, Ghost Cities, Massive Loans, and the End of the Chinese Miracle by Dinny McMahon

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, American Society of Civil Engineers: Report Card, Andrei Shleifer, Asian financial crisis, bank run, business cycle, California gold rush, capital controls, crony capitalism, dark matter, Deng Xiaoping, Donald Trump, Edward Glaeser, eurozone crisis, financial innovation, fixed income, Gini coefficient, Global Witness, Great Leap Forward, high-speed rail, if you build it, they will come, income inequality, industrial robot, invisible hand, low interest rates, megacity, middle-income trap, military-industrial complex, money market fund, mortgage debt, new economy, peer-to-peer lending, Ponzi scheme, Ronald Reagan, short selling, Silicon Valley, subprime mortgage crisis, too big to fail, trickle-down economics, urban planning, working-age population, zero-sum game

The enviable purchasing power of its tourists is not the natural order of things but rather the result of heavily lopsided income distribution. China suffers from some of the worst income inequality in the world. According to China’s official statistics, its 2012 Gini coefficient—a measure of inequality in which zero represents perfect equality and 1 represents perfect inequality—was 0.47, making it broadly as unequal as the United States (the World Bank says anything above 0.4 signals extreme inequality). Independent calculations have estimated that Chinese inequality is actually significantly worse than that, with estimates ranging between 0.53 and 0.61. Given such vast disparities in wealth, it’s amazing that the country isn’t a tinderbox.

See credit Fisher, Richard, 10 forge, at Erzhong, 26, 27, 29 “four wars,” 148–49 Foxconn, 66–67 fraud credibility of statistics, 9–11 investigation, 138–39 revelations of, 140 Silvercorp Metals, 1–6 free trade, 169–70, 185–86 Friedman, Milton, 57–58 Friedman, Thomas, xvi Fu Chengyu, 132 fuel quality standards, 154 G Gansu Province, 41 GDP data, 9–21, 22, 88 financial services, 133 per capita, 173 shadow banking, 106 ghost cities, 49–73 concessions, 87–88 debt accumulation, 69–73 defined, 51 Hebei, 91–92 monetary incentive, 64–68 populating, 61–64 Tieling as, 49–51 urbanization, 59–61 Xiongan and Pudong, 56–59 Gini coefficient, 199 globalization, 169–70, 185–86, 193–97 Goldberg, Rube, 109 Gong Bailin, 40, 41 Googut Auction, 117 gray income, 162–63 growth Chinese Communist Party and, 200–201 of Chinese economy, xvi-xvii, xix credit expansion, 109, 142. See also shadow banking housing construction, 59 loan repayment, 115–16 real estate market, 86–91 of Tieling, 55–56 urbanization and (see urbanization) Guangxi Province, 74 H Haley, George, 184 Haley, Usha, 184 Han Changfu, 187 Han Tianpei, 157–61 Haussmann, Baron, 78 He Fan, 157 Hebei, 74, 80–83, 91–93 Hefei, 127 Henan Found Mining Company, 16 Henan Province, 2, 58, 66–67 Henglan fraud, 22–23 housing affordability of, 86, 90–91, 92–93 construction of, 52–54, 59.

unequal as the United States: Kevin Yao and Aileen Wang, “China Lets Gini Out of the Bottle; Wide Wealth Gap,” Reuters, January 18, 2013, http://www.reuters.com/article/us-china-economy-income-gap-idUSBRE90H06L20130118. between 0.53 and 0.61: Chuin Wei-Yap, “In an Unequal China, Inequality Data Lack Equal Standing,” Wall Street Journal, January 17, 2016, https://blogs.wsj.com/chinarealtime/2016/01/17/in-an-unequal-china-inequality-data-lack-equal-standing/; Yu Xie and Xiang Zhou, “Income Inequality in Today’s China,” Proceedings of the National Academy of Sciences of the United States of America 111, no. 19 (2014), http://www.pnas.org/content/111/19/6928.abstract. living than themselves: Richard Wike and Bruce Stokes, “Chinese Views on the Economy and Domestic Challenges,” Pew Research Center, October 5, 2016, http://www.pewglobal.org/2016/10/05/1-chinese-views-on-the-economy-and-domestic-challenges/.


pages: 346 words: 89,180

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

23andMe, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, Big Tech, book value, Brexit referendum, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, cloud computing, cognitive bias, computer age, congestion pricing, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial engineering, financial innovation, full employment, fundamental attribution error, future of work, gentrification, gigafactory, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, Jeremy Corbyn, job automation, Kanban, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low interest rates, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, Ocado, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, private spaceflight, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, sunk-cost fallacy, survivorship bias, tacit knowledge, tech billionaire, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, TSMC, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

Finally, as the Institute for Fiscal Studies notes, wealth inequality is much higher than income inequality. The wealthiest 10 percent of households hold 50 percent of the wealth. The least wealthy 25 percent of households hold almost no wealth at all. The Gini coefficient, which is a summary measure for how unequal a distribution is, ranges from 0 to 1, where a measure of 0 is equality and 1 is where only one person accounts for the entire measure. The Gini coefficient is 0.64 for wealth and 0.34 for net income (Crawford, Innes, and O’Dea 2016). The first and most obvious type is inequality of earnings. In the UK and the United States, there was a big rise in earnings inequality in the 1980s and 1990s; inequality has remained at this higher level since.

Might this also have contributed to levels and different dimensions of inequality that we see in today’s societies? In this chapter, we’ll argue that the growth of the new intangible economy does indeed help explain the types of inequality we’re currently seeing. Inequality: A Field Guide Economic inequality is a hydra-headed beast. It’s helpful to differentiate between a few different sorts of inequality that crop up in the public debate, and these are set out in box 6.1. Box 6.1. Measures of Inequality To clarify the types of inequality it’s helpful to distinguish between two economic concepts: income and wealth.

The cultural causes of Brexit and Trump are exacerbated by the economic causes—causes that arise from the emergence of an intangible economy. Conclusion: The Implications of an Intangible Economy for Inequality We’ve argued that the rise of intangibles explains several aspects of the long-run rise in inequality. First, inequality of income. The synergies and spillovers that intangibles create increase inequality between competing companies, and this inequality leads to increasing differences in employee pay (recent research suggests these interfirm differences account for a large proportion of the rise of income inequality). In addition, managing intangibles requires particular skills and education, and people with these skills (such as Reich’s symbolic analysts) are clustering in high-paid jobs in intangible-intensive firms.


pages: 614 words: 168,545

Rentier Capitalism: Who Owns the Economy, and Who Pays for It? by Brett Christophers

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Amazon Web Services, barriers to entry, Big bang: deregulation of the City of London, Big Tech, book value, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business process, business process outsourcing, Buy land – they’re not making it any more, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cloud computing, collective bargaining, congestion charging, corporate governance, data is not the new oil, David Graeber, DeepMind, deindustrialization, Diane Coyle, digital capitalism, disintermediation, diversification, diversified portfolio, Donald Trump, Downton Abbey, electricity market, Etonian, European colonialism, financial deregulation, financial innovation, financial intermediation, G4S, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, greed is good, green new deal, haute couture, high net worth, housing crisis, income inequality, independent contractor, intangible asset, Internet of things, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kickstarter, land bank, land reform, land value tax, light touch regulation, low interest rates, Lyft, manufacturing employment, market clearing, Martin Wolf, means of production, moral hazard, mortgage debt, Network effects, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, patent troll, pattern recognition, peak oil, Piper Alpha, post-Fordism, post-war consensus, precariat, price discrimination, price mechanism, profit maximization, proprietary trading, quantitative easing, race to the bottom, remunicipalization, rent control, rent gap, rent-seeking, ride hailing / ride sharing, Right to Buy, risk free rate, Ronald Coase, Rutger Bregman, sharing economy, short selling, Silicon Valley, software patent, subscription business, surveillance capitalism, TaskRabbit, tech bro, The Nature of the Firm, transaction costs, Uber for X, uber lyft, vertical integration, very high income, wage slave, We are all Keynesians now, wealth creators, winner-take-all economy, working-age population, yield curve, you are the product

In fact, it is more unevenly distributed than any other form of wealth: for the period July 2014–June 2016, the Gini coefficient – the most common measure of inequality, where 0 expresses no inequality and 1 expresses maximal inequality – for private pension wealth was 0.72, and for net other financial wealth (bank accounts, stocks and shares, and so on) it was 0.91; for net property wealth and physical wealth, the figures were 0.67 and 0.46, respectively.87 Figure 1.9 illustrates this inequality of distribution graphically for the period July 2012– June 2014. As it shows, financial wealth was heavily concentrated at the top end, with all percentiles in the bottom quarter of the wealth distribution having negative total net financial wealth.

In 2015, the estate agent Savills estimated that, between 2009 and 2014, the value of existing privately rented residential stock (stock already in the rental sector at the former date rather than entering it during that five-year period) increased by £177 billion.103 Four years later another estate agent, Hamptons International, revealed what headline numbers such as these meant in terms of actual individual wealth gains realized upon disposal: having held rental properties on average for approximately ten years, private landlords in England and Wales who sold up in 2018 made an average gross gain per property of £79,770 – a figure that increased to £248,000 (around £25,000 per year of ownership) in London.104 It is thus little wonder that, between 2006–8 and 2014–16, Britain’s Gini coefficient for net property wealth increased from 0.62 to 0.67.105 Wealth, in short, begets wealth. The growth of petit property rentierism in twenty-first-century Britain has been, at the same time, the growth of wealth inequality. Having considered the growth of the private residential rental sector from the perspective of the petit rentier, it is important to consider it also from the other side of the fence.

See also bonds; derivatives; equities; securitization financial crisis, 72, 75, 77–78, 79–80, 84, 263, 348 financial form of landownership, 81, 358–359 financial globalization, 51–52, 63 financial market infrastructures, 83–84 financial rents, 49–93; earned by individuals and households, xxxv, 86–91, 93; earned by non-financial corporations, 85–86; forms of, 57–59, 78–84; and imperialism, 63; scarcity and, 64–66, 73–74, 76–78 financial risk, 185, 310–312 Financial Services Authority (FSA), 55 financialization, 4–5, 20, 52 FirstGroup, 259 fiscal regime, 116–117, 119–120, 134, 434n38 5G services, 296 flexible specialization, 18–19 Flutter Entertainment, 9, 184–185, 198–199 Ford, Jonathan, 21, 293, 300, 302, 306, 310, 312, 322 Forde, Chris, 190, 218 Forestry Commission, 343 Forrester, Katrina, 218 foundational economy, 398, 401–402 Foundational Economy Collective, 398 4G services, 296–298, 309 Foxconn, 228–230 France, income distribution in, 90 franchises: fast-food, and intellectual property rents, 141–143; passenger rail services, and contract rents, 248, 253, 255–256, 259 Francis, Becky, 238 Franks, Oliver, 4 Friedman, Milton, xix–xx Froud, Julie, 252–253 FTSE share price indices, 192 Fujitsu, 259 Fulfillment by Amazon (FBA), 277–278, 283, 287 ‘functionless investor’, financial rentier as, 51, 65–66, 74 Furman, Jason, 207, 209–210 G4S, 239, 248, 274 Gardiner, Laura, 42 Gaviscon, 177 The General Theory of Employment, Interest and Money (Keynes), 65, 74 Generation Rent, 376 gig economy, 184, 216, 217, 219 Gilead (pharmaceutical company), 178 Gillespie, Tarleton, 190–191 Gini coefficient, 88, 367 Girobank, 282 Glasenberg, Ivan, 97 GlaxoSmithKline, 7, 148, 150, 155–156, 166, 169, 172 Gleit, Naomi, 215–216 Glencore, 7, 96–97, 100, 106, 107, 116–117, 432–433n15 Global Intellectual Property Index, 159 globalization, effect on national economies of, 10–11 Goldman Sachs, 11, 227–229 goldsmith banking, 50 Goodwin, Matthew, 381–382 Google: as attention platform, 185–186, 188–189, 194; competition policy infringements, 205–206; market dominance, 204–205, 208–209, 211; revenues and profits, 221–223; tax avoidance, 223–224; treatment of contractors, 272 Google Ventures, 147 Gowers, Andrew, 155, 164–165, 174 Graeber, David, 40 Grainger (property company), 357 Great Western Railway franchise, 259 Greater London Authority, 202 Greater London Council (GLC), 202 Green, Brian, 331 green economy, 400–402 Green New Deal, 399, 413 Greenergy, 11 Griffith, Matt, 359 gross domestic product (GDP), 105, 106 gross national product (GNP), 105 gross operating surplus (GOS), 12–14, 362 gross value-added (GVA), 103–104, 105, 112, 333, 334, 425n26 Grosvenor, Hugh Richard Louis, 363 Grosvenor Group, 336, 356–358, 362–363 ground rent, xx–xxi, 331–332 Guinan, Joe, 279 Haldane, Andrew, 36–37 Hall, David, 306, 404 Hall, Stuart, 3 Hammond, Philip, 135, 224–225 Hamptons International, 367 Hanna, Thomas, 279 Harcourt, William, xix–xx Harford, Tim, 32, 388 Hargreaves, Ian, 153–155 Hart, David, 32 Harvey, David, xxi, 30, 127–128, 292, 358, 374–375, 406, 409 Harvie, Christopher, 114, 121, 122, 126 Harworth Group plc, 328–329 Hawkins, Nigel, 284, 289–290, 295, 305, 313, 325, 330 Hazlett, Thomas, 307–308 Health and Social Care Act (2012), 237 Heath, Oliver, 381–382 Hegel, Georg Wilhelm Friedrich, 382–383 Helm, Dieter, 312, 318 Help to Buy programme, 348 heterodox economics, rent in, xx–xxiii Hillier, Meg, 268–269 HM Revenue and Customs (HRMC), 224, 249, 259 Hobbs, Cat, 404 Hodkinson, Stuart, 268 Home Office, 266 homeownership, rates of, 336–337, 366, 369–370, 373, 375–376 homeownership societies, 69, 87, 366 honourable poverty, 382 House of Lords Select Committee on Communications, 200–201, 206 house prices, 84–85, 331, 348 household debt, 46–48, 68–69, 84, 92; inequality and, 47, 92–93 household rentierism, xxxv–xxxvi, 42–43, 86–91, 364–367, 381, 383, 418; democratization of, 87–88.


pages: 414 words: 101,285

The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It by Ian Goldin, Mike Mariathasan

air freight, air traffic controllers' union, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, barriers to entry, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Bretton Woods, BRICs, business cycle, butterfly effect, carbon tax, clean water, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, connected car, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, digital divide, discovery of penicillin, diversification, diversified portfolio, Douglas Engelbart, Douglas Engelbart, Edward Lorenz: Chaos theory, energy security, eurozone crisis, Eyjafjallajökull, failed state, Fairchild Semiconductor, Fellow of the Royal Society, financial deregulation, financial innovation, financial intermediation, fixed income, Gini coefficient, Glass-Steagall Act, global pandemic, global supply chain, global value chain, global village, high-speed rail, income inequality, information asymmetry, Jean Tirole, John Snow's cholera map, Kenneth Rogoff, light touch regulation, Long Term Capital Management, market bubble, mass immigration, megacity, moral hazard, Occupy movement, offshore financial centre, open economy, precautionary principle, profit maximization, purchasing power parity, race to the bottom, RAND corporation, regulatory arbitrage, reshoring, risk free rate, Robert Solow, scientific management, Silicon Valley, six sigma, social contagion, social distancing, Stuxnet, supply-chain management, systems thinking, tail risk, TED Talk, The Great Moderation, too big to fail, Toyota Production System, trade liberalization, Tragedy of the Commons, transaction costs, uranium enrichment, vertical integration

In a fascinating study, François Bourguignon and Christian Morrisson found that location determined income inequality in 1820 to only a small extent (11.7 percent of the explanation was between-country differences), while social class was significantly more important (within-country differences accounted for 88.5 percent of income inequality as measured by the Theil index). By 1992 the study found that location accounted for as much as 60 percent of inequality, while class explained only 40 percent.47 Using data from 2005 and Gini coefficients to measure inequality, other studies have found the relevance of class even further reduced (explaining only 15 percent of the Gini coefficient) and that of between-country differences further elevated (to 85 percent).48 In fact, Milanović implies that this development has weakened global cohesion because members of the working class across countries now have less in common with one another economically and may even have “conflicting” interests.49 Unskilled laborers in rich cities receive higher incomes and are now much better off than their counterparts in the world’s poorer regions (see table 7.1).

Within-Country Inequality The OECD reports that income inequality was increasing in most OECD countries from the mid-1980s to the late 2000s; exceptions were Turkey and Greece, where inequality decreased, and France, Hungary, and Belgium, where the degree of inequality remained stable throughout the late 2000s (figure 7.1). For Anglo-Saxon countries like the United States or the United Kingdom, the increase in inequality is the continuation of a trend that started in the 1970s; the fact that countries like “Denmark, Germany and Sweden, which have traditionally had low inequality, are no longer spared from the rising inequality trend” constitutes a more recent phenomenon.11 These inequalities can partly be explained by changes in wages and, more specifically, by the accelerating growth of salaries among top earners.12 Yet there are also more structural explanations: reduced working-time arrangements, for instance, are more prevalent among low-wage earners, and the more frequent use of such arrangements causes the income gap to widen even when wages remain unchanged.

138 The Export of Pollution 139 Lessons for Managing Environmental Risk 141 6 Pandemics and Health Risks 144 Pandemic Risk 145 Globalization and Health Risks 147 Case Studies 150 Noninfectious Diseases 159 Global Cooperation and Disease Control 160 Lessons from Pandemic Management 164 7 Inequality and Social Risks 168 Global Integration and Inequality 169 The Channels of Inequality 180 The Risks of Inequality 181 Lessons for Challenging Global Inequalities 195 8 Managing Systemic Risk 198 Moving Forward, Not Backward 200 Confronting a New Challenge? 202 The Need to Reform Global Governance 206 Why Reform Has Been So Sluggish 209 Lessons for Global Policy Reform 212 Managing Systemic Risk 219 Notes 221 References 257 Index 285 Boxes, Illustrations, and Tables BOXES Box 1.1.


pages: 330 words: 99,044

Reimagining Capitalism in a World on Fire by Rebecca Henderson

"Friedman doctrine" OR "shareholder theory", Airbnb, asset allocation, behavioural economics, benefit corporation, Berlin Wall, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, circular economy, collaborative economy, collective bargaining, commoditize, corporate governance, corporate social responsibility, crony capitalism, dark matter, decarbonisation, disruptive innovation, double entry bookkeeping, Elon Musk, Erik Brynjolfsson, export processing zone, Exxon Valdez, Fall of the Berlin Wall, family office, fixed income, George Akerlof, Gini coefficient, global supply chain, greed is good, Greta Thunberg, growth hacking, Hans Rosling, Howard Zinn, Hyman Minsky, impact investing, income inequality, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Kickstarter, Lyft, Marc Benioff, Mark Zuckerberg, Max Levchin, means of production, meta-analysis, microcredit, middle-income trap, Minsky moment, mittelstand, Mont Pelerin Society, Neil Armstrong, Nelson Mandela, opioid epidemic / opioid crisis, Paris climate accords, passive investing, Paul Samuelson, Philip Mirowski, plant based meat, profit maximization, race to the bottom, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Salesforce, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, sovereign wealth fund, Steven Pinker, stocks for the long run, Tim Cook: Apple, total factor productivity, Toyota Production System, uber lyft, urban planning, Washington Consensus, WeWork, working-age population, Zipcar

Doing Business, “Training for Reform. Economy Profile Mauritius” (Washington, DC: World Bank Group, 2019), www.doingbusiness.org/content/dam/doingBusiness/country/m/mauritius/MUS.pdf. 90. “Mauritius,” World Bank Data, https://data.worldbank.org/country/mauritius. 91. Lower Gini numbers mean less inequality. A society with a Gini coefficient of 0 would be perfectly equal. One with a coefficient of 100 would give all the income to a single person; “Countries Ranked by GINI Index (World Bank Estimate),” Index Mundi, www.indexmundi.com/facts/indicators/SI.POV.GINI/rankings. 92. Human Development Indices and Indicators: 2018 Statistical Update (Mauritius: UNDP, 2018), http://hdr.undp.org/sites/all/themes/hdr_theme/country-notes/MUS.pdf. 93.

Mauritius ranks twenty-fifth in the World Bank’s Ease of Doing Business Index and as the eighth “freest economy in the world.”89 Real GDP grew more than 5 percent per year between 1970 and 2009, and in 2018 GDP per capita was $9,69790—just behind Poland, Turkey, and Costa Rica. Between 1962 and 2008 the Gini coefficient dropped from 0.50 to 0.38. (In 2013 the United States had a Gini of 0.41. Germany’s Gini was 31.4, and Denmark’s was 28.5.)91 Gender equality has improved, and the poverty rate has fallen from 40 to 11 percent. The country recently ranked 11 out of 102 countries in the OECD Social Institutions and Gender Index and 65 in the Human Development Index—ahead of Mexico, Brazil, and China.92 What can we learn from Mauritius’s experience?

GDP took off like a rocket and with it, shareholder value and CEO pay.26 But… meanwhile, the environmental costs of this growth—trillions of tons of greenhouse gases in the atmosphere, a poisoned ocean, and the widespread destruction of the earth’s natural systems—remained largely invisible. Worldwide inequality fell as several of the developing economies—most notably China—began to catch up to Western levels of income. But in the developed world income inequality has increased enormously. The vast majority of the fruits flowing from the productivity growth of the last twenty years have gone to the top 10 percent of the income distribution, particularly in the United States and the United Kingdom.27 Real incomes at the bottom have stagnated.28 The populist fury that has emerged as a result is threatening the viability of our societies—and of our economies.


pages: 831 words: 98,409

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World by Sandra Navidi

"World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, assortative mating, bank run, barriers to entry, Bear Stearns, Bernie Sanders, Black Swan, Blythe Masters, Bretton Woods, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, commoditize, conceptual framework, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, digital divide, diversification, Dunbar number, East Village, eat what you kill, Elon Musk, eurozone crisis, fake it until you make it, family office, financial engineering, financial repression, Gini coefficient, glass ceiling, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google bus, Gordon Gekko, haute cuisine, high net worth, hindsight bias, income inequality, index fund, intangible asset, Jaron Lanier, Jim Simons, John Meriwether, junk bonds, Kenneth Arrow, Kenneth Rogoff, Kevin Roose, knowledge economy, London Whale, Long Term Capital Management, longitudinal study, Mark Zuckerberg, mass immigration, McMansion, mittelstand, Money creation, money market fund, Myron Scholes, NetJets, Network effects, no-fly zone, offshore financial centre, old-boy network, Parag Khanna, Paul Samuelson, peer-to-peer, performance metric, Peter Thiel, plutocrats, Ponzi scheme, power law, public intellectual, quantitative easing, Renaissance Technologies, rent-seeking, reserve currency, risk tolerance, Robert Gordon, Robert Shiller, rolodex, Satyajit Das, search costs, shareholder value, Sheryl Sandberg, Silicon Valley, social intelligence, sovereign wealth fund, Stephen Hawking, Steve Jobs, subprime mortgage crisis, systems thinking, tech billionaire, The Future of Employment, The Predators' Ball, The Rise and Fall of American Growth, too big to fail, Tyler Cowen, women in the workforce, young professional

While college graduates are 8 times likelier to live in the upper-income tiers—though often with a debt-albatross around their necks—those without a degree have virtually no chance of improving their station in life.11 As a consequence, Americans have come to realize that the American dream has been just that, a dream, and their typically optimistic outlook has given way to gloom, with only 14 percent foreseeing a better life for their children.12 The life expectancy of American whites has been falling as suicide rates are on the rise.13 As evidenced by a recognized measure called the Gini coefficient, the level of inequality in many parts of the world is dismal.14 Globalization Winners versus Globalization Losers To make matters worse, many governments, together with central banks and the financial sector, have resorted to using “accommodative monetary policies”—meaning expanding the overall money supply, or what is commonly referred to as “printing money”—to reduce debts and stimulate demand.

See Wealth gaps Gates, Bill, 4, 70, 128 Geithner, Timothy AIG and, 183 appointment as U.S. treasury secretary, 188 background on, 45–46 at Bilderberg conference, 121 CEO relationships with, 174 Jamie Dimon and, 57 Larry Fink and, 30–31 in Lehman Brothers collapse, 172–173 Nouriel Roubini and, 47 personal relationships and, 11, 172 in public and private sectors, 165 relationship with Bernanke and Paulson, 11 Robert Rubin and, 168 Gekko, Gordon, 191, 210 Gender discrimination, 201 Gender gap, 147, 158–161 Genentech, 199 Generosity, 105 Geneva, Switzerland, 93 Gergiev, Valery, 116 Germany, 37, 39, 84, 116, 141–142, 174, 178, 190 Gini coefficient, 211 Give and Take, 104 “Givers,” 104–105 “Giving Pledge,” 70, 126 “Glass cliff,” 154 Glass-Steagall Act, 167, 188 Glencore, 171, 205 Global Competitiveness Report, 96 “Global corporate citizenship,” 63, 95 Global corporations, 178–179 Global Risk Report, 212 Globalization, xxvi, 8, 95, 97, 211, 213, 220 Goethe, 76 Goethe University Frankfurt, 142 Goldman Sachs, 23, 36, 44, 52, 76, 84, 88, 91, 121, 136, 151, 156, 165–166, 168, 184, 189, 217 Goodbye Gordon Gekko, 24 Google, 40, 114, 199 Gorbachev, Mikhail, 16 Gordon, Robert, 220 Gorman, James, 89 Grant, Adam M., 104 Great Britain, 9 Great Depression, 34, 36, 186, 219 Greece, 27, 110, 132, 177, 194 Greed, 220–221 Green, Michael, 128 Greenspan, Alan, 35–36, 42, 44, 220 Gregory, Joe, 182 Griffin, Kenneth, 76, 82, 87, 121 Grill Room, 124 Grímsson, Olafur Ragnar, 9 Gross, Bill, 53, 65–69 Gross domestic product debt versus, 210 finance as, 12 Group of Thirty, 105, 118, 222–224 Groupthink, 51 Guanxi, 103 Guardian, 87, 160 Guare, John, 18 H Haakon, Prince of Norway, 114 Haines, Stephen, 218 Haldane, Andrew, 214 “Halo effect,” 23 Hamilton, Alexander, 167 Hamilton Project, 168–169 Hamptons, 91 Hanauer, Nick, 13, 212 “Hard power,” 225 Harvard Business Review, 87, 152 Harvard Business School, 41, 57, 61, 199 Harvard Club, 195 Harvard Corporation, 168 Harvard Gay & Lesbian Caucus, 200 Harvard Kennedy School of Government, 96 Harvard Law School, 23, 199 Harvard University, 36, 47, 81–82, 153, 166, 174, 185, 187, 198 Hawking, Stephen, xxvi Hedge fund(s), 23–24, 27, 63, 70–71, 75, 82, 86–87, 111, 188 Hedge fund managers earnings by, 87–88 residences of, 90 women as, 149 Heffernan, Margret, 224 Henry Crown Fellowship Program, 200 Herrhausen, Alfred, 136 Heterophily, 147 Hierarchy creditworthiness and, 51 opposition to change by, 227 purposes of, 225 social, 22 status and, 22 at World Economic Forum, 114 Highbridge Capital Management, 90 “High-Level Conference on the International Monetary System,” 38 Hildebrand, Philipp, 30, 39, 43, 121 Homogeneity description of, 78–79 familiarity and, 102 hegemony of, 79–92 Homophily, 75–92 description of, 41 mentoring based on, 155 shared background and, 79 in spouse selection, 79–80 Hotel De Bilderberg, 120 Hubs definition of, 19 in financial system, 19 links to, 19 network efficiency affected by, 20 system failures caused by failure of, 20 Human capital, 26, 80 Human networks formation of, 98 homophily influences on, 76 position of individuals in, 21 social capital in, 25 Human relationships description of, 7–8, 105 links in, 19 Human thinking, 50, 218 Humor, 102 Hyperconnectivity, 214 I Iceland, 27 Ideologies, 63–64 IGWEL.

Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: W. W. Norton & Company, 2012), 121, Kindle edition. 11. Nick Hanauer, “The Pitchforks Are Coming... For Us Plutocrats,” Politico, July/August 2014, http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.xhtml. 12. Julia La Roche, “Paul Tudor Jones: Income Inequality Will End in Revolution, Taxes, or War,” Business Insider, March 19, 2015, http://www.businessinsider.com/paul-tudor-jones-on-inequality-2015-3. 13. Alec Hogg, “As Inequality Soars, the Nervous Super Rich Are Already Planning Their Escapes,” The Guardian, January 23, 2015, http://www.theguardian.com/public-leaders-network/2015/jan/23/nervous-super-rich-planning-escapes-davos-2015.


pages: 359 words: 97,415

Vanishing Frontiers: The Forces Driving Mexico and the United States Together by Andrew Selee

Berlin Wall, call centre, Capital in the Twenty-First Century by Thomas Piketty, Day of the Dead, Donald Trump, electricity market, energy security, Gini coefficient, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, informal economy, job automation, low skilled workers, manufacturing employment, oil shale / tar sands, open economy, opioid epidemic / opioid crisis, payday loans, public intellectual, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Silicon Valley startup, Steve Wozniak, work culture , Y Combinator

To be sure, there is far less: Coneval, Medición de la pobreza en Mexico y en las entidades federativas 2016 (Mexico: Coneval, 2016), http://www.coneval.org.mx/Medicion/MP/Documents/Pobreza_16/Pobreza_2016_CONEVAL.pdf. But while income inequality has dropped: Mexico still has a higher Gini coefficient, around .48, while the United States’ Gini coefficient is .39, according to the Organization for Economic Cooperation and Development in 2016. However, the US rate has expanded in recent years, while the Mexican rate dropped noticeably over two decades but still remained high. See Mark Deen, “Chile, Mexico, U.S. Have Highest Inequality Rates, OECD Says,” Bloomberg, November 24, 2016. On growing inequality in the United States, see Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014).

He notes that the disparity is probably even greater if you look at assets rather than income, though no reliable data currently allow us to calculate asset inequality in Mexico. Of course, inequality is something that Mexicans and Americans share—both are among the most unequal countries in the world. But while income inequality has dropped slightly in Mexico as educational attainment has increased and the middle class has expanded, it has grown significantly in the United States over the past two decades. Inequality is due in part to fiscal policy, which penalizes smaller businesses and lower middle-income earners, says Esquivel. But it also has to do with the vast differences between the globally integrated sectors of the economy and the more inwardly focused ones.

One study by the McKinsey Global Institute found that the productivity of large Mexican businesses with over a hundred employees had increased by an impressive 5.6 percent a year in the decade from 1999 to 2009, but small businesses with fewer than ten employees had actually lost productivity at the rate of 6.5 percent a year. Medium enterprises with more than ten but fewer than a hundred employees grew at an anemic 1 percent a year. Inequality also persists because most smaller Mexican businesses, including family businesses, remain firmly anchored in the informal economy, where they are not registered and don’t pay taxes but also have no access to credit or long-term security. Over half of Mexico’s nonagricultural workers are in the informal sector, largely because it’s simply too complicated and expensive to register a small business legally.


pages: 471 words: 109,267

The Verdict: Did Labour Change Britain? by Polly Toynbee, David Walker

Alan Greenspan, An Inconvenient Truth, banking crisis, Big bang: deregulation of the City of London, blood diamond, Bob Geldof, Boris Johnson, call centre, central bank independence, congestion charging, Corn Laws, Credit Default Swap, Crossrail, decarbonisation, deglobalization, deindustrialization, Etonian, failed state, first-past-the-post, Frank Gehry, gender pay gap, Gini coefficient, high net worth, hiring and firing, illegal immigration, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, labour market flexibility, market bubble, mass immigration, military-industrial complex, millennium bug, moral panic, North Sea oil, Northern Rock, offshore financial centre, pension reform, plutocrats, Ponzi scheme, profit maximization, purchasing power parity, Right to Buy, shareholder value, Skype, smart meter, social distancing, stem cell, The Spirit Level, too big to fail, University of East Anglia, working-age population, Y2K

Something was pulling incomes apart in all rich countries, except possibly France. Overall income inequality is measured by a standard called the Gini coefficient – the higher it is, the more unequal the society. On a scale of 100 in 2008, the US figure was 46.6. When Labour left office in 1979, the UK stood at 25. It rose during the 1980s, far more than in comparable countries, stabilizing at 34 in the early 1990s. From 1997 it rose two points to 36 – notably higher than Germany, Canada, France and the Scandinavian countries. This amounted to ‘some edging up of inequality under Labour’, but nothing like the big rise in the 1980s. It was largely accounted for by the richest 1 per cent of the population increasing their share of income.

For the first time since the mid 1970s the figures were moving in the right direction. Labour certainly stopped things getting worse. Professor John Hills of the London School of Economics, an expert witness, even put a number on Labour’s impact. Child poverty would have been between 6 and 9 per cent higher if not for Labour’s measures. The Gini coefficient would have gone up three points rather than the two points it actually rose under Labour. A one-point mitigation – that was Labour’s record. Labour’s barrister would claim A for effort: the emphasis on equality in school attainment, public health, programmes for deprived communities, early years interventions, the New Deal for unemployed youth, adults and the disabled, a minimum wage, tax credits.

Gender, race, disability and class can generate injustice, but income decides, binding children’s life chances to their home background. Labour tried but did not quite prevent income inequality getting worse in an already notably unequal country. But they slowed down the rise in inequality. Tax, benefits and spending changes ‘significantly redistributed income to the less well off’, the Centre for Economic Performance concluded. ‘Inequality would have been much higher otherwise.’ The 1997 campaign banned references to poverty as too redolent of Old Labour. So when Blair, having been prime minister for only a month, walked up a disinfected stairway on the Aylesbury estate in Peckham to make his first speech about the plight of the poor, he addressed ‘social exclusion’ instead.


pages: 576 words: 105,655

Austerity: The History of a Dangerous Idea by Mark Blyth

"there is no alternative" (TINA), accounting loophole / creative accounting, Alan Greenspan, balance sheet recession, bank run, banking crisis, Bear Stearns, Black Swan, book value, Bretton Woods, business cycle, buy and hold, capital controls, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, collateralized debt obligation, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, debt deflation, deindustrialization, disintermediation, diversification, en.wikipedia.org, ending welfare as we know it, Eugene Fama: efficient market hypothesis, eurozone crisis, financial engineering, financial repression, fixed income, floating exchange rates, Fractional reserve banking, full employment, German hyperinflation, Gini coefficient, global reserve currency, Greenspan put, Growth in a Time of Debt, high-speed rail, Hyman Minsky, income inequality, information asymmetry, interest rate swap, invisible hand, Irish property bubble, Joseph Schumpeter, Kenneth Rogoff, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Long Term Capital Management, low interest rates, market bubble, market clearing, Martin Wolf, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, Occupy movement, offshore financial centre, paradox of thrift, Philip Mirowski, Phillips curve, Post-Keynesian economics, price stability, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Solow, savings glut, short selling, structural adjustment programs, tail risk, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, Two Sigma, unorthodox policies, value at risk, Washington Consensus, zero-sum game

To put that into perspective, only Norway, Switzerland, Austria, the Netherlands, and Germany—none of which experienced a serious crisis—boast lower rates of unemployment.32 Finally, consider this bonus to the Icelandic experience of not bailing their banks. After initially falling quite rapidly, real wages have been rising at a brisk pace.33 This has helped reverse the trend of growing inequality witnessed between 1995 and 2007, when the after-tax Gini coefficient rose from 0.21 to 0.43, mostly because of the high incomes of top earners—a phenomenon seen in all highly financialized societies. By 2010, when capital income had collapsed and the tax code was reformed, the Gini coefficient was pushed back down to 0.245.34 Can we generalize from Iceland to elsewhere? After all, we previously argued that we should not generalize from the experience of the REBLLs to the much larger states of Southern Europe.

After all, as Andrew Lo noted in a recent wickedly entitled essay called “Reading about the Financial Crisis: A 21-Book Review,” the crisis is both overexplained and overdetermined.2 The crisis is overexplained in that there are so many possible suspects who can be rounded up and accused of being “the cause” that authors can construct convincing narratives featuring almost any culprit from Fannie and Freddie to leverage ratios to income inequality—even though the meltdown obviously was a deeply nonlinear and multicausal process.3 The crisis is overdetermined in that, being a nonlinear, multicausal process, many of these supposed causes could be ruled out and the crisis could still have occurred. For example, three excellent books on the crisis stress, respectively, increasing income inequality in the run-up to the crisis, the captured nature of bank regulation, and the political power of finance. Each book certainly captures an important aspect of the crisis.4 But are these factors absolutely necessary to adequately explain it?

Reinhart and Kenneth S. Rogoff “Growth in a Time of Debt,” American Economic Review, 100, 2 (2010): 573–578. 28. Timothy Noah, “Introducing the Great Divergence,” Slate, September 3, 2010, Part of a series entitled “The United States of Inequality,” http://www.slate.com/articles/news_and_politics/the_great_divergence/features/2010/the_united_states_of_inequality/introducing_the_great_divergence.html. 29. See US Census Bureau website, http://www.census.gov/hhes/www/poverty/about/overview/index.html, accessed September 19, 2011. 30. Robert Wade in John Ravenhill (2010), Global Political Economy, 3rd ed.


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

active measures, active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, cakes and ale, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, cognitive load, 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, longitudinal study, lump of labour, Mahatma Gandhi, Mahbub ul Haq, meta-analysis, microcredit, move 37, 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, twin studies, urban planning, Washington Consensus, Winter of Discontent, working poor

There are, though, major challenges to health equity, prominent among them increasing economic and social inequalities and the lack of political response to them. Jean Drèze and Amartya Sen entitled their latest book on India An Uncertain Glory. It was a reflection that there are things both glorious and not so glorious about India’s progress. They identify inequality in India as a cause of major unsolved problems. They do not, however, think that it is well captured by a simple measure of income inequality such as the Gini coefficient (in which everyone’s income is ranked from lowest to highest, and a calculation made of dispersion; if everyone had the same income the Gini would be 0; if one person had all the income the Gini would be 1; the greater the inequality the higher the Gini in the range 0 to 1).

Even were you concerned only with economic growth, greater equality makes sense, but as I have tried to make plain, exorbitant inequality damages our lives, and has impact on the social gradient in health. There are strong moral and practical reasons to be concerned. FIGURE 11.1: GINI COEFFICIENTS OF INCOME INEQUALITY, OECD COUNTRIES, MID-1980S AND 2011/12 If we turn from income to wealth, again we see enormous inequalities. According to the Economist, global wealth grew from $117 trillion in 2000 to $262 trillion in 2014.7 That comes to $56,000 for each adult on the planet. 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.

Recognising the rights of people of all ages will improve all our lives. My theme through the book is that inequities in society lead to inequities in health. In this chapter, I will focus on inequities in health and functioning of older people between countries and inequities between social groups within countries. By doing so, I hope to address a further challenge to a moral society: inequities between older people and the rest of society. Year on year, as age creeps on, I become less tolerant of these age-based inequities. Maria from Brazil is my heroine, along with the novelists, orchestra conductors, the Rolling Stones, charity organisers and local volunteers who in their later decades make society just a little better.


Succeeding With AI: How to Make AI Work for Your Business by Veljko Krunic

AI winter, Albert Einstein, algorithmic trading, AlphaGo, Amazon Web Services, anti-fragile, anti-pattern, artificial general intelligence, autonomous vehicles, Bayesian statistics, bioinformatics, Black Swan, Boeing 737 MAX, business process, cloud computing, commoditize, computer vision, correlation coefficient, data is the new oil, data science, deep learning, DeepMind, en.wikipedia.org, fail fast, Gini coefficient, high net worth, information retrieval, Internet of things, iterative process, job automation, Lean Startup, license plate recognition, minimum viable product, natural language processing, recommendation engine, self-driving car, sentiment analysis, Silicon Valley, six sigma, smart cities, speech recognition, statistical model, strong AI, tail risk, The Design of Experiments, the scientific method, web application, zero-sum game

Unfortunately, your data science team doesn’t have strong business domain knowledge, and they provide you with a metric that you don’t understand—let’s call it the Gini coefficient. If they do well on that metric, the project will help your business. Answer to question 8: Good luck! This is an example of using a technical metric that has an unclear relation to your business. Consequently, it’s not clear what value of the Gini coefficient is “good” for your business. Now you have a technical team measuring themselves based on improving “Gini,” and a business team making decisions based Answers to chapter 1 exercises 227 on some other criteria.

Question 7: All AI tools are created equal. Question 8: You’re a project executive, and you leave the definition of the evaluation metrics to your data science team. Unfortunately, your data science team doesn’t have strong business domain knowledge, and they provide you with a metric that you don’t understand—let’s call it the Gini coefficient. If they do well on that metric, the project will help your business. 1.12.2 Longer exercises: Identify the problem A short narrative description of a hypothetical project or actions taken during the individual projects follows. What’s your opinion of the situation described? Question 1: A friend who works in the IT department of an organization somewhat similar to yours uses tool X and approach Y with great success.

[Cited 2019 Sep 9.] Available from: https://www.microsoft .com/en-us/research/group/fate/ Pichai S. AI at Google: Our principles. Google. 2018 Jun 7 [cited 2018 Jun 30]. Available from: https://www.blog.google/technology/ai/ai-principles/ O’Neil C. Weapons of math destruction: How big data increases inequality and threatens democracy. New York: Crown; 2016. Corbett-Davies S, Goel S. The measure and mismeasure of fairness: A critical review of fair machine learning. arXiv. 2018 Jul;arXiv:1808.00023 [cs.CY]. Zöller M-A, Huber MF. Benchmark and survey of automated machine learning frameworks. arXiv. 2019 Apr;arXiv:1904.12054 [cs.LG].


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, flag carrier, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, Great Leap Forward, guns versus butter model, high-speed rail, income inequality, income per capita, indoor plumbing, informal economy, intermodal, inverted yield curve, invisible hand, It's morning again in America, Kenneth Rogoff, knowledge economy, late capitalism, Les Trente Glorieuses, linear programming, low interest rates, manufacturing employment, Multi Fibre Arrangement, new economy, Nixon shock, Nixon triggered the end of the Bretton Woods system, North Sea oil, oil shock, Paul Samuelson, pension reform, Phillips curve, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

Smith, Income, Poverty, and Health Insurance Coverage in the United States: 2012, US Census Bureau, Current Population Reports, P60–245 (September 2013), Table A-4; Atkinson and Morelli, “Chartbook of Economic Inequality.” In the United States, the Gini coefficient of household gross income reached its lowest level in 1974. 7. Alissa Goodman and Steven Webb, “For Richer, for Poorer: The Changing Distribution of Income in the United Kingdom, 1961–91,” Institute for Fiscal Studies, 1994, 15–17, 40, 56–60; Mike Brewer, Alastair Muriel, and Liam Wren-Lewis, “Accounting for Changes in Inequality Since 1968: Decomposition Analyses for Great Britain,” Institute for Fiscal Studies, 2009; UK Office for National Statistics, “Middle-Income Households, 1977–2011/12,” December 2, 2013; A.

The other countries for which Atkinson and Morelli provide relevant data for the 1950s and 1960s are Australia, Canada, Finland, France, Great Britain, Japan, New Zealand, Norway, South Africa, Sweden, and the United States. In Japan, the Gini coefficient, a measure that would equal 0 if each household had an equal share of the nation’s income and 1 if all income belonged to a single household, fell from around 0.3 before the war to 0.04 in 1953, indicating a very high degree of equality. See T. Mizoguchi, “Long-run Fluctuations in Income Distribution in Japan,” Economic Review 37 (1986): 152–158, cited in Toshiaki Tachibanaki, Confronting Income Inequality in Japan (Cambridge, MA: MIT Press, 2005), 59. 4. Facundo Alvaredo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez, “The Top 1% in International and Historical Perspective,” Journal of Economic Perspectives 27 (2013): 7; Richard T.

Even though higher pensions and other government benefits boosted the incomes of some population groups, especially retirees and single parents, income distribution grew far more skewed in the 1980s, and would continue to grow increasingly unequal for decades beyond.7 The disparities in other wealthy countries were less stark, in most cases because government stepped in to reduce the effects of less equal wages. In Canada, for example, wage inequality increased from the mid-1970s but income inequality did not, thanks to government benefits that targeted low-wage workers. It was not until the 1980s that the top wage earners began to pull away. In Japan, incomes became more equal through the 1970s; but once inequality began to rise, around 1981, it advanced so steadily that by 2005 one author could write that it was “approaching the highest among advanced countries.” Sweden, long thought of as a bastion of social-democratic equality, saw income disparities begin to increase around 1981, and so did Spain and Switzerland.


pages: 476 words: 125,219

Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy by Robert W. McChesney

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, Alan Greenspan, Albert Einstein, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, AOL-Time Warner, Automated Insights, barriers to entry, Berlin Wall, Big Tech, business cycle, Cass Sunstein, citizen journalism, classic study, cloud computing, collaborative consumption, collective bargaining, company town, creative destruction, crony capitalism, David Brooks, death of newspapers, declining real wages, digital capitalism, digital divide, disinformation, Double Irish / Dutch Sandwich, Dr. Strangelove, Erik Brynjolfsson, Evgeny Morozov, failed state, fake news, Filter Bubble, fulfillment center, full employment, future of journalism, George Gilder, Gini coefficient, Google Earth, income inequality, informal economy, intangible asset, invention of agriculture, invisible hand, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Perry Barlow, Joseph Schumpeter, Julian Assange, Kickstarter, Mark Zuckerberg, Marshall McLuhan, means of production, Metcalfe’s law, military-industrial complex, mutually assured destruction, national security letter, Nelson Mandela, Network effects, new economy, New Journalism, Nicholas Carr, Occupy movement, ocean acidification, offshore financial centre, patent troll, Peter Thiel, plutocrats, post scarcity, Post-Keynesian economics, power law, price mechanism, profit maximization, profit motive, public intellectual, QWERTY keyboard, Ralph Nader, Richard Stallman, road to serfdom, Robert Metcalfe, Saturday Night Live, sentiment analysis, Silicon Valley, Silicon Valley billionaire, single-payer health, Skype, spectrum auction, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, technological determinism, Telecommunications Act of 1996, the long tail, the medium is the message, The Spirit Level, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, Upton Sinclair, WikiLeaks, winner-take-all economy, yellow journalism, Yochai Benkler

Bureau of Labor Statistics, “Labor Productivity (Output Per Hour)” (PRS85006091) and “Real Hourly Compensation” (PRS85006151), Nonfarm Business, bls.gov. Economists have long used the Gini index, or Gini coefficient, to measure inequality within nations, with a score of zero being perfect economic equality (everyone getting the same income) and a score of one being perfect economic inequality (one person getting all the income in the nation). In 2009, the most recent calculation available, the Gini coefficient for the United States was 0.47, a 20 percent rise in income disparity over the past forty years, according to the U.S. Census Bureau. Germany (0.27), Italy (0.32), Ireland (0.29), and Sweden (0.23) give some sense of where European nations are in calculations determined between 2005 and 2009.

“I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”34 American economic inequality is the direst threat to effective democracy, which is premised upon political equality. Timothy Noah calls it the Great Divergence in his illuminating 2012 book of that title. He concludes from his research that there is consensus among most experts about the existence of economic inequality and, increasingly, its causes.35 It is difficult to reconcile such extreme inequality with anything but a superficial democracy. Ironically the one issue that best demonstrates that may be inequality itself. Michael Norton of Harvard Business School and Dan Ariely of Duke created a survey to determine what Americans considered a desirable level of inequality in society.

Likewise, it is for this reason that most capitalists not only oppose unions but use their political muscle to support politicians and laws that will make organizing unions more difficult, if not impossible.15 One of the great stories of the past generation in the United States, overlapping the digital revolution, has been the collapse of organized labor, the stagnation of wages, and the massive increase in economic inequality. During these times the rich have prospered and everyone else has floundered. Joseph Stiglitz states that the field of economics has provided no credible justification for anything remotely close to America’s staggering inequality.16 Pundits and politicians tell us that increasing inequality is a function of a new information economy that rewards skilled workers—a necessary consequence of an innovative and dynamic economy. Scholars like James Galbraith, as well as Jacob Hacker and Paul Pierson, systematically demolish this rationalization.


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It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, Alan Greenspan, Apollo 11, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Black Lives Matter, Boeing 747, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, clean tech, clean water, coronavirus, Crossrail, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, driverless car, Elon Musk, Exxon Valdez, factory automation, failed state, fake news, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, independent contractor, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, Modern Monetary Theory, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plant based meat, plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, Tyler Cowen, uber lyft, universal basic income, War on Poverty, Washington Consensus, We are all Keynesians now, WikiLeaks, working poor, Works Progress Administration

Perhaps some future condition will change this, but for the moment, America, China, and parts of Europe are generating income inequality. YET BROADLY ACROSS THE WORLD, inequality is decreasing, not rising. Milanovic calculates that beginning in 1988—roughly when China and India liberalized and free-market international trade began to surge—the overall inequality of the world has declined about 10 percent. Economists measure inequality using the Gini coefficient, a scale on which the lower the number, the better. “Since 1988, the global Gini coefficient has fallen from 0.69 to 0.63,” Milanovic says. “That represents the first overall decline of inequality during the industrial era. The reason is the amazing decrease in poverty.

So would China have been better off remaining in the year 1990? Ideal would have been the same reduction of poverty minus the inequality, but this may not be possible, at least in today’s world. Branko Milanovic, a Serbian-born economist at City University of New York, whose academic specialty is inequality research, says, “In China, less poverty and more inequality were part and parcel of each other. Probably there would have been no way to get the economic growth without the increased inequality and opportunities for corruption.” Perhaps there would have been no way to achieve the rising living standards that are benefiting most of the world without the insecurity that market forces generate, or without the side effect of an outsized One Percent whose opulence is offensive and whose political influence distorts every system of government.

That federal entitlement spending is backed by two sources—taxes on the affluent and borrowing from the young through the national debt. Both are income-transfer mechanisms. Yet income inequality still is high. The Belarus-born economist Simon Kuznets, who won the Nobel Prize in Economics in 1971, showed that industrial development first increases and then decreases inequality. This formula has held since 1971 in most nations: if Kuznets continues to be correct, inequality in China soon will moderate. But inequality currents of the past century in the United States and Europe have been more like rolling waves than Kuznets expected, even discounting for the world wars.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

affirmative action, Alan Greenspan, Albert Einstein, Andrei Shleifer, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Boeing 747, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Cass Sunstein, central bank independence, classic study, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency risk, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, Great Leap Forward, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, libertarian paternalism, low interest rates, low skilled workers, Malacca Straits, managed futures, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, school vouchers, seminal paper, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, tech worker, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

In 2007, the United States had a Gini index of 45, compared to 28 for France, 23 for Sweden, and 57 for Brazil. By this measure, the United States has grown more unequal over the past several decades. America’s Gini coefficient was 36.5 in 1980 and 37.9 in 1950. Size of government. If we are going to complain about “big government,” we ought to at least know how big that government is. One relatively simple measure of the size of government is the ratio of all government spending (local, state, and federal) to GDP. Government spending in America has historically been around 30 percent of GDP, which is low by the standards of the developed world.

Nonetheless, the broader point is valid. * To derive the Gini index, the personal incomes in a country are arranged in ascending order. A line, the Lorenz curve, plots the cumulative share of personal income against the cumulative share of population. Total equality would be a 45-degree line. The Gini coefficient is the ratio of the area between the diagonal and the Lorenz curve to the total area under the diagonal. * I can’t remember the exact numbers, but they were something along these lines. * Okay, that’s not exactly true. At the height of the financial crisis, right around the time that Lehman Brothers declared bankruptcy, the yield on three-month U.S.

Our only resounding success is poverty among the elderly, which has fallen from 30 percent in the 1960s to below 10 percent, largely as the result of Social Security. Income inequality. We care about the size of the pie; we also care about how it is sliced. Economists have a tool that collapses income inequality into a single number, the Gini index.* On this scale, a score of zero represents total equality—a state in which every worker earns exactly the same. At the other end, a score of 100 represents total inequality—a state in which all income is earned by one individual. The countries of the world can be arrayed along this continuum. In 2007, the United States had a Gini index of 45, compared to 28 for France, 23 for Sweden, and 57 for Brazil.


pages: 505 words: 138,917

Open: The Story of Human Progress by Johan Norberg

Abraham Maslow, additive manufacturing, affirmative action, Albert Einstein, anti-globalists, basic income, Berlin Wall, Bernie Sanders, Bletchley Park, Brexit referendum, British Empire, business cycle, business process, California gold rush, carbon tax, citizen journalism, classic study, Clayton Christensen, clean water, cognitive dissonance, collective bargaining, Corn Laws, coronavirus, COVID-19, creative destruction, crony capitalism, decarbonisation, deindustrialization, Deng Xiaoping, digital map, Donald Trump, Edward Jenner, fake news, Fall of the Berlin Wall, falling living standards, Filter Bubble, financial innovation, flying shuttle, Flynn Effect, Francis Fukuyama: the end of history, future of work, Galaxy Zoo, George Gilder, Gini coefficient, global pandemic, global supply chain, global village, green new deal, humanitarian revolution, illegal immigration, income per capita, Indoor air pollution, indoor plumbing, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Islamic Golden Age, James Watt: steam engine, Jane Jacobs, Jeff Bezos, job automation, John von Neumann, joint-stock company, Joseph Schumpeter, Kickstarter, knowledge economy, labour mobility, Lao Tzu, liberal capitalism, manufacturing employment, mass immigration, negative emissions, Network effects, open borders, open economy, Pax Mongolica, place-making, profit motive, RAND corporation, regulatory arbitrage, rent control, Republic of Letters, road to serfdom, Ronald Reagan, Schrödinger's Cat, sharing economy, side project, Silicon Valley, Solyndra, spice trade, stem cell, Steve Bannon, Steve Jobs, Steve Wozniak, Steven Pinker, tacit knowledge, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade liberalization, trade route, transatlantic slave trade, Tyler Cowen, Uber for X, ultimatum game, universal basic income, World Values Survey, Xiaogang Anhui farmers, zero-sum game

Economic opening and ensuing growth since then have reduced the share of extremely poor to one in ten Chinese. Of course, these advances did not take place at the same rate everywhere (the greatest growth was in cities and along the coasts). Therefore inequality increased rapidly, from a Gini coefficient (a measure between 0 and 1 of a country’s inequality: the closer the number is to 1, the greater the degree of inequality) of around 0.3 to almost 0.5. Anyone who sees equality as the most important value would consider this development to be a terrible setback. Those who see poverty as the big problem see it as one of the greatest advances ever made.24 Some get rich by stealing and some get rich by abusing a monopoly position, but on a free market the most common way of becoming rich is to give customers the goods and services they crave.

(Fukuyama), 362–5 End of Work, The (Rifkin), 312 Engels, Friedrich, 33, 36, 162, 206, 247, 256 English Civil War (1642–1651), 148, 183, 184, 201 Enigma machine, 124–6 Enlightenment, 4, 5, 6, 13, 103, 154–60, 165–6, 195–6 Environmental Performance Index, 327 Ephesus, 45 Epic of Gilgamesh, The, 38 Epicurus, 134–5 Epstein, Richard, 320 equality matching, 262–6, 267 Erasmus, 152 Erdogan, Recep Tayyip, 354 Ethiopia, 72, 130 ethnocentrism, 219, 271 Etruscan civilization (c. 900–27 BC), 43 Eubulus, 47 eugenics, 109 Euphrates river, 37 Euripides, 132 European Organization for Nuclear Research, 306 European Parliament, 325 European Union (EU) Brexit (2016–), 9, 14, 118, 238, 240–41, 349, 354, 379 common currency, 280–81 freedom of movement, 118, 343 migration crisis (2015–), 10, 114, 115, 342–3, 358 subsidies in, 280 trade and, 272 United States, trade with, 19 Evans, Oliver, 203 Evolution of God, The (Wright), 249 evolutionary psychology, 14, 23, 225 exoticism, 84 Expressionism, 198 Facebook, 239, 309 Falwell, Jerry, 113–14 Farage, Nigel, 241 farming, see agriculture Fascist Italy (1922–1943), 105, 219 FedEx, 319 Feifer, Jason, 290–92 Fenway Park, Boston, 223 Ferdinand II, King of Aragon, 97, 98, 106 Ferguson, Charles, 314 Fermi, Enrico, 105 Ferney, France, 153 feudalism, 92, 194, 202, 208 fight-or-flight instinct, 15, 346, 348–9 filter bubbles, 239 financial crisis (2008), 10, 15, 62, 254, 333, 358, 359–60 fire, control of, 32–3, 76 Flanders, 208 fluyts, 100 Flynn effect, 109 Fogel, Robert, 276 folk economics, 258–62 football, 223–4, 245–6 Forbes, 274 Ford, Henry, 203 Fortune 500 companies, 82 Fox News, 82, 302, 354 France, 151 American Revolutionary War (1775–83), 201 automation in, 313 Cathars, 94, 142 Cobden–Chevalier Treaty (1860), 53–4 corruption in, 345 Dutch War (1672–8), 101 Encyclopédie, 154 free zones in, 180–81 Huguenots, persecution of, 97, 99, 101, 158, 193 immigration in, 115 Jews, persecution of, 96, 97, 254 languages in, 289 Minitel, 313 Revolution (1789–99), 201, 292 Royal Academy of Sciences, 156 ruin follies, 287 St Bartholomew’s Day massacre (1572), 97 Thököly Uprising (1678–85), 137 Uber in, 320 University of Paris, 140, 141–2, 143 Francis I, Emperor of Austria-Hungary, 178 Franciscans, 144 Franklin, Benjamin, 107 Franks, 92 free speech, 127, 131–2, 160, 163–5, 343 Chicago principles, 164–5 emigration for, 152–3 university campuses, 163–5 free trade, see under trade Fried, Dan, 289 Friedman, Benjamin, 253 Friedman, David, 284 Friedman, Thomas, 325 Friedrich Wilhelm I, King of Prussia, 153 Fukuyama, Francis, 362–5 Fulda, Germany, 179, 180 Future and Its Enemies, The (Postrel), 300 Future of Nostalgia, The (Boym), 288 Galatia, 90 Galaxy Zoo, 80 Galilei, Galileo, 146, 150 Gallup, 164 game theory, 26 Gandhi, Indira, 326 gas lighting, 297 Gates, William ‘Bill’, 274, 277, 309 Gauls, 90, 91, 92 gay rights, 113, 336 Geary, Patrick, 288–9 gender equality, 113, 114 General Motors, 64 generations baby-boom generation (1946–64), 294, 340 generation X (1965–80), 340 immigration and, 106, 110–11, 113–14 interwar generation (1928–45), 340 millennial generation (1981–96), 340 nostalgia and, 291, 293–4, 296 genetically modified organisms (GMO), 299, 301 Geneva, Switzerland, 152, 153 Genghis Khan, 94–5, 96, 174 Genoa, Republic of (1005–1797), 73, 178 George II, King of Great Britain and Ireland, 193 George III, King of Great Britain and Ireland, 103, 193 George Mason University, 257, 258 Georgia, 365 Georgia, United States, 349 German Conservative Party, 254 Germany automatic looms, 179 Berlin Wall, fall of (1989), 10, 340, 341, 363, 364 Bronze Age migration, 75 budget deficits, 60 COVID-19 pandemic (2019–20), 12 guilds in, 190 immigration in, 114, 115 Jews, persecution of, 99, 104–6, 109, 220, 233 migration crisis (2015–), 342–3 Nazi period (1933–45), 104–6, 109, 124, 220, 233, 353 Neolithic migration, 74 protectionism in, 314 Reichstag fire (1933), 353 Thirty Years War (1618–48), 150 United States, migration to, 104, 107–8, 111 Weimar period (1918–33), 353 al-Ghazali, 139 Gholia, 89 Gibbon, Edward, 90 Gilder, George, 314 Gilgamesh, 38 Gillis, John, 291 Gingrich, Newton, 313 Gini coefficient, 273 Gintis, Herbert, 36 global history, 13 global price crisis (2010–11), 11 global warming, 75, 323, 325, 326–34 globalization, 4, 55, 270 backlashes against, 9, 14, 54, 57 cities and, 35 classical world, 43–50 conspiracy theories on, 323 disease and, 11, 77–9 United States and, 19 Westernization, 4 Glorious Revolution (1688), 101, 185–8, 190, 193 Goa, India, 146–7 golden nugget theory, 5 Golden Rule, 251–2 Golding, William, 219, 243, 244 Goldstone, Jack, 5, 133, 353 Goodness Paradox, The (Wrangham), 227 Google, 309, 311 Gordon, Thomas, 201 Göring, Hermann, 106 gossip, 229 Goths, 92 Gottlieb, Anthony, 135 Great Awakening (1730–55), 102 Great Depression (1929–39), 54–5, 56, 254 Great Enrichment, 167, 204 Great Recession (2007–9), 254–5, 358, 359–60 Great Transformation, The (Polanyi), 37 Great Vanishing, 134–5 Great Wall of China, 178 Greece, ancient, 127–32, 169 Athens, 47, 53, 89, 90, 131–2, 134 Axial Age, 129 cosmopolitanism, 87–8 golden nugget theory, 5 Ionian enlightenment, 127–9 Mycenae, 88 philosophy, 13, 70, 127–32, 134–5, 136 Phoenicians, relations with, 43, 44, 45, 46 science, 127–32, 136 Sparta, 47, 54, 90, 132 trade, attitudes towards, 47, 54 xenophobia in, 90 Green New Deal, 302 Greene, Joshua, 216, 259 Greenland, 51 Gregorian calendar, 137, 152 Gregory IX, Pope, 142 Gregory XIII, Pope, 152 gross domestic product (GDP), 68–9, 257, 278–9 Grotius, Hugo, 147, 152–3 groupthink, 83 Guangzhou, Guangdong, 352 guilds, 190 Gutenberg, Johannes, 146 Haber, Fritz, 105 Habsburg Empire (1282–1918) anti-Semitism in, 254 Austria, 151, 179, 190 refugees, 99 Spain, 98–9, 208 Hadrian, Roman Emperor, 91 Hadrian’s Wall, 47 Hagley Park, West Midlands, 286–7 Haidt, Jonathan, 163, 229, 344, 348, 357 Haile Selassie, Emperor of Ethiopia, 72 Hamas, 365 Hangzhou, Zhejiang, 173 Hanseatic League (1358–1862), 53 Hanson, Robin, 282 Hanway, Jonas, 298 Happy Days, 294 Harari, Yuval Noah, 38 Harriot, Thomas, 150 Hartsoeker, Nicolaas, 159 Harvard Business Review, 313 Harvard University, 116, 122, 137, 253, 309, 313 Haskell, Thomas, 206 Hässelby, Stockholm, 217–18, 245 Hayashi, Stuart, 370 Hayek, Friedrich, 1, 7, 29, 300, 325 Hebrew Bible, 248–50 Hegel, Georg Wilhelm Friedrich, 288, 365 Helm, Dieter, 328, 331 Henrich, Joseph, 36 Hercules, 87 Herodotus, 132 Hewlett-Packard, 304 Higgs, Robert, 337 Hill, Christopher, 182 Hinduism, 136, 149, 354 von Hippel, William, 24, 25, 262, 284 Hippocrates, 128 Hispanic people, 110–11 Hitler, Adolf, 104–5, 353 Hobbes, Thomas, 9, 152, 226 Hofer, Johannes, 288 Holmgren, Pär, 325 Holocaust (1941–5), 109, 220 Holy Roman Empire (800–1806), 155, 181, 288 Homestead Acts, 171 Homo economicus, 34, 36 Homo erectus, 76, 267 Homo sapiens, 3, 21, 23, 30–33, 76, 259–62, 282, 371 homosexuality, 79, 113–14, 336 Homs, Syria, 82 Honeywell, 303 Hong Kong, 53, 235, 316 Hoover, Herbert, 55 horseshoes, 203 House of Wisdom, Baghdad, 136 Household Narrative, The, 297 housing, 375–6 Huguenots, 97, 99, 101, 158, 193 human rights, 87, 147, 213 humanitarianism, 204–7 Hume, David, 151, 154, 194 Hungary, 105, 190, 235, 237, 354, 357 hunkering down, 121, 165 Huns, 93 hunter-gatherer societies death rate, 9 disease and, 78 division of labour and, 29, 32, 40–41, 57 equality matching, 262–3, 265 inbreeding and, 78 isolation and, 52 migration, 73–4, 78–9 physical fallacy, 268 race and, 232 trade, 265 tyranny of cousins, 230 Huntington, Samuel, 110, 362–3, 365–6 Hussein, Saddam, 345 Hussey, Edward, 287 Hutchins, Robert Maynard, 165 Hutus, 230–31 Hypatia, 134 hyper-fast stars, 80 IBM, 305, 307, 319 Ibn al-Haytham, 156 Ibn Hayyan, Jabir, 156 Ibn Rushd, 137–8, 143, 144, 145 ice core drilling, 49 Identity & Violence (Sen), 231 identity politics, 241 al-Idrisi, Muhammad, 137 immigration birth rates and, 115 crime and, 110, 119 culture and, 69–73, 116, 119, 120–23 disgust and, 336, 371 division of labour and, 117 empires and, 84–106 European migration crisis (2015–), 10, 114, 115, 118, 342–3 exoticism, 84 GDP and, 68 innovation and, 81–4 Islam and, 112–14, 255 labour market and, 115, 116–19 opposition to, 69, 70, 114–23, 223, 254–5 productivity and, 68, 81, 117, 204 protectionism and, 66–7 self-selection and, 107, 112 skilled vs unskilled, 66, 82, 102, 116, 117 trade and, 35, 66–7, 234–5 tribalism and, 223, 235–6, 240, 243 urban vs rural areas, 114 welfare and, 118, 281 zero-sum thinking and, 254–5, 259 immigration in United States, 102–14 crime and, 110, 119 innovation and, 81–2, 202 overestimation of, 115, 223 tribalism and, 223, 240 zero-sum thinking and, 254–5, 259 In Defence of Global Capitalism (Norberg), 270 in vitro fertilization, 298–9 inbreeding, 78 India, 42, 45, 46, 56, 75, 129, 136, 140, 146, 270 Arabic numerals, 70, 137 engineering in, 269 Hindu nationalism, 354 industrialization, 207 Maurya Empire (323–184 BC), 53 Mughal Empire (1526–1857), 98, 148, 149, 215 national stereotypes, 235 Pakistan, relations with, 366 pollution in, 326 poverty in, 276, 326 Indo-European language, 75 Indonesia, 41 Industrial Revolution; industrialization, 5, 6, 13, 54, 132, 180, 339 in Britain, 182, 188–99, 202 in China, 169, 172–3, 207 climate change and, 326 in Dutch Republic, 101 in India, 207 in Japan, 71 in United States, 202, 291–2 in Vietnam, 207 inequality, 273, 349 Inglehart, Ronald, 339 ingroups and outgroups, 217–47 fluidity, 230–38 political, 224–5, 238–42 zero-sum relationships and, 252–5 Innocent III, Pope, 233 InnoCentive, 126–7 innovation, 4, 6, 10, 27, 80 ancient world, 32, 42, 44, 46 authoritarianism and, 318 bureaucratic inertia and, 318–21 canon and, 195 cities and, 40, 53, 79 creative destruction, 57, 179, 182, 190 cultural evolution, 28 immigration and 81–4 patent systems, 189–90 population and, 27, 51, 53 Schumpeterian profits, 273–5 resistance to, 10, 179–81 zero-sum thinking and, 266–9 Inquisition, 150 France, 94, 143 Portugal, 100 Spain, 97, 98 intellectual property, 58 Intergalactic Computer Network, 307 International Monetary Fund (IMF), 117 Internet, 57, 275, 278, 306–11, 312, 313 interwar generation (1928–45), 340 Inuit, 22, 51 Ionian enlightenment, 127–9 IQ (intelligence quotient), 109 Iran, 365 Ireland, 104, 108–9, 111, 112, 379 iron, 172 Isabella I, Queen of Castile, 97 Isaiah, 46 Isaura Palaia, Galatia, 90 Isenberg, Daniel, 296 Isis, 89 Islam; Islamic world Arab Spring (2011), 10, 342 clash of civilizations narrative, 237, 365 conflict within, 365 efflorescence, 6, 53, 136–41 fundamentalism, 112, 134, 139, 351 Koran, 137, 250–51 migration from, 112–14 orthodox backlash, 148–9 philosophy, 5, 13 science, 70, 132, 136–41 values in, 112, 113 Islamic State, 351, 365–6 Islamic world, 5, 6, 13, 53, 70 Israel, 111, 365 Italy, 6, 151, 169 anti-Semitism in, 254 Fascist period (1922–1943), 105 Genoa, Republic of (1005–1797), 73, 178 guilds in, 190 Lombard League (1167–1250), 181 Ötzi, 1–2, 8–9, 73, 74 Padua, 144, 146 Papacy in, 155, 181 Renaissance, 6, 150, 153, 169 United States, migration to, 104, 109 Venice, Republic of (697–1797), 53, 144, 152, 174, 181 Jacobs, Jane, 39–40, 79, 264 James II and VII, King of England, Scotland and Ireland, 185–6 Jamestown, Virginia, 200 Japan housing in, 376 kimonos, 73 Meiji Restoration (1868), 53, 70–71 protectionism, 314 Tokugawa Shogunate (1600–1868), 54 United States, migration to, 104, 236, 335 Japanning, 156 JavaScript, 310 jealous emulation, 154–7 jeans, 73 Jefferson, Thomas, 103, 184, 201, 205 Jenner, Edward, 296 Jerusalem, 87, 251 Jesus, 250 Jews in Abbasid Caliphate, 136 anti-Semitism, 254–5, 356 Ashkenazim, 99 Babylonian captivity, 87, 249 Bible, 46, 72, 248–50 Black Death and, 355–6 in Britain, 101, 193 in Dutch Republic, 99, 100, 150 in Germany, 99, 104–6, 109, 111, 254 Inquisition and, 97, 98 in Israel, 111 Mongol invasion and, 95 Muhammed and, 251 Nazirites, 72 in Ottoman Empire, 98 persecution of, 11, 95–7, 109, 220, 233, 251, 355–6 in Poland, 111, 220 in Roman Empire, 90, 93, 94 Sephardim, 99 in Song Empire, 170 in Spain, 97, 98, 99, 140 in United States, 102, 109 Jim Crow laws (1877–1965), 106, 254 Job Buddy, 375 Jobless Future, The (Aronowitz), 312 Jobs, Steven, 82, 304 John Chrysostom, 135 John III Sobieski, King of Poland, 237, 238 Johnson, Samuel, 191, 197 Johnson, Steven, 306 Jones, Rhys, 51 Joule, James Prescott, 196 Judaism, 46, 72, 93, 94, 96, 97 Jupiter, 145 Jurchen people, 172 Justinian I, Byzantine Emperor, 134, 224 Kahn, Robert, 307 Kandinsky, Wassily, 220–21, 289 Kant, Immanuel, 154 Karakorum, Mongol Empire, 96 al-Karaouine, Morocco, 137 Kearney, Denis, 109 keels, 44 Kenya, 21–2 Khayyam, Omar, 137 al-Khwarizmi, 137 Kiesling, Lynne, 328 Kim Jong-il, 314–15 kimonos, 73 King, Martin Luther, 19 King, Steven, 111 Kipling, Rudyard, 70 Klee, Paul, 220–21, 289 Know-Nothings, 108–9 Kodak, 319 Koran, 137, 250–51 Kramer, Samuel Noah, 37, 292 Krastev, Ivan, 342–3 Krugman, Paul, 309 Ku Klux Klan, 254 Kublai Khan, 174 Kurds, 136 Kushim, 37–8 labour mobility, 69, 374–7 lacquerware, 156 lactose, 75 Lao Tzu, 129 lapis lazuli, 70 Late Bronze-Age Collapse (1200–1150 BC), 44, 49, 54 Lebanon, 43, 236 Lee, William, 179 leisure, 199 Lenin, Vladimir, 256 Lesbos, 141 Levellers, 183–4, 186 Leviathan (Hobbes), 152 Levinovitz, Alan Jay, 290 Levy, David, 205 Lewis, David Levering, 140 Libanius, 49 liberalism, 14, 183, 334–40 colonialism and, 214 disgust and, 335, 336 dynamism and, 301 economic, 185, 336 Islam and, 112–14 security and, 334–40, 378 slave trade and, 205 universities and, 163 Libya, 48, 89, 366 Licklider, Joseph Carl Robnett, 307 life expectancy, 4, 169, 339 light bulbs, 297 Lilburne, John, 183 Lincoln, Abraham, 203 Lind, Amanda, 72 Lindsey, Brink, 301 literacy, 15, 57, 168 in Britain, 188, 198 in China, 148 in Dark Ages, 50 empathy and, 246–7 in Greece, 128–9 in Renaissance, 146, 148 Lithuania, 238 Little Ice Age, 148 lobbying, 280, 329 Locke, John, 100, 152, 185, 186, 201 Lombard League, 181 London, England, 190, 193–4, 197 7/7 bombings (2005), 341 London Bridge stabbings (2019), 120 Long Depression (1873–86), 253–4 Lord of the Flies (Golding), 219, 243, 244 Lord’s Resistance Army, 365 Louis IX, King of France, 96 Louis XIV, King of France, 237 Louis XVI, King of France, 201 love, 199 Lucas, Robert, 167 Lucy, 24–5 Lugh, 89 Lul, 111 Luther, Martin, 150, 356 Lutheranism, 99, 356 Lüthi, Max, 351 Lysenko, Trofim, 162 Lyttelton family, 286 Macartney Mission (1793), 176 Macedonian Empire (808–148 BC), 84, 87–9 Madison, James, 337 madrasas, 138 Madrid train bombings (2004), 341 Maduro, Nicolás, 354, 380 Magna Carta (1215), 5 Magris, Claudio, 219 Malacca, 100 Maltesholm School, Hässelby, 217–18, 245 mammoths, 76 Manchester United, 246 Manichaeism, 93 Mann, Thomas, 79 Mansfield, Edward, 271 Mao Zedong, 53, 162, 315, 316, 317, 355 Marcus Aurelius, Roman Emperor, 91 Marduk, 87 de Mariana, Juan, 147 markets, 37 humanitarianism and, 204, 206 immigration and, 68 tribalism, 247 ultimatum game, 34–5 Marley, Robert ‘Bob’, 72 marriage, 199 Marshall, Thurgood, 335 Marx, Karl, 33, 36, 162, 169, 247, 255–6 Marxism, 33, 36, 162, 182, 256, 268 Mary II, Queen of England, Scotland and Ireland, 186, 193 Maryland, United States, 349 Maslow, Abraham, 339, 341 al-Masudi, 136 mathematics, 70, 134, 135, 137, 156 Maurya Empire (323–184 BC), 53 Mauss, Marcel, 71 McCarthy, Joseph, 335 McCarthy, Kevin, 108 McCloskey, Deirdre, 167, 189, 191–2, 198 McConnell, Addison Mitchell ‘Mitch’, 108 McKinsey, 313 measles, 77 media, 346–9, 370 Medicaid, 119 Medina, 251 Medusa, 88 Meiji Restoration (1868), 53, 70–71 Mencken, Henry Louis, 325, 353 Mercury, 89 Merkel, Angela, 343 Mesopotamia, 37–43, 45, 70, 292–3 Metaphysics (Aristotle), 142 Mexico, 73, 77, 257 United States, migration to, 110, 122, 223, 240, 255 Miami, Florida, 120 Micro-80 computers, 304 Microsoft, 305–6, 309 middle class, 60–61 Migration Advisory Committee, UK, 118 Miletus, 127 militarism, 214 Mill, John Stuart, 124, 160, 164, 176, 319 millennial generation (1981–96), 340 Milton, John, 150 Ming Empire (1368–1644), 54, 148, 175, 177–8, 179, 215 minimal group paradigm, 220–22 Minitel, 313 Mobutu Sese Seko, 187 Mokyr, Joel, 157, 195, 196–7 Molyneux, Stefan, 84 Mongol Empire (1206–1368), 53, 84, 94–7, 138, 139, 173–4, 352–3 monopolies, 182, 189 Monte Testaccio, 48 Montesquieu, 89, 94 Moral Consequences of Growth, The (Friedman), 253 Moral Man and Immoral Society (Niebuhr), 253 Moriscos, 97 mortgages, 375 Moscow Institute of Electronic Engineering, 304 most-favoured-nations clause, 53–4 Mughal Empire (1526–1857), 98, 148, 149, 215 Muhammed, Prophet of Islam, 251 Murray, William Vans, 104 Muslims migration of, 112–14, 170, 255 persecution of, 97, 106, 233, 355 Mutz, Diana, 271 Mycenae, 88 Myth of Nations, The (Geary), 288–9 Myth of the Rational Voter, The (Caplan), 258 Naipaul, Vidiadhar Surajprasad, 167 Napoleonic Wars (1803–15), 288 National Aeronautics and Space Administration (NASA), 126, 127 National Library of Medicine, US, 12 National Science Foundation, US, 313 National Security Agency, US, 313 national stereotypes, 235 nationalism, 9, 11, 13, 16 civic nationalism, 377–8 clash of civilizations narrative, 237 cultural purity and, 69, 70, 71, 352 immigration and, 69, 70, 82 nostalgia and, 287–8, 351 World War I (1914–18), 214 zero-sum thinking, 253, 254, 259, 272 nativism, 14, 122, 176, 223, 254, 349–51, 358 Natural History Museum, London, 124, 125 Naturalism, 198 Nazi Germany (1933–45), 104–6, 109, 124, 220, 233, 353 Nazirites, 72 Neanderthals, 30–33, 75, 76 Nebuchadnezzar, Babylonian Emperor, 46 neckties, 72 negative income tax, 374–5 Neilson, James Beaumont, 194 Nemeth, Charlan, 83 Neo-Classicism, 198 Neolithic period (c. 10,000–4500 BC), 74 Netflix, 309, 310 Netherlands, 99 von Neumann, John, 105 neurasthenia, 291 New Atlantis (Bacon), 147 New Guinea, 41 New Testament, 250 New York, United States crime in, 246, 334 September 11 attacks (2001), 10, 114, 340–42 New York Times, 291, 297, 325 New York University, 223 New York Yankees, 223 Newcomen, Thomas, 196 Newton, Isaac, 158–9, 201 Nicomachean Ethics (Aristotle), 131 Niebuhr, Reinhold, 253 Nietzsche, Friedrich, 365 Nîmes, France, 73 Nineteen Eighty-Four (Orwell), 230, 368 Nineveh, Assyria, 248–9 Nixey, Catherine, 134 Nobel Prize, 82, 105, 276 non-market societies, 34, 35 Nordhaus, William, 273–4 North American Free Trade Agreement (NAFTA), 63, 64 North Carolina, United States, 102 North Korea, 54, 314–15, 366 North Star, 44 nostalgia, 14, 286–95, 313, 351 Not Fit for Our Society (Schrag), 107 novels, 188–9, 246–7 nuclear power, 301, 327, 328, 329, 332 nuclear weapons, 105, 290, 306 O’Rourke, Patrick Jake, 280 Oannes, 267 Obama, Barack, 66, 240, 329 obsidian, 22, 29 occupational licensing, 376–7 Ögedei Khan, 96 Ogilvie, Sheilagh, 179 Oklahoma, United States, 218–19 Old Testament, 46, 72, 248–50 olive oil, 48 Olorgesailie, 21–2 omnivores, 299 On Liberty (Mill), 160 one-year-old children, 26 open society, 6 open-mindedness, 35, 112 Opening of the mouth’ rite, 70 Orbán, Viktor, 354, 380 de Orta, Garcia, 146–7 Orwell, George, 230, 368 Osman II, Ottoman Sultan, 148 Ottoman Empire (1299–1923), 84, 94, 98, 148, 215, 220, 237, 353 Ötzi, 1–2, 8–9, 73, 74 overpopulation, 81, 160 Overton, Richard, 183 Pacific islands, 52 Paine, Thomas, 56, 158, 247 Pakistan, 70, 366 Pallas Athena, 89 Pallavicino, Ferrante, 150 Palmer, Tom Gordon, 15 Panthers and Pythons, 243–4 Papacy, 102, 142, 143, 152, 155, 178 Papin, Denis, 179, 180 Paris, France exiles in, 152, 153 University of Paris, 140, 141–2, 143 parochialism, 216 patent systems, 58, 82, 189–90, 203, 314 in Britain, 179, 189–90, 203, 314 in China, 58 in France, 189 immigrants and, 82 in Netherlands, 189 in United States, 203 PayPal, 310 Peasants’ Revolt (1381), 208 peer review, 127 Pence, Michael, 108 penny universities, 166 Pericles, 131 Permissionless Innovation (Thierer), 299 Perry, Gina, 243 Perseus, 87–8 Persia, ancient, 84, 86–7, 88, 95, 129, 215 Abbasid period (750–1258), 136 Achaemenid Empire (550–330 BC), 86–7, 88 Greeks, influence on, 129 Mongols, influence on, 95 Safavid Empire (1501–1736), 149 Sasanian Empire (224–651), 134 personality traits, 7 Pertinax, Roman Emperor, 91 Pessimists Archive, 290, 297, 298 Pessinuntia, 89 Peters, Margaret, 66 Peterson Institute for International Economics, 60 Petty, William, 296 Philip II King of Spain, 98 Phoenicia (2500–539 BC), 43–6, 49, 70, 128–9 Phoenicia dye, 44 Phrygians, 89 physical fallacy, 267–8 Physics (Aristotle), 142 Pietists, 153 Pinker, Steven, 23, 243, 266, 324 Plague of Justinian (541–750), 77 Plato, 130, 131, 132, 134, 352 pluralism, 85, 129, 357 Plutarch, 45–6 Poland Battle of Vienna (1683), 237, 238 Dutch Republic, migration to, 99 Holocaust (1941–5), 220 immigration, 116 Israel, migration to, 111 United Kingdom, migration to, 120 United States, migration to, 108, 109 Polanyi, Karl, 37 polio, 293 pollution, 326, 347 Polo, Marco, 174 Popper, Karl, 6, 26, 127, 129, 130, 182–3, 237, 362 population density, 28 populism, 9, 13, 14, 16, 324, 379–82 authoritarianism and, 325, 350–51 complexity and, 324 nostalgia and, 295, 324, 351 trade and, 19 zero-sum thinking and, 254, 259, 274 pornography, 113, 336 Portugal Empire (1415–1999), 100, 146–7, 178 guilds in, 190 Inquisition, 100 Postrel, Virginia, 300, 312, 326 pound locks, 172 poverty, 4, 168, 213, 270 in Britain, 256 in China, 4, 316 immigration and, 66, 69, 81, 121 in Japan, 71 Jeff Bezos test, 275–9 Preston, Lancashire, 190 priests, 41, 128 printing, 146, 153, 171 Pritchard, James Bennett, 43 productivity cities and, 40 foreign trade and, 57, 59, 63 free goods and, 278 immigration and, 68, 81, 117, 204 programming, 8 Progress (Norberg), 12–13 progressives, 286, 300–302 Proserpina, 89 protectionism, 13, 15, 16, 54–5 Great Depression (1929–39), 54–5 immigration and, 66–7 Internet and, 314 Trump administration (2017–), 19, 57–8 Protestantism, 99, 104, 148, 149, 153, 169, 178, 237 Prussia (1701–1918), 153, 288 Psychological Science, 335 Puerto Rico, 80 Pufendorf, Samuel, 147 purchasing power, 59, 61, 63, 66, 198 Puritanism, 99, 102 Putin, Vladimir, 14, 353–4 Putnam, Robert, 121, 165 Pythagoras, 137 Pythons and Panthers, 243–4 al-Qaeda, 351 Qianlong, Qing Emperor, 153 Qing Empire (1644–1912), 148, 149, 151, 153, 175–7, 179 Quakers, 99, 102, 206 Quarantelli, Enrico, 338 Quarterly Journal of Economics, The, 63 race; racism, 76–7, 206, 231–4, 358–9 railways, 53, 179, 202, 296, 297 Rammstein, 274 RAND Corporation, 307 Raphael, 137 Rastafari, 72 Rattlers and Eagles, 218–19, 236, 243, 252 reactive aggression, 227–8 Reagan, Ronald, 63, 111 Realism, 198 realistic conflict theory, 222 Reconquista (711–1492), 139 Red Genies, 236 Red Sea, 75 Reformation, 148, 155 refugees crime and, 119 European migration crisis (2015–), 10, 114, 115, 281, 342–3 integration of, 117–18 German Jews (1933–45), 104–6, 109 Rembrandt, 99 reminiscence bump, 294 Renaissance, 5, 6, 132, 143, 145–6, 149–50, 215 Republic of Letters, 157–9, 165, 195 Republic, The (Plato), 352 Republican Party, 164, 225, 238, 240, 301 Reynell, Carew, 184 Reynolds, Glenn, 308 Ridley, Matthew, 20–21, 80 right to work laws, 65 Rizzo, Frank, 334 Road to Serfdom, The (Hayek), 325 Robbers Cave experiment (1954), 218–19, 236, 243, 252, 371 Robbins, Caroline, 200–201 Robertson, Marion Gordon ‘Pat’, 114 Robinson, James, 185, 187, 200 rock paper scissors, 26 Rogers, Will, 282 Roman Law, 5 Romanticism, 198, 287, 296–7 Rome, ancient, 47–50, 89–94, 132 Antonine Plague (165–80), 77 assimilation, 91–2 chariot racing, 224 Christianity in, 90, 93–4, 133–4 citizenship, 91 cosmopolitanism, 89–91 fall of, 54, 94 gods in, 89–90 golden nugget theory, 5 globalization, 45–6, 47–50 haircuts, 72 Latin alphabet, 45 philosophy, 70, 136 Phoenicians, relations with, 43, 44 Sabines, relations with, 89 Social War (91–88 BC), 91 trousers, attitudes towards, 92 Romulus, 89, 90 Rotterdam, Holland, 158 Rousseau, Jean-Jacques, 226 Royal Navy, 205 Royal Society, 156, 157, 158, 196 Rubin, Paul, 258 ruin follies, 286–7 rule of law, 68, 189, 269, 334, 343, 358, 379 Rumbold, Richard, 183–4 Rushdie, Salman, 73 Ruskin, John, 206, 297 Russia Imperial period (1721–1917), 154, 289–90 Israel, migration to, 111 Mongol period (1237–1368), 95, 352 Orthodox Christianity, 155 Putin period (1999–), 14, 15, 347, 353–4, 365, 367 Soviet period (1917–91), 162, 302–5, 315, 317 United States, relations with, 236 Yamnaya people, 74–5 Rust Belt, 58, 62, 64–6, 349 Rwandan Genocide (1994), 230–31 Sabines, 89 Safavid Empire (1501–1736), 149 safety of wings, 374 Saint-Sever, France, 180 Salamanca school, 147, 150 Sanders, Bernard, 302 Santa Fe Institute, 216 SARS (severe acute respiratory syndrome), 3, 162 Saudi Arabia, 365 Scandinavia Bronze Age migration, 75 Neolithic migration, 74 United States, migration to, 104, 108 see also Sweden scapegoats, 11, 83, 253, 268, 349, 355–61 Black Death (1346–53), 352, 355–6 Great Recession (2007–9), 255 Mongol invasion (1241), 95 Schmandt-Besserat, Denise, 38 School of Athens, The (Raphael), 137 School of Salamanca, 147, 150 Schrag, Peter, 107 Schrödinger, Erwin, 105, 128, 129, 132 Schumpeter, Joseph, 277 Schumpeterian profits, 273–5 science, 127–66 in China, 4, 13, 70, 153, 156, 162–3, 169–73 Christianity and, 133–5, 141–6, 149–50 Enlightenment, 154–9 experiments, 156–7 Great Vanishing, 134–5 in Greece, 127–32 jealous emulation and, 154–7 in Islamic world, 70, 132, 136–41 Renaissance, 145–6 Republic of Letters, 157–9, 165, 195 sclera, 25 Scotland, 101, 194 Scotney Castle, Kent, 287 Sculley, John, 304 sea peoples, 43 sea snails, 44 Seinfeld, Jerry, 224 Seleucid Empire (312–63 BC), 88 self-esteem, 372, 379 Sen, Amartya, 231 Seneca, 49, 91 Sephardic Jews, 99 September 11 attacks (2001), 10, 114, 340–42, 363 Septimius Severus, Roman Emperor, 91 Servius, Publius, 90 Seven Wonders of the World, 45 Seville, Spain, 91, 139 sex bonobos and, 226 encoding and, 233 inbreeding, 78 views on, 113, 336 SGML (Standard Generalized Markup Language), 307 Shaftesbury, Lord, see Cooper, Anthony Ashley Sherif, Muzafer, 219, 220, 222, 243, 252 Shia Islam, 149 Shining, The, 335 shirts, 72 Siberia, 76 Sicily, 89 Sierra Leone, 365 Siger of Brabant, 143, 144 Sikhism, 149 Silicon Valley, 311 Silk Road, 171, 174, 352 silver processing, 49 Simler, Kevin, 282 Simmel, Georg, 266 Simon, Julian, 81 Simple Rules for a Complex World (Epstein), 320 Singapore, 53 skilled workers, 36, 45, 66, 95, 97, 101, 117 Slater, Samuel, 202 slavery, 86, 156, 205–6, 232 in British Empire, 182, 199, 200, 205 in Mesopotamia, 40, 41, 43 in Rome, 47, 48 in Sparta, 54 in United States, 103, 106, 205, 232 smallpox, 77, 197, 293, 296 Smith, Adam, 21, 59, 192, 194, 205, 280 Smith, Fred, 319 smoke detectors, 234 Smoot–Hawley Tariff Act (1930), 55 snack boxes, 20 Snow, Charles Percy, 105 social media, 239, 347, 370 social status, 281–5 Social War (91–88 BC), 91 Socrates, 130, 131–2, 330 solar power, 328, 329, 331, 332 Solomon, King of Israel, 38, 45 Solyndra, 329 Song Empire (960–1279), 53, 169–75 Sony, 319 Soros, George, 323 South Korea, 314, 366 South Sudan, 365 Soviet Union (1922–91), 162, 302–5, 315, 317 Sovu, Rwanda, 231 Sowell, Thomas, 267–8 Spain, 97–101, 184, 207 Almohad Caliphate (1121–1269), 137–8 amphorae production, 48 al-Andalus (711–1492), 97, 137–9, 140 Columbus’ voyages (1492–1503), 178 Dutch Revolt (1568–1648), 98–9, 101 Empire (1492–1976), 147, 178, 182 guilds in, 190 Inquisition (1478–1834), 97, 98 Jews, persecution of, 97–8, 106, 140 Madrid train bombings (2004), 341 Muslims, persecution of, 97, 106 Reconquista (711–1492), 97, 138–9, 140 regional authorities, 152 Roman period (c.218 BC–472 AD), 48, 91 Salamanca school, 147, 150 sombreros, 73 Uber in, 320 vaqueros, 73 Spanish flu (1918–19), 77 Sparta, 47, 54, 90, 132 Spencer, Herbert, 165, 214 Spinoza, Baruch, 100, 150, 153 Spitalfields, London, 190 sports, 199, 223–4, 232–3, 245–6 Sri Lanka, 100, 365 St Bartholomew’s Day massacre (1572), 97 St Louis, SS, 109 Standage, Tom, 166 Stanford University, 307, 311 Star Trek, 246, 259 stasists, 301–2 Statute of Labourers (1351), 208 steam engine, 179, 180, 189, 194, 203, 296 steamships, 53, 202 Stenner, Karen, 242, 343, 348, 350, 357 Stockholm, Sweden, 217–18 Stranger Things, 294 Strasbourg, France, 153 strategic tolerance, 86–96 Strindberg, August, 239 Suarez, Francisco, 147 suits, 72 Sumer (4500–1900 BC), 37–43, 45, 55, 292–3 Summers, Larry, 329 Sunni Islam, 148, 149, 238, 365 superpowers, 338–9 supply chains, 11, 62, 66 Sweden DNA in, 73 Green Party, 325 Lind dreadlocks affair (2019), 72 immigration in, 114, 115, 118, 281 manufacturing in, 65 Muslim community, 114 Neolithic migration, 74 refugees in, 118, 281, 342 United States, migration to, 107 Sweden Democrats, 281 swine flu, 3 Switzerland, 152, 153 Sylvester II, Pope, 137 Symbolism, 198 Syria, 42, 82, 342, 365, 366 tabula rasa, 225 Tacitus, 91 Taiwan, 316, 366 Taizu, Song Emperor, 170 Tajfel, Henri, 220, 221–2 Tandy, Geoffrey, 124–6 Tang Empire (618–907), 84, 170, 177, 352 Tanzania, 257 Taoism, 129, 149 tariffs, 15, 56, 373 Anglo–French Treaty (1860), 53–4 Great Depression (1929–39), 54–5 Obama’s tyre tariffs (2009), 66 Trump’s steel tariffs (2018), 272 Tasmania, 50–53, 54 Tatars, 238 taxation in Britain, 72, 187, 188, 189 carbon tax, 330–31 crony capitalism and, 279–80 immigration and, 69 negative income tax, 374–5 in Song Empire, 172 in Spanish Netherlands, 98 Taylor, Robert, 306 TCP/IP protocol, 307 technology, 296–9 automation, 63, 312–13 computers, 302–14 decline, 51–2 Internet, 57, 275, 278, 306–11, 312 nostalgia and, 296–9, 313 technocrats, 299–300, 312, 313–14, 326–9 technological decline, 51–2 telescopes, 145–6 Teller, Edward, 105 Temple of Artemis, Ephesus, 45 Temple of Serapis, Alexandria, 134 Tencent, 311 terrorism, 10, 114, 229, 340–41, 363 Tetlock, Philip, 160 textiles, 172–3 Thales, 127 Thierer, Adam, 299 third-party punishment game, 35 Thirty Years War (1618–48), 72, 97, 148, 150 Thomas Aquinas, Saint, 142–3, 144–5 Thoreau, Henry David, 203 Thracians, 130 Thucydides, 131, 132 Tiangong Kaiwu, 153 Tibetans, 85 Tierra del Fuego, 52–3 Tigris river, 37, 139 Timurid Empire (1370–1507), 139 tin, 42 Tokugawa Shogunate (1600–1868), 54 Toledo, Spain, 140 tolerance, 86–114, 129 Tomasello, Michael, 25 ‘too big to fail’, 280 Tower of Babel, 39 Toynbee, Arnold, 382 trade, 13, 19–23, 28–9, 129, 140, 363, 373 backlashes against, 19, 54–67, 254 benefit–cost ratio, 60, 61, 62 Britain, 181–99 competitive advantage, 28–9 division of labour and, 28, 31, 57 Great Depression (1929–39), 54–5 Greece, ancient, 47 humanitarianism and, 204–7 Mesopotania, 37–43 migration and, 35, 66–7, 234–5 morality of, 33–6 Phoenicia, 43–6 Rome, ancient, 47–50 snack boxes, 20 United States, 19, 57–8, 202–3 zero-sum thinking and, 248, 252–66, 270–72 trade unions, 64, 65, 272, 374 Trajan, Roman Emperor, 91 Trans-Pacific Partnership, 58 Transparency International, 381 Treaty of Trianon (1920), 354 Treaty of Versailles (1919), 353 Trenchard, John, 201 Treschow, Michael, 65 Trevor-Roper, Hugh, 215, 356 tribalism, 14, 217–47, 362, 368–72 fluid, 230–38 political, 224–5, 238–42, 378, 379 media and, 348, 370 threats and, 241, 350, 370 Trollboda School, Hässelby, 218 Trump, Donald, 9, 14, 240, 313, 321, 322, 354, 365, 367, 380 immigration, views on, 223 presidential election (2016), 238, 241, 242, 349, 350 stasism, 301, 302 steel tariffs (2018), 272 trade, views on, 19, 57–8 zero-sum attitude, 248 Tunisia, 45, 48 Turing, Alan, 124 Turkey; Turks, 70, 74, 136, 156, 354, 357, 365 turtle theory, 121–2 Tutsis, 230–31 Twilight Zone, The, 260–61 Twitter, 84, 239, 245 Two Treatises of Government (Locke), 186, 201 tyranny of cousins, 229, 230 tyre tariffs, 66 Tyre, 45 Uber, 319–20 Uganda, 365 Ukraine, 75, 116, 365 ultimatum game, 34–6 umbrellas, 298 uncertainty, 321–6 unemployment, 62, 373–4, 376, 377 ‘unicorns’, 82 United Auto Workers, 64 United Kingdom, see Britain United Nations, 327 United States, 199–203 Afghanistan War (2001–14), 345 America First, 19, 272 automation in, 313 Bureau of Labor Statistics, 65 California Gold Rush (1848–1855), 104 China, trade with, 19, 57, 58–9, 62–3, 64 Chinese Exclusion Act (1882), 254 citizenship, 103 Civil War (1861–5), 109 climate change polices in, 328 Constitution (1789), 102, 202 consumer price index, 277 COVID-19 pandemic (2019–20), 12 crime in, 110, 119, 120, 346 Declaration of Independence (1776), 103, 201, 202 dynamism in, 301–2 Federalist Party, 103 free trade gains, 60, 61 Great Depression (1929–39), 54–5, 254 gross domestic product (GDP), 257 Homestead Acts, 171 housing in, 376 immigration, see immigration in United States Industrial Revolution, 202, 291–2 innovation in, 53, 203, 298–9 intellectual property in, 58 Internet in, 306–14 Iraq War (2003–11), 345 Jim Crow laws (1877–1965), 106, 254 Know-Nothings, 108–9 Ku Klux Klan, 254 labour mobility in, 374, 376–7 lobbying in, 280, 329 Manhattan Project (1942–6), 105 manufacturing, 62–6 McCarthy era (1947–57), 335 Medicaid, 119 middle class, 60–61 NAFTA, 63, 64 National Library of Medicine, 12 national stereotypes, 235, 236 nostalgia in, 290–92, 294 open society, 169, 199–203 patent system, 203 political tribalism in, 224–5, 238, 240 populist movement, 254 presidential election (2016), 238, 241, 242, 349, 350 railways, 202 Revolutionary War (1775–83), 102–3, 200–201 Robbers Cave experiment (1954), 218–19, 236, 243, 252, 371 Rust Belt, 58, 62, 64–6, 349 Saudi Arabia, relations with, 365 Senate, 108 September 11 attacks (2001), 10, 114, 340–42, 363 slavery in, 103, 106, 205 Smoot–Hawley Tariff Act (1930), 55 Supreme Court, 108, 335 tariffs, 66, 272 trade deficits, 60, 270 Trump administration (2017–), see Trump, Donald unemployment in, 373, 376 universities, 163–5, 241 Vietnam War (1955–75), 345 Watergate scandal (1972–4), 345 World War II (1939–45), 56, 64, 335 Yankees, 58 United Steelworkers, 64, 272 universal basic income (UBI), 374, 375 universities, 140 University Bologna, 140 University of California, Berkeley, 311 University of Cambridge, 140 University of Chicago, 165 University of Leeds, 357 University of London, 201 University of Marburg, 153 University of Oxford, 140, 144, 145, 328 University of Padua, 144, 146 University of Paris, 140, 141–2, 143 University of Pennsylvania, 271 University of Salamanca, 140 University of Toulouse, 144 unskilled workers, 36, 66, 102, 117 untranslatable words, 288 Ur, 55 urbanization, see cities Uruk, Sumer, 39 US Steel, 64 Usher, Abbott Payson, 196 Uyghurs, 85, 174 vaccines, 12, 296, 299 Vandals, 92 Vanini, Lucilio, 150 vaqueros, 73 Vargas Llosa, Mario, 213, 261 Vatican Palace, 137 Vavilov, Nikolai, 162 Venezuela, 354 Venice, Republic of (697–1797), 53, 144, 152, 174, 181 Vermeer, Johannes, 99 Vespucci, Amerigo, 146 Vienna, Austria, 95, 237, 238 Vienna Congress (1815), 288 Vietnam, 171, 207, 270, 345 Virgil, 91 Virginia Company, 200 vitamin D, 74 de Vitoria, Francisco, 147 Vladimir’s choice, 221, 252, 271 Voltaire, 153, 193 Walton, Sam, 277 Wang, Nina, 315 War of the Polish Succession (1733–8), 289–90 Ward-Perkins, Bryan, 50 warfare, 216–17, 243 Warren, Elizabeth, 302 washing of hands, 10, 335 Washington, George, 103, 205 Washington, DC, United States, 280 Watergate scandal (1972–4), 345 Watson, John, 291 Watson, Peter, 79 Watt, James, 172, 189, 194, 274 Weatherford, Jack, 95 Web of Science, 159 Weber, Maximilian, 204 WeChat, 311 Weekly Standard, 312 welfare systems, 118, 281, 374 Wengrow, David, 42 West Africa Squadron, 205 Western Roman Empire (395–480), 94, 135 Westernization, 4–5 Wheelan, Charles, 20 Whig Party, 185, 201 White House Science Council, 313 white supremacists, 84, 351, 367 Whitechapel, London, 190 Who Are We?

Schumpeterian profits Even though the economy is not in itself a zero-sum game, there is a common perception that the recent rise in inequality within most countries is turning it into one. There are certainly examples of this, where the wealthy got rich at the expense of others and now use their wealth to gain special privileges and political protection. But in itself, inequality is just a comparison of quantities and does not say anything about the relationship between them. Inequality can increase between two individuals who are both getting richer if they do it at different paces, which is normally the case in a dynamic economy.


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The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa's Wealth by Tom Burgis

Airbus A320, Berlin Wall, blood diamond, BRICs, British Empire, central bank independence, clean water, colonial rule, corporate social responsibility, crony capitalism, Deng Xiaoping, Donald Trump, F. W. de Klerk, financial engineering, flag carrier, Gini coefficient, Global Witness, Livingstone, I presume, McMansion, megacity, megaproject, Nelson Mandela, offshore financial centre, oil shock, open economy, purchasing power parity, rolodex, Ronald Reagan, Silicon Valley, South China Sea, sovereign wealth fund, structural adjustment programs, trade route, transfer pricing, upwardly mobile, urban planning, Washington Consensus, WikiLeaks, zero-sum game

The data on income distribution under apartheid are drawn from Murray Leibbrandt, Ingrid Woolard, Arden Finn and Jonathan Argent, ‘Trends in South African Income Distribution and Poverty Since the Fall of Apartheid’, OECD, May 2010, www.npconline.co.za/MediaLib/Downloads/​Home/Tabs/Diagnostic/Ec​onomy2/Trends%20in%20South%20African%20In​come%20Distribution%20and%20Poverty%​20since%20the%20Fall%20o​f%20Apartheid.pdf. The 2009 income distribution data are from the World Bank: World Bank, World Development Indicators 2014, http://databank.worldbank.org/data/views/reports/tableview.aspx#. 12. The Gini coefficient shows income distribution on a scale in which zero shows perfect equality and 100 shows perfect inequality. In 1993, the year before the end of white rule, South Africa’s Gini coefficient was 59.3. In 2009 it was 63.1, the highest level in the world after the Seychelles, Namibia and the Comoros. World Bank, World Development Indicators 2014, http://databank.worldbank.org/data/views/reports/tableview.aspx?

The game, Salim and his team concluded, was rigged – and the World Bank appeared to be on the wrong side. ‘The knowledge, power, financial, and technical resource gaps between major extractive industry companies, civil society, developing-country governments, and local communities throughout the world are profound,’ Salim’s research concluded. ‘The inequalities between local communities and transnational companies are not just economic in nature; they include access to political power and information and the ability to know and use the legal system to their advantage.’ In the dry language of the World Bank Salim was describing the looting machine: the alliance between shadow governments and the resource industry that tramples over the people who live where oil and minerals are found.

His son, Teodorin Obiang, officially received only a modest salary for the ministerial positions he has held but has nonetheless been the proud owner of a $30 million mansion in Malibu, properties in Cape Town and the Avenue Foch in Paris, a fleet of Ferraris and Rolls-Royces, a Gulfstream jet, paintings by Renoir and Matisse, and one of Michael Jackson’s crystal-encrusted gloves.6 The rest of Equatorial Guinea endures living standards ranked 136 out of 186 countries, behind Guatemala (GDP per head: $5,000), and has the same life expectancy, fifty-one years, as Somalia. The average length of schooling is eight years, about the same as in Afghanistan. Mining was always going to be central to the ANC’s plans to redress the economic injustices of apartheid – an experiment in whether South Africa could break the link between resource wealth and extreme inequality. The industry had served both as the test tube for apartheid policies and the breeding ground of resistance to white rule. The ANC inherited a country in which the mining industry, like the rest of the economy, was controlled by a white minority that had surrendered political but not commercial hegemony.


pages: 535 words: 158,863

Superclass: The Global Power Elite and the World They Are Making by David Rothkopf

"World Economic Forum" Davos, airport security, Alan Greenspan, anti-communist, asset allocation, Ayatollah Khomeini, bank run, barriers to entry, Bear Stearns, Berlin Wall, Big Tech, Bob Geldof, Branko Milanovic, Bretton Woods, BRICs, business cycle, carried interest, clean water, compensation consultant, corporate governance, creative destruction, crony capitalism, David Brooks, Doha Development Round, Donald Trump, fake news, financial innovation, fixed income, Francis Fukuyama: the end of history, Gini coefficient, global village, high net worth, income inequality, industrial cluster, informal economy, Internet Archive, Jeff Bezos, jimmy wales, John Elkington, joint-stock company, knowledge economy, Larry Ellison, liberal capitalism, Live Aid, Long Term Capital Management, Mahatma Gandhi, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Martin Wolf, mass immigration, means of production, Mexican peso crisis / tequila crisis, Michael Milken, Mikhail Gorbachev, military-industrial complex, Nelson Mandela, old-boy network, open borders, plutocrats, Ponzi scheme, price mechanism, proprietary trading, Savings and loan crisis, shareholder value, Skype, special economic zone, Steve Jobs, Thorstein Veblen, too big to fail, trade liberalization, trickle-down economics, upwardly mobile, vertical integration, Vilfredo Pareto, Washington Consensus, William Langewiesche

Even in China, which has shown such remarkable growth over the past two decades, inequality is increasing; in the period between 1984 and 2004, China’s Gini coefficient almost doubled, from 29 to 47. Disputes arise over the interpretation of these figures. One often-cited distinction is the difference between measuring inequality among the peoples of a country and inequality among all peoples. The World Bank’s Branko Milanovic has argued that measuring intracountry income gaps is a useful metric when testing the effectiveness of policies. By this measure, inequality has been on the rise for almost seven decades, with a period of “steady and sharp” increase between 1982 and 1994.

They are either pioneers who earn the benefits they reap, or they are exploiters who should beware the impending backlash or global revolution. But they are, in either case, important to the story of inequality. Now, I’m not one for frittering away time on contorted academic debates while people are starving to death. You can’t eat a Gini coefficient (the economic measure of inequality). But I do know a couple of things that are hard to argue with. First, there is economic inequality. Second, it is getting worse in some places. Third, those with the most power are undoubtedly in the best position to fix it—and often also happen to be those who are on the “have lots” end of the have/have-not continuum.

SIX CENTRAL ISSUES ASSOCIATED WITH THE SUPERCLASS In studying this extraordinary landscape, several central themes regularly arise: power, global inequality, governance, global vs. national tension, alternatives, the future. These themes lead to a number of important questions: What is the nature of the power of the superclass? What are its origins and its scope, and how is it likely to evolve? Has the superclass used its power in a self-serving way that has exacerbated global inequality? Is there a link between the growing global inequality of wealth and global inequality in the distribution of power? What are the roots of the inequality? Does the nature of the distribution of power in the global era call into question the relevance of our global legal and governmental institutions?


pages: 543 words: 153,550

Model Thinker: What You Need to Know to Make Data Work for You by Scott E. Page

Airbnb, Albert Einstein, Alfred Russel Wallace, algorithmic trading, Alvin Roth, assortative mating, behavioural economics, Bernie Madoff, bitcoin, Black Swan, blockchain, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Checklist Manifesto, computer age, corporate governance, correlation does not imply causation, cuban missile crisis, data science, deep learning, deliberate practice, discrete time, distributed ledger, Easter island, en.wikipedia.org, Estimating the Reproducibility of Psychological Science, Everything should be made as simple as possible, experimental economics, first-price auction, Flash crash, Ford Model T, Geoffrey West, Santa Fe Institute, germ theory of disease, Gini coefficient, Higgs boson, High speed trading, impulse control, income inequality, Isaac Newton, John von Neumann, Kenneth Rogoff, knowledge economy, knowledge worker, Long Term Capital Management, loss aversion, low skilled workers, Mark Zuckerberg, market design, meta-analysis, money market fund, multi-armed bandit, Nash equilibrium, natural language processing, Network effects, opioid epidemic / opioid crisis, p-value, Pareto efficiency, pattern recognition, Paul Erdős, Paul Samuelson, phenotype, Phillips curve, power law, pre–internet, prisoner's dilemma, race to the bottom, random walk, randomized controlled trial, Richard Feynman, Richard Thaler, Robert Solow, school choice, scientific management, sealed-bid auction, second-price auction, selection bias, six sigma, social graph, spectrum auction, statistical model, Stephen Hawking, Supply of New York City Cabdrivers, systems thinking, tacit knowledge, The Bell Curve by Richard Herrnstein and Charles Murray, The Great Moderation, the long tail, The Rise and Fall of American Growth, the rule of 72, the scientific method, The Spirit Level, the strength of weak ties, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, urban sprawl, value at risk, web application, winner-take-all economy, zero-sum game

Household income for a couple consisting of a man with education level lM and a woman with education level lW earns the following estimated household income:12 Income(M, lM) + Income(W, lW) Cause of inequality: Increases in the number of educated women, increased pay for workers with higher levels of education, and assortative mating (the tendency for people to marry others of the same income level) result in an increase in household-level income inequality. Had marriages been random rather than assortative, income inequality would be much less. One study finds that inequality as measured by the Gini coefficient, a common measure of inequality, would have decreased by 25%.13 Our next model analyzes movements between income categories using a Markov model.

For the first case, the percentages are 76.3%, 21.5%, and 2.2% respectively. 2 See Wakeland, Nielsen, and Geissert 2015. 3 I thank Abbie Jacobs for her commentary and insights on this section of the book. 4 See Wilkinson and Pickett 2009. 5 Comments made at the Becker Friedman Institute at the University of Chicago, “Understanding Inequality and What to Do About It,” November 6, 2015. 6 See Goldin and Katz 2008, Acemoglu and Autor 2011, and Murphy and Topel 2016. 7 See Mas-Colell, Whinston, and Green 1995 for how to prove such a result. 8 See Kaplan and Rauh 2013a, and a model by Jones and Kim (2018) that uses ability as a proxy for the scalability of an entrepreneurial idea. See Frank 1996 for early research on how inequality has occurred within every profession. For a more recent study, see Xie, Killewald, and Near 2016. 9 See Ormerod 2012. 10 Ormerod 2012 describes in detail how our increased connectedness contributes to inequality. 11 See Cancian and Reed 1999 and Schwartz and Mare 2005. 12 See Greenwood et al. 2014 for the full model. 13 The estimate is that it would have been 0.34 rather than 0.43. See Greenwood et al. 2014. The Gini coefficient measures the distance between the income distribution and an equal distribution.

To explain these other features of the data, we need the other models, such as the income mobility model, Durlauf’s persistent inequality model, and the spatial voting model. By constructing a dialogue between multiple models and data, we come away with a deep, multifaceted understanding of the causes of inequality. We identify multiple processes that produce and maintain inequality and see how they overlap and intersect. Our understanding of the complexity of inequality and the self-reinforcing causal forces that sustain it should make us dubious of quick fixes. Reducing inequality will require concentrated efforts on multiple fronts. Into the World We have just learned how by applying many models as an ensemble we can explicate the multiple causes of the opioid epidemic and income equality and reveal the limits of any one framing.


pages: 119 words: 10,356

Topics in Market Microstructure by Ilija I. Zovko

Brownian motion, computerized trading, continuous double auction, correlation coefficient, financial intermediation, Gini coefficient, information asymmetry, market design, market friction, market microstructure, Murray Gell-Mann, p-value, power law, quantitative trading / quantitative finance, random walk, stochastic process, stochastic volatility, transaction costs

Quantitative model of price diffusion and market friction based on trading as a mechanistic random process. Physical Review Letters, 90(10): Article no. 108102, 2003. H. Demsetz. The cost of transacting. The Quarterly Journal of Economics, 82:33–53, 1968. P. M. Dixon, J. Weiner, T. Mitchell-Olds, and R. Woodley. Bootstrapping the gini coefficient of inequality. Ecology, 68(5):1548– 1551, 1987. I. Domowitz and J. Wang. Auctions as algorithms: Computerized trade execution and price discovery. Journal of Economic Dynamics and Control, 18(1):29–60, 1994. D. Easley and M. O’Hara. Price, trade size, and information in securities markets. Journal of Financial Economics, 19(1):69–90, 1987.

The specialist’s order book and price anomalies, 1990. R. Roll. A simple implicit measure of the effective bid-ask spread in an efficient market. Journal of Finance, 39(4):1127–39, 1984. Y. Schwarzkopf and J. D. Farmer. Time evolution of the mutual fund size distribution. In preparation, January 2008. A. Sen. On Economic Inequality. Oxford Clarendon Press, 1973. D. J. Seppi. Liquidity provision with limit orders and a strategic specialist. Review of Financial Studies, 10(1):103–50, 1997. F. Slanina. Mean-field approximation for a limit order driven market model. Physical Review E, 64(5):Article no. 0561363, 2001. Part 2. B.


From Peoples into Nations by John Connelly

Albert Einstein, anti-communist, bank run, Berlin Wall, Cass Sunstein, centre right, collective bargaining, colonial exploitation, colonial rule, crony capitalism, cuban missile crisis, disinformation, facts on the ground, Fall of the Berlin Wall, financial independence, German hyperinflation, Gini coefficient, Johann Wolfgang von Goethe, joint-stock company, laissez-faire capitalism, land bank, land reform, land tenure, liberal capitalism, means of production, Mikhail Gorbachev, moral hazard, oil shock, old-boy network, open borders, Panopticon Jeremy Bentham, Peace of Westphalia, profit motive, purchasing power parity, Ronald Reagan, strikebreaker, the built environment, The Chicago School, trade liberalization, Transnistria, union organizing, upwardly mobile, wikimedia commons, women in the workforce

But if the income the state plan budgeted for white collar workers was high, they might come to seem a leading class in a society where class distinctions were supposedly fading. FIGURE 23.2. Healthy lunch for schoolchildren (Dillstädt, GDR, 1975). Source: Helmut Schaar (photographer), Bundesarchiv, Bild 183-P1124-0029 / CC-BY-SA 3.0. Ultimately, the regimes in question opted against significant differentials in income. The Gini coefficients (statistical measures of social inequality) of state socialist societies were the lowest on earth (the Czechoslovak figure was the lowest measured anywhere).24 The cream of the intelligentsia and members of the upper party bureaucracy had privileged access to goods and services, but, as we shall see in greater detail, this was modest in comparison with the advantages in consumption enjoyed by Western elites.

This aid had the effect not only of bringing Poland and other candidate states closer to Western Europe in terms of per capita gross domestic product but also of reducing discrepancies within Eastern Europe and causing Poland and Hungary to pull far ahead of Ukraine and Belarus. Rather than increasing social inequalities within Poland or Hungary, modernization put a halt to growing differentiation between town and countryside, as well as between social classes. (Until 2005, the Gini coefficient climbed in the new EU states, but within two to three years after accession, it began to decline.)49 Besides contributing to growth in East Central Europe, development in agricultural regions benefited old EU countries, which could now market more products in the east.

Bradley Abrams, “Buying Time: Consumption and Political Legitimization in Late Communist Czechoslovakia,” in The End and the Beginning: The Revolutions of 1989 and the Resurgence of History, Vladimir Tismaneanu with Bogdan C. Iacob, eds. (Budapest, 2012), 405. 23. Abrams, “Buying Time,” 401; Dombos and Pellandini-Simányi, “Kids, Cars,” 326. 24. A Gini coefficient of 0 indicates perfect equality, of 1 perfect inequality. The Czechoslovak figure was .22; GDR was .28; Cuba, .27; and Poland, .31. K. Griffin, Alternative Strategies for Economic Development (New York, 1999), 219. The US figure has been rising, from .37 in 1986, to .38 in 1991 to .40 in 1994. World Bank, “GINI Index for the United States,” retrieved from Federal Reserve Bank of St.


pages: 537 words: 158,544

Second World: Empires and Influence in the New Global Order by Parag Khanna

Abraham Maslow, Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, death from overwork, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, dual-use technology, Edward Glaeser, energy security, European colonialism, export processing zone, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, gentrification, Gini coefficient, global reserve currency, global supply chain, Great Leap Forward, guns versus butter model, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, karōshi / gwarosa / guolaosi, Khyber Pass, Kickstarter, knowledge economy, land reform, Londongrad, low cost airline, low skilled workers, mass immigration, means of production, megacity, meritocracy, military-industrial complex, Monroe Doctrine, Nelson Mandela, no-fly zone, oil shale / tar sands, oil shock, oil-for-food scandal, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, restrictive zoning, rising living standards, Robert Solow, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Suez crisis 1956, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

See Emile Kok-Kheng Yeoh, “Development Policy, Demographic Diversity, and Interregional Disparities in China,” paper presented at the inaugural international ChinaWorld workshop, March 10–11, 2006, Asia Research Centre, Copenhagen Business School. See Shang-Jin Wei, “Is Globalization Good for the Poor in China?” Finance and Development, September 2002. China’s Gini coefficient, a measure of income equality, has risen to .45 since the beginning of reforms as the rich get richer—but this is no worse than the United States. And its urban Gini coefficient is only .32, which is near the global average. 33. Hu Jintao’s prioritization of rural development in fact sharpened the ideological debate over the merits of capitalism in light of the widening gap between urban and rural incomes. 34.

China’s coastal provinces have to date received an overwhelming proportion—four-fifths—of total foreign investment, but this dazzling statistic is by design: Capitalism has come in stages to China as a way to manage it gradually. The cost of this approach, however, has been inequality.31 Migrants show up in big coastal cities as if arriving in a new world the likes of which they have never imagined. Many rummage through trash dumps to earn more money than they would as farmers, while elites casually ignore them like hordes of animals. Like Brazil, inequality has correlated to rising crime in China. The city of Guangzhou has deployed hundreds of additional policemen to patrol the streets. But because China is tackling its inequality problem head-on rather than getting hung up about crime, it has become the model that Brazil is watching most closely.

Even a year after Katrina, much housing remained in ruins, some schools had not reopened, and the electricity supply was limited, prompting an enterprising Chinese contractor to offer to rebuild a number of dilapidated Mississippi towns, as their residents were still living in tents and trailers. American socioeconomic attitudes would be laughable if they were not so scary. As in other countries, there is a general correlation linking low education, high income inequality, low living standards, and rising crime: America has an equal number of gang members as policemen (about 750,000). The relationship between inequality and homicide is airtight: “Societies that tolerate the injustices of great inequality will almost inescapably suffer their social consequences: they will be unfriendly and violent, recognized more for their hostility than their hospitality.”29 If every society gets the barbarians it deserves, as Toynbee argued, are Americans their own worst enemies?


pages: 223 words: 58,732

The Retreat of Western Liberalism by Edward Luce

"World Economic Forum" Davos, 3D printing, affirmative action, Airbnb, Alan Greenspan, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, bread and circuses, Bretton Woods, Brexit referendum, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, disinformation, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, driverless car, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Evgeny Morozov, fake news, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, gentrification, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, Great Leap Forward, illegal immigration, imperial preference, income inequality, independent contractor, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, Les Trente Glorieuses, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meritocracy, microaggression, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, opioid epidemic / opioid crisis, Peace of Westphalia, Peter Thiel, plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Robert Solow, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

The gap between the pay of the average chief executive and their employees has risen tenfold since the late 1970s to around four hundred.30 Europe has seen varying rates of rising inequality, with Britain and Spain recording the fastest-rising Gini coefficient – the measure of inequality – and Germany and Scandinavia the least. But all have been moving the same way. In contrast to the industrial era, however, today’s inequality is accompanied by vanishing mobility. It is not just that people are staying physically put. They are also likelier to stay trapped in the same income group. America, in particular, which had traditionally shown the highest class mobility of any Western country, now has the lowest. Today it is rarer for a poor American to become rich than a poor Briton, which means the American dream is less likely to be realised in America.31 The meritocratic society has given way to a hereditary meritocracy.

Millennials have grown up with something the rest of us may be forced to learn in the years ahead. These are the costs, both material and psychological, that we pay for stagnation. The other big crisis of Western political economy is rising income inequality. The West is suffering from acute polarisation. History tells us that inequality soars when societies develop. That is what economic theory dictates as well. During the nineteenth century, British and US inequality rose to giddying heights as the owners of new wealth – the railroads, shipping lines, iron and steel mills and machine industries – reaped the benefits of vast new monopolies. It was also an age of ferment.

Hobson, Imperialism: A Study (James Pott & Company, New York, 1902), p. 333. 3 Jamil Anderlini and Lucy Hornby, ‘China overtakes US as world’s largest goods trader’, Financial Times, 10 January 2014, <https://www.ft.com/content/7c2dbd70-79a6-11e3-b381-00144feabdc0>. 4 Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (Belknap Press, Cambridge MA, 2016 (ebook)). 5 Danny Quah, ‘The Global Economy’s Shifting Centre of Gravity’, Global Policy, 2:1 (January 2011), <http://onlinelibrary.wiley.com/doi/10.1111/j.1758-5899.2010.00066.x/pdf>. 6 Milanovic, Global Inequality. 7 Hobson, Imperialism, p. 339. 8 Milanovic, Global Inequality. 9 Richard Baldwin: The Great Convergence: Information Technology and the New Globalization (Belknap Press, Cambridge MA, 2016 (ebook)). 10 Hugh White, The China Choice: Why We Should Share Power (Oxford University Press, Oxford, 2012 (ebook)). 11 The World Economic Forum’s website has a comprehensive database of each forum’s reports and sessions stretching back many years.


pages: 499 words: 152,156

Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos

conceptual framework, crony capitalism, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, East Village, Evgeny Morozov, fake news, financial independence, Gini coefficient, Great Leap Forward, high-speed rail, income inequality, indoor plumbing, information asymmetry, land reform, Lao Tzu, low skilled workers, market fundamentalism, Mohammed Bouazizi, plutocrats, prosperity theology / prosperity gospel / gospel of success, rolodex, scientific worldview, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, Steve Jobs, transcontinental railway, Washington Consensus, Xiaogang Anhui farmers, young professional

A new mood was setting in: China’s boom had made almost everyone better off to some degree—average incomes had more than tripled over the past decade—but the gap between rich and poor had ballooned more than the Party ever intended. In 2001 the blunt-spoken premier Zhu Rongji had been asked if he worried that the growing divide might lead to social unrest. “Not yet,” Zhu said. He pointed to the measurement of income equality known as the Gini coefficient, which ranges from 0 to 1, with one being extreme disparity in wealth. Chinese officials predicted that China would be stable as long as its Gini stayed below what he called a “danger line” of 0.4. Eleven years later, the number had grown so large that the government simply stopped publishing it, saying the wealthy hid too much of their income to make the statistic credible.

It could have reformed the tax system—it still had no capital gains or inheritance taxes—but instead it adopted a more immediate strategy: in April 2011, Beijing banned companies from using the word luxury in their names and ads. The “Black Swan Luxury Bakery,” which was selling wedding cakes for $314,000, had to call itself the “Black Swan Art Bakery.” (The ban did not last.) After years of not daring to measure the Gini coefficient, in January 2013 the government finally published a figure, 0.47, but many specialists dismissed it; the economist Xu Xiaonian called it “a fairy tale.” (An independent calculation put the figure at 0.61, higher than the level in Zimbabwe.) Yet, for all the talk about income, it was becoming clear that people cared most of all about the gap in opportunity.

THE HARD TRUTH To understand the changes in opportunity and mobility in China, I relied on many studies, including Cathy Honge Gong, Andrew Leigh, and Xin Meng, “Intergenerational Income Mobility in Urban China,” Discussion Paper no. 140, National Centre for Social and Economic Modelling, University of Canberra, 2010; James J. Heckman and Junjian Yi, “Human Capital, Economic Growth, and Inequality in China,” NBER Working Paper no. 18100, May 2012; John Knight, “Inequality in China: An Overview,” World Bank, 2013; Yingqiang Zhang and Tor Eriksson, “Inequality of Opportunity and Income Inequality in Nine Chinese Provinces, 1989–2006,” China Economic Review 21, no. 4 (2010): 607–16. I am thankful for Martin Whyte’s advice and judgment on this subject. 19. THE SPIRITUAL VOID For background on faith in China before and after 1949, including the lost temples of Beijing, Mao’s cult of personality, and the violence that stemmed from it, I relied on Geremie Barmé, Shades of Mao: The Posthumous Cult of the Great Leader (Armonk, NY, and London: M.E.


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

"World Economic Forum" Davos, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business cycle, 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, creative destruction, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, driverless car, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, financial engineering, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, global macro, Goodhart's law, guns versus butter model, hiring and firing, hype cycle, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Japanese asset price bubble, Jeff Bezos, job automation, John Markoff, Joseph Schumpeter, junk bonds, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, Larry Ellison, lateral thinking, liberal capitalism, low interest rates, Malacca Straits, Mark Zuckerberg, market bubble, Mary Meeker, mass immigration, megacity, megaproject, Mexican peso crisis / tequila crisis, middle-income trap, military-industrial complex, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, open immigration, pattern recognition, Paul Samuelson, Peter Thiel, pets.com, 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, tacit knowledge, tech billionaire, The Future of Employment, 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, work culture , working-age population

However, if a tycoon is making a fortune by cozying up to politicians and landing contracts from the government, or worse by capitalizing on Daddy’s contacts, then resentment surfaces, and the nation’s focus turns to redistributing rather than creating wealth. The most rigorous statistical measures of inequality can offer a useful snapshot of the big picture, but they are updated too infrequently to provide the necessary warning signs of fast-shifting popular sentiment. The most common measure of income inequality, the Gini coefficient, scores a nation from one to zero: One represents a totally unequal society in which one person gets all the income, and zero represents a completely egalitarian society in which everyone has the same income.

“Mahatma,” 236 Garotinho, Anthony, 78 Gates, Bill, 104, 119, 124 GDP (gross domestic product): analysis of, 407 and civil wars, 142 and credit markets, 300, 301n, 302 and current account, 273, 296 and debt, 149, 216, 291, 300, 317, 320, 328 global, 2–3, 19, 243 and government spending, 135–39, 164 and inflation, 235, 238 and investment, 202–3, 204, 205–6, 217, 231–32 and leadership, 86–87 and manufacturing, 204–6, 214–15 per capita, 345–46, 347 and population growth, 30 rising, 8 and wealth gap, 107–10 Geographic Sweet Spot (Rule 5), 166–200, 402–3; see also location geopolitics, 172–75 Germany, 93, 138, 192, 208 billionaires in, 116, 121, 122, 388 currency in, 294 economic strength of, 286, 387–88, 391, 400 fall of Berlin Wall in, 215 Hartz reforms in, 215, 387 hype about, 335 and immigration, 45, 50, 53, 388 industrialization in, 144, 215 leadership in, 387, 388 and location, 388 per capita income in, 32 population growth rates in, 26, 45 retirement in, 37, 39, 45 slump in (1860s), 6 state bank in, 245, 388 workforce in, 19, 32, 37, 41, 55–56, 388 Ghana, 12, 87, 354 Giang Ho, 336 Gini coefficient, 99–100 global cities, 197–200 global economy: competition in, 17, 57, 68, 173–74, 193, 295 cycles in, 2, 3, 10, 172 protection measures, 172–73 global financial crisis (2007–2009): and debt, 300, 302–3, 327–28 effects of, vii, viii, xi–xii, 59, 69–70, 102, 253, 274–75, 279, 324–25, 328 and emerging markets, 146–48, 280 and global trade, 2, 172–75 and government spending, 146–47, 164 and new regulations, 276 onset of, 338 preceding events (BC), 1, 5, 13, 101, 102, 132, 177, 276, 358, 359 reality in years following (AC), 1, 5–6, 71, 134, 137, 173, 400 recovery from, 17, 23–24, 60, 93–94, 150 and state banks, 151–52, 276 as systemic crisis, 23 unexpectedness of, 5, 11, 337–38 globalization: and asset prices, 257–58 deglobalization, 274–77, 296, 394, 399 trends in, 1, 8, 199, 211, 295 and wages, 101 gold standard, end of, 252 Goldstone, Jack, 92 “golf course capitalism,” 331, 351 Good Billionaires/Bad Billionaires (Rule 3), 95–131 bad billionaires defined, 100, 105–6, 111, 121–22 billionaire lists, 100, 103–5, 111–12, 116–17, 120–21 and corrupt societies, 127–29 good billionaires defined, 104–5, 111 quality: good vs. bad, 110–15, 121–24 rise of billionaire rule, 129–31 see also wealth Goodhart’s Law, 13, 18 governments: key tasks of, 135 meddling, see Perils of the State too-small, 141–43 government spending, 135–41, 145–51, 164 Great Depression (1930s), 172, 173, 254, 258, 299, 325 Great Recession (2007–2009), see global financial crisis Greece, 5, 20 backsliding, 288, 346 corruption in, 137, 164 currency crisis in, 286, 293 debt crisis in, 51, 127, 137–38, 163–64, 300, 301, 327 economic cycle in, 88, 286 government collapse (2011), 80 tourism in, 288 Gref, German, 60, 67 Guericke, Konstantin, 49 guns versus butter, 158 Haiti, 346 Hanushek, Eric, 16 Harari, Yuval, 199 Henry I, king of England, 264 Hessler, Peter, 42 Hong Kong, 171, 176, 253, 254, 346 Huang, Yukon, 196 Humala, Ollanta, 76 Human Development Index (HDI), 10 Hungary, 151, 176, 320 Hussein, Jaffer, 246 Hussein, Saddam, 89 hype: applying the rules to, 351–55 of commodity economies, 340–42, 343 constant vigilance in, 344–47 on convergence myth, 338–41, 352 cover stories, 334–38, 347, 349–52 and disaster scenarios, 343–44 of emerging nations, 4, 8, 9, 333–34, 338–40 focus on one growth factor, 11, 14 indifference vs., 332, 333, 347–51 and media negativity, 349–50 of need for structural reform, 62–63 time differentiation in, 330, 335 Hype Watch (Rule 10), 329–55 Iceland, 88 immigration: anti-immigrant forces, 27, 44, 49, 53 and capital flight, 52–53 economic, 2, 48, 170 highly skilled, 48–54 and social services, 50 student visas, 49 and workforce, 28, 44–54 incremental capital output ratio (ICOR), 149 India, 157, 174, 283 bureaucracy in, 133, 162, 209 corruption in, 105–6, 112, 129, 164 economic cycle in, 8, 10, 62, 63, 94, 358, 375 GDP of, 4–5, 12, 175 and geopolitics, 172–73, 175 government spending in, 149, 150, 164 HDI ranking, 10 hype about, 4, 10, 333, 334, 336, 338, 345, 358, 370 and immigration, 50, 52 inflation in, 4, 236–38, 250–52, 374 infrastructure in, 374 international business in, 18, 375, 394 investment in, 205, 208–9, 231, 250, 374 leadership in, 70, 79, 81, 94, 350–51, 373–75 location of, 185, 374–75 manufacturing in, 208–10, 213 nationalism in, 81–82 population centers in, 195–97 population growth rates in, 26–27, 30, 31 prices in, 234–38 and regional alliances, 180–81, 375 service jobs in, 212–13, 218, 221 social unrest in, 4, 31, 70, 73, 74, 236 stagnation in, 6, 75 state banks in, 151–52, 153–54, 374 state intervention in, 135–36, 196 tax evasion in, 128–29 war with Pakistan, 97, 375 wealth gap in, 102, 105, 112, 116, 120, 129 workforce in, 32, 42–43, 44, 209 Indonesia, 116, 120, 326 and budget deficit, 148, 158, 163 closed economy of, 174, 178 commodities economy of, 227, 342, 376 currency of, 292, 293, 321 debt in, 320–23, 324, 325, 327 economic growth in, 82, 349 energy subsidies in, 157–58 financial deepening in, 327 GDP of, 175, 205 and hype, 330–31, 349 and international trade, 179–80, 293 leadership in, 59–60, 82, 93, 143 population growth rates in, 30 and regional alliances, 377 social unrest in, 70, 321 state banks in, 151, 320–23 industrialization, 98 and investment, 205 and population growth, 195 state assistance in, 144, 145–46 see also manufacturing Industrial Revolution, 6, 35, 255 inflation, 234–61 containment of, 21, 65 and currencies, 264–65, 292 and deflation, 5, 252–57 and economic growth, 238–40, 326, 365 and GDP, 235, 238 and government collapse, 242, 247 hyperinflation, 69, 97, 155, 239 and investment, 233, 238, 240 persistence of, 252 and prices, 237, 240–42, 257–61 stagflation, 64, 65, 240, 395 war on, 240–46 infrastructure, 10 and export trade, 207–8 inadequate, 141–43 investment in, 21, 135, 158, 175, 232–33 interest rates, 229, 235, 239, 240, 244, 260, 306, 335 International Monetary Fund (IMF): bailouts from, 5, 65, 68, 272, 280, 354, 372 on capital flight, 280 and debt, 299 on economic growth factors, 12, 152 forecasting record of, 336–38 on global debt crisis, 259, 324 global recession defined by, 2 and hype, 335–37 on inflation, 241 reforms required by, 68, 248, 372 WEO database of, 407 on women’s opportunities, 43 Internet, 1, 8, 221 censorship of, 308 “crowdfunding” sites on, 313 and global trade, 176, 197, 199 hype in, 334 information flow on, 1 service jobs for, 210, 211–13 shopping via, 257–58 investment: in commodities, 223–29 as economic indicator, 15, 202–3, 205–6, 233 in education, 16–18 by entrepreneurs, 158, 209, 226 and GDP, 202–3, 204, 205–6, 217, 231–32 good vs. bad, 203 ideal level of, 205–6 and inflation, 233, 238, 240 in infrastructure, 21, 135, 158, 175, 232–33 in manufacturing, 203–6, 232 and price shifts, 344 in real estate, 222–23, 229–31 shift from private to public, 149 speculation, 229–31, 313–14, 382 in technology, 218–21, 229, 233, 255 weak, 231–33 Iran, 174, 190 birth rate in, 26 economic cycle in, 87, 88, 346, 348 hype about, 346, 348 as Shiite theocracy, 170 trade with, 170–71 workforce in, 42 Iraq: economic cycle in, 87, 88, 89 hype about, 346, 348 leadership in, 89 refugees from, 2, 44 wars in, 167, 346 Ireland, 29, 288, 300, 346 Islam, Shiite-Sunni divide, 170 Israel, 175, 218–19 Italy, 83, 136, 192, 204 birth rate in, 26 debt in, 310, 385 internal devaluation in, 287 leadership in, 70, 81 wealth gap in, 102, 116–17, 121, 122 workforce in, 32, 39, 44 Jaitley, Arun, 106 Jamaica, 5, 66, 339 Japan, 26, 141, 190, 194 agriculture in, 384 bank crises in, 316, 319 billionaires in, 110, 116, 121 currency in, 294, 385 debt in, 300, 307, 316, 317, 318–19, 320, 384, 385 deflation in, 253–54, 256, 260 economic cycle in, 8, 57, 83, 93, 94, 175, 238, 308, 310, 317, 335 economic reform in, 384 and global trade, 176, 178, 184, 187, 294 hype about, 329–30, 334, 335, 348, 351 and immigration, 47, 50, 52, 384 industrialization in, 144, 178 insularity of, 46 investment in, 221, 238, 253, 318, 385 manufacturing in, 203, 212–13 and per capita GDP, 346 population decline in, 46, 383 reconstruction period in, 29 and regional alliances, 179, 183, 384 slump (1990s), 6, 258, 329, 335 technology in, 295 tourism in, 384–85 workforce in, 32, 37, 41, 43, 44, 55–56, 384, 385 “zombie companies” in, 318–19 Jim Yong Kim, 48 jobs: availability of, 32, 37, 55 in government or state-owned companies, 155–56 manufacturing as source of, 15 new, 57 replaced by machines, 16, 24, 101 and service sector, 202, 209–13, 221 Jobs, Steve, 49 Johnson, Simon, 176 Jonathan, Goodluck, 226, 352, 398 Jordan, 88, 206 Jordà, Òscar, 259 Jospin, Lionel, 34 Juncker, Jean-Claude, 80 Kahneman, Daniel, 56 Katz, Lawrence, 55 Kaunda, Kenneth, 96 Kenya, 31, 181–82, 190, 238, 354–55, 398–99 Kenyatta, Uhuru, 355, 399 Keynes, John Maynard, 149–50 Khan, Genghis, 8, 187 Khodorkovsky, Mikhail, 350 Kim Dae-jung, 66–67, 71 Kim Il-sung, 96 Kim Jong-il, 74, 86, 94 Kirchner, Nestor, 9, 64, 74, 76, 98 Kissinger, Henry A., 79 Kiss of Debt (Rule 9), 297–328 Zielinski play, 297–98, 299, 323 see also debt Kohler, Hans-Peter, 35 Koizumi, Junichiro, 335, 351 Kudrin, Alexei, 60, 67, 74 Kuznets, Simon, 101, 299 Lagarde, Christine, 58 Laos, 180 Latin America, 364–70 economic cycles in, 93, 291, 310, 342 infrastructure in, 186 and location, 177 regional alliances, 179, 182–83, 366 wealth gap in, 95–96, 97, 125–26 see also specific nations Lavagna, Roberto, 74 leadership: aging, 3, 59, 71–72, 75, 114 arrogance of, 59, 60, 61, 62, 71, 72 autocrats vs. democrats, 21, 63, 82, 85–91, 132, 333, 365 charismatic, 61, 68, 69 in circle of life, 60–62, 364–65 corruption of, 3, 12, 60, 61, 67, 91, 97, 105–6, 114, 127–29, 226, 320, 379 and elections, 364–65 fresh, 63, 64–70, 75, 76–77, 86, 94, 388 populist, 59, 77–80, 96–99, 363–64 and regional alliances, 179 stale, 21, 59, 61, 63, 70–77, 86, 92, 94, 249, 376, 392–93 technocrats, 63, 80–85, 237 tenure of, 73–75, 90 Li, Robin, 113 Libya, 4, 74, 92, 167, 168, 185 life expectancy, 10, 19, 25, 26, 28, 44 and retirement, 37, 38–40 Li Keqiang, 84, 150, 312 location, 166–200 and economic growth, 175–78, 199–200 and global trade, 171–75, 176–89, 199–200 population centers, 189–97 regional alliances, 173–75, 178–84, 199 service cities, 197–200 and shipping routes, 185–86, 402–3 long term, myth of, 399–401 López Michelsen, Alfonso, 188 Lucas, Robert, 280 Lucas paradox, 280 Lula da Silva, Luiz Inácio, 66, 69, 71, 74, 79, 284 Ma, Jack, 113, 114 Macri, Mauricio, 83, 365–66 Maduro, Nicolás, 158 Ma Huateng, 113 Maktoum, Sheikh Mohammed bin Rashid Al, ruling family of, 166–67 Malaysia, 190, 342 banking crisis in (1990s), 316 debt in, 299, 300, 306, 315, 325 economic cycle in, 29, 327, 378–79 and global trade, 174, 178, 180 hype about, 330, 331, 345, 348 immigration to, 48, 51 investment in, 206, 231 leadership in, 60, 76, 379 manufacturing in, 205 state banks in, 151, 323–24 wealth in, 107, 118 Malta, 342, 348 Malthus, Thomas, 27, 343 Manuel, Trevor, 341 manufacturing: and economic growth, 15–16, 216, 227, 341 for export, 207–8 and GDP, 204–6, 214–15 and innovation, 15, 204 international, 213–15, 216 investment in, 203–6, 232 and productivity, 15, 204–5, 207 stabilizing effect of, 215–17 virtuous cycle of, 206–10, 215, 221, 228 Mao Zedong, 84 Marcos, Ferdinand, 7, 79, 334 Marino, Roger, 49 markets: cycles of, viii–x, 74–75 and leadership, 79–81 predictive power of, 13–14, 75 Marx, Karl, 92 Mauro, Paolo, 336 Mboweni, Tito, 245 Meirelles, Henrique, 69, 245 Menem, Carlos, 82 Mercosur trade bloc, 182–83, 366 Merkel, Angela, 45, 387, 388 Mexico, 368–70 breakdown in government functions, 201–2 corruption in, 141 currency crisis (1994) in, 5, 65, 148, 273, 281, 285, 298, 324 debt of, 291, 298, 324–25 economic cycle in, 98, 348, 400 government spending in, 140, 141, 148 and immigration, 53–54 inflation in, 242, 246, 370 infrastructure in, 232, 369 investment in, 203, 205, 220, 232, 368, 369 leadership in, 81, 94, 98, 368–69 location of, 168, 169, 177, 193, 199–200, 370 manufacturing in, 369–70 and oil, 130, 368, 369 population centers in, 193–94, 199 population growth rates in, 26, 30, 369 and regional alliances, 183, 199, 370 social unrest in, 70, 77, 98 technology in, 219–20 wealth gap in, 115, 120, 364 workforce in, 40, 43 middle class: anger of, 3, 5, 72–73, 76–77 growing, 204 jobs for, 213 and wealth inequality, 102 Middle East: Arab Spring, 4, 31, 76, 91–92, 167, 242 energy subsidies in, 156, 157 investment in, 169–70 political unrest in, 167, 168, 169, 170, 396 restrictions on women in, 42 see also specific nations middle-income trap (hype), 344–45 Mikitani, Hiroshi, 110 Modi, Narenda, 79, 94, 210, 350–51, 370, 373–75 Mohamad, Mahathir, 60, 231, 280, 330 money flows, 2, 5, 268–70, 275, 277, 279–90, 292, 295–96 Monti, Mario, 81 Morales, Evo, 76 Morocco, 168, 185, 190, 199 Moynihan, Daniel Patrick, 234–35 Mozambique, 225, 354 Mubarak, Gamal, 133 Mubarak, Hosni, 76, 92 Mugabe, Robert, 86, 88–89, 96–97, 373 Musk, Elon, 123–24 Myanmar, 187, 333, 334 Nakasone, Yasuhiro, 46 Nanda, Ramana, 220 natural resources, 223–29 Nehru, Vikram, 81, 82 Netherlands, 41–42, 50, 176, 224–25, 255, 256, 299 news media, see hype New Zealand, 244 Nguyen Tan Dung, 90–91 Nicaragua, 98 Niger, 66, 339 Nigeria: commodities economy of, 4, 174, 223, 225–27, 228, 293, 394, 398 corruption in, 226–27, 398 economic cycle in, 88, 348, 398 GDP in, 12, 87, 227 government spending in, 141–42 hype about, 348, 398 inflation in, 242 leadership in, 352–53, 365, 398 and regional alliance, 182 slipping backward, 202, 205, 232, 398 workforce in, 19, 29, 31, 185 North America Free Trade Agreement (NAFTA), 183 North Korea, 74, 86, 96, 136, 174 Norway, 90, 225, 300, 346, 348 Nyerere, Julius, 96 Obasanjo, Olusegun, 398 OECD (Organization for Economic Cooperation and Development), 40, 44, 48–49 oil: and bad billionaires, 100, 111 and corruption, 226 curse of, 12, 169, 224, 227 and “Dutch disease,” 224–25 exporters of, 155, 174, 341, 394 extraction of, 124–25 investment in, 223, 224, 225, 228 offshore, 130 price of, 4, 29, 60, 62, 64, 65, 89, 111, 114, 154–55, 227–29, 257, 268, 282, 293, 333, 342, 348, 362, 393, 394, 398 shale, 228–29 Okonjo-Iweala, Ngozi, 227 Oman, 342 Omidyar, Pierre, 49 OPEC, 64, 65, 240, 333 Ortega, Daniel, 98 Osborne, Michael, 54 Osnos, Evan, 145 Ostry, Jonathan, 125–26 Ozden, Caglar, 51 Pacific Alliance, 183–84, 199 Pakistan, 142, 180, 370–73 infrastructure in, 187, 372 leadership in, 77, 94, 96, 372 service jobs in, 212 war with India, 97, 375 workforce in, 31, 42, 370–71, 373 Palaiologos, Yannis, 164 Paldam, Martin, 241 Palestine, 175 Papademos, Lucas, 80 Paraguay, 182, 183, 242 Park Chung-hee, 85 Park Geun-hye, 47, 383 pattern recognition, 7–11 Peña Nieto, Enrique, 94, 115, 368–69 People Matter (Rule 1), 23–57; see also workforce per capita income, 10, 339–40, 348 Perils of the State (Rule 4), 132–65 and bad billionaires, 127–29 devaluing the currency, 290–96, 381 energy subsidies, 156–58 and leaders, see leadership meddling in private companies, 158–62, 246, 250–51 and population growth, 33, 35–36 privatization, 161–62, 177 sensible role for state, 162–65 state banks, 134, 151–54, 243–44 state companies as political tools, 154–56, 165 Perón, Juan, 333 Persson, Stefan, 174, 179 Peru, 52, 188, 190, 291 commodities economy of, 174, 228, 368 investment in, 228 leadership in, 98 and Pacific Alliance, 183–84 workforce in, 43 pessimism, prevailing fashion of, 9, 275, 360, 399 Philippines, 180, 193, 194, 198 economic recovery in, 327, 350, 375–76, 378 economic slowdown in, 346 hype about, 333, 334, 348 investment in, 232, 375–76 leadership in, 79, 97, 376 population growth in, 31 service jobs in, 212–13, 221 social unrest in, 70, 77 wealth redistribution in, 97 workforce in, 19, 31 Piketty, Thomas, 104 Piñera, Sebastián, 34–35, 95–96, 98, 102, 126 Pinochet, Augusto, 82, 98, 99 Pires, Pedro, 353 Poland, 139, 190, 339 billionaires in, 109, 120, 391 currency of, 288–90 debt in, 391 investment in, 205, 215, 391 leadership in, 74–75, 365 location of, 168, 176, 177, 198–200 political shift in, 391 population growth rate in, 30, 39 private economy in, 159, 160, 161 workforce in, 39, 391, 392 population growth: baby bonuses, 33–36 decline in, 19–20, 24–32, 44, 56, 392, 394, 399 and economic growth, 29–32, 57 forecasts of, 25, 27, 28, 32 measurement of, 21 and replacement fertility rate, 26, 33, 37, 47 and workforce growth, 18–19, 39, 57 populism, 59, 60, 77–80, 81–82, 96–99, 100, 247, 363–64, 389 Portugal, 29, 30, 39, 288 Price of Onions (Rule 7), 234–61; see also inflation; prices prices, 234–61 asset, 257–61 of commodities, 111, 114, 174, 228, 263, 278, 341–42, 354, 365, 386; see also oil consumer, 235, 256, 257–61 and currency, 294 and deflation, 256 falling, 4, 5, 253–54 of food, 234, 235, 236, 241–42, 365 to foreign buyers, 258 “Mapping the World’s Prices,” 265 of money, 304 public anger about, 237, 241–42 stabilizing, 261 of stocks, 313 validity of data about, 13 wage-price spiral, 240 Pritchett, Lant, 336, 347 production: chain of, 27 as growth factor, 15–16 productivity: elusive x factor in, 20 and government spending, 148–49 and ICOR, 149 and immigration, 51 in manufacturing, 15, 204–5, 207 measurement of, 17, 18–21 and population trends, 39, 57 and technology, 220–21 Putin, Vladimir, 18, 42, 392–94 and billionaires, 114, 115, 350 and economic reforms, 58–59, 60, 61, 67–69, 78, 284 hype about, 342, 350, 393, 394 and populism, 59 rise to power, 61, 66, 67 and social unrest, 73–74 and stale leadership, 60, 71–72, 76, 114, 159–60, 392 and state intervention, 159–60, 350 Qaddafi, Muammar el-, 74 Rahman, Sheikh Mujibur, 96 Rajan, Raghuram, 251 Rajapaksa, Mahinda, 180, 373 Rao, Jaithirth, 209–10 Razak, Najib, 379 Reagan, Ronald, 64–65, 66, 70 Real Effective Exchange Rate (REER), 265, 267, 272 real estate: bad billionaires in, 100, 105, 107, 108, 110–11, 364, 369 and debt, 310–13 investment binges in, 222–23, 228, 229–31, 382, 387 prices of, 108, 257–61, 309, 312, 382, 389 and state banks, 154 recessions: 1930s (Great Depression), 172, 173, 254, 258 1970s, 2, 64, 65 1980s, 2, 64, 305 1990s, 2, 6, 13, 64, 66, 68, 83, 138, 148, 161 2007–2009, see global financial crisis in Asia (1997-1998), see Asia China as possible source of, 2–3 cycles of, 2, 14, 64–66, 87–88 debt as cause of, 260, 298–99, 301, 303–4, 308–10, 317–19 dot-com bust, see dot-com bubble forecasting of, 14, 337–38, 400 official documentation of, 14 U.S. origins of, 2, 132, 303–4, 305–6, 308–9, 327–28, 362 Regional Comprehensive Economic Partnership, 173 rent-seeking industries, 110–11, 122, 123, 124 Renzi, Matteo, 81, 94 Rhodes-Kropf, Matthew, 220 Rickards, James, 168 Robinson, James, 176 robots, 27, 36, 54–57, 214 Rockefeller, John D., 124 Rodrik, Dani, 207 Romania, 87, 162, 238, 348, 391–92 Rothschild, Baron de, 349 Rousseff, Dilma, 80, 152–53, 155, 366, 368 Roy, Nilanjana, 236 Rubin, Robert, 341 Russia, 193, 326, 344 aging population in, 72 authoritarianism in, 3, 60 author’s speech in, 58–59 banking crisis (1990s), 61 billionaires in, 103, 107, 114–15, 116, 119, 120, 364, 393 birth rate in, 26 brain drain from, 52 capital flight from, 52, 281, 282, 367 commodities economy in, 4, 205, 225, 341, 367, 376, 393, 397 currency of, 263, 265, 268, 281, 282, 289, 291, 393, 394 debt in, 59, 291, 327, 394 economic growth in, 17, 60, 63, 66, 69, 159, 340, 358 economic slowdown in, 346, 392 education in, 17 financial deepening in, 327 GDP of, 4, 175, 394 government spending in, 139, 149, 394 hype about, 4, 338, 347, 348, 350 inflation in, 241, 242, 246 international business in, 18, 394 international sanctions against, 282 investment in, 205, 208, 232, 394–95, 397 leadership in, 349, 392–94; see also Putin, Vladimir oil in, 29, 60, 62, 72, 114, 155, 159, 265, 282, 341, 342, 393, 394 oligarchs in, 107, 114–15, 160, 268 per capita income in, 61, 68 political cronyism in, 4, 159, 160 reforms in, 58, 59, 60, 61, 66, 67, 68, 78 social unrest in, 4, 73–74 state banks in, 151–52, 159, 282 stock exchange in, 161 tech companies in, 17, 159–60 workforce in, 30, 42, 155, 393 Rwanda, 181, 182, 199 Rybolovlev, Dmitry, 107 Sakurauchi, Yoshio, 329–30 Samuelson, Paul, 13 Santos, Manuel, 188, 189 Sassen, Saskia, 197 Saudi Arabia, 29, 42, 170, 190 currency of, 396 energy subsidies in, 156, 157 GDP in, 87 government spending in, 139, 396 leadership in, 87, 396 and oil prices, 227–28, 279, 333, 394 roller-coaster economy of, 227–28 savings, 16, 277–79 Scandinavia, 35, 42 Schlumpeter, Joseph, 360 Schularick, Moritz, 259 service businesses, 204, 210–13 service cities, 197–200 Sharif, Nawaz, 94, 372 Sharma, Rahul, 170–71 Shinawatra, Thaksin, 79, 97 Shinawatra, Yingluck, 78–79, 217 Sierra Leone, 225 Silk Road, 8, 187–88, 399 Singapore, 32, 33, 175, 182, 238, 346, 348 Singh, Manmohan, 62, 73, 74–75, 133, 187, 234–37, 250 Sirisena, Maithripala, 181 Sisi, Abdel Fattah el-, 76, 157 social upheavals: Arab Spring, 4, 31, 76, 91–92, 167, 242 “middle-class rage,” 72–73 as revolts against stale leadership, 21, 61, 70, 72, 73–74, 77, 92 spread of, 3, 91–92 South Africa: commodities economy in, 223, 225, 263, 376, 397 corruption in, 164 currency in, 397 debt of, 291 decline in development of, 3, 6, 205, 346, 397 economic growth in, 10, 38, 90, 340 HDI ranking, 10 immigration to, 48 investment in, 232, 397 leadership in, 76, 90, 352–53, 397 life expectancy in, 10 social unrest in, 4, 73, 74 South Asia, 370–75, 400 commodities economies in, 371 political instability in, 180, 373 regional alliances, 179, 180 restrictions on women in, 42 Southeast Asia, 375–80 economic cycle in, 310, 324, 326, 327, 349, 375–76, 400 and global trade, 176, 178, 179–80 and hype, 330, 331 South Korea, 190, 197–98 and China, 382 debt in, 216, 321 economic growth in, 10, 66–67, 87, 175, 216, 238, 308 government spending in, 140, 146 HDI ranking, 10 homogeneity in, 46–47 hype about, 333, 334, 339 inflation in, 237, 246 and international business, 179, 382–83 investment in, 205, 206, 218, 221, 225, 238, 253 leadership in, 66–67, 82, 85, 93, 349 literacy in, 17 manufacturing in, 205, 212–13, 214–15, 216, 225, 382–83 per capita income in, 215, 316 productivity in, 20 robots in, 56 technology in, 218, 221, 295, 382 wealth in, 107–8, 109, 116, 117–18, 120, 121–22, 383 workforce in, 40, 43, 44, 47, 56, 140, 383 Soviet Union: after 1991, see Russia central plan of, 81, 85 fall of, 29, 67, 107, 109, 151, 198, 208, 242 Spain, 29, 32, 192 current account in, 288 debt in, 327–28, 389–90 internal devaluation in, 287 manufacturing in, 387 Spence, Michael, 341 Spence Commission, 341–42 Sri Lanka, 180–81, 187, 212, 365, 370–71, 373 stagflation, 64, 65, 240, 395 stagnation, 6, 83, 88, 91, 105, 172, 192 state banks, 134, 151–54 state capitalism, 133–35, 155 stock markets: best time to buy in, 349 and crisis of 2008, 146–47 mania/crash, 258–61, 313–14, 318 signals from, 13, 74–75, 133, 134, 258, 313 state-run companies in, 135 “structural reform,” 62–63, 163 Studwell, Joe, 17, 143–44 Sudan, 142, 185 Suharto, 59–60, 82, 93, 293, 320–21, 330 Summers, Lawrence, 104, 336, 347 supply and demand, 256–57 supply networks, 235, 238, 239–40, 243, 253, 292, 365 supply side, 24 Surowiecki, James, 13 Sweden, 42, 50, 136, 138 billionaires in, 108, 116, 121, 123 debt in, 300 economic cycle in, 17, 90, 256 financial crisis (1990s), 317 and inflation, 245 Switzerland, 41, 50, 121, 138–39, 198, 294 Syria: and Arab Spring, 92, 167 civil war in, 4, 92, 168, 224 economic cycle in, 87, 88 leadership in, 89 refugees from, 2, 44, 48 Taiwan, 144, 151, 190 banking crises in (1995, 1997), 316, 317 and China, 382–83 debt in, 291, 307, 317–18 economic growth in, 87, 175, 238, 308, 348 government spending in, 140, 146 hype about, 333, 334, 345, 346, 348 and international business, 382–83 investment in, 205, 218 leadership in, 82, 86, 93 literacy in, 17 per capita income in, 316 and regional alliances, 179, 383 and technology, 221, 295 wealth in, 107–8, 118, 120, 122 working-age population in, 383 Tanzania, 96, 181–82 taxes: corporate, 63, 138 cutting, 67 evading, 128, 137, 142, 164 failure to collect, 141–43 and government spending, 136–37 import tariffs, 172 inheritance, 124 and public services, 140 Taylor, Alan M., 259, 304, 310 technology: automation, 214 cycle of, 8, 124, 218–21 driverless cars, 54 and immigration, 51–52 investment in, 218–21, 229, 233, 255 and jobs, 101, 211, 212 and leisure time, 199 and productivity, 20, 51, 119, 220–21 robot workers, 27, 36, 54–57, 214 and service businesses, 210, 211–13 3-D printing, 8, 214 Tetlock, Philip, 400 Thailand, 47–48, 189–90 capital flight from, 272, 292 commodities economy in, 342, 379 credit binge in, 199, 297, 298–302, 306, 315, 328, 380 currency of, 217, 267, 271–73, 273, 285–86, 292 economic contraction in, 286, 349, 379 economic growth in, 79, 217, 256, 348, 380 economic recovery of, 288, 302, 325, 327 and hype, 330, 349 infrastructure in, 207–8, 230 and international trade, 174, 178, 179–80, 216 investment in, 206, 217, 225, 230–31 leadership in, 78–79, 97, 379–80 manufacturing in, 216–17, 225, 227, 379 military coup in (2014), 379–80 population growth rates in, 30, 47 social unrest in, 78–79, 189, 190, 217 state banks in, 151, 321, 323–24 Thatcher, Margaret, 64–65, 68, 94 Thiel, Peter, 104, 119, 125 thrift, 16, 277–79 Time, 331, 334–35, 347, 349, 350, 352 tourism, 2, 37, 199, 211, 288, 384–85 trade balance, 269 Transatlantic Trade and Investment Partnership, 173, 179 Trans-Pacific Partnership, 173, 178, 361, 377, 378, 383, 384, 386 Trudeau, Justin, 386 Trump, Donald, 53, 364 Tsai Ing-wen, 383 Tunisia, 91–92, 224 Turkey, 190, 326 currency of, 273–74, 280, 283, 291, 292, 293, 396 debt of, 291, 306, 327, 328 economic growth in, 66, 69, 72 financial deepening in, 327 government spending in, 139, 247–48 hype about, 345, 348 immigration to, 48 inflation in, 241, 242, 246, 247–50, 326 leadership in, 60, 66, 71–72, 74, 349, 395 and location, 395–96 per capita income in, 68, 331, 348 population growth in, 31 populist nationalism in, 60, 72, 247 reforms in, 67–68, 72, 248, 249, 331 social unrest in, 4, 61, 72, 73, 74 wealth in, 114, 116, 120 Tusk, Donald, 74–75 Uganda, 87, 181, 354–55 United Arab Emirates, 167, 170 United Kingdom, see Britain United Nations (UN), 10, 47 on population growth, 19, 25, 27, 33, 44–45 United States, 194–95, 360–64 billionaires in, 107, 108, 114, 116, 118–19, 121, 123–25, 364 birth rate in, 26 checks and balances in, 364 credit markets in, 13, 298, 303–4, 305–6, 316 currency of, 266, 271, 272, 362–63 current account deficit in, 278, 362–63 debt in, 363 economic growth in, 3, 288, 337–38, 340 economic recovery in, 24, 64–65, 102, 360 economic strength of, 266, 400 financial speculation in, 102 and geopolitics, 172–73 and global trade, 184, 185, 402–3 government spending in, 138, 139 and hype, 361–62 and immigration, 45, 49–50, 52, 53, 360 industrialization in, 144, 215 inflation in, 240–41, 258 infrastructure in, 207, 208 life expectancy in, 39, 40 and location, 176–77, 200 long boom of, 255–56 manufacturing in, 204, 213, 214, 215, 361 oil and gas in, 228–29, 362 per capita income in, 32, 66, 339, 346 polarization in, 62–63, 132, 363–64 productivity in, 20, 51–52, 220–21, 257, 303 recessions originating in, 2, 132, 303–4, 305–6, 308–9, 327–28, 362 and regional alliances, 173–75, 178, 183, 188, 199, 361, 383, 384, 386 “second term curse” in, 70–71 technology in, 20, 218, 221, 294, 303, 361–62 Treasury bonds, 280 Washington Consensus, 132–33 and wealth gap, 101, 102, 364 workforce in, 19, 32, 37, 41–42, 43–44, 360 Uribe, Álvaro, 77, 183, 350 Uruguay, 300 Velasco, Juan, 98 Venezuela, 4, 158 economic cycle in, 87, 346, 365 leadership in, 64, 69, 76, 77, 98, 365 oil in, 333, 334 and regional alliances, 182, 366 Vietnam, 42, 202 billionaires in, 118 Communist Party in, 377–78 currency in, 295 fiscal deficit in, 377 and global trade, 174, 176–78, 180, 295 hype about, 345 inflation in, 378 investment in, 378 leadership in, 90–91 location of, 168, 177–78, 185, 378 manufacturing in, 213, 378 per capita income in, 178, 378 population centers in, 190, 191, 199 Viravaidya, Mechai, 47 Volcker, Paul, 241, 245, 335 wage-price spiral, 240 Walton family, 119 Wang Jianlin, 114 wealth: balance in, 103 billionaire lists, 100, 103, 104, 116, 117, 120–21 and capital flight, 52–53, 107, 279–81, 292 creation of, 99, 103, 115 crony capitalism, 105–6, 112, 130, 332 of entrepreneurs, 118–19, 122 in family empires/inherited, 104, 116–21 measures of, 101 redistribution of, 95, 96–98, 99, 101, 126 of robber barons, 124 scale of, 107–10 and state meddling, 127–29 wealth gap, 95–96, 99–102, 364 and corruption, 127–29 and easy money, 101–2, 108 and economic declines, 125–27 rise of, 129–31 welfare states, 64, 65, 93, 97, 126, 138, 140–41 Wen Jiabao, 307, 308, 311–12 Widodo, Joko, 143, 157, 163, 376–77 Wiesel, Elie, 331–32 wildebeest, survival of, viii, ix, xi women: and birth rates, 18, 25–26, 28, 33–36, 43, 44, 47, 392 economic restrictions on, 42 education of, 26, 41 working, 28, 34, 35, 36, 40–44, 47 workforce: aging, 392 and available jobs, 32, 37, 55 and baby bonuses, 33–36 and economic growth, 24, 26, 52 global, 55–56 growth rate in, 28–32 highly skilled, 48–54 hours worked by, 18 and immigration, 28, 44–54 manual labor, 213 new people in, 28, 36, 57 participation rate in, 36–37 and pension funds, 279 and population declines, 24–32, 35, 38, 43, 44, 56 and productivity data, 18–19, 39 replaced by machines, 16, 24 and retirement, 36–40 robots in, 54–57 skilled, 48–54 wages, 101, 184, 185, 204, 214, 243, 257 women in, 28, 34, 35, 36, 40–44, 47 World Bank: on convergence, 339, 341 data set of, 407 on economic growth factors, 12, 18, 342, 346 forecasting record of, 336, 338 on inflation, 242 on infrastructure, 186, 187 on middle-income trap, 345 on new business, 48 on service sector, 210–11 Spence Commission, 341–42 on wealth gap, 100 on workforce, 42, 51 world economy, 358–401 absence of optimism in, 359 combined scores of, 358–59 crisis (2008), see global financial crisis disruptions of, 358–59 potential growth rate of, 359 world maps, 356–57, 402–3 see also specific nations World Trade Organization, 177 Wu Jinglian, 314 Xiao Gang, 311 Xi Jinping, 120, 156, 187, 208 Yellen, Janet, 101 Yeltsin, Boris, 67, 242 Yemen, 92 Yudhoyono, Susilo Bambang (SBY), 93, 157 Zambia, 96, 354 Zambrano, Lorenzo, 219–20 Zeihan, Peer, 184 Zielinski, Robert, The Kiss of Debt, 297–98, 299, 323 Zimbabwe, 86, 88–89, 96–97, 373 Zoellick, Robert, 242 “zombie companies,” 318–19 Zong Qinghou, 113 Zuckerberg, Mark, 104, 119, 124 Zuma, Jacob, 352, 397 ALSO BY RUCHIR SHARMA Breakout Nations: In Pursuit of the Next Economic Miracles ABOUT THE AUTHOR Ruchir Sharma is head of emerging markets and chief global strategist at Morgan Stanley Investment Management, with more than $20 billion of assets under management.

Developing societies do tend to be more unequal than rich ones, but it is increasingly unclear that their inequality problem will naturally disappear. The belief that inequality fades over time had been the working assumption since the 1950s, when the economist Simon Kuznets pointed out that countries tend to grow more unequal in the early stages of development, as some poor farmers move to better-paying factory jobs in the cities, and less unequal in the later stages, as the urban middle class grows. Today, however, inequality appears to be rising at all stages of development: in poor, middle-class, and rich countries. One reason for the widening threat of inequality is that the period of intense globalization before 2008 tended to depress blue-collar wages.


pages: 205 words: 61,903

Survival of the Richest: Escape Fantasies of the Tech Billionaires by Douglas Rushkoff

"World Economic Forum" Davos, 4chan, A Declaration of the Independence of Cyberspace, agricultural Revolution, Airbnb, Alan Greenspan, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, basic income, behavioural economics, Big Tech, biodiversity loss, Biosphere 2, bitcoin, blockchain, Boston Dynamics, Burning Man, buy low sell high, Californian Ideology, carbon credits, carbon footprint, circular economy, clean water, cognitive dissonance, Colonization of Mars, coronavirus, COVID-19, creative destruction, Credit Default Swap, CRISPR, data science, David Graeber, DeepMind, degrowth, Demis Hassabis, deplatforming, digital capitalism, digital map, disinformation, Donald Trump, Elon Musk, en.wikipedia.org, energy transition, Ethereum, ethereum blockchain, European colonialism, Evgeny Morozov, Extinction Rebellion, Fairphone, fake news, Filter Bubble, game design, gamification, gig economy, Gini coefficient, global pandemic, Google bus, green new deal, Greta Thunberg, Haight Ashbury, hockey-stick growth, Howard Rheingold, if you build it, they will come, impact investing, income inequality, independent contractor, Jane Jacobs, Jeff Bezos, Jeffrey Epstein, job automation, John Nash: game theory, John Perry Barlow, Joseph Schumpeter, Just-in-time delivery, liberal capitalism, Mark Zuckerberg, Marshall McLuhan, mass immigration, megaproject, meme stock, mental accounting, Michael Milken, microplastics / micro fibres, military-industrial complex, Minecraft, mirror neurons, move fast and break things, Naomi Klein, New Urbanism, Norbert Wiener, Oculus Rift, One Laptop per Child (OLPC), operational security, Patri Friedman, pattern recognition, Peter Thiel, planetary scale, Plato's cave, Ponzi scheme, profit motive, QAnon, RAND corporation, Ray Kurzweil, rent-seeking, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, Shoshana Zuboff, Silicon Valley, Silicon Valley billionaire, SimCity, Singularitarianism, Skinner box, Snapchat, sovereign wealth fund, Stephen Hawking, Steve Bannon, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, surveillance capitalism, tech billionaire, tech bro, technological solutionism, technoutopianism, Ted Nelson, TED Talk, the medium is the message, theory of mind, TikTok, Torches of Freedom, Tragedy of the Commons, universal basic income, urban renewal, warehouse robotics, We are as Gods, WeWork, Whole Earth Catalog, work culture , working poor

Jeff Bezos has a yacht with a helipad that serves as a companion yacht to his main yacht, which has large sails that would get in the way of his helicopter during takeoff and landing. There is no such thing as enough. This drive toward wealth and power is like a poker game where everyone stays at the table until a single player has won all the money. It’s a drive toward inequality as the ultimate goal—what economists would call a Gini coefficient of 1—where just one person has accumulated everything. All the financial, technological, and cultural feedback loops in which they are participating support this singular drive. As game theorist John Nash (the subject of the movie A Beautiful Mind ) demonstrated in his early work, the wealthier party in a transaction always has an advantage if no rules or limits are put in place to counter this effect.

(New York: Viking Penguin, 1987), 251.   38   “we’re way closer … people’s brains” : Matthew Gault, “Billionaires See VR as a Way to Avoid Radical Social Change,” Wired , February 15, 2021, https:// www .wired .com /story /billionaires -use -vr -avoid -social -change /.   38   “It is not possible … you wanted” : Gault, “Billionaires See VR as a Way to Avoid Radical Social Change.”   39   “Yes, we are in a pandemic” : David Zweig, “$25,000 Pod Schools: How Well-to-Do Children Will Weather the Pandemic,” New York Times , July 30, 2020, https:// www .nytimes .com /2020 /07 /30 /nyregion /pod -schools -hastings -on -hudson .html.   41   legions of Amazon workers : Joey Hadden, “Amazon Delivery Drivers Share What It’s Like to Be on the Front Lines of the Coronavirus Pandemic, Including Not Having Time to Wash Their Hands and Uncleaned Vans,” Business Insider , April 2, 2020, https:// www .businessinsider .com /why -amazon -delivery -workers -feel -exposed -and -vulnerable -to -coronavirus -2020 -3.   41   Amazon avoids taxes : Matthew Gardner, “Amazon Has Record-Breaking Profits in 2020, Avoids $2.3 Billion in Federal Income Taxes,” Institute on Taxation and Economic Policy, February 3, 2021, https:// itep .org /amazon -has -record -breaking -profits -in -2020 -avoids -2 -3 -billion -in -federal -income -taxes /.   41   anti-competitive practices : Mark Chandler, “Amazon Accused of Anti-Competitive Practices by US Subcommittee,” Bookseller , October 8, 2020, https:// www .thebookseller .com /news /amazon -accused -anti -competitive -practices -us -subcommittee -1222115.   41   abuses labor : Jodi Kantor, Karen Weise, and Grace Ashford, “Power and Peril: 5 Takeaways on Amazon’s Employment Machine,” New York Times , June 15, 2021, https:// www .nytimes .com /2021 /06 /15 /us /politics /amazon -warehouse -workers .html; Casey Newton, “Amazon’s Poor Treatment of Workers Is Catching up to It during the Coronavirus Crisis,” Verge , April 1, 2020, https:// www .theverge .com /interface /2020 /4 /1 /21201162 /amazon -delivery -delays -coronavirus -worker -strikes.   42   more people opened online trading : Annie Massa, “Pandemic-Fueled Day Trading Is Overwhelming Online Brokers—and the Traders Are Fuming,” Fortune , December 9, 2020, https:// fortune .com /2020 /12 /08 /day -trading -online -brokers -tech -failure -crashes -outages /.   42   Shares of Zoom went up : Shanhong Liu, “Price of Zoom shares traded on Nasdaq Stock Market in 2020 and 2021,” Statista , August 9, 2021, https:// www .statista .com /statistics /1106104 /stock -price -zoom /.   42   Jeff Bezos’s fortune rose : Chase Peterson-Withorn, “How Much Money America’s Billionaires Have Made During the Covid-19 Pandemic,” Forbes , April 30, 2021, https:// www .forbes .com /sites /chasewithorn /2021 /04 /30 /american -billionaires -have -gotten -12 -trillion -richer -during -the -pandemic.   42   five biggest U.S. tech companies : The staff of the Wall Street Journal , “How Big Tech Got Even Bigger,” Wall Street Journal , February 6, 2021, https:// www .wsj .com /articles /how -big -tech -got -even -bigger -11612587632.   42   Netflix’s share price : Jonathan Ponciano, “5 Big Numbers That Show Netflix’s Massive Growth Continues during the Coronavirus Pandemic,” Forbes , October 20, 2020, https:// www .forbes .com /sites /jonathanponciano /2020 /10 /19 /netflix -earnings -5 -numbers -growth -continues -during -the -coronavirus -pandemic /.   43   “Many creatives, startups, and techies” : Jen Murphy, “Remote Workers Flee to $70,000-a-Month Resorts While Awaiting Vaccines,” Bloomberg , February 15, 2021, https:// www .bloomberg .com /news /articles /2021 -02 -15 /remote -workers -flee -to -luxury -beach -resorts -while -awaiting -vaccines.   43   “It’s been great here” : Julie Satow, “Turning a Second Home into a Primary Home,” New York Times , July 24, 2020, https:// www .nytimes .com /2020 /07 /24 /realestate /coronavirus -second -homes - .html.   43   Each 1 percent increase : Mary Van Beusekom, “Race, Income Inequality Fuel COVID Disparities in US Counties,” Center for Infectious Disease Research and Policy, University of Minnesota, January 20, 2021, https:// www .cidrap .umn .edu /news -perspective /2021 /01 /race -income -inequality -fuel -covid -disparities -us -counties; Tim F. Liao and Fernando De Maio, “Association of Social and Economic Inequality with Coronavirus DISEASE 2019 Incidence and Mortality across US Counties,” JAMA Network Open 4, no. 1 (2021), https:// doi .org /10 .1001 /jamanetworkopen .2020 .34578.   43   people processing pork : Tina L.

The dependably wealth-apologist New York Times was busy running non-ironic photo spreads of families “retreating” to their summer homes—second residences worth well more than most of our primary ones—and stories about their successes working remotely from the beach, or retrofitting extra bedrooms as offices. “It’s been great here ,” one venture fund founder explained. “If I didn’t know there was absolute chaos in the world … I could do this forever.” That chaos in the world was real. While the wealthy retreated, the poor were clobbered. Each 1 percent increase in a county’s income inequality was associated with a 2 percent increase of Covid infection and a 3 percent rise in related deaths. By nearly every metric, the poorer a region or country, the more Covid and death. Likewise, the people processing pork and beef suffered over 100 percent greater transmission rates than the people to whom all that meat was delivered.


pages: 652 words: 172,428

Aftershocks: Pandemic Politics and the End of the Old International Order by Colin Kahl, Thomas Wright

"World Economic Forum" Davos, 2021 United States Capitol attack, banking crisis, Berlin Wall, biodiversity loss, Black Lives Matter, Boris Johnson, British Empire, Carmen Reinhart, centre right, Charles Lindbergh, circular economy, citizen journalism, clean water, collapse of Lehman Brothers, colonial rule, contact tracing, contact tracing app, coronavirus, COVID-19, creative destruction, cuban missile crisis, deglobalization, digital rights, disinformation, Donald Trump, drone strike, eurozone crisis, failed state, fake news, Fall of the Berlin Wall, fear of failure, future of work, George Floyd, German hyperinflation, Gini coefficient, global pandemic, global supply chain, global value chain, income inequality, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, it's over 9,000, job automation, junk bonds, Kibera, lab leak, liberal world order, lockdown, low interest rates, Mahatma Gandhi, Martin Wolf, mass immigration, megacity, mobile money, oil shale / tar sands, oil shock, one-China policy, open borders, open economy, Paris climate accords, public intellectual, Ronald Reagan, social distancing, South China Sea, spice trade, statistical model, subprime mortgage crisis, W. E. B. Du Bois, World Values Survey, zoonotic diseases

Though the government acted quickly, the systemic vulnerability at the heart of the problem was too deep to overcome. Economic disparities were another critical factor. In 2018, Peru’s Gini coefficient—a common measure of inequality—was 0.43 (the average across Latin America and the Caribbean as a whole was 0.46). A Gini coefficient of zero expresses perfect equality, whereas a coefficient of 1 expresses maximum inequality. By comparison, the average score in high-income countries in 2018 was 0.32. Peru’s inequality was emblematic of Latin America’s standing as the second-most-unequal region in the world (after sub-Saharan Africa).87 Consequently, despite years of economic growth, poverty remained a major challenge.

Quoted in Mitra Taj and Anatoly Kurmanaev, “Virus Exposes Weak Links in Peru’s Success Story,” New York Times, June 12, 2020, https://www.nytimes.com/2020/06/12/world/americas/coronavirus-peru-inequality-corruption.html.   87.  Matías Busso and Julián Messina, The Inequality Crisis: Latin America and the Caribbean at the Crossroads (Washington, DC: Inter-American Development Bank, 2020), 3, 17, 46, https://publications.iadb.org/publications/english/document/The-Inequality-Crisis-Latin-America-and-the-Caribbean-at-the-Crossroads.pdf.   88.  Laís Abramo et al., Social Panorama of Latin America (Santiago: Economic Commission for Latin America and the Caribbean, 2019), 96, https://repositorio.cepal.org/bitstream/handle/11362/44989/1/S1901132_en.pdf.

In particular, it laid bare, accelerated, and magnified the impact of underlying forces between and within countries, straining economies, worsening inequality, and contributing to social and political unrest. In so doing, the aftershocks of the influenza pandemic made an already tumultuous and conflict-prone world even more unstable. As the 1920s and 1930s marched on, the geopolitical impact of the Great Influenza became harder to discern. And yet this history is no less important to consider in our current moment, because many of the factors that made the world so volatile, crisis-prone, and dangerous during the interwar period—mounting inequality, widespread civil strife, rising populism and xenophobia, growing economic nationalism and pressures to deglobalize, resurgent authoritarianism, backsliding democracy, escalating great-power rivalry, American retreat, brittle international institutions, and a free world in disarray—were already reemerging in our time during the years immediately before the coronavirus pandemic struck.


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, barriers to entry, basic income, benefit corporation, business cycle, carbon tax, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, endogenous growth, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, Kenneth Arrow, labor-force participation, manufacturing employment, market bubble, minimum wage unemployment, new economy, off-the-grid, postindustrial economy, purchasing power parity, race to the bottom, rent-seeking, rising living standards, Robert Gordon, Robert Shiller, Ronald Reagan, school choice, shareholder value, sharing economy, Skype, Steve Jobs, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, universal basic income, War on Poverty, working poor, zero day

In the second chart, the vertical axis shows the degree to which transfers reduce income inequality; given its low spending, Australia’s public transfer system is effective at redistributing income.101 FIGURE 4.19 Australia’s government transfers: heavily targeted, inexpensive, and redistributive Australia is “Asl.” Targeting: concentration coefficient for government transfers; “high” indicates more targeted, “low” more universal. Transfer generosity: government transfers as a share of household income. Redistribution: percentage reduction in inequality of household income (Gini coefficient) when government transfers are added. Data source: Ive Marx, Lina Salanauskaite, and Gerlinde Verbist, “The Paradox of Redistribution Revisited,” unpublished paper, 2012, using Luxembourg Income Study data.

After rising steadily for a century, the share of Americans completing secondary school has been stuck at 75 percent for several decades.31 Social and economic shifts are partly to blame: there are more students for whom English is not the principal language at home, more children grow up in unstable families, and the incomes of low-income households have barely budged. Despite these obstacles, or perhaps because of them, we need schools to do better. A generation ago many blamed the huge inequality of school resources, a product of our decentralized, property-tax-based system of school funding.32 Some of that inequality has been rectified, as state governments now contribute a larger share of funds to schools and distribute them to offset the unequal distribution of local property values.33 While funding inequality across states remains substantial, overall the situation is better. Some believe the problem lies in lack of competition among public schools.

It simply requires extra effort, including providing extra resources, to ensure that public provision to the remaining students in the local school is as good as possible or to help those students move to other schools. The second (related) problem is social division. When people with greater means choose private service providers and those with less use public providers, inequality of income and assets spills over into other realms of life. Economic inequality becomes social inequality. Arguably, societies function better—they achieve a greater sense of common purpose—when there are elements of life in which the rich, middle, and poor share the same space or experience.117 But forced togetherness is not an optimal solution here.


pages: 309 words: 78,361

Plenitude: The New Economics of True Wealth by Juliet B. Schor

Asian financial crisis, behavioural economics, big-box store, business climate, business cycle, carbon footprint, carbon tax, clean tech, Community Supported Agriculture, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, decarbonisation, degrowth, dematerialisation, demographic transition, deskilling, Edward Glaeser, en.wikipedia.org, Gini coefficient, global village, Herman Kahn, IKEA effect, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jevons paradox, Joseph Schumpeter, Kenneth Arrow, knowledge economy, life extension, McMansion, new economy, ocean acidification, off-the-grid, peak oil, pink-collar, post-industrial society, prediction markets, purchasing power parity, radical decentralization, ride hailing / ride sharing, Robert Shiller, sharing economy, Simon Kuznets, single-payer health, smart grid, systematic bias, systems thinking, The Chicago School, Thomas L Friedman, Thomas Malthus, too big to fail, transaction costs, Yochai Benkler, Zipcar

More than half earning less than a thousand dollars annually is the author’s calculation from Chen and Ravallion (2008), table 5. 26 In 1960 the average person consumed just a third: Economic report of the president (2009), table B-31, p. 321, per capita consumption expenditures in 2000 dollars, author’s calculation. 1960-2008:3. 26 inflation-adjusted per-person expenditures have tripled for furniture and household goods: Economic report of the president (2009), table B-17, p. 305, author’s calculation of per capita changes from aggregate expenditures, 1990-2008:3. 26 Overall, average real per-person spending increased 42 percent: Economic report of the president (2009), table B-31, p. 321, per capita consumption expenditures in 2000 dollars, author’s calculation, 1990-2008:3. 26 Since 2000, nearly half, or 47 percent, of the nation’s entire income: Mishel, Bernstein, and Shierholz (2009), table 1.7, p. 61. 26 income inequality was worse than . . . since the end of the 1920s: The U.S. Census Bureau’s historical data on Gini coefficients shows the 2006 Gini of 47 as the highest since 1967, the earliest reported by the Census. See United States Census Bureau (2009). The Gini in 1929 is estimated at 41 as reported by Brenner, Kaelble, and Thomas (1991), p.199. The share going to the top 1 percent was not quite at 1929 levels (Saez [2008]).

Few economists go all the way with the Cornucopians, but a larger number are believers in a more moderate variant of eco-optimism, which argues that growth itself will save the environment. Represented in a concept called the Environmental Kuznets Curve, it is modeled on studies of inequality carried out in the 1950s and ’60s by the economist Simon Kuznets. Kuznets saw a humpback data pattern across nations. At a given point in time, some had low levels of both income and inequality, some had more inequality and more income, and some had high incomes with low inequality. From this finding, most economists came to believe that countries must endure a growing concentration of income as they develop, but that once they become wealthy, they can buy themselves more fairness.

Sustainability groups operating at the local and regional levels are already part of networked efforts to influence economic development, pushing for community investments with public payoffs. A commonwealth approach is a departure from the usual debates about inequality, which center on income rather than assets, and redistribution rather than expansion of wealth. After-the-fact taxation that redirects skewed market outcomes was once the dominant approach to inequality, but it has become less popular as its drawbacks surfaced. Neoliberal ideology has predisposed many to view market outcomes as natural or even fair, and has obscured the underlying biases, subsidies, and distortions associated with current market rules and structures.


pages: 238 words: 73,121

Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, Craig Calhoun, Stephen Hoye, Audible Studios

affirmative action, blood diamond, Bretton Woods, BRICs, British Empire, business cycle, butterfly effect, company town, creative destruction, deindustrialization, demographic transition, Deng Xiaoping, discovery of the americas, distributed generation, Dr. Strangelove, eurozone crisis, fiat currency, financial engineering, full employment, gentrification, Gini coefficient, global village, hydraulic fracturing, income inequality, Isaac Newton, job automation, joint-stock company, Joseph Schumpeter, junk bonds, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, loose coupling, low skilled workers, market bubble, market fundamentalism, mass immigration, means of production, mega-rich, Mikhail Gorbachev, military-industrial complex, mutually assured destruction, offshore financial centre, oil shale / tar sands, Ponzi scheme, postindustrial economy, reserve currency, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, Suez crisis 1956, too big to fail, transaction costs, vertical integration, Washington Consensus, WikiLeaks

Hence oscillations between the two kinds of systems of political economy, over future centuries. Postcapitalism likely will not end all economic inequality. Past experience with socialist regimes shows they have cut the level of inequality by about one-half—compare Gini coefficients of socialist and capitalist societies, and the drastic increase in inequality following the downfall of the U.S.S.R. After socialism does something to fix the rampant inequality generated by capitalism, and to restore decent terms of employment to the majority, people may well become bored and disgruntled. Another fifty years down the line, there could be a repeat of the disenchantment with communism that took place in the 1980s.

Its gigantic military has experienced what are in effect defeats over the last decade. Its political and ideological power relations have reached near-crisis level. Rising divisive inequality has been deliberately encouraged by politicians. The merging of top management and big corporate investors (especially the bosses of insurance and pension funds) so that they are essentially paying themselves exorbitant salaries and bonuses (on which they only have to pay 15% rather than 35% tax rates) also grossly widens inequality. The combination of regressive taxes, corporate plundering, and anemic economic growth has led to economic recession and to ideological alienation.

The contrast with austerity-plagued Europe and the politically deadlocked and only slightly faster growing United States is palpable. Yet there is a crucial similarity despite differences of mood and trajectory. Capitalist growth has imposed enormous costs in pollution, social upheaval, and inequality. The appropriation of disproportionate wealth by a capitalist elite is manifest, even flaunted, though so far enough others have shared in development to mute protest. Corruption adds a further challenge on top of inequality. At the same time, huge investments in infrastructure and resources are demanded, both for industry itself and to house rapidly urbanizing populations. These costs are largely externalized, while the new wealth is appropriated by those able to own, command salaries from, or tax capitalist profits.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

air traffic controllers' union, Airbnb, Alan Greenspan, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, carbon tax, Carmen Reinhart, centre right, collective bargaining, company town, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, full employment, future of work, gig economy, Gini coefficient, green new deal, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Martin Wolf, meta-analysis, mini-job, Money creation, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, public intellectual, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Solow, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

(In the United States, the government stayed out of health care provision for able-bodied adults—partly as a result of the unions’ desire to keep it within the purview of collective bargaining—but treated employer-paid health insurance favourably in the tax code.) FIGURE 4.1. Income inequality in four major economies over time. The charts show Gini coefficients of overall inequality of equivalised disposable household income (US: gross household income; UK: after-tax income of tax units) and shares of the top 1 per cent of tax units (individuals in France and post-1991 UK) in gross income excluding capital gains. Source: Anthony Atkinson, Joe Hasell, Salvatore Morelli, and Max Roser, The Chartbook of Economic Inequality, 2017, https://www.chartbookofeconomicinequality.com. Even so, the social insurance function of the West’s postwar social contracts originally worked through the mechanisms characteristic of the factory economy.

The evidence is reviewed by Elhanan Helpman, “Globalisation and Wage Inequality,” Journal of the British Academy 5 (July 2017): 125–62, https://doi.org/10.5871/jba/005.125. See also Philipp Heimberger, “Does Economic Globalisation Affect Income Inequality? A Meta-analysis” (Vienna Institute for International Economic Studies Working Paper 165, October 2019), https://wiiw.ac.at/does-economic-globalisation-affect-income-inequality-a-meta-analysis-p-5044.html. This metastudy summarises 123 peer-reviewed articles on globalisation’s effect on income inequality. It finds a small positive relationship—smaller with trade integration than with financial globalisation—in both poor and rich countries, which suggests that any inequality effect of trade integration is similar to that caused by technological advances pushing up the need for skilled labour. 15.

The majority of European countries have seen declines in union membership and the coverage of collective bargaining. The consequences are clear: the increase in inequality across countries in the 1980s is tightly linked to how much unionisation declined—the steeper the fall of organised labour, the greater the increase in inequality.6 The third area in which economic belonging has been undermined since the 1970s is economic security. Policy has generally failed to counteract the growing economic precariousness of ordinary people’s lives, even where inequality has increased only moderately (nowhere has it failed to rise at all). This is most striking in labour markets.


pages: 316 words: 87,486

Listen, Liberal: Or, What Ever Happened to the Party of the People? by Thomas Frank

Affordable Care Act / Obamacare, Airbnb, Alan Greenspan, Amazon Mechanical Turk, American ideology, antiwork, barriers to entry, Berlin Wall, Bernie Sanders, Black Lives Matter, blue-collar work, Burning Man, centre right, circulation of elites, Clayton Christensen, collective bargaining, Credit Default Swap, David Brooks, deindustrialization, disruptive innovation, Donald Trump, driverless car, Edward Snowden, Evgeny Morozov, Fall of the Berlin Wall, financial engineering, financial innovation, Frank Gehry, fulfillment center, full employment, George Gilder, gig economy, Gini coefficient, Glass-Steagall Act, high-speed rail, income inequality, independent contractor, Jaron Lanier, Jeff Bezos, knowledge economy, knowledge worker, Lean Startup, mandatory minimum, Marc Andreessen, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, microcredit, mobile money, moral panic, mortgage debt, Nelson Mandela, new economy, obamacare, payday loans, Peter Thiel, plutocrats, Ponzi scheme, post-industrial society, postindustrial economy, pre–internet, profit maximization, profit motive, race to the bottom, Republic of Letters, Richard Florida, ride hailing / ride sharing, Ronald Reagan, Savings and loan crisis, sharing economy, Silicon Valley, Steve Jobs, Steven Levy, TaskRabbit, tech worker, TED Talk, Thorstein Veblen, too big to fail, Travis Kalanick, Uber for X, union organizing, urban decay, WeWork, women in the workforce, Works Progress Administration, young professional

The Center on Budget and Policy Priorities’ study, “Pulling Apart: A State-by-State Analysis of Income Trends,” dated November 15, 2012, ranks Massachusetts number eight, seven, and two among the states, depending on the historical period in question. http://www.cbpp.org/research/poverty-and-inequality/pulling-apart-a-state-by-state-analysis-of-income-trends. According to 2013 Gini coefficients calculated by the Census Bureau, Massachusetts ranks fourth after New York, Connecticut, and Louisiana (it is tied with Georgia and Florida). See “Household Income: 2013,” one of the Bureau’s American Community Survey Briefs, dated September 2014. https://www.census.gov/content/dam/Census/library/publications/2014/acs/acsbr13-02.pdf.

., or the election fund-raising system, which allows a single Vegas billionaire to personally choose the acceptable candidates for a major political party. “Inequality” is a euphemism for the Appalachification of our world. “Inequality” is what we say when we describe how the relationship of the very wealthy to the rest of us has come to approximate the relationship of Louis XVI with the peasantry of eighteenth-century France. Inequality is about you working harder than ever before while others work barely at all and yet are prospered by the market god with every imaginable blessing. Inequality is about the way speculators and even criminals get a helping hand from Uncle Sam while the Vietnam vet down the street from you loses his house.

Inequality is about the way speculators and even criminals get a helping hand from Uncle Sam while the Vietnam vet down the street from you loses his house. Inequality is the reason some people find such significance in the ceiling height of an entrance foyer or the hop content of a beer while others will never believe in anything again. Inequality is not an “issue,” as that term is generally used; it is the eternal conflict of management and labor, owner and worker, rich and poor—only with one side pinned to the ground and the other leisurely pounding away at its adversary’s face. “Inequality” is not even the right word for the situation, really, since it implies a technical problem we can solve with a twist of the knobs back in D.C.


pages: 362 words: 83,464

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alvin Toffler, American Society of Civil Engineers: Report Card, back-to-the-city movement, Bob Noyce, Boston Dynamics, California gold rush, Californian Ideology, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, classic study, Cornelius Vanderbilt, creative destruction, crony capitalism, David Graeber, degrowth, deindustrialization, do what you love, don't be evil, Downton Abbey, driverless car, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Future Shock, Gini coefficient, Google bus, Herman Kahn, housing crisis, income inequality, independent contractor, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kevin Roose, labor-force participation, Larry Ellison, Lewis Mumford, low interest rates, low-wage service sector, Marc Andreessen, Mark Zuckerberg, Mary Meeker, mass affluent, McJob, McMansion, medical bankruptcy, microapartment, Nate Silver, National Debt Clock, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, post-industrial society, public intellectual, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Solyndra, Steve Jobs, stock buybacks, tech worker, techlash, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, Tony Fadell, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, Virgin Galactic, War on Poverty, women in the workforce, working poor, young professional

In contrast, Bruegmann argues, suburbia offered the “surest way” for the broader portions of the population “to obtain some of the privacy, mobility and choice that once were available only to the wealthiest and most powerful members of society.”71 It was also in the suburbs that many long-term urban renters could at last buy their own residence.72 Occasionally attacked, with some justification, for restrictions against minorities, suburbs in recent decades have become bastions of relative economic equality. American Community Survey data for 2012 indicates that the suburban areas have considerably less household income inequality than the core cities. Among the 51 metropolitan areas with a population of more than 1 million, suburban areas were less unequal (measured by the GINI Coefficient) than the core cities in 46 cases. Despite its egalitarian promise, the suburbs traditionally have been disdained by large parts of the academic, media, and policy communities. The American intelligentsia, notes historian Michael Lind, has been “all but united in its snobbish disdain for America’s working-class and middle-class suburbs.”

.], “David Stockman Explains the Keynesian State-Wreck Ahead—Sundown In America,” Zero Hedge (blog), October 5, 2013, http://www.zerohedge.com/news/2013-10-05/david-stockman-explains-keynesian-state-wreck-ahead-sundown-america; Hibah Yousuf, “Obama Admits 95% of Income Gains Gone to Top 1%,” CNN Money, September 15, 2013, http://money.cnn.com/2013/09/15/news/economy/income-inequality-obama; Alexander Eichler, “Consumption Inequality Keeping Up With Rising Income Inequality: Study,” Huffington Post, April 10, 2012, http://www.huffingtonpost.com/2012/04/10/consumption-inequality-income_n_1413454.html; Alexander Eichler, “Income Inequality Worse under Obama than George W. Bush,” Huffington Post, April 11, 2012, http://www.huffingtonpost.com/2012/04/11/income-inequality-obama-bush_n_1419008.html; Richard Fry and Paul Taylor, “A Rise in Wealth for the Wealthy; Declines for the Lower 93%,” report, Pew Research Social & Demographic Trends, April 23, 2013, http://www.pewsocialtrends.org/files/2013/04/wealth_recovery_final.pdf. 17.

New York’s middle class has been in decline for decades, and as early as 1989 its economy was declared to be “hollow in the middle.”22 The most profound level of inequality and bifurcated class structure is found in the densest and most influential urban environment in North America—Manhattan. In 1980, Manhattan ranked seventeenth among the nation’s more than 3,000 counties in income inequality; by 2007 it ranked first, with the top fifth of all households earning 52 times that of the lowest fifth, a disparity roughly comparable to that of Namibia.23 Manhattan’s GINI index now stands higher than that of South Africa before the apartheid-ending 1994 election. If Manhattan were a country, it would rank sixth highest in income inequality in the world out of more than 130 for which the World Bank reports data.24 Amid the upper-tier affluence, in part due to the impact of bailouts of the great financial institutions concentrated in the city, New York’s wealthiest one percent earn a third of the entire city’s personal income—almost twice the proportion for the rest of the country.25 This makes all the more understandable how, despite the city’s relatively strong recovery from both 9/11 and the recession, the strident populist campaign of Mayor Bill de Blasio was so strongly supported.26 The same patterns can be seen, albeit to a lesser extent, in other major cities, notes a recent analysis of 2010 Census data by the Brookings Institution.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

"World Economic Forum" Davos, affirmative action, air traffic controllers' union, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, California energy crisis, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, gentrification, George Gilder, Gini coefficient, global reserve currency, Great Leap Forward, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low interest rates, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, megaproject, Mexican peso crisis / tequila crisis, military-industrial complex, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Savings and loan crisis, Silicon Valley, special economic zone, structural adjustment programs, Suez crisis 1956, the built environment, The Chicago School, Tragedy of the Commons, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, We are all Keynesians now, Winter of Discontent

In the past five years, the income divide between the urban rich and the rural poor has widened so sharply that some studies now compare China’s social cleavage unfavourably with Africa’s poorest nations.’46 Social inequality was never eradicated in the revolutionary era. The differentiation between town and country was even written into law. But with reform, writes Wang, ‘this structural inequality quickly transformed itself into disparities in income among different classes, social strata, and regions, leading rapidly to social polarization’.47 Formal measures of social inequality, such as the Gini coefficient, confirm that China has travelled the path from one of the poorest and most egalitarian societies to chronic inequality, all in the space of twenty years (see Figure 5.2).

While affluent urban dwellers drive BMWs, rural farmers are lucky to eat meat once a week. Even more emphatic has been the increasing inequality within both the rural and the urban sectors. Regional inequalities have also deepened, with some of the southern coastal zone cities surging ahead while the interior and the ‘rust belt’ of the northern region have either failed to take off or floundered badly.48 Figure 5.2 Increasing income inequality in China: rural (above) and urban (below), 1985–2000 Source: Wu and Perloff, China’s Income Distribution Over Time. Mere increases in social inequality constitute an uncertain indicator of the reconstitution of class power.

Figure 1.3 The restoration of class power: share in national income of the top 0.1% of the population, US, Britain, and France, 1913–1998 Source: Task Force on Inequality and American Democracy, American Democracy in an Age of Rising Inequality. The US is not alone in this: the top 1 per cent of income earners in Britain have doubled their share of the national income from 6.5 per cent to 13 per cent since 1982. And when we look further afield we see extraordinary concentrations of wealth and power emerging all over the place. A small and powerful oligarchy arose in Russia after neoliberal ‘shock therapy’ had been administered there in the 1990s. Extraordinary surges in income inequalities and wealth have occurred in China as it has adopted free-market-oriented practices.


pages: 365 words: 88,125

23 Things They Don't Tell You About Capitalism by Ha-Joon Chang

accelerated depreciation, affirmative action, Alan Greenspan, AOL-Time Warner, Asian financial crisis, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, borderless world, business logic, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, deskilling, digital divide, ending welfare as we know it, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, full employment, German hyperinflation, Gini coefficient, Glass-Steagall Act, hiring and firing, Hyman Minsky, income inequality, income per capita, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market fundamentalism, means of production, Mexican peso crisis / tequila crisis, microcredit, Myron Scholes, North Sea oil, offshore financial centre, old-boy network, post-industrial society, price stability, profit maximization, profit motive, purchasing power parity, rent control, Robert Solow, shareholder value, short selling, Skype, structural adjustment programs, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, Toyota Production System, trade liberalization, trickle-down economics, women in the workforce, working poor, zero-sum game

Shierholz, The State of Working America, 2008/9 (Economic Policy Institute, Washington, DC, 2009), p. 26, table 3. 3 According to the OECD (Organization for Economic Development and Cooperation), before taxes and transfers, the US, as of mid 2000s, had a Gini coefficient (the measure of income inequality, with 0 as absolute equality and 1 as absolute inequality) of 0.46. The figures were 0.51 for Germany, 0.49 for Belgium, 0.44 for Japan, 0.43 for Sweden and 0.42 for the Netherlands. THING 14 1 L. Mishel, J. Bernstein and H. Shierholz, The State of Working America, 2008/9 (Economic Policy Institute, Washington, DC, 2009), table 3.2. 2 Ibid., table 3.1. 3 ‘Should Congress put a cap on executive pay?’

The top 0.1 per cent did even better, increasing their share by more than three times, from 3.5 per cent in 1979 to 11.6 per cent in 2006.2 This was mainly because of the astronomical increase in executive pay in the country, whose lack of justification is increasingly becoming obvious in the aftermath of the 2008 financial crisis (see Thing 14). Of the sixty-five developing and former socialist countries covered in the above-mentioned ILO study, income inequality rose in forty-one countries during the same period. While the proportion of countries experiencing rising inequality among them was smaller than for the rich countries, many of these countries already had very high inequality, so the impacts of rising inequality were even worse than in the rich countries. Water that does not trickle down All this upward redistribution of income might have been justified, had it led to accelerated growth.

Increased trade liberalization and increased foreign investment – or at least the threat of them – have also put downward pressure on wages. As a result, income inequality has increased in most rich countries. For example, according to the ILO (International Labour Organization) report The World of Work 2008, of the twenty advanced economies for which data was available, between 1990 and 2000 income inequality rose in sixteen countries, with only Switzerland among the remaining four experiencing a significant fall.1 During this period, income inequality in the US, already by far the highest in the rich world, rose to a level comparable to that of some Latin American countries such as Uruguay and Venezuela.


pages: 317 words: 87,566

The Happiness Industry: How the Government and Big Business Sold Us Well-Being by William Davies

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 1960s counterculture, Abraham Maslow, Airbnb, behavioural economics, business intelligence, business logic, corporate governance, data science, dematerialisation, experimental subject, Exxon Valdez, Frederick Winslow Taylor, Gini coefficient, income inequality, intangible asset, invisible hand, joint-stock company, Leo Hollis, lifelogging, market bubble, mental accounting, military-industrial complex, nudge unit, Panopticon Jeremy Bentham, Philip Mirowski, power law, profit maximization, randomized controlled trial, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, science of happiness, scientific management, selective serotonin reuptake inhibitor (SSRI), sentiment analysis, sharing economy, Slavoj Žižek, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, social contagion, social intelligence, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, TED Talk, The Chicago School, The Spirit Level, theory of mind, urban planning, Vilfredo Pareto, W. E. B. Du Bois, you are the product

Michael Hardt and Antonio Negri, Empire, Cambridge, MA: Harvard University Press, 2000; Adam Arvidsson and Nicolai Peitersen, The Ethical Economy: Rebuilding Value After the Crisis, New York: Columbia University Press, 2014; Jeremy Gilbert, Common Ground: Democracy and Collectivity in an Age of Individualism, London: Pluto Press, 2014. 5 The Crisis of Authority 1‘Full Text: Blair’s Newsnight Interview’, theguardian.com, 21 April 2005. 2Richard Wilkinson and Kate Pickett, The Spirit Level. 3ESPNcricinfo staff, ‘We Urge the Development of Inner Fitness’, espncricinfo.com, 1 April 2014. 4‘Competitiveness and Perfectionism: Common Traits of Both Athletic Performance and Disordered Eating’, medicalnewstoday.com, 22 May 2009. 5Tim Kasser, The High Price of Materialism, Cambridge, MA: MIT Press, 2003. 6See Toben Nelson et al., ‘Do Youth Sports Prevent Pediatric Obesity? A Systematic Review and Commentary’, Current Sports Medicine Reports 10: 6, 2011. 7This is according to the Gini coefficient. 8Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan, New York: W. W. Norton & Company, 2009. 9Jessica Grogan, Encountering America: Humanistic Psychology, Sixties Culture and the Shaping of the Modern Self, New York: Harper Perennial, 2013. 10Hadley Cantril, The Pattern of Human Concerns, New Brunswick: Rutgers University Press, 1966. 11Quoted in Jamie Peck, Constructions of Neoliberal Reason, Oxford: Oxford University Press, 2010, 117. 12Andrew McGettigan, ‘Human Capital in English Higher Education’, paper given at Governing Academic Life, London School of Economics and Political Science, 25–26 June 2014. 13Edmund Kitch, ‘The Fire of Truth: A Remembrance of Law and Economics at Chicago, 1932–1970’, Journal of Law and Economics 26: 1, 1983. 14Ibid. 15George Priest, ‘The Rise of Law and Economics: A Memoir of the Early Years’, in Francesco Parisi and Charles Rowley, eds., The Origins of Law and Economics: Essays by the Founding Fathers, Cheltenham: Edward Elgar, 2005, 356. 16Milton Friedman, ‘The Social Responsibility of Business Is to Increase Its Profits’, The New York Times Magazine, 13 September 1970. 17Will Davies, The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition, London: Sage, 2014. 18Nikolas Rose, ‘Neurochemical Selves’, Society, November/December, 2003; Nikolas Rose, Politics of Life Itself: Biomedicine, Power and Subjectivity in the Twenty-First Century, Princeton, NJ: Princeton University Press, 2007. 19Peter Kramer, Listening to Prozac, London: Fourth Estate, 1994. 20Alain Ehrenberg, The Weariness of the Self: Diagnosing the History of Depression in the Contemporary Age, Montreal: McGill-Queen’s University Press, 2010. 21David Healy, The Antidepressant Era, Cambridge, MA: Harvard University Press, 1997. 22As has been widely researched and commented on, antidepressants are only marginally more effective than placebos, and the effectiveness of placebos has been growing year on year.

., 28, 30 The Hidden Persuaders (Packard), 73, 74 Hilton, Steve, 191 homo economicus, 61–2 Hoover, Herbert, 100 HOPE (Hawaii’s Opportunity Probation with Enforcement) programme, 235 Hospital Anxiety and Depression Scale, 175 Hsieh, Tony, 113 Hudson Yards real estate project (NYC), 233–4, 235, 237 human capital, 126, 151, 160 human existence, ideal form of, 112 human optimality/optimization, 5, 129, 274 human resource management, 189, 238, 276 human resources profession, 108, 133 Hume, David, 14 Hyde Park (Chicago), 148 idealism, 27, 181 Ignite U, 134 imipramine, 162 income inequality, 34, 144. See also economic inequality Increasing Access to Psychological Therapies programme, 111 indices, 176 individual choice, theory of, 59 Influence: The Psychology of Persuasion (Cialdini), 238 Infoglut (Andrejevic), 260 Ingeus, 110, 112 insurance fraud, 42, 44, 45, 46 intangible assets, 126 internet addiction, 204–5, 207 internships, 274 interventions, 17, 20, 35, 108, 111, 265 Introduction to the Principles of Morals and Legislation (Bentham), 22 introspection, 22, 48, 63, 64, 78, 86 iPhone 6, 26, 135 iproniazid, 162 J.

This means understanding the difference between, say, ‘despair’ and ‘sadness’, and the ability of the person using those terms to do so deliberately and meaningfully. Were, for instance, someone to describe themselves as ‘angry’, a response focused on making them feel better might entirely miss the point of what they were saying. It might even be deemed insulting. Were someone to be unhappy about the fact that income inequality in Britain and the United States has reached levels not seen since the 1920s, the advice – as given by some happiness economists – that one is best off not knowing what other people earn would seem like a form of hopelessness.20 In a monistic world, there is merely sentiment, experiences of pleasure and pain that fluctuate silently inside the head, with symptoms that are discernable to the expert eye.


pages: 684 words: 212,486

Hunger: The Oldest Problem by Martin Caparros

"World Economic Forum" Davos, Berlin Wall, Bob Geldof, carbon credits, carbon footprint, classic study, commoditize, David Graeber, disinformation, European colonialism, Fall of the Berlin Wall, Food sovereignty, Gini coefficient, Great Leap Forward, income inequality, index fund, invention of agriculture, Jeff Bezos, Live Aid, Louis Pasteur, Mahatma Gandhi, Mohammed Bouazizi, Nelson Mandela, New Journalism, plutocrats, profit maximization, Slavoj Žižek, The Fortune at the Bottom of the Pyramid, the market place, Tobin tax, trade liberalization, trickle-down economics, Upton Sinclair, Washington Consensus, We are the 99%

Together with the wealthy classes in Europe and the United States, they make up the global rich, people who live in several places at once, profit from many places at once, move their wealth freely around the cyber-global economy; a sector that is increasingly able to evade the control of political and judicial institutions that were created for national economic units. The famous Gini coefficient, named after the Italian statistician and organicist Corrado Gini, measures the level of inequality in a society according to a scale from 0, if everybody has the same, to 1, if one person has everything, and shows that differences have increased over the last thirty years in almost every country. China is a good example. From a Gini of 0.27 in the eighties, it moved to a Gini of 0.48 today.

From a Gini of 0.27 in the eighties, it moved to a Gini of 0.48 today. In Brazil it has remained stable at around 0.50, but even in Sweden the coefficient went from 0.20 to 0.25, and in Germany from 0.24 to 0.32. The United States went from 0.30 to 0.38, and Great Britain from 0.26 to 0.40.2 The Gini coefficient of inequality worldwide—if all the incomes of all the inhabitants of the world are compared—is 0.70: so much more brutal than the index of any individual country. A recent report from Oxfam says that 48 percent of the wealth in the world is in the hands of 1 percent of the population. Or, put slightly differently: seventy million people own the same amount of wealth as the remaining seven billion.

It is a modern, innovative idea that nobody would have mentioned two centuries ago—and that many still mention because of media pressure. But it now forms part of the cultural package. One of its consequences is this aid, and so many different people practice it because it does not question inequality and its mechanisms, only extreme want. Better: it allows us to posit that the problem in these societies is not inequality of ownership but rather the extreme form of inequality that can produce hunger. That inequality is fine, it is invigorating, and is capable of self-correcting. The problem is not that the famous 1 percent has so much; the problem is that sometimes some people don’t manage to eat. If they can be fed, everything will be better.


pages: 273 words: 85,195

Nomadland: Surviving America in the Twenty-First Century by Jessica Bruder

Affordable Care Act / Obamacare, back-to-the-land, big-box store, Boeing 747, Burning Man, cognitive dissonance, company town, crowdsourcing, fulfillment center, full employment, game design, gender pay gap, gentrification, Gini coefficient, income inequality, independent contractor, Jeff Bezos, Jessica Bruder, job automation, Mars Rover, new economy, Nomadland, off grid, off-the-grid, payday loans, Pepto Bismol, precariat, prosperity theology / prosperity gospel / gospel of success, Ronald Reagan, satellite internet, Saturday Night Live, sharing economy, six sigma, supply-chain management, traumatic brain injury, union organizing, urban sprawl, Wayback Machine, white picket fence, Y2K

Denying access to opportunity for large segments of the population means throwing away vast reserves of talent and brainpower. It’s also been shown to dampen economic growth. The most widely accepted measure for calculating income inequality is a century-old formula called the Gini coefficient. It’s a gold standard for economists around the globe, along with the World Bank, the CIA, and the Paris-based Organization for Economic Cooperation and Development. What it reveals is startling. Today the United States has the most unequal society of all developed nations. America’s level of inequality is comparable to that of Russia, China, Argentina, and the war-torn Democratic Republic of the Congo. And as bad as the situation is now, it’s likely to get worse.

Einstein’s brain: Stephen Jay Gould, “Wide Hats and Narrow Minds,” New Scientist, March 8, 1979, p. 777. 248. Dampening growth: Sean McElwee, “Three Ways Inequality Is Making Life Worse for Everyone,” Salon, Friday, April 3, 2015, http://www.salon.com/2015/04/03/3_ways_inequality_is_making_life_worse_for_everyone. 248. U.S. most unequal: “Inequality Update,” Organisation for Economic Co-operation and Development, November 2016, https://www.oecd.org/social/OECD2016-Income-Inequality-Update.pdf. 248. Comparing nations’ inequality: http://www.indexmundi.com/facts/indicators/SI.POV.GINI/rankings. 248. Octopus in a coconut: https://www.facebook.com/LADbible/videos/2969897786390725.


There Is No Planet B: A Handbook for the Make or Break Years by Mike Berners-Lee

air freight, Anthropocene, autonomous vehicles, Big Tech, biodiversity loss, call centre, carbon footprint, carbon tax, cloud computing, dematerialisation, disinformation, driverless car, Easter island, Elon Musk, energy security, energy transition, fake news, food miles, Gini coefficient, global supply chain, global village, Hans Rosling, high-speed rail, income inequality, Intergovernmental Panel on Climate Change (IPCC), Jevons paradox, land reform, microplastics / micro fibres, negative emissions, neoliberal agenda, off grid, performance metric, post-truth, profit motive, shareholder value, Silicon Valley, smart cities, Stephen Hawking, systems thinking, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, trickle-down economics, urban planning

Norway Finland Czech Republic Denmark Belgium Sweden Netherlands Austria Switzerland Germany France Ireland Taiwan Canada New Zealand United Kingdom Italy Greece Spain Portugal Venezuela United States Argenna Vietnam China Russia Indonesia Bolivia Philippines Chile Brazil Peru South Africa 0 20 40 60 80 Gini coefficient (%) Before tax Aer tax Figure 5.6. The Gini coefficient of income inequality before and after tax for selected countries in 2015. Do we need a carbon price? 145 Tax is undoubtedly a massively important mechanism for reducing income inequality and countries use it to very different extents. The chart shows income inequality in selected countries before and after income tax. The inequality measure shown here is a well established Gini coefficient, which ranges from 0% (everyone having the same income) to 100% (one person has all the country’s income).

Ireland and Germany’s income tax regime take them from among the world’s most income-unequal countries to among the more equal. The UK’s tax system takes it out of the inequality doghouse to a somewhat more respectable position. Taiwan, interestingly, has similar income equality after tax to Ireland, but gets there without much recourse to income tax. Brazil and Peru, for example, have high income inequality before tax, don’t use tax to sort the problem out and are left with hugely unequal societies. (For more stats and data on tax and income inequality follow this endnote20.) For all the moaning that goes on about income tax, most people are far better off for it, in relative terms at least, and in absolute terms too, provided the money is tolerably well spent on things we can all benefit from.

To be told that how you live is not fit for the twenty-first century is not what any of us can easily hold on to unless we at least have some idea of what we might do differently. Notes to Pages 145–149 267 20 Gini coefficient data from The Standardized World Income Inequality Database. (SWIID) https://fsolt.org/swiid/ For a stack of interesting stats and charts on income inequality, I recommend browsing Our World in Data: https://ourworldindata.org/income-inequality 21 WeAll, an interesting start-up organisation focussed on the Wellbeing Economy. Website coming soon. ‘The purpose of the economy should be to achieve sustainable wellbeing – the wellbeing of all humans and the planet.


pages: 279 words: 90,888

The Lost Decade: 2010–2020, and What Lies Ahead for Britain by Polly Toynbee, David Walker

banking crisis, battle of ideas, bike sharing, Boris Johnson, Brexit referendum, Bullingdon Club, call centre, car-free, centre right, collective bargaining, congestion charging, corporate governance, crony capitalism, Crossrail, David Attenborough, Dominic Cummings, Donald Trump, Downton Abbey, energy transition, Etonian, financial engineering, first-past-the-post, G4S, gender pay gap, gig economy, Gini coefficient, global village, green new deal, Greta Thunberg, high net worth, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), James Dyson, Jeremy Corbyn, Large Hadron Collider, low interest rates, manufacturing employment, mass immigration, moral panic, mortgage debt, North Sea oil, offshore financial centre, opioid epidemic / opioid crisis, payday loans, pension reform, Phoebe Waller-Bridge, quantitative easing, Right to Buy, Saturday Night Live, selection bias, smart meter, Uber for X, ultra-processed food, urban renewal, working-age population

The Rolls-Royce mandarins of the Great British System had either been suborned or, in the culmination of a process started with Thatcher, lost sight of the vocation they once had: to serve the state, something much bigger than here-today-gone-tomorrow politicians. They took their knighthoods and left chaos and social inequity behind. Unequal Shares Income inequality did not change much, which may be surprising given both austerity and boardroom excess. But while most incomes fell or flatlined, in an odd balancing act those at the top took a hit from the lingering effects of the crash, while benefit freezes and restraints only took their full effect later, preserving the incomes of the poorest for a while. The Gini coefficient measuring income inequality may pick this up later. But already, within the top category of income earners, a gap had opened between the super-rich and the affluent also-rans, and it grew.

References and sources for our facts and figures are listed at davidwalkerassociates.wordpress.com. Our 2010 book The Verdict: Did Labour Change Britain? measured the Blair and Brown years. We used it to benchmark what Tory ministers inherited. Here we record the fate of Sure Start, social security, inequality, the legal system, defence and support for research and industry. The decade from 2010 to 2020 saw a drive to renew and harden Tory anti-state, anti-tax individualism, testing them to destruction. The core beliefs of most of those around Johnson’s Cabinet table were nurtured in Thatcherism, though much was opportunistically suppressed in the 2019 election to stay in power.

Empirical reality may force the adoption of more progressive policies. Electoral and practical necessity demands spending and repair to popular services, from social care to police and potholes. The climate emergency, demography and ageing, new technology: these are unstoppable, and require an active, interventionist state. Meanwhile, attitudes on gender, inequality and diversity will go on liberalising. Challenges from Russia and China, let alone any practicable Brexit settlement, make mending a broken foreign policy essential. This book is both a spur and a reminder of all that was lost and all that needs reclaiming after the lost decade. 1 Leaving It All Behind What happened will scar the rest of our lives.


pages: 389 words: 87,758

No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, additive manufacturing, Airbnb, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, asset light, autonomous vehicles, Bakken shale, barriers to entry, business cycle, business intelligence, carbon tax, Carmen Reinhart, central bank independence, circular economy, cloud computing, corporate governance, creative destruction, crowdsourcing, data science, demographic dividend, deskilling, digital capitalism, disintermediation, disruptive innovation, distributed generation, driverless car, Erik Brynjolfsson, financial innovation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Gini coefficient, global supply chain, global village, high-speed rail, hydraulic fracturing, illegal immigration, income inequality, index fund, industrial robot, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, inventory management, job automation, Just-in-time delivery, Kenneth Rogoff, Kickstarter, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, M-Pesa, machine readable, mass immigration, megacity, megaproject, mobile money, Mohammed Bouazizi, Network effects, new economy, New Urbanism, ocean acidification, oil shale / tar sands, oil shock, old age dependency ratio, openstreetmap, peer-to-peer lending, pension reform, pension time bomb, private sector deleveraging, purchasing power parity, quantitative easing, recommendation engine, Report Card for America’s Infrastructure, RFID, ride hailing / ride sharing, Salesforce, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, sovereign wealth fund, spinning jenny, stem cell, Steve Jobs, subscription business, supply-chain management, synthetic biology, TaskRabbit, The Great Moderation, trade route, transaction costs, Travis Kalanick, uber lyft, urban sprawl, Watson beat the top human players on Jeopardy!, working-age population, Zipcar

Since the mid-1980s, in all but four of the countries in the OECD, incomes have risen significantly faster for the top decile of households than for the bottom decile. The handful of exceptions that had faster income growth in the bottom decile include Portugal, Ireland, Greece, and Spain, each of which has suffered a remarkably deep recession.15 Advanced economies are not the only ones facing this challenge. The Gini coefficient (a measure of income distribution within a nation) for China and India has also increased in the last two decades, in part due to a wide and growing disparity between rural and urban areas. In China in particular, the cities most connected to global trade and financial flows—Shanghai, Beijing, Guangzhou, and Shenzhen—have far outpaced less connected cities in the interior.16 Christine Lagarde, the managing director of the International Monetary Fund, summed up the issue: “Put simply, a severely skewed income distribution harms the pace and sustainability of growth over the longer term.

Declining budgets and high levels of government debt are stretching government resources 1 Sum of developing and developed countries’ fiscal balances. SOURCE: EIU World Database; McKinsey Global institute analysis Inequality in a Time of Productivity Growth Global inequality between countries is shrinking as China and other emerging economies grow rapidly. With their newfound prosperity, they continue to reduce the income gap between themselves and advanced economies by increasing productivity. At the same time, however, income inequality within countries is widening. Since the mid-1980s, in all but four of the countries in the OECD, incomes have risen significantly faster for the top decile of households than for the bottom decile.

It leads to an economy of exclusion, and a wasteland of discarded potential.”17 Debate rages about the source of the growing inequality and indeed about whether there is even a single source. One thing is certain, however. Productivity plays an often-overlooked role. According to some research, productivity growth confined to a small segment of the population tends to worsen inequality. When only the wealthy become more productive, they reap a disproportionate share of the benefits. Consequently, greater and more widely distributed productivity growth could then be a solution to rising inequality. And yet at a time of weak demand growth, economic policy makers everywhere often face a public perception that productivity kills jobs.


pages: 288 words: 89,781

The Classical School by Callum Williams

"Friedman doctrine" OR "shareholder theory", bank run, banking crisis, basic income, Brexit referendum, British Empire, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Charles Babbage, complexity theory, Corn Laws, David Ricardo: comparative advantage, death from overwork, deindustrialization, Donald Trump, double entry bookkeeping, falling living standards, Fellow of the Royal Society, full employment, Gini coefficient, Gordon Gekko, greed is good, helicopter parent, income inequality, invisible hand, Jevons paradox, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, low skilled workers, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, minimum wage unemployment, Modern Monetary Theory, new economy, New Journalism, non-tariff barriers, Paul Samuelson, Post-Keynesian economics, purchasing power parity, Ronald Coase, secular stagnation, Silicon Valley, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, universal basic income

Yes, the market could produce too many of one particular good, such as shoes, but generalised overproduction could not happen. Sismondi disagreed with Say’s law–vehemently. Were Sismondi’s theories ever vindicated? As far as the data are concerned, some of what Sismondi argued has been proven right. From 1759 to 1801 the Gini coefficient of England and Wales, a widely used measure of inequality, rose from about 0.45 to 0.52. Capitalists’ profits did indeed increase during the early part of the industrial revolution, even as workers’ wage growth stagnated. Sismondi’s strident argument even unsettled Ricardo, one of his great intellectual adversaries. In the third edition of Ricardo’s Principles, which was published in 1821, the author noted that “the opinion entertained by the labouring classes, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error”.

Take the question of the transfer of wealth from one generation to the next, in the form of inheritances or gifts. Should it be taxed? As we shall see, people like John Stuart Mill and Alfred Marshall, from a utilitarian perspective, worried that the unrestricted right to pass on money would perpetuate inequality. They also worried that people who inherited lots of money would not have much of an incentive to work hard. At the time Condorcet was writing, inheritance was a big deal. Around 1800 the annual flow of French inheritances from one generation to the next equalled a gigantic 20% of national income (far higher than it is today), meaning that a lot of people did not need to bother working at all in order to earn a living.

For him the only thing that needed tweaking, “as a consequence of natural rights”, was that a father’s property be divided equally among his children. The law of unintended consequences Condorcet’s strong support for free-market economics has not endeared him to all. Won’t leaving the market to “do its own thing” obviously lead to high inequality and great unhappiness for a great number of people? It is not for nothing that Charles Augustin Sainte-Beuve, a literary critic, referred to Condorcet as the “extreme product and as it were monstrous brain” of the “final school of the eighteenth century” with its “orgies of rationalism”. But there is laissez-faire and laissez-faire.


pages: 436 words: 98,538

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Albert Einstein, assortative mating, bank run, Berlin Wall, book value, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, Larry Ellison, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

“Quarterly Growth Rates of Real GDP, Change over Previous Quarter,” Quarterly National Accounts, Organisation of Economic Co-operation and Development, accessed September 30, 2015, https://stats.oecd.org/index.aspx?queryid=350. “Income Inequality Gini Coefficient,” Organisation of Economic Co-operation and Development, accessed May 11, 2016, https://data.oecd.org/inequality/income-inequality.htm. 25. William D. Nordhaus, “Schumpeterian Profits and the Alchemist Fallacy,” Yale Economic Applications and Policy Discussion Paper No. 6, April 2, 2005, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=820309. 26.

A recent study published by the National Bureau of Economic Research (NBER) using extensive tax records from the Social Security Administration directly contradicts Piketty’s claim that CEO pay has risen relative to the workers they lead.6 The study begins: It is frequently asserted that inequality within the firm is a driving force leading to an increase in overall inequality. For example, according to Mishel and Sabadish (2014),7 “a key driver of wage inequality is the growth of chief executive officer earnings and compensation.” Piketty (2013)* (p. 315)8 agrees, noting that “the primary reason for increased income inequality in recent decades is the rise of the supermanager.” And he adds (p. 332)9 that “wage inequalities increased rapidly in the United States and Britain because U.S. and British corporations became much more tolerant of extremely generous pay packages after 1970.”10 The study concludes: Contrary to the assertions made by Mishel and Sabadish (2014),11 Piketty (2013),12 and others, we find strong evidence that . . . individuals in the top one percent in 2012 . . . are now paid less, relative to their firms’ mean incomes, than they were three decades ago. . . .

Men, 1979–2004,” NBER Working Paper no. 11895 (December 2005). Bowles and Park, “Emulation, Inequality, and Work Hours.” 40. Kristin J. Forbes, “A Reassessment of the Relationship Between Inequality and Growth,” American Economic Review 90, no. 4 (2000): 869–87, http://web.mit.edu/~kjforbes/www/Papers/Inequality-Growth-AER.pdf. 41. Robert J. Barro, “Inequality and Growth in a Panel of Countries,” Journal of Economic Growth 5 (March 2000): 5–32, http://scholar.harvard.edu/files/barro/files/inequality_growth_1999.pdf. 42. Jens Arnold, “Do Tax Structures Affect Aggregate Economic Growth?


pages: 330 words: 91,805

Peers Inc: How People and Platforms Are Inventing the Collaborative Economy and Reinventing Capitalism by Robin Chase

Airbnb, Amazon Web Services, Andy Kessler, Anthropocene, Apollo 13, banking crisis, barriers to entry, basic income, Benevolent Dictator For Life (BDFL), bike sharing, bitcoin, blockchain, Burning Man, business climate, call centre, car-free, carbon tax, circular economy, cloud computing, collaborative consumption, collaborative economy, collective bargaining, commoditize, congestion charging, creative destruction, crowdsourcing, cryptocurrency, data science, deal flow, decarbonisation, different worldview, do-ocracy, don't be evil, Donald Shoup, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, Eyjafjallajökull, Ferguson, Missouri, Firefox, Free Software Foundation, frictionless, Gini coefficient, GPS: selective availability, high-speed rail, hive mind, income inequality, independent contractor, index fund, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Jane Jacobs, Jeff Bezos, jimmy wales, job satisfaction, Kickstarter, Kinder Surprise, language acquisition, Larry Ellison, Lean Startup, low interest rates, Lyft, machine readable, means of production, megacity, Minecraft, minimum viable product, Network effects, new economy, Oculus Rift, off-the-grid, openstreetmap, optical character recognition, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, Post-Keynesian economics, Richard Stallman, ride hailing / ride sharing, Ronald Coase, Ronald Reagan, Salesforce, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, smart cities, smart grid, Snapchat, sovereign wealth fund, Steve Crocker, Steve Jobs, Steven Levy, TaskRabbit, The Death and Life of Great American Cities, The Future of Employment, the long tail, The Nature of the Firm, Tragedy of the Commons, transaction costs, Turing test, turn-by-turn navigation, Uber and Lyft, uber lyft, vertical integration, Zipcar

In economist Thomas Piketty’s 2014 bestselling Capital in the 21st Century, his analysis found that the top 10 percent of Americans in 2010 owned 70 percent of the capital, trending toward the extreme capital inequality last observed in 1910 monarchical Europe. Today, in the countries experiencing the most economic equality (like Norway, Denmark, and Hungary as measured by the Gini coefficient), the top 10 percent control about 50 percent of the capital, an amount considered “medium inequality.” In the fall 2014 issue of the Journal of Post Keynesian Economics, Pavlina R. Tcherneva, an economist at Bard College, updated Piketty’s data through 2012 and looked at which groups got the benefits of economic expansion.

We can scale globally yet adapt to the very local. The old industrial model cannot solve climate change. It is too slow, too inefficient, too exclusive. Peers Inc is driving the rapid transformation of our economy and will also provide an answer to the conundrum of disappearing jobs, escalating income inequality, and devastating resource scarcity. What we do now will have profound and lasting effects on our future. We are at the end of the old fossil-fuel-saturated, consumption-based industrial economy. We are at the beginning of the new collaborative economy, which thrives on sharing, openness, and connectedness.

The winners keep winning and tend to wind up with monopolistic power. She continues: It soon grows beyond replacement. Just look at how even after [Microsoft] management wasted billions of dollars on Bing, it is still failing against [Google], while [Google] never even missed a quarter. Thus, hyper efficiency, automation, wealth transfer and income inequality go together. In addition, this concentrating quality has all the power of the gravitational pull of a black hole. That is because in this model, with a relatively fixed cost for the central processing engine, he with the most transactions wins. Not only are all transactions amortized against a similar fixed base allowing for lower end prices, but the biggest engine gets smarter, faster.


pages: 393 words: 91,257

The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, Admiral Zheng, Alvin Toffler, Andy Kessler, autonomous vehicles, basic income, Bernie Sanders, Big Tech, bread and circuses, Brexit referendum, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, Cass Sunstein, clean water, company town, content marketing, Cornelius Vanderbilt, creative destruction, data science, deindustrialization, demographic transition, deplatforming, don't be evil, Donald Trump, driverless car, edge city, Elon Musk, European colonialism, Evgeny Morozov, financial independence, Francis Fukuyama: the end of history, Future Shock, gentrification, gig economy, Gini coefficient, Google bus, Great Leap Forward, green new deal, guest worker program, Hans Rosling, Herbert Marcuse, housing crisis, income inequality, informal economy, Jane Jacobs, Jaron Lanier, Jeff Bezos, Jeremy Corbyn, job automation, job polarisation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, life extension, low skilled workers, Lyft, Marc Benioff, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, megacity, Michael Shellenberger, Nate Silver, new economy, New Urbanism, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, Occupy movement, Parag Khanna, Peter Thiel, plutocrats, post-industrial society, post-work, postindustrial economy, postnationalism / post nation state, precariat, profit motive, public intellectual, RAND corporation, Ray Kurzweil, rent control, Richard Florida, road to serfdom, Robert Gordon, Salesforce, Sam Altman, San Francisco homelessness, Satyajit Das, sharing economy, Sidewalk Labs, Silicon Valley, smart cities, Social Justice Warrior, Steve Jobs, Stewart Brand, superstar cities, technological determinism, Ted Nordhaus, The Death and Life of Great American Cities, The future is already here, The Future of Employment, The Rise and Fall of American Growth, Thomas L Friedman, too big to fail, trade route, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, unpaid internship, upwardly mobile, Virgin Galactic, We are the 99%, Wolfgang Streeck, women in the workforce, work culture , working-age population, Y Combinator

Surprisingly, in progressiveoriented countries such as Finland, stock ownership is considerably more concentrated among the very richest people than in the United States. The trend is not only a Western one. In avowedly socialist China, for example, the top 1 percent of the population hold about one-third of the country’s wealth, and roughly 1,300 individuals hold about 20 percent. Since 1978, China’s Gini coefficient, which measures inequality of wealth distribution, has tripled.13 Globally, the ultra-rich are an emergent aristocracy. Fewer than one hundred billionaires together now own as much as half of the world’s assets, the same proportion owned by around four hundred people a little more than five years ago.14 The concentration of wealth is also clear in property ownership.

New Yorker, May 8, 2017, https://www.newyorker.com/magazine/2017/05/15/is-the-gig-economy-working; Jeff Daniels, “Nearly half of California’s gig economy workers struggling with poverty, new survey says,” CNBC, August 28, 2018, https://www.cnbc.com/2018/08/28/about-half-of-californias-gig-economy-workers-struggling-with-poverty.html; Leonid Bershidsky, “Gig-Economy Workers Are the Modern Proletariat,” Bloomberg, September 25, 2018, https://www.bloomberg.com/opinion/articles/2018-09-25/gig-economy-workers-are-last-of-marx-s-oppressed-proletarians. 18 Kate Aronoff, “How the On-Demand Economy Enables the Cycle of Racial Labor Discrimination,” Color Lines, July 5, 2017, https://www.colorlines.com/articles/how-demand-economy-enables-cycle-racial-labor-discrimination; Robert Reich, “The Share-the-Scraps Economy,” February 2, 2015, https://robertreich.org/post/109894095095. 19 Charles Murray, Coming Apart: The State of White America, 1960–2010 (New York: Crown Forum, 2012), 125–27; Maria Koulogou, “The New Inequality; The Decline of the Working Class Family,” Quillette, June 13, 2019, https://quillette.com/2019/06/13/the-new-inequality-the-decline-of-the-working-class-family/. 20 E. J. Hobsbawm, The Age of Revolution, 1789–1848 (New York: New American Library, 1962), 241; Friedrich Engels, The Condition of the Working Class in England (London: Penguin, 2009), 144. 21 Isabel V. Sawhill, “Inequality and social mobility: Be afraid,” Brookings, May 27, 2015, https://www.brookings.edu/blog/social-mobility-memos/2015/05/27/inequality-and-social-mobility-be-afraid/; Motoko Rich et al., “Money, Race and Success; How Your School District Compares,” New York Times, April 29, 2015, https://www.nytimes.com/interactive/2016/04/29/upshot/money-race-and-success-how-your-school-district-compares.html?

Review of Finance, vol. 23:4 (July 2019), 697–743, https://academic.oup.com/rof/article/23/4/697/5477414; Mike Konczal, “There Are Too Few Companies and Their Profits Are Too High,” Nation, August 5, 2019, https://www.thenation.com/article/industry-concentration-score/. 3 Taichi Sakaiya, The Knowledge Value Revolution, trans. George Fields and William Marsh (Tokyo: Kodansha International, 1985), 152. 4 Danny Yadron, “Silicon Valley tech firms exacerbating income inequality, World Bank warns,” Guardian, January 15, 2016, https://www.theguardian.com/technology/2016/jan/14/silicon-valley-tech-irms-income-inequality-world-bank; Gemma Tetlow, “Blame Technology not Globalization for Rising Inequality, Says IMF,” Financial Times, April 11, 2017, https://www.t.com/content/cfbd0af6-1e0b-11e7-b7d3163-f5a7f229c. 5 Michael Anton, “The Frivolous Valley and Its Dreadful Conformity,” Law & Liberty, September 4, 2018, https://www.lawliberty.org/liberty-forum/the-frivolous-valley-and-its-dreadful-conformity/. 6 Kevin Starr, California: A History (New York: Modern Library, 2005), 261–67; Kevin Starr, The Dream Endures: California Enters the 1940s (New York: Oxford University Press, 1997) 42–43; Gary Brechin, Imperial San Francisco: Urban Power, Earthly Ruin (Berkeley: University of California Press, 1999), 98–99, 322–23; Leslie Berlin, “Tracing Silicon Valley’s Roots,” SFGate, September 30, 2007, https://www.sfgate.com/business/article/Tracing-Silicon-Valley-s-roots-2520298.php. 7 Ruchir Sharma, “When Will the Tech Bubble Burst?”


pages: 660 words: 141,595

Data Science for Business: What You Need to Know About Data Mining and Data-Analytic Thinking by Foster Provost, Tom Fawcett

Albert Einstein, Amazon Mechanical Turk, Apollo 13, big data - Walmart - Pop Tarts, bioinformatics, business process, call centre, chief data officer, Claude Shannon: information theory, computer vision, conceptual framework, correlation does not imply causation, crowdsourcing, data acquisition, data science, David Brooks, en.wikipedia.org, Erik Brynjolfsson, Gini coefficient, Helicobacter pylori, independent contractor, information retrieval, intangible asset, iterative process, Johann Wolfgang von Goethe, Louis Pasteur, Menlo Park, Nate Silver, Netflix Prize, new economy, p-value, pattern recognition, placebo effect, price discrimination, recommendation engine, Ronald Coase, selection bias, Silicon Valley, Skype, SoftBank, speech recognition, Steve Jobs, supply-chain management, systems thinking, Teledyne, text mining, the long tail, The Signal and the Noise by Nate Silver, Thomas Bayes, transaction costs, WikiLeaks

For now it is enough to realize that it’s a good general summary statistic of the predictiveness of a classifier. Tip As a technical note, the AUC is equivalent to the Mann-Whitney-Wilcoxon measure, a well-known ordering measure in Statistics (Wilcoxon, 1945). It is also equivalent to the Gini Coefficient, with a minor algebraic transformation (Adams & Hand, 1999; Stein, 2005). Both are equivalent to the probability that a randomly chosen positive instance will be ranked ahead of a randomly chosen negative instance. Cumulative Response and Lift Curves ROC curves are a common tool for visualizing model performance for classification, class probability estimation, and scoring.

., Summary generative questions, Applying Bayes’ Rule to Data Science geometric interpretation, nearest-neighbor reasoning and, Geometric Interpretation, Overfitting, and Complexity Control–Geometric Interpretation, Overfitting, and Complexity Control Gillespie, Dizzie, Example: Jazz Musicians Gini Coefficient, The Area Under the ROC Curve (AUC) Glen Albyn single malt scotch, * Using Supervised Learning to Generate Cluster Descriptions Glen Grant single malt scotch, * Using Supervised Learning to Generate Cluster Descriptions Glen Mhor single malt scotch, Understanding the Results of Clustering Glen Spey single malt scotch, Understanding the Results of Clustering Glenfiddich single malt scotch, Understanding the Results of Clustering Glenglassaugh single malt whiskey, Hierarchical Clustering Glengoyne single malt scotch, * Using Supervised Learning to Generate Cluster Descriptions Glenlossie single malt scotch, * Using Supervised Learning to Generate Cluster Descriptions Glentauchers single malt scotch, Understanding the Results of Clustering Glenugie single malt scotch, Understanding the Results of Clustering goals, Optimizing an Objective Function Goethe, Johann Wolfgang von, Introduction: Data-Analytic Thinking Goodman, Benny, Example: Jazz Musicians Google, Why Text Is Important, Representation, Attracting and Nurturing Data Scientists and Their Teams Prediction API, Thinking Data-Analytically, Redux search advertising on, Example: Targeting Online Consumers With Advertisements Google Finance, The Data Google Scholar, Final Example: From Crowd-Sourcing to Cloud-Sourcing Graepel, Thore, Example: Evidence Lifts from Facebook “Likes”–Example: Evidence Lifts from Facebook “Likes” graphical user interface (GUI), Database Querying graphs entropy, Example: Attribute Selection with Information Gain fitting, From Holdout Evaluation to Cross-Validation, Summary Green Giant Consulting example, Scenario and Proposal–Flaws in the GGC Proposal GUI, Database Querying H Haimowitz, Ira, Stepping Back: Solving a Business Problem Versus Data Exploration Harrahs casinos, Data Science, Engineering, and Data-Driven Decision Making, Data and Data Science Capability as a Strategic Asset hashing methods, Computational efficiency heterogeneous attributes, Dimensionality and domain knowledge Hewlett-Packard, Similarity, Neighbors, and Clusters, Data preparation, Named Entity Extraction hierarchical clustering, Hierarchical Clustering–Hierarchical Clustering Hilton, Perez, The Data hinge loss, Support Vector Machines, Briefly, Regression via Mathematical Functions history, Machine Learning and Data Mining hit rate, ROC Graphs and Curves, Cumulative Response and Lift Curves holdout data, Holdout Data and Fitting Graphs creating, Holdout Data and Fitting Graphs overfitting and, Holdout Data and Fitting Graphs–Holdout Data and Fitting Graphs holdout evaluations, of overfitting, From Holdout Evaluation to Cross-Validation holdout testing, From Holdout Evaluation to Cross-Validation homogenous regions, Classification via Mathematical Functions homographs, Why Text Is Difficult How I Met Your Mother (television show), Example: Evidence Lifts from Facebook “Likes” Howls Moving Castle, Example: Evidence Lifts from Facebook “Likes” human interaction and data science, What Data Can’t Do: Humans in the Loop, Revisited–What Data Can’t Do: Humans in the Loop, Revisited Hurricane Frances example, Example: Hurricane Frances hyperplanes, Visualizing Segmentations, Linear Discriminant Functions hypotheses, computing probability of, Bayes’ Rule hypothesis generation, Statistics hypothesis tests, Avoiding Overfitting with Tree Induction I IBM, Similarity, Neighbors, and Clusters, Understanding the Results of Clustering, Attracting and Nurturing Data Scientists and Their Teams, Attracting and Nurturing Data Scientists and Their Teams IEEE International Conference on Data Mining, Is There More to Data Science?

For our example problem (chosen for its straightforward derivation), the answer works out to the intuitively satisfying result: mail to those people whose estimated expected donation is greater than the cost associated with mailing! Mathematically, we simply look for those whose expected benefit of targeting is greater than zero, and simplify the inequality algebraically. Let dR(x) be the estimated donation if consumer x were to respond, and let c be the mailing cost. Then: We always want this benefit to be greater than zero, so: That is, the expected donation (lefthand side) should be greater than the solicitation cost (righthand side).


pages: 328 words: 96,678

MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them by Nouriel Roubini

"World Economic Forum" Davos, 2021 United States Capitol attack, 3D printing, 9 dash line, AI winter, AlphaGo, artificial general intelligence, asset allocation, assortative mating, autonomous vehicles, bank run, banking crisis, basic income, Bear Stearns, Big Tech, bitcoin, Bletchley Park, blockchain, Boston Dynamics, Bretton Woods, British Empire, business cycle, business process, call centre, carbon tax, Carmen Reinhart, cashless society, central bank independence, collateralized debt obligation, Computing Machinery and Intelligence, coronavirus, COVID-19, creative destruction, credit crunch, crony capitalism, cryptocurrency, currency manipulation / currency intervention, currency peg, data is the new oil, David Ricardo: comparative advantage, debt deflation, decarbonisation, deep learning, DeepMind, deglobalization, Demis Hassabis, democratizing finance, Deng Xiaoping, disintermediation, Dogecoin, Donald Trump, Elon Musk, en.wikipedia.org, energy security, energy transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, eurozone crisis, failed state, fake news, family office, fiat currency, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, future of work, game design, geopolitical risk, George Santayana, Gini coefficient, global pandemic, global reserve currency, global supply chain, GPS: selective availability, green transition, Greensill Capital, Greenspan put, Herbert Marcuse, high-speed rail, Hyman Minsky, income inequality, inflation targeting, initial coin offering, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of movable type, Isaac Newton, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, junk bonds, Kenneth Rogoff, knowledge worker, Long Term Capital Management, low interest rates, low skilled workers, low-wage service sector, M-Pesa, margin call, market bubble, Martin Wolf, mass immigration, means of production, meme stock, Michael Milken, middle-income trap, Mikhail Gorbachev, Minsky moment, Modern Monetary Theory, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Mustafa Suleyman, Nash equilibrium, natural language processing, negative equity, Nick Bostrom, non-fungible token, non-tariff barriers, ocean acidification, oil shale / tar sands, oil shock, paradox of thrift, pets.com, Phillips curve, planetary scale, Ponzi scheme, precariat, price mechanism, price stability, public intellectual, purchasing power parity, quantitative easing, race to the bottom, Ralph Waldo Emerson, ransomware, Ray Kurzweil, regulatory arbitrage, reserve currency, reshoring, Robert Shiller, Ronald Reagan, Salesforce, Satoshi Nakamoto, Savings and loan crisis, Second Machine Age, short selling, Silicon Valley, smart contracts, South China Sea, sovereign wealth fund, Stephen Hawking, TED Talk, The Great Moderation, the payments system, Thomas L Friedman, TikTok, too big to fail, Turing test, universal basic income, War on Poverty, warehouse robotics, Washington Consensus, Watson beat the top human players on Jeopardy!, working-age population, Yogi Berra, Yom Kippur War, zero-sum game, zoonotic diseases

A small oligopoly of miners—many in remote jurisdictions such as Belarus, China or Russia and outside the reach of US law enforcement—validates most transactions on centralized exchanges. Developers are centralized and crypto designers act as police, prosecutor, and judge when things go wrong. Wealth accumulates unevenly; the Gini coefficient of inequality of Bitcoin is worse than that of North Korea, where Kim Jong-un and his cronies control most income and wealth. Crypto zealots talk of a world of decentralization where the unbanked are banked, refugees receive digital identities and funds to survive, and the poor have cheaper access to financial services.

It visits misfortune on a much larger population, a shrinking middle class, white collar workers and even affluent tiers that rely on social stability. Many of us agree that inequality is one of the most terrible challenges of our time. Nonetheless, policy proposals that target inequality have a dismal track record. Most of them feature taxation that redistributes wealth and income from rich to poor, and they are thus opposed by the very powerful rich elite. In The Great Leveler, historian Walter Scheidel shows that peaceful redistribution has never succeeded in easing inequality.3 It takes massive upheaval to cause meaningful change. When inequality spirals to its ugly and violent conclusion—social upheaval, revolution, or war—millions die.

“The central bank does have an important role in ensuring that banks are prepared for the direct risks from severe weather and from the globe’s transition to new energy sources.”2 Inequality is another serious problem that can tear social fabric apart and is now leading to political populism and economic nationalism. Moreover, the greater the rate of inflation, the greater the gap between haves and have-nots. Thus, easing income inequality has become another priority for central banks like the Fed. It now pursues a “broad and inclusive maximum employment” target where the term inclusive implies addressing inequality and the jobs of those left behind in a recession: women, minorities and the poor.


pages: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

Asperger Syndrome, banking crisis, Berlin Wall, Boris Johnson, British Empire, Bullingdon Club, call centre, collapse of Lehman Brothers, credit crunch, deindustrialization, Etonian, facts on the ground, falling living standards, first-past-the-post, ghettoisation, Gini coefficient, green new deal, hiring and firing, housing crisis, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, mass immigration, meritocracy, Neil Kinnock, Occupy movement, pension reform, place-making, plutocrats, post-war consensus, race to the bottom, Right to Buy, rising living standards, social distancing, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, too big to fail, unpaid internship, upwardly mobile, We are the 99%, wealth creators, Winter of Discontent, women in the workforce, working-age population

But with so many leaving school with nothing much to look forward to, itshould not be all that surprising if a small minority should respond to their bleak prospects in this way. A toxic combination of inequality and consumerism also undoubtedly played its part. In 1979, Britain was one of the most equal Western societies. After three decades of Thatcherism, it is now one of the least equal. The Gini coefficient-which measures levels of inequality in a society-has shot up from .25 to .40 in three decades. London is one of the most unequal cities on earth: the richest 10 per cent is worth 273 times more than the poorest 10 per cent" London is not-yet-like Paris, where the affluent are concentrated in the centre, and the poorest are more likely to be found in the banlieues (the suburbs).

In part, itis the product of a deeply unequal society. 'In my view, one of the key effects of greater inequality is toincrease feelings of superiority and inferiority in society,' says Richard Wilkinson, coauthor of the seminal The Spirit Level, a book that effectively demonstrates thelinkbetween inequality and a range of social problems. And indeed inequality is much greater today than it has been for most of our history. 'A widespread inequality is an extremely recent thing for most of the world,' argues the professor of human geography and' inequality expert', Danny Dorling. Demonizing people at the bottom has been a convenient way of justifying an unequal society throughout the ages.

What is remarkable about these figures is that they have come at a time when inequality has grown as sharply as social mobility has declined. The G ini coefficient-used to measure overall income inequality in Britain-was rated as 26 in 1979. Today it has risen to 39. It is not simply that this growing social division renders those at the top more likely to be ignorant of how other people live their lives. As we have seen, demonizing the less well-off also makes it easier to justify an unprecedented and growing level of social inequality. After all, to admit that some people are poorer than others because of the social injustice inherent in our society would require government action.


pages: 701 words: 199,010

The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal by Ludwig B. Chincarini

affirmative action, Alan Greenspan, asset-backed security, automated trading system, bank run, banking crisis, Basel III, Bear Stearns, Bernie Madoff, Black-Scholes formula, Bob Litterman, business cycle, buttonwood tree, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, corporate governance, correlation coefficient, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, delta neutral, discounted cash flows, diversification, diversified portfolio, family office, financial engineering, financial innovation, financial intermediation, fixed income, Flash crash, full employment, Gini coefficient, Glass-Steagall Act, global macro, high net worth, hindsight bias, housing crisis, implied volatility, income inequality, interest rate derivative, interest rate swap, John Meriwether, Kickstarter, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, low skilled workers, managed futures, margin call, market design, market fundamentalism, merger arbitrage, Mexican peso crisis / tequila crisis, Mitch Kapor, money market fund, moral hazard, mortgage debt, Myron Scholes, National best bid and offer, negative equity, Northern Rock, Occupy movement, oil shock, price stability, proprietary trading, quantitative easing, quantitative hedge fund, quantitative trading / quantitative finance, Ralph Waldo Emerson, regulatory arbitrage, Renaissance Technologies, risk free rate, risk tolerance, risk-adjusted returns, Robert Shiller, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Sharpe ratio, short selling, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, survivorship bias, systematic trading, tail risk, The Great Moderation, too big to fail, transaction costs, value at risk, yield curve, zero-coupon bond

For example, if there are 100 people in the population, then you order the people by income and then take the top 20 people and take their median income and so on. 7. The bias could go in either direction. 8. A common measure that is used to understand inequality is the Gini coefficient. A measure of 0 indicates total equality and a measure of 1 indicates total inequality. The Gini coefficient has been rising since 1967 from a value of 0.403 to the 2009 value of 0.468. 9. It would be an interesting research project to study this in more depth to see if it is a more general phenomena. 10. The actual definition from the BLS is as follows.

Since the 1970s, the gap between rich and poor has grown under both Democratic and Republican presidential administrations.12 During the Clinton administration, the economy was prosperous, but the rich saw income growth of 30%. The poorest got income growth of 16%, while middle-class income grew just 15%. Since 1967, rich people’s average incomes have grown by 70%. Poor people’s incomes have grown by just 29%. Wall Street and Washington didn’t create this inequality. A variety of factors are at work. More-educated workers have reaped the rewards of technological progress to a greater degree than have less-educated workers. Opening world trade has meant fierce competition for low-skill jobs. The fairy-tale decade misled us into thinking the economy was better than it was.

Although hard to analyze, typically a rise in inventories signals a slowing economy. Officially, we were out of the recession, but the economy was still not doing well as of the first quarter of 2011. Did the stimulus help boost GDP in the aftermath? The answer is a little and only temporarily. TABLE K.5 Prosperity and Income Inequality To put the recent crisis in perspective, one might ask what has happened to the prosperity of different classes of people by income; that is the rich, the middle-class, and the poor. Table K.5 shows the growth in median income for the richest Americans, middle-class Americans, and the poorest Americans.6 One should remember that this does not include migrations across categories.


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Bad Data Handbook by Q. Ethan McCallum

Amazon Mechanical Turk, asset allocation, barriers to entry, Benoit Mandelbrot, business intelligence, cellular automata, chief data officer, Chuck Templeton: OpenTable:, cloud computing, cognitive dissonance, combinatorial explosion, commoditize, conceptual framework, data science, database schema, DevOps, en.wikipedia.org, Firefox, Flash crash, functional programming, Gini coefficient, hype cycle, illegal immigration, iterative process, labor-force participation, loose coupling, machine readable, natural language processing, Netflix Prize, One Laptop per Child (OLPC), power law, quantitative trading / quantitative finance, recommendation engine, selection bias, sentiment analysis, SQL injection, statistical model, supply-chain management, survivorship bias, text mining, too big to fail, web application

Although the ultimate diagnostic tool is a double-logarithmic plot of the full histogram as shown in Figure 7-4, an early warning sign is excessively large values for the calculated width of the distribution (for the visitor data, the standard deviation comes out to roughly 437, which should be compared to the mean, of only 26). Once the full histogram information is available, we can plot the Lorenz curve and even calculate a numerical measure for the skewness of the distribution (such as the Gini coefficient) for further diagnosis and analysis. Figure 7-5. Cumulative distribution function for the data from Figure 7-4. Notice the reduced scale of the horizontal axis. Figure 7-5 suggests a way to deal with such data. The graph shows a cumulative distribution plot, that is, the cumulative fraction of people and page views, attributable to visitors having consumed fewer than x pages per month.

Economics Letters 82: 189-194. Feng, Shuaizhang, Burkhauser, Richard, & Butler, J.S. 2006. “Levels and long-term trends in earnings inequality: Overcoming Current Population Survey Censoring Problems Using the GB2 Distribution.” Journal of Business & Economic Statistics 24, no. 1: 57 - 62. Gottschalk, Peter, and Robert Moffitt. 1994. “The growth of earnings instability in the U.S. labor market.” Brookings Papers on Economic Activity 2: 217-254. Haider, Steven J. 2001. “Earnings instability and earnings inequality in the United States, 1967-1991.” Journal of Labor Economics 19, no. 4: 799-836. Ham, John C., Xianghong Li, and Lara Shore-Sheppard. 2009.

., and Edward J. Schumacher. 2004. “Matched bias in wage gap estimates due to earnings imputation.” Journal of Labor Economics 22, no. 3: 689-772. Jenkins, Stephen P. 2009. “Distributionally-Sensitive Inequality Indices and the GB2 Income Distribution.” Review of Income and Wealth 55, no. 2: 392-398. Jenkins, Stephen P., Richard V. Burkhauser, Shuaizhang Feng, and Jeff Larrimore. 2011. “Measuring inequality using censored data: A multiple imputation approach.” Journal of the Royal Statistical Society (A), 174, Part 1: 63-81. Lillard, Lee, James P. Smith, and Finis Welch. 1986. “What do we really know about wages?


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The Raging 2020s: Companies, Countries, People - and the Fight for Our Future by Alec Ross

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, Affordable Care Act / Obamacare, air gap, air traffic controllers' union, Airbnb, Albert Einstein, An Inconvenient Truth, autonomous vehicles, barriers to entry, benefit corporation, Bernie Sanders, Big Tech, big-box store, British Empire, call centre, capital controls, clean water, collective bargaining, computer vision, coronavirus, corporate governance, corporate raider, COVID-19, deep learning, Deng Xiaoping, Didi Chuxing, disinformation, Dissolution of the Soviet Union, Donald Trump, Double Irish / Dutch Sandwich, drone strike, dumpster diving, employer provided health coverage, Francis Fukuyama: the end of history, future of work, general purpose technology, gig economy, Gini coefficient, global supply chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, high-speed rail, hiring and firing, income inequality, independent contractor, information security, intangible asset, invisible hand, Jeff Bezos, knowledge worker, late capitalism, low skilled workers, Lyft, Marc Andreessen, Marc Benioff, mass immigration, megacity, military-industrial complex, minimum wage unemployment, mittelstand, mortgage tax deduction, natural language processing, Oculus Rift, off-the-grid, offshore financial centre, open economy, OpenAI, Parag Khanna, Paris climate accords, profit motive, race to the bottom, RAND corporation, ride hailing / ride sharing, Robert Bork, rolodex, Ronald Reagan, Salesforce, self-driving car, shareholder value, side hustle, side project, Silicon Valley, smart cities, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, sparse data, special economic zone, Steven Levy, stock buybacks, strikebreaker, TaskRabbit, tech bro, tech worker, transcontinental railway, transfer pricing, Travis Kalanick, trickle-down economics, Uber and Lyft, uber lyft, union organizing, Upton Sinclair, vertical integration, working poor

In his polemic Loeb accurately captured what now needs to happen: we need to define who the stakeholders are and provide the kind of measures of performance and accountability for those stakeholders that we provide for shareholders. For example, right now publicly traded companies in most countries are required to disclose the compensation for the CEO and other top executives. It would be productive to also produce a sort of “Gini coefficient” measure across the company to show the distance between top and bottom earners and to demonstrate where people fall in the averages (including mean and median). The assumption here is not that equal pay is the ultimate good, any more than zero pay would be an ideal measure for CEO compensation.

We stood together by his window so he could show me his dramatic, unobstructed view of the White House, and he told me, “When people talk about inequality they only talk about inequality of income. We talk about it in three levels: inequality of income, inequality of opportunity, and inequality of power. And unless you solve the inequality of power, you’ll never solve the inequality of income and the inequality of opportunity. So right now we have an economy that is on a trajectory towards implosion. If inequality continues to grow, the system will implode.” Trumka held up his Apple iPhone and remarked, “We don’t get the benefit of this telephone.

: Economic Gains from Gender Equality in Nordic Countries (summary brief, Paris: Organisation for Economic Co-operation and Development, May 2018), https://www.oecd.org/els/emp/last-mile-longest-gender-nordic-countries-brief.pdf; “Income Inequality,” Organisation for Economic Co-operation and Development, accessed July 21, 2020, https://data.oecd.org/inequality/income-inequality.htm#indicator-chart; Jacob Funk Kirkegaard, “Which Places Have the Highest Concentration of Billionaires?,” Peterson Institute for International Economics, June 29, 2018, https://www.piie.com/research/piie-charts/which-places-have-highest-concentration-billionaires.


pages: 565 words: 122,605

The Human City: Urbanism for the Rest of Us by Joel Kotkin

"World Economic Forum" Davos, Alvin Toffler, autonomous vehicles, birth tourism , blue-collar work, British Empire, carbon footprint, Celebration, Florida, citizen journalism, colonial rule, crony capitalism, deindustrialization, demographic winter, Deng Xiaoping, Downton Abbey, edge city, Edward Glaeser, financial engineering, financial independence, Frank Gehry, gentrification, Gini coefficient, Google bus, housing crisis, illegal immigration, income inequality, informal economy, intentional community, Jane Jacobs, labor-force participation, land reform, Lewis Mumford, life extension, market bubble, mass immigration, McMansion, megacity, megaproject, microapartment, new economy, New Urbanism, Own Your Own Home, peak oil, pensions crisis, Peter Calthorpe, post-industrial society, RAND corporation, Richard Florida, rising living standards, Ronald Reagan, Salesforce, Seaside, Florida, self-driving car, Shenzhen was a fishing village, Silicon Valley, starchitect, Stewart Brand, streetcar suburb, Ted Nelson, the built environment, trade route, transit-oriented development, upwardly mobile, urban planning, urban renewal, urban sprawl, Victor Gruen, Whole Earth Catalog, women in the workforce, young professional

In addition, notes the 2010 census, many among the suburban “poor” are far from destitute or emblematic of multigenerational poverty but rather are people with smaller paychecks, often elderly residents with savings and paid-off mortgages.129 But overall, suburbs are not primary generators of inequality. According to University of Washington professor Richard Morrill’s examination of 2012 American Community Survey data, less dense, suburban-dominated areas tend to have “generally less inequality” than the denser core cities. For example, in California, Riverside-San Bernardino is far less unequal than Los Angeles, and Sacramento is less unequal than San Francisco.130 In the 51 metropolitan areas with a population greater than 1 million, notes demographer Wendell Cox, suburban areas are less unequal (as measured by the Gini coefficient)131 than the core cities in 46 cases.132 This is also the case in Australia, where suburbs still retain, as noted in a 2015 report, “a remarkable level of universality and equality.”133 The suburban detached house—detested by many planners—remains the linchpin of middle-class economics.

By 2020, according to the researchers, the portion of middle-income neighborhoods could fall to less than 10 percent, with the balance made up of both affluent and poor residents.80 Inequality is also increasing in Europe’s cities. Many low-wage workers congregate in the closer-in suburbs, as has happened in Paris, the continent’s leading global city.81 The social protections of the European Union may have ameliorated, for the time being, the shift toward an increasingly bifurcated society, but greater inequality seems likely in the future. In this era of powerful oligarchs and growing inequality, global cities are increasingly less likely places for upward mobility than in the past. Even Tokyo, once widely seen as among the most egalitarian societies on earth and where foreigners account for less than 2 percent of the population,82 has become distinctly less equal.

“Because that’s where the revenue comes to take care of everybody else.”89 This reliance on the rich, notes a Citigroup study, creates an urban employment structure based on “plutonomy,” an economy and society driven largely by the wealthy class’s investment and spending.90 In this way, the playground of these “luxury cores” around the world, as will be discussed later, serve less as places of aspiration than as geographies of inequality. New York, for example, is by some measurements the most unequal of American major cities, with a level of inequality that approximates South Africa before apartheid. New York’s wealthiest 1 percent earn a third of the entire municipality’s personal income91—almost twice the proportion for the rest of the country.92 Other luxury cores exhibit somewhat similar patterns.


pages: 308 words: 99,298

Brexit, No Exit: Why in the End Britain Won't Leave Europe by Denis MacShane

"World Economic Forum" Davos, 3D printing, Alan Greenspan, Alvin Toffler, banking crisis, battle of ideas, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, centre right, Corn Laws, deindustrialization, Doha Development Round, Donald Trump, Etonian, European colonialism, fake news, financial engineering, first-past-the-post, fixed income, Gini coefficient, greed is good, illegal immigration, information security, James Dyson, Jeremy Corbyn, labour mobility, liberal capitalism, low cost airline, low interest rates, Martin Wolf, mass immigration, military-industrial complex, Mont Pelerin Society, negative equity, Neil Kinnock, new economy, non-tariff barriers, offshore financial centre, open borders, open economy, post-truth, price stability, purchasing power parity, quantitative easing, reshoring, road to serfdom, secular stagnation, Silicon Valley, Thales and the olive presses, trade liberalization, transaction costs, women in the workforce

Moreover, 495,000 council houses were sold under Labour between 1997 and 2009, but in Yorkshire and the Humber region, which recorded a high Leave vote, only 24 council houses were built. Figures dug up from the Office of National Statistics by John Healey MP reveal that the regional share of UK output has fallen in every part of the country since 2010, other than in London and the South-East, where it has risen. According to Healey, the Gini coefficient measure of regional inequality has risen in every year since then. The South Yorkshire MP points out that ‘house prices are 93 per cent higher in London compared to the low-point after the global financial crash, but in other parts of the country they haven’t recovered at all, leaving thousands of households in negative equity’.

Jeremy Corbyn, the leftist Labour leader, has saved his honour and his focus on domestic issues like austerity, cuts to public services like health care and the police found an echo especially among young voters. Mrs May and the pro-Brexit press in Britain tried to portray Corbyn as a friend of terrorists, a leftwing extremist living in an imagined left-wing 1970s past. But voters saw an elderly man with a white beard talking about injustice and inequality at home and abroad and young voters in particular liked the message and gave Corbyn their support. But the Labour leader only added 32 MPs and the party is still far short of a majority in the Commons. In London, where many Labour candidates defied Corbyn’s support for leaving the Single Market and imposing immigration controls on fellow Europeans and campaigned to stay in Europe, Labour did very well.

A ComRes poll for the Independent newspaper showed that 49 per cent of those who voted for Leave thought that securing Britain’s economic future via a good trade deal was a priority, against 39 per cent who said reducing immigration was the main purpose of Brexit. Eric Kaufmann, Professor of Politics at Birkbeck, University of London, has carried out further research. When asked two months after the referendum, ‘What is the most important issue facing Britain today’ only 5 per cent of Leave voters mentioned poverty or inequality, but 41 per cent of Leave voters said immigration was the most important issue for today’s Britain. In fact, Britain is ninth in the league table of EU countries with a sizeable level of movement of other EU citizens to live or work outside their borders. The region which recorded the highest Leave vote was North-East England, where only 19,000 people from the countries that joined the EU after 2004 live or work.


Sam Friedman and Daniel Laurison by The Class Ceiling Why it Pays to be Privileged (2019, Policy Press)

affirmative action, Ascot racecourse, Boris Johnson, Bullingdon Club, classic study, critical race theory, discrete time, Donald Trump, Downton Abbey, emotional labour, equal pay for equal work, gender pay gap, gig economy, Gini coefficient, glass ceiling, Hyperloop, if you build it, they will come, imposter syndrome, income inequality, invisible hand, Jeremy Corbyn, job satisfaction, knowledge economy, longitudinal study, Martin Parr, meritocracy, meta-analysis, microaggression, nudge theory, nudge unit, old-boy network, performance metric, psychological pricing, school choice, Skype, starchitect, The Spirit Level, the strength of weak ties, unpaid internship, upwardly mobile, W. E. B. Du Bois, work culture

For an excellent overview of UK trends in absolute and relative mobility, see Goldthorpe (2016). Bukodi et al (2015). Piketty (2014). Savage and Friedman (2017). Piketty (2014) and Dorling (2014). The Gini coefficient is the dominant approach to measuring and comparing levels of economic inequality; Piketty’s work generally examines the share of income going to the top 1% of earners in a country. By either measure, there was a slight dip in inequality around the 2008 financial crisis, but the overall trend since the 1970s has been towards higher inequality. McKenzie (2015); Savage et al (2015b); Bloodworth (2016); Major and Machin (2018); Wilkinson and Pickett (2018). Elliott (2017).

Meanwhile, those at the bottom of the social hierarchy were most likely to be at the sharp end of cuts in public spending.24 In these conditions inequality – particularly at the top end of the income distribution – has mushroomed, climbing, by many measures, towards levels not seen since the 1930s.25 The political discourse, unsurprisingly, has come full circle. There is now a growing consensus that class divisions are hardening,26 and a widespread concern that the contemporary dynamics of inequality, especially post-Brexit, are taking severe turns that demand urgent political intervention.27 Social mobility and the politics of inequality Amid rising inequality, and the growing public unrest it has generated, social mobility has emerged as the key rhetorical tool through which politicians are staging their response.

Accordingly, for a long time the dominant political view held that economic inequality is not necessarily a problem as long as there is equality of opportunity. From this perspective, if those from different backgrounds have fair access to the most desirable jobs and the highest incomes, any inequality in outcome that follows is acceptable, and possibly even desirable (as higher rewards should motivate the most capable to seek the most prized jobs32). Social mobility, through this lens, is therefore a key means of justifying inequality, imbuing inequality with what Goldthorpe has called ‘meritocratic legitimacy’.33 But there are signs that this consensus is shifting.


pages: 453 words: 117,893

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Wang Jianlin told me when I interviewed him for my BBC TV programme that, as societies become middle class, their resentment against the rich grows. He cited Singapore and Hong Kong as societies in which such attitudes have emerged as their societies became better off. His observation echoes studies that find that inequality and poverty are relative concepts. Indeed, it’s not just the absolute difference between the incomes of the rich and the poor that matters for wellbeing. That’s what is typically measured by indicators such as the Gini coefficient: an index that is zero if all individuals have the same income and one if one person has all the income in a country. But, as a society becomes increasingly dominated by a growing middle class, such comparisons are relative.

There is no imperative for the government to intervene a great deal in the workings of the market economy, for instance, in the ups and downs of a business cycle. But, how about redistributing income in the face of rising inequality? How would Marshall have viewed inequalities that have burgeoned as the benefits of a growing economy disproportionately accrue to the top 1 per cent? There’s no doubt that inequality is high on the policy agenda, a reminder that we must consider the quality and not just the speed of economic growth. A best-selling book on the topic of inequality is by the French economist Thomas Piketty. Its popularity reflects a widespread concern that inequality is as high now in America as the Gilded Age of the late nineteenth century.

As we’ll come to later, this adherence to utility maximization for society as a whole, which pays less attention to the distribution of that utility, may be why inequality has grown so rapidly in some capitalist economies. For Marshall, interest in inequality and poverty permeated his work. To the Royal Commission on the Aged Poor in 1893 he declared: ‘I have devoted myself for the last twenty-five years to the problem of poverty, and very little of my work has been devoted to any inquiry which does not bear upon that.’10 So, what would Alfred Marshall make of the growing inequality in the developed world that has seen as much inequality in early twenty-first century America as he witnessed during the Gilded Age? Growing inequality Some of the statistics on income inequality that have propelled it up the policy agenda are striking.


pages: 374 words: 113,126

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Wang Jianlin told me when I interviewed him for my BBC TV programme that, as societies become middle class, their resentment against the rich grows. He cited Singapore and Hong Kong as societies in which such attitudes have emerged as their societies became better off. His observation echoes studies that find that inequality and poverty are relative concepts. Indeed, it’s not just the absolute difference between the incomes of the rich and the poor that matters for wellbeing. That’s what is typically measured by indicators such as the Gini coefficient: an index that is zero if all individuals have the same income and one if one person has all the income in a country. But, as a society becomes increasingly dominated by a growing middle class, such comparisons are relative.

There is no imperative for the government to intervene a great deal in the workings of the market economy, for instance, in the ups and downs of a business cycle. But, how about redistributing income in the face of rising inequality? How would Marshall have viewed inequalities that have burgeoned as the benefits of a growing economy disproportionately accrue to the top 1 per cent? There’s no doubt that inequality is high on the policy agenda, a reminder that we must consider the quality and not just the speed of economic growth. A best-selling book on the topic of inequality is by the French economist Thomas Piketty. Its popularity reflects a widespread concern that inequality is as high now in America as the Gilded Age of the late nineteenth century.

As we’ll come to later, this adherence to utility maximization for society as a whole, which pays less attention to the distribution of that utility, may be why inequality has grown so rapidly in some capitalist economies. For Marshall, interest in inequality and poverty permeated his work. To the Royal Commission on the Aged Poor in 1893 he declared: ‘I have devoted myself for the last twenty-five years to the problem of poverty, and very little of my work has been devoted to any inquiry which does not bear upon that.’10 So, what would Alfred Marshall make of the growing inequality in the developed world that has seen as much inequality in early twenty-first century America as he witnessed during the Gilded Age? Growing inequality Some of the statistics on income inequality that have propelled it up the policy agenda are striking.


pages: 406 words: 113,841

The American Way of Poverty: How the Other Half Still Lives by Sasha Abramsky

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American Legislative Exchange Council, bank run, basic income, benefit corporation, big-box store, collective bargaining, deindustrialization, fixed income, Francis Fukuyama: the end of history, full employment, ghettoisation, Gini coefficient, government statistician, guns versus butter model, housing crisis, illegal immigration, immigration reform, income inequality, indoor plumbing, job automation, Kickstarter, land bank, Mark Zuckerberg, Maui Hawaii, microcredit, military-industrial complex, mortgage debt, mortgage tax deduction, new economy, Occupy movement, off-the-grid, offshore financial centre, payday loans, plutocrats, Ponzi scheme, Potemkin village, profit motive, Ronald Reagan, school vouchers, upwardly mobile, War on Poverty, Washington Consensus, women in the workforce, working poor, working-age population, Works Progress Administration

In September 2012, the Associated Press calculated that a resident who had lived in the state since the first checks were issued in 1982 would have received more than $34,000 from the fund during the three decades that followed.5 Perhaps not entirely coincidentally, despite the fact that the legislature doesn’t collect back the dividend from wealthier residents via higher state taxes, Alaska’s Gini Coefficient data—Gini being a complex measure used to track inequality—indicated the state had less extremes of wealth and poverty than almost any other state in the union. Almost certainly, Zelleke’s proposal is too big a pill to swallow. But there’s no practical reason that an alternative, more limited, model couldn’t be developed.

In fact, an increasingly vocal line of reasoning, harking back to the Social Darwinism, survival-of-the-fittest rhetoric of the late nineteenth century, has it that it represents something quintessentially hopeful. The flip side of inequality, they argue, is opportunity. Anyone can, in America, strike it rich. All one needs for success is a little bit of gumption and a willingness to take risks. That was, in many ways, the key argument that GOP presidential hopeful Rick Santorum laid out in a major speech before the Detroit Economic Club on February 16, 2012. “I’m about equality of opportunity. I’m not about equality of result when it comes to income inequality. There is income inequality in America. There always has been, and hopefully, and I do say that, there always will be,” Santorum told his audience, in a city in which two-thirds of children were currently living below the poverty line.

In his 1971 book A Theory of Justice,13 the influential liberal philosopher John Rawls argued that the moral imperative of a political and economic system was to raise the condition of society’s most vulnerable, and that the means to do so were, largely, to be discovered by trial and error. In theory, growing inequality would pass his morality test so long as the condition of the poor was being bettered. In practice, however, because inequality tended to increase during moments when poor people were losing political and economic clout, such developments tended to raise a red flag. Far better to promote policies that have the effect of reducing the divides between the wealthiest and the poorest in any given society, he continued.


pages: 393 words: 115,178

The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program That Shaped Our World by Vincent Bevins

Albert Einstein, American ideology, anti-communist, Berlin Wall, Branko Milanovic, British Empire, capitalist realism, centre right, colonial rule, crony capitalism, cuban missile crisis, Deng Xiaoping, disinformation, European colonialism, Fall of the Berlin Wall, feminist movement, Gini coefficient, Great Leap Forward, income inequality, land reform, market fundamentalism, megacity, military-industrial complex, Nelson Mandela, RAND corporation, Ronald Reagan, sexual politics, South China Sea, structural adjustment programs, union organizing

See Robert Wade, “Escaping the periphery: the East Asian ‘mystery’ solved,” United Nations University World Institute for Development Economics Research, September 2018, for discussion of the exceptional treatment South Korea and Taiwan were given by Washington due to their strategic importance in the Cold War. * 2017 Appendix 3 Global Inequality Between Countries, 1960–2017 The measure of inequality used here is the GINI coefficient. Purely for reference, inequality within the United States is around 41.5 (World Bank estimate). Some of the most equal societies on Earth, often in Northern Europe, hit lows of around 25, and South Africa, one of the world’s most unequal nations, has a GINI index of 65.

Classification: LCC E744 .B476 2020 | DDC 327.73009/04—dc23 LC record available at https://lccn.loc.gov/2019046069 ISBNs: 978-1-5417-4240-6 (hardcover), 978-1-5417-2401-3 (ebook) E3-20200415-JV-NF-ORI Contents Cover Title Page Copyright Dedication Introduction 1 A New American Age 2 Independent Indonesia 3 Feet to the Fire, Pope in the Sky 4 An Alliance for Progress 5 To Brazil and Back 6 The September 30th Movement 7 Extermination 8 Around the World 9 Jakarta Is Coming 10 Back Up North 11 We Are the Champions 12 Where Are They Now? And Where Are We? Acknowledgments Discover More About the Author Appendixes Appendix 1. Data Table: The World in 1960 Appendix 2. Data Table: The World Today Appendix 3. Global Inequality: Chart One Appendix 4. Global Inequality: Chart Two Appendix 5. Map: Anticommunist Extermination Programs, 1945–2000 Notes For Bu Cisca and Pak Hong Lan Oei Explore book giveaways, sneak peeks, deals, and more. Tap here to learn more. Introduction IN MAY 1962, A YOUNG girl named Ing Giok Tan got on a rusty old boat in Jakarta, Indonesia.

It is Chinese economic growth over the past few decades that has driven most of the reductions in global inequality that have taken place since 1980. There are heated debates as to whether China has grown because it embraced capitalism or because it had Communist reforms and still remains under the control of a technocratic single party. But what is clear is that China is absolutely not an anticommunist regime created by US intervention in the Cold War. One way of looking at it indicates that global inequality has gone down slightly since 1960, largely because of China (see Appendix Three). Another way of looking at it—that is, by grouping countries into regions—indicates that the Third World has been stuck where it was, while the First World has gotten even better off (see Appendix Four).


pages: 366 words: 117,875

Arrival City by Doug Saunders

agricultural Revolution, Ayatollah Khomeini, Berlin Wall, Boeing 747, Branko Milanovic, call centre, credit crunch, Deng Xiaoping, desegregation, foreign exchange controls, gentrification, ghettoisation, Gini coefficient, guest worker program, Hernando de Soto, Honoré de Balzac, illegal immigration, immigration reform, income inequality, informal economy, Jane Jacobs, Kibera, land reform, land tenure, low skilled workers, mass immigration, megacity, microcredit, new economy, Pearl River Delta, pensions crisis, place-making, price mechanism, rent control, Silicon Valley, special economic zone, the built environment, The Chicago School, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban sprawl, white flight, working poor, working-age population

Its evolution ought to be studied by governments in Africa, South America, and East Asia, for it is precisely the form of politics that fills the vacuum when the rural migrants are taken for granted. * I have omitted Soheila’s surname to protect her security. † The names of these settlements were later changed by the government to Nasim Shahr and Golestan, though they are still widely known by their original names. ‡ The Gini Coefficient, the standard measure of inequality, in which zero indicates perfect equality and a one indicates complete inequality, increased from 0.44 to 0.48, a significant jump, between 2000 and 2005, according to the Venezuelan Central Bank. § Shivaji Bhosale was the seventeenth-century Maharashtrian Hindu who led an uprising against the Moghul rulers of the region and established a Marathi empire; he is a folk hero among Maharashtrians and low-caste Hindus across India. 8 THE NEW CITY CONFRONTS THE OLD WORLD THE PROBLEM OF SPACE Les Pyramides, Evry, France Like the ruins of some lost Martian empire on the cover of a previous generation’s science-fiction novel, the dun-and-gray pyramids materialize amid fields and forests along the motorway an hour south of Paris.

However, with a growth rate approaching 4 percent per year across its wider metropolitan district (whose population is 32 million), Chongqing qualifies by any measure. † All figures in this book are converted to United States dollars. ‡ Inequality has declined with urbanization in those countries that allow their arrival cities to flourish. Brazil, Peru, and Malaysia have all seen inequality fall during their periods of urbanization. China, with its restricted arrival cities, has seen inequality increase. India, with chaotic urban policies, has seen no change. In all these cases, urbanization has sharply reduced poverty and improved the living standards of the poorest fifth of the population

Or, in an alternative version offered in popular books and movies, arrival cities are written off as contiguous extensions of a dystopian “planet of slums,” a homogenous netherworld, in which the static poor are consigned to prisonlike neighborhoods guarded by hostile police, abused by exploitative corporations, and preyed upon by parasitic evangelical religions.2 This is certainly the fate of many arrival cities after they have been deprived of their fluid structure or abandoned by the state. Yet, to see this as their normal condition is to ignore the arrival city’s great success: it is, in the most successful parts of both the developing world and the Western world, the key instrument in creating a new middle class, abolishing the horrors of rural poverty and ending inequality.‡ Rather than dismissing these neighborhoods as changeless entities or mere locations, we need to start seeing them as a set of functions. The first arrival-city function is the creation and maintenance of a network: a web of human relationships connecting village to arrival city to established city.


pages: 421 words: 125,417

Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

agricultural Revolution, air freight, Anthropocene, back-to-the-land, biodiversity loss, British Empire, business process, carbon credits, carbon footprint, carbon tax, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, digital divide, Edward Glaeser, energy security, failed state, Garrett Hardin, Gini coefficient, global pandemic, Global Witness, Haber-Bosch Process, impact investing, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, low skilled workers, mass immigration, microcredit, ocean acidification, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, Tragedy of the Commons, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population, zoonotic diseases

SOCIAL SPENDING AND ECONOMIC OUTCOMES The evidence suggests that the high social spending in the social-welfare states is indeed very effective in reducing poverty and inequality and in promoting health and prosperity. Table 11.2 shows three different measures of poverty in the three country groups: the poverty rate (the percentage of people living at less than half the average national household income); the share of disposable income (after taxes) received by the poorest 20 percent of the population; and the Gini coefficient on income, which measures how equally wealth is distributed across the country (0 is perfectly equal, 100 is entirely unequal).

Markets should be left to provide the bulk of the services otherwise provided by the welfare state. The opposing view is that a large social safety net actually ensures confidence in the future, enables people to take risks, and also allows for a redistribution of wealth that prevents the most extreme economic inequality. Redistribution of wealth ensures that the most acute inequalities are avoided. While there will still be inequality, there will be no deprived underclass at the low end of the income spectrum nor a wealthy plutocracy at the other. Proponents of an expansive welfare state also argue that relying on markets to ensure help for the poorest of the poor within a society is futile.

As a final point, social-welfare spending not only reduces inequities and uncertainties within a rich society but also bolsters the confidence and trust within the society to be more generous on the international stage. Countries treat the world’s poor and vulnerable as they treat their own. U.S. policies, by pursuing a constricted notion of social insurance, foster a society of fear and vulnerability that lacks the readiness to contribute more to global cooperation. Mainstream Americans feel increasingly unnerved by widening income inequality at home, and are therefore less likely to support assistance for the poor abroad.


Making Globalization Work by Joseph E. Stiglitz

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, benefit corporation, Berlin Wall, blood diamond, business process, capital controls, carbon tax, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Garrett Hardin, Gini coefficient, global reserve currency, Global Witness, Great Leap Forward, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, negative emissions, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Seymour Hersh, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, Tragedy of the Commons, trickle-down economics, union organizing, Washington Consensus, zero-sum game

Chapter One 1.World Commission on the Social Dimension of Globalization, A Fair Globalization: Creating Opportunities for All (Geneva: International Labour Office, 2004), p. x; available at www.ilo.org/public/english/fairglobalization/report/ index.htm. 2.World Commission on the Social Dimension of Globalization, A Fair Globalization: Creating Opportunities for All, op. cit., p. 44; and Giovanni Andrea Cor-nia and Tony Addison with Sampsa Kiiski, “Income Distribution Changes and Their Impact in the Post–World War II Period,” World Institute for Development Economics Research Discussion Paper 2003/28, March 2003. Inequality is measured by the Gini coefficient, one of the standard measures. 3.Even the $2-a-day standard is less than a fifth of the poverty standard used in the United States and western Europe. 4.Shaohua Chen and Martin Ravallion, “How Have the World’s Poorest Fared since the Early 1980s?,” World Bank Development Research Group, World Bank Policy Research Working Paper 3341, June 2004.

(Interestingly, such beliefs have persisted, even as economic research has undermined their intellectual foundations.) On the other hand, those who, like me, think that markets often fail to produce efficient outcomes (producing too much pollution and too little basic research, for instance) and are disturbed by income inequalities and high levels of poverty, also believe that reducing that inequality can cost less than the conservative economists predict. Those who worry about inequality and poverty also see the enormous costs of not dealing with the problem: the social consequences, including alienation, violence, and social conflict. They are also more sanguine about the possibilities for government interventions; while governments sometimes, or even often, are less efficient than one might have hoped, there are notable instances of success, several of which I discuss in the pages that follow.

I also hope to show that while globalization’s critics are correct in saying it has been used to push a particular set of values, this need not be so. Globalization does not have to be bad for the environment, increase inequality, weaken cultural diversity, and advance corporate interests at the expense of the well-being of ordinary citizens. In Making Globalization Work, I attempt to show how globalization, properly managed, as it was in the successful development of much of East Asia, can do a great deal to benefit both the developing and the developed countries of the world. Attitudes toward globalization, and the failures and inequities associated with the way it has been managed, provide a Rorschach test for both countries and their people, revealing their fundamental beliefs and attitudes, their perspectives on the role of government and the market, the importance they attach to social justice, and the weight they put on noneconomic values.


Super Continent: The Logic of Eurasian Integration by Kent E. Calder

"World Economic Forum" Davos, 3D printing, air freight, Asian financial crisis, Bear Stearns, Berlin Wall, blockchain, Bretton Woods, business intelligence, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, cloud computing, colonial rule, Credit Default Swap, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, disruptive innovation, Doha Development Round, Donald Trump, energy transition, European colonialism, export processing zone, failed state, Fall of the Berlin Wall, foreign exchange controls, geopolitical risk, Gini coefficient, high-speed rail, housing crisis, income inequality, industrial cluster, industrial robot, interest rate swap, intermodal, Internet of things, invention of movable type, inventory management, John Markoff, liberal world order, Malacca Straits, Mikhail Gorbachev, mittelstand, money market fund, moral hazard, new economy, oil shale / tar sands, oil shock, purchasing power parity, quantitative easing, reserve currency, Ronald Reagan, seigniorage, Shenzhen special economic zone , smart cities, smart grid, SoftBank, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, Suez canal 1869, Suez crisis 1956, supply-chain management, Thomas L Friedman, trade liberalization, trade route, transcontinental railway, UNCLOS, UNCLOS, union organizing, Washington Consensus, working-age population, zero-sum game

By 2017, however, that multiple had narrowed to less than 7 times. See World Bank, “GDP Per Capita (Current US$),” World Development Indicators, accessed October 10, 2018, https://​data​.worldbank​.org/​products/​wdi. 20. Sonali Jain-Chandra, “Chart of the Week: Inequality in China,” IMFBlog, September 20, 2018, https://​blogs​.imf​.org/​2018/​09/​20/​chart​-of​-the​-week​-inequality​-in​-china/. 21. Gini coefficients of income inequality have risen in all regions of the world ­except Latin America, sub-Saharan Africa, and the Middle East/North Africa, although Notes to Chapter 9 295 they were already high in those areas. The coefficient has risen most sharply in China.

That said, SinoIndian relations seem less likely to be plagued by serious conflict than the relations between China and Japan. Both of the emerging giants are growing rapidly and have broadly complementary economies—manufacturing versus services.66 Populism and the Western Industrial World Income inequality within the major nations of the world is deepening, even as income inequality between nations is generally falling, as noted earlier. Such domestic inequality is felt more intensely in the West than in Asia, because economic growth is lower in the West and competition between immigrants and the native born is more intense. The tension is especially intense in Eu- Shadows and Critical Uncertainties 201 rope, both because growth is generally lower there than in North America and also because immigration is more extensive.

Over 700 million people have escaped from poverty in China alone.18 Broadly speaking, globalization has decreased income inequality between nations— especially between newly industrializing economies and Western industrial powers.19 Despite these felicitous developments, globalization has also generated a variety of predictably negative consequences that threaten global stability, and that of Eurasia, from a long-term perspective. Most importantly, globalization seems to have deepened income inequality within nations—with the fruits of global interdependence flowing disproportionately to urban professionals, corporate executives, and in many cases government officials—particularly in the financial sector.


pages: 689 words: 134,457

When McKinsey Comes to Town: The Hidden Influence of the World's Most Powerful Consulting Firm by Walt Bogdanich, Michael Forsythe

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Alistair Cooke, Amazon Web Services, An Inconvenient Truth, asset light, asset-backed security, Atul Gawande, Bear Stearns, Boris Johnson, British Empire, call centre, Cambridge Analytica, carbon footprint, Citizen Lab, cognitive dissonance, collective bargaining, compensation consultant, coronavirus, corporate governance, corporate social responsibility, Corrections Corporation of America, COVID-19, creative destruction, Credit Default Swap, crony capitalism, data science, David Attenborough, decarbonisation, deindustrialization, disinformation, disruptive innovation, do well by doing good, don't be evil, Donald Trump, double entry bookkeeping, facts on the ground, failed state, financial engineering, full employment, future of work, George Floyd, Gini coefficient, Glass-Steagall Act, global pandemic, illegal immigration, income inequality, information security, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, job-hopping, junk bonds, Kenneth Arrow, Kickstarter, load shedding, Mark Zuckerberg, megaproject, Moneyball by Michael Lewis explains big data, mortgage debt, Multics, Nelson Mandela, obamacare, offshore financial centre, old-boy network, opioid epidemic / opioid crisis, profit maximization, public intellectual, RAND corporation, Rutger Bregman, scientific management, sentiment analysis, shareholder value, Sheryl Sandberg, Silicon Valley, smart cities, smart meter, South China Sea, sovereign wealth fund, tech worker, The future is already here, The Nature of the Firm, too big to fail, urban planning, WikiLeaks, working poor, Yogi Berra, zero-sum game

GO TO NOTE REFERENCE IN TEXT $700 million: “The McKinsey Dossier Part 1—How McKinsey and Trillian Ripped R1.6bn from Eskom,” amaBhungane and Scorpio, Sept. 14, 2017. The figure is converted using the 2017 rand into U.S. dollars rate. GO TO NOTE REFERENCE IN TEXT income gap: The World Bank Gini index. Measured according to the ranked Gini coefficients assigned to each country. GO TO NOTE REFERENCE IN TEXT youth unemployment topping 50 percent: The World Bank. GO TO NOTE REFERENCE IN TEXT In the first half of 2015: Statement of Yeboah-Amankwah to Commission of Inquiry into State Capture, April 8, 2019, 12.

How do you have a Values Day and do that shit? It’s unbelievable.” An even bigger problem, Peters said, might be the “disinvestment in people” in favor of bigger profits. “I really think the shareholder value maximization thing has done more harm than any single thing maybe in the country. It is the father of inequality, and inequality is the father of Trump.” Several former consultants said they had a hard time understanding how a firm with such kind and caring people could take on such disreputable clients. Green, the university dean, estimates that nine out of ten of his colleagues would not work for a tobacco company or an undemocratic government, yet they would serve them under the name McKinsey.

., documented that over the last four decades the rising market power of corporations contributed to some of society’s most intractable problems: wage growth stagnated as productivity grew; before-tax profit of U.S. corporations rose sharply as income inequality worsened; and household debt rose as financial instability increased. Even the Business Roundtable in August 2019 reevaluated its position that corporations should serve only shareholder interests—a reflection, McKinsey said, “of tensions that have been boiling over.” With offshoring out of favor with many Washington policy makers, the McKinsey Global Institute defended its support of globalization, saying outsourcing and weaker labor unions had been wrongly cited as leading causes of income inequality. The more likely culprits, McKinsey said, were the “boom and bust cycles in the economy” and technological advances.


pages: 458 words: 132,912

The Dying Citizen: How Progressive Elites, Tribalism, and Globalization Are Destroying the Idea of America by Victor Davis Hanson

"World Economic Forum" Davos, 2021 United States Capitol attack, 23andMe, affirmative action, Affordable Care Act / Obamacare, airport security, Bernie Sanders, Big Tech, Black Lives Matter, Boeing 737 MAX, borderless world, bread and circuses, British Empire, business climate, business cycle, carbon footprint, centre right, clean water, coronavirus, COVID-19, creative destruction, currency manipulation / currency intervention, defund the police, deindustrialization, deplatforming, disinformation, Donald Trump, Dr. Strangelove, drone strike, El Camino Real, fake news, Ferguson, Missouri, fixed income, Francis Fukuyama: the end of history, future of work, George Floyd, Gini coefficient, global pandemic, Herbert Marcuse, high-speed rail, Honoré de Balzac, illegal immigration, immigration reform, income inequality, Jeff Bezos, Joseph Schumpeter, laissez-faire capitalism, lockdown, Mark Zuckerberg, mass immigration, mass incarceration, Menlo Park, microaggression, military-industrial complex, mortgage debt, Nate Silver, new economy, New Urbanism, obamacare, old-boy network, Paris climate accords, Parler "social media", peak oil, Potemkin village, Ralph Waldo Emerson, Robert Mercer, Ronald Reagan, school choice, Silicon Valley, Silicon Valley billionaire, Skype, social distancing, Social Justice Warrior, tech worker, Thomas L Friedman, transcontinental railway, upwardly mobile, vertical integration, WikiLeaks, working poor, Yom Kippur War, zero-sum game

When state regulatory and environmental policies do not encourage middle-class viability and access to affordable housing, electric power, gasoline, and infrastructure, society descends into a binary of haves and have-nots. Progressive California ranks as the third-highest state in the nation in terms of inequality, according to the so-called Gini coefficient that measures purported levels of income and capital wealth disequilibrium. Nearly half of the nation’s homeless live in California—a state that professes to have the most progressive policies concerning the poor. About one-third of all Americans on public assistance reside in California.

Rollback of highspeed rail: Romy Varghese, “California’s Newsom Scales Back Plans for High-Speed Rail Line,” Bloomberg, February 12, 2019, www.bloomberg.com/news/articles/2019-02-12/california-governor-says-he-s-dropping-high-speed-rail-plan; last California reservoir: Paul Rogers, “California Drought: Why Doesn’t California Build Big Dams Any More?,” Mercury News, August 31, 2014, www.mercurynews.com/2014/08/31/california-drought-why-doesnt-california-build-big-dams-any-more. 44. Ranking of inequality in California: “Income Inequality by State, 2021,” World Economic Review, https://worldpopulationreview.com/state-rankings/income-inequality-by-state. The Homeless: Jacob Passy, “Nearly Half of the U.S.’s Homeless People Live in One State: California,” MarketWatch, September 29, 2019, www.marketwatch.com/story/this-state-is-home-to-nearly-half-of-all-people-living-on-the-streets-in-the-us-2019-09-18; California’s percentage of the nation’s poor: Kerry Jackson, “California, Poverty Capital,” City Journal, winter 2018, www.city-journal.org/html/california-poverty-capital-15659.html.

The latter advanced lots of reasons to shut down assembly plants in the United States rather than seek innovative ways to salvage profitable businesses that employed fellow Americans. As far as faulting the losers of globalization, Summers himself at one point felt any resulting inequality simply reflected merit-based reality and purportedly remarked, “One of the challenges in our society is that the truth is a kind of disequalizer. One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they’re supposed to be treated.”30 A number of popular landmark studies over the last four decades—most notably those of Fred Siegel, Joel Kotkin, social critic of popular culture and values Christopher Lasch, Charles Murray, sociologist Robert Nisbet, and political scientist Kevin Philips—all warned of the costs to the nation when middle-class viability is lost.


The Party: The Secret World of China's Communist Rulers by Richard McGregor

activist lawyer, banking crisis, corporate governance, credit crunch, Deng Xiaoping, financial innovation, Gini coefficient, glass ceiling, global reserve currency, Great Leap Forward, haute couture, high-speed rail, hiring and firing, income inequality, invisible hand, kremlinology, land reform, Martin Wolf, megaproject, Mikhail Gorbachev, military-industrial complex, old-boy network, one-China policy, Panopticon Jeremy Bentham, pre–internet, reserve currency, risk/return, Shenzhen special economic zone , South China Sea, sovereign wealth fund, special economic zone, Upton Sinclair

when you started a family…: One of the most contentious communist policies, the one-child policy, still remains on the books, although in practice it has long been flexible in some areas. The one-child policy was in fact introduced relatively late in the Party’s rule, in 1979. The official name of the…: The Chinese name, in pinyin, is Zhongguo Pudong Ganbu Xueyuan. Amidst China’s successes…: The measure used here is the Gini coefficient, a commonly used measure for income inequality. In the two years to…: Paper by Bert Hofman, World Bank China economist, presented to Bank of China forum, in Beijing, 2 November 2006. See also Financial Times and Wall Street Journal, 22 November 2006. When I met…: The names of the students have been changed at their request.

In China, the middle class has become a conservative bulwark of Party rule. The middle class en masse hasn’t dared rise up against the state, because they have so much to lose. Inequality is another of the Party’s often stated Achilles heels. The extreme poverty that exists in China alongside great and often ill-gotten wealth is more than just embarrassing for a state that professes to be built on the principles of socialism. The Party talks incessantly in public about addressing inequality, because it knows how corrosive the rich–poor gap is to its standing. But it doesn’t follow that the issue will break the Party asunder. China has become a remarkably aspirational place, not unlike the US.

America has not fallen apart because incomes in Mississippi and West Virginia have no hope of ever catching up with rich Maryland and Connecticut. The economy has been energized by people who want to emulate the wealthy rather than pull them down. Similarly, enough Chinese have faith in their ability to build a better life for their families to keep the issue of inequality at bay, for now. Then there is corruption. Certainly, China is deeply corrupt, but corrupt regimes can last a long time. The Chinese officials who do get arrested for graft generally fall into two categories, or sometimes both. They are the losers in political power struggles, or their corruption has become so outrageous that it embarrasses the system, and thereby jeopardizes the game for everyone else.


pages: 566 words: 160,453

Not Working: Where Have All the Good Jobs Gone? by David G. Blanchflower

90 percent rule, active measures, affirmative action, Affordable Care Act / Obamacare, Albert Einstein, bank run, banking crisis, basic income, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Lives Matter, Black Swan, Boris Johnson, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clapham omnibus, collective bargaining, correlation does not imply causation, credit crunch, declining real wages, deindustrialization, Donald Trump, driverless car, estate planning, fake news, Fall of the Berlin Wall, full employment, George Akerlof, gig economy, Gini coefficient, Growth in a Time of Debt, high-speed rail, illegal immigration, income inequality, independent contractor, indoor plumbing, inflation targeting, Jeremy Corbyn, job satisfaction, John Bercow, Kenneth Rogoff, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, mass incarceration, meta-analysis, moral hazard, Nate Silver, negative equity, new economy, Northern Rock, obamacare, oil shock, open borders, opioid epidemic / opioid crisis, Own Your Own Home, p-value, Panamax, pension reform, Phillips curve, plutocrats, post-materialism, price stability, prisoner's dilemma, quantitative easing, rent control, Richard Thaler, Robert Shiller, Ronald Coase, selection bias, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, universal basic income, University of East Anglia, urban planning, working poor, working-age population, yield curve

According to the OECD, in 2016 it was 6.3 in the United States versus 4.2 in the UK (in 2017), 3.7 in Germany in 2015, 3.5 in France, 3.3 in Sweden (in 2016), and 2.9 in Denmark (in 2015).31 Another measure of inequality is the Gini coefficient, which is available across countries for 2012. This shows that, across OECD countries, the United States and the UK rank #1 and #3 as the countries with the highest levels of inequality. Despite these relatively narrow income differences many in Europe think they are still too high. Table 4.5. Government Should Reduce Income Differences: Percentage Saying “Strongly Agree” or “Agree” Austria Belgium Germany Finland France Ireland Israel Netherlands Russia Sweden Switzerland UK 77 72 73 71 75 72 77 62 69 64 65 64 Source: European Social Surveys Sweep 8, 2016 (variable = gincdif), weighted. http://www.europeansocialsurvey.org.

Relative things matter. The implication is that people care about inequality. There is evidence that individuals in Europe have a lower tendency to report themselves as happy when inequality is high, but this is not the case in the United States.43 Another analysis was recently conducted at the zip-code, MSA, and state levels of the inequality well-being relationship using data from the Gallup Healthways Well-Being Index and income inequality data from the American Community Survey.44 It found, in contrast, that the net relationship between income inequality and happiness in the United States is negative. A study that used the World Database of Happiness found a positive relationship in Latin America, Eastern Europe, and Asia but a negative one in Western Europe.45 Another study looked at the relationship between economic mobility and inequality across advanced countries.46 It found clear evidence that as inequality rises, mobility declines.

Since 1980, growth in real incomes for the bottom 90 percent of adults has been only about half of the national average on a pretax basis and about two-thirds on a posttax basis. Median pretax incomes have hardly grown since 1980. The government has offset only a small fraction of the increase in inequality. According to Mishel and Sabadish (2013), “A key driver of wage inequality is the growth of chief executive officer earnings and compensation.” Piketty agrees, noting that “the primary reason for increased income inequality in recent decades is the rise of the super-manager” (2014, 315). And he adds that “wage inequalities increased rapidly in the United States and Britain because U.S. and British corporations became much more tolerant of extremely generous pay packages after 1970” (2014, 332).


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, Alan Greenspan, anti-communist, bank run, banking crisis, Basel III, Bear Stearns, benefit corporation, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, export processing zone, failed state, fake news, falling living standards, family office, financial deregulation, financial engineering, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global supply chain, Global Witness, high net worth, Ida Tarbell, income inequality, index fund, invisible hand, Jeff Bezos, junk bonds, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, megaproject, Michael Milken, Money creation, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Ponzi scheme, price mechanism, proprietary trading, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, Savings and loan crisis, seminal paper, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, stock buybacks, Suez crisis 1956, The Chicago School, Thorstein Veblen, too big to fail, Tragedy of the Commons, transfer pricing, two and twenty, vertical integration, Wayback Machine, wealth creators, white picket fence, women in the workforce, zero-sum game

While Japan and Germany display a wide range of competitive industries, Britain’s revealed comparative advantage is concentrated massively in just two sectors: financial services and insurance. On inequality, this is widely documented. See, for instance, ‘Understanding the Socio-Economic Divide in Europe’, Organisation for Economic Co-operation and Development, 26 January 2017, Figure 2.1. Gini coefficients (a measure of inequality) for 22 European countries range between 0.25 for Denmark, the least unequal, and just below 0.36 for the UK, whose Gini is a shade lower than that of the most unequal country, Estonia, whose Gini is just above 0.36. What is more, Gini is an imperfect measure of inequality because it does not adequately reflect extreme wealth concentration among the top 1 or 0.1 per cent, which is an especially British phenomenon. 8.

One is that the finance curse has powerful racial, gender, geographical and generational effects. Pretty much every time, as I will show, financialisation and the rise of finance tends to mean wealth and power are extracted from the more disadvantaged groups, and delivered up to those least in need of it, worsening inequalities of wealth and power across many dimensions. Another potential cost that cannot be measured is that excess finance, by worsening these inequalities, will have added to a pervasive sense of injustice among many British people, and contributed significantly towards the Brexit vote. A further unmeasurable cost is the rise in organised crime and other abusive activities that happen in the City of London.

This is an outcome and a reflection of inequality, as large firms and their owners bust unions, escape taxes and use mergers and monopoly powers to wrest a rising share of the economic pie away from workers, consumers, taxpayers and others. Since the rich spend a lower share of their income than the poor, this upward transfer of wealth saps overall spending power in our economies, so there’s reduced demand for the goods and services produced by corporations, meaning they invest less. This is one of the main reasons why, as the IMF and others have found, inequality tends to reduce economic growth. This is an old economic problem.


pages: 459 words: 144,009

Upheaval: Turning Points for Nations in Crisis by Jared Diamond

anti-communist, Asian financial crisis, Berlin Wall, British Empire, California gold rush, carbon tax, clean water, correlation coefficient, cuban missile crisis, Dissolution of the Soviet Union, Gini coefficient, high-speed rail, illegal immigration, interchangeable parts, invention of writing, Jeff Bezos, low interest rates, medical malpractice, mutually assured destruction, Nelson Mandela, Nick Bostrom, nuclear winter, oil shale / tar sands, peak oil, post-work, purchasing power parity, rising living standards, risk tolerance, Ronald Reagan, Suez canal 1869, Suez crisis 1956, The Spirit Level, Timothy McVeigh, traffic fines, transcontinental railway, women in the workforce, World Values Survey

So, the Declaration of Independence really did enshrine legal equality as a core U.S. value, at least in theory. What’s the reality about economic inequality in the U.S.? Economic inequality within a country can be measured in several different ways. One question concerns what quantity to compare among people: their raw unadjusted gross incomes? Or their adjusted incomes, after deductions such as for taxes, and after additions such as of Social Security payments and food stamps? Or their wealth or total assets? Individual variation among each of those quantities can in turn be measured in different ways, such as by the so-called Gini coefficient; by comparing the income of the country’s richest 1% with its poorest 1%; by computing the percentage of total national income belonging to the richest 1%; and by calculating the percentage of billionaires among the country’s population.

In contrast, in the United Kingdom election campaigning is restricted by law to a few weeks before an election, and the amount of money that can be spent for campaign purposes is also restricted by law. Our next fundamental problem is inequality. Let’s consider what Americans think about American equality or inequality, how to measure it, and how the U.S. ranks in inequality and in socio-economic mobility compared to other major democracies. And, if inequality is high—so what? That is, if it turned out that many Americans really are poor, and doomed to remain poor, that would of course be very sad for them as individuals, but—is that also bad for rich Americans, and for the U.S. as a whole? When asked about equality or inequality in the U.S., Americans are likely to respond that equality is a core American value, as stated already in the second sentence of our 1776 Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal.…” Note, however, that the Declaration doesn’t state that all men (and now, also women) actually are equal or deserve to have equal incomes.

However, as for which major democracy has the greatest inequality, all quantities compared and all measures yield the same conclusion: the major democracy with the greatest inequality is the U.S. That’s been true for a long time, and that inequality of ours is still increasing. Some of those measures of rising American economic inequality have now become frequently quoted and widely familiar. For instance, the share of unadjusted national income earned by the richest 1% of Americans rose from less than 10% in the 1970’s to over 25% today. Inequality is rising even within the ranks of rich Americans themselves: the richest 1% of Americans have increased their incomes proportionately much more than the richest 5%; the richest 0.1% have done proportionately better than the richest 1%; and the three richest Americans (currently Jeff Bezos, Bill Gates, and Warren Buffett) have combined net worths currently equal to the combined net worths of the 130 million poorest Americans.


pages: 346 words: 101,763

Confessions of a Microfinance Heretic by Hugh Sinclair

"World Economic Forum" Davos, accounting loophole / creative accounting, Bernie Madoff, colonial exploitation, en.wikipedia.org, end world poverty, financial innovation, financial intermediation, Gini coefficient, Global Witness, high net worth, illegal immigration, impact investing, inventory management, low interest rates, microcredit, Northern Rock, peer-to-peer lending, pirate software, Ponzi scheme, principal–agent problem, profit motive, Vision Fund

Finally, to deviate momentarily into the world of economic statistics, there is a rather disturbing analysis possible with the Nicaraguan crisis. Essentially we have a closed time period: microfinance hit the country like a tsunami, then collapsed. This is a neat case study. Over this period the Gini coefficient of Nicaragua hardly changed. This statistic measures the inequality of income and wealth in a society. The poor got neither better off nor worse off compared to the rest of the country. The Human Development Index is the UN’s overall measure of well-being. When I first entered microfinance, in 2001, Nicaragua was the 106th poorest country in the world as measured by this index.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

Abraham Maslow, Alan Greenspan, Andrei Shleifer, asset-backed security, bank run, banking crisis, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, bread and circuses, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, disinformation, diversification, double helix, Edward Glaeser, financial deregulation, financial engineering, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, general purpose technology, George Akerlof, Gini coefficient, Glass-Steagall Act, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, Japanese asset price bubble, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, language acquisition, Large Hadron Collider, liberal capitalism, light touch regulation, Long Term Capital Management, long term incentive plan, Louis Pasteur, low cost airline, low interest rates, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, meritocracy, Mikhail Gorbachev, millennium bug, Money creation, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, power law, price discrimination, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, Savings and loan crisis, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, systems thinking, tail risk, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, three-masted sailing ship, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, work culture , working poor, world market for maybe five computers, zero-sum game, éminence grise

If the Tories’ policies had been maintained between 1997 and 2006, the Gini coefficient – the standard measure for income distribution where zero is perfect equality and one means that a single person has all a country’s income – would actually have been 1 per cent higher than it was under Labour.11 New Labour, then, did make a difference. The trouble is that it made nothing like enough of a difference. The social settlement in Britain was not to have powerful social insurance, massive investment in education or big transfers to ameliorate structural inequality; it was to work around the edges. To compensate, most people sustained their living standards through borrowing rather than by earning increased prosperity.

9 Too many left-of-centre writers take it as axiomatic: a) that the case for more equality as an entitlement is unanswerable; b) that the state must thus deliver it; c) that the definition of equality must be broadened well beyond income to include work satisfaction, compensation for tedious tasks and being able to choose lifestyles – like staying home to raise children – in the same way as the wealthy can; and d) that this is so obviously the good society that the better-off will willingly accept whatever transfer of resources is required to achieve it and will give up bourgeois ideas that desert should be proportional to effort and contribution. I understand why the left makes these arguments, and even have some sympathy for them. The current level of inequality is offensive and the damage being done goes well beyond mere income inequality. But that does not mean that society is prepared to flip to a world of complete equality. It might just want more equality – while maintaining a degree of inequality based on due desert – but is very wary about how to get there. This seems to be borne out by opinion polls. In one British poll, 76 per cent of respondents felt that the gap between those on low and high incomes was ‘too large’, but only 34 per cent believed that the government should redistribute money from the better-off to tackle inequality.10 Over time, there has been a substantial drop in support for higher taxes and spending: from 65 per cent in 1997 to 38 per cent in 2005.

: Why Bubbles Are Great for the Economy, Collins. 7 Paola Giuliano and Antonio Spilimbergo (2009) ‘Growing up in a Recession: Beliefs and the Macroeconomy’, IZA DP No. 4365. 8 Clive Cookson, ‘Bank Crises Kill, Says Study’, Financial Times, 26 February 2008, at http://www.ft.com/cms/s/0/170ca8d6-e40e-11dc-8799-0000779fd2ac.html. 9 See the DCLG’s Indices of Deprivation (2007 is the latest available year) at http://www.communities.gov.uk/communities/neighbourhoodrenewal/deprivation/deprivation07/. 10 Mike Brewer, Luke Sibiet and Liam Wren-Lewis (2007) ‘Racing away? Income Inequality and the Evolution of High Incomes’, IFS Briefing Note No. 76. 11 Stewart Lansley (2006) Rich Britain: The Rise and Rise of the New Super-Wealthy, Politico’s. See also George Irvin (2008) Super Rich: The Rise of Inequality in Britain and the United States, Polity; and David Rothkopf (2008) Superclass: The Global Power Elite and the World They Are Making, Farrar, Straus Giroux. 12 Oliver James (2007) Affluenza: How to be Successful and Stay Sane, Vermilion; Avner Offer (2006) The Challenge of Affluence: Self-Control and Well-Being in the United States and Britain since 1950, Oxford University Press. 13 Cabinet Office (2009) Unleashing Aspiration: The Final Report of the Panel on Fair Access to the Professions, HMSO. 14 Christopher Foster (2005) British Government in Crisis or the Third English Revolution, Hart. 15 Ian Jack, ‘Fear and Loathing in Dagenham’, Guardian, 21 November 2009. 16 Susan Neiman (2009) Moral Clarity: A Guide for Grown-up Idealists, Bodley Head, p. 4. 17 Tom MacInnes, Peter Kenway and Anushree Parekh, ‘Monitoring Poverty and Social Exclusion 2009’, report, Joseph Rowntree Foundation. 18 Jonathan Grant and Joachim Krupels, ‘Science and Technology Policy’, in Varum Uberoi, Adam Coutts, Iain Mclean and David Halpern (eds) (2009) Options for a New Britain, Palgrave Macmillan. 19 Dominic Sandbrook, ‘The Death of Ideas’, New Statesman, 6 August 2009. 20 Charles Tilly (2008) Credit and Blame, Princeton University Press. 21 J.


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The Aristocracy of Talent: How Meritocracy Made the Modern World by Adrian Wooldridge

"World Economic Forum" Davos, Ada Lovelace, affirmative action, Alan Greenspan, Albert Einstein, assortative mating, barriers to entry, Bernie Sanders, Black Lives Matter, Bletchley Park, borderless world, Boris Johnson, Brexit referendum, business intelligence, central bank independence, circulation of elites, Clayton Christensen, cognitive bias, Corn Laws, coronavirus, corporate governance, correlation coefficient, COVID-19, creative destruction, critical race theory, David Brooks, Dominic Cummings, Donald Trump, Double Irish / Dutch Sandwich, Etonian, European colonialism, fake news, feminist movement, George Floyd, George Gilder, Gini coefficient, glass ceiling, helicopter parent, Home mortgage interest deduction, income inequality, intangible asset, invention of gunpowder, invention of the printing press, Isaac Newton, Jeff Bezos, Jeremy Corbyn, Jim Simons, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, land tenure, London Interbank Offered Rate, Long Term Capital Management, Louis Pasteur, Mahatma Gandhi, Mark Zuckerberg, means of production, meritocracy, meta-analysis, microaggression, mortgage tax deduction, Myron Scholes, offshore financial centre, opioid epidemic / opioid crisis, Panopticon Jeremy Bentham, Peter Thiel, plutocrats, post-industrial society, post-oil, pre–internet, public intellectual, publish or perish, Ralph Waldo Emerson, RAND corporation, rent-seeking, Richard Florida, Ronald Reagan, scientific management, sexual politics, shareholder value, Sheryl Sandberg, Silicon Valley, spinning jenny, Steve Bannon, Steven Pinker, supply-chain management, surveillance capitalism, tech bro, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thorstein Veblen, three-martini lunch, Tim Cook: Apple, transfer pricing, Tyler Cowen, unit 8200, upwardly mobile, Vilfredo Pareto, W. E. B. Du Bois, wealth creators, women in the workforce

One study found that the top 1 per cent of Chinese controlled a third of the country’s assets.30 Another calculated that Beijing has more billionaires than New York. The official estimate of China’s Gini coefficient (a standard measure in which 0 means total equality and 1 means total inequality) was 0.48 in 2018, higher than anywhere in the OECD, and many unofficial estimates are higher. Some academics think that anything above the 0.5 threshold heralds social instability.31 The combination of rising inequality and growing corruption raises serious questions about China’s future as an opportunity society. A lucky generation that came of age in the 1990s accumulated remarkable privileges – and then set about reinforcing their position with a combination of connections and corruption.

Nothing is more false: nothing is demonstrated more false by experience.’8 Across the Atlantic, John Adams was equally indignant: ‘I have never read Reasoning more absurd, Sophistry more gross, in proof of the Athanasian Creed, or Transubstantiation, than the subtle labours of Helvetius and Rousseau to demonstrate the natural Equality of Mankind.’9 Adams was unfair to Rousseau: like so many other people at the time, Rousseau was ambivalent on the subject, routinely checking himself if he thought that his assertion of natural equality went too far. Though he opened his Discourse on the Origin and Foundations of Inequality among Men (1755) with the striking claim that in the state of nature men are naturally free, independent and equal, he also recognized that some people are naturally stronger, faster and smarter than others. Sweeping away artificial inequalities would quickly allow natural inequalities to assert themselves – he listed differences in aptitude for farming, governing and reasoning – and over time these natural inequalities would lead to social hierarchy. In Émile (1762), his treatise on education, he argued that education should be calibrated to suit the natural abilities of individual students: ‘Each advances more or less according to his genius, his taste, his needs, his talents, his zeal, and the occasions he has to devote himself to them.’

., p. 174 56 Lemann, The Big Test, p. 83 57 Gould, The Mismeasure of Man, esp. pp. 234–321 58 Liam Hudson’s foreword to Leon Kamin, The Science and Politics of IQ (Hanondsworth, Perguin, 1977), p. ii 59 Lemann, The Big Test, p. 45 60 J. B. S. Haldane, ‘The Inequality of Man’ in his The Inequality of Man and Other Essays (London, Chatto and Windus, 1932), p. 12 61 J. B. S. Haldane, ‘Biology and Statesmanship’, in John R. Baker and J. B. S. Haldane, Biology in Everyday Life (London, George Allen and Unwin, 1933), p. 117 62 Haldane, ‘The Inequality of Man’, p. 22 63 McMahon, Divine Fury, pp. 201–2 64 Eustace Percy, Some Memories (London, Eyre and Spottiswood, 1958), p. 106 65 T. S. Eliot, Notes towards the Definition of Culture (1948; London, Faber and Faber, 1979), p. 101 66 Liam Hudson, The Cult of the Fact (London, Jonathan Cape, 1976), p. 47 67 Arno J.


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The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

90 percent rule, airline deregulation, Alan Greenspan, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, Dr. Strangelove, ending welfare as we know it, financial deregulation, financial engineering, financial innovation, fixed income, flag carrier, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Greenspan put, Growth in a Time of Debt, Ida Tarbell, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, It's morning again in America, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Les Trente Glorieuses, long and variable lags, Long Term Capital Management, low cost airline, low interest rates, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, Nixon triggered the end of the Bretton Woods system, oil shock, Paul Samuelson, Philip Mirowski, Phillips curve, plutocrats, precautionary principle, price stability, profit motive, public intellectual, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Robert Solow, Ronald Coase, Ronald Reagan, Sam Peltzman, Savings and loan crisis, Silicon Valley, Simon Kuznets, starchitect, Steve Bannon, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now

Murray, Showdown at Gucci Gulch: Lawmakers, Lobbyists, and the Unlikely Triumph of Tax Reform (New York: Vintage, 1988), 111. 86. “The Distribution of Household Income, 2015,” November 8, 2018, Congressional Budget Office. 87. The Gini coefficient, a standard measure of income inequality, rose by 5.17 percent between 1983 and 1988, the largest increase over any five-year period since World War II. See Wojciech Kopczuk, Emmanuel Saez, and Jae Song, “Earnings Inequality and Mobility in the United States: Evidence from Social Security Data Since 1937,” Quarterly Journal of Economics 125, no. 1 (February 2010). 88. Keith Joseph, “Monetarism Is Not Enough,” London, April 5, 1976; available at margaretthatcher.org/document/110796. 89.

During the mid-twentieth century, the government had used income taxation as a corrective for economic inequality. Taxation was a bulldozer that made the tallest mountains noticeably shorter and the shortest hills a little taller. In 1979, under Carter, the inequality of income distribution after taxation was 10.2 percent smaller than the inequality of income distribution before taxation. The Reagan tax cuts substituted a much smaller bulldozer. By 1986, the inequality of income distribution after taxation was just 5.1 percent smaller than the inequality before taxation.86 After-tax income inequality in the United States rose faster during the mid-1980s than during any other period in the postwar era.87 The gulf between the wealthy and everyone else was yawning wider — and the federal government was no longer fighting back.

“In order to send good avocados to Europeans, we end up drinking water with shit in it,” one of the villagers said.71 Unequal growth, however, is not the primary reason that Santiago remains a city with an abundance of helicopter pads on the roofs of its downtown skyscrapers and shantytowns on its fringes. Chile’s inequality is primarily the result of the indifference of its political leaders. The standard measures of inequality assess the distribution of household income after taxes are paid and government benefits are received. This, after all, is the lived reality of inequality. And by this measure, the extent of inequality in Chile is an extreme outlier among developed nations. But the initial distribution of income, before taxes and government transfers, is highly unequal throughout the developed world.


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The end of history and the last man by Francis Fukuyama

affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, Bonfire of the Vanities, business cycle, centre right, classic study, cuban missile crisis, deindustrialization, Deng Xiaoping, Donald Trump, European colonialism, Exxon Valdez, F. W. de Klerk, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Great Leap Forward, Gunnar Myrdal, Herbert Marcuse, Hernando de Soto, income inequality, Isaac Newton, Joan Didion, joint-stock company, Joseph Schumpeter, kremlinology, land reform, liberal world order, liberation theology, life extension, linear programming, long peace, means of production, Michael Milken, Mikhail Gorbachev, Nelson Mandela, New Journalism, nuclear winter, old-boy network, open economy, post-industrial society, RAND corporation, Ronald Reagan, Socratic dialogue, Strategic Defense Initiative, strikebreaker, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, zero-sum game

., p. 5. 13 Ibid. 14 Figures taken from “Taiwan and Korea: Two Paths to Prosperity,” Economist 316, no. 7663 (July 14, 1990): 19-22. 15 One measure of the growth of a broad, educated middle class is regular newspaper readership, the act which according to Hegel would replace the daily prayer for those middle-class societies at the end of history. Newspaper readership is now as high in Taiwan and South Korea as in the United States. Pye (1990a), p. 9. 16 Ibid. Taiwan by the early 1980s had the lowest “Gini coefficient” (a measure of even income distribution) of any developing country. See Gary S. Fields, “Employment, Income Distribution and Economic Growth in Seven Small Open Economies,” Economic Journal 94 (March 1984): 74-83. 17 On other attempts to defend dependencia theory from Asian evidence, see Peter Evans, “Class, State, and Dependence in East Asia: Lessons for Latin Americanists,” and Bruce Cumings, “The Origins and Development of the Northeast Asian Political Economy: Industrial Sectors, Product Cycles, and Political Consequences,” both in Frederic C.

Despite the present receding of the old economic class issue on the part of the Left, it is not clear that there will be any end to new and potentially more radical challenges to liberal democracy based on other forms of inequality. Already, forms of inequality such as racism, sexism, and homophobia have displaced the traditional class issue for the Left on contemporary American college campuses. Once the principle of equal recognition of each person’s human dignity—the satisfaction of their isothymia—is established, there is no guarantee that people will continue to accept the existence of natural or necessary residual forms of inequality. The fact that nature distributes capabilities unequally is not particularly just. Just because the present generation accepts this kind of inequality as either natural or necessary does not mean that it will be accepted as such in the future.

But the middle of that pyramid remains fairly capacious, and a high degree of social mobility permits almost everyone to identify with the aspirations of the middle class and to think that they are, at least potentially, members of it. Middle-class societies will remain highly inegalitarian in certain respects, but the sources of inequality will increasingly be attributable to the natural inequality of talents, the economically necessary division of labor, and to culture. We may interpret Kojève’s remark that postwar America had in effect achieved Marx’s “classless society” in these terms: not that all social inequality was eliminated, but that those barriers which remained were in some respect “necessary and ineradicable,” due to the nature of things rather than the will of man.


Debtor Nation: The History of America in Red Ink (Politics and Society in Modern America) by Louis Hyman

Alan Greenspan, asset-backed security, bank run, barriers to entry, Bretton Woods, business cycle, business logic, card file, central bank independence, computer age, corporate governance, credit crunch, declining real wages, deindustrialization, diversified portfolio, financial independence, financial innovation, fixed income, Gini coefficient, Glass-Steagall Act, Home mortgage interest deduction, housing crisis, income inequality, invisible hand, It's morning again in America, late fees, London Interbank Offered Rate, low interest rates, market fundamentalism, means of production, mortgage debt, mortgage tax deduction, p-value, pattern recognition, post-Fordism, profit maximization, profit motive, risk/return, Ronald Reagan, Savings and loan crisis, Silicon Valley, statistical model, Tax Reform Act of 1986, technological determinism, technology bubble, the built environment, transaction costs, union organizing, white flight, women in the workforce, working poor, zero-sum game

Margo, “Median earnings of full-time workers, by sex and race: 1960–1997,” Table Ba4512 in Historical Statistics of the United States, Earliest Times to the Present: Millennial Edition, eds. Susan B. Carter, Scott Sigmund Gartner, Michael R. Haines, Alan L. Olmstead, Richard Sutch, and Gavin Wright (New York: Cambridge University Press, 2006). In 1994 dollars. Gini Coefficient .50 .45 .40 .35 1947 1955 1965 1975 1985 1995 Year Figure 7.2. Income Inequality. Source: Peter H. Lindert, “Distribution of money income among households: 1947–1998,” Table Be1-18 in Historical Statistics of the United States, Earliest Times to the Present: Millennial Edition, eds. Susan B. Carter, Scott Sigmund Gartner, Michael R.

“Negro Suburbia Is Fast Growing,” Chicago Defender, September 17, 1959, 2. 21. While I do not discuss this explicitly in the chapter, I wonder if this is one the roots of the wealth inequality between today’s white and black households. See Melvin Oliver’s Black Wealth, White Wealth: A New Perspective on Racial Inequality (New York, Routledge, 1995), for more on the importance of wealth inequality compared to income inequality today. As discussed later in the chapter, at the same income levels, African Americans always borrowed more frequently than whites and had lower wealth levels. 22. This was determined by running a series of regressions on debt and liquid assets, while controlling for location, mortgage status, marital status, and income.

Amadeo Giannini, the Bank of America president, claimed that the “broadcasts [were] calculated to appeal to those home lovers whose existence in [urban] rented quarters amount[ed] to a frustration, and there [was] an abundance of them.”140 The point of the FHA program was to escape the cities, not save them. The possibility of divorcing jobs, housing, and investment from a specific location is part of what gave FHA policies their power, but also constrained their ability to redress economic inequality. Indeed, in helping to recover the economy through suburbanization, the FHA re-entrenched wealth inequality along racial lines for several generations. FNMA: Making a National Mortgage Network To make federal housing programs self-sustaining, the government needed to lure private capital into housing. Investing in far-away housing was risky because investors could not easily buy and sell from afar, much less be sure about what they were investing in.


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

3D printing, Airbnb, Alan Greenspan, 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, book value, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, clean tech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Crossrail, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, financial engineering, first-past-the-post, Ford Model T, forward guidance, full employment, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, high-speed rail, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land bank, liquidity trap, low interest rates, 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, peer-to-peer rental, 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, Tyler Cowen: Great Stagnation, working-age population, Zipcar

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.

It is a dynamic economy that always strives to do better: encouraging and embracing new and different ways of doing things and seeking to surpass the limits imposed by current technologies and institutions. And it is a decent economy: one where there is a rough correspondence between rewards and merit, where inequalities of wealth and power are not so great that they become entrenched and where suffering is minimised. A good economy generates sustained rises in living standards that are widely shared. It’s an open economy that adds up. There are many facets to economic progress. Many reports have been written, books penned and conferences held on the deficiencies of gross domestic product (GDP) as a yardstick of economic performance.

This unfairness is not just unethical; it eventually stunts economic dynamism. As well as becoming more adaptable and dynamic, Europe’s economies ought to be more decent. A decent society is one where equal opportunities are a priority, there is a closer connection between people’s contribution to society and their rewards, inequalities of wealth and power are not so great that they become entrenched and everyone enjoys a decent minimum standard of living. In principle, many politicians would agree. In practice, they often don’t want (or dare) to tackle privileged vested interests. Even well-meaning ones tend to tackle symptoms rather than causes – and may make things worse.


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A Splendid Exchange: How Trade Shaped the World by William J. Bernstein

Admiral Zheng, asset allocation, bank run, Benoit Mandelbrot, British Empire, call centre, clean water, Columbian Exchange, Corn Laws, cotton gin, David Ricardo: comparative advantage, death from overwork, deindustrialization, Doha Development Round, domestication of the camel, double entry bookkeeping, Easter island, Eratosthenes, financial innovation, flying shuttle, Gini coefficient, God and Mammon, high-speed rail, ice-free Arctic, imperial preference, income inequality, intermodal, James Hargreaves, John Harrison: Longitude, Khyber Pass, low skilled workers, non-tariff barriers, Paul Samuelson, placebo effect, Port of Oakland, refrigerator car, Silicon Valley, South China Sea, South Sea Bubble, spice trade, spinning jenny, Steven Pinker, Suez canal 1869, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade liberalization, trade route, transatlantic slave trade, transcontinental railway, two and twenty, upwardly mobile, working poor, zero-sum game

Economists and demographers use a number of measures of inequality, the most popular being the Gini coefficient. This number varies between zero and one; a population in which everyone has exactly the same income has a coefficient of 0.0, and a population in which only one individual earns all the income has a coefficient of 1.0. The Ginis of the world's twenty wealthiest nations range from 0.25 (Sweden) to 0.41 (United States). The list of the highest-Gini nations fails to impress: Namibia, 0.74; Botswana, 0.63; Bolivia, 0.60; and Paraguay, 0.58.26 More systematic research strongly suggests that increasing inequality produces social and political instability, which in turn leads to decreased investment and decreased economic development .27 Modem developed nations have gotten into the habit of intentionally lowering their Ginis with redistributive tax policies and social welfare programs.

Whom does free trade hurt in the developed world? The relatively scarce factor: low-skilled labor. Who benefits? Highly skilled workers. Further, globalization increases income inequalities in the rich nations, as the inflation-adjusted incomes of the highly skilled rise rapidly and those of the low-skilled rise more slowly or even fall. Once again, Stolper-Samuelson comes alive in the real world. For the past generation, income inequalities have grown dramatically in the United States. Figure 14-1 plots Census Bureau data with American families sorted into two groups-the top quintile, or 20 percent, and bottom 80 percent-and then computes their shares of total national income over the past thirty-five years.

Yet again, this is nothing new. In the nineteenth century, as inequality rose, so did fear of immigration. A century ago, the United States, Canada, Australia, Brazil, and Argentina all began to restrict immigration. This tightening did not correlate at all with the factors that traditionally have received blame for it: economic hard times and racism. Rather it took place precisely when income competition from recent European immigrants at the low end of the wage scale started to squeeze low-paid voters.25 Why all the fuss about income inequality? Isn't it simply a sign of a healthy economy that generously rewards the successful and ambitious?


pages: 397 words: 112,034

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

There is an enormous contrast between the two industrial powerhouses of Brazil (nearly 40 percent of the regional economy) and Mexico (about 25 percent) and the others, which are primarily commodity exporters. In terms of income distribution, Latin America is one of the most backward areas of the world, with Gini coefficients in the 0.50 to 0.60 range (including progressive Chile), although there are some exceptions, notably Uruguay and Costa Rica. Politically, there are signs of increasing maturity and democratic stability, mostly in Brazil and Chile, and also perhaps in Colombia, Peru, Panama, Costa Rica, and Mexico.

Although much has been achieved in promoting access to the public school system, little has been achieved with regard to quality improvement of the education offered. Consequently, “unemployability,” widespread vacancies, and a huge skills gap have emerged concurrently. As a result, the income and wealth inequalities within society have worsened. The most recent projections suggest that South Africa may well have overtaken Brazil as the country with the most unequal distribution of income. Another crucial policy failure has been the absence of a well-defined industrial strategy that is rooted in the country’s comparative advantages and enhanced by an appropriate mix of factor prices and implementation institutions.


pages: 603 words: 182,826

Owning the Earth: The Transforming History of Land Ownership by Andro Linklater

agricultural Revolution, Alan Greenspan, anti-communist, Anton Chekhov, Ayatollah Khomeini, Bear Stearns, Big bang: deregulation of the City of London, British Empire, business cycle, colonial rule, Corn Laws, Cornelius Vanderbilt, corporate governance, creative destruction, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, electricity market, facts on the ground, flying shuttle, Ford Model T, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, Google Earth, Great Leap Forward, income inequality, invisible hand, James Hargreaves, James Watt: steam engine, John Perry Barlow, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kibera, Kickstarter, land reform, land tenure, light touch regulation, market clearing, means of production, megacity, Mikhail Gorbachev, Mohammed Bouazizi, Monkeys Reject Unequal Pay, mortgage debt, Northern Rock, Peace of Westphalia, Pearl River Delta, plutocrats, Ponzi scheme, profit motive, quantitative easing, Ralph Waldo Emerson, refrigerator car, Right to Buy, road to serfdom, Robert Shiller, Ronald Reagan, spinning jenny, Suez canal 1869, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, three-masted sailing ship, too big to fail, trade route, transatlantic slave trade, transcontinental railway, ultimatum game, wage slave, WikiLeaks, wikimedia commons, working poor

the freedom and equality that characterized the United States: Even at its most egalitarian, American society had its inequalities: as much as 25 percent of midwestern farms were rented before the Civil War, and the richest 1 percent owned 12 percent of the land. However, so long as the supply of land appeared inexhaustible, a statistical anomaly indicated that the society had achieved perfect equality. By entering infinity, representing open access to limitless resources, the Gini coefficient, the most informative equation for calculating income and wealth inequality, will give a result equivalent to zero, or perfect equality (where all the resources are owned by one person, the result is one).

Slightly below these peaks, the top 1 percent of Americans owned 34 percent of the nation’s wealth while the bottom 90 percent owned just 29 percent. Hayek’s goal of creating an aristocracy of wealth had been achieved. Belatedly, even Alan Greenspan recognized that inequality on this scale “is not the type of thing which a democratic society—a capitalist democratic society—can really accept without addressing.” James Harrington, author of Oceana, would have understood Greenspan’s unease. Extremes of inequality in the distribution of property had to be accompanied by extremes of inequality in the distribution of power. And that would inevitably change the nature of government. In the early twentieth century, the American commentator Vernon Parrington summarized in a sentence the dilemma that a century later gnawed at the heart of American politics: “We must have a political state strong enough to deal with corporate wealth,” he wrote to a friend, “but how are we going to keep the state with its augmenting power from being captured by the force we want to control?”

Such irrational behavior—effectively denying oneself nourishment—clearly had some deep-rooted cause. Brosnan and her colleague, primatologist Fran de Waal, concluded that it pointed toward “an early evolutionary origin of inequity aversion.” The finding sparked a furious debate that revolved around the possible effect of what was quickly dubbed a “fairness gene.” Much of the argument about Brosnan and de Waal’s findings as well as the results of other experiments arose from the difficulty of defining what a sense of fairness, or “inequity aversion,” entailed: did it mean expecting to share a reward equally, or simply hoping to receive a small part of the reward given to another, or even forgoing all reward so that another, more deserving (in primate terms, higher-ranking) participant could benefit?


pages: 651 words: 180,162

Antifragile: Things That Gain From Disorder by Nassim Nicholas Taleb

"World Economic Forum" Davos, Air France Flight 447, Alan Greenspan, Andrei Shleifer, anti-fragile, banking crisis, Benoit Mandelbrot, Berlin Wall, biodiversity loss, Black Swan, business cycle, caloric restriction, caloric restriction, Chuck Templeton: OpenTable:, commoditize, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discrete time, double entry bookkeeping, Emanuel Derman, epigenetics, fail fast, financial engineering, financial independence, Flash crash, flying shuttle, Gary Taubes, George Santayana, Gini coefficient, Helicobacter pylori, Henri Poincaré, Higgs boson, high net worth, hygiene hypothesis, Ignaz Semmelweis: hand washing, informal economy, invention of the wheel, invisible hand, Isaac Newton, James Hargreaves, Jane Jacobs, Jim Simons, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, knowledge economy, language acquisition, Lao Tzu, Long Term Capital Management, loss aversion, Louis Pasteur, mandelbrot fractal, Marc Andreessen, Mark Spitznagel, meta-analysis, microbiome, money market fund, moral hazard, mouse model, Myron Scholes, Norbert Wiener, pattern recognition, Paul Samuelson, placebo effect, Ponzi scheme, Post-Keynesian economics, power law, principal–agent problem, purchasing power parity, quantitative trading / quantitative finance, Ralph Nader, random walk, Ray Kurzweil, rent control, Republic of Letters, Ronald Reagan, Rory Sutherland, Rupert Read, selection bias, Silicon Valley, six sigma, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, stochastic process, stochastic volatility, synthetic biology, tacit knowledge, tail risk, Thales and the olive presses, Thales of Miletus, The Great Moderation, the new new thing, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Malthus, too big to fail, transaction costs, urban planning, Vilfredo Pareto, Yogi Berra, Zipf's Law

Luxury goods and optionality. On the vertical the probability, on the horizontal the integral of wealth. Antifragility city: the effect of change in inequality on the pool of very rich increases nonlinearly in the tails: the money of the superrich reacts to inequality rather than total wealth in the world. Their share of wealth multiplies by close to 50 times in response to a change of 25% in dispersion of wealth. A small change of 0.01 in the GINI coefficient (0 when perfect inequality, 1.00 when one person has all) equivalent to 8% rise in real Gross Domestic Product—the effect is stark regardless of the probability distribution.

If the population in the Western world had an average income of fifty thousand dollars, with no inequality at all, luxury goods sellers would not survive. But if the average stays the same but with a high degree of inequality, with some incomes higher than two million dollars, and potentially some incomes higher than ten million, then the business has plenty of customers—even if such high incomes are offset by masses of people with lower incomes. The “tails” of the distribution on the higher end of the income brackets, the extreme, are much more determined by changes in inequality than changes in the average. It gains from dispersion, hence is antifragile.

Conversely, if the patient is near healthy, then Mother Nature should be the doctor. Jensen’s Inequality in Medicine The philosopher’s stone explained that the volatility of an exposure can matter more than its average—the difference is the “convexity bias.” If you are antifragile (i.e., convex) to a given substance, then you are better off having it randomly distributed, rather than provided steadily. I’ve found very few medical papers making use of nonlinearity by applying convexity effects to medical problems, in spite of the ubiquity of nonlinear responses in biology. (I am being generous; I actually found only one explicit use of Jensen’s inequality in one single application—thanks to my friend Eric Briys—and only one that used it properly, so the response “we know that” by medical researchers when the consequence nonlinearity is explained to them is rather lame.)


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The Better Angels of Our Nature: Why Violence Has Declined by Steven Pinker

1960s counterculture, affirmative action, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, availability heuristic, behavioural economics, Berlin Wall, Boeing 747, Bonfire of the Vanities, book value, bread and circuses, British Empire, Broken windows theory, business cycle, California gold rush, Cass Sunstein, citation needed, classic study, clean water, cognitive dissonance, colonial rule, Columbine, computer age, Computing Machinery and Intelligence, conceptual framework, confounding variable, correlation coefficient, correlation does not imply causation, crack epidemic, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, demographic transition, desegregation, Doomsday Clock, Douglas Hofstadter, Dr. Strangelove, Edward Glaeser, en.wikipedia.org, European colonialism, experimental subject, facts on the ground, failed state, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, fudge factor, full employment, Garrett Hardin, George Santayana, ghettoisation, Gini coefficient, global village, Golden arches theory, Great Leap Forward, Henri Poincaré, Herbert Marcuse, Herman Kahn, high-speed rail, Hobbesian trap, humanitarian revolution, impulse control, income inequality, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, Isaac Newton, lake wobegon effect, libertarian paternalism, long peace, longitudinal study, loss aversion, Marshall McLuhan, mass incarceration, McMansion, means of production, mental accounting, meta-analysis, Mikhail Gorbachev, mirror neurons, moral panic, mutually assured destruction, Nelson Mandela, nuclear taboo, Oklahoma City bombing, open economy, Peace of Westphalia, Peter Singer: altruism, power law, QWERTY keyboard, race to the bottom, Ralph Waldo Emerson, random walk, Republic of Letters, Richard Thaler, Ronald Reagan, Rosa Parks, Saturday Night Live, security theater, Skinner box, Skype, Slavoj Žižek, South China Sea, Stanford marshmallow experiment, Stanford prison experiment, statistical model, stem cell, Steven Levy, Steven Pinker, sunk-cost fallacy, technological determinism, The Bell Curve by Richard Herrnstein and Charles Murray, the long tail, The Wealth of Nations by Adam Smith, theory of mind, Timothy McVeigh, Tragedy of the Commons, transatlantic slave trade, trolley problem, Turing machine, twin studies, ultimatum game, uranium enrichment, Vilfredo Pareto, Walter Mischel, WarGames: Global Thermonuclear War, WikiLeaks, women in the workforce, zero-sum game

It was never right to begin with.”143 Among economic measures, inequality is generally a better predictor of violence than unemployment.144 But the Gini coefficient, the standard index of income inequality, actually rose in the United States from 1990 to 2000, while crime was falling, and it had hit its low point in 1968, when crime was soaring.145 The problem with invoking inequality to explain changes in violence is that while it correlates with violence across states and countries, it does not correlate with violence over time within a state or country, possibly because the real cause of the differences is not inequality per se but stable features of a state’s governance or culture that affect both inequality and violence.146 (For example, in unequal societies, poor neighborhoods are left without police protection and can become zones of violent anarchy.)

.), homicides in Gerges, Fawaz German Peace Society Germany: Berlin Wall borders of and empire genocide in; see also Holocaust homicides in militarism in Nazi Party in, see Nazism pacifism in and poison gas unification wars fought in witch-hunters in and world wars Geronimo Gigerenzer, Gerd Gilbert, Daniel Gilles de Rais Gilligan, Carol Gilmore commission Gimme Shelter (documentary) Ginges, Jeremy Gini coefficient Giuliani, Rudy Glaeser, Edward Gleason, Jackie Gleditsch, Kristian Gleditsch, Nils Petter globalization; see also trade, international Global Terrorism Database Global Village Global Zero glory, concept of Glover, Jonathan glucose God; see also religion Godfather, The (film) Godwin, William Goetz, Bernhard Goffman, Erving Golden Arches theory Golden Rule Goldhagen, Daniel Goldstein, Joshua Goldwater, Barry Gone With the Wind (film) Goodall, Jane Goodman, Andrew Goodman, Paul Goodwin, Jan Gopnik, Adam Gorbachev, Mikhail Gore, Al Gorton, William Gottfredson, Michael Gottschall, Jonathan Gould, Stephen Jay government: anarchy contrasted with benefits of and civilization and civil war coercive and conquest emergence of genocides by good and justice system legitimate use of violence by in medieval times and official discrimination as technology trust in violence controlled by violence perpetrated by world see also anarchy; anocracy; autocracy; democracy; Leviathan; monarchy Grafton, Anthony Grand Illusion (film) Graves, Robert Gray, Heather Gray, John Gray, Kurt Great Britain, see Britain/United Kingdom; England; Scotland; Wales Great Dictator, The (film) great powers aggrandizement of aspiring in Cold War interstate wars of modern international order and peacekeeping and Universal Declaration of Human Rights Greece, ancient Athenian democracy human sacrifice in infanticide in slavery in Greece, modern homicides in Greene, Joshua Greenfield, Liah Green movement Gregory I, Pope Gregory VII, Pope Grenada Grey, Lady Jane Grimm’s Fairy Tales Groebner, Valentin Grotius, Hugo group processes; see also conformity; crowds, madness of; groupthink groupthink Guardian Angels Guatemala guerrillas Guevara, Che guillotine guilt Gurr, Ted Robert Gutenberg, Johannes Guthrie, Arlo gynecide Habsburg dynasty Hacker, Andrew Hagen, Edward Hague Convention Haidt, Jonathan Hakemulder, Jèmeljan Haldane, J.B.S.

Unemployment doesn’t predict violent crime: Zimring, 2007, p. 63; Levitt, 2004; Raphael & Winter-Ebmer, 2001. 143. “never right to begin with”: Quoted in A. Baker, “In this recession, bad times do not bring more crime (if they ever did),” New York Times, Nov. 30, 2009. 144. Inequality and violence: Daly, Wilson, & Vasdev, 2001; LaFree, 1999. 145. Gini index for the United States: U.S. Census Bureau, 2010b. 146. Inequality may not cause crime: Neumayer, 2003, 2010. 147. Claim that abortion lowers crime: Donohue & Levitt, 2001. 148. Abortion one of four causes of crime decline: Levitt, 2004. 149. Problems for the abortion-crime connection: Joyce, 2004; Lott & Whitley, 2007; Zimring, 2007; Foote & Goetz, 2008; S.


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What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, benefit corporation, Black Swan, blood diamond, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, company town, compensation consultant, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Glass-Steagall Act, Gordon Gekko, Greenspan put, hiring and firing, Ida Tarbell, income inequality, independent contractor, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, Money creation, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, Paul Volcker talking about ATMs, pension reform, performance metric, Pershing Square Capital Management, pirate software, plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, rolling blackouts, Ronald Reagan, Sand Hill Road, Savings and loan crisis, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, stock buybacks, subprime mortgage crisis, The Chicago School, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

The American multiple is twice as severe as any other rich democracy. As the Economist magazine noted in June 2006, the exaggerated American income distribution is nearly halfway to the range typical of nations such as Brazil, “notorious for the concentration of income and wealth.”8 And, the Gini Coefficient measure of inequality shows that the American income distribution is even more skewed than a number of other middle-income nations like Egypt and India.9 Chart 15.2 Source: “Are We Growing Unequal?” OECD, table 1, October 2008. Income disparities in some other rich democracies such as Germany have grown slightly more exaggerated in this period, but the extreme scale and the pace of the American income disparity in recent decades sets the United States apart.

CHAPTER 11 1 David Stockman, “Four Deformations of the Apocalypse.” 2 Michale Sauga and Peter Müller, “Interview with German Finance Minister Schäuble,” Der Spiegel, Nov. 8, 2010. 3 Joseph E. Stiglitz, “Breaking the Vicious Cycle of Inequality,” New York Times, June 24, 2012. 4 Peter G. Peterson, “The Morning After.” 5 “Rising Debt Burden,” Inequality in the US,” The Stanford Center on Poverty and Inequality, September 2012, http://www.stanford.edu/group/scspi/slides/Inequality_SlideDeck.pdf, download slides at www.inequality.com. 6 “Inequality, Debt and the Financial Crisis,” Editorial, New York Times, May 4, 2012. 7 A majority of this was household and business community debt, which rose as a share of GDP from 123 percent in 1981 to 290 percent in late 2008.

Students from highest-income households are eight times more likely than those from the lowest-income families to earn a bachelor’s degree by age 24.45 And these results parallel those reached by other researchers such as Ron Haskins, Harry Holzer, and Robert Lerman.46 Chart 16.4. Source: Martha J. Bailey and Susan M. Dynarski, “Gains and Gaps: Changing Inequality in US College Entry and Completion,” NBER working paper no. 17633 (December 2011); “College Completion by Income and Year of Birth,” Inequality in America, The Stanford Center for Poverty and Inequality, September 2012. The actual situation is worse. A Century Foundation Report in 2010 concluded that 44 percent of low-income students with high standardized test scores enroll in four-year colleges, while 50 percent of those from high-income households but with only average test scores enroll.47 And the world knows it.


The Washington Connection and Third World Fascism by Noam Chomsky

anti-communist, business climate, colonial rule, death from overwork, declining real wages, deliberate practice, disinformation, European colonialism, friendly fire, Gini coefficient, guns versus butter model, income inequality, income per capita, land bank, land reform, land tenure, low interest rates, military-industrial complex, new economy, RAND corporation, Seymour Hersh, strikebreaker, systematic bias, union organizing

In the light of the role of client fascism as a system of institutionalized class repression and warfare, it is little wonder that the income share of the top 5% of income receiving units in Brazil rose from 44% in 1960 to 50% in 1970, that the share of the poorest 80% fell from 35% to 27.5%, and that only the top 10% of the population increased its relative income share. The Gini coefficient, a widely used measure of income inequality, reached its highest national level ever recorded in Latin America in Brazil in 1970.52 According to Business Week, the real wages of the lowest 80% of the Brazilian population “have been steadily dropping since 1964—the year the generals took over—despite a tripling of the gross national product to $80 billion.”53 In 1971, 65% of Brazil’s economically active population subsisted on a monthly income of $60 or less; only 1% earned $350 per month and over, but many of these earned $5,000 a month or more.

Citing the same Bishop, Davis notes that “if the incentives given to the oligarchies and trusts from the south of the country had been invested in the peasantry of the country, a very different set of events would have occurred...‘Such investment could have produced a future of hope and development for all of these people in the interior of Brazil, rather than perpetuate the inequities of the latifundia system which is socially and radically unjust’” (p. 126). The actual policies pursued, while benefiting a traditional and foreign elite, are not only destroying the Indians but are severely damaging the Brazilian peasant small-holders and agricultural workers and have, in fact “worsened the already severe pattern of hunger and malnourishment that characterizes the majority of the population of Brazil” (pp. 126, 132).

Land reform has moved with glacial speed...Most Dominican children don’t go beyond the third grade; only one in five reaches the sixth grade.174 G&W acknowledged in 1978 that cane cutter money wages had not kept up with inflation in the years since 1966,175 and there is other evidence to the same effect,176 which suggests a probable further absolute fall in the real income of the majority and a further shift toward inequality in income shares. There is also evidence that the nutritional deficit of the Dominican majority is huge.177 Michael Flannery cites a report which states that in 1972 “a mere 11 percent of Dominicans drink milk, 4 percent eat meat and 2 percent eat eggs. Fish are plentiful in the waters off the island, but draw better prices in other markets.


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The Making of Global Capitalism by Leo Panitch, Sam Gindin

accounting loophole / creative accounting, active measures, airline deregulation, Alan Greenspan, anti-communist, Asian financial crisis, asset-backed security, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Big bang: deregulation of the City of London, bilateral investment treaty, book value, Branko Milanovic, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, Carmen Reinhart, central bank independence, classic study, collective bargaining, continuous integration, corporate governance, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, dark matter, democratizing finance, 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, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global value chain, guest worker program, Hyman Minsky, imperial preference, income inequality, inflation targeting, interchangeable parts, interest rate swap, Kenneth Rogoff, Kickstarter, land reform, late capitalism, liberal capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, market fundamentalism, Martin Wolf, means of production, military-industrial complex, money market fund, money: store of value / unit of account / medium of exchange, Monroe Doctrine, moral hazard, mortgage debt, mortgage tax deduction, Myron Scholes, new economy, Nixon triggered the end of the Bretton Woods system, non-tariff barriers, Northern Rock, oil shock, precariat, price stability, proprietary trading, quantitative easing, Ralph Nader, RAND corporation, regulatory arbitrage, reserve currency, risk tolerance, Ronald Reagan, Savings and loan crisis, scientific management, seigniorage, shareholder value, short selling, Silicon Valley, sovereign wealth fund, special drawing rights, special economic zone, stock buybacks, structural adjustment programs, subprime mortgage crisis, Tax Reform Act of 1986, 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, vertical integration, very high income, Washington Consensus, We are all Keynesians now, Works Progress Administration, zero-coupon bond, zero-sum game

Available at www.clb.org.hk. 105 Ho-fung Hung, “Sinomania: Global Crisis, China’s Crisis,” Socialist Register 2012, London: Merlin, 2011. 106 There are many problems in interpreting the data, but that there has been a major increase in inequality in China is not disputed. For recent analyses with comparisons to other countries, see Jiandong Chen, Dai Dai, Ming Pu, Wenxuan Hou, and Qiaobin Fen, “The Trend of the Gini Coefficient of China,” Brooks World Poverty Institute, University of Manchester, January 2010. A recent OECD study (“OECD Economic Survey—China,” February 2010) provides a lower indicator of inequality than the Chinese Academy of Sciences does, but still assesses Chinese inequality as being higher than the US; it also argues that income inequality in China peaked in 2005, and has since stopped increasing. 107 Sean Starrs, “China’s Integration into the American-Centered Global Political Economy,” CRC Research Report, Department of Political Science, York University, 2009. 108 Paul Masson, Wendy Dobson, and Robert Lafrance, “China’s Integration into the Global Financial System,” Bank of Canada Review, Summer 2008, p. 22. 109 Ibid., p. 27. 110 It was notable, for instance, that even Niall Ferguson fueled such expectations despite his understanding of the “symbiotic economic relationship” between China and the US, which he dubbed “Chimerica.”

But the pace was now largely determined by the growth of China’s exports and by related changes in production processes in other countries, all of which “were linked and collectively shaped by broader transnational capitalist dynamics, in particular by the establishment and intensification of transnational corporate-controlled cross-border production networks.”6 As the Asian Development Bank emphasized, “an open, rules-based global system of trade and investment remains a high regional priority”; and since “Asia’s continued success depends on access to global markets,” the main goal was to “move faster towards global integration.”7 Moreover, the unevenness of capitalist competition and development sharpened inequalities among the developing countries themselves. For instance, the value of manufactured goods per capita in Brazil was ten times that of sub-Saharan Africa. In fact, in 2007 eight countries accounted for three-quarters of all the manufacturing output by the 140 developing countries in the World Bank’s database. The number of people living in poverty globally, as measured by the number of people living below an absolute standard such as $1 per day, had been reduced by the millennium. But such averages could be misleading. Although inequality between countries seemed to decrease, this was only because the enormous size of China and India skewed the international distribution data; once these two countries are excluded from the data, there was a rising trend in inter-country inequality after 1980.

Although inequality between countries seemed to decrease, this was only because the enormous size of China and India skewed the international distribution data; once these two countries are excluded from the data, there was a rising trend in inter-country inequality after 1980. This was especially significant since “the last two decades in the twentieth century saw a resumption in the upward trajectory of aggregate within-country inequality”—and this was as true for China and India, as it was for the advanced capitalist countries themselves.8 Chief Financial Architect The many economic crises that attended capitalist globalization in the 1990s presented the need to establish, in the words of the US Treasury’s Larry Summers, an “institutional architecture that links the industrialized and developing world and unifies them in the way the industrialized world is already unified.”9 What the G7 called for by way of such a “new international architecture”10 was a series of institutional reforms, primarily involving changes to the states and financial systems of “emerging market” countries, which would allow investors to assess risks more adequately and help the IMF address crises more expeditiously.


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In Spite of the Gods: The Rise of Modern India by Edward Luce

affirmative action, Albert Einstein, Alvin Toffler, Bretton Woods, call centre, centre right, clean water, colonial rule, company town, crony capitalism, cuban missile crisis, demographic dividend, digital divide, dual-use technology, energy security, financial independence, friendly fire, Future Shock, Gini coefficient, Great Leap Forward, Haight Ashbury, informal economy, job-hopping, Kickstarter, land reform, Mahatma Gandhi, Martin Wolf, megacity, new economy, plutocrats, profit motive, purchasing power parity, Silicon Valley, trade liberalization, upwardly mobile, uranium enrichment, urban planning, women in the workforce, working-age population, Y2K

“Weekend Ruminations,” Business Standard, September 11, 2004. 3. There have been heated disputes about the degree to which poverty has been reduced since 1991. Ninan takes the largest estimate, which is the official figure used by the Indian government and the World Bank. Clearly India’s Gini Coefficient—its measure of inequality—has risen since 1991. But that is not inconsistent with a sharply falling poverty ratio. Improvements in other numbers, notably India’s human development indicators, corroborate the poverty reduction data. 4. Myron Weiner, The Indian Paradox, edited by Ashutosh Varshney, p. 36. 5.


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Data Mining: Concepts, Models, Methods, and Algorithms by Mehmed Kantardzić

Albert Einstein, algorithmic bias, backpropagation, bioinformatics, business cycle, business intelligence, business process, butter production in bangladesh, combinatorial explosion, computer vision, conceptual framework, correlation coefficient, correlation does not imply causation, data acquisition, discrete time, El Camino Real, fault tolerance, finite state, Gini coefficient, information retrieval, Internet Archive, inventory management, iterative process, knowledge worker, linked data, loose coupling, Menlo Park, natural language processing, Netflix Prize, NP-complete, PageRank, pattern recognition, peer-to-peer, phenotype, random walk, RFID, semantic web, speech recognition, statistical model, Telecommunications Act of 1996, telemarketer, text mining, traveling salesman, web application

This decreases as a split favoring one class: for instance a 70/30 distribution produces Gini index of 0.42. If we have more than two classes, the maximum possible value for index increases; for instance, the worst possible diversity for three classes is a 33% split, and it produces a Gini value of 0.67. The Gini coefficient, which ranges from 0 to 1 (for extremely large number of classes), is multiplied by 100 to range between 0 and 100 in some commercial tools. The quality of a split on a feature into k subsets Si is then computed as the weighted sum of the Gini indices of the resulting subsets: where ni is the number of samples in subset Si after splitting, and n is the total number of samples in the given node.

However, Relief does not help with removing redundant features. As long as features are deemed relevant to the class concept, they will be selected even though many of them are highly correlated to each other. One of the Relief problems is to pick a proper value of τ. Theoretically, using the so-called Cebysev’s inequality τ may be estimated: While the above formula determines τ in terms of α (data-mining model accuracy) and m (the training data set size), experiments show that the score levels display clear contrast between relevant and irrelevant features so τ can easily be determined by inspection. Relief was extended to deal with multi-class problems, noise, redundant, and missing data.

The size of a suitable subset is determined by taking into account the cost of computation, memory requirements, accuracy of the estimator, and other characteristics of the algorithm and data. Generally, a subset size can be determined so that the estimates for the entire data set do not differ by more than a stated margin error in more than δ of the samples. By setting up a probability inequality P(|e − e0| ≥ ε) ≤ δ, we solve it for the subset of sample size n, and for a given value ε (confidence limit) and δ (where 1 − δ is the confidence level). The parameter e stands for an estimate from the subset and it is generally a function of the subset size n, while e0 stands for the true value obtained from entire data set.


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Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamond, British Empire, centre right, classic study, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, Cornelius Vanderbilt, cotton gin, crony capitalism, Day of the Dead, deindustrialization, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, Great Leap Forward, Hernando de Soto, high-speed rail, Home mortgage interest deduction, household responsibility system, income inequality, information asymmetry, invention of the printing press, iterative process, Kickstarter, knowledge worker, labour management system, land reform, land tenure, life extension, low interest rates, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, Nelson Mandela, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, scientific management, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, subprime mortgage crisis, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Twitter Arab Spring, Tyler Cowen, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, work culture , World Values Survey, zero-sum game

The scores for political stability and rule of law are roughly comparable between Latin America and East Asia, and sharply lower in sub-Saharan Africa. FIGURE 18. Gini Coefficients, Selected Countries SOURCE: World Bank The difference among regions can also be measured in terms of inequality, as indicated in Figure 18, which presents Gini index numbers for a selected group of countries (Gini indexes range from 0 to 100, with 0 representing perfect equality and 100 representing complete inequality). The countries of sub-Saharan Africa vary widely: Ethiopia is relatively equal, while oil-rich Nigeria and Angola have very high levels of inequality. In East Asia, Japan and South Korea have had low rates of inequality since the 1950s, as did China at the end of the Maoist period.

Economic growth by itself is not sufficient to create democratic stability if it is not broadly shared. One of the greatest threats to China’s social stability today is its rapid increase in income inequality since the mid-1990s, which by 2012 had reached Latin American levels.7 Latin America itself had reached middle-income status well before East Asia but continued to be plagued by high levels of inequality and the populist policies that flowed from it. One of the most promising developments for the region, however, has been the notable fall in income inequality in the decade of the 2000s, as documented by economists Luis Felipe López-Calva and Nora Lustig.8 There have been significant gains to the Latin American middle class.

Dominic Wilson and Raluca Dragusanu, The Expanding Middle: The Exploding World Middle Class and Falling Global Inequality (New York: Goldman Sachs Global Economics Paper No. 170, 2008), p. 4. 6. European Union Institute for Security Studies, Global Trends 2030—Citizens in an Interconnected and Polycentric World (Paris: EUISS, 2012), p. 28. 7. China’s Gini index was 42.5 in 2005 (World Bank). 8. López-Calva and Lustig, Declining Inequality in Latin America. 9. This figure quoted in Francesca Castellani and Gwenn Parent, Being “Middle Class” in Latin America (Paris: OECD Development Centre Working Paper No. 305, 2011), p. 9. 10. Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (2003): 1–39; see also Jacob S.


The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan

addicted to oil, air freight, airline deregulation, Alan Greenspan, Albert Einstein, asset-backed security, bank run, Berlin Wall, Black Monday: stock market crash in 1987, Bretton Woods, business cycle, business process, buy and hold, call centre, capital controls, carbon tax, central bank independence, collateralized debt obligation, collective bargaining, compensation consultant, conceptual framework, Corn Laws, corporate governance, corporate raider, correlation coefficient, cotton gin, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, currency risk, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, double entry bookkeeping, equity premium, everywhere but in the productivity statistics, Fall of the Berlin Wall, fiat currency, financial innovation, financial intermediation, full employment, Gini coefficient, Glass-Steagall Act, Hernando de Soto, income inequality, income per capita, information security, invisible hand, Joseph Schumpeter, junk bonds, labor-force participation, laissez-faire capitalism, land reform, Long Term Capital Management, low interest rates, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, Myron Scholes, Nelson Mandela, new economy, North Sea oil, oil shock, open economy, open immigration, Pearl River Delta, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, Reminiscences of a Stock Operator, reserve currency, Right to Buy, risk tolerance, Robert Solow, Ronald Reagan, Savings and loan crisis, shareholder value, short selling, Silicon Valley, special economic zone, stock buybacks, stocks for the long run, Suez crisis 1956, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tipper Gore, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, We are all Keynesians now, working-age population, Y2K, zero-sum game

Overshadowing the current anxiety is a problem of longer standing: many people's day-by-day experiences in the job market seem to contra*The standard measure of concentration of household income, for example, the "Gini coefficient," rose steadily between 1980 and 2005 from .403 to .469. Polls give each respondent equal weight, and there are far more lower- and middle-income earners who are doing poorly than upper-income earners who are doing well. More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. EDUCATION AND INCOME INEQUALITY diet the well-documented evidence that competitive markets over the decades have elevated standards of living for the vast majority of Americans and much of the rest of the world.

In other words, the adverse economic consequences of the policies T h e s e per capita GDPs are all reported in real terms. 335 More ebooks visit: http://www.ccebook.cn ccebook-orginal english ebooks This file was collected by ccebook.cn form the internet, the author keeps the copyright. THE AGE OF T U R B U L E N C E are ignored, willfully or inadvertently. Populism is most evident, as one would expect, in economies with high levels of income inequality such as in Latin America. Indeed, inequality in all Latin American economies is among the highest in the world, far greater than in any industrial country and, notably, higher than that of any of the economies of East Asia. The roots of Latin American inequality lie deep in the European colonization that, from the sixteenth through the nineteenth centuries, exploited slaves and indigenous populations. Its remnants today are to be seen, according to the World Bank, in large racial disparities in income.

T H E AGE OF T U R B U L E N C E the effect of Canadian lumber on housing prices and inflation, the trend toward just-in-time manufacturing. He had an eye for the big picture too, like the historic connection between income inequality and economic change. He believed dot-com millionaires were an inevitable by-product of progress. "Whenever you shift to a new economic paradigm, there's more inequality," he'd say. "There was more when we moved from farm to factory. Vast fortunes were made by those who financed the Industrial Revolution and those who built the railroads." Now we were shifting into the digital age, so we had dot-com millionaires.


pages: 767 words: 208,933

Liberalism at Large: The World According to the Economist by Alex Zevin

"there is no alternative" (TINA), activist fund / activist shareholder / activist investor, affirmative action, Alan Greenspan, anti-communist, Asian financial crisis, bank run, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, business cycle, capital controls, carbon tax, centre right, Chelsea Manning, collective bargaining, Columbine, Corn Laws, corporate governance, corporate social responsibility, creative destruction, credit crunch, David Ricardo: comparative advantage, debt deflation, desegregation, disinformation, disruptive innovation, do well by doing good, Donald Trump, driverless car, Edward Snowden, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, Gini coefficient, Glass-Steagall Act, global supply chain, guns versus butter model, hiring and firing, imperial preference, income inequality, interest rate derivative, invisible hand, It's morning again in America, Jeremy Corbyn, John von Neumann, Joseph Schumpeter, Julian Assange, junk bonds, Khartoum Gordon, land reform, liberal capitalism, liberal world order, light touch regulation, Long Term Capital Management, low interest rates, market bubble, Martin Wolf, means of production, Michael Milken, Mikhail Gorbachev, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, new economy, New Journalism, Nixon triggered the end of the Bretton Woods system, no-fly zone, Norman Macrae, Northern Rock, Occupy movement, Philip Mirowski, plutocrats, post-war consensus, price stability, quantitative easing, race to the bottom, railway mania, rent control, rent-seeking, road to serfdom, Ronald Reagan, Rosa Parks, Seymour Hersh, Snapchat, Socratic dialogue, Steve Bannon, subprime mortgage crisis, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade liberalization, trade route, unbanked and underbanked, underbanked, unorthodox policies, upwardly mobile, War on Poverty, WikiLeaks, Winter of Discontent, Yom Kippur War, young professional

‘That cover had a huge effect and met with almost no internal dissent.’132 It was also an intellectual manifesto, as important for making her case to be editor as books had been for Emmott and Micklethwait. In it Beddoes acknowledged the problem of inequality, which had seen the richest 1 per cent in the US double their share of national income since 1980, while the top .01 per cent (around 16,000 families) had quadrupled their take. And that trend towards greater inequality was not confined to America; measured by Gini coefficients it had risen in China, India, Russia, Sweden and almost everywhere else that had chosen ‘openness’ and ‘reform’ in the last three decades. In addition to the populist dangers this bred, a growing body of literature suggested too large an underclass ‘slows growth, causes financial crises and weakens demand’.133 Up top, financiers should pay their share of income tax, and the ‘implicit subsidy’ to banks too big to fail (around $30 billion in lower borrowing costs) should end; ditto cronyism, in communist China as in the capitalist US, where private money flowed without legal limit into politics.

In a book celebrating the Economist’s centenary in 1943, Crowther drew a direct line from the first editor James Wilson, whose sunken eyes stared grimly from the front page, to himself. Liberalism still aimed at the greatest freedom for the greatest number. But laissez-faire had in this respect turned out to have certain disadvantages: ‘irregularity and inequality of the society it breeds’, at a time when larger electorates insisted ‘inequality and insecurity’ rank ‘equally with that abolition of poverty which seemed, a hundred years ago, to stand alone’. This was followed by an immediate qualification, however, for ‘if events prove that restrictionism and monopoly are organically inseparable from Government intervention in the economic field, then it will be the duty of the Economist to that extent to swing back towards the purest individualism.’41 Hayek, a devoted reader, gently mocked the idea of such an unbroken continuity with the Victorian era, wondering in a review whether Crowther wasn’t himself a little doubtful about it.42 The Economist for its part had only praise for the outspoken emigré at the London School of Economics when his polemic against planning, The Road to Serfdom, appeared a few months later.

But the small print involved much the same entitlement cuts Coggan wanted. Sweden was the upmarket model cited for tax reform and budget discipline. It was true, she granted, that income inequality had leapt by 25 per cent there since 1980. But the Swedes were still among the most equal of peoples, in part because market reforms had boosted growth without sacrificing services (improved, in their turn, by charter schools and private health providers). Latin America, on the other hand, was a bargain option. Inequality was also falling in (most) countries there, thanks to ‘targeted’ spending on primary schools for the poor, while its conditional cash transfers offered a more ‘cost-effective’ welfare system (less than .4 per cent of GDP in Brazil) that also produced good behaviour in terms of school attendance and job hunting.


pages: 1,034 words: 241,773

Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker

3D printing, Abraham Maslow, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Alignment Problem, An Inconvenient Truth, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, biodiversity loss, Black Swan, Bonfire of the Vanities, Brexit referendum, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charlie Hebdo massacre, classic study, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, confounding variable, correlation does not imply causation, creative destruction, CRISPR, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, data science, decarbonisation, degrowth, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, Eddington experiment, Edward Jenner, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, fake news, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, Garrett Hardin, germ theory of disease, Gini coefficient, Great Leap Forward, Hacker Conference 1984, Hans Rosling, hedonic treadmill, helicopter parent, Herbert Marcuse, Herman Kahn, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, launch on warning, life extension, long peace, longitudinal study, Louis Pasteur, Mahbub ul Haq, Martin Wolf, mass incarceration, meta-analysis, Michael Shellenberger, microaggression, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, negative emissions, Nelson Mandela, New Journalism, Norman Mailer, nuclear taboo, nuclear winter, obamacare, ocean acidification, Oklahoma City bombing, open economy, opioid epidemic / opioid crisis, paperclip maximiser, Paris climate accords, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, post-truth, power law, precautionary principle, precision agriculture, prediction markets, public intellectual, purchasing power parity, radical life extension, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, Social Justice Warrior, sovereign wealth fund, sparse data, stem cell, Stephen Hawking, Steve Bannon, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, synthetic biology, tech billionaire, technological determinism, technological singularity, Ted Kaczynski, Ted Nordhaus, TED Talk, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, Tragedy of the Commons, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, W. E. B. Du Bois, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K

The left and right ends of the political spectrum, incensed by economic inequality for their different reasons, curled around to meet each other, and their shared cynicism about the modern economy helped elect the most radical American president in recent times. Has rising inequality really immiserated the majority of citizens? Economic inequality undoubtedly has increased in most Western countries since its low point around 1980, particularly in the United States and other English-speaking countries, and especially in the contrast between the very richest and everyone else.3 Economic inequality is usually measured by the Gini coefficient, a number that can vary between 0, when everyone has the same as everyone else, and 1, when one person has everything and everyone else has nothing.

But in their recent article “Why People Prefer Unequal Societies,” the psychologists Christina Starmans, Mark Sheskin, and Paul Bloom took another look at the studies and found that people prefer unequal distributions, both among fellow participants in the lab and among citizens in their country, as long as they sense that the allocation is fair: that the bonuses go to harder workers, more generous helpers, or even the lucky winners of an impartial lottery.17 “There is no evidence so far,” the authors conclude, “that children or adults possess any general aversion to inequality.” People are content with economic inequality as long as they feel that the country is meritocratic, and they get angry when they feel it isn’t. Narratives about the causes of inequality loom larger in people’s minds than the existence of inequality. That creates an opening for politicians to rouse the rabble by singling out cheaters who take more than their fair share: welfare queens, immigrants, foreign countries, bankers, or the rich, sometimes identified with ethnic minorities.18 In addition to effects on individual psychology, inequality has been linked to several kinds of society-wide dysfunction, including economic stagnation, financial instability, intergenerational immobility, and political influence-peddling.

Figure 9-1 also shows an international Gini calculated by the economist Branko Milanović in which every country counts in proportion to its population, making the human impact of the drop in inequality more apparent. Figure 9-1: International inequality, 1820–2013 Sources: International inequality: OECD Clio Infra Project, Moatsos et al. 2014; data are for market household income across countries. Population-weighted international inequality: Milanović 2012; data for 2012 and 2013 provided by Branko Milanović, personal communication. Still, an international Gini treats all the Chinese as if they earned the same amount, all the Americans as if they earned the American average, and so on, and as a result it underestimates inequality across the human race.