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Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King
Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, 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, Francis Fukuyama: the end of history, full employment, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, low skilled workers, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War
Meanwhile, for former members of the Soviet Empire, openness is, in some cases, resulting in a mini-version of China’s experience. 1917 marked the start of the ‘short-century’ economic and political mistake in Russia, and, through its repressive influence, Russia’s western and southern neighbours. Taken together, the emerging nations are now at least as big economically as the US and they’re growing around three times faster. Admittedly, despite their gains, many in the emerging nations are still very poor. For example, the median income per capita for China’s rural workers in 2008 stood at RMB4, 700 or, in 2008 dollars, $691. Yet, for urban workers, life is getting better; income per capita for Chinese urbanites in 2008 was RMB15,000 or $2,205. Within this urban group, there are now millions of people earning annual incomes in the $5,000–10,000 range. At these levels, citizens begin to place increasing demands on the world’s scarce resources. They want cars, holidays, central heating, air-conditioning and all the paraphernalia of modern life.20 They aspire to Western diets.
By the beginning of the twentieth century, the world economy was completely dominated by the Western powers, who directly produced more than 50 per cent of the world’s GDP, a result of their rapid economic growth over many previous decades. By the mid-twentieth century, other nations just didn’t seem to matter: their shares of world income were tiny and their incomes per capita were minute. Across East Asia, for example, incomes per capita were less than one-tenth of those of the United States. THE NEW FORCES OF GLOBALIZATION While the progress of Western economies was, thus, hugely impressive compared with the competition, their progress did not depend purely on technology gains and the benefits of free markets, important though these sometimes were. There were three other vital ingredients.
No productivity miracle is likely to be big enough to cope with this demographic pressure. China is the first economy of size still to have remarkably low per-capita incomes by global standards. In the past, there has been a strong correlation between overall output and output per head. For example, the US is the world’s biggest economy and, of the major industrial nations, has one of the highest levels of income per capita. Conversely, the majority of poor countries are poor both in per-capita terms and also in total. China is unique. Following thirty years of rapid economic growth it is still poor in relation to the industrialized world, but already it has become a huge global player in resource markets. Imagine, then, that China keeps growing at its current rate. In thirty years’ time China would be roughly the same size in economic terms as the US.
air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, clean water, colonial rule, correlation does not imply causation, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Francisco Pizarro, fundamental attribution error, germ theory of disease, greed is good, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Rogoff, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, risk/return, road to serfdom, Silicon Valley, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, World Values Survey, young professional
The difference between 6 percent growth and the global average of 2 percent growth for one year is a 4 percent difference in income, which is good but hardly merits miracle designation. But if the 6 percent growth of income per capita were really permanent, the consequences indeed would be miraculous. Over fifty years, a sustained average of 6 percent growth produces an eighteen-fold increase in income per capita. Average global growth of 2 percent per capita increases income over the same period at less than three-fold. A three-fold increase in income is great, but it is a lot less than the eighteen-fold increased produced by the 6 percent growth-miracle cases. The power of compound growth has attracted a lot of effort to reach the lasting miracle growth of 6 percent. Almost all these hopes have been disappointed in the long run. We now have annual data on growth of income per capita for 101 countries over fifty years, and data for shorter periods for another 103 countries.
While the average Nigerian may find it difficult to afford adequately nutritious meals every day, the average citizen of Luxembourg need not worry too much about buying the latest generation cell phone on the market.21 There are two commonly used measures of overall development success: the growth of income per capita and the level already attained of income per capita. This chapter has already discussed the small share of national differences in growth, but what about levels of development as measured by income per capita? Is it time to salute the remarkable performance of the Luxembourg development experts? One answer to that question is evident in the map of life expectancy shown in Figure 10.1. Income, infant mortality, and life expectancy are characteristics much more of regions than they are of nations.
If there is one number to which the rights of millions will be happily sacrificed, it is the national GDP growth rate. National leaders believe national growth takes place as the result of national actions. These leaders take great pride in rapid national growth, as do their expert advisers who think their advice is paying off. The unofficial line for a “growth miracle” seems to be annual growth of income per capita of 6 percent. Grow 6 percent, and all will be forgiven. The national state justifies itself partly as the custodian of economic management charged with promoting growth. The development agencies and experts justify themselves as advisors to these states on how to raise growth. Their claims to be able to raise growth are part of the justification for nation-states and their technocratic advisors to have more power.
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, income inequality, income per capita, labor-force participation, minimum wage unemployment, offshore financial centre, open economy, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus
France’s Gini coefficient, as defined earlier, was 0.29. This means that on average, the gap between the standard of living of two people This difference is due to corporate and state income that is not distributed, as well as the differences in how income is defined in household surveys and the national accounts (see above). In what follows, standard of living will generally refer to the mean income per capita given by household surveys. 10 Global Inequality21 taken at random was 58% of average income, thus slightly less than $12,000. Among wealthy countries, France has moderate levels of inequality. The ratio of the standard of living of the richest 10% to the poorest 10% was lower (slightly less than 5, to be precise) in the Scandinavian countries, which have the highest levels of equality among wealthy countries.
Of course, there are other dimensions to inequality and poverty than income: access to basic infrastructure, health, education, access to the legal system, or ability to participate in public decision-making, among others. We could Global Inequality25 have covered them in more detail, even though they are often harder to observe on an individual basis.13 Across countries, on the other hand, they turn out to be highly, but not perfectly, correlated with differences in income per capita. This is the sad snapshot of world inequality today. Any snapshot, however, is marked by the moment in which it was taken. The global distribution of standard of living is certainly dramatically unequal, but has this always been the case? Are things on track to improve or, on the contrary, are they getting worse? A Historic Turning Point Opinion is divided on the subject of the evolution of global standard of living inequality.
There were approximately 2 billion people living in extreme poverty in the early 1980s; however, the last twenty years have witnessed a considerable decline in that number. Since 1990, the number of people in poverty has dropped by around 500 million individuals. For the first time since the Industrial Revolution two centuries ago, economic progress is moving more quickly than population growth, in part because the latter has slowed down but overwhelmingly because of accelerated growth in average income per capita in the developing world. This is a stunning turn of events. Given these undeniable statistics, why do we still read and hear that global inequality continues to worsen? The answer to this question has two parts. The first is purely statistical. As we have seen, the numbers for the recent period in figure 1 refer to the standard of living distribution after normalization to a particular country’s GDP per person.
When the Money Runs Out: The End of Western Affluence by Stephen D. King
Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population
said the master at length, in a faint voice. ‘Please, sir,’ replied Oliver, ‘I want some more.’ The master aimed a blow at Oliver’s head with the ladle; pinioned him in his arm; and shrieked aloud for the beadle. (Charles Dickens, Oliver Twist) 43 4099.indd 43 29/03/13 2:23 PM When the Money Runs Out Thanks to persistent economic growth, twenty-first century Britain is a very different proposition. Incomes per capita have risen twelvefold since Dickens published Oliver Twist in 18386 and, thankfully, we no longer have workhouses. Yes, poverty still exists and vulnerable individuals are still, at times, poorly treated. Amazingly, during the Queen’s Diamond Jubilee celebrations in June 2012, up to 30 unemployed people bussed in from the West Country to work as stewards in the Jubilee Thames Pageant found themselves having to sleep rough under London Bridge before performing their (unpaid) duties.7 But, for the most part, twenty-first century Britain has a different and more enlightened attitude.
Opposition 196 4099.indd 196 29/03/13 2:23 PM From Economic Disappointment to Political Instability was squashed, patronage was handed out where necessary, and the whiff of corruption began to permeate all aspects of Indonesian society. None of this mattered too much so long as the economy was performing well. Suharto’s initial success in the late 1960s was to stamp out the hyperinflation that had proved so incredibly debilitating under his predecessor, Sukarno. Suharto’s so-called ‘New Order’ delivered significant increases in living standards, with incomes per capita quadrupling between the mid-1960s and the mid-1990s. Nevertheless, Indonesia was still a poor country and, even before the Asian crisis, was losing ground to others. China, in particular, was catching up rapidly. Meanwhile, on the home front, the mid-1990s saw an increase in political opposition, led by Megawati Sukarnoputri, the head of the Indonesian Democratic Party and, by happy coincidence, the daughter of Sukarno, Indonesia’s former leader.
He managed to avoid domestic upheaval – preventing the majority Malays and minority Chinese from fighting each other – by aiming the nation’s ire at the rest of the world. 201 4099.indd 201 29/03/13 2:23 PM When the Money Runs Out Korea: Democracy and Self-S acrifice Unlike either Indonesia or Malaysia, Korea was already a reasonably wealthy country at the onset of the Asian crisis. It had a properly developed – if relatively new – democracy.16 Its incomes per capita averaged around $13,000 a year, higher than in either Portugal or Greece. Yet, for all its success, it was nevertheless unable to avoid the perils of the crisis. Korea, too, had become dependent on capital inflows from abroad: its current account deficit exceeded 4 per cent of GDP in 1996. And, like the other two nations, there was a whiff of corruption in the air: the connections between government and the chaebol (translated literally as ‘wealth clan’ or ‘wealth faction’), Korea’s large industrial conglomerates, were seen by many as yet another example of Asian crony capitalism.
A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang
Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, 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 innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, 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 reform, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, 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 Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population, World Values Survey
The fact is that capitalism developed first in Western Europe. Before the rise of capitalism, the Western European societies, like all the other pre-capitalist societies, changed very slowly. The society was basically organized around farming, which used virtually the same technologies for centuries, with a limited degree of commerce and handicraft industries. Between 1000 and 1500, the medieval era, income per capita, namely, income per person, in Western Europe grew at 0.12 per cent per year.1 This means that income in 1500 was only 82 per cent higher than that in 1000. To put it into perspective, this is a growth that China, growing at 11 per cent a year, experienced in just six years between 2002 and 2008. This means that, in terms of material progress, one year in China today is equivalent to eighty-three years in medieval Western Europe (which were equivalent to three-and-a-half medieval lifetimes, as the average life expectancy at the time was only twenty-four years)
Those economies were only a step away from a fully planned economy, it was argued, because their economic activities were already planned to a high degree by large enterprises and cartels of those enterprises. The Soviet Union – even its more developed European part – was a very backward economy in which capitalism had been hardly developed, where socialism really had no business emerging. To everyone’s surprise, the early Soviet industrialization was a big success, most graphically proven by its ability to repel the Nazi advance on the Eastern Front during the Second World War. Income per capita is estimated to have grown at 5 per cent per year between 1928 and 1938 – an astonishingly rapid rate in a world in which income typically grew at 1–2 per cent per year.15 This growth came at the cost of millions of deaths – from political repression and the 1932 famine.* However, the scale of the famine was not known at the time, and many were impressed by Soviet economic performance, especially given that capitalism was then on its knees, following the Great Depression of 1929.
Even the larger middle-income developing countries (30–50 million people), such as Colombia or South Africa, may have GDP of $300–400 billion. These are only as large as the GDP of a mid-sized US state, such as Washington or Minnesota. In terms of GDP per capita figures, we have a huge range. Since these figures are similar – actually identical in theory, although not necessarily so in practice – to income per capita figures that we discuss shortly, suffice it to say here that we are talking about differentials over 500 times. Income Gross Domestic Income, or GDI GDP may be seen as a sum of incomes, rather than outputs, as everyone who is involved in the production activity is paid for his/her contribution (whether the amounts paid are ‘fair’ is another matter). Going back to the baker’s example, having paid for flour, eggs and other intermediate inputs, the bakery will divide up its value-added between wages for its workers, profits for its shareholders, interest payments for the loan it may have contracted and the indirect taxes that are automatically included in the revenue that it generates (that is, value added tax (VAT) or sales tax).
Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, labour market flexibility, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus
Countries in the upper right portion—that is, countries 142 The Politics of Underdevelopment in Latin America Number of Regime Changes 8 Panama 7 6 5 Ecuador Argentina Bolivia Brazil Dominican Republic Paraguay Peru 4 Venezuela El Salvador 3 Colombia Guatemala 2 Costa Rica Uruguay 1 Nicaragua 0 0 Chile 2000 Mexico 4000 6000 8000 10000 Average Annual per Capita Income ($) figure 6.4 Per Capita Income and Regime Change in Latin America, 1940–1970. Note: Income per capita expressed in 1996 purchasing power parity dollars. Sources: Data elaborated from the Penn World Table, http://pwt.econ.upenn.edu/php_site/pwt_index.php; and the Third World Government Stability database, http://colfa.utsa.edu/govstability. Number of Regime Changes 8 7 6 Argentina Panama 5 4 Bolivia 3 2 Nicaragua El Salvador Dominican Republic Peru Ecuador Brazil Guatemala Chile Mexico 1 Colombia 0 0 2000 4000 Costa Rica Uruguay Venezuela 6000 8000 10000 Average Annual per Capita Income ($) figure 6.5 Per Capita Income and Regime Change in Latin America, 1970–2000. Note: Income per capita expressed in 1996 purchasing power parity dollars. Sources: Data elaborated from the Penn World Table, http://pwt.econ.upenn.edu/php_site/pwt_index.php; and the Third World Government Stability database, http://colfa.utsa.edu/ govstability.
The Politics of Underdevelopment in Latin America part iii INSTITUTIONAL FACTORS IN LATIN AMERICA’S DEVELOPMENT This page intentionally left blank 7 The Latin American Equilibrium james a. robinson O ne of the enduring puzzles of Latin American history is its comparative economic performance.1 At the time of conquest and settlement, though Latin American countries were relatively poor and economically backward compared to their colonists from Spain and Portugal, the gap was small in relation to what it is today. For example, in 1500, Spain’s income per capita was probably about 50 percent greater than the Latin American average. Today, average income in Spain is about 300 percent greater.2 Even more puzzling, at the time of conquest, the most prosperous parts of the Americas were not those which are today the richest. In 1492, it was not Canada, the United States, or the Southern Cone of Latin America that were the most economically advanced; it was Mexico, Peru, and Bolivia with their complex centralized societies.3 Though the technology of the Mexicas or Tawantinsuyu may not have been very advanced by modern standards, they had developed extraordinary abilities to provide public goods, irrigation works, and infrastructure, and they had systems of taxation and resource mobilization that would be the envy of many modern developing countries.
George Lovell and Christopher Lutz, “Conquest and Population: Maya Demography in Historical Perspective,” Latin American Research Review 29 (1994): 133–140. 180 175 170 Cms 165 160 155 150 145 140 8250 BC 1500 AD1750 AD1873 1900 1920 1930 1940 1950 1960 1970 1980 1989 Year Men Women figure 7.2 Height of Latin American Adult Men and Women in Guatemala (Cubic Fit). Source: Barry Bogin and Ryan Keep, “Eight Thousand Years of Economic and Political History in Latin America Revealed by an Anthropometry,” Annals of Human Biology 26 (1999): 333–351. between Europe and the Americas which had existed in 1492 probably stayed about constant over the colonial period, with Europe remaining about 50 percent more prosperous, even though the level of income per capita had grown slowly everywhere. In some sense, then, the real puzzle begins in the nineteenth century, the epoch of rapid economic divergence. By the 1820s, Latin American countries had emerged from colonialism, and though it was once believed that they remained in the grip of a British-initiated “informal empire” in the nineteenth century, the more plausible view is that rather it was Latin Americans and their governments who decided, possibly inadvertently, how their societies would evolve.
Capital in the Twenty-First Century by Thomas Piketty
accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, very high income, We are the 99%
These effects are all the more significant because the growth rate that figures in the law β = s / g is the overall rate of growth of national income, that is, the sum of the per capita growth rate and the population growth rate.3 In other words, for a savings rate on the order of 10–12 percent and a growth rate of national income per capita on the order of 1.5–2 percent a year, it follows immediately that a country that has near-zero demographic growth and therefore a total growth rate close to 1.5–2 percent, as in Europe, can expect to accumulate a capital stock worth six to eight years of national income, whereas a country with demographic growth on the order of 1 percent a year and therefore a total growth rate of 2.5–3 percent, as in the United States, will accumulate a capital stock worth only three to four years of national income. And if the latter country tends to save a little less than the former, perhaps because its population is not aging as rapidly, this mechanism will be further reinforced as a result. In other words, countries with similar growth rates of income per capita can end up with very different capital/income ratios simply because their demographic growth rates are not the same.
Like all averages, this average income figure hides enormous disparities. In practice, many people earn much less than 2,500 euros a month, while others earn dozens of times that much. Income disparities are partly the result of unequal pay for work and partly of much larger inequalities in income from capital, which are themselves a consequence of the extreme concentration of wealth. The average national income per capita is simply the amount that one could distribute to each individual if it were possible to equalize the income distribution without altering total output or national income.11 Similarly, private per capita wealth on the order of 180,000 euros, or six years of national income, does not mean that everyone owns that much capital. Many people have much less, while some own millions or tens of millions of euros’ worth of capital assets.
Nevertheless, they represent real progress in comparison with national accounts from the early postwar years, which were concerned solely with endless growth in output.18 These are the official series that I use in this book to analyze aggregate wealth and the current capital/income ratio in the wealthy countries. One conclusion stands out in this brief history of national accounting: national accounts are a social construct in perpetual evolution. They always reflect the preoccupations of the era when they were conceived.19 We should be careful not to make a fetish of the published figures. When a country’s national income per capita is said to be 30,000 euros, it is obvious that this number, like all economic and social statistics, should be regarded as an estimate, a construct, and not a mathematical certainty. It is simply the best estimate we have. National accounts represent the only consistent, systematic attempt to analyze a country’s economic activity. They should be regarded as a limited and imperfect research tool, a compilation and arrangement of data from highly disparate sources.
The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly
Andrei Shleifer, business climate, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, financial repression, Gini coefficient, Hernando de Soto, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, large denomination, manufacturing employment, Network effects, New Urbanism, open economy, Productivity paradox, purchasing power parity, rent-seeking, Ronald Reagan, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War
For example, suppose that you got one percentage point of growth for every four percentage points of investment. A country that wanted to triple growth from 1 percent to 4 percent had to raise its investment rate from 4 percent Aid for Investment 31 of GDP to 16 percent of GDP. The 4 percent GDP growth would give a per capita growth rate of 2 percent if population growth was 2 percent. At a 2 percent per year rate of growth, income per capita would double every thirty-six years. Investment had to keep ahead of population growth. Development was a race between machines and motherhood. How do you get investment highenough? Say thatcurrent national saving is 4 percent of GDP. The early development economists thought that poor countries were so poor they had little hope of increasing their saving. There was thus a ”financing gap” of 12 percent of GDP between the ”required investment” (16 percent of GDP) and the current 4 percent of GDP level of national savings.
This was at the same time that their real per capita capital stocks weregrowingat over 1 percent per year andeducational attainment was also increasing. I wouldn't argue that Costa Rica, Ecuador, Peru, and Syria had technological regress, but clearly other factors got in the way of technological progress. Technologically driven growth is anything but automatic. Just as productivity growth explains most of the difference in per capita growth across countries, so differences in technological levels explain most of the differences in income per capita. U.S.workers produce twenty times the output per worker that Chinese workers do. If Chinese workershad the same technology as U.S. workers, then U.S. workers would produce only twice as much as Chinese workers (which wouldbe explained by more education and machinery for U.S. workers). Most of the higher output of American workers compared to Chinese workers is explained by higher technological productivity.l0 Poor countries like China continue to lag behind technologically, despite the widespread availability of advanced technology.
*O Harvard economist Jeffrey Frankel and Berkeley economist David Romer find apositive effect of theshare of trade(exportsplus imports) in GDP on income levels. They argue that this is a causal relationship, by identifying the geographic component of trade (the tendency for neighbors to trade more with each other and the tendency for larger economies to have more internaltrade).21 The effect is large: a 1 point rise in the shareof trade in GDP raises income per capita by 2 percent. Maryland economist Francisco Rodriguez and Harvard economist DaniRodrik express a contrarian view. They argue that many of these measures do not really capture trade interventions and that they are not robust to changes in the sample period or other control variables (they did not study all of the results mentioned here, however).22Still, few variables in the research on growth captureexactly a specific policy or are robust to all possible control variables.It is too easy to drive out individual associations with other controlvariables.
Economic Gangsters: Corruption, Violence, and the Poverty of Nations by Raymond Fisman, Edward Miguel
accounting loophole / creative accounting, Andrei Shleifer, Asian financial crisis, barriers to entry, blood diamonds, clean water, colonial rule, congestion charging, European colonialism, failed state, feminist movement, George Akerlof, income inequality, income per capita, invisible hand, megacity, oil rush, prediction markets, random walk, Scramble for Africa, Silicon Valley, South China Sea, unemployed young men
Market-oriented reforms have since produced an astounding industrial transformation. The countryside has started to empty as China’s rural masses seek their fortunes in coastal cities. More than twice as many Chinese lived in 127 CH A PTER F I VE urban areas in 2005 than they did twenty-five years earlier, when the reforms began. This economic miracle has brought higher living standards to hundreds of millions of people in a few short decades: China’s income per capita was at African levels in the 1970s before the reforms, but now workers there earn many times as much as their African counterparts. But China’s modern economic growth is fuelled, literally, by burning coal, gas, and oil. The torrid rate of expansion of Chinese manufacturing is outstripped only by its growing fossil fuel consumption. Between 2002 and 2004, energy use in China increased by a staggering 33 percent, and the resulting increase in carbon dioxide (CO2) emissions made China the world’s biggest polluter of greenhouse gases by 2007—far ahead of predictions for when China would edge out the United States.18 Together, these two countries account for over 40 percent of global CO2 emissions, the main culprit behind global warming.
And no matter how rapid the recovery, the war, in addition to all the direct pain and suffering the conflict wrought, was definitely a short-run economic disaster since so much time and energy was spent fighting rather than working at economically productive activities. Vietnam’s southeast Asian neighbors—like the “Tiger economies” of Malaysia and Thailand—didn’t suffer from the American War. Income per capita is now $4,970 in Malaysia and $2,720 in Thailand—but only $620 in Vietnam.9 Yet for all the suffering it caused, the war did have at least a hint of a silver lining for the Vietnamese people. The conflict generated a stronger sense of Vietnamese national identity, forged through shared struggles and sacrifice. In the long-run, this feeling of common purpose can help to foster peace, consensus, and political stability—and even indirectly boost economic growth.
Before, the government had faced a constant budget crunch, and in its desperation to obtain hard currency to purchase arms, was forced to accept unfavorable terms. Peace meant that diamond firms no longer got the same sweetheart deals. Royalty payments to the government for mining concessions jumped from $37.5 million in 2002 to nearly $110 million one year later, despite only a modest increase in the value of the diamonds extracted. Overall, the Angolan economy has taken off since the war’s end, with income per capita rising by more than 20 percent between 2003 and 2005— proving once again that the poorest economies can quickly rebound from war. If the old diamond companies are suffering, the rest of the country isn’t. In the oil rush that has seized much of Africa in recent years, we may be witnessing another disconnect 184 TH E RO A D BA CK F RO M WAR between economic prosperity and business profits.
Portfolio Design: A Modern Approach to Asset Allocation by R. Marston
asset allocation, Bretton Woods, capital asset pricing model, capital controls, carried interest, commodity trading advisor, correlation coefficient, diversification, diversified portfolio, equity premium, Eugene Fama: efficient market hypothesis, family office, financial innovation, fixed income, German hyperinflation, high net worth, hiring and firing, housing crisis, income per capita, index fund, inventory management, Long Term Capital Management, mortgage debt, passive investing, purchasing power parity, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, Sharpe ratio, Silicon Valley, superstar cities, transaction costs, Vanguard fund
E 97 P1: a/b c06 P2: c/d QC: e/f JWBT412-Marston T1: g December 8, 2010 17:41 98 Printer: Courier Westford PORTFOLIO DESIGN WHAT IS AN EMERGING MARKET? How is an emerging market defined? The International Finance Corporation traditionally used one criterion, gross national income per capita.2 Any country that was classified by the World Bank as a low income or middle income country was also classified as an emerging market. In 2008, China had a total gross national income of $3,899 billion, but a per capita income of only $2,940. Singapore, in contrast, had a gross national income of $168 billion, but a per capita income of $34,760.3 So China is classified as an emerging market even though its total output was many times that of Singapore because its income per capita is so low. The bulk of the world’s income is earned by the high income countries. Figure 6.1 shows the division of the world’s gross national income (GNI) in 2008.
China’s huge GNI must be shared by a huge population. When measuring national income, it’s sensible to adjust for the cost of living. That is certainly true within a single country over time. If you want to measure the income of the average American today relative to decades ago, the only sensible way to measure income is to adjust for changes in the cost of living. So we might compare gross national income per capita in the year 1960 versus that of 2010 in terms of today’s cost of living (2010 dollars). A similar approach might be used in comparing GNI per capita between countries at the same time since there might be substantial differences in the cost of living across countries. A basket of goods might be much less expensive in China than in Japan even if the basket itself were identical in both countries.
See Federal Housing Finance Agency fixed income, 121–122 fixed income arbitrage, 171 forecast error, 240–241 foreign bonds, 135 correlation with currency, 139 correlation with U.S. bonds, 137 interest rates, 135 returns, 135–136 foreign stocks correlation with U.S. stocks, 87–88 currency and, 79–85 diversification benefits, 85–90 key features, 93–94 owning, 90–93 returns, 79–85 shortcuts to owning, 90–93 U.S. versus, 75–79 foundations, 285–286 spending rules, 5, 286–288 French, Kenneth, 33, 35, 37–38, 49–50, 57, 65 frontier markets, 103 fund of funds, 172, 182–186 Fung, K.H., 187 G geometric averages, 16, 46 Getmansky, Mila, 176 global macro, 172 GNI. See gross national income Goetzmann, William N., 117–118 gold, 249–251 Goldman Sachs Commodity Index (GSCI), 240–243 Gorton, Gary, 236, 239 gross national income (GNI), 98–99 gross national income per capita, 98, 103 growth index, value versus, 59–64 growth indexes, 64–65 growth portfolios, 69–71 growth stocks in portfolios, 69–71 key features, 71 GSCI. See Goldman Sachs Commodity Index Gyourko, Joseph, 221 H He, Guangliang, 154–155 health care, 195 hedge funds, 167 Hedge Funds Research (HFR), 173 hedge funds biases, 178–181 databases, 172–173 fund of funds, 182–186 investment strategies, 169–172 investors, 168 key features, 187 managers, 181–183 portfolio, 186–187 returns, 172–178 hedges, currency, 138–139 HFR.
Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs
agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, Haber-Bosch Process, income inequality, income per capita, intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, labour mobility, low skilled workers, microcredit, oil shale / tar sands, 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, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population
By 2050, today’s developing countries would have an average income of $40,000 per person, roughly equal to U.S. income in 2005, and the United States would have a projected 2050 level of $90,000. Of course, this scenario is highly optimistic in that it assumes the world avoids any prolonged crisis, that the United States grows at the historical average, and that all other countries achieve convergent growth. Figure 2.2(a): The Convergence of Global Income per Capita through 2050 Source: Calculated using data from World Bank (2007) Note: Vertical axis on logarithmic scale. Income is measured in purchasing power parity (PPP) to adjust for difference in price levels across countries. More People and Higher Incomes Not only will most of the world be richer, but there will be a lot more people around enjoying those higher incomes. The world’s population continues to grow rapidly, even though the proportional rate of population growth (each year’s increase relative to the size of the global population) has declined.
Man-made climate change is not a sin of humanity, or even a result we could have easily predicted and avoided; it is, rather, an accident of chemistry, specifically, the accident that carbon dioxide has greenhouse climate effects (described in detail in Chapter 4). This accident is so novel and has come upon us so recently that global society has been caught largely unawares as to how it should respond. Figure 3.2(a): World Income per Capita from 1500 to 2001 Source: Data from Maddison (2001) Figure 3.2(b): World Income from 1500 to 2001 Source: Calculated using data from Maddison (2001) A tenfold increase in human population since 1750 and a similar increase in production per person on the planet mean that human society’s level of economic activity is perhaps one hundred times what it was at the start of the industrial era.
The natural prey is simply no match for the incredible power and technology of modern fishing fleets, complete with fishnets that stretch for miles and satellite-based tracking of open-sea schools of fish. As a recent study shows, perhaps two thirds or more of the world’s major marine fisheries are “fully exploited, overexploited, or depleted.” RISING PRESSURES Today’s rates of economic activity, if they were to be maintained at current rates into the future with current technologies, would be environmentally unsustainable. Yet both population and income per capita are rising rapidly. The pressures on the ecological systems are intensifying, and development and dissemination of sustainable technologies are far too slow. If we do little more than scale up what we are consuming today, we will drive many of the planet’s ecosystems, and countless species, to the point of collapse. The most famous early doomsday prediction came in 1798 from the Reverend Thomas Malthus, who noted that populations tend to rise geometrically (in compounded multiples) while food production only rises arithmetically (in added increments).
Unhealthy societies: the afflictions of inequality by Richard G. Wilkinson
attribution theory, 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, means of production, purchasing power parity, rising living standards, upwardly mobile
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.
The broad picture is shown in figure 3.1. It sets out the relationship between Gross National Product per capita (GNPpc) and life expectancy at birth for men and women combined among countries at all stages of development. Each point is a country, and the four curves show the relationship between GNPpc and life expectancy as it was in 1900, 1930, 1960 and 1990. 34 The health of societies Figure 3.1 Life expectancy and income per capita for selected countries and periods Source: World Bank, World Development Report, 1993 At lower levels of GNPpc there was, at each point in time, an apparent relationship with life expectancy in that the two seem to rise together. However, at higher levels of GNPpc the relationship seems to disappear: at each point in time the curve flattens out towards the horizontal. This suggests that once countries have reached some threshold level of income (around $5000 per capita in 1990), life expectancy plateaus out and further increases in GNPpc are no longer associated with increases in life expectancy.
Not only are data available for fifty states, but they are less affected by low response rates. The same is true in relation to questions about which equivalence scales should be used. Equivalence scales is the name given to the system used for adjusting aggregate household incomes to allow for the number of people living in each household. You could simply divide household income by the number of people in the household to get household income per capita. But as it is much cheaper for Income distribution and health 91 (say) four people to live together, sharing a washing machine, fridge, television, heating bills and the costs of services, it would seem appropriate to use an equivalence scale which took account of those kinds of economies. But clearly the economies of scale with things like heating costs are much greater than the economies of scale for the costs of food or clothing.
Portfolios of the poor: how the world's poor live on $2 a day by Daryl Collins, Jonathan Morduch, Stuart Rutherford
Cass Sunstein, clean water, failed state, financial innovation, financial intermediation, income per capita, informal economy, job automation, M-Pesa, mental accounting, microcredit, moral hazard, profit motive, purchasing power parity, RAND corporation, randomized controlled trial, The Fortune at the Bottom of the Pyramid, transaction costs
In our study, these households were able to “leverage” their more regular sources of income to engage in larger-scale financial intermediation: with a regular income, they were more comfortable taking on higher levels of debt and lenders were more willing to provide loans. As table 2.4 shows, regular wage earners in South Africa are usually better off in terms of both absolute income and income per capita than those earning irregularly (those whose income 44 T H E DA I LY G R I N D Table 2.4 Regular versus Irregular Income Households, South Africa Wage-earning households Share of sample in profile Financial statistics Average monthly income Average monthly income per capita Debt/service ratio Debt/equity ratio Grant-receiving households Irregular income households 49% 27% 21% $635 $188 $235 $219 13% 22% $61 17% 23% $87 7% 19% Note: US$ converted from South African rand at $ = 6.5 rand, market rate. comes from a small business piecemeal work, or remittances from relatives).
South Africa: Urban 1 60 households in a township outside Johannesburg; 11 dropped out during the study year, so results are based on 49 households in this area. South Africa: Urban 2 60 households in a township outside Cape Town; 15 households dropped out during the study year, so results are based on 45 households from this area. Half the urban sample was drawn from the township of Diepsloot, about a 45-minute car ride outside Johannesburg. This sample includes only two households that have PPP income per capita per day less than $2. Fifty-six percent of the able-bodied adults in this sample have regular jobs. The area was originally developed as a relocation area for residents of another flooded and overcrowded township. Diepsloot residents were ultimately promised Reconstruction and Development Programme homes supplied by the governments, but many were still waiting. Three-quarters of the sample lived in tiny one-room shacks.
GDP: A Brief but Affectionate History by Diane Coyle
Asian financial crisis, Berlin Wall, big-box store, Bretton Woods, BRICs, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, income inequality, income per capita, informal economy, John von Neumann, Kevin Kelly, Long Term Capital Management, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, purchasing power parity, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population
The economist Amartya Sen, who subsequently won the Nobel Memorial Prize, had electrified the world of development economics with the argument that famines had nothing to do with income and poverty; rather, they were caused when governments were not responsive to the needs of their people, and in particular when there were no newspapers or broadcasters with sufficient independence to challenge and criticize government decisions. Democracies did not suffer famines, at any level of GDP per capita.9 Sen went on to argue that although income per capita was important, it was not as complete a measure of people’s welfare as their capabilities—this would include income or command over resources but also variables such as health, education, women’s freedom, and access to key technologies such as electricity and roads.10 The HDI measures these separate indicators and combines them into a single ranking. This is published every year by the United Nations Development Program.
Ironically, those people who argue most strongly for using an alternative to GDP for the developed economies tend to be focused on income and poverty measures above all else when it comes to developing countries. The difference between GDP per capita and human development does matter for how you assess the efforts to assist developing countries, all those trillions of dollars in aid. The results in terms of GDP have been disappointing. The gap between incomes per capita of the world’s poorest and richest countries has soared in the past half century. But in many other ways—the indicators included in the HDI—there is good news. The gap between rich and poor countries in terms of life expectancy and infant mortality has narrowed significantly, despite the scourge of HIV/AIDS in sub-Saharan Africa. Access to education has improved substantially in poor countries.
Money Mischief: Episodes in Monetary History by Milton Friedman
Bretton Woods, British Empire, currency peg, double entry bookkeeping, fiat currency, financial innovation, floating exchange rates, full employment, German hyperinflation, income per capita, law of one price, oil shock, price anchoring, price stability, transaction costs
But wages both for farm and factory labour sank as economic conditions worsened, and suffering extended further and further" (p. 60). Still another example of a contemporary observation, though published much later, is Young (1971, pp. 208–11, 220–23). [back] *** * Such a low ratio was not reached in the United States until after the Civil War, by which time real income per capita in the United States was about ten times as large as estimated real income per capita in China in 1933. Such a low ratio was not reached in. France until 1952 (Saint Marc 1983, pp. 38–39)! [back] *** † Some percentages for underdeveloped countries for 1988, based on IMF estimates, are 60 for India, 62 for Syria and Mexico, 65 for Chad, 68 for Zaire and Nepal, 74 for Yemen Arab Republic, 78 for Central African Republic. [back] *** * The decline in the smaller total may be an overestimate because Rawski does not allow for a probable decline in the silver reserve held behind bank notes.
The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis by Stephen Leeb, Donna Leeb
Buckminster Fuller, diversified portfolio, fixed income, hydrogen economy, income per capita, index fund, mortgage debt, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit motive, reserve currency, rising living standards, Ronald Reagan, shareholder value, Silicon Valley, Vanguard fund, Yom Kippur War, zero-coupon bond
This point has been made frequently and cogently, in particular by the New York Times columnist Thomas Friedman, who has noted that the Saudis have used their oil revenues not to foster economic growth in their country but to keep their populace oppressed and in tow. Friedman’s arguments have been based in part on his personal observations, but there is ample hard data leading to the same conclusion. As figure 3b, “Declining Saudi GDP,” shows, income per capita in Saudi Arabia has been in a steady downtrend over the past decade. This has occurred despite the fact that the country has been receiving massive amounts of money—nearly $100 billion, or $4,500 per capita, a year—in oil revenues for very little effort. Given this tremendous influx of funds, it seems almost unimaginable that Saudi Arabia hasn’t managed to provide a vibrant economy for its citizens, and it is evidence of repression with a capital R.
But no matter how you measure it, China is the fastest-growing major economy in the world. This means that for a while to come China is likely to be the world’s leading economic engine, even more important than the U.S. China’s economic heft comes from the sheer size of its population, in contrast to the U.S., where it is a matter of population in conjunction with an elevated standard of living, or income per capita. On a per capita basis, income in China is modest by world standards. Most important for our argument, per capita oil consumption in China is currently just one-half or so of the world’s average. And it’s about one-tenth that of many modern industrialized economies, such as the U.S. Like other major world economies, China also is making a significant transition. But in China’s case, it’s not a transition from manufacturing to services, but from agriculture to manufacturing.
The Fair Trade Scandal: Marketing Poverty to Benefit the Rich by Ndongo Sylla
British Empire, carbon footprint, corporate social responsibility, David Ricardo: comparative advantage, deglobalization, Doha Development Round, Food sovereignty, global value chain, illegal immigration, income inequality, income per capita, invisible hand, Joseph Schumpeter, labour mobility, land reform, market fundamentalism, means of production, Mont Pelerin Society, Naomi Klein, non-tariff barriers, offshore financial centre, open economy, Plutocrats, plutocrats, price mechanism, purchasing power parity, Ronald Reagan, Scientific racism, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, transatlantic slave trade, trickle-down economics, Washington Consensus
In order to accommodate this heterogeneity, several classifications are available. Here I refer only to those that are the most widely used (see Table 1.1). The first approach, at once the most basic and most widespread, consists in classifying countries on the basis of geographical location. The second approach, as used by the World Bank, differentiates developing countries based on the gross national income per capita: upper middle-income countries (between $3,946 and $12,195 per capita), lower middle-income countries (between $996 and $3,945 per capita) and low-income countries ($995 per capita or less). The third approach, developed by UNCTAD, identifies groups of developing countries that are defined through their foreign trade structure or their economic dynamism: major petroleum exporters (those for which oil exports account for at least 50 per cent of export revenue); major manufactured goods exporters (those for which manufactured products account for at least 50 per cent of export revenue); emerging countries; newly industrialised countries (a group which includes first-generation and second-generation countries).
Yet, to realise how small the benefits from Fair Trade are, one can simply compare this export revenue to the number of workers in each 123 Sylla T02779 01 text 123 28/11/2013 13:04 the fair trade scandal case. We obtain an average of €415 for producers and €716 for wage workers.5 For all workers combined, we obtain on average €454 in annual revenue. When taking into account workers and their families, there would be, according to FLO, close to 6 million people who rely on Fairtrade.6 Based on this estimation, the annual average income per capita amounted to €74 in 2008. It goes without saying, obviously, that the purchasing power for this amount varies according to the context. Pronouncing any judgement on the benefits that one or the other might gain from such an amount becomes a delicate task. In spite of this obvious difficulty, there is no possible ambiguity on this subject. First of all, we should point out that these sums of €74 only represent 16 per cent of the average GDP per capita of LDCs.7 Second, we ought to point out that the averages calculated so far are the gross income – in other words, costs (of production, transport, packaging, etc.) were not deducted (see Table 5.1).8 Given how low they are, it is not random that these averages do not appear in the ‘Facts and figures’ section of the websites of some labelling initiatives.
3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yield management
Annual Growth Rate of Two Concepts of Income by Distributional Group, 1979 to 2011 Income Group Market Income Post-Tax Post-Transfer Income (1) (2) Top One Percent 3.82 4.05 81–99 Percentile 1.39 1.60 20–80 Percentile 0.46 1.05 1–20 Percentile 0.46 1.23 Average All Percentiles 1.16 1.48 Average 1–99 Percentile 0.87 1.28 Difference, All vs. 1–99 0.29 0.20 Difference, All vs. Median 0.70 0.43 Source: CBO, The Distribution of Household Income and Federal Taxes, 2011 When we consider the future of American growth, we care not just about growth of average income per capita, but also about growth of income per capita for the median American household. Figure 18–2 exhibits the differences between the annual growth rate of the average and bottom 90 percent for Piketty–Saez, as well as the differences between average and median growth for the census data and for the CBO data without and with the adjustments for taxes and transfers. Because the CBO data are superior to the other data sources, and because well-being depends on income after taxes and transfers, we take the right-hand bar in figure 18–2 as most relevant.6 It shows that the difference between average and median growth in the adjusted CBO data is 0.43 percent per year for 1979–2011.
Taking into account that by 1920 the electric light was ten times more powerful than a kerosene lamp, the same $20 would purchase 4.4 million candle hours per year. Filament incandescent bulbs cost about the same per lumen in 1990 as in 1920 in nominal terms, but in real terms, their cost was much lower, by another factor of eight. None of this decline in prices has been heretofore captured by official price indexes, and the consumer surplus captured by this decline in prices is one of many reasons to consider the growth of real income per capita during 1890–1940 substantially understated. Note that these price comparisons are all based on the quantity of light emitted by a device, so all the price declines are understated thanks to the improvement in the quality of light. All those improvements in quality—no more odors, no need to clean lamp chimneys, no more danger of fires, no more flickering—are completely missed not only by traditional measures of the cost of living, but also by Nordhaus’s creative attempts to link together the prices per lumen of candles, fuel lamps, and electric light bulbs.87 Only 3 percent of American homes had electric service in 1900.
Finally, the black line shows an even greater decline in the ratio of the quality-adjusted price to nominal disposable income per person, demonstrating that much of the rapid adoption of the automobile between 1910 and 1929 reflected a substitution response to a rapid decline in price relative to income. Figure 5–3. Prices of Selected Automobile Models, with or without Quality Adjustment, and Relative to Nominal Disposable Income per Capita, 1906–1940 Sources: See table 5–2. AUTOMOBILES AND PAVED ROADS: CHICKEN AND EGG The most important hindrance to the development of motor transport was the lack of paved roads. The revolutionary 1901 Mercedes, commonly called the “first modern automobile,” sold in the United States at the price of $12,450 in an era when the average annual income was less than $1,000, and it could cruise at a speed of fifty miles per hour, faster than the elapsed railroad times for 1900 shown in table 5–1.
Bourgeois Dignity: Why Economics Can't Explain the Modern World by Deirdre N. McCloskey
Admiral Zheng, agricultural Revolution, Albert Einstein, BRICs, British Empire, butterfly effect, Carmen Reinhart, clockwork universe, computer age, Corn Laws, dark matter, David Ricardo: comparative advantage, Donald Trump, Edward Lorenz: Chaos theory, European colonialism, experimental economics, financial innovation, Fractional reserve banking, full employment, George Akerlof, germ theory of disease, Gini coefficient, greed is good, Howard Zinn, income per capita, interchangeable parts, invention of agriculture, invention of air conditioning, invention of writing, invisible hand, Isaac Newton, James Watt: steam engine, John Maynard Keynes: technological unemployment, John Snow's cholera map, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, means of production, Naomi Klein, New Economic Geography, New Urbanism, purchasing power parity, rent-seeking, road to serfdom, Robert Gordon, Ronald Coase, Ronald Reagan, Scientific racism, Scramble for Africa, Shenzhen was a fishing village, Simon Kuznets, Slavoj Žižek, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, tulip mania, union organizing, Upton Sinclair, urban renewal, V2 rocket, very high income, working poor, World Values Survey, Yogi Berra
The figures were estimated by Angus Maddison in his amazing palace of numbers, The World Economy (2006), these particular numbers on p. 642. For "two centuries ago" I used the average of Maddison's world figures for 1700 and 1820. Economic historians agree on a factor of ten or so since the eighteenth century: for example, Easterlin 1995 (2004), p. 84. 3. The "bottom billion" is Paul Collier's phrase (Collier 2007). The Norwegian ratio to average entire-world gross national income per capita in 2006 (at purchasing power parity: adjusting for the cost of living) was 5.4 (according to World Bank 2008, pp. 8, 161). And relative to the average of low income countries by World-Bank definitions the ratio was 27, that is, $137 a day compared with the low-income average of $5 a day (World Bank 2008, p. 10). 4. Maddison 2006, p. 615. 5. Collier 2007, pp. 3, x. 6. Again the figures are at (U.S.A.) purchasing-power parity, from World Bank 2008. 7.
The French state imposed quality standards on textiles, and gave subsidies to enterprises it approved of, licensed some companies and refused licenses to others. Even so, France had a pretty big domestic market. Guillaume Daudin concluded that in the eighteenth century that “for all types of high value-to-weight goods, some French supply centers reached 25 million people or more. For all types of textile groups, some French supply centers reached 20 million people or more. Even taking into account differences in real, nominal and disposable income per capita, these supply centers had access to domestic markets that were at least as large as the whole of Britain. Differences in the size of foreign markets were too small to reverse that result.”7 That is, the size of the internal British market does not seem to explain Britain’s lead. In short, eighteenth-century foreign and domestic trade and their alleged economies of scale in Britain do not seem to be special. **** Many historians have noted that the very reason that Columbus sailed the ocean blue was to get access to what was already a great 182 playground of foreign trade by Arabs, Chinese, Japanese, Indians, Indonesians, Africans, namely, the Indian Ocean.
And what income there was from abroad was largely a matter of mutually advantageous trade having nothing to do with empire — Britain invested as much in places like the United States and Argentina as in comparable areas of the Empire, and there is no evidence in any case that returns to investment in the Empire were especially high.15 The British worried in 1776-1783 and in 1899-1902 and in 1947 about the loss of their various bits of empire. But is the average British person worse off now than when Britain ruled the waves? By no means. British income per head boomed after losing colonies in 1783 and 1947, and stagnated in 1902-1914 after expensively keeping the Boer Republics in the Empire. Nowadays, after the tragic loss of maps painted red, British real national income per capita is higher than ever, and is among the 217 very highest in the world — in 2007 a little bit above, adjusted to purchasing power parity, that of France, Germany, Italy; though a good deal below its former and terribly exploited colonies Hong Kong, Singapore, Ireland, and the United States. Did the acquisition of Empire, then, cause spurts in British growth? By no means. Indeed, as I said, at the climax of imperial pretension, in the 1890s and 1900s, holding sway to the east and west of Suez, the growth of British real income per head notably slowed.
airport security, anti-communist, Asian financial crisis, bank run, banking crisis, Bretton Woods, British Empire, call centre, clean water, colonial exploitation, colonial rule, Edward Glaeser, European colonialism, failed state, farmers can use mobile phones to check market prices, George Akerlof, Hernando de Soto, income inequality, income per capita, Indoor air pollution, invisible hand, Kenneth Rogoff, laissez-faire capitalism, land reform, land tenure, microcredit, moral hazard, Naomi Klein, purchasing power parity, randomized controlled trial, Ronald Reagan, Scramble for Africa, structural adjustment programs, The Fortune at the Bottom of the Pyramid, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, War on Poverty, Xiaogang Anhui farmers
Note that African growth over the previous ten years had been a respectable 2 percent up to about 1975 (with modest aid), contradicting the idea that Africa is always and everywhere condemned to low growth without aid. There is a negative association, but I don’t think the increase in aid caused the fall in growth. Rather, the fall in growth probably caused the increase in aid. But the surge of aid was not successful in reversing or halting the slide in growth of income per capita toward zero. Let us do more formal statistical testing. Long and inconclusive literature on aid and economic growth was produced in the 1960s, 1970s, and 1980s, which was hampered by the limited data availability and inconclusive debate about the mechanisms by which aid would affect growth. The possible reverse causality made conclusions difficult: if donors gave greater aid in response to slower growth, then interpreting how aid flow affected growth could be difficult.
The governor-general of India from 1828 to 1835 spoke of the “improvement” of India, “founding British greatness on Indian happiness.26 A British commentator on India concurred in 1854: “when the contrast between the influence of a Christian and a Heathen government is considered; when the knowledge of the wretchedness of the people forces us to reflect on the unspeakable blessings to millions that would follow the extension of British rule, it is not ambition but benevolence that dictates the desire for the whole country.27 The nineteenth-century economist John Stuart Mill saw the British empire as furnishing what sounds like a colonial combination of the Big Push and structural adjustment: “a better government: more complete security of property; moderate taxes; a more permanent…tenure of land…the introduction of foreign arts…and the introduction of foreign capital, which renders the increase of production no longer exclusively dependent on the thrift or providence of the inhabitants themselves.28 Refuting criticism that Manchester capitalists dictated imperial policy, Lord Palmerston said in 1863, “India was governed for India and…not for the Manchester people.29 In India, the British doubled the area under irrigation from 1891 to 1938, introduced a postal and telegraph system, and built forty thousand miles of railroad track.30 Railways had been part of India’s “development plan” since the 1820s, the key to “opening up” the country to commerce.31 The Indian civil servant Charles Trevelyan in 1853 had told a Commons committee that railways would be “the greatest missionary of all.32 The development efforts were not any more successful than today’s foreign aid or nation-building, however: Indian income per capita failed to rise from 1820 to 1870, grew at only 0.5 percent per annum from 1870 to 1913, then failed to grow again from 1913 to independence in 1947.33 In the American empire in the Philippines, American teachers and their Filipino successors imparted at least a rough education, raising literacy and making English the lingua franca in the ethnically fragmented islands. Americans also contributed dams and irrigation facilities, mines and timber concessions, roads, railways, and ports, legal reforms, a tax system, and currency reform.
We see in figure 32 (which has a logarithmic scale in which every unit increase means a doubling of income) that these variations are minor in the long run. Starting in 1870, the Japanese economy registered miraculous growth. It recovered quickly from the destruction of World War II to post even more miraculous growth. It became a full democracy after the evil militarist detour of the 1930s and 1940s. Today, income per capita is thirty-two times higher than what it was in 1870. And it did all this without the White Man’s Burden—the West never colonized Japan. Instead, Japan had homegrown Searchers. Fig. 32. Japan Per Capita Income, 1820–2001 The first reaction to Matthew Perry’s visits to Japan in 1853–1854 was “revere the Emperor; expel the barbarians.” But when a group of samurai rebels overthrew the shogun and restored power to the Meiji emperor in 1868, the new catchphrase became “Japanese spirit, Western learning.1 The young revolutionaries combined patriotism with pragmatism—they realized the West was ahead, and they wanted to borrow Western methods to catch up, while preserving Japanese institutions, culture, and independence.
affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, colonial rule, Daniel Kahneman / Amos Tversky, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, endowment effect, European colonialism, experimental economics, experimental subject, George Akerlof, income per capita, invention of the telephone, Jane Jacobs, John von Neumann, law of one price, Martin Wolf, mutually assured destruction, New Economic Geography, new economy, Plutocrats, plutocrats, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, spinning jenny, Steve Jobs, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, women in the workforce
The income of the richest countries today is around one hundred dollars per person per day. Subsistence income—that is, the income that most people have relied on for most of history—is about a dollar a day, a sum that will provide food, rudimentary shelter, and almost nothing else. The halfway point between today’s living standards in the United States and those of 1 million B.C. (or 100,000 B.C., or 10,000 B.C., since little changed) is as recent as 1880: Income per capita increased tenfold, to about ten dollars a day, in the entirety of the existence of humankind running up to A.D. 1880, and it increased another ten times in the 125 years since then. Remember that these figures do not even make allowances for the Nordhaus effect. Of course, we do not have any persuasive way of measuring income in prehistoric times. But we can be fairly sure that for most of human history, it was roughly zero.
An alternative way of raising revenue: Details of the fiscal regime before 1688 are from North and Weingast, “Constitutions and Commitment.” 9. A MILLION YEARS OF LOGIC Imagine compressing: For the chronology, I have relied on Eric Beinhocker’s summary in The Origins of Wealth (London: Random House, 2007) and encyclopedias. But economic growth didn’t simply: For the Stone Age, I am using population data from Kremer and assuming no appreciable increase in income per capita. Michael Kremer, “Population Growth and Technological Change: One Million B.C. to 1990,” Quarterly Journal of Economics 108, no. 3(1993): 681–716. For modern population growth, see U.S. Census Bureau, www.census.gov/ipc/www/idb. Data for after A.D. 1 are from Angus Maddison, the world’s foremost calculator of historical economic data, at www.ggdc.net/maddison/Historical_Statistics/ horizontal-file_10-2006.xls.
Oil Panic and the Global Crisis: Predictions and Myths by Steven M. Gorelick
California gold rush, carbon footprint, energy security, energy transition, flex fuel, income per capita, invention of the telephone, meta analysis, meta-analysis, North Sea oil, oil shale / tar sands, oil shock, peak oil, price stability, profit motive, purchasing power parity, RAND corporation, statistical model, Thomas Malthus
The concern is that when China and India improve their standards of living, their annual oil consumption will not remain at 2.2 and 0.9 barrels per person but will mirror the US annual value of 25.1 barrels per person.124 30 USA Canada Annual oil consumption in 2007 20 (barrels per person) Australia Spain Japan 10 China 0 Russia India 0 Italy Mexico Sweden France Denmark United Kingdom Germany Brazil Indonesia 20,000 40,000 60,000 Income in 2007 (per capita GDP in 2007 dollars) Figure 4.45 Oil consumption per capita versus income per capita in 2007 (2007$), based on gross domestic product (GDP) of countries shown. (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) Consider China. In terms of GDP, China’s 2007 per capita income was one-twenty-sixth (4 percent) that of the US (in 2007, estimated average annual income in China was $1,970 versus $46,300 in the US (2007$)),125 and its per capita oil use was less than one-tenth that of the US.
The US used less than half as much oil per GDP in 2007 as it did in 1975 (Figure 4.49). 30 Canada Annual oil consumption in 1980 20 (barrels per person) USA Sweden Denmark Australia Japan Russia 10 Spain France Germany Italy United Kingdom Mexico China Brazil 0 India 0 Indonesia 10,000 20,000 30,000 40,000 50,000 60,000 Income in 1980 (per capita GDP in 2007 dollars) Figure 4.46 Oil use per capita versus per capita income in 1980 (in 2007$).127 (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) 50 Trend 1980 Annual oil consumption (barrels per person) 40 30 USA 1980 USA 2007 20 Trend 2007 10 China 0 India 0 40,000 Income (per capita GDP in 2007 dollars) 20,000 60,000 Figure 4.47 Per capita oil use versus per capita income in 2007 in comparison to the trend in 1980 (both in 2007$). Intensity of oil use (the slope of the trend line) has diminished since 1980. (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) 150 Counter-Arguments to Imminent Global Oil Depletion Global oil-use intensity 1.0 (billion barrels per year per trillion 2007 dollars of GWP) 0.8 0.6 1950 1960 1970 1980 1990 2000 2010 Figure 4.48 World oil use per GWP over time.
The Price of Everything: And the Hidden Logic of Value by Eduardo Porter
Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, new economy, New Urbanism, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, women in the workforce, World Values Survey, Yom Kippur War, young professional
THE AMERICAN TRADE-OFF But we shouldn’t despair just yet. The treadmill of happiness is a metaphor too far. And Easterlin overstates his case. The evidence arrayed against the proposition that progress—economic or otherwise—can make us consistently happier is weaker than it appears. Economic progress can still do a lot for humankind. American happiness remains peculiarly impervious to progress. Between 1946 and 1991 income per capita in the United States rose by a factor of 2.5—ownership of consumer durables from TV sets to cars soared, educational attainment jumped, and life expectancy at birth climbed. Still, Americans’ average happiness measured by surveys fell slightly. The United States was one of only four industrialized countries—alongside Hungary, Portugal, and Canada—where life satisfaction fell between 2000 and 2006.
In the mid-1990s, their fertility rate was 7.6 children per woman. By contrast, the fertility rate of other Jews in Israel is about 2.3. In the United States, the most religious states tend to be the most fertile and the poorest. New Hampshire is probably the least God-fearing state in the Union: 21.4 percent of its population report being atheist or having no religious belief. It is relatively rich, with a median income per capita of $74,625 in 2007. And it had only forty-two births per one thousand women in 2006. In Mississippi, by contrast, there were sixty-two births per thousand. Mississippi is poor: its median family income was $44,769. And only 5.8 percent of Mississippians report no religion. Despite the wave of secularization experienced over the past hundred years, I suspect the world might be about to become more religious, not less.
The End of Growth by Jeff Rubin
Ayatollah Khomeini, Bakken shale, banking crisis, Berlin Wall, British Empire, call centre, carbon footprint, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, decarbonisation, deglobalization, energy security, eurozone crisis, Exxon Valdez, Fall of the Berlin Wall, fiat currency, flex fuel, full employment, ghettoisation, global supply chain, Hans Island, happiness index / gross national happiness, housing crisis, hydraulic fracturing, illegal immigration, income per capita, Jane Jacobs, labour mobility, McMansion, Monroe Doctrine, moral hazard, new economy, Occupy movement, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, quantitative easing, race to the bottom, reserve currency, Ronald Reagan, South China Sea, sovereign wealth fund, The Chicago School, The Death and Life of Great American Cities, Thomas Malthus, Thorstein Veblen, too big to fail, uranium enrichment, urban planning, urban sprawl, women in the workforce, working poor, Yom Kippur War
Faltering income growth is inconsistent with the world most Western consumers have come to know. But having less disposable income may not be as painful as you think. A growing body of research shows that consumer satisfaction hasn’t kept pace with increasing consumer expenditures. Similarly, other studies in OECD countries show that our sense of individual well-being lags behind increases in personal income growth. In the United States, for example, real income per capita has more than doubled since the Second World War. Despite increased wealth, however, studies find that Americans are no more satisfied than they were sixty-five years ago. In polls that gauge well-being, citizens in countries with less personal consumption, such as Denmark, consistently score higher than Americans. An international study on life satisfaction conducted by Gallup ranked the United States 19th, a disproportionately low standing in relation to its per capita income and consumption.
In the summer of 2011, half of Pakistan’s power-generating capacity was off line, because utilities couldn’t pay for fuel. Cities in Pakistan are routinely subjected to electricity outages that last upward of fourteen hours. In rural areas, the power rationing is even more extreme and blackouts can last even longer. Energy shortages have not only turned off the power for millions of Pakistanis, they’ve also shackled the country’s economic growth. Pakistan’s income per capita is increasing at its slowest rate since 1951, and now sits at a quarter of the pace enjoyed by neighboring India. Faced with mounting power outages, multinational firms are pulling out of the country and the economy is collapsing. And social and fiscal conditions will only get worse as Pakistan’s population continues to grow. People in Karachi may be able to live without air-conditioning and even cars, but they can’t go without food.
accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop, illegal immigration, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, Silicon Valley, South Sea Bubble, Steven Pinker, 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, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey
The “anti” camp argues that globalization has helped a few prosper but left behind the majority, leading to the greatest degree of inequality in history. Both hold some truth, depending on how you look at inequality. In particular, there is a distinction between inequality within countries and inequality between countries. Starting with the latter, and looking at average income per capita nation by nation, countries such as the United States and United Kingdom have pulled much further ahead of the poorest countries such as Zimbabwe and Niger. At the same time, there has been a huge rise in average income per capita in China and India such that they have narrowed the gap with the richest countries. This latter development means global inequality has decreased substantially, but inequality within nations has not.14 In general developing countries divide into sheep and goats—a group including India and China that have been gaining ground on the rich countries in average per capita incomes and a group concentrated in sub-Saharan Africa where this process (which economists term convergence) has not been taking place.
affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey
Specific recipes for success do not travel well. It is the broad vision behind them that needs emulation. These lessons were put to good use in the most astounding development success the world has ever known. Marching to Its Own Drum: China and Globalization The feat that China’s economy pulled off would have been difficult to imagine had it not happened in front of our eyes. Since 1978, income per capita in China has grown at an average rate of 8.3 percent per annum—a rate that implies a doubling of incomes every nine years. Thanks to this rapid economic growth, half a billion people were lifted out of extreme poverty.18 During the same period China transformed itself from near autarky to the most feared competitor on world markets. That this happened in a country with a complete lack of private property rights (until recently) and run by the Communist Party only deepens the mystery.
The SEZs generated incentives for export-oriented investments without pulling the rug from under state enterprises. What fueled China’s growth, along with these institutional innovations, was a dramatic productive transformation. The Chinese economy latched on to advanced, high-productivity products that no one would expect a poor, labor-abundant country like China to produce, let alone export. By the end of the 1990s, China’s export portfolio resembled that of a country with an income-per-capita level at least three times higher than China’s.22 This was the result not of natural, market-led processes but of a determined push by the Chinese government. Low labor costs did help China’s export drive, but they don’t tell the whole story. In areas such as consumer electronics and auto parts China made stupendous productivity gains, catching up with countries at much higher levels of income.
Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business by John Mackey, Rajendra Sisodia, Bill George
Berlin Wall, Buckminster Fuller, business process, carbon footprint, collective bargaining, corporate governance, corporate social responsibility, crony capitalism, cross-subsidies, en.wikipedia.org, Fall of the Berlin Wall, fear of failure, Flynn Effect, income per capita, invisible hand, Jeff Bezos, job satisfaction, lone genius, Mahatma Gandhi, microcredit, Occupy movement, profit maximization, Ralph Waldo Emerson, shareholder value, six sigma, Steve Jobs, Steven Pinker, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, too big to fail, union organizing, women in the workforce
It has enabled humankind to progress at a rate unprecedented in all of history. Consider these facts: Just 200 years ago, 85 percent of the world’s population lived in extreme poverty (defined as less than $1 a day); that number is now only about 16 percent.1 Free-enterprise capitalism has created prosperity not just for a few, but for billions of people everywhere. As figure 1-1 shows, average income per capita globally has increased 1,000 percent since 1800.2 It has increased 1,600 percent in developed countries. Japan’s income per capita has increased by 3,500 percent since 1700. Adjusting for affordability and quality improvements, the standard of living of ordinary Americans has increased 10,000 percent since 1800!3 Perhaps most startling, the gross domestic product (GDP) of South Korea has grown 260-fold since 1960, transforming it from one of the poorest countries in the world to one of the richest and most advanced.4 Over tens of thousands of years, the human population grew very slowly and declined frequently as huge epidemics such as the plague and influenza claimed millions of lives.
Creating Unequal Futures?: Rethinking Poverty, Inequality and Disadvantage by Ruth Fincher, Peter Saunders
barriers to entry, ending welfare as we know it, financial independence, full employment, Gini coefficient, income inequality, income per capita, labour market flexibility, labour mobility, 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, 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
TABLES 2.1 Relationship between poverty and social exclusion 2.2 Income inequality in OECD countries, late 1980s 2.3 Income inequality in countries in LIS database, mid-1980s 2.4 Comparison of estimates of poverty in Australia from LIS studies 2.5 Alternative estimates of relative low income in developed economies in the early 1990s 3.1 Articles on poverty and welfare in international news: 1 July–30 September 1998 3.2 Articles on poverty and welfare in domestic news: 1 July–30 September, 1998 4.1 Child poverty rates: relative poverty line 4.2 Child poverty rates: ‘real poverty line’ 4.3 Children aged 0–4 years and 5–14 years to 2006 4.4 Living circumstances of children, 1992 and 1996 4.5 Labour force status of parents with children aged under 15 years 4.6 Access and participation indicators for low socioeconomic status group, 1991–95, age group 15–24 4.7 18- to 19-year-old school leavers engaged in marginalising and non-marginalising activities, May 1996 4.8 Characteristics of 19-year-olds in 1994 and 1995 who have been consistently engaged in marginalising activities from age 16 years 5.1 Head count measures of poverty as measured by the per cent of households and income units with income below various percentages of the Australian median income, 1994–95 5.2 Multi-dimensional nature of indigenous poverty, 1994 5.3 Factors potentially correlated with poverty among indigenous households, 1994 6.1 Five-yearly population growth rate, Cairns, Kelsey, Australia, 1981–86 6.2 Dwelling structure, Cairns, Kelsey, Australia, 1996 6.3 Housing tenure, Cairns, Kelsey, Australia, 1996 6.4 Age profile, Kelsey, Cairns, Australia, 1996 6.5 Total weekly household income, Cairns, Kelsey and Australia, 1996 52 58 59 60 62 79 81 103 104 105 106 110 113 118 120 145 147 150 164 165 166 166 167 xii PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xii FIGURES AND TABLES 7.1 Comparison between static and dynamic accounts of the labour market, Australia, mid-1990s 7.2 Proportion of dual wage-earning households by wage levels, Australia 1988–89 7.3 Occupation of spouse for various categories of wage-earning household reference persons, Australia 1988–89 7.4 Occupational composition of households 7.5 Access to training for salesworkers, labourers and plant and machine operators, Australia 1993 7.6 Overview of low-wage firms in Australia, 1995–96 7.7 Characteristics of low-wage firms in Australia, 1995–96 205 210 211 212 218 218 219 xiii PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xiii Abbreviations ABBREVIATIONS ABC ABR ABS ACA ACIRRT ACOSS ACTU ADAM AFR ALP ATSIC AWIRS AWOTE BBC BCA BFS CDC CDEP CNN DEETYA EITC ESCAP FNQ GDP Australian Broadcasting Commission Aboriginals Benefit Reserve Australian Bureau of Statistics ‘A Current Affair’ Australian Centre for Industrial Relations Research and Training Australian Council of Social Service Australian Council of Trade Unions Agreements Database and Monitor Australian Financial Review Australian Labor Party Aboriginal and Torres Strait Islander Commission Australian Workplace Industrial Relations Survey Average Weekly Ordinary Time Earnings British Broadcasting Corporation Business Council of Australia Business Funding Scheme Commercial Development Corporation Community Development Employment Projects Cable News Network Department of Employment, Education, Training and Youth Affairs earned income tax credit Economic and Social Commission for Asia and the Pacific Far North Queensland Gross Domestic Product xiv PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xiv ABBREVIATIONS HDI HDIPC IBIP ILC IMF LIS MIRE NATSIS OECD PPPs PR RMI SMH UN UNICEF Human Development Index Household Disposable Income Per Capita Indigenous Business Incentives Program Indigenous Land Corporation International Monetary Fund Luxembourg Income Study Mission Recherche National Aboriginal and Torres Strait Islander Survey Organisation for Economic Co-operation and Development Purchasing Power Parties public relations Revenu minimum d’insertion Sydney Morning Herald United Nations United Nations International Children’s Emergency Fund xv PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xv This page intentionally left blank PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xvi 1 The complex contexts of Australian inequality Ruth Fincher and Peter Saunders CREATING UNEQUAL FUTURES THE COMPLEX CONTEXTS OF AUSTRALIAN INEQUALITY The eminent economist and commentator, John Kenneth Galbraith, recently identified persistent inequality in the distribution of income (and urban poverty in particular) as a major piece of ‘unfinished business’ at the end of the twentieth century (Galbraith 1999).
This assumption was justified on the basis that it produced a standard ‘so austere as, we believe, to make it unchallengeable. No one can seriously argue that those we define as poor are not so’ (Henderson, Harcourt and Harper 1970, quoted in Saunders 1994). Subsequent updating, first according to movements in average weekly earnings, but since the early 1980s in line with Household Disposable Income Per Capita (HDIPC) from the National Accounts, means that the Henderson line has evolved into a purely relative measure, currently around 60 per cent of median income. 5 This does not mean that all choices are equally valid—there are specific equivalence scales, for example, that differ markedly from the consensus of this research. In contrast, the comprehensiveness of the income measure is of fundamental importance. 6 The de-commodification scores attempt to measure variables, such as the prohibitiveness of eligibility conditions, the strength of 67 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 67 CREATING UNEQUAL FUTURES?
Limits to Growth: The 30-Year Update by Donella H. Meadows, Jörgen Randers, Dennis L. Meadows
agricultural Revolution, Buckminster Fuller, clean water, Climatic Research Unit, conceptual framework, dematerialisation, demographic transition, financial independence, game design, income per capita, informal economy, means of production, new economy, purchasing power parity, Ralph Waldo Emerson, Ronald Reagan, University of East Anglia, urban sprawl, Whole Earth Review
Figure 2-7 shows, for example, the correlation between per capita income (measured as the gross national income, or GNI,8 per person per year) and birth rates in various countries of the world. Clearly there is a strong relationship between high incomes and low birth rates. Just as clearly, especially at low incomes, there are striking exceptions. China, for example, has anomalously low birth rates for its level of income. Some Middle Eastern and African countries have anomalously high birth rates for theirs. FIGURE 2-7 Birth Rates and Gross National Income per Capita in 2001 As a society becomes wealthier, the birth rate of its people tends to decline. The poorest nations experience birth rates from 20 to more than 50 births per 1,000 people per year. None of the richest nations has a birth rate above 20 per 1,000 per year. (Source: PRB; World Bank.) The factors believed to be most directly important in lowering birth rates are not so much the size or wealth of the economy, but the extent to which economic improvement actually touches the lives of all families, and especially the lives of women.
United Kingdom Office for National Statistics (ONS), National Statistics Online: Birth Statistics: Births and patterns of family building England and Wales (FM1), http: / / www.statistics.gov.uk/ STATBASE / Product. asp?vlnk= 5 768. Statistical Yearbook of the Republic of China (Taipei: Directorate-General of Budget, Accounting & Statistics, Executive Yuan, Republic of China, 1995). Figure 2-7 Birth Rates and Gross National income per Capita in 2001 World Population Data Sheet 2001 (Washington, DC: Population Reference Bureau, 200i)http://www.prb.org. World Bank, "World Development Indicators (WDI) Database," http: / / www.worldbank.org/ data / dataquery.html (accessed 1/ 15 / 04). Figure 2-8 Flows of Physical Capital in the Economy of World3 Figure 2-9 U.S. Gross National Income by Sector U.S. Dept. of Commerce, Bureau of Economic Analysis Interactive Access to National Income and Product Accounts Tables, http: / /www.bea.doc.gov/bea/dn/nipaweb/.
More Guns, Less Crime: Understanding Crime and Gun-Control Laws by John R. Lott
affirmative action, Columbine, crack epidemic, Donald Trump, Edward Glaeser, gun show loophole, income per capita, More Guns, Less Crime, statistical model, the medium is the message, transaction costs
I know from personal communication that some critics (such as Black and Nagin) did indeed examine numerous diﬀerent specifications.15 A more systematic, if time-consuming, approach is to try all possible combinations of these so-called control variables—factors which may be interesting but are included so that we can be sure of the importance of some other “focus” variables.16 In my regressions to explain crime rates there are at least nine groups of control variables—population density, waiting periods and background checks, penalties for using guns in the commission of a crime, per-capita income, per-capita unemployment insurance payments, per-capita income maintenance payments, retirement payments per person for those over sixty-five, state poverty rate, and state unemployment rate.17 To run all possible combinations of these nine groups of control variables requires 512 regressions. The regressions for murder rates also require a tenth control variable for the death-penalty execution rate and thus results in 1,024 combinations of control variables.
As with the right-to-carry laws, simple before-and-after trends were included to measure the changing impact of these rules over time. Let us return to the main focus, guns and crime. To examine the impact of right-to-carry laws, the following list of variables has been accounted for: city population, arrest rate by type of crime, unemployment rate, percentage of families headed by females, family poverty rate, median family income, per-capita income, percentage of the population living below poverty, percentage of the population that is white, percentage that is black, percentage that is Hispanic, percentage that is female, percentage that is less than five years of age, percentage that is between five and seventeen, percentage that is between eighteen and twenty-five, percentage that is between twenty-six and sixty-four, percentage that is sixty-five and older, median population age, percentage of the population over age twenty-five with a high school diploma, percentage of the population over age twenty-five with a college degree, and other types of gun-control laws (waiting periods, background checks, and additional penalties for using guns in the commission of a crime).
So do increases in either gun magazine sales or survey data precede changes in murder? To answer this I added the sales of the diﬀerent gun magazines into the crime regressions reported earlier in this book. This allows us to account for the impact that other factors have on murder rates. These include the arrest rate for murder, the death penalty execution rate, the population density, the unemployment rate, the poverty rate, per capita income, per capita welfare payments, and detailed demographic information on the share of the population by age, sex, and race.6 The results are reported in table A7.1. If more sales of a gun magazine lead in a year or two to higher murder rates, it appears to occur only for the fourth largest magazine, Guns and Ammo, where a 1 percent increase in magazine sales increases murder rates by 0.24 percent the following year and by 0.17 percent two years later.
The Atlantic and Its Enemies: A History of the Cold War by Norman Stone
affirmative action, anti-communist, Ayatollah Khomeini, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, British Empire, central bank independence, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, European colonialism, facts on the ground, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, illegal immigration, income per capita, interchangeable parts, Jane Jacobs, Joseph Schumpeter, labour mobility, land reform, means of production, Mikhail Gorbachev, new economy, North Sea oil, oil shock, Ponzi scheme, price mechanism, price stability, RAND corporation, rent-seeking, Ronald Reagan, Silicon Valley, special drawing rights, Steve Jobs, strikebreaker, The Death and Life of Great American Cities, trade liberalization, trickle-down economics, V2 rocket, War on Poverty, Washington Consensus, Yom Kippur War, éminence grise
Bohley, Bärbel Böhm, Karl Bokassa, Jean-Bédel Bolivia Bologna Bolsheviks: and bureaucracy and China Civil War Congress of the Peoples of the East (1920) lies of Revolution and science Bond, James (fictional character) Bonn Borinage Borland Software Corporation Borodin, Mikhail Boston Bourgès-Maunoury, Maurice BP (British Petroleum) Bradlee, Ben Braestrup, Peter Brandt, Willy: background and character elected Chancellor foreign minister mayor of West Berlin memoirs Nobel Peace Prize Ostpolitik resignation Braşov Bratislava author’s imprisonment in Braudel, Fernand Braun, Otto Brazil Breakfast at Tiffany’s (film) Brecht, Bertolt Brentano, Lujo Brescia Brest-Litovsk Bretherton, Russell Bretton Woods conference (1944) Bretton Woods system end of Triffin Dilemma Brezhnev, Leonid: and Afghanistan and arms limitiation talks background and character and de Gaulle death and East Germany and Helsinki conference (1975) and Johnson and Middle East nationalities policy and Orthodox Church ‘our common European home’ and Poland political reforms and ‘Prague Spring’ and Soviet satellite states and Stalin succeeds Khrushchev and Vietnam Brioni island Britain: agriculture atomic bombs automobile industry balance of payments banking system and Chinesewar civil service class system coal industry Communist Party council housing crime cultural institutions currency controls and Cyprus defence expenditure Department of Trade and Industry Depression (1930s) devaluation of sterling divorce rates economic and political decline education system (see also universities) and EEC/EU and Egypt emigration and establishment of NATO and European Exchange Rate Mechanism (ERM) Falklands War (1982) family breakdown film industry financial deregulation fishing industry general elections: (1945); (1950); (1951); (1959); (1970); (1974); (1979); (1983) gold reserves and GreekWar IMF bail-out (1976) import surcharges income per capita Industrial Revolution industrial wastelands inflation intelligentsia and Iran Lend-Lease aid and Malaya and Marshall Plan middle classes miners’ strike (1984-5) monarchy National Health Service nationalization of industry navy North Sea oil nuclear weapons oil imports Poll Tax post-war debt post-war shortages and rationing privatizations productivity levels property prices public transport race riots scientific and technological developments Second World War shipbuilding steel industry strikes Suez crisis taxation television textile industry trade unions underclass unemployment universities Welfare State Westland affair (‘Westgate’; 1986) winter weather of 1946-7 withdrawal of forces from Gulf (1971) zone of occupation in Germany British Airways British Commonwealth British Empire: American antipathy towards decline of decolonization revitalization attempts trade British Leyland (automobile manufacturer) British Petroleum (BP) British Steel British Telecom Brittan, Sir Samuel Bronfman, Edgar Brown, Andrew Brucan, Silviu Bruce, David Bruges Brussels Brussels Exhibition (1958) Brussels Pact (1948) Bryan, William Jennings Brzezinski, Zbigniew Bucak, Mehmet Celal Bucharest Buck, Pearl S.
Turin University Turing, Alan Türkeş, Alparslan Turkey: Alevi population ANAP (‘Motherland’ Party) banking system Christian minorities coal industry consumer goods production corruption and Cyprus Democratic Party education system (see also universities) and EEC/EU elections: (1950); (1974); (1977); (1983); (1986); (1989); (1991) emigration establishment and success of Atatürk’s republic GAP project Greek population ‘guest workers’ in Germany and human rights hydro-electricity inflation infrastructure Inönü’s government intelligentsia Islam Jews in Justice Party and Korean War Kurdish population language and Marshall Plan Marxism military coup (1960) military coup (1971) military coup (‘generals’ coup’; 1980) Nationalist Party NATO membership Özal’s economic reforms Özal’s premiership and presidency peasantry political instability of multi-party period population growth refugees in relations with USSR Republican Party Second World War secularism Soviet territorial claims steel industry taxation trade unions universities US aid US bases war with Greece (1919-22) Turner Broadcasting Tutzing U2 spy planes UB (Polish secret police) Uganda Uglich Ukraine: birth rate Communist takeover demolition of churches Khrushchev as Party head nationalism Russian population transfer of Crimea to Uniates Ukrainians: in Poland in Soviet Politburo Ulbricht, Walter unemployment: Britain Chile ‘downsizing’ France Nazi Germany Phillips Curve reunified Germany USA Uniates (Orthodox Church) ‘Uniscan’ (proposed European free-trade area) Unitarians United Nations: and Afghanistan and Chilean coup (1973) and Cuban crisis of 1962 and Cyprus development of bureaucracy establishment of as forum for ‘world opinion’ investigation of German reunification and Korean War ‘non-aligned’ states and Palestine ‘peacekeeping’ role Security Council and Suez crisis and Yom Kippur War United Nations Economic Council for Latin America United Nations Human Rights Commission United Nations Relief and Rehabilitation Administration (UNRRA) United Workers’ Party (Hungarian) universities: Belgium Britain Chile France Germany Italy Poland Romania student demonstrations student exchanges student loans Turkey USA USSR UNRRA (United Nations Relief and Rehabilitation Administration) Untergang, Der (Downfall; film) uranium Uriage, administrators’ school Urrutia, Manuel USA: and Afghanistan ‘Alliance for Progress’ (plan for Latin America) armaments industry atomic bombs automobile industry balance of payments banking system Bay of Pigs invasion (1961) business management methods and Chile and Chinesewar Civil Rights Act (1964) coal production coin-clipping Communists conservatism Constitution consumer goods production crime Cuban crisis of 1962 and Cyprus Declaration of Independence defence expenditure Democratic Party Depression (1930s) and division of Germany education system (see also universities) and Egypt and establishment of NATO and European Defence Community European resistance to cultural domination and Falklands War (1982) family breakdown farm subsidies fast food Federal Reserve feminism film industry financial deregulation and German economic miracle gold reserves grain exports to USSR Great Society and Greekwar and Haiti health care ICBMs (intercontinental ballistic missiles) immigration income per capita inflation intelligentsia interest rates and Iran Iran-Contra affair and Israel Jews in Korean War Lend-Lease aid to Britain McCarthyism mass culture missionaries in China motorways National Security Council (NSC) New Deal New Frontier nuclear weapons development oil industry and Pakistan personal debt and Poland post-war occupation of Japan poverty Presidential elections: (1952); (1960); (1964); (1968); (1972); (1976); (1980); (1984); (1988) productivity public transport ‘pursuit of happiness’ racial problem refugee groups Republican Party ‘rust belt’ SALT (Strategic Arms Limitation Talks) and Saudi Arabia Savings and Loans crisis Second World War space programme steel production Strategic Defense Initiative (‘Star Wars’) strikes ‘supplyside’ economics Supreme Court taxation technological developments trade unions and Turkey underclass unemployment universities urban development and decay visa system Watergate scandal welfare system westward migration see also CIA; Marshall Plan; Vietnam War USSR: Afghanistan war (1979-89) Agitation and Propaganda department alcoholism American grain imports and Angola anti-alcohol campaign atomic bombs and Austria Berlin blockade (1948-9) birth rate border conflicts with China business management methods censorship and Chile and Chinesewar collapse of communism collectivization policy commissariat for culture coup of August 1991 Cuban crisis of 1962 cultural institutions deportations disintegration dissidents ‘Doctors’ plot’ (1952) and East Germany economic stagnation and Egypt and Ethiopia Five Year Plans friendship treaty with China (1950) German invasion (1941) glasnost and human rights and Hungarian uprising of 1956 ICBMs (intercontinental ballistic missiles) inflation information technology institutchiki intelligentsia internment camps invasion of Czechoslovakia and Iran Jews in and Korean War life expectancy rates and Marshall Plan Molotov Plan nationalism navy New Economic Policy non-Russian populations nuclear power nuclear weapons development oil and gas production ‘Optimal Functioning’ planning system ‘our common European home’ ‘peaceful coexistence’ doctrine peasantry perestroyka and Poland power struggle following Stalin’s death and ‘Prague Spring’ refugees in Turkey relations with West Germany religious persecution reparations demands and Romania SALT (Strategic Arms Limitation Talks) scientific and technological developments Second World War shortages and starvation Siberian gas pipeline Sino-Soviet split slave labour space programme Spetsnaz (‘special forces’ troops) stage managment of revolutions of 1989 Stalin’s purges steel industry strikes television and Turkey underground theatre universities and Vietnam Western studies of Soviet economy winter war with Finland (1939-40) see also Communist Party of Soviet Union; KGB; Red Army; RussianWar; Russian Revolution Ussuri river Ustinov, Dmitry Uzbekistan Uzbeks Uzunada island Vaizey, John, Baron Valparaíso Van, Turkey Vance, Cyrus Vandenberg Resolution (1948) Vann, John Vatican Papal Guard Vatican(ecumenical council) Venezuela, oil production Venice Venice conference (1956) venture capital Verheugen, Günter Verlaine, Paul Vernadsky, George Vernadsky, Vladimir Vial (Chilean conglomerate) Vichy France Vienna: airport bombing (1985) Atomic Energy Commission author’s studies in espionage in Karl-Marx Hof bombardment (1934) Kraus on OPEC headquarters post-war rebuilding State Opera Taylor on Vienna conference (1961) Vienna OPEC conference (1973) Vienna school of economics Vietnam: agricultual collectivization ‘boat people’ Buddhists Catholics Chinese minority population Communist Party famine French rule France-Indochina war independence movement industrialization invasion of Cambodia (1978) Japanese invasion (1941) partition peasantry war with China see also North Vietnam; South Vietnam Vietnam War (1959-75): American conscription American public opposition Ap Bac, battle of (1963) bombing campaigns ceasefire CIA involvement civilian casualty totals corruption European response to fall of Saigon (1975) guerrilla warfare Gulf of Tonkin incident (1964) Ho Chi Minh Trail Khe Sanh, battle of (1968) Lam Son operation (1971) media coverage military casualty totals My Lai massacre (1968) numbers of American troops deployed origins of Paris peace talks ‘peace initiatives’ Phoenix ‘pacification’ programme Tet offensive (1968) use of Agent Orange use of helicopters ‘Vietnamization’ Vilna Vinde, Pierre Vladikavkaz Volcker, Paul Volga Famine (1921-2) Volga river Volhynia Volkswagen (automobile manufacturer) Volobuyev, P.
Werfel, Franz Werfel, Roman Werner, Pierre West Berlin: access agreements with East birth rate Brandt as mayor isolation of student population subsidies symbolism of war damage Weizsäcker as mayor see also Berlin Wall West Germany (Federal Republic of Germany): agriculture automobile industry balance of payments birth rates Bundesbank (Federal Bank) Catholic Church Christian Democrats (CDU) coal production Communist Party conservatism constitution contraceptivedevelopment cultural institutions economic miracle education system (see also universities) elections: (1965); (1969); (1972) establishment of West German state and European Atomic Community and European Economic Community exports fiftieth anniversary floating of currency Franco-German reconciliation Free Democrats (FDP) Grand Coalition (SPD-CDU) Green Party ‘guest workers’ and Helsinki conference (1975) immigration from East Germany income per capita inflation intelligentsia introduction of Deutsche Mark and Kurdish nationalism ‘Little’ coalition (SPD-FDP) missile bases NATO membership neo-Nazism and nuclear weapons Ostpolitik peasantry political institutions privatizations productivity levels protectionism rearmament Red Army Faction refugee leagues regional policy relations with Poland relations with USSR reunification shipbuilding Social Democrats (SPD) Soviet gas supplies Sozialmarktwirtschaft steel production taxation television terrorism trade unions traffic policy treaties with East Germany (1971-2) Turkish immigrants universities welfare system Western European Union Westland affair (‘Westgate’; 1986) Westmoreland, William Weyand, Frederick.
The Rational Optimist: How Prosperity Evolves by Matt Ridley
23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, Plutocrats, plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, wage slave, working poor, working-age population, Y2K, Yogi Berra
Later in this book I will argue that the wrong kind of government can be a disastrous long-term impoverishing factor – the Ming empire is my prime example. Zimbabwe today needs better rules before it can have better markets. But note here that a country’s economic freedom predicts its prosperity better than its mineral wealth, education system or infrastructure do. In a sample of 127 countries, the sixty-three with the higher economic freedom had more than four times the income per capita and nearly twice the growth rate of the countries that did not. A few years ago the World Bank published a study of ‘intangible wealth’ – trying to measure the value of education, the rule of law and other such nebulous things. It simply added up the natural capital (resources, land) and produced capital (tools, property) and measured what was left over to explain each country’s per capita income.
Abbasids 161, 178 Abelard, Peter 358 aborigines (Australian): division of labour 62, 63, 76; farming 127; technological regress 78–84; trade 90–91, 92 abortion, compulsory 203 Abu Hureyra 127 Acapulco 184 accounting systems 160, 168, 196 Accra 189 Acemoglu, Daron 321 Ache people 61 Acheulean tools 48–9, 50, 275, 373 Achuar people 87 acid rain 280, 281, 304–6, 329, 339 acidification of oceans 280, 340–41 Adams, Henry 289 Aden 177 Adenauer, Konrad 289 Aegean sea 168, 170–71 Afghanistan 14, 208–9, 315, 353 Africa: agriculture 145, 148, 154–5, 326; AIDS epidemic 14, 307–8, 316, 319, 320, 322; colonialism 319–20, 321–2; demographic transition 210, 316, 328; economic growth 315, 326–8, 332, 347; international aid 317–19, 322, 328; lawlessness 293, 320; life expectancy 14, 316, 422; per capita income 14, 315, 317, 320; poverty 314–17, 319–20, 322, 325–6, 327–8; prehistoric 52–5, 65–6, 83, 123, 350; property rights 320, 321, 323–5; trade 187–8, 320, 322–3, 325, 326, 327–8; see also individual countries African-Americans 108 agricultural employment: decline in 42–3; hardships of 13, 219–20, 285–6 agriculture: early development of 122–30, 135–9, 352, 387, 388; fertilisers, development of 135, 139–41, 142, 146, 147, 337; genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358; hybrids, development of 141–2, 146, 153; and trade 123, 126, 127–33, 159, 163–4; and urbanisation 128, 158–9, 163–4, 215; see also farming; food supply Agta people 61–2 aid, international 28, 141, 154, 203, 317–19, 328 AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 AIG (insurance corporation) 115 air conditioning 17 air pollution 304–5 air travel: costs of 24, 37, 252, 253; speed of 253 aircraft 257, 261, 264, 266 Akkadian empire 161, 164–5 Al-Ghazali 357 Al-Khwarizmi, Muhammad ibn Musa 115 Al-Qaeda 296 Albania 187 Alcoa (corporation) 24 Alexander the Great 169, 171 Alexander, Gary 295 Alexandria 171, 175, 270 Algeria 53, 246, 345 alphabet, invention of 166, 396 Alps 122, 178 altruism 93–4, 97 aluminium 24, 213, 237, 303 Alyawarre aborigines 63 Amalfi 178 Amazon (corporation) 21, 259, 261 Amazonia 76, 138, 145, 250–51 amber 71, 92 ambition 45–6, 351 Ames, Bruce 298–9 Amish people 211 ammonia 140, 146 Amsterdam 115–16, 169, 259, 368 Amsterdam Exchange Bank 251 Anabaptists 211 Anatolia 127, 128, 164, 165, 166, 167 Ancoats, Manchester 214 Andaman islands 66–7, 78 Andes 123, 140, 163 Andrew, Deroi Kwesi 189 Angkor Wat 330 Angola 316 animal welfare 104, 145–6 animals: conservation 324, 339; extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9; humans’ differences from other 1, 2–4, 6, 56, 58, 64 Annan, Kofi 337 Antarctica 334 anti-corporatism 110–111, 114 anti-slavery 104, 105–6, 214 antibiotics 6, 258, 271, 307 antimony 213 ants 75–6, 87–8, 192 apartheid 108 apes 56–7, 59–60, 62, 65, 88; see also chimpanzees; orang-utans ‘apocaholics’ 295, 301 Appalachia 239 Apple (corporation) 260, 261, 268 Aquinas, St Thomas 102 Arabia 66, 159, 176, 179 Arabian Sea 174 Arabs 89, 175, 176–7, 180, 209, 357 Aral Sea 240 Arcadia Biosciences (company) 31–2 Archimedes 256 Arctic Ocean 125, 130, 185, 334, 338–9 Argentina 15, 186, 187 Arikamedu 174 Aristotle 115, 250 Arizona 152, 246, 345 Arkwright, Sir Richard 227 Armenians 89 Arnolfini, Giovanni 179 art: cave paintings 2, 68, 73, 76–7; and commerce 115–16; symbolism in 136; as unique human trait 4 Ashur, Assyria 165 Asimov, Isaac 354 Asoka the Great 172–3 aspirin 258 asset price inflation 24, 30 Assyrian empire 161, 165–6, 167 asteroid impacts, risk of 280, 333 astronomy 221, 270, 357 Athabasca tar sands, Canada 238 Athens 115, 170, 171 Atlantic Monthly 293 Atlantic Ocean 125, 170 Attica 171 Augustus, Roman emperor 174 Augustus the Strong, Elector of Saxony 184–5 Australia: climate 127, 241, 300, 334; prehistoric 66, 67, 69–70, 127; trade 187; see also aborigines (Australian); Tasmania Austria 132 Ausubel, Jesse 239, 346, 409 automobiles see cars axes: copper 123, 131, 132, 136, 271; stone 2, 5, 48–9, 50, 51, 71, 81, 90–91, 92, 118–19, 271 Babylon 21, 161, 166, 240, 254, 289 Bacon, Francis 255 bacteria: cross fertilisation 271; and pest control 151; resistance to antibiotics 6, 258, 271, 307; symbiosis 75 Baghdad 115, 177, 178, 357 Baines, Edward 227 Baird, John Logie 38 baking 124, 130 ‘balance of nature’, belief in 250–51 Balazs, Etienne 183 bald eagles 17, 299 Bali 66 Baltic Sea 71, 128–9, 180, 185 Bamako 326 bananas 92, 126, 149, 154, 392 Bangladesh 204, 210, 426 Banks, Sir Joseph 221 Barigaza (Bharuch) 174 barley 32, 124, 151 barrels 176 bartering vii, 56–60, 65, 84, 91–2, 163, 356 Basalla, George 272 Basra 177 battery farming 104, 145–6 BBC 295 beads 53, 70, 71, 73, 81, 93, 162 beef 186, 224, 308; see also cattle bees, killer 280 Beijing 17 Beinhocker, Eric 112 Bell, Alexander Graham 38 Bengal famine (1943) 141 benzene 257 Berlin 299 Berlin, Sir Isaiah 288 Bernard of Clairvaux, St 358 Berners-Lee, Sir Tim 38, 273 Berra, Yogi 354 Besant, Annie 208 Bhutan 25–6 Bible 138, 168, 396 bicycles 248–9, 263, 269–70 bin Laden, Osama 110 biofuels 149, 236, 238, 239, 240–43, 246, 300, 339, 343, 344, 346, 393 Bird, Isabella 197–8 birds: effects of pollution on 17, 299; killed by wind turbines 239, 409; nests 51; sexual differences 64; songbirds 55; see also individual species bireme galleys 167 Birmingham 223 birth control see contraception birth rates: declining 204–212; and food supply 192, 208–9; and industrialisation 202; measurement of 205, 403; population control policies 202–4, 208; pre-industrial societies 135, 137; and television 234; and wealth 200–201, 204, 205–6, 209, 211, 212; see also population growth Black Death 181, 195–6, 197, 380 Black Sea 71, 128, 129, 170, 176, 180 blogging 257 Blombos Cave, South Africa 53, 83 blood circulation, discovery of 258 Blunt, John 29 boat-building 167, 168, 177; see also canoes; ship-building Boers 321, 322 Bohemia 222 Bolivia 315, 324 Bolsheviks 324 Borlaug, Norman 142–3, 146 Borneo 339 Bosch, Carl 140, 412 Botswana 15, 316, 320–22, 326 Bottger, Johann Friedrich 184–5 Boudreaux, Don 21, 214 Boulton, Matthew 221, 256, 413–14 bows and arrows 43, 62, 70, 82, 137, 251, 274 Boxgrove hominids 48, 50 Boyer, Stanley 222, 405 Boyle, Robert 256 Bradlaugh, Charles 208 brain size 3–4, 48–9, 51, 55 Bramah, Joseph 221 Branc, Slovakia 136 Brand, Stewart 154, 189, 205 Brando, Marlon 110 brass 223 Brazil 38, 87, 123, 190, 240, 242, 315, 358 bread 38, 124, 140, 158, 224, 286, 392 bridges, suspension 283 Brin, Sergey 221, 405 Britain: affluence 12, 16, 224–5, 236, 296–7; birth rates 195, 200–201, 206, 208, 227; British exceptionalism 200–202, 221–2; climate change policy 330–31; consumer prices 24, 224–5, 227, 228; copyright system 267; enclosure acts 226, 323, 406; energy use 22, 231–2, 232–3, 342–3, 368, 430; ‘glorious revolution’ (1688) 223; income equality 18–19, 218; industrial revolution 201–2, 216–17, 220–32, 255–6, 258–9; life expectancy 15, 17–18; National Food Service 268; National Health Service 111, 261; parliamentary reform 107; per capita income 16, 218, 227, 285, 404–5; productivity 112; property rights 223, 226, 323–4; state benefits 16; tariffs 185–6, 186–7, 223; see also England; Scotland; Wales British Empire 161, 322 bronze 164, 168, 177 Brosnan, Sarah 59 Brown, Lester 147–8, 281–2, 300–301 Brown, Louise 306 Bruges 179 Brunel, Sir Marc 221 Buddhism 2, 172, 357 Buddle, John 412 Buffett, Warren 106, 268 Bulgaria 320 Burkina Faso 154 Burma 66, 67, 209, 335 Bush, George W. 161 Butler, Eamonn 105, 249 Byblos 167 Byzantium 176, 177, 179 cabbages 298 ‘Caesarism’ 289 Cairo 323 Calcutta 190, 315 Calico Act (1722) 226 Califano, Joseph 202–3 California: agriculture 150; Chumash people 62, 92–3; development of credit card 251, 254; Mojave Desert 69; Silicon Valley 221–2, 224, 257, 258, 259, 268 Cambodia 14, 315 camels 135, 176–7 camera pills 270–71 Cameroon 57 Campania 174, 175 Canaanites 166, 396 Canada 141, 169, 202, 238, 304, 305 Canal du Midi 251 cancer 14, 18, 293, 297–9, 302, 308, 329 Cannae, battle of 170 canning 186, 258 canoes 66, 67, 79, 82 capitalism 23–4, 101–4, 110, 115, 133, 214, 258–62, 291–2, 311; see also corporations; markets ‘Captain Swing’ 283 capuchin monkeys 96–7, 375 Caral, Peru 162–3 carbon dioxide emissions 340–47; absorption of 217; and agriculture 130, 337–8; and biofuels 242; costs of 331; and economic growth 315, 332; and fossil fuels 237, 315; and local sourcing of goods 41–2; taxes 346, 356 Cardwell’s Law 411 Caribbean see West Indies Carnegie, Andrew 23 Carney, Thomas 173 carnivorism 51, 60, 62, 68–9, 147, 156, 241, 376 carrots 153, 156 cars: biofuel for 240, 241; costs of 24, 252; efficiency of 252; future production 282, 355; hybrid 245; invention of 189, 270, 271; pollution from 17, 242; sport-utility vehicles 45 The Rational Optimist 424 Carson, Rachel 152, 297–8 Carter, Jimmy 238 Carthage 169, 170, 173 Cartwright, Edmund 221, 263 Castro, Fidel 187 Catalhoyuk 127 catallaxy 56, 355–9 Catholicism 105, 208, 306 cattle 122, 132, 145, 147, 148, 150, 197, 321, 336; see also beef Caucasus 237 cave paintings 2, 68, 73, 76–7 Cavendish, Henry 221 cement 283 central heating 16, 37 cereals 124–5, 125–6, 130–31, 143–4, 146–7, 158, 163; global harvests 121 Champlain, Samuel 138–9 charcoal 131, 216, 229, 230, 346 charitable giving 92, 105, 106, 295, 318–19, 356 Charles V: king of Spain 30–31; Holy Roman Emperor 184 Charles, Prince of Wales 291, 332 Chauvet Cave, France 2, 68, 73, 76–7 Chernobyl 283, 308, 345, 421 Chicago World Fair (1893) 346 chickens 122–3, 145–6, 147, 148, 408 chickpeas 125 Childe, Gordon 162 children: child labour 104, 188, 218, 220, 292; child molestation 104; childcare 2, 62–3; childhood diseases 310; mortality rates 14, 15, 16, 208–9, 284 Chile 187 chimpanzees 2, 3, 4, 6, 29, 59–60, 87, 88, 97 China: agriculture 123, 126, 148, 152, 220; birth rate 15, 200–201; coal supplies 229–30; Cultural Revolution 14, 201; diet 241; economic growth and industrialisation 17, 109, 180–81, 187, 201, 219, 220, 281–2, 300, 322, 324–5, 328, 358; economic and technological regression 180, 181–2, 193, 229–30, 255, 321, 357–8; energy use 245; income equality 19; innovations 181, 251; life expectancy 15; Longshan culture 397; Maoism 16, 187, 296, 311; Ming empire 117, 181–4, 260, 311; per capita income 15, 180; prehistoric 68, 123, 126; serfdom 181–2; Shang dynasty 166; Song dynasty 180–81; trade 172, 174–5, 177, 179, 183–4, 187, 225, 228 chlorine 296 cholera 40, 310 Chomsky, Noam 291 Christianity 172, 357, 358, 396; see also Catholicism; Church of England; monasteries Christmas 134 Chumash people 62, 92–3 Church of England 194 Churchill, Sir Winston 288 Cicero 173 Cilicia 173 Cisco Systems (corporation) 268 Cistercians 215 civil rights movement 108, 109 Clairvaux Abbey 215 Clark, Colin 146, 227 Clark, Gregory 193, 201, 401, 404 Clarke, Arthur C. 354 climate change 328–47, 426–30; costs of mitigation measures 330–32, 333, 338, 342–4; death rates associated with 335–7; and ecological dynamism 250, 329–30, 335, 339; and economic growth 315, 331–3, 341–3, 347; effects on ecosystems 338–41; and food supply 337–8; and fossil fuels 243, 314, 342, 346, 426; historic 194, 195, 329, 334, 426–7; pessimism about 280, 281, 314–15, 328–9; prehistoric 54, 65, 125, 127, 130, 160, 329, 334, 339, 340, 352; scepticism about 111, 329–30, 426; solutions to 8, 315, 345–7 Clinton, Bill 341 Clippinger, John 99 cloth trade 75, 159, 160, 165, 172, 177, 180, 194, 196, 225, 225–9, 232 clothes: Britain 224, 225, 227; early homo sapiens 71, 73; Inuits 64; metal age 122; Tasmanian natives 78 clothing prices 20, 34, 37, 40, 227, 228 ‘Club of Rome’ 302–3 coal: and economic take-off 201, 202, 213, 214, 216–17; and generation of electricity 233, 237, 239, 240, 304, 344; and industrialisation 229–33, 236, 407; prices 230, 232, 237; supplies 302–3 coal mining 132, 230–31, 237, 239, 257, 343 Coalbrookdale 407 Cobb, Kelly 35 Coca-Cola (corporation) 111, 263 coffee 298–9, 392 Cohen, Mark 135 Cold War 299 collective intelligence 5, 38–9, 46, 56, 83, 350–52, 355–6 Collier, Paul 315, 316–17 colonialism 160, 161, 187, 321–2; see also imperialism Colorado 324 Columbus, Christopher 91, 184 combine harvesters 158, 392 combined-cycle turbines 244, 410 commerce see trade Commoner, Barry 402 communism 106, 336 Compaq (corporation) 259 computer games 273, 292 computers 2, 3, 5, 211, 252, 260, 261, 263–4, 268, 282; computing power costs 24; information storage capacities 276; silicon chips 245, 263, 267–8; software 99, 257, 272–3, 304, 356; Y2K bug 280, 290, 341; see also internet Confucius 2, 181 Congo 14–15, 28, 307, 316 Congreve, Sir William 221 Connelly, Matthew 204 conservation, nature 324, 339; see also wilderness land, expansion of conservatism 109 Constantinople 175, 177 consumer spending, average 39–40 containerisation 113, 253, 386 continental drift 274 contraception 208, 210; coerced 203–4 Cook, Captain James 91 cooking 4, 29, 38, 50, 51, 52, 55, 60–61, 64, 163, 337 copper 122, 123, 131–2, 160, 162, 164, 165, 168, 213, 223, 302, 303 copyright 264, 266–7, 326 coral reefs 250, 339–40, 429–30 Cordoba 177 corn laws 185–6 Cornwall 132 corporations 110–116, 355; research and development budgets 260, 262, 269 Cosmides, Leda 57 Costa Rica 338 cotton 37, 108, 149, 151–2, 162, 163, 171, 172, 202, 225–9, 230, 407; calico 225–6, 232; spinning and weaving 184, 214, 217, 219–20, 227–8, 232, 256, 258, 263, 283 Coughlin, Father Charles 109 Craigslist (website) 273, 356 Crapper, Thomas 38 Crathis river 171 creationists 358 creative destruction 114, 356 credit cards 251, 254 credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411 Cree Indians 62 Crete 167, 169 Crichton, Michael 254 Crick, Francis 412 crime: cyber-crime 99–100, 357; falling rates 106, 201; false convictions 19–20; homicide 14, 20, 85, 88, 106, 118, 201; illegal drugs 106, 186; pessimism about 288, 293 Crimea 171 crocodiles, deaths by 40 Crompton, Samuel 227 Crookes, Sir William 140, 141 cruelty 104, 106, 138–9, 146 crusades 358 Cuba 187, 299 ‘curse of resources’ 31, 320 cyber-crime 99–100, 357 Cyprus 132, 148, 167, 168 Cyrus the Great 169 Dalkon Shield (contraceptive device) 203 Dalton, John 221 Damascus 127 Damerham, Wiltshire 194 Danube, River 128, 132 Darby, Abraham 407 Darfur 302, 353 Dark Ages 164, 175–6, 215 Darwin, Charles 77, 81, 91–2, 105, 116, 350, 415 Darwin, Erasmus 256 Darwinism 5 Davy, Sir Humphry 221, 412 Dawkins, Richard 5, 51 DDT (pesticide) 297–8, 299 de Geer, Louis 184 de Soto, Hernando 323, 324, 325 de Waal, Frans 88 Dean, James 110 decimal system 173, 178 deer 32–3, 122 deflation 24 Defoe, Daniel 224 deforestation, predictions of 304–5, 339 Delhi 189 Dell (corporation) 268 Dell, Michael 264 demographic transition 206–212, 316, 328, 402 Denmark 200, 344, 366; National Academy of Sciences 280 Dennett, Dan 350 dentistry 45 depression (psychological) 8, 156 depressions (economic) 3, 31, 32, 186–7, 192, 289; see also economic crashes deserts, expanding 28, 280 Detroit 315, 355 Dhaka 189 diabetes 156, 274, 306 Diamond, Jared 293–4, 380 diamonds 320, 322 Dickens, Charles 220 Diesel, Rudolf 146 Digital Equipment Corporation 260, 282 digital photography 114, 386 Dimawe, battle of (1852) 321 Diocletian, Roman emperor 175, 184 Diodorus 169 diprotodons 69 discount merchandising 112–14 division of labour: Adam Smith on vii, 80; and catallaxy 56; and fragmented government 172; in insects 75–6, 87–8; and population growth 211; by sex 61–5, 136, 376; and specialisation 7, 33, 38, 46, 61, 76–7, 175; among strangers and enemies 87–9; and trust 100; and urbanisation 164 DNA: forensic use 20; gene transfer 153 dogs 43, 56, 61, 84, 125 Doll, Richard 298 Dolphin, HMS 169 dolphins 3, 87 Domesday Book 215 Doriot, Georges 261 ‘dot-communism’ 356 Dover Castle 197 droughts: modern 241, 300, 334; prehistoric 54, 65, 334 drug crime 106, 186 DuPont (corporation) 31 dyes 167, 225, 257, 263 dynamos 217, 233–4, 271–2, 289 dysentery 157, 353 eagles 17, 239, 299, 409 East India Company 225, 226 Easter Island 380 Easterbrook, Greg 294, 300, 370 Easterlin, Richard 26 Easterly, William 318, 411 eBay (corporation) 21, 99, 100, 114, 115 Ebla, Syria 164 Ebola virus 307 economic booms 9, 29, 216 economic crashes 7–8, 9, 193; credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411; see also depressions (economic) ecosystems, dynamism of 250–51, 303, 410 Ecuador 87 Edinburgh Review 285 Edison, Thomas 234, 246, 272, 412 education: Africa 320; Japan 16; measuring value of 117; and population control 209, 210; universal access 106, 235; women and 209, 210 Edwards, Robert 306 Eemian interglacial period 52–3 Egypt: ancient 161, 166, 167, 170, 171, 192, 193, 197, 270, 334; Mamluk 182; modern 142, 154, 192, 301, 323; prehistoric 44, 45, 125, 126; Roman 174, 175, 178 Ehrenreich, Barbara 291 Ehrlich, Anne 203, 301–2 Ehrlich, Paul 143, 190, 203, 207, 301–2, 303 electric motors 271–2, 283 electricity 233–5, 236, 237, 245–6, 337, 343–4; costs 23; dynamos 217, 233–4, 271–2, 289 elephants 51, 54, 69, 303, 321 Eliot, T.S. 289 email 292 emigration 199–200, 202; see also migrations empathy 94–8 empires, trading 160–61; see also imperialism enclosure acts 226, 323, 406 endocrine disruptors 293 Engels, Friedrich 107–8, 136 England: agriculture 194–6, 215; infant mortality 284; law 118; life expectancy 13, 284; medieval population 194–7; per capita income 196; scientific revolution 255–7; trade 75, 89, 104, 106, 118, 169, 194; see also Britain Enron (corporation) 29, 111, 385 Erie, Lake 17 Erie Canal 139, 283 ethanol 240–42, 300 Ethiopia 14, 316, 319; prehistoric 52, 53, 129 eugenics 288, 329 Euphrates river 127, 158, 161, 167, 177 evolution, biological 5, 6, 7, 49–50, 55–6, 75, 271, 350 Ewald, Paul 309 exchange: etiquette and ritual of 133–4; and innovation 71–2, 76, 119, 167–8, 251, 269–74; and pre-industrial economies 133–4; and property rights 324–5; and rule of law 116, 117–18; and sexual division of labour 65; and specialisation 7, 10, 33, 35, 37–8, 46, 56, 58, 75, 90, 132–3, 350–52, 355, 358–9; and trust 98–100, 103, 104; as unique human trait 56–60; and virtue 100–104; see also bartering; markets; trade executions 104 extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9 Exxon (corporation) 111, 115 eye colour 129 Ezekiel 167, 168 Facebook (website) 262, 268, 356 factories 160, 214, 218, 219–20, 221, 223, 256, 258–9, 284–5 falcons 299 family formation 195, 209–210, 211, 227 famines: modern 141, 143, 154, 199, 203, 302; pessimism about 280, 281, 284, 290, 300–302, 314; pre-industrial 45, 139, 195, 197 Faraday, Michael 271–2 Fargione, Joseph 242 farming: battery 104, 145–6; free-range 146, 308; intensive 143–9; organic 147, 149–52, 393; slash-and-burn 87, 129, 130; subsidies 188, 328; subsistence 87, 138, 175–6, 189, 192, 199–200; see also agriculture; food supply fascism 289 Fauchart, Emmanuelle 264 fax machines 252 Feering, Essex 195 Fehr, Ernst 94–6 female emancipation 107, 108–9, 209 feminism 109 Ferguson, Adam 1 Ferguson, Niall 85 Fermat’s Last Theorem 275 fermenting 130, 241 Ferranti, Sebastian de 234 Fertile Crescent 126, 251 fertilisation, in-vitro 306 fertilisers 32, 129, 135, 139–41, 142, 143, 145, 146, 147, 148, 149–50, 152, 155, 200, 337 Fibonacci 178 figs 125, 129 filariasis 310 Finland 15, 35, 261 fire, invention of 4, 50, 51, 52, 60, 274 First World War 289, 309 fish, sex-change 280, 293 fish farming 148, 155 fishing 62, 63–4, 71, 78–9, 81–2, 125, 127, 129, 136, 159, 162, 163, 327 Fishman, Charles 113 Flanders 179, 181, 194 flight, powered 257, 261, 264, 266 Flinders Island 81, 84 floods 128, 250, 329, 331, 334, 335, 426 Florence 89, 103, 115, 178 flowers, cut 42, 327, 328 flu, pandemic 28, 145–6, 308–310 Flynn, James 19 Fontaine, Hippolyte 233–4 food aid 28, 141, 154, 203 food miles 41–2, 353, 392; see also local sourcing food preservation 139, 145, 258 food prices 20, 22, 23, 34, 39, 40, 42, 240, 241, 300 food processing 29–30, 60–61, 145; see also baking; cooking food retailing 36, 112, 148, 268; see also supermarkets food sharing 56, 59–60, 64 food supply: and biofuels 240–41, 243, 300; and climate change 337–8; and industrialisation 139, 201–2; pessimism about 280, 281, 284, 290, 300–302; and population growth 139, 141, 143–4, 146–7, 192, 206, 208–9, 300–302 Ford, Ford Maddox 188 Ford, Henry 24, 114, 189, 271 Forester, Jay 303 forests, fears of depletion 304–5, 339 fossil fuels: and ecology 237, 240, 304, 315, 342–3, 345–6; fertilisers 143, 150, 155, 237; and industrialisation 214, 216–17, 229–33, 352; and labour saving 236–7; and productivity 244–5; supplies 216–17, 229–30, 237–8, 245, 302–3; see also charcoal; coal; gas, natural; oil; peat Fourier analysis 283 FOXP2 (gene) 55, 375 fragmentation, political 170–73, 180–81, 184, 185 France: capital markets 259; famine 197; infant mortality 16; population growth 206, 208; revolution 324; trade 184, 186, 222 Franco, Francisco 186 Frank, Robert 95–6 Franken, Al 291 Franklin, Benjamin 107, 256 Franks 176 Fray Bentos 186 free choice 27–8, 107–110, 291–2 free-range farming 146, 308 French Revolution 324 Friedel, Robert 224 Friedman, Milton 111 Friend, Sir Richard 257 Friends of the Earth 154, 155 Fry, Art 261 Fuji (corporation) 114, 386 Fujian, China 89, 183 fur trade 169, 180 futurology 354–5 Gadir (Cadiz) 168–9, 170 Gaelic language 129 Galbraith, J.K. 16 Galdikas, Birute 60 Galilee, Sea of 124 Galileo 115 Gandhi, Indira 203, 204 Gandhi, Sanjay 203–4 Ganges, River 147, 172 gas, natural 235, 236, 237, 240, 302, 303, 337 Gates, Bill 106, 264, 268 GDP per capita (world), increases in 11, 349 Genentech (corporation) 259, 405 General Electric Company 261, 264 General Motors (corporation) 115 generosity 86–7, 94–5 genetic research 54, 151, 265, 306–7, 310, 356, 358 genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358 Genghis Khan 182 Genoa 89, 169, 178, 180 genome sequencing 265 geothermal power 246, 344 Germany: Great Depression (1930s) 31; industrialisation 202; infant mortality 16; Nazism 109, 289; population growth 202; predicted deforestation 304, 305; prehistoric 70, 138; trade 179–80, 187; see also West Germany Ghana 187, 189, 316, 326 Gibraltar, Strait of 180 gift giving 87, 92, 133, 134 Gilbert, Daniel 4 Gilgamesh, King 159 Ginsberg, Allen 110 Gintis, Herb 86 Gladstone, William 237 Glaeser, Edward 190 Glasgow 315 glass 166, 174–5, 177, 259 glass fibre 303 Global Humanitarian Forum 337 global warming see climate change globalisation 290, 358 ‘glorious revolution’ (1688) 223 GM (genetically modified) crops 28, 148, 151–6, 283, 358 goats 122, 126, 144, 145, 197, 320 Goethe, Johann von 104 Goklany, Indur 143–4, 341, 426 gold 165, 177, 303 golden eagles 239, 409 golden toads 338 Goldsmith, Edward 291 Google (corporation) 21, 100, 114, 259, 260, 268, 355 Gore, Al 233, 291 Goths 175 Gott, Richard 294 Gramme, Zénobe Théophile 233–4 Grantham, George 401 gravity, discovery of 258 Gray, John 285, 291 Great Barrier Reef 250 Greece: ancient 115, 128, 161, 170–71, 173–4; modern 186 greenhouse gases 152, 155, 242, 329; see also carbon dioxide emissions Greenland: ice cap 125, 130, 313, 334, 339, 426; Inuits 61; Norse 380 Greenpeace 154, 155, 281, 385 Grottes des Pigeons, Morocco 53 Groves, Leslie 412 Growth is Good for the Poor (World Bank study) 317 guano 139–40, 302 Guatemala 209 Gujarat 162, 174 Gujaratis 89 Gustavus Adolphus, King of Sweden 184 Gutenberg, Johann 184, 253 Guth, Werner 86 habeas corpus 358 Haber, Fritz 140, 412 Hadza people 61, 63, 87 Haiti 14, 301, 315 Halaf people 130 Hall, Charles Martin 24 Halley, Edmond 256 HANPP (human appropriation of net primary productivity) number 144–5 Hanseatic merchants 89, 179–80, 196 Hansen, James 426 hanta virus 307 happiness 25–8, 191 Harappa, Indus valley 161–2 Hardin, Garrett 203 harems 136 Hargreaves, James 227, 256 Harlem, Holland 215–16 Harper’s Weekly 23 Harvey, William 256 hay 214–15, 216, 239, 408–9 Hayek, Friedrich 5, 19, 38, 56, 250, 280, 355 heart disease 18, 156, 295 ‘hedonic treadmill’ 27 height, average human 16, 18 Heller, Michael 265–6 Hellespont 128, 170 Henrich, Joe 77, 377 Henry II, King of England 118 Henry, Joseph 271, 272 Henry, William 221 Heraclitus 251 herbicides 145, 152, 153–4 herding 130–31 Hero of Alexandria 270 Herschel, Sir William 221 Hesiod 292 Hippel, Eric von 273 hippies 26, 110, 175 Hiroshima 283 Hitler, Adolf 16, 184, 296 Hittites 166, 167 HIV/AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 Hiwi people 61 Hobbes, Thomas 96 Hock, Dee 254 Hohle Fels, Germany 70 Holdren, John 203, 207, 311 Holland: agriculture 153; golden age 185, 201, 215–16, 223; horticulture 42; industrialisation 215–16, 226; innovations 264; trade 31, 89, 104, 106, 185, 223, 328 Holy Roman Empire 178, 265–6 Homer 2, 102, 168 Homestead Act (1862) 323 homicide 14, 20, 85, 88, 106, 118, 201 Homo erectus 49, 68, 71, 373 Homo heidelbergensis 49, 50–52, 373 Homo sapiens, emergence of 52–3 Hong Kong 31, 83, 158, 169, 187, 219, 328 Hongwu, Chinese emperor 183 Hood, Leroy 222, 405 Hooke, Robert 256 horses 48, 68, 69, 129, 140, 197, 215, 282, 408–9; shoes and harnesses 176, 215 housing costs 20, 25, 34, 39–40, 234, 368 Hoxha, Enver 187 Hrdy, Sarah 88 Huber, Peter 244, 344 Hueper, Wilhelm 297 Huguenots 184 Huia (birds) 64 human sacrifice 104 Hume, David 96, 103, 104, 170 humour 2 Hunan 177 Hungary 222 Huns 175 hunter-gatherers: consumption and production patterns 29–30, 123; division of labour 61–5, 76, 136; famines 45, 139; limitations of band size 77; modern societies 66–7, 76, 77–8, 80, 87, 135–6, 136–7; nomadism 130; nostalgia for life of 43–5, 135, 137; permanent settlements 128; processing of food 29, 38, 61; technological regress 78–84; trade 72, 77–8, 81, 92–3, 123, 136–7; violence and warfare 27, 44–5, 136, 137 hunting 61–4, 68–70, 125–6, 130, 339 Huron Indians 138–9 hurricanes 329, 335, 337 Hurst, Blake 152 Hutterites 211 Huxley, Aldous 289, 354 hydroelectric power 236, 239, 343, 344, 409 hyenas 43, 50, 54 IBM (corporation) 260, 261, 282 Ibn Khaldun 182 ice ages 52, 127, 329, 335, 340, 388 ice caps 125, 130, 313, 314, 334, 338–9, 426 Iceland 324 Ichaboe island 140 ‘idea-agora’ 262 imitation 4, 5, 6, 50, 77, 80 imperialism 104, 162, 164, 166, 172, 182, 319–20, 357; see also colonialism in-vitro fertilisation 306 income, per capita: and economic freedom 117; equality 18–19, 218–19; increases in 14, 15, 16–17, 218–19, 285, 331–2 India: agriculture 126, 129, 141, 142–3, 147, 151–2, 156, 301; British rule 160; caste system 173; economic growth 187, 358; energy use 245; income equality 19; infant mortality 16; innovations 172–3, 251; Mauryan empire 172–3, 201, 357; mobile phone use 327; population growth 202, 203–4; prehistoric 66, 126, 129; trade 174–5, 175, 179, 186–7, 225, 228, 232; urbanisation 189 Indian Ocean 174, 175 Indonesia 66, 87, 89, 177 Indus river 167 Indus valley civilisation 161–2, 164 industrialisation: and capital investment 258–9; and end of slavery 197, 214; and food production 139, 201–2; and fossil fuels 214, 216–17, 229–33, 352; and innovation 38, 220–24, 227–8; and living standards 217–20, 226–7, 258; pessimistic views of 42, 102–3, 217–18, 284–5; and productivity 227–8, 230–31, 232, 235–6, 244–5; and science 255–8; and trade 224–6; and urbanisation 188, 226–7 infant mortality 14, 15, 16, 208–9, 284 inflation 24, 30, 169, 289 influenza see flu, pandemic Ingleheart, Ronald 27 innovation: and capital investment 258–62, 269; and exchange 71–2, 76, 119, 167–8, 251, 269–74; and government spending programmes 267–9; increasing returns of 248–55, 274–7, 346, 354, 358–9; and industrialisation 38, 220–24, 227–8; and intellectual property 262–7, 269; limitlessness 374–7; and population growth 252; and productivity 227–8; and science 255–8, 412; and specialisation 56, 71–2, 73–4, 76–7, 119, 251; and trade 168, 171 insect-resistant crops 154–5 insecticides 151–2 insects 75–6, 87–8 insulin 156, 274 Intel (corporation) 263, 268 intellectual property 262–7; see also copyright; patents intensive farming 143–9 Intergovernmental Panel on Climate Change (IPCC) 330, 331, 332, 333–4, 338, 342, 347, 425, 426, 427, 428 internal combustion engine 140, 146, 244 International Planned Parenthood Foundation 203 internet: access to 253, 268; blogging 257; and charitable giving 318–19, 356; cyber-crime 99–100, 357; development of 263, 268, 270, 356; email 292; free exchange 105, 272–3, 356; packet switching 263; problem-solving applications 261–2; search engines 245, 256, 267; shopping 37, 99, 107, 261; social networking websites 262, 268, 356; speed of 252, 253; trust among users 99–100, 356; World Wide Web 273, 356 Inuits 44, 61, 64, 126 IPCC (Intergovernmental Panel on Climate Change) 330, 331, 332, 333–4, 338, 342, 347, 349, 425, 426, 427, 428 IQ levels 19 Iran 162 Iraq 31, 158, 161 Ireland 24, 129, 199, 227 iron 166, 167, 169, 181, 184, 223, 229, 230, 302, 407 irradiated food 150–51 irrigation 136, 147–8, 159, 161, 163, 198, 242, 281 Isaac, Glyn 64 Isaiah 102, 168 Islam 176, 357, 358 Israel 53, 69, 124, 148 Israelites 168 Italy: birth rate 208; city states 178–9, 181, 196; fascism 289; Greek settlements 170–71, 173–4; infant mortality 15; innovations 196, 251; mercantilism 89, 103, 178–9, 180, 196; prehistoric 69 ivory 70, 71, 73, 167 Jacob, François 7 Jacobs, Jane 128 Jamaica 149 James II, King 223 Japan: agriculture 197–8; birth rates 212; dictatorship 109; economic development 103, 322, 332; economic and technological regression 193, 197–9, 202; education 16; happiness 27; industrialisation 219; life expectancy 17, 31; trade 31, 183, 184, 187, 197 Jarawa tribe 67 Java 187 jealousy 2, 351 Jebel Sahaba cemeteries, Egypt 44, 45 Jefferson, Thomas 247, 249, 269 Jenner, Edward 221 Jensen, Robert 327 Jericho 127, 138 Jevons, Stanley 213, 237, 245 Jews 89, 108, 177–8, 184 Jigme Singye Wangchuck, King of Bhutan 25–6 Jobs, Steve 221, 264, 405 John, King of England 118 Johnson, Lyndon 202–3 Jones, Rhys 79 Jordan 148, 167 Jordan river 127 Joyce, James 289 justice 19–20, 116, 320, 358 Kalahari desert 44, 61, 76 Kalkadoon aborigines 91 Kanesh, Anatolia 165 Kangaroo Island 81 kangaroos 62, 63, 69–70, 84, 127 Kant, Immanuel 96 Kaplan, Robert 293 Kay, John 184, 227 Kazakhstan 206 Kealey, Terence 172, 255, 411 Kelly, Kevin 356 Kelvin, William Thomson, 1st Baron 412 Kenya 42, 87, 155, 209, 316, 326, 336, 353 Kerala 327 Kerouac, Jack 110 Khoisan people 54, 61, 62, 67, 116, 321 Kim Il Sung 187 King, Gregory 218 Kingdon, Jonathan 67 Kinneret, Lake 124 Klasies River 83 Klein, Naomi 291 Kleiner Perkins Caufield & Byers (venture capitalists) 259 knowledge, increasing returns of 248–50, 274–7 Kodak (corporation) 114, 386 Kohler, Hans-Peter 212 Korea 184, 197, 300; see also North Korea; South Korea Kuhn, Steven 64, 69 kula (exchange system) 134 !
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, demographic transition, Deng Xiaoping, failed state, Fall of the Berlin Wall, Gini coefficient, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, low skilled workers, low-wage service sector, Malacca Straits, microcredit, Network effects, new economy, New Urbanism, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, women in the workforce, working-age population
In a study comparing the wages for migrant workers in the United States to what they could have earned at home, the average migrant worker (the mean across forty-two countries) would make more than five times as much in the United States than at home.24 Some of the individual country wage ratios are presented in table 7.1. Even the most conservative estimate of the welfare gain to a moderately skilled worker in the median country of their sampling who moves to the United States is $10,000 (PPP adjusted) per worker, per year—which is double the average income per capita in the developing world.25 TABLE 7.1 ESTIMATES OF WAGE RATIOS FOR MIGRANT WORKERS IN THE U.S. (COMPARING HOME WAGES WITH U.S. WAGES). Source: Michael A. Clemens, Claudio E. Montenegro, and Lant Pritchett. 2009. “The Place Premium: Wage Differences for Identical Workers across the U.S. Border,” Harvard Kennedy School Faculty Research Working Paper Series, RWP 09-004. This table presents model 6 in table 1.
Southern European and East Asian countries saw emigration initially rise with per capita incomes and then gradually fall as rising wages reduced migration incentives. These countries transitioned from being primarily source countries to become migration destinations. In this section, we are concerned with the first part of this process, or what Timothy J. Hatton and Jeffrey G. Williamson call the “emigration life cycle”: Country-specific emigration life cycles across the long nineteenth century make it clear that real wage or income per capita gaps will not by themselves explain emigration: during the course of modern economic growth in Europe, country emigration rates rose steeply at first from very low levels, after which the rise began to slow down as the emigration rates climbed to a peak, and subsequently they fell. This life cycle stylized fact has emerged from study after study, both for aggregate time series as country emigration rates and for regional emigration rates within countries.26 People in poor, agrarian countries generally do not move in large numbers, so the rising rate of emigration follows their emergence from what Hatton and Williamson call “the poverty trap” of low wages and low mobility.
The Great Surge: The Ascent of the Developing World by Steven Radelet
Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global supply chain, income inequality, income per capita, invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor
American political scientist Seymour Martin Lipset argued, as part of “modernization theory,” that democracy was much more likely to occur in countries that had achieved at least moderate levels of education and income, and that had formed a large middle class.23 To become a democracy, a country had to develop economically, or so the story went. This idea was not just popular with academics but also provided convenient cover for authoritarian leaders making economic progress, who argued that democracy could wait: Park in South Korea, Suharto in Indonesia, Pinochet in Chile, and so on. Yet when Mali became a democracy in 1992, it had an income per capita of just $300 (in constant price 2005 US dollars), making it one of the poorest countries in the world. Nepal’s income was just $230 per person in 1990 when King Birendra Bir Bikram Shah Dev began a political transition. Timor-Leste launched its long-awaited independence in 1999 with an average income of $430, and Malawi made the jump in 1994 with an average income of barely $200. Today twenty-two democracies have average incomes below $1,000, the World Bank’s cutoff that it uses to define “low-income countries,” and fifteen of those have average incomes below $500.
Far from Zheng He’s great armada that traversed the seas, China could not control its own territory. With the upheaval of the early twentieth century—the end of imperial rule, the long civil war, the emergence of the People’s Republic in 1949, the disasters of the Great Leap Forward and the Cultural Revolution—China made little development progress. While there was some slow income growth alongside larger improvements in health, it remained a poor country. In 1970 its income per capita was around $350 (in constant 2005 PPP prices)—less than today’s Democratic Republic of the Congo, now the poorest country in the world. China, largely disconnected from the global economy, was no longer a source of innovation and technology. In 1970 its exports accounted for a paltry 3 percent of GDP, the lowest among all developing countries. Today, just a few decades later, all has changed.
Making Globalization Work by Joseph E. Stiglitz
affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, 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, Gini coefficient, global reserve currency, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, inventory management, invisible hand, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, 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, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus
Its performance in the past fifteen years has been a little bit better—a measly annual increase in per capita income of 0.2 percent. See World Bank, China 2020: Development Challenges in the New Century (Washington, DC: World Bank, 1997), p. 3; available at http://www-wds.world bank. org/servIet/WDS ContentServer/WDSP/IB/1997/09/01 /000009265_398 0625172933/Rendered/PDF/multi0page.pdf. Since 1970, the total (average annual rate of) increase in income per capita has been: China, 923 percent (6.8 percent); Indonesia, 286 percent (4.0 percent); Korea, 566 percent (5.6 percent); Malaysia, 283 percent (3.9 percent); Thailand, 347 percent (4.4 percent). Though data on poverty over such longtime spans are unreliable and spotty, it appears that in less than two decades, using the $2-per-day measure of poverty, China's poverty rate dropped from 67 percent to 47 percent between 1987 and 2001, Indonesia's poverty rate dropped from 76 percent to 52 percent between 1987 and 2002, Malaysia's poverty rate dropped from 15 percent to 9 percent between 1987 and 1997, and Thailand's poverty rate dropped from 37 percent to 32 percent between 1992 and 2000.
See Sandra Polaski, "Mexican Employment, Productivity, and Income a Decade after NAFTA," Carnegie Endowment for International Piece, brief submitted to the Canadia..1 Standing Senate Committee on Foreign Affairs, February 25, 2004. 8. See Gruben, "Was Nafta Behind Mexico's High Maquiladora Growth?," op. cit. In the case of Mexico, the debate is complicated by its 1994-95 financial crisis. A World Bank study concluded that without NAFTA, Mexican income per capita would have been 4 percent lower. (Daniel Lederman, William E Maloney, and Luis Serven, Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings, World Bank, December 2003.) But there were serious flaws with that study. See, for instance, Mark Weisbrot, David Rosnick, and Dean Baker, "Getting Mexico to Grow with NAFTA: The World Bank Analysis," Center for Economic Policy Research, September 20, 2004, available at www.ceprnet/publications/nafta_2004_10.htm.
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, Gini coefficient, glass ceiling, income inequality, income per capita, industrial robot, Joseph Schumpeter, land reform, land tenure, large denomination, market fragmentation, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, urban sprawl, Washington Consensus, working-age population
When the regional recession struck in the early 1980s, the Philippine economy collapsed under the weight of unserviceable debt and shrank an astonishing 20 per cent. It only really stabilised in the mid 1990s, and there has been no sustained period of growth since. The Philippines has no indigenous, value-added manufacturing capacity. At the end of the Second World War only Japan and Malaysia had higher incomes per capita in Asia. Then Korea and Taiwan overtook the Philippines in the 1950s. The country slid down past Thailand in the 1980s, and Indonesia more recently. From having been in a position near the top of the Asian pile, the Philippines today is an authentic, technology-less Third World state with poverty rates to match.231 What was not important North-east and south-east Asia provide small variations around clear themes.
It is only a combination of the two that can take the country to the front rank of nations and allow Chinese people to be genuinely proud of where they come from. Thus far, institutional deficiency has not been a significant drag on China’s economic growth. But it will catch up with it eventually. The Chinese government already spends more money trying to micro-manage people’s lives through its domestic security apparatus than it does on defence.69 On its present trajectory, China is set to be a middle-income per capita, but profoundly institutionally retarded state. At an economic level, this gives leading nations nothing to fear. At a political level the outlook is more tricky. We must hope that the fact that China is more cosmopolitan, and its military more subject to civilian control, than nineteenth-century Germany or inter-war Japan makes it a less threatening rising power. In the coming years, the world’s developed nations will need to remain engaged with a more assertive China, and to press their political and humanitarian principles.
business climate, credit crunch, Deng Xiaoping, Donald Trump, facts on the ground, glass ceiling, high net worth, illegal immigration, income per capita, indoor plumbing, job-hopping, Maui Hawaii, price stability, quantitative easing, Silicon Valley, Skype, South China Sea, Steve Jobs, thinkpad, trade route, trickle-down economics, upwardly mobile, urban planning, women in the workforce, young professional
Chinese consumers are well aware of what products you are selling in other markets, because of information flow via the Internet and tourism, and they don’t want to wait months or years to buy the newest products. They have no compunctions about going through illegal channels if it means faster gratification. Key Action Item Your former factory workers now might be your target market. With rising incomes, per capita GDP has tripled in the last decade from $1,000 to $3,000 per year. Revamp your China-based factories to sell within China rather than just for export. Release in China before Other Markets Many companies make the mistake of taking too long to introduce the season’s newest products into China. Until Apple moved up its scheduled release dates for China, their official sales stumbled because consumers were not willing to wait a month before getting access to their devices.
Bakken shale, Climategate, Climatic Research Unit, deindustrialization, energy security, failed state, Francis Fukuyama: the end of history, income per capita, means of production, mutually assured destruction, oil shale / tar sands, oil shock, out of africa, peak oil, price discovery process, rising living standards, South China Sea, University of East Anglia, uranium enrichment, Yom Kippur War
But industry and consumers need a steady source of electricity. A storage system for intermittent wind power to be stored so it can be drawn on when required at least doubles the cost of wind power, even before taking into account the conversion losses, which would be at least 40 percent of generated power. Relying on wind would take the percentage of U.S. GDP outlaid on energy from the current 9 percent to at least 29 percent, slashing disposable income per capita. According to figures released by the wind power industry, individual wind turbines have a high energy return on investment—that is, twenty times. As part of an integrated power supply system with energy storage and backup power generation, however, energy return on investment falls to less than five times, even going by industry figures. And those figures may be overly generous. A recent UK study by the Renewable Energy Foundation, The Performance of Wind Farms in the United Kingdom and Denmark, shows that the economic life of onshore wind turbines is in reality between ten and fifteen years, not the twenty to twenty-five years projected by the wind industry itself and used for government projections.
The Handbook of Personal Wealth Management by Reuvid, Jonathan.
asset allocation, banking crisis, BRICs, collapse of Lehman Brothers, correlation coefficient, credit crunch, cross-subsidies, diversification, diversified portfolio, estate planning, financial deregulation, fixed income, high net worth, income per capita, index fund, interest rate swap, laissez-faire capitalism, land tenure, market bubble, merger arbitrage, new economy, Northern Rock, pattern recognition, Ponzi scheme, prediction markets, risk tolerance, risk-adjusted returns, risk/return, short selling, side project, sovereign wealth fund, statistical arbitrage, systematic trading, transaction costs, yield curve
For this reason, buying art associated with future economic development and a strong national culture while understanding the fashions of the past ឣ 162 PLEASURABLE INVESTMENT ______________________________________________ may reap the best rewards; the logic being that as the wealthy proportion of a population reaches a certain income level they tend to buy their own art before exploring art from other countries. Looking beyond the BRIC countries of Brazil, Russia, China, and India, Goldman Sachs recommends the ‘Next 11’ as general investment opportunities; in order of projected income per capita in 2025, these are South Korea, Mexico, Turkey, Iran, Vietnam, Egypt, Indonesia, Philippines, Pakistan, Nigeria and Bangladesh. The major art auction houses are represented in five of these countries. Nevertheless, the best advice as always is to buy something you like and hope your enthusiasm is shared with buyers of the future. Figure 4.3.3, taken from www.artprice.com 2008 illustrates developed and emerging market post-war and contemporary art trends. 1,400 1,200 1,000 800 600 Chinese contemporary art 400 Indian contemporary art American pop art 200 Young British artists 01 /0 1 01 /20 /0 03 5/ 01 20 /0 03 9 01 /20 /0 03 1/ 01 20 /0 04 5 01 /20 /0 04 9 01 /20 /0 04 1/ 01 20 /0 05 5 01 /20 /0 05 9 01 /20 /0 05 1/ 01 20 /0 06 5 01 /20 /0 06 9 01 /20 /0 06 1/ 01 20 /0 07 5 01 /20 /0 07 9 01 /20 /0 07 1/ 01 20 /0 08 5 01 /20 /0 08 9/ 20 08 0 Source: artprice.com, 2008 Figure 4.3.3 Developed and emerging markets, post-war and contemporary art 163 4.4 4.4 Mission possible Stefan Velvick, Charities Aid Foundation Background These are tough times for charities.
23andMe, 8-hour work day, Albert Einstein, Anne Wojcicki, artificial general intelligence, attribution theory, Bill Joy: nanobots, bioinformatics, Clayton Christensen, dark matter, East Village, en.wikipedia.org, epigenetics, Frank Gehry, Googley, income per capita, indoor plumbing, Jeff Bezos, Johann Wolfgang von Goethe, Law of Accelerating Returns, life extension, personalized medicine, Peter Thiel, placebo effect, post scarcity, Ray Kurzweil, rolodex, Silicon Valley, Simon Kuznets, Singularitarianism, smart grid, speech recognition, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Levy, Thomas Malthus, upwardly mobile, World Values Survey, X Prize
Put another way, poor health causes a decline in productivity for the simple reason that it’s very difficult to work effectively when you’re in ill health, thereby increasing your chances of falling into poverty. In their paper titled “The Health and Wealth of Nations,” Harvard economist David Bloom and Queen’s University economist David Canning explain that, based on the available research, if there are “two countries that are identical in all respects, except that one has a 5 year advantage in life expectancy,” then the “real income per capita in the healthier country will grow 0.3–0.5% per year faster than in its less healthy counterpart.”9 Although these percentages might look small, they are actually quite significant, especially when we consider that between 1965 and 1990 countries experienced an average per capita income growth of 2 percent per year. When countries only have an average growth of that amount, an advantage of 0.5 percent is quite the boost.
Discardia: More Life, Less Stuff by Dinah Sanders
Atul Gawande, big-box store, carbon footprint, clean water, clockwatching, cognitive bias, collaborative consumption, credit crunch, endowment effect, Firefox, game design, Inbox Zero, income per capita, index card, indoor plumbing, Internet Archive, Kevin Kelly, late fees, Marshall McLuhan, McMansion, Merlin Mann, side project, Silicon Valley, Stewart Brand
Symptom #19: Clutter Everywhere Solution #19: You Need What You Need, but You Don’t Need Much More Than You Need How terrible would it be if you needed a glass jar and didn’t have one? —Gretchen Rubin, author So much stuff If you combine mass production and rising standards of living over the past century, pretty much anyone outside the Third World can have more belongings than they’ll ever need—and more than their homes can accommodate. This reality reached a fever pitch after the 1960s as real disposable personal income per capita in the United States grew and spending increased while prices for most goods dropped dramatically. By the 1990s, heftily squatting on the scales opposite voluntary simplicity and similar movements, the average American family had twice as many possessions as their counterpart 25 years prior, according to a September 2009 article by Jon Mooallem in The New York Times, “The Self-Storage Self - Storing All the Stuff We Accumulate.”
The Paradox of Choice: Why More Is Less by Barry Schwartz
accounting loophole / creative accounting, attribution theory, Atul Gawande, availability heuristic, Cass Sunstein, Daniel Kahneman / Amos Tversky, endowment effect, framing effect, income per capita, job satisfaction, loss aversion, medical residency, mental accounting, Own Your Own Home, positional goods, price anchoring, psychological pricing, RAND corporation, Richard Thaler, science of happiness, The Wealth of Nations by Adam Smith
., of 2000, 26 electricity service electronic gadgets employment at home mobility in wardrobe and endowment effect Epstein, Benita error, susceptibility to evolution existential choice exit Exit, Voice, and Loyalty (Hirschman) expectations: control of high raised rising see also prospect theory expected utility experience, diversity of experienced utility expressive value, of choice F family “fear of falling,” feelings, memories and predictions of framing comparison and definition of prospect theory and psychological accounting and reference prices and risk assessment and France Frank, Robert freedom “freedom from” and “freedom to,” self-respect and, see also autonomy friendship G gains, see risk, risk assessment Gallup polls Gawande, Atul Gawande, Hunter Germany goal-setting God, belief in “good enough,” see satisficers Gore, Al gratitude Great Britain grocery shopping gross domestic product guarantees, money-back H habits happiness autonomy and choice and decline in maximizing as obstacle to measurements and surveys of social comparison and social relations and status and wealth and see also satisfaction Harris, Lou Harvard University health care health insurance heart disease hedonic adaptation hedonic lag helplessness, learned heuristic, definition of high expectations, curse of Hirsch, Fred Hirschman, Albert HMOs human progress Hungary hypertension I Iceland identity, choice of illness immune system inaction inertia income per capita individualism infants “infomercial,” information: evaluations of filtered by consciousness gathering of quality and quantity of information costs instrumental value, of choice Internet medical misinformation on interviews, effect of J jams, of choice Japan jeans, selection of job mobility Johnson, Paul Joyless Economy, The (Scitovsky) justification, of choices K Kahneman, Daniel Kaiser Permanente Kaminer, Wendy Katz, Jay L Landman, Janet Lane, Robert learned helplessness liberty, negative vs. positive liking, wanting and loss aversion Loss of Happiness in Market Democracies, The (Lane) losses.
Ada Lovelace, Albert Einstein, Arthur Eddington, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, New Economic Geography, Norbert Wiener, p-value, phenotype, price mechanism, Richard Florida, Ronald Coase, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population
I am quite familiar with the general exploitation narrative, having spent the first twenty-four years of my life in the long strip of coast and mountains known as Chile. Chile has a long mining tradition or as I like to say, Chile is heavily involved in “atomic ranching.” But this was not always the case. During the nineteenth century Chile’s wealth came mostly from the export of saltpeter, a mineral used as a fertilizer and as an ingredient in gunpowder. Saltpeter made the Chilean economy boom. At the turn of the twentieth century Chile had an income per capita that was larger than that of Spain, Sweden, or Finland.6 Things were good, but the pendulum was about to swing the other way. Figure 3. Products that Brazil exported to China in 2012. Total exports USD 41.3B (Source: atlas.media.mit.edu) Figure 4. Products that China exported to Brazil in 2012. Total exports USD 33.4B (Source: atlas.media.mit.edu) In 1909 the German chemists Fritz Haber and Carl Bosch discovered an inexpensive way of synthesizing saltpeter on an industrial scale.
Plenitude: The New Economics of True Wealth by Juliet B. Schor
Asian financial crisis, big-box store, business climate, carbon footprint, cleantech, Community Supported Agriculture, credit crunch, Daniel Kahneman / Amos Tversky, decarbonisation, dematerialisation, demographic transition, deskilling, Edward Glaeser, en.wikipedia.org, Gini coefficient, global village, income inequality, income per capita, Isaac Newton, Joseph Schumpeter, knowledge economy, life extension, McMansion, new economy, peak oil, pink-collar, post-industrial society, prediction markets, purchasing power parity, ride hailing / ride sharing, Robert Shiller, Robert Shiller, sharing economy, Simon Kuznets, single-payer health, smart grid, The Chicago School, Thomas L Friedman, Thomas Malthus, too big to fail, transaction costs, Zipcar
The Path to Sustainability: Population, Affluence, and Technology Ecological economists often organize their thinking with an accounting framework developed by two scientists: Paul Ehrlich of Stanford and Harvard’s John Holdren, currently President Obama’s chief scientific adviser. It says that environmental impact is a product of three things: population, affluence, and technology. Affluence is income per capita, and includes not just what individuals earn, but the entire production of a society. Population measures the number of people consuming that level of income. Technology stands for an operator that translates total production into all of its ecological effects. Strictly speaking, this “technology” concept covers more than the word does in its common usage, because it also incorporates the mix of different products and activities.
The Haves and the Have-Nots by Branko Milanovic
Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, 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, Plutocrats, plutocrats, purchasing power parity, Simon Kuznets, very high income, Washington Consensus
4 The total number of people included in 2005 surveys is just under 6 billion. About 5 percent of people in the world, living in the poorest and most conflict-ridden countries such as Sudan, Afghanistan, North Korea, Somalia, and Iraq, are not included since their countries do not conduct national household surveys. Thus, all inequality results shown here are (slight) underestimates compared to “real” values. 5 It takes $90,000 of net income per capita to be in the top 1 percent of U.S. income distribution. 6 We know that 60/(2.06)α has to yield 6. Hence, α = 3.2. Vignette 3.2 1 One example is Thomas Friedman, The World Is Flat (New York: Farrar, Straus, and Giroux, 2005). 2 Pioneered by Lester Thurow, “A Surge in Inequality,” Scientific American 256 (1987), it was used recently in Carol Graham, Nancy Birdsall, and Stefano Pettinato, Stuck in the Tunnel: Is Globalization Muddling the Middle?
Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics by Francis Fukuyama
Asian financial crisis, banking crisis, Berlin Wall, Bretton Woods, British Empire, capital controls, Carmen Reinhart, cognitive bias, cuban missile crisis, energy security, flex fuel, income per capita, informal economy, invisible hand, John von Neumann, Menlo Park, Mikhail Gorbachev, moral hazard, Norbert Wiener, oil rush, oil shale / tar sands, oil shock, packet switching, RAND corporation, Ray Kurzweil, reserve currency, Ronald Reagan, The Wisdom of Crowds, trade route, Vannevar Bush, Vernor Vinge, Yom Kippur War
See International Health Regulations Imagination: believability and, 93–94, 98; of low-probability events, 3, 8–9, 98; as psychological barrier, 8–9; of strategic surprises, 93–94, 97–99 IMF. See International Monetary Fund Immigration, 148, 149, 156, 161–62 Incentives: for good vs. bad predictions, 2, 171; against infectious disease preparedness, 87, 88, 89; political, 4, 171 Income gap, 137, 149 Income per capita: increases in, 137; and value of life, 11, 15 Incubation period, of SARS, 87 India: energy dependence of, 76; poverty rates in, 164; predictions of famine in, 135–36 Indian Ocean tsunami (2004), political barriers to preparing for, 10–11 Individualism, expressive, 133 Indonesia: breakup of, as future surprise, 106, 144; conditions before economic crisis in, 44, 46; effects of economic crisis in, 42, 47, 49 Inequality, income, 137, 149 Infectious disease, emerging, 82–90; drug resistance in, 84, 85; funding for response to, 89–90; gaps in preparation for, 83; global approach to, 83, 89–90; international regulations on, 88–89, 90; optimism vs. pessimism about prospect of, 129–30, 136; preparedness for, 85–86, 171; prevention of, 83–85; reporting on, 87, 88; response to, 87, 89–90; sources of, 82, 83; surveillance of, 86–87, 88; transmission of, 82–83, 85; treatment of, 84; vs. wellestablished disease, 84–85 Influenza pandemic: bird flu and, 82, 83, 84, 85, 86; funding for response to, 89–90; optimism vs. pessimism about prospect of, 129–30, 136; 2990-7 ch17 index 7/23/07 12:33 PM Page 190 190 1918–19 outbreak of, 83, 130, 136; preparedness for, 85; prevention of, 84, 85; response to, 87, 89–90; sources of future, 82; surveillance of, 86 Information collection, filters for, and strategic surprises, 99–100 Information processing, and strategic surprises, 100–01 Information technology innovation, 120–25; convergence of ideas in, 123–25; at DARPA, 63–65; individuals driving, 120–23; in scenario thinking, 110, 117–19; trends in, 120; U.S. leadership in, 58 Innovation organization, 59–70; DARPA model of, 63–67; definition of, 59; and energy dependence, 59–60, 67–70; fragmentation of, 62–63; at institutional level, 59, 63–67; at personal level, 59, 63–65; precursors to DARPA model of, 60–63; in World War II, 60–61 Inside-out perspective, 101–03 Institute of Medicine, 89 Institutional barriers: to energy innovation agency, 68–69; to preparedness, 2–5, 171 Institutional organization, of DARPA, 59, 63–67 Intel, 122–23 Intelligence, U.S.: examples of failures in, 41.
Progress: Ten Reasons to Look Forward to the Future by Johan Norberg
agricultural Revolution, anti-communist, availability heuristic, Bartolomé de las Casas, Berlin Wall, British Empire, business climate, clean water, Daniel Kahneman / Amos Tversky, demographic transition, desegregation, Donald Trump, Flynn Effect, germ theory of disease, Gini coefficient, 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, meta-analysis, Mikhail Gorbachev, more computing power than Apollo, moveable type in China, Naomi Klein, open economy, place-making, Rosa Parks, special economic zone, Steven Pinker, telerobotics, The Wealth of Nations by Adam Smith, transatlantic slave trade, very high income, working poor, Xiaogang Anhui farmers
In Asia, some attribute this fertility decline to brutal policies like China’s one-child policy, but fertility fell much further among the Chinese in Taiwan and by exactly the same rate in Thailand. Women don’t suffer through as many pregnancies, and parents are spared the agony of having to see their children dying. The wealthier a country is, the healthier it is. Variation in income can explain over seventy per cent of the variation in infant and child mortality. No country with an income per capita above $10,000 has an infant mortality rate above two per cent. Richer people can invest more in sanitation and water facilities, and can afford food and medicine. But it is not just that humanity is getting richer, so it can afford a better standard of living. That is not even the major cause. Even more important is that a decent standard of living is getting much cheaper. Health indicators for a given income level are improving all the time.
airport security, availability heuristic, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, big-box store, Black Swan, Broken windows theory, Carmen Reinhart, Claude Shannon: information theory, Climategate, Climatic Research Unit, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, computer age, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, Daniel Kahneman / Amos Tversky, diversification, Donald Trump, Edmond Halley, Edward Lorenz: Chaos theory, en.wikipedia.org, equity premium, Eugene Fama: efficient market hypothesis, everywhere but in the productivity statistics, fear of failure, Fellow of the Royal Society, Freestyle chess, fudge factor, George Akerlof, haute cuisine, Henri Poincaré, high batting average, housing crisis, income per capita, index fund, Internet Archive, invention of the printing press, invisible hand, Isaac Newton, James Watt: steam engine, John Nash: game theory, John von Neumann, Kenneth Rogoff, knowledge economy, locking in a profit, Loma Prieta earthquake, market bubble, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, Monroe Doctrine, mortgage debt, Nate Silver, new economy, Norbert Wiener, PageRank, pattern recognition, pets.com, prediction markets, Productivity paradox, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, Saturday Night Live, savings glut, security theater, short selling, Skype, statistical model, Steven Pinker, The Great Moderation, The Market for Lemons, the scientific method, The Signal and the Noise by Nate Silver, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, transfer pricing, University of East Anglia, Watson beat the top human players on Jeopardy!, wikimedia commons
He said accounting for a president’s approval rating (historically a very reliable indicator of his likelihood to be reelected) would not improve his forecasts at all. Nor did the inflation rate or the unemployment rate matter. And the identity of the candidates made no difference: a party may as well nominate a highly ideological senator like George McGovern as a centrist and war hero like Dwight D. Eisenhower. The key instead, Hibbs asserted, was a relatively obscure economic variable called real disposable income per capita. So how did the model do? It forecasted a landslide victory for Al Gore, predicting him to win the election by 9 percentage points. But George W. Bush won instead after the recount in Florida. Gore did win the nationwide popular vote, but the model had implied that the election would be nowhere near close, attributing only about a 1 in 80 chance to such a tight finish.32 There were several other models that took a similar approach, claiming they had boiled down something as complex as a presidential election to a two-variable formula.
., 428 Rasskin-Gutman, Diego, 269 ratings agencies, 463 CDOs misrated by, 20–21, 21, 22, 26–30, 36, 42, 43, 45 housing bubble missed by, 22–23, 24, 25–26, 28–29, 42, 45, 327 models of, 13, 22, 26, 27, 29, 42, 45, 68 profits of, 24–25 see also specific agencies rationality, 183–84 biases as, 197–99, 200 of markets, 356–57 as probabilistic, 242 Reagan, Ronald, 50, 68, 160, 433, 466 RealClimate.org, 390, 409 real disposable income per capita, 67 recessions, 42 double dip, 196 failed predictions of, 177, 187, 194 in Great Moderation, 190 inflation-driven, 191 of 1990, 187, 191 since World War II, 185 of 2000-1, 187, 191 of 2007-9, see Great Recession rec.sport.baseball, 78 Red Cross, 158 Red River of the North, 177–79 regression analysis, 100, 401, 402, 498, 508 regulation, 13, 369 Reinhart, Carmen, 39–40, 43 religion, 13 Industrial Revolution and, 6 religious extremism, 428 religious wars of sixteenth and seventeenth centuries, 2, 6 Remote Sensing Systems, 394 Reno, Nev., 156–57, 157, 477 reserve clause, 471 resolution, as measure of forecasts, 474 results-oriented thinking, 326–28 revising predictions, see Bayesian reasoning Ricciardi, J.
agricultural Revolution, Albert Einstein, back-to-the-land, British Empire, carbon footprint, collaborative economy, death of newspapers, delayed gratification, distributed generation, en.wikipedia.org, energy security, feminist movement, global village, hydrogen economy, illegal immigration, income inequality, income per capita, interchangeable parts, Internet Archive, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, labour mobility, Mahatma Gandhi, Marshall McLuhan, means of production, megacity, meta analysis, meta-analysis, Milgram experiment, new economy, New Urbanism, Norbert Wiener, out of africa, Peace of Westphalia, peak oil, planetary scale, Simon Kuznets, Skype, smart grid, smart meter, supply-chain management, surplus humans, the medium is the message, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, transaction costs, upwardly mobile, uranium enrichment, working poor, World Values Survey
The important point, which the Europeans seem to recognize in their emphasis on the quality of life of the community, is what Layard and other scholars have found in their own studies. Layard writes:From this psychological reality it follows that if money is transferred from a richer person to a poorer person, the poor person gains more happiness than the rich person loses. So average happiness increases. Thus a country will have a higher level of average happiness the more equally its income is distributed—all else being equal.69 The income per capita for Europeans is, on average, 29.3 percent lower than American income, and Europeans have smaller houses, cars, and wardrobes and fewer electronic conveniences.70 Moreover, a greater percentage of their income goes to taxes to pay for an array of “public” services, designed to improve the quality of life of the entire community. Their greater emphasis on the social model, as opposed to the American emphasis on the market model, narrows the gap in wealth.
Huizinga, Johan human behavior human collaboration human consciousness in children six levels of human journey bodily experience and reality bridging the is/ought gap communications and energy and faith versus reason feelings/emotions in history mortality new biosphere phase in truth, freedom, and equality human migration human nature altruism versus self-interest attachment theorists on changing views on embodied approach to Freud on object relations theorists on Romantics on Human Origins (MacCurdy) human race bipedalism of common language of complex system of cosmopolitanization of Human Resource Development Quarterly human resources management humanism Humanist Age humanist psychology Hume, David hurricane intensity hydraulic societies Chinese control of nature in Egyptian entropic decline of Indian Jewish parenting in rise of theology in Sumerian See also Roman Empire hydrogen hydrogen-powered fuel-cell vehicles hydrologic cycle Iacoboni, Marco, Dr. IBM ideal self identity crisis ideological consciousness imagination imaginative identification immortality imprinting income, per capita Index of Economic Well-Being (IEWB) Index of Sustainable Economic Welfare (ISEW) India individuality in late Middle Ages induction scripts Indus Valley Industrial Revolution industrial societies infant Ainsworth on altruism in Bowlby on consciousness in empathic distress in Fairbairn on Freud on IQ development in isolation effects on Klein on Kohut on Levy on mimicry in nature versus nurture and orphans Suttie on Winnicott on Information and Communications Technology (ICT) revolution Information Technology (IT) Inglehart, Ronald InnoCentive Inquiry into the Nature and Causes of the Wealth of Nations (Smith) insula intentionality, sense of interior furniture intermarriage internal combustion engine international law Internet interracial dating/marriage intimacy introspection invulnerability Iowa Child Research Welfare Station Iran Iraq is/ought gap Islamic Society of North America isolated system isolation Italian Renaissance Italy Jacobsen, Thorkild Jains James, William Japanese culture Jefferson, Thomas Jerusalem Jesus Gnostic view of story of Jews Johns Hopkins University Johnson, David W.
13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak
Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bernie Madoff, Bonfire of the Vanities, bonus culture, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Gordon Gekko, greed is good, Home mortgage interest deduction, Hyman Minsky, income per capita, interest rate derivative, interest rate swap, Kenneth Rogoff, laissez-faire capitalism, late fees, Long Term Capital Management, market bubble, market fundamentalism, Martin Wolf, moral hazard, mortgage tax deduction, Ponzi scheme, price stability, profit maximization, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, sovereign wealth fund, The Myth of the Rational Market, too big to fail, transaction costs, value at risk, yield curve
As in many other low-income countries in the past half-century, economic development was dominated by a small economic elite defined by their personal ties to the ruling family, which traded favors for both political support and cold, hard cash—a pattern known as “crony capitalism.”26 For example, Indofood became one of the largest conglomerates in the country, largely because of a longtime personal friendship between its founder, Liem Sioe Liong, and Suharto.27 Suharto’s wife, Siti Hartinah Suharto, known as Madame Tien, was involved in so many business deals that she was referred to by critics as “Madame Tien Percent” for her alleged fees.28 Suharto’s children also cut themselves into many major deals; his daughter was involved in the largest taxi company, one son tried to build cars, and another son was a financial entrepreneur.29 For a long time, the system worked reasonably well. Annual income per capita grew from $1,235 in 1970, just after Suharto came to power, to just over $4,545 by 1997.30 Indonesia was still a poor country with pervasive poverty, but thirty years of economic growth had created higher standards of living for millions of people. The country was regarded as a development success story by the World Bank and by foreign investors, who supplied much of the capital needed to build factories, roads, and apartment buildings.
How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky
banking crisis, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, David Ricardo: comparative advantage, death of newspapers, financial innovation, Francis Fukuyama: the end of history, full employment, happiness index / gross national happiness, income inequality, income per capita, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, lump of labour, market clearing, market fundamentalism, profit motive, purchasing power parity, Ralph Waldo Emerson, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, wage slave, World Values Survey
At the point of “Bliss,” in 2030, growth of income would stop (because everyone would have enough) and necessary work would fall towards zero (because almost everything people needed would be produced by machines). Now let us compare the two predictions with actual outcomes. What has happened to growth in the rich countries plotted against Keynes’s prediction is shown in Chart 2, while what has happened to hours of work in rich countries, plotted against Keynes’s prediction, shown in Chart 3. Growth of real income per capita has been much as Keynes expected. The coincidence is in fact a bit of a fluke. Keynes assumed no major wars and no population growth in the countries covered. In fact there was another world war, and population has grown by about one-third. But he underestimated productivity growth. The two mistakes cancelled each other out, with the result that per capita incomes indeed rose fourfold in the seventy years from 1930, up to Keynes’s lower bound.
affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey
Mohamed Suharto came to power in a military coup in 1966 and ruled until 1998. He is estimated to have stolen at least $15 billion during his 32-year rule. Some suggest the figure may even have been as high as $35 billion.His children became some of the country’s richest business people. If we take the mid-point of these two estimates ($25 billion), Suharto has stolen the equivalent of 5.2 times his country’s national income in 1961 ($4.8 billion). Zaire’s income per capita in purchasing power terms in 1997, when Mobutu was deposed, was one third of its level in 1965, when he came to power. In 1997, the country stood 141st among the 174 countries for which the UN calculated a ‘human development index’ (HDI). The HDI takes into account not only income but also ‘quality of life’ measured by life expectancy and literacy. Considering the corruption statistics, Indonesia should have performed even worse than Zaire.
The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, Baxter: Rethink Robotics, British Empire, business intelligence, business process, call centre, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, crowdsourcing, David Ricardo: comparative advantage, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, Mars Rover, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, payday loans, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K
In contrast, as discussed in chapter 7, productivity grew at an average of 1.56 percent per year during this period, accelerating a bit to 1.88 percent per year from 2000 to 2011. Most of the growth in productivity directly translated into comparable growth in average income. The reason why median income growth was so much lower was primarily because of increases in inequality.14 FIGURE 9.1 Real GDP vs. Median Income per Capita The Three Pairs of Winners and Losers In the past couple of decades, we’ve seen changes in tax policy, greater overseas competition, ongoing government waste, and Wall Street shenanigans. But when we look at the data and research, we conclude that none of these are the primary driver of growing inequality. Instead, the main driver is exponential, digital, and combinatorial change in the technology that undergirds our economic system.
Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller
Andrei Shleifer, asset-backed security, Bernie Madoff, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, en.wikipedia.org, endowment effect, equity premium, financial intermediation, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, late fees, loss aversion, Menlo Park, mental accounting, Milgram experiment, moral hazard, new economy, payday loans, Ponzi scheme, profit motive, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, wage slave
Indeed, that is exactly what John Maynard Keynes, one of the most astute economists of all time, thought would be the case when he looked forward from 1930. In an essay, which was little noticed when published, Keynes projected what life would be like “for our grandchildren,” in 2030: one hundred years thence.12 In one respect he almost hit a bull’s-eye. He “supposed” that the standard of living would be eight times higher. For the United States, as of 2010, real income per capita was 5.6 times higher.13 With another twenty years to go on Keynes’s stopwatch, and with annual growth in per capita income at its historic average between 1.5 percent and 2 percent, his supposition will be remarkably close to target. But in another respect, Keynes was totally off the mark. As you might expect, Keynes did not say that the grandchildren would be going to bed worried about their next pound or their next shilling.
airport security, British Empire, call centre, clean water, corporate social responsibility, Deng Xiaoping, Donald Trump, fear of failure, glass ceiling, high net worth, income per capita, Jeff Bezos, Johann Wolfgang von Goethe, microcredit, Own Your Own Home, random walk, rolodex, shareholder value, Silicon Valley, Skype, Steve Ballmer
Dean Chan introduced himself succinctly and got straight to the point. He was a fellow Kellogg graduate who had read an article in our alumni magazine about Room to Read’s progress. He saw serious fund-raising potential in Great Britain and was ready and willing to set up Room to Read as a public charity. Dean laid out the business case. The country had over 60 million people and one of the strongest economies and incomes per capita in the world. The average citizen was well aware of the global condition, partly as a result of the glory days of the British Empire. There was a strong history of citizens donating to causes beyond the borders. I agreed that the British market was tempting, but asked whether it wouldn’t be logistically and bureaucratically complex to set up a charitable entity. Dean replied that he had already contacted the charity commission, studied the application process, and believed it was possible to get set up in less than two months.
Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano
banking crisis, banks create money, barriers to entry, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, floating exchange rates, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, money: store of value / unit of account / medium of exchange, offshore financial centre, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce
In addition, as the economic crisis came with instability, continuous currency depreciation, and high and volatile inflation, there was a reduction in real wages, affecting workers and their families as well as other low-income groups and classes whose incomes grow (if at all) at a slower pace than the exchange rate and average prices. In the case of Ecuador, as documented in chapter 4, unemployment, poverty, and inequality all worsened in this period. From a longer-term perspective, the low (and volatile) rate of GDP growth of the 1980s and 1990s implied almost stagnant income per capita for a long period, with minimal poverty reduction, persistent inequality, and social marginalization of minorities. This social situation worsened further because of the economic crisis of the late 1990s. The social impact of dollarization has to be evaluated against this background. Gender biases, in turn, seem to make crises affect women more adversely (see chapter 5). Dollarization, as we document in this book, has not been costless in Ecuador.
affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey
Mohamed Suharto came to power in a military coup in 1966 and ruled until 1998. He is estimated to have stolen at least $15 billion during his 32-year rule. Some suggest the figure may even have been as high as $35 billion. His children became some of the country’s richest business people. If we take the mid-point of these two estimates ($25 billion), Suharto has stolen the equivalent of 5.2 times his country’s national income in 1961 ($4.8 billion). Zaire’s income per capita in purchasing power terms in 1997, when Mobutu was deposed, was one third of its level in 1965, when he came to power. In 1997, the country stood 141st among the 174 countries for which the UN calculated a ‘human development index’ (HDI). The HDI takes into account not only income but also ‘quality of life’ measured by life expectancy and literacy. Considering the corruption statistics, Indonesia should have performed even worse than Zaire.
Reinventing the Bazaar: A Natural History of Markets by John McMillan
accounting loophole / creative accounting, Albert Einstein, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management
Since the full range of market-supporting institutions were in place at the outset, most prices were free, and most of the economy was privately owned, New Zealand provides a favorable test case for shock therapy. The impetus for reform was chronically low growth together with unsustainable budgetary imbalances. From 1950 to 1980, New Zealand slipped from having the world’s third-highest income per capita to twenty-second. The reforms were needed, therefore, and most observers agree that moving rapidly was justified in the circumstances. But the reforms were slow to show a return, and they brought severe social costs. In the 1960s and 1970s, the government’s knee-jerk response to any external shock was to impose controls on imports, prices, wages, profits, and interest rates. Restraints on markets abounded.
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof, Robert J. Shiller
affirmative action, Andrei Shleifer, asset-backed security, bank run, banking crisis, collateralized debt obligation, conceptual framework, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, experimental subject, financial innovation, full employment, George Akerlof, housing crisis, Hyman Minsky, income per capita, inflation targeting, invisible hand, Isaac Newton, Jane Jacobs, Jean Tirole, job satisfaction, Joseph Schumpeter, Long Term Capital Management, loss aversion, market bubble, market clearing, mental accounting, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, new economy, New Urbanism, Plutocrats, plutocrats, price stability, profit maximization, purchasing power parity, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, South Sea Bubble, The Chicago School, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, working-age population, Y2K, Yom Kippur War
While we believe these models to be often useful, they most certainly neglect some important structure that involves psychological variables that we cannot quantify. 27. http://research.stlouisfed.org/fred2/series/OILPRICE. 28. Akerlof’s personal knowledge from working at the Council of Economic Advisers in 1973. 29. Meadows et al. (1972, p. 125). 30. De Long and Summers (1992), in a comparison of countries around the world, showed that those with higher levels of investment, particularly high equipment investment, have higher growth of income per capita. Hsieh and Klenow (2003, p. 1) additionally conclude that “one of the strongest relationships established in the empirical growth literature is the positive correlation between the rate of investment in physical capital and the level of output per worker.” 31. Welch and Byrne (2001, pp. 93, 94, 107, and 171). 32. Truman Bewley (2002), relying on experiments by Daniel Ellsberg showing that people have uncertainty aversion, describes people’s reaction to uncertainty as inertial, that is, they tend to stay with the status quo.
1960s counterculture, affirmative action, airline deregulation, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, Long Term Capital Management, manufacturing employment, market bubble, Martin Wolf, new economy, oil shale / tar sands, oil shock, open economy, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Ronald Reagan, Simon Kuznets, strikebreaker, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War
The problem was that feed prices continued to rise, but processors, wholesalers, and retailers had to keep their prices down. With echoes from the 1930s, processors drowned baby chicks and farmers slaughtered calves—drastic measures that processors claimed were less expensive than raising the animals to sell at low prices.21 By August even Nixon had enough and unfroze prices, producing another price explosion. Farmers made out very well. In 1973, for the first time since such statistics were recorded, on-farm income per capita in the United States was higher than off-farm income.22 But food inflation was the inevitable result. High food prices were important in their own right, but they heated up distributional struggles between business and labor because food is an important component of working class spending. Union negotiators attempted to meet the higher food costs with higher wages for their members. This effort was one of the reasons why 1973 yielded the highest strike level since 1959.23 Mounting food prices returned the consumer to the forefront of American politics in 1973, and the government acted.
Happy City: Transforming Our Lives Through Urban Design by Charles Montgomery
2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, American Society of Civil Engineers: Report Card, Bernie Madoff, British Empire, Buckminster Fuller, car-free, carbon footprint, centre right, City Beautiful movement, clean water, congestion charging, correlation does not imply causation, East Village, edge city, energy security, Enrique Peñalosa, experimental subject, Frank Gehry, Google Earth, happiness index / gross national happiness, Home mortgage interest deduction, housing crisis, income inequality, income per capita, invisible hand, Jane Jacobs, license plate recognition, McMansion, means of production, megacity, Menlo Park, meta analysis, meta-analysis, mortgage tax deduction, New Urbanism, peak oil, Ponzi scheme, rent control, ride hailing / ride sharing, risk tolerance, science of happiness, Seaside, Florida, Silicon Valley, the built environment, The Death and Life of Great American Cities, the High Line, The Spirit Level, The Wealth of Nations by Adam Smith, trade route, transit-oriented development, upwardly mobile, urban planning, urban sprawl, wage slave, white flight, World Values Survey, Zipcar
When Peñalosa ran for the mayor’s seat back in 1997, he refused to make the promises doled out by so many politicians. He was not going to make everyone richer. Forget the dream of becoming as wealthy as Americans: it would take generations to catch up to the gringos, even if the urban economy caught fire and burned blue for a century. The dream of riches, Peñalosa complained, served only to make Bogotans feel bad. “If we defined our success just in terms of income per capita, we would have to accept ourselves as second- or third-rate societies—as a bunch of losers,” he said. No, the city needed a new goal. Peñalosa promised neither a car in every garage nor a socialist revolution. His promise was simple. He was going to make Bogotans happier. “And what are our needs for happiness?” he asked. “We need to walk, just as birds need to fly. We need to be around other people.
How Markets Fail: The Logic of Economic Calamities by John Cassidy
Albert Einstein, Andrei Shleifer, anti-communist, asset allocation, asset-backed security, availability heuristic, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Black-Scholes formula, Bretton Woods, British Empire, capital asset pricing model, centralized clearinghouse, collateralized debt obligation, Columbine, conceptual framework, Corn Laws, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Daniel Kahneman / Amos Tversky, debt deflation, diversification, Elliott wave, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, global supply chain, Haight Ashbury, hiring and firing, Hyman Minsky, income per capita, incomplete markets, index fund, invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, margin call, market bubble, market clearing, mental accounting, Mikhail Gorbachev, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Network effects, Nick Leeson, Northern Rock, paradox of thrift, Ponzi scheme, price discrimination, price stability, principal–agent problem, profit maximization, quantitative trading / quantitative ﬁnance, race to the bottom, Ralph Nader, RAND corporation, random walk, Renaissance Technologies, rent control, Richard Thaler, risk tolerance, risk-adjusted returns, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, statistical model, technology bubble, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, unorthodox policies, value at risk, Vanguard fund
Vigorous growth resumed, continuing after Pinochet’s replacement, which came in 1990, by the democratically elected Patricio Aylwin. Since the early 1990s, the Chilean economy has had its share of ups and downs, but, generally speaking, it has outperformed most other economies in Latin America. In his 1998 memoir, Friedman defended his visit to Chile and claimed that the country’s experience had demonstrated beyond doubt the efficacy of free market policies. “From 1973 to 1995, real income-per-capita multiplied more than two and a half fold, inflation fell from 500 percent per year to 8 percent, the infant mortality per 1,000 live births fell from 66 to 13, and life expectancy at birth rose from 64 years to 73 years. And authentic political freedom has been restored with the turnover of power by the junta to a freely elected government.” Some experts on the Chilean economy might quibble with Friedman’s historical account, but there is no doubting the significance of the Chilean free market experiment.
Crisis and Leviathan: Critical Episodes in the Growth of American Government by Robert Higgs, Arthur A. Ekirch, Jr.
Alistair Cooke, clean water, collective bargaining, credit crunch, declining real wages, endowment effect, fiat currency, full employment, hiring and firing, income per capita, Joseph Schumpeter, laissez-faire capitalism, manufacturing employment, means of production, minimum wage unemployment, Plutocrats, plutocrats, post-industrial society, price discrimination, profit motive, rent control, rent-seeking, Richard Thaler, road to serfdom, Ronald Reagan, Simon Kuznets, strikebreaker, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, transcontinental railway, union organizing, Upton Sinclair, War on Poverty, Works Progress Administration
Hence tangible capital per worker rose rapidly, by about 80 percent in just three decades. 4 In addition, human capital was accumulated as the average worker became healthier, more educated, and better trained; and intellectual capital was accumulated as inventiveness and the adoption of new techniques of production flourished as never before. The result of all these productivity-enhancing endeavors was economic growth, a process-erratic in the short run but sustained in the long run-that generated rising real income per capita. Between the late sixties and the early nineties, real GNP per capita increased at an average rate of more than 2 percent per year. 5 Economic growth both caused and in part resulted from ongoing shifts in the relative importance of industries, sectors, and regions. It fed and was nourished in turn by urbanization. In 1870 just 26 percent of Americans lived in incorporated places with populations of more than 2,500; by 1890, 80 History 35 percent did.
Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff
affirmative action, Amazon Mechanical Turk, banks create money, big-box store, Bretton Woods, car-free, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, global village, Google Earth, greed is good, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, moral hazard, mutually assured destruction, Naomi Klein, new economy, New Urbanism, Norbert Wiener, peak oil, place-making, placebo effect, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional
Or perhaps the wealthy obsess over what they hope is an entirely dog-eat-dog reality because their participation in the culture of money hasn’t ended up making them any happier. According to a study conducted at the height of the market, 23 percent of brokers and traders at the seven largest firms on Wall Street suffered from depression—more than three times the national average. Scientists and United Nations sociologists alike have concluded that affluence produces rapidly diminishing returns on happiness. After achieving an income per capita of about $15,000, any increase in wealth makes little difference to a nation’s total happiness metrics. Among the six articles I found from Forbes in 2006 fiercely criticizing this “swath of studies” as well as the whole notion of “happiness research,” none mentioned any of them specifically, or their findings. The libertarian think tank the Cato Institute similarly criticized these studies along with any attempt to measure subjective well-being—but concluded that even if they were true and money didn’t make people happier, this would only support the libertarian position that wealth redistribution by government was unnecessary.
Bad Pharma: How Medicine Is Broken, and How We Can Fix It by Ben Goldacre
data acquisition, framing effect, if you build it, they will come, illegal immigration, income per capita, meta analysis, meta-analysis, placebo effect, randomized controlled trial, Ronald Reagan, Simon Singh, WikiLeaks
There are more than half a million people living with HIV in Thailand (many of them can thank Western sex tourists for that), and 120,000 have AIDS. The country can afford first-line AIDS drugs, but many become ineffective with time, through acquired resistance. Abbott had been charging $2,200 a year for Kaletra in Thailand, which was – by morbid coincidence – roughly the same as the gross income per capita. We give drug companies exclusive rights to manufacture the treatments they have discovered for a limited period of time – usually about eighteen years – in order to incentivise innovation. It’s unlikely that the revenue available from selling drugs in poorer countries will ever incentivise innovation of new treatments to any great extent (we can see this very clearly from the fact that so many medical conditions that occur mainly in developing countries are neglected by the pharmaceutical industry).
Connectography: Mapping the Future of Global Civilization by Parag Khanna
1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, complexity theory, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, megacity, Mercator projection, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Peace of Westphalia, peak oil, Peter Thiel, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day
Sitting at the mouth of the Hai River with access to the Yellow and Yangtze Rivers via the Grand Canal, Tianjin has been a naval gateway into China for centuries and became a crucial treaty port controlled by Europeans after the Opium Wars. While it has always been a shipping center, the reinvestment of its annual double-digit growth rates has created high-end jobs in airline manufacturing and other sectors. Today Tianjin boasts China’s highest income per capita ($13,500, which is $1,000 higher than Shanghai). Its downtown business district is now home to the most industrial investment funds in China, making it the headquarters for financial innovation and even commercial courts for intellectual property dispute resolution with foreign companies. Like Shanghai, it plans a free trade zone. Tianjin also hosts China’s National Supercomputing Center, where the world-leading Tianhe-1A is located.
Poisoned Wells: The Dirty Politics of African Oil by Nicholas Shaxson
Asian financial crisis, Berlin Wall, blood diamonds, business climate, central bank independence, clean water, colonial rule, energy security, Exxon Valdez, failed state, Fall of the Berlin Wall, Hernando de Soto, income per capita, inflation targeting, Martin Wolf, mobile money, offshore financial centre, Ronald Reagan, Scramble for Africa, Yom Kippur War
In the countryside, away from foreign eyes, Plácido reckons things are as bad as ever. As Equatorial Guinea’s per capita income rose from $368 per capita in 1990 to over $2,000 in 2000, the country slipped ten places down the United Nations’ Human Development ranking. It now has the dubious distinction of being the country with the greatest negative difference—93 places—between its ranking in terms of human welfare and its income per capita. Agriculture and manufacturing have fallen to less than two percent of GDP between them, while oil claims 93 percent.85 The share of health and education spending has shrunk. 142 Obiang Nguema Obiang said in 2003 that there is no poverty, only “shortages.”86 Yet the IMF in 2005 was gloomier. “Unfortunately,” it said, “the country’s oil and gas wealth has not yet let to a measurable improvement in living conditions for the majority.”87 Now, despite all the scandals, powerful Americans line up to praise Obiang.
Empire: How Britain Made the Modern World by Niall Ferguson
British Empire, Cape to Cairo, colonial rule, Corn Laws, European colonialism, imperial preference, income per capita, John Harrison: Longitude, joint-stock company, Khartoum Gordon, Khyber Pass, land reform, land tenure, Livingstone, I presume, Mahatma Gandhi, night-watchman state, profit motive, Scramble for Africa, spice trade, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, transatlantic slave trade, union organizing
Ernest grew tanned and broad-shouldered working the prairie soil; shaved off his moustache; became handsome where once he had been hangdog. The chicken shack was supplanted by a clapboard farmhouse. Gradually, their sense of isolation diminished as more Scots settled in the area. It was reassuring to be able to celebrate Hogmanay with fellow countrymen so far from home, since ‘they don’t hold New Year out here very much just the Scotch folk’. Today their ten grandchildren live all over Canada, a country whose annual income per capita is not merely 10 per cent higher than Britain’s but second only to that of the United States. All thanks to the British Empire. So to say that I grew up in the Empire’s shadow would be to conjure up too tenebrous an image. To the Scots, the Empire stood for bright sunlight. Little may have been left of it on the map by the 1970s, but my family was so completely imbued with the imperial ethos that its importance went unquestioned.
additive manufacturing, barriers to entry, Berlin Wall, bilateral investment treaty, business process, business process outsourcing, call centre, citizen journalism, Clayton Christensen, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, conceptual framework, corporate governance, crony capitalism, deskilling, disintermediation, don't be evil, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, illegal immigration, immigration reform, income inequality, income per capita, intermodal, invisible hand, job-hopping, Joseph Schumpeter, Julian Assange, Kickstarter, Martin Wolf, megacity, Naomi Klein, Nate Silver, new economy, Northern Rock, Occupy movement, open borders, open economy, Peace of Westphalia, Plutocrats, plutocrats, price mechanism, price stability, private military company, profit maximization, Ronald Coase, Ronald Reagan, Silicon Valley, Skype, Steve Jobs, The Nature of the Firm, Thomas Malthus, too big to fail, trade route, transaction costs, Washington Consensus, WikiLeaks, World Values Survey
THE MORE REVOLUTION: OVERWHELMING THE MEANS OF CONTROL Ours is an age of profusion. There is simply more of everything now. There are more people, countries, cities, political parties, armies; more goods and services, and more companies selling them; more weapons and more medicines; more students and more computers; more preachers and more criminals. The world’s economic output has increased fivefold since 1950. Income per capita is three and a half times greater than it was then. Most importantly, there are more people—2 billion more than there were just two decades ago. By 2050, the world’s population will be four times larger than it was in 1950. Comprehending the size of this population as well as its age structure, geographical distribution, longevity, health, and aspirations is critical for understanding what has happened to power.
Admiral Zheng, Asian financial crisis, Berlin Wall, Bretton Woods, BRICs, British Empire, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global reserve currency, global supply chain, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, Malacca Straits, Martin Wolf, Naomi Klein, new economy, New Urbanism, open economy, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Xiaogang Anhui farmers
But even when it overtakes the United States in 2027, as predicted by Goldman Sachs, it will still have a relatively low GDP per head, and even in 2050 it will still only belong to the ‘upper middle group’ rather than the ‘rich club’ (see Figure 23). Welcome to a new kind of global power, which is, at one and the same time, both a developed - by virtue of the size of its GDP - and a developing country - by virtue of its GDP per capita. Figure 23. Future income per capita of major countries. The implications of a potential superpower being both a developed and a developing country are profound and multifarious. Previously the distinction between developed and developing countries was clear and unambiguous. Indeed between 1900 and 1960 there was a fundamental cleavage between those countries that industrialized in the nineteenth century and those that did not, a situation which persisted until the rise of the Asian tigers from the late fifties.
The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz
affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, 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, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, invisible hand, John Harrison: Longitude, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, London Interbank Offered Rate, lone genius, low skilled workers, Mark Zuckerberg, market bubble, market fundamentalism, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, obamacare, offshore financial centre, paper trading, patent troll, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, 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, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, women in the workforce
Economists marvel at our health care sector and its ability to deliver less for more: health outcomes are worse in the United States than in almost all other advanced industrial countries, and yet the United States spends absolutely more per capita, and more as a percentage of GDP, by a considerable amount. We’ve been spending more than one-sixth of GDP on health care, while France has been spending less than an eighth. Per capita spending in the United States has been two and a half times higher than the average of the advanced industrial countries.30 This inefficiency is so large that after it is taken into account, the gap between income per capita in the United States and in France shrinks by about a third.31 While there are many reasons for this disparity in the efficiency of the health care system, rent seeking, in particular on the part of health insurance companies and drug companies, plays a significant role. Earlier, we cited the most notorious example: a provision in the 2003 Bush Medicare expansion that led to much higher drug prices in the United States and to a windfall gain (a rent) for the drug companies estimated at $50 billion or more a year.
This Changes Everything: Capitalism vs. The Climate by Naomi Klein
1960s counterculture, battle of ideas, Berlin Wall, big-box store, bilateral investment treaty, British Empire, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, Climategate, cognitive dissonance, colonial rule, Community Supported Agriculture, complexity theory, crony capitalism, decarbonisation, deindustrialization, dematerialisation, Donald Trump, Downton Abbey, energy security, energy transition, equal pay for equal work, Exxon Valdez, failed state, Fall of the Berlin Wall, feminist movement, financial deregulation, food miles, Food sovereignty, global supply chain, hydraulic fracturing, ice-free Arctic, immigration reform, income per capita, Internet Archive, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, market fundamentalism, moral hazard, Naomi Klein, new economy, Nixon shock, Occupy movement, offshore financial centre, oil shale / tar sands, open borders, patent troll, planetary scale, post-oil, profit motive, quantitative easing, race to the bottom, Ralph Waldo Emerson, Rana Plaza, Ronald Reagan, smart grid, special economic zone, Stephen Hawking, Stewart Brand, structural adjustment programs, Ted Kaczynski, the scientific method, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, transatlantic slave trade, trickle-down economics, Upton Sinclair, uranium enrichment, urban planning, urban sprawl, wages for housework, walkable city, Washington Consensus, Whole Earth Catalog, WikiLeaks
Even if that were true, however, the basic global picture still suggests that the necessary reductions are incompatible with economic growth as we have known it. As Tim Jackson shows in Prosperity Without Growth, global annual emission cuts of as little as 4.9 percent cannot be achieved simply with green tech and greater efficiencies. Indeed he writes that to meet that target, with the world population and income per capita continuing to grow at current rates, the carbon intensity of economic activity would need to go down “almost ten times faster than it is doing right now.” And by 2050, we would need to be twenty-one times more efficient than we are today. So, even if Anderson and Bows-Larkin have vastly overshot, they are still right on their fundamental point: we need to change our current model of growth.
City: Urbanism and Its End by Douglas W. Rae
agricultural Revolution, barriers to entry, business climate, City Beautiful movement, complexity theory, desegregation, edge city, ghettoisation, income per capita, informal economy, interchangeable parts, invisible hand, James Watt: steam engine, Jane Jacobs, joint-stock company, Joseph Schumpeter, manufacturing employment, New Economic Geography, new economy, New Urbanism, Plutocrats, plutocrats, Saturday Night Live, the built environment, The Death and Life of Great American Cities, the market place, urban planning, urban renewal, War on Poverty, white flight, Works Progress Administration
The same boyfriend, as it happens, turns up elsewhere in our story. By the 1920s he was operating the New Haven Baseball Exhibition Company, scheduling major league opponents for local teams. He eventually left the city and became general manager of the New York Yankees. See New Haven Register, December 24, 1999, p. D3. 4. Dollars, denominated in 2002 currency, refer to the first quarter of each named year. GDP per capita is not, of course, equivalent to income per capita, but it provides a broad indicator of total prosperity per person. Inflation from 1996 to 2002 is calculated at 15.36 percent using U.S. Bureau of Labor Statistics calculations available at www.bls.gov. Source: Raymond Fair at www.Fairmodel.econ.yale.edu. Because the distribution of personal and household incomes is very unequal, real families experienced unequal changes over very much larger or smaller starting points across these decades. 5.
The Age of Turbulence: Adventures in a New World (Hardback) - Common by Alan Greenspan
air freight, airline deregulation, Albert Einstein, asset-backed security, bank run, Berlin Wall, Bretton Woods, business process, call centre, capital controls, central bank independence, collateralized debt obligation, collective bargaining, conceptual framework, Corn Laws, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cuban missile crisis, currency peg, 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, Hernando de Soto, income inequality, income per capita, invisible hand, Joseph Schumpeter, labor-force participation, labour market flexibility, laissez-faire capitalism, land reform, Long Term Capital Management, Mahatma Gandhi, manufacturing employment, market bubble, means of production, Mikhail Gorbachev, moral hazard, mortgage debt, new economy, North Sea oil, oil shock, open economy, pets.com, Potemkin village, price mechanism, price stability, Productivity paradox, profit maximization, purchasing power parity, random walk, reserve currency, risk tolerance, Ronald Reagan, shareholder value, short selling, Silicon Valley, special economic zone, the payments system, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, trade liberalization, trade route, transaction costs, transcontinental railway, urban renewal, working-age population, Y2K
The loading-up of employment costs on business (especially retirement costs) periodically induces French governments in desperation to initiate modest reforms, only to be thwarted by opposition marches on the ChampsElysees, a tactic that has brought many a French government to grief. It is difficult not to be gloomy about France's economic prospects. In 287 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. T H E AGE OF T U R B U L E N C E world rankings of income per capita, France has fallen from eleventh in 1980 to eighteenth in 2005, according to IMF data. The unemployment rate in the early 1970s averaged 2.5 percent. Since the late 1980s, it has ranged between 8 percent and 12 percent.* Yet the French people's sense of freedom and nationalism is so pervasive that when pushed to the edge, they seem to regroup and productively engage the global community. I suspect there will be more of the same now that Nicolas Sarkozy has been elected president.
The Washington Connection and Third World Fascism by Noam Chomsky
anti-communist, business climate, colonial rule, declining real wages, deliberate practice, European colonialism, friendly fire, Gini coefficient, income inequality, income per capita, land reform, land tenure, new economy, RAND corporation, strikebreaker, union organizing
Another facet of the official mythology and propaganda regarding arms aid is that it “contributed to Thailand’s economic growth by enabling Thailand to devote a greater share of its resources to economic development.”71 Awkwardly, however, between 1954, the year of the SEATO treaty, and 1959, the value of Thai military expenditures rose by 250%. This was explained by Unger as a result of growth stimulated by military aid, which provided “an expanding income some of which could be devoted to security expenditures.”72 But Thai income per capita in 1959 was well below the levels of 1950-1952.73 Control by an internally unconstrained military junta, dependent on the largesse of an external sponsor engaged in an anti-Communist crusade, is the key to this huge expansion of military outlays in a country with pressing development needs. Rising security expenditures were part of the total package of aid-armaments-repression that was immensely advantageous to the Thai military elite and at the same time met the requirements of the selectively benevolent tutelage of the U.S. cold warriors.
Immigration worldwide: policies, practices, and trends by Uma Anand Segal, Doreen Elliott, Nazneen S. Mayadas
affirmative action, Asian financial crisis, Berlin Wall, borderless world, British Empire, Celtic Tiger, centre right, conceptual framework, credit crunch, demographic transition, deskilling, en.wikipedia.org, European colonialism, Fall of the Berlin Wall, financial independence, full employment, global village, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, informal economy, knowledge economy, labor-force participation, labour market flexibility, labour mobility, low skilled workers, minimum wage unemployment, New Urbanism, open borders, phenotype, South China Sea, structural adjustment programs, trade route, transaction costs, upwardly mobile, urban planning, women in the workforce
The numbers of migrants increased substantially during the latter decades of the last century as the ‘‘push’’ factors have multiplied. Conditions in the migrant-sending countries worsened as population growth, poverty, and unemployment were compounded by political and ethnic conflicts. Inequitable income distribution within the sender country acted as a motivation to emigrate as did the widening differential between Spain’s income per capita and that pertaining in the source countries. Interestingly, acute poverty is not always the principal driver in the decision to migrate. There is ample evidence that many migrants are educated, urban dwellers who are far from being the poorest in the source country and as such suffer from relative deprivation (Reyneri 2003). Improved communications and lower travel costs helped to boost the numbers opting to migrate.