rising living standards

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pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

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

Fifth, the structure of our political system impedes progressive policy change. Each of these is a potentially powerful obstacle to progress. Yet none is likely to derail America’s slow but steady movement toward an expanded government role in improving economic security, enhancing opportunity, and ensuring rising living standards for all. Obstacle 1: Americans Don’t Want Big Government Compared to other rich nations, the United States has a relatively small government—particularly with respect to programs that provide economic security, enhance opportunity, and facilitate rising living standards. Many say this is because it’s what Americans want. More than our counterparts in other rich nations, we tend to believe that individual effort, rather than luck, determines success in life. We therefore see a need for only minimal government assistance.

Despite our affluence, however, too few ordinary Americans have adequate economic security, too few who grow up in disadvantaged circumstances are able to reach the middle class, and too few have seen their boat lifted when the economic tide rises. This book is about how we can do better. The problems we confront are big ones, but they are not intractable. The key to a solution? Government social programs. Social programs function as a safety net, a springboard, and an escalator: they provide economic security, enhance opportunity, and ensure rising living standards. Over the past century, we have gradually expanded the size and scope of such programs. Given recent economic and social shifts, we need to do more. Our history and the experiences of some other affluent nations point us in useful directions, and they suggest we can expand government without destroying liberty, breaking the bank, or wrecking the economy. Can it happen? The notion that we are likely to further increase the size and scope of our social policy may seem blind to the reality of contemporary American politics.

In recent decades the Nordic countries have supplemented generous social insurance programs with services aimed at boosting employment and enhancing productivity, from early education and active labor market programs to public infrastructure and support for research and development.18 And for the most part, these countries believe in a market-friendly regulatory approach.19 There are regulations to protect workers, consumers, and the environment, to be sure. But these exist within an institutional context that aims to encourage entrepreneurship and flexibility by making it easy to start or close a business, to hire or fire employees, and to adjust work hours. In other words, modern social democracy means a commitment to extensive use of government policy to promote economic security, expand opportunity, and ensure rising living standards for all. But it aims to do so while facilitating freedom, flexibility, and market dynamism. Freedom, flexibility, and market dynamism have long been hallmarks of America’s economy. These are qualities worth preserving. The Nordic countries’ experience shows us that a nation can successfully embrace both flexibility and security, both competition and social justice. Modern social democracy can give us the best of both worlds.


pages: 561 words: 87,892

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, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, G4S, 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, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

By doing so, the opportunity to grow sufficient crops to feed the starving and the destitute may be foregone. At its worst, scarcity promotes armed conflict. In Africa and elsewhere, low incomes per head and a sense of hopelessness about the economic future lead all too frequently to war and war, in turn, lowers incomes per head. People choose (or are forced) to fight, rather than feed, each other. In the West, where we’ve experienced steadily rising living standards for many years, we have often forgotten about the ultimate economic constraint of scarcity. Technologies will overcome temporary shortages. People and governments ignore budgetary constraints, hoping instead for continued access to credit. Governments boast about the pace of economic growth. We have come to expect – even to deserve – higher living standards, based on our faith in the success of technology and free markets.

As a result, the demand for ultimately scarce resources – most obviously food and fuel – is growing rapidly. At the same time, the competitive environment is changing. Fragmented local labour markets are increasingly being joined together, reducing the relative bargaining power of many Western workers. The ability to negotiate pay increases and decent pensions is fading, constrained by the competitive onslaught from newly enfranchised workers elsewhere in the world. Our belief in ever-rising living standards hinges on the idea that the West will continue to reap significant economic benefits from technological progress. As we shall see, however, this idea is unsound. Japan is one of the most technologically advanced countries in the world yet its economy has stagnated over the last twenty years. Technologies certainly help to raise living standards, but the story doesn’t end there. Technologies also change the competitive nature of markets, to the advantage of some but to the disadvantage of others.

To remove the Malthusian constraint, then, any self-respecting political leader wants to have a piece of the productivity action. Higher productivity should deliver higher incomes. Yet, as I argue throughout this book, gains in productivity have not delivered universal benefits. With the rise of the emerging nations, the economic calculus is changing in ways that seem to be undermining Western hopes of ever-rising living standards, even allowing for continued technological progress across the world as a whole. OPPORTUNITY FOR ALL The changing fortunes exemplified by Wimbledon and the Olympics stem from two key aspects of globalization. Political barriers have come down. Following the collapse of Soviet communism, estranged countries and their previously repressed people have become more closely connected with the Western world than before.


pages: 356 words: 91,157

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

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

This book is my attempt to grapple with the New Urban Crisis and the deep contradictions of our cities and our society writ large. In writing it, I have three primary objectives: to spell out the key dimensions of this crisis; to identify the fundamental forces that are shaping it; and to outline what we need to do to bring about a new and more inclusive urbanism that encourages innovation and wealth creation while generating good jobs, rising living standards, and a better way of life for all. The stakes could not be higher. How we come to grips with the New Urban Crisis will determine whether we become more divided and slide backward into economic stagnation, or forge ahead to a new era of more sustainable and inclusive prosperity. 1 THE URBAN CONTRADICTION I magine that you could travel back in time to 1975, snatch a random New Yorker off the street, and set him loose in the city today.

Marrying my own long-held interest in urban economic development with the insights of urban sociologists on the corrosive effects of concentrated poverty, I mapped the deep new divides that isolate the classes in separate neighborhoods and traced the growth of poverty and economic disadvantage in the suburbs. I delved deep into the many challenges that face the rapidly growing cities of the world’s emerging economies, where urbanization is failing to spur the same kind of economic growth and rising living standards that it did for the advanced nations.3 The New Urban Crisis is different from the older urban crisis of the 1960s and 1970s. That previous crisis was defined by the economic abandonment of cities and their loss of economic function. Shaped by deindustrialization and white flight, its hallmark was a hollowing out of the city center, a phenomenon that urban theorists and policymakers labeled the hole-in-the-donut.

But much of it is also homegrown: more and more people who were once members of the middle class have fallen out of it, as a result of either job loss or rising housing prices. Suburbia has long been home to the wealthiest communities in America, but now its inequalities increasingly rival those of cities. The fifth and final dimension of the New Urban Crisis is the crisis of urbanization in the developing world. The urban optimists believe that urbanization will ultimately bring economic growth, rising living standards, and a growing middle class to these places, just like it did for the United States, Europe, Japan, and more recently, China. Cities, after all, have historically driven the development of national economies. But this connection between urbanization and a rising standard of living has broken down in many of the most rapidly urbanizing areas of the world. We are seeing the rise of a troubling phenomenon of urbanization without growth, in which people pour into rapidly urbanizing areas of the developing world, but see little or no improvement in their living standards.


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, business cycle, 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, fixed income, 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, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, 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

Economic stagnation brings with it a new political tension, a debate between potential winners and losers. That debate, however, is far from being resolved. MOON LANDINGS REVISITED The West now has the growth profile of Japan and, in some cases, levels of income inequality approaching Argentina’s. For Westerners used to ever rising living standards, who have come to expect continuous improvements in their daily lives from one year to the next, this presents a major challenge. Based on our collective belief in continuously rising living standards, we have spent the last half-­century watching our financial wealth and our political and economic ‘rights’ accumulate at an incredible pace. We all, directly or indirectly, own pieces of paper or rely on political promises that make claims on future economic prosperity. The pieces of paper range from cash through to government bonds, from equities through to property deeds and from asset-­backed securities through to collateralized debt obligations. 34 4099.indd 34 29/03/13 2:23 PM Taking Progress for Granted The language deployed may vary from the very simple to the incredibly complicated but these pieces of paper all have one thing in common: they represent claims on assumed future economic success.

An excessive increase in consumer demand would lead to higher prices: wage earners would end up worse off in real terms, bringing demand back on track. A sudden reduction in capital spending would lead to lower interest rates – the supply of savings would now be greater than the demand for loans – thus 55 4099.indd 55 29/03/13 2:23 PM When the Money Runs Out encouraging households to spend rather than save. Demand would then stabilize. Other than as a consequence of major political upheavals – war was hardly conducive to rising living standards – economies seemed destined to stick to a path ultimately determined by a mixture of population growth, capital accumulation and advances in technology. Macroeconomics had yet to be invented. While the Weimar Republic’s experience was readily understandable – rebuilding Germany’s economy after the First World War while, at the same time, paying reparations to the victorious (and vindictive) Allies led inevitably to the printing press – the Great Depression was a far bigger challenge to the prevailing orthodoxy.

Among the big losers in the UK in the first half of the twentieth century were the landed gentry, many of whom were undone by the impact of death duties, one reason why the National Trust now looks after ‘over 350 historic houses, gardens and ancient monuments’.12 The Trust purchased its first property – the Alfriston Clergy House in Sussex – for a mere £10 in 1896 but other properties soon followed as the rich were inevitably squeezed to fund the costs of two world wars and an intervening depression. Above a certain threshold, property rights were mostly ignored. Rich creditors lost out, even as national income for the most part continued to expand. In the second half of the twentieth century, both debtors and creditors could more happily live side-­by-­side thanks to persistently rising living standards. Rising incomes gave at least some creditors a reasonable return – banks and bondholders both did incredibly well as the inflationary 1970s gave way to the price stability of the 1980s and beyond – while debtors could sleep easily, knowing that higher living standards would easily allow them to pay off their debts, with both interest and little financial pain. Without growth, however, the relationship between creditors and debtors becomes a lot more problematic.


pages: 295 words: 90,821

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath

"Robert Solow", active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population

But because those baby boomers, on average, did not have large families of their own, when they began to exit the labor force in the twenty-first century there was no way to keep up the momentum. The ratio of workers to population fell, and hence the growth rate of human capital fell during the twenty-first century. The growth slowdown is, in large part, a consequence of the family decisions made by people thirty or forty years ago. And those decisions were informed by the success of rising living standards and innovation in contraception. Beyond demographics, increased living standards had another significant consequence for economic growth, which worked through our choices about the kinds of products we purchase. In 1940 you might have spent your money installing plumbing for running water or a toilet, if you didn’t already have those things. The same went for air-conditioning, a TV, or a computer at other points in time during the twentieth century.

The steady increase in GDP per capita that drove the demographic changes and shift in spending toward services represented a substantial improvement in material living standards, but that doesn’t mean that everyone enjoyed the same improvement, or that there were no consequences for the environment, politics, or society in general. Think of GDP per capita like a pedometer for economic activity. Just as achieving ten thousand steps in a day does not tell you everything about your health, the successes behind the growth slowdown do not tell you everything about society or the economy. But because it is ultimately rising living standards that lie behind the growth slowdown, we may not be able to—or even want to—reverse it. Would it be worth it to destroy everyone’s car just to boost both employment in the automotive industry and the growth rate of GDP per capita for a little while? Would you want to roll back living standards and women’s rights to reverse population aging in the hopes of increasing growth decades in the future?

The literature attempting to explain the fundamental shift from families that had five to eight children each to families with one to three children each is vast and encompasses economics, sociology, psychology, anthropology, history, demography, political science, and medicine. I will not pretend that I can do justice to all the nuances of this research. Let me give you what I believe are the crucial elements explaining fertility decline in the United States. The short answer is that the fertility decline is a reaction to rising living standards in a very broad sense. It is a symptom of success. Economists are often accused of turning everything into a cold, lifeless comparison of costs and benefits. And the economics of family size, which Gary Becker is credited with originating, is often cited as the primary example. Becker suggested that the choice of family size was no different from choices about, say, what cereal to buy: it involves preferences and budget constraints.


pages: 409 words: 118,448

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

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

Yet the turbulence of those decades can be understood only if we remember that economic conditions were getting steadily better in many parts of the world—not just for the rich, but for almost everyone. The very fact that life was so good—that jobs were easy to find; that food was plentiful and decent housing commonplace; that a newly woven safety net protected against unemployment, illness, and old age—encouraged individuals to take risks, from marching in the streets to joining the antimaterialist counterculture. Rising living standards and greater economic security made it possible for many people in many countries to join in the cultural ferment and social upheaval of the 1960s and early 1970s, and arguably engendered the confidence that brought vocal challenges to injustices—gender discrimination, environmental degradation, repression of homosexuals—that had long existed with little public outrage. Then, quite unexpectedly, growth stalled.

“Making slow growth normal serves the progressive program of defining economic failure down,” the conservative US political commentator George F. Will asserted in a 2015 critique of President Barack Obama’s policies, as if the rate of economic growth were a matter of presidential discretion.11 IN CHRONOLOGICAL TIME, THE GOLDEN AGE WAS BRIEF. BARELY a quarter-century elapsed from its blossoming out of a world in ruins to its sudden end amid unimagined prosperity, steadily rising living standards, and jobs for all. Scholars have spent the past fifty years struggling to understand what went wrong and how to set it right. But it may be that there is nothing to fix, that the long boom was a unique event that will never come again. Harvard University economist Zvi Griliches, a pioneer of research into productivity, concluded as much. “Perhaps the 1970s were not so abnormal after all,” he mused after decades studying productivity change.

Prices dropped, revealing the developing countries for what they were: places with low productivity and very high obstacles to starting businesses and promoting new ideas. The very policies that the planners had introduced to drive their economies to new heights, policies that favored certain sectors and certain well-connected individuals, stood in the way of economic growth. As in Karl Schiller’s Germany, so, too, in Mexico and Brazil and Indonesia: the idea that government planning could assure prosperity and rising living standards for all proved to be a cruel hoax. CHAPTER 3 Chaos Richard Nixon wasn’t much for economics. Politics aside, the interests of the thirty-seventh president of the United States ran more to realpolitik: war and peace, nuclear deterrence, and the strategic balance of power. The economic realm, by contrast, offered too few opportunities for political advantage and too many problems a president could not fix.


pages: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

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

At the same time, globalisation and increased concentration in the banking system since the crisis mean that the scale of any future global financial crisis and subsequent recession will be greater than ever before. Moreover, the environmental cost of bringing emerging market countries up to the per capita income levels of the advanced countries is rising all the time and is hazardous for the planet in a way that the fallout from early industrialisation was not. It follows from all this that the rising living standards for which capitalism deserves credit are accompanied by a high degree of insecurity – an insecurity that is exacerbated at the time of writing by tight fiscal policies in the US and Europe. These were designed to address the government deficits and debt burdens incurred to finance the welfare safety nets that were installed to mitigate that insecurity. The other key discontent about capitalism concerns its ethical basis.

But nor is there any justification in the attitude of many modern bankers, hedge fund managers and traders who think that manufacturing is for wimps – although this view has become notably less prevalent since the financial crisis. Manufacturing, as I have explained, has the extraordinary characteristic of being able to use decreasing human resources in producing ever increasing output. That is no mean trick and is an important part of the process whereby millions across the world have increasingly enjoyed the benefit of fast-rising living standards. One of the more poignant episodes in the afterlife of Lehman Brothers was the auctioning at Christie’s in 2010 of memorabilia from the defunct investment bank’s London office. These included a fine edition of Gibbons’s The History of the Decline and Fall of the Roman Empire, which fetched £2,375. Among other things, this event raised the question of whether the rise of finance before the Lehman collapse should have been a greater cause for concern than the decline of manufacturing.

With a majority of its $4 trillion of official reserves invested in dollar securities, China cannot now pull out except at the risk of precipitating a dollar crash that might wreck the value of this humungous nest egg. So the world’s biggest creditor country has not imposed discipline via the bond market on the world’s biggest debtor and would probably only do so in extreme political circumstances. Worse, Americans whose real incomes were declining for years enjoyed the illusion of rising living standards on the basis of a credit bubble that allowed them to treat their constantly re-mortgaged homes as automated teller machines. Then the residential property market collapsed. Meantime, the US cannot lightly alienate China because a Chinese financial exodus would, as suggested earlier, run the risk of precipitating a currency and financial crisis that would cause the government’s borrowing costs to rocket.


pages: 236 words: 67,953

Brave New World of Work by Ulrich Beck

affirmative action, anti-globalists, Asian financial crisis, basic income, Berlin Wall, collective bargaining, conceptual framework, Fall of the Berlin Wall, feminist movement, full employment, future of work, Gunnar Myrdal, hiring and firing, illegal immigration, income inequality, informal economy, job automation, knowledge worker, labour market flexibility, labour mobility, low skilled workers, McJob, means of production, mini-job, post-work, postnationalism / post nation state, profit maximization, purchasing power parity, rising living standards, Silicon Valley, working poor, working-age population, zero-sum game

This involved a wide range of strategies, actors and conditions which tied company management, banks, trade unions and political parties, as well as governments, to a relatively uniform philosophy of growth and a corresponding set of measures that held out a promise of success. The cultural-political targets of these measures were citizens in full-time employment, who had expectations of rising living standards and job security, while the main recipes were workforce participation, free collective bargaining, strong trade unions, government intervention and Keynesian macro-policies. Since conjunctural downturns and rising unemployment were seen as caused by weak demand, the state was not supposed to stint on public expenditure, and employers were also urged to increase wages as a means of pushing up internal demand.

The same holds for transport projects, or decisions to promote certain kinds of energy instead of others – and even if a certain objective is not disputed, there are usually various ways of achieving it, whose comparative advantages and disadvantages can only exceptionally be calculated in such a way that a clear vote emerges in favour of one option.51 On the other hand, the ‘Fordist consensus’ included the economic-political compromise of the ‘worker-citizen’. This compromise, with its faith in rising living standards, left class-struggle rhetoric hanging in the cloakroom and sought to procure a commitment to democracy outside work in the electoral arena. But now, in the wake of the globalization and individualization of work, the Fordist worker-citizen sees the ground slipping away beneath his feet and becomes politicized. The key questions today are thus different. How will democracy be possible beyond the full-employment society?

The dominance of a state-organized and state-monopolized politics also asserts itself vis-à-vis the economy and the market, although this is often disputed and not only by Marxists. To be sure, this model of ‘employee soci-ety’ (Lepsius) and ‘working citizen’ gained its persuasive power in Europe only after the Second World War, especially in contradistinction to the model of capitalist class society. The ‘employee’ refrains from any class-struggle rhetoric and receives instead a state-backed promise of rising living standards and social security. The citizen's political identity is thus given up at the workplace cloakroom. If the diagnosis is correct that attractive forms of paid work are drying up, then this old social architecture must be losing its stability. Either one sticks ‘even so’ to the fiction of a full employment society and a politics based upon it – in which case, a Brazilianization of the West is what lies ahead.


pages: 128 words: 35,958

Getting Back to Full Employment: A Better Bargain for Working People by Dean Baker, Jared Bernstein

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Asian financial crisis, business cycle, collective bargaining, declining real wages, full employment, George Akerlof, income inequality, inflation targeting, mass immigration, minimum wage unemployment, new economy, price stability, publication bias, quantitative easing, Report Card for America’s Infrastructure, rising living standards, selection bias, War on Poverty

As we revisit this critical issue, the jobless rate has ranged from 7 percent to 10 percent for over four years, and it’s not expected to come down much anytime soon. A strong labor market with full employment need not be a rare economic anomaly that returns roughly twice for every one appearance of Halley’s Comet. Full employment can be a regular feature of the policy landscape, with tremendous benefits for rising living standards, poverty reduction, the federal budget, and equitable economic growth. In this book we present the benefits and importance of full employment in ways that are particularly germane to the economy today, and we offer policies to begin moving to full employment now. Full employment can be defined as the level of employment at which additional demand in the economy will not create more employment.

But slack employment and its corollary – diminished bargaining power – get overlooked, in no small part because policymakers assume full employment is out of their control, though it is decidedly not. To give up on full employment is a mistake, because in an economy in which collective bargaining is minimal in the private sector and under siege in the public sector, full employment is the only route for working Americans can get ahead. Rising living standards for the majority require a labor market that is tight enough to force employers to raise compensation to the level where they can attract and keep the workers they need. Whenever that force has been in place, working people have done much better than when it’s been absent. Growing together or growing apart, and the role of full employment As discussed in Chapter 1, economists don’t have a good track record in terms of quantifying a reliable definition of full employment or the costs of setting the NAIRU – the unemployment rate generally associated with non-inflationary full employment – so high that it sacrifices growth and jobs, particularly for less-advantaged persons whose incomes are closely tied to the unemployment rate.


pages: 268 words: 89,761

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

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

Looking at the curves for different data in figure 3.1 it is clear that life expectancy increases not so much by countries moving out along a given curve, but by moving on to new, higher curves. Indeed, as early as 1975 Preston concluded that no more than 12 per cent of the improvement in life expectancy was associated with the rising standard of living (Preston 1975). In order to get a clearer idea of whether health really is responsive to rising living standards among the rich countries on the flat part of figure 3.1, let us move from cross-sectional data to look at changes over time. Figure 3.2 shows the relationship between percentage changes in GNPpc and changes in life expectancy over the twenty years 1970–90 among the rich market countries belonging to the Organisation for Economic Cooperation and Development (OECD). Among these countries it is possible to compare GNPpc at purchasing power parities rather than according to the vagaries of changing exchange rates between currencies.

These considerations show that the shifts in the curves in figure 3.1, and the weak correlations between life expectancy and rising GNPpc, should not necessarily be taken as proof that the improvements in mortality are not a product of economic development as properly understood. Indeed, it is hard to think of an explanation for rising life expectancy which is not in some way sustained, enabled or supported by economic development. The evidence for rejecting at least some distant link between rising living standards and increasing life expectancy seems inadequate. For countries on the horizontal part of the curves in figure 3.1 (which becomes more horizontal in the light of the inadequate quality adjustments), the onus for explaining the upward shift of the life expectancy curve is on the qualitative improvements in living standards which take place over time. If one were to suggest ways in which qualitative change might improve health, one might point to cleaner central heating, which avoids the problems of indoor air pollution and fire hazards associated with open fires; 42 The health of societies freezers which enable people to eat food with less bacterial contamination; a whole host of developments (including washing machines, electric kettles and disposable nappies) which have made baby and childcare not only easier but also more hygienic and safe; lead-free petrol which reduces environmental pollution; increases in car safety, which have reduced road deaths despite increased car ownership; and the wider provision of phones, which enables families and friends to overcome some of the social dislocation caused by geographical separation (relevant to the powerful influence of social support on health).

There are then several important processes which point towards the same interpretation of the flattening part of the curves relating life expectancy to GNPpc in figure 3.1. To summarise, these are the decline in the infectious diseases traditionally associated with poverty, the reversal of social-class gradients in conditions previously associated with wealth—including heart disease and obesity (this latter probably for the first time in recorded history) and lastly, the cessation of the decline in the proportion of low birthweight babies despite rising living standards. Together these suggest that we should probably interpret the levelling off of the curve of rising life expectancy with increasing GNP per capita as the attainment among the majority of the population of a minimum real material standard of living, above which further increases in personal subsistence no longer provide the key to further increases in health. For the bulk of the population, the stranglehold of the absolute standard of living on health has been overcome.


pages: 364 words: 99,613

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux

back-to-the-land, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, business cycle, call centre, centre right, cognitive dissonance, collateralized debt obligation, collective bargaining, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, disruptive innovation, falling living standards, financial deregulation, financial innovation, full employment, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kickstarter, lake wobegon effect, Long Term Capital Management, market fundamentalism, Martin Wolf, McMansion, medical malpractice, mortgage debt, Myron Scholes, Naomi Klein, new economy, oil shock, old-boy network, Paul Samuelson, plutocrats, Plutocrats, price mechanism, price stability, private military company, Ralph Nader, reserve currency, rising living standards, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, school vouchers, Silicon Valley, single-payer health, South China Sea, statistical model, Steve Jobs, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War

As the world around us has changed, so has the nation’s central economic problem. With the shrinking of our historical legacy of competitive advantages, the problem is no longer simply stability, or the smoothing out of the business cycle. National adjustment to our new condition requires economic redevelopment: improving the basic capacity of the economy to compete in a way that generates rising living standards. Again, the United States is obviously not a third-world country. But its future, like that of a third-world country, depends on its ability to build infrastructure, to educate its people, and to set national priorities. Economics commentator Jeff Madrick has suggested, and even the hard-line economists at the World Bank and the International Monetary Fund have learned, that a country’s economic development is a political process as much as an economic one.

The same Washington policymakers who have declared Social Security, which runs 6 percent of GDP, an unacceptable burden on the economy maintain that spending roughly the same amount on the military is no problem. Double standards aside, the issue here is the future financial condition of Americans, not America. In the three decades after World War II a robust economy was able to support both high Pentagon budgets and rising living standards. In the Reagan era, the military budget was financed the way we financed general prosperity—by borrowing. In the coming era of slow growth, fiscal austerity, and rising debt, the costs of empire will be paid in real time. And there is virtually no chance that reductions in military spending will provide anything like the resources needed for the investments and social programs required to stop the decline of middle-class living standards.

But as Medicare premiums rise, the age of eligibility lengthens, and more U.S. doctors opt out of the system, budgeting pressure will erode the assumption that sick Americans will be treated at home, in their own country. Reliance on personal services for growth implies a low productivity and, therefore low-wage, economy. High worker productivity does not guarantee high wages when the bargaining power of labor is weak, but, without it, rising living standards cannot be sustained. In a growing balanced economy wages in the high productivity manufacturing industries can rise while prices for manufactured products remain stable or fall. In low-productivity services sectors, prices have to rise in order to pay higher wages. The classic 1966 study by William J. Baumol and William G. Bowen pointed out that while output-per-worker in manufacturing had grown spectacularly, the efficiency of a symphony orchestra playing Mozart had not improved in over two centuries.


pages: 343 words: 102,846

Trees on Mars: Our Obsession With the Future by Hal Niedzviecki

"Robert Solow", Ada Lovelace, agricultural Revolution, Airbnb, Albert Einstein, anti-communist, big data - Walmart - Pop Tarts, big-box store, business intelligence, Colonization of Mars, computer age, crowdsourcing, David Brooks, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Flynn Effect, Google Glasses, hive mind, Howard Zinn, if you build it, they will come, income inequality, Internet of things, invention of movable type, Jaron Lanier, Jeff Bezos, job automation, John von Neumann, knowledge economy, Kodak vs Instagram, life extension, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Peter H. Diamandis: Planetary Resources, Peter Thiel, Pierre-Simon Laplace, Ponzi scheme, precariat, prediction markets, Ralph Nader, randomized controlled trial, Ray Kurzweil, ride hailing / ride sharing, rising living standards, Ronald Reagan, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, TaskRabbit, technological singularity, technoutopianism, Ted Kaczynski, Thomas L Friedman, Uber and Lyft, uber lyft, working poor

The answer comes through an analysis of productivity. Productivity is the measurement of how efficient we are at generating goods and services. “Labor productivity can be measured as output per worker or output per hour worked.”27 Up until very recently, it was a trusted axiom—one shown to be true by economist Robert Solow, who was awarded a Nobel Prize in 1987 for establishing it—that rising productivity leads to rising living standards. If your country’s overall productivity was going up—if you could make more stuff faster and increase the gross national product produced per worker—your country’s living standards were going up. The more stuff you made faster and better, the more money and jobs there were for everyone. Productivity was measured at a 4 percent increase in 2010. (It has been estimated at 1 percent annual increase throughout the 1800s.)28 In fact, throughout the first millennial decade, productivity increased at a very good average rate of 2.5 percent, “far better than the 1970s and 1980s” and slightly better than the 1990s.”29 Overall, notes a commentator, “the productivity of American workers—those lucky enough to have jobs—has risen smartly.”30 All these gains in productivity have been excellent for the companies that are the engines of the economy.

The famed 1 percent captured 95 percent of post-financial crisis growth since 2009, leaving 90 percent of the population of the US poorer than they were five or ten years before.35 The trend is the same across the globe, with almost half of the world’s wealth in the hands of just 1 percent of the population, which means that the wealth of the top i percent richest people in the world ($110 trillion) amounts to sixty-five times the total wealth of the bottom half of the world’s population.36 So that’s the picture in the age of permanent future: plenty of profit, ever-increasing productivity, substantial corporate investment in technology and machinery, and the top 20 percent spending like it’s 1985. But also an incongruous downward spiral never before seen in an era of rising productivity and profit—a chaotic spiral of chronic underemployment, declining wages, and looming obsolescence kept spinning by obscene wealth for a tiny handful. So then we have to ask, why have rising living standards for all decoupled from advancing productivity? What changed over the last twenty years? What’s different now? The answer is not technology, but specifically the development of technologies that vastly increase the speed at which we can collect, share, process and manage information. Most of technological development from the 1950s on has been primarily improvements on existing ideas. The exception is the rise of digital interconnectivity made possible by ever-smaller, cheaper, and more powerful information processers.

Furthermore, computers are, in some sense, the “universal machine” that has applications in almost all industries and tasks.47 Just at the moment we’ve made getting to the future first our main priority, technology and so-called innovation are no longer the definitive engines of prosperity we had imagined them to be during the hundred years of unprecedented growth that shuddered to a halt at the turn of the millennium. In fact, in many ways the most lauded, widespread technologies and innovations of the last few decades have been moving us in the opposite direction—they are working against prosperity. For the first time in the history of the world, jobs are being lost—not created—by technology. ° ° ° ° ° ° Here’s a quick example of how technology has helped decouple production from rising living standards. At the height of its power, the photography company Kodak employed more than 140,000 people worldwide and was worth twenty-eight billion dollars.48,49 They even invented the first digital camera. Eastman Kodak Co. generated good jobs and good salaries for upstate New York’s Rochester area for multiple decades. But in 2012 Kodak filed for bankruptcy, and the new face of photography is found on sites like Instagram and Flickr which together process and showcase billions of photos—pixilated into digital information—every year.


pages: 280 words: 74,559

Fully Automated Luxury Communism by Aaron Bastani

"Robert Solow", autonomous vehicles, banking crisis, basic income, Berlin Wall, Bernie Sanders, Bretton Woods, capital controls, cashless society, central bank independence, collapse of Lehman Brothers, computer age, computer vision, David Ricardo: comparative advantage, decarbonisation, dematerialisation, Donald Trump, double helix, Elon Musk, energy transition, Erik Brynjolfsson, financial independence, Francis Fukuyama: the end of history, future of work, G4S, housing crisis, income inequality, industrial robot, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, James Watt: steam engine, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Kuiper Belt, land reform, liberal capitalism, low earth orbit, low skilled workers, M-Pesa, market fundamentalism, means of production, mobile money, more computing power than Apollo, new economy, off grid, pattern recognition, Peter H. Diamandis: Planetary Resources, post scarcity, post-work, price mechanism, price stability, private space industry, Productivity paradox, profit motive, race to the bottom, RFID, rising living standards, Second Machine Age, self-driving car, sensor fusion, shareholder value, Silicon Valley, Simon Kuznets, Slavoj Žižek, stem cell, Stewart Brand, technoutopianism, the built environment, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, transatlantic slave trade, Travis Kalanick, universal basic income, V2 rocket, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, working-age population

And yet there is also a deeper story at play, one which remains largely unremarked upon. While the events of the last several years are both historic and unexpected, they are a response to an economic crisis, beginning in 2008, which itself only represents the first stage of a prolonged period of global disorder. Over coming decades we will not only endure the aftershocks of the failure of this economic model to deliver rising living standards, but also the era-defining effects of the aforementioned five crises. Individually, each poses an existential threat to our way of life. Together they could blow away the social and economic certainties of the last two and a half centuries. But there is a deeper layer still, because we are at a crossroads as much as a cliff edge. Alongside these challenges we also see the contours of something new, a society as distinct from our own as that of the twentieth century to feudalism, or urban civilisation from the life of the hunter-gatherer.

But that isn’t everything, because the final piece in changing the financial architecture to enable the transition to FALC is perhaps the most important. It involves the progressive socialisation of finance and capital markets. A Socialised Capital Market As the end drew nearer for the USSR and Eastern Bloc in the late 1980s, dissident intellectuals were eager to draw lessons from a system which despite its best intentions was now failing to deliver rising living standards on a par with the West. Włodzimierz Brus and Kazimierz Łaski were two such thinkers, socialist economists and followers of the distinguished Marxist–Keynesian Michał Kalecki. In From Marx to the Market, published in England in 1989, they assessed the prospects for socialist economics with the demise of the Soviet project. Both had been influential proponents of democratic reforms for decades, with Łaski forced to leave Poland in 1968 and Brus in 1972.


pages: 72 words: 21,361

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

"Robert Solow", Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business cycle, business process, call centre, combinatorial explosion, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, hiring and firing, income inequality, intangible asset, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, Loebner Prize, low skilled workers, minimum wage unemployment, patent troll, pattern recognition, Paul Samuelson, Ray Kurzweil, rising living standards, Robert Gordon, self-driving car, shareholder value, Skype, too big to fail, Turing test, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, wealth creators, winner-take-all economy, zero-sum game

Growing Productivity Of the plethora of economic statistics—unemployment, inflation, trade, budget deficits, money supply, and so on—one is paramount: productivity growth. Productivity is the amount of output per unit of input. In particular, labor productivity can be measured as output per worker or output per hour worked. In the long run, productivity growth is almost the only thing that matters for ensuring rising living standards. Robert Solow earned his Nobel Prize for showing that economic growth does not come from people working harder but rather from working smarter. That means using new technologies and new techniques of production to create more value without increasing the labor, capital, and other resources used. Even a few percentage points of faster productivity growth per year can lead to large differences in wealth over time.


pages: 310 words: 85,995

The Future of Capitalism: Facing the New Anxieties by Paul Collier

"Robert Solow", accounting loophole / creative accounting, Airbnb, assortative mating, bank run, Berlin Wall, Bernie Sanders, bitcoin, Bob Geldof, bonus culture, business cycle, call centre, central bank independence, centre right, Commodity Super-Cycle, computerized trading, corporate governance, creative destruction, cuban missile crisis, David Brooks, delayed gratification, deskilling, Donald Trump, eurozone crisis, financial deregulation, full employment, George Akerlof, Goldman Sachs: Vampire Squid, greed is good, income inequality, industrial cluster, information asymmetry, intangible asset, Jean Tirole, job satisfaction, Joseph Schumpeter, knowledge economy, late capitalism, loss aversion, Mark Zuckerberg, minimum wage unemployment, moral hazard, negative equity, New Urbanism, Northern Rock, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, race to the bottom, rent control, rent-seeking, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, too big to fail, trade liberalization, urban planning, web of trust, zero-sum game

Surveys show an unprecedented level of youthful pessimism: most young people expect to have lower living standards than their parents. Nor is this a delusion: during the past four decades, the economic performance of capitalism has deteriorated. The global financial crisis of 2008–9 made it manifest, but from the 1980s this pessimism has been slowly growing. Capitalism’s core credential of steadily rising living standards for all has been tarnished: it has continued to deliver for some, but has passed others by. In America, the emblematic heart of capitalism, half of the 1980s generation are absolutely worse off than the generation of their parents at the same age.2 For them, capitalism is not working. Given the huge advances in technology and public policy that have taken place since 1980, that failure is astounding.

The knowledge that, even once retired with a golden parachute, a former CEO could be dragged off the golf course and held responsible for past mistakes would likely concentrate the minds of those in positions of responsibility. Once you have demonstrated some spine, you can move on to present a national strategy in simple terms. Perhaps start with the purpose of firms, to benefit society in ways that are sustainable and restore rising living standards. Explain why many firms have deviated from this purpose. Explain the government policies that will try to correct this state of affairs, and – most crucially – explain their limitations. Then invite people across society to take on this new role as ethical citizens. Like all successful narratives, change cannot be achieved overnight. It requires a sustained and consistent message across many different mouthpieces of government and, like all narratives, it can be fatally undermined by actions that are inconsistent with the words.


pages: 261 words: 81,802

The Trouble With Billionaires by Linda McQuaig

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

Rather, these cases are being cited deceptively in an attempt to perpetuate myths about the menace of taxation. • • • A broad consensus emerged during the 1950s and ’60s about the role of government and the goals of public policy, including taxation. Based on the experience of citizens during the Great Depression and the Second World War, it was widely accepted that governments should correct the pervasive failures of the market, stabilize the economy, ensure rising living standards, guarantee workers a degree of economic security, provide access to health and education services, and promote social equality. While the precise nature of what was often called the ‘social contract’ varied from country to country, citizens in most Western industrialized nations opted to rely upon the economic decisions of democratically elected governments rather than purely on the market.

As Nicholas Timmins notes: ‘at the end of the sixties and a quarter-century on from the Beveridge report, the welfare state’s condition can only be described as one of mature flowering. The services it provided were bigger, better and more comprehensive than ‌anything that had gone before’.10 At the same time, Britain enjoyed sustained economic growth, with a Keynesian approach by government maintaining a high level of employment and rising living standards. Average earnings (after inflation) rose by 2.7 per cent a year between 1951 and 1961, while profit rates averaged ‌a healthy 15.5 per cent.11 From 1951 to 1964, the number of cars on the British roads rose from 2.5 million to six million, and there was similarly impressive growth in the number of households owning refrigerators (from 5 to 37 per cent) and washing machines (from ‌11 to 52 per cent).12 In 1959, the Conservatives, portraying themselves as the trusted managers of the welfare state, were re-elected with the campaign slogan: ‘You’ve never had it so good


pages: 263 words: 80,594

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

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

We are living through a mass extinction: the last fifty years has seen a 60% fall in vertebrate populations. Insects, particularly those critical for pollinating many plant species, are in terminal decline, and our soils are being eroded faster than they can be replenished. In other words, we are on the verge of ecological Armageddon. But this moment of extended crisis could also represent a moment of opportunity. Many capitalist economies around the world are not only failing to deliver rising living standards for their most powerful constituencies, the capitalist mode of production is accelerating the breakdown of all our most important environmental systems. Finance-led growth contributes to these dynamics by creating huge, unsustainable booms, followed by equally massive, wasteful busts. We cannot afford to organise our economies according to the logic of finance-led growth anymore. But our aim should not be to replace it with a new, equally contradictory model.

The numbers of people working part-time, on zero-hour contracts or on non-permanent contracts have all increased. Many of those working in the “gig economy” for companies such as Uber or Deliveroo also sacrifice benefits such as pensions and sick pay, meaning that their effective remuneration is even lower than what is captured in the headline wage statistics. Today, eight million people in poverty live in a working household.11 The link between employment and rising living standards has been severed. High levels of employment have also coincided with a stagnation in productivity — the amount of output produced for every hour worked. Productivity in the UK is 13% below the G7 average, having stalled since the financial crisis. One major reason for this is the declining productivity in financial and professional services. These previously highly profitable industries drove increases in productivity that were eventually shown to be illusory, revealing poor rates of productivity growth in much of the rest of the economy.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

"Robert Solow", banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business cycle, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

Nearly everyone else, in contrast, has ended up in the second track—the slow lane of the economy. This track—the ‘productive economy’ where new businesses are built, new products devised and wealth and jobs created—is the one on which economic success depends. It produces the goods and services that make up economic output, provides jobs for the bulk of the workforce and creates the wealth that enables rising living standards. But while the first track is thriving, this one is floundering. Although the productive side of the economy has always depended on the financial side, the interests of these two tracks have become increasingly at odds. Actively promoted by successive governments over three decades, for misguided reasons as we shall see, the money economy has captured the dominant position, greatly out of proportion to the needs of the wider economy.

‘The consequence of a strategy which attempts to obtain wage increases or to resist wage cuts in a period when capital faces increasing competition, is that capitalists find it harder and harder to meet those demands and to remain profitable at the same time’, argued the radical political economists, Andrew Glyn and Bob Sutcliffe, in their influential book, British Capitalism, Workers and the Profits Squeeze , published in 1972. ‘Sometimes, therefore, capital and labour are bargaining not only about wages, but about the survival of the capitalist system’.66 The global economic problems of the time were much more significant than just another of the periodic crises endemic to the history of capitalism. The steadily rising living standards of the ‘golden age’ gave way to near stagnant output. What one economist called ‘disorganised capitalism’ was not well enough equipped to cope with the external oil price shock of 1973, the end of cheap energy and the surges in other commodity prices and the rise of industrial militancy, while the tools of economic management, so successful for the previous twenty five years proved less able to cope with inflation than stagnation, let alone both.67 To settle the crisis and the weakening of private capital what was needed was a modest correction in the wage share, and the restoration of profit levels, returning them to the norm of the post-war decades.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

"Robert Solow", 23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, creative destruction, 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, hedonic treadmill, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), 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, Kickstarter, 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, Thales and the olive presses, Thales of Miletus, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, Y2K, Yogi Berra, zero-sum game

Let it never be for gotten that, by propagating excessive caution about genetically modified food aid, some pressure groups may have exacerbated real hunger in Zambia in the early 2000s. The precautionary principle – better safe than sorry – condemns itself: in a sorry world there is no safety to be found in standing still. More immediately, the financial crash of 2008 has caused a deep and painful recession that will generate mass unemployment and real hardship in many parts of the world. The reality of rising living standards feels to many today to be a trick, a pyramid scheme achieved by borrowing from the future. Until he was rumbled in 2008, Bernard Madoff offered his investors high and steady returns of more than 1 per cent a month on their money for thirty years. He did so by paying new investors’ capital out to old investors as revenue, a chain-letter con trick that could not last. When the music stopped, $65 billion of investors’ funds had been looted.

Now, thanks to farming, each individual had not only other members of the Species working for her (and vice versa), but members of other species as well, such as cows and corn. Around 200 years ago, the pace of change quickened again thanks to the Species’ new ability to recruit extinct species to its service as well, through the mining of fossil fuels and the releasing of their energy in ways that generated still more services. By now the Species was the dominant large animal on its planet and was suddenly experiencing rapidly rising living standards because of falling birth rates. Parasites plagued it still – starting wars, demanding obedience, building bureaucracies, committing frauds, preaching schisms – but the exchange and specialisation continued, and the collective intelligence of the Species reached unprecedented levels. By now almost the entire world was connected by a web so that ideas from everywhere could meet and mate. The pace of progress picked up once more.

If my great grand-daughter reads this book in 2100 I want her to know that I am acutely aware of the inequality of the world I inhabit, a world where I can worry about my weight and a restaurant owner can moan about the iniquity of importing green beans by air from Kenya in winter, while in Darfur a child’s shrunken face is covered in flies, in Somalia a woman is stoned to death and in Afghanistan a lone American entrepreneur builds schools while his government drops bombs. It is precisely this ‘evitable’ misery that is the reason for pressing on urgently with economic progress, innovation and change, the only known way of bringing the benefits of a rising living standard to many more people. It is precisely because there is so much poverty, hunger and illness that the world must be very careful not to get in the way of the things that have bettered so many lives already – the tools of trade, technology and trust, of specialisation and exchange. It is precisely because there is still so much further to go that those who offer counsels of despair or calls to slow down in the face of looming environmental disaster may be not only factually but morally wrong.


pages: 525 words: 153,356

The People: The Rise and Fall of the Working Class, 1910-2010 by Selina Todd

call centre, collective bargaining, conceptual framework, credit crunch, deindustrialization, deskilling, different worldview, Downton Abbey, financial independence, full employment, income inequality, longitudinal study, manufacturing employment, Neil Kinnock, New Urbanism, Red Clydeside, rent control, Right to Buy, rising living standards, sexual politics, strikebreaker, The Spirit Level, unemployed young men, union organizing, upwardly mobile, urban renewal, Winter of Discontent, women in the workforce, young professional

Far from being a resounding Labour victory, the election was really a defeat for the Conservatives, who had failed to recover from the Profumo sex scandal, Rachmanism and the economic insecurity of the early 1960s.53 By October 1964, the sociologists had left Luton. Goldthorpe’s research team concluded that despite experiencing rising living standards, most of these affluent workers remained staunchly Labour. The researchers could find no ready explanation for this, but that was because they took ‘rising living standards’ for granted, without questioning why so many of their interviewees were discontented about their circumstances, and uncertain about the future. Most of the interviewees still felt they were living in circumstances that they had not chosen – that they were ‘the rest’ as distinct from ‘the rich’.54 Wilson scored highly with younger wage-earners, many of whom were frustrated with the chasm between the Conservatives’ promises of affluence and the reality of everyday life.

By the 1950s, there was no hard and fast division between the living standards of those who had served in the forces and those who had stayed at home; Mr Blake and Mr Kiddey pointed to the re-emergence of a pre-war fracture between the living conditions of skilled workers and those of the rest of the working class. These disgruntled men believed that the promises they were made in the 1940s had been broken. Many of them experienced the 1950s not as a time of rising living standards, but as a period when their hopes of attaining – or returning to – skilled work were dashed. As a result of inter-war unemployment and wartime disruption, many thousands of men had slid down the occupational ladder. Ann Lanchbury’s father was among them. A trained carpenter, he had been laid off in the hard times of the 1930s. During the war he had become a semi-skilled worker at Coventry’s Jaguar plant, where he took pride in making ‘all the wooden insides of Jaguar cars’.


pages: 324 words: 92,805

The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business cycle, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy

At the Federal Reserve, chairman Alan Greenspan, another champion of unfettered, efficient markets, saw rapidly appreciating housing prices and equity withdrawals as an easy way to help offset consumers’ flattening incomes. In this Panglossian scenario, by keeping interest rates low, the government hoped to harness financial markets to do what traditional economic activity no longer seemed capable of doing: maintain rising living standards. Government, too, had gone myopic. As Greenspan explained in a 2004 speech, the “surge in mortgage refinancings” had “likely improved rather than worsened the financial condition of the average homeowner . . . and has very likely been a supportive factor for the general economy.” Meanwhile, on suburban tracts no more than forty-five minutes from Greenspan’s office at the Fed, new housing developments were selling out before crews had broken ground, and units were flipping once or twice or even three times before they were finished.

More and more, the point of innovation in the Impulse Society seems to be to create extraordinary new efficiencies that enable an enterprising elite to carve off ever-larger pieces of the pie—a share that is increasingly difficult to justify as benefiting the larger society. Efficiency itself now seems corrupt: the drive for ever-greater output at an ever-lower cost, once the engine of rising living standards and universal progress, now seems to work mainly for those who own the machines, factories, and other capital assets—as if we’ve somehow deleted much of the social progress achieved over the last century and slipped back to the Gilded Age. Such a development should be troubling to more than the members of Occupy Wall Street. Indeed, it should prompt even those in high places—attorneys, say, or stock traders, and certainly politicians—to ask not only where our efficient innovations are taking us, but what, and who, that innovation is really for.


pages: 354 words: 92,470

Grave New World: The End of Globalization, the Return of History by Stephen D. King

9 dash line, Admiral Zheng, air freight, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, joint-stock company, Kickstarter, Long Term Capital Management, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, plutocrats, Plutocrats, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, The Rise and Fall of American Growth, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

Whilst they accounted for over 18 per cent of the world’s population in 1950, their share may have dropped to a rather insignificant 7.7 per cent by 2100. TWENTY-FIRST-CENTURY MIGRATION TRIGGERS Knowing that populations are likely to wax and wane is not in itself enough to demonstrate that there will be large migratory movements. There needs also to be a catalyst. There are likely to be at least three in the twenty-first century: rising living standards in poor countries; persistence of conflict where government and institutions are ineffective or where there are failed states; and climate change, the effects of which will impact some nations more than others. Take Nigeria again. Its per capita incomes fell rapidly in the early 1980s: between 1981 and 1987, living standards dropped on average by 6 per cent per year, a truly catastrophic outcome.

Typically, to secure the capital inflow, the recipient country would need to provide better infrastructure, improved corporate governance and higher levels of legal protection to make the prospective investment ‘safe’.3 In time, this ‘exchange’ – between investment and governance, rather than between exports and imports – created a virtuous circle, leading to an emerging-market revolution associated with rapidly rising living standards for the many, not the few. In China, for example, the first stirrings of economic convergence with the West appeared in the early 1980s. By 2010, Chinese per capita incomes had risen to 25 per cent of those in the US, by which time US incomes themselves were considerably higher than they had been in the 1950s. If nineteenth-century technology had been the great divider (thanks to industrial concentration), late twentieth-century technology was the great unifier (thanks to global supply chains).


Refuge: Transforming a Broken Refugee System by Alexander Betts, Paul Collier

Alvin Roth, anti-communist, centre right, charter city, corporate social responsibility, Donald Trump, failed state, Filter Bubble, global supply chain, informal economy, Kibera, mass immigration, megacity, mobile money, Mohammed Bouazizi, mutually assured destruction, open borders, Peace of Westphalia, peer-to-peer, race to the bottom, randomized controlled trial, rising living standards, risk/return, school choice, special economic zone, structural adjustment programs, trade route, urban planning, zero-sum game

By the 1980s there was a grim cliff between a rich world and a poor world with little in between. Since the 1990s, global inequality has been falling rapidly as most other countries have started to catch up. The most spectacular cases have been China and India, home to a third of mankind. But this trend is widespread; once impoverished and conflict-devastated societies like Vietnam, Rwanda and Colombia are now peaceful and have achieved rapidly rising living standards. Most countries are now somewhere in the middle. So, global economic developments look to be unpromising as an explanation for the upsurge in displacement. What else might it be? WHAT DRIVES DISPLACEMENT AND REFUGE? People seeking refuge are not fleeing poverty, they are fleeing danger. The flight for refuge happens when a society ceases to provide security for its people. For one reason or another, it falls into violent disorder.

A repressive state, with considerable capacity for mass violence, it had relied upon the technique of incarcerating its potentially disaffected youth in the army to serve long terms as conscripts. For around a decade this worked: the rhetoric of unity in the face of the powerful neighbouring enemy, Ethiopia, lent a degree of legitimacy. Gradually, this narrative has lost its power to ensnare. While Eritrea’s economy has stagnated, despite its excellent coastal location, the economy of landlocked Ethiopia has been well run for ordinary people and delivered rapidly rising living standards. It has also become home to thousands of Eritreans. To the bottomless dismay of the heroic people who fought for the secession from Ethiopia, their struggle succeeded only to be revealed as pointless. With the demise of the rationale for a society kept permanently on a war-footing, the ordinary people who worked as the jailers of the nation’s youth lost their dedication. Junior officers and border guards began to accept bribes from reluctant conscripts keen to escape.


pages: 339 words: 95,270

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein

Albert Einstein, Asian financial crisis, asset allocation, asset-backed security, Berlin Wall, Bernie Sanders, Branko Milanovic, Bretton Woods, British Empire, business climate, business cycle, capital controls, centre right, collective bargaining, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, deglobalization, deindustrialization, Deng Xiaoping, Donald Trump, Double Irish / Dutch Sandwich, Fall of the Berlin Wall, falling living standards, financial innovation, financial repression, fixed income, full employment, George Akerlof, global supply chain, global value chain, illegal immigration, income inequality, intangible asset, invention of the telegraph, joint-stock company, land reform, Long Term Capital Management, Malcom McLean invented shipping containers, manufacturing employment, Martin Wolf, mass immigration, Mikhail Gorbachev, money market fund, mortgage debt, New Urbanism, offshore financial centre, oil shock, open economy, paradox of thrift, passive income, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, Scramble for Africa, sovereign wealth fund, The Nature of the Firm, The Wealth of Nations by Adam Smith, Tim Cook: Apple, trade liberalization, Wolfgang Streeck

Conversely, countries where people collectively spend less than they earn must be investing their current account surpluses abroad; more money is going out to buy foreign assets than is coming in from the rest of the world to buy local assets.17 The following equations may help clarify these relations: Current account = Financial account + Statistical discrepancy Current account = Household saving + Corporate profits + Taxes – (Household investment + Business investment + Government spending) Financial account = Foreigners buying local assets – Locals buying foreign assets Financial account = Private sector financial account + Change in central bank reserves Large surpluses or deficits are not inherently good or bad. “Good imbalances” allow savers from richer surplus countries to earn healthy returns by financing development and rising living standards in deficit countries. This is what the United States did for much of the nineteenth century, when it imported mainly British capital to boost domestic investment to levels much higher than it could have otherwise achieved without squeezing American workers. More recently, except for a brief period in the late 1980s, South Korea consistently imported more than it exported in the decades from independence in 1948 until the Asian Financial Crisis in 1997.

Losses were concentrated in the places and sectors most exposed to competition from manufacturers in countries where workers are paid far less than they are worth, most notably China. There was nothing inherently wrong with American manufacturers opening operations in China. The problem was that workers in China and elsewhere were unable to consume additional imports from the United States, which broke the link between rising trade and rising living standards.36 In theory, the hit to manufacturing could have been offset by gains elsewhere in the economy. Yet despite the inflation of the health care, government, construction, finance, and education sectors—which accounted for most of the jobs created in the years before the financial crisis—the age-adjusted share of Americans with a job never surpassed the peak reached in 2000. The drop was particularly severe for those without college degrees.


pages: 94 words: 26,453

The End of Nice: How to Be Human in a World Run by Robots (Kindle Single) by Richard Newton

3D printing, Black Swan, British Empire, Buckminster Fuller, Clayton Christensen, crowdsourcing, deliberate practice, disruptive innovation, fear of failure, Filter Bubble, future of work, Google Glasses, Isaac Newton, James Dyson, Jaron Lanier, Jeff Bezos, job automation, lateral thinking, Lean Startup, low skilled workers, Mark Zuckerberg, move fast and break things, move fast and break things, Paul Erdős, Paul Graham, recommendation engine, rising living standards, Robert Shiller, Robert Shiller, Silicon Valley, Silicon Valley startup, skunkworks, social intelligence, Steve Ballmer, Steve Jobs, Y Combinator

Safe is the antithesis of creativity. It is fearful. Safe was for the era when corporate titans serenely ploughed the seas of commerce troubled only by seven-year cycles of boom and bust; a time when long, constant, loyal employment and career progression were things you could believe in. The incentive to invite risk into your day or your life was pretty small when you could guarantee a good job with rising living standards and long-term employment. So almost everyone did that. In contrast, pursuing a field where the success rates were low – such as being an artist or setting up a business – simply didn’t seem a good idea to well adjusted people. Those who chose that route were the exceptions. They were the misfits who embraced the risk of failure because they were driven. For the fortunate this lit the path to great success.


pages: 371 words: 98,534

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

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

China’s single-minded focus on heavy industry and capital-intensive production meant that traditional manufacturing and service industries, which are usually large employers of labour, didn’t expand as they could have done relative to population size. Between 1952 and 1978, for example, the number of people per employee in the retail sector rose from 81 to 214, and the number of people per restaurant rose from 676 to 8,189.11 Normally, we would have expected to see rising living standards and consumption trends reflected in a larger increase in the size of the retail and services industries. The greatest economic legacy of the Mao period for China may well have been its shortcomings and failures. These spawned a willingness on the part of new leaders to experiment, and to learn lessons from the rest of the world. Some fourteen years before Mao died, in 1962, Deng Xiaoping had first used a phrase praising better incentives for peasants that has become widely associated with him.

In the 1980s, the state allowed them the right to bear another child if their firstborn was female. In 2013, driven by the growing awareness of the weakness of China’s demographic outlook, all couples were allowed a second child, if they were both single children. Whether the one-child policy had a marked role in lowering the fertility rate, in contrast to other factors, is a moot point, given the stance of public policy before the one-child policy was introduced.3 In any event, rising living standards still rank as one of the best forms of contraception. Consider that many places that never had a one-child policy have the same or lower fertility rates than China. These include Hong Kong, Singapore, Taiwan and South Korea, Germany, Spain, Greece, Portugal and Italy, Russia and most of eastern Europe, and Iran. One thing that the one-child policy certainly did achieve was a serious gender imbalance.


pages: 391 words: 102,301

Zero-Sum Future: American Power in an Age of Anxiety by Gideon Rachman

Asian financial crisis, bank run, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Bretton Woods, BRICs, capital controls, centre right, clean water, collapse of Lehman Brothers, colonial rule, currency manipulation / currency intervention, deindustrialization, Deng Xiaoping, Doha Development Round, energy security, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, global reserve currency, greed is good, Hernando de Soto, illegal immigration, income inequality, invisible hand, Jeff Bezos, laissez-faire capitalism, Live Aid, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, Nelson Mandela, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, plutocrats, Plutocrats, popular capitalism, price stability, RAND corporation, reserve currency, rising living standards, road to serfdom, Ronald Reagan, shareholder value, Sinatra Doctrine, sovereign wealth fund, special economic zone, Steve Jobs, Stewart Brand, The Chicago School, The Great Moderation, The Myth of the Rational Market, Thomas Malthus, trickle-down economics, Washington Consensus, Winter of Discontent, zero-sum game

Might it be possible to go back to international business, as it was conducted before the crash of 2008? It would be a mistake to believe that. It is the argument of this book that the international political system has indeed entered a period of dangerous instability and profound change. Over the past thirty years the world’s major powers have all embraced “globalization”—an economic system that promised rising living standards across the world and that created common interests between the world’s most powerful nations. In the aftermath of the cold war, America was obviously the dominant global power, which added to the stability of the international system by discouraging challenges from other nations. But the economic crisis that struck the world in 2008 has changed the logic of international relations. It is no longer obvious that globalization benefits all the world’s major powers.

There have been moves to rehabilitate Stalin in Russian history textbooks and Mao’s portrait still appears on the Chinese currency. But the modern authoritarianism of both countries is still miles away from the state terror of the Soviet and Maoist eras. In normal circumstances, in modern Russia and China only those people who directly challenge the state need fear repression. Meanwhile, the apolitical middle classes are kept happy with the promise of steadily rising living standards. The lack of a middle-class push for democracy in Russia and China is a challenge to the prevailing Western assumptions of the Age of Optimism. The standard argument was that economic liberalism would inevitably lead to political liberalism. Middle-class people who had gotten used to freedom and choice in their personal lives would eventually demand freedom and choice in politics, as well.


pages: 374 words: 111,284

The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"Robert Solow", 3D printing, agricultural Revolution, AI winter, Albert Einstein, anti-work, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, computer age, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deindustrialization, deskilling, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, financial intermediation, full employment, future of work, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Paul Samuelson, Peter Thiel, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, Y2K, Yogi Berra

Posthumously he earned one of the greatest consolation prizes going: Charles Darwin credited him as the inspiration for his theory of evolution through natural selection.14 Fluctuations and losers from change The account I gave at the beginning of this chapter makes it sound as though the post-Industrial Revolution world has been one long upward trajectory. That is indeed the impression given by Figure 1. And it is a very good first approximation of what happened. But it is not the whole truth. Once the engine of economic progress got going, there was anything but a smooth and even process of rising living standards for everyone. Indeed, the early decades of the nineteenth century constituted a prolonged period during which wage growth lagged productivity growth, and living standards were squeezed. This period is known as “the Engels pause,” after Friedrich Engels, Karl Marx’s collaborator and benefactor, who wrote about it in The Communist Manifesto, published in 1848.15 The historian Yuval Noah Harari suggests that in 1850 (i.e., before the consequences of the Industrial Revolution had started to elevate general living standards), “the life of the average person was not better – and might actually have been worse – than the lives of archaic hunter-gatherers.”16 Similarly, the economic historian Robert Allen has argued that it was only after 1870 that European real wages rose decisively above medieval levels, with Britain leading the way.

Moreover, in marked contrast to Gordon’s characterization of the essence of the third industrial revolution, what happens here, in what is widely referred to as the fourth industrial revolution, most definitely does promise to conform to the normal pattern of technological advance throughout our industrial history, namely the replacement of human labor by machines. This promises to be a return to normal with a vengeance. If this happens on any scale, then the robotics and AI revolution will surely not be of little economic importance, as Gordon alleges for computers and the digital revolution. Indeed, quite the opposite. So, just as many economists have started to become pessimistic about the capacity for economic progress and rising living standards, along has come a new “revolution” which promises to deliver just what they were beginning to despair of. But is it all that it is cracked up to be? And, if it is, so that the post-Industrial Revolution engine of progress is back in business, will the overall effects be the same as those that dominated the nineteenth and twentieth centuries? That is to say, will the “creative destruction” that powered previous advances again ensure that there are new jobs to take the place of the old?


pages: 179 words: 43,441

The Fourth Industrial Revolution by Klaus Schwab

3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, barriers to entry, Baxter: Rethink Robotics, bitcoin, blockchain, Buckminster Fuller, call centre, clean water, collaborative consumption, commoditize, conceptual framework, continuous integration, crowdsourcing, digital twin, disintermediation, disruptive innovation, distributed ledger, Edward Snowden, Elon Musk, epigenetics, Erik Brynjolfsson, future of work, global value chain, Google Glasses, income inequality, Internet Archive, Internet of things, invention of the steam engine, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, life extension, Lyft, mass immigration, megacity, meta analysis, meta-analysis, more computing power than Apollo, mutually assured destruction, Narrative Science, Network effects, Nicholas Carr, personalized medicine, precariat, precision agriculture, Productivity paradox, race to the bottom, randomized controlled trial, reshoring, RFID, rising living standards, Sam Altman, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, smart cities, smart contracts, software as a service, Stephen Hawking, Steve Jobs, Steven Levy, Stuxnet, supercomputer in your pocket, TaskRabbit, The Future of Employment, The Spirit Level, total factor productivity, transaction costs, Uber and Lyft, uber lyft, Watson beat the top human players on Jeopardy!, WikiLeaks, winner-take-all economy, women in the workforce, working-age population, Y Combinator, Zipcar

The US Bureau of Labour Statistics indicates that TFP growth between 2007 and 2014 was only 0.5%, a significant drop when compared to the 1.4% annual growth in the period 1995 to 2007.19 This drop in measured productivity is particularly concerning given that it has occurred as the 50 largest US companies have amassed cash assets of more than $1 trillion, despite real interest rates hovering around zero for almost five years.20 Productivity is the most important determinant of long-term growth and rising living standards so its absence, if maintained throughout the fourth industrial revolution, means that we will have less of each. Yet how can we reconcile the data indicating declining productivity with the expectations of higher productivity that tend to be associated with the exponential progress of technology and innovation? One primary argument focuses on the challenge of measuring inputs and outputs and hence discerning productivity.


pages: 424 words: 119,679

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

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

Fixation on such instances rather than on the larger picture, however, undercuts the case for the next round of reforms by making it seem the ship is sinking. Yes, this book contains anecdotes, and here are a few. As this project progressed I found, when talking to audiences, that discussion of increasing longevity coupled to reduction of disease rates always caused someone to raise a hand and object, “How can you say that, I have a friend who has cancer.” Discussion of rising living standards and improvement of net buying power for average people always caused someone to raise a hand and say, “But I have a family member who is unemployed and says there are no jobs.” Other indicators of social improvement always caused someone to raise a hand and say, “But I know a person who…” At first I thought that for some convoluted psychological reason, good news scares people; after all, we are trained to expect the worst, and seldom disappointed.

Branko Milanovic, a Serbian-born economist at City University of New York, whose academic specialty is inequality research, says, “In China, less poverty and more inequality were part and parcel of each other. Probably there would have been no way to get the economic growth without the increased inequality and opportunities for corruption.” Perhaps there would have been no way to achieve the rising living standards that are benefiting most of the world without the insecurity that market forces generate, or without the side effect of an outsized One Percent whose opulence is offensive and whose political influence distorts every system of government. Inequality could be eliminated by confiscatory public policy, but that would stop the global economic system from reducing poverty. In this sense, inequality is not necessarily a net negative, so long as average people become better off—which for several generations has been the result of free-market economies and global trade.


pages: 459 words: 138,689

Slowdown: The End of the Great Acceleration―and Why It’s Good for the Planet, the Economy, and Our Lives by Danny Dorling, Kirsten McClure

Affordable Care Act / Obamacare, Berlin Wall, Bernie Sanders, Boris Johnson, British Empire, business cycle, capital controls, clean water, creative destruction, credit crunch, Donald Trump, drone strike, Elon Musk, en.wikipedia.org, Flynn Effect, full employment, future of work, gender pay gap, global supply chain, Google Glasses, Henri Poincaré, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, James Dyson, jimmy wales, John Harrison: Longitude, Kickstarter, low earth orbit, Mark Zuckerberg, market clearing, Martin Wolf, mass immigration, means of production, megacity, meta analysis, meta-analysis, mortgage debt, nuclear winter, pattern recognition, Ponzi scheme, price stability, profit maximization, purchasing power parity, QWERTY keyboard, random walk, rent control, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Scramble for Africa, sexual politics, Skype, Stephen Hawking, Steven Pinker, structural adjustment programs, the built environment, Tim Cook: Apple, transatlantic slave trade, trickle-down economics, very high income, wealth creators, wikimedia commons, working poor

Way back in the 1950s, within living memory of a very large number of people today, almost nobody knew what would soon transpire. You could look at the timeline in figure 14 that ends in 1960 and even imagine a slowdown coming, especially if you concentrate on the period from 1950 to 1960. However, a slowdown it was not to be. Had we known at that time the damage that this pollution would cause, it could have been much easier to deal with. Sadly, we equated industry with progress and greater production with rising living standards. The car was seen as a symbol of freedom and the airplane as a means of adventure. Traveling faster and further was to be admired. In September 1959, the Soviets’ unmanned Luna 2 spacecraft landed on the moon and the news was received in awe. CARS, ACCELERATION, AND ATTRIBUTION The emission of yet more and more CO2 into the atmosphere, leading to climate change and thus global warming, is still accelerating, but it cannot continue to do so indefinitely if we are to survive well (or—logically—even if we don’t prosper) as a species.

We need to be optimistic again, even in the face of all that we now know. The children of that Socialist Sunday School in Bradford did not yet know that there were two world wars, the crash of 1929, and a Great Depression to come. Those who survived would also live to see, in their middle age, the arrival of the new dawn that they had been promised, a welfare state, free health service, full employment, high and still growing equality, and rapidly rising living standards. That is why this banner has survived: they won, despite all the adversity of their times. We need to plan to win again. Exactly a century after that banner was made, a research fellow at the Future of Humanity Institute at the University of Oxford published an article in which he detailed what he believed remain the five biggest threats to human existence: nuclear war, a bioengineered pandemic, superintelligence, nanotechnology, and unknown unknowns.


pages: 618 words: 160,006

Seapower States: Maritime Culture, Continental Empires and the Conflict That Made the Modern World by Andrew Lambert

British Empire, different worldview, Donald Trump, joint-stock company, Malacca Straits, megacity, Mikhail Gorbachev, open economy, rising living standards, South China Sea, spice trade, trade route, transatlantic slave trade, UNCLOS

Instead there are three separate forces, revealingly described as the People’s Liberation Army’s Navy (PLAN), which operate independently of one another. The late nineteenth-century Qing Empire used the same method of enhancing political control – with catastrophic operational consequences. The Chinese state has maintained domestic political legitimacy by creating a high-growth economy based on manufacturing for export. The aim is to keep the population content through rising living standards, while withholding democratic accountability and political inclusion. In the eighteenth century Chinese imperial governments, equally focused on internal stability, were wiser. They restricted trade to a single port, Quangdo, which was as far from Beijing as possible, prevented contact between Westerners and the local populace, and stopped trade altogether when necessary. Today decades of export-led growth, fuelled by state borrowing, have kept the masses employed and political dissent under control, but rising wages and structural inefficiency have reduced China’s competitive edge, and the state has not generated enough high-value manufacturing to compensate.

China has no interest in sea control beyond a degree of the strategic depth, including a secure bastion area for ballistic missile submarines. It prefers terrestrial possessions, artificial islands, railroads, pipelines and canals to oceanic activity. China’s strategic and political cultures are best understood through the lens of the ‘Great Wall’ and the ‘Great Firewall’, barriers that are the antithesis of seapower identity. To sustain the export of manufactured goods, to sustain economic growth, deliver rising living standards within a rigid one-party state and control the spread of information, the Chinese leadership has devised a ‘New Silk Road’. This state-funded project would link China to Europe by rail to offload industrial over-production while controlling the spread of ideas. By contrast maritime connections have a long history of spreading unwelcome ideas, and are easily interdicted in war. In a replay of the famous geopolitical debate between Alfred T.


pages: 585 words: 151,239

Capitalism in America: A History by Adrian Wooldridge, Alan Greenspan

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, agricultural Revolution, air freight, Airbnb, airline deregulation, American Society of Civil Engineers: Report Card, Asian financial crisis, bank run, barriers to entry, Berlin Wall, Bonfire of the Vanities, Bretton Woods, British Empire, business climate, business cycle, business process, California gold rush, Charles Lindbergh, cloud computing, collateralized debt obligation, collective bargaining, Corn Laws, corporate governance, corporate raider, creative destruction, credit crunch, debt deflation, Deng Xiaoping, disruptive innovation, Donald Trump, edge city, Elon Musk, equal pay for equal work, Everybody Ought to Be Rich, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, fixed income, full employment, George Gilder, germ theory of disease, global supply chain, hiring and firing, income per capita, indoor plumbing, informal economy, interchangeable parts, invention of the telegraph, invention of the telephone, Isaac Newton, Jeff Bezos, jimmy wales, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, labor-force participation, Louis Pasteur, low skilled workers, manufacturing employment, market bubble, Mason jar, mass immigration, means of production, Menlo Park, Mexican peso crisis / tequila crisis, minimum wage unemployment, mortgage debt, Myron Scholes, Network effects, new economy, New Urbanism, Northern Rock, oil rush, oil shale / tar sands, oil shock, Peter Thiel, plutocrats, Plutocrats, popular capitalism, post-industrial society, postindustrial economy, price stability, Productivity paradox, purchasing power parity, Ralph Nader, Ralph Waldo Emerson, RAND corporation, refrigerator car, reserve currency, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Sand Hill Road, savings glut, secular stagnation, Silicon Valley, Silicon Valley startup, Simon Kuznets, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, stem cell, Steve Jobs, Steve Wozniak, strikebreaker, supply-chain management, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, total factor productivity, trade route, transcontinental railway, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Unsafe at Any Speed, Upton Sinclair, urban sprawl, Vannevar Bush, War on Poverty, washing machines reduced drudgery, Washington Consensus, white flight, wikimedia commons, William Shockley: the traitorous eight, women in the workforce, Works Progress Administration, Yom Kippur War, young professional

For twenty-five years after the war, the economy boomed and Harvard economists, looking for an ax to grind, began to focus on the evils of affluence. Postwar America was a land of opportunity. Returning troops without a penny in their pockets could get into college and buy a house courtesy of the GI Bill. Blue-collar workers without more than a high school education could afford to raise a family in the suburbs. Opportunity bred optimism: Americans looked forward to a future of ever-rising living standards and the government embraced ever-loftier goals. This was a world in which everything was shiny and new—in which brand-new families brought brand-new houses (with garages) and filled them with brand-new things. In 1946, 2.2 million Americans plighted their troth—a record that stood for thirty-three years. In the same year, 3.4 million babies were born. The babies kept coming—3.8 million in 1947, 3.9 million in 1952, and more than 4 million every year from 1954 to 1964.

Advancing knowledge led to better behavior: cities began to remove garbage, purify water supplies, and process sewage; citizens washed their hands and otherwise improved their personal habits. The battle against ill health proved so successful by 2000 that some inhabitants of Silicon Valley began to regard death as a problem to be solved rather than a fact to be approached with dignity. But the most important driver was rising living standards that made it possible for people to afford better food, bigger and cleaner homes, and improved health care. As life expectancy increased, the workweek shrunk. In 1900, the average factory worker worked nearly sixty hours a week—ten hours a day, year in and year out. By 1950, the figure had declined to about forty hours, where it has more or less stayed ever since. Some people in the professional classes undoubtedly work much more than this: you can’t be a first-class academic or lawyer or indeed journalist without putting in long hours.


pages: 475 words: 155,554

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge by Faisal Islam

Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, Basel III, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, British Empire, capital controls, carbon footprint, Celtic Tiger, central bank independence, centre right, collapse of Lehman Brothers, credit crunch, Credit Default Swap, crony capitalism, dark matter, deindustrialization, Deng Xiaoping, disintermediation, energy security, Eugene Fama: efficient market hypothesis, eurozone crisis, financial deregulation, financial innovation, financial repression, floating exchange rates, forensic accounting, forward guidance, full employment, G4S, ghettoisation, global rebalancing, global reserve currency, hiring and firing, inflation targeting, Irish property bubble, Just-in-time delivery, labour market flexibility, light touch regulation, London Whale, Long Term Capital Management, margin call, market clearing, megacity, Mikhail Gorbachev, mini-job, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, negative equity, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, Pearl River Delta, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, Right to Buy, rising living standards, Ronald Reagan, savings glut, shareholder value, sovereign wealth fund, The Chicago School, the payments system, too big to fail, trade route, transaction costs, two tier labour market, unorthodox policies, uranium enrichment, urban planning, value at risk, WikiLeaks, working-age population, zero-sum game

Deng Zhi’s life is typical of the 262 million migrant workers who cross the length and breadth of China to work seventy-two-hour weeks, for £100 a month. Together, they form the biggest human migration on the planet, a monumental demographic shift of a quarter of a billion people in search of work, every year, 166 million moving thousands of miles to different provinces. They are the invisible labour force whose efforts have underpinned rising living standards in the West, and the rising influence of China around the globe. You can trace the roots of this extraordinary phenomenon back to the beginning of this century, when the Great Migration was sparked by the loosening of restrictions on rural migration. The numbers of migrant workers had been static at 60–70 million during the 1990s. But in the first decade of the twenty-first century their number trebled to a size bigger than the workforce of the USA or the European Union.

Neither the country’s elite nor its highly educated youth are likely to forget the Lent of 2013. And what happened to them then will never be forgiven. Epilogue: New Default Lines If there is any point to economics, and the pursuit of growth, it should be the advancement of ordinary people. In the years of easy growth before the credit bust, the rising tide lifted most vessels, from the superyachts to the rowing boats. But the promise of rising living standards for everyone has stalled. The boom in credit masked this for around a decade. In some countries, such as Britain, the United States and the nations of the Eurozone periphery, the argument right now is not so much about who shares the proceeds of growth, but rather who bears the burden of paying the cost for the decade of excess. In Rhode Island I met some of America’s 48 million recipients of food stamps: working pensioners who cannot earn enough to buy the food they need.


pages: 217 words: 61,407

Twilight of Abundance: Why the 21st Century Will Be Nasty, Brutish, and Short by David Archibald

Bakken shale, Climategate, Climatic Research Unit, deindustrialization, energy security, failed state, Francis Fukuyama: the end of history, income per capita, Intergovernmental Panel on Climate Change (IPCC), means of production, mutually assured destruction, oil shale / tar sands, oil shock, out of africa, peak oil, price discovery process, rising living standards, sceptred isle, South China Sea, University of East Anglia, uranium enrichment, Yom Kippur War

THE STATE OF CHINA’S DOMESTIC ECONOMY The Chinese economy has undergone strong growth over the last fifteen years, as profits from manufactured exports have been recycled into domestic housing stock and infrastructure. As a bubble economy, China’s economy is very likely to contract as the credit-fueled housing boom winds back. The legitimacy of the Chinese Communist party is conditional upon continually rising living standards. When growth falters, the politburo will switch to getting its legitimacy from leading the country in war. The only target that could satisfy the amount of emotional investment in remembering the century of humiliation is Japan. MILITARY READINESS The Chinese do not yet have all the weapons they would like to have for future conflicts. They are having trouble making nuclear-powered submarines and engines for jet fighters.


pages: 222 words: 70,559

The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis by Stephen Leeb, Donna Leeb

Buckminster Fuller, buy and hold, 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

But this just doesn’t jibe with the fact that in 1970 only 30 percent of married women with children under the age of six worked outside the home, while in 2000 the percentage was 63 percent. Changing social mores may explain some of the difference, but not most of it. The reality is that for a growing number of American families, two incomes are required to provide the necessities that one income could provide in 1970. This is just not consistent with rising living standards. In short, a belief that rising productivity has kept and will keep inflation tame is a bit like believing in Santa Claus. It’s a nice idea, but the weight of the evidence is against it. There you have our case for inflation, all nine chapters of it. Together, all the trends we’ve been describing are likely to cause inflation to take hold with the tenacity of a demented terrier that has sunk its teeth into some unfortunate prey.


pages: 239 words: 70,206

Data-Ism: The Revolution Transforming Decision Making, Consumer Behavior, and Almost Everything Else by Steve Lohr

"Robert Solow", 23andMe, Affordable Care Act / Obamacare, Albert Einstein, big data - Walmart - Pop Tarts, bioinformatics, business cycle, business intelligence, call centre, cloud computing, computer age, conceptual framework, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, Danny Hillis, data is the new oil, David Brooks, East Village, Edward Snowden, Emanuel Derman, Erik Brynjolfsson, everywhere but in the productivity statistics, Frederick Winslow Taylor, Google Glasses, impulse control, income inequality, indoor plumbing, industrial robot, informal economy, Internet of things, invention of writing, Johannes Kepler, John Markoff, John von Neumann, lifelogging, Mark Zuckerberg, market bubble, meta analysis, meta-analysis, money market fund, natural language processing, obamacare, pattern recognition, payday loans, personalized medicine, precision agriculture, pre–internet, Productivity paradox, RAND corporation, rising living standards, Robert Gordon, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, speech recognition, statistical model, Steve Jobs, Steven Levy, The Design of Experiments, the scientific method, Thomas Kuhn: the structure of scientific revolutions, unbanked and underbanked, underbanked, Von Neumann architecture, Watson beat the top human players on Jeopardy!

His research has focused on the impact of technology on productivity, work, and decision making. I first started talking to Brynjolfsson in the mid-1990s. The Internet boom was under way, but there was a puzzle, economically. The Internet was minting millionaires aplenty and hailed as a revolutionary technology, yet it was not boosting the productivity of the American economy. Productivity gains—more wealth created per hour of labor—are the fuel of rising living standards, and a by-product of the efficiency that technology is supposed to generate. The conundrum raised the question of whether all of the investment in, and enthusiasm for, digital technology was justified. Robert Solow, a Nobel Prize–winning economist, tartly summed up the quandary in the late 1980s, when he wrote, “You can see the computer age everywhere but in the productivity statistics.”


pages: 233 words: 64,702

China's Disruptors: How Alibaba, Xiaomi, Tencent, and Other Companies Are Changing the Rules of Business by Edward Tse

3D printing, Airbnb, Airbus A320, Asian financial crisis, barriers to entry, bilateral investment treaty, business process, capital controls, commoditize, conceptual framework, corporate governance, creative destruction, crowdsourcing, currency manipulation / currency intervention, David Graeber, Deng Xiaoping, disruptive innovation, experimental economics, global supply chain, global value chain, high net worth, industrial robot, Joseph Schumpeter, Lyft, money market fund, offshore financial centre, Pearl River Delta, reshoring, rising living standards, risk tolerance, Silicon Valley, Skype, Snapchat, sovereign wealth fund, special economic zone, speech recognition, Steve Jobs, thinkpad, trade route, wealth creators, working-age population

As is frequently reported overseas, the number of protests, peaceful and otherwise, number in the tens of thousands each year. But to interpret this as meaning that China stands at the brink of chaos is to totally misread the state of the nation. While overseas, particularly in the West, China is routinely described as a country lacking in basic freedoms and rights, in China the prevailing view is that the country is on the rise, living standards are improving, and as a result personal freedom is also far greater than ever before. Surveys of China by the Pew Research Center have repeatedly found that the country’s people are among the happiest in the world both with their current economic situation and with their prospects for the future. The real threat to China’s future is not collapse, but that its rulers will fail to manage their country’s development.


Smart Cities, Digital Nations by Caspar Herzberg

Asian financial crisis, barriers to entry, business climate, business cycle, business process, carbon footprint, clean water, cloud computing, corporate social responsibility, Dean Kamen, demographic dividend, Edward Glaeser, Edward Snowden, hive mind, Internet of things, knowledge economy, Masdar, megacity, New Urbanism, packet switching, QR code, remote working, RFID, rising living standards, risk tolerance, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley startup, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart meter, social software, special economic zone, Stephen Hawking, telepresence, too big to fail, trade route, transcontinental railway, upwardly mobile, urban planning, urban sprawl, women in the workforce, working poor, X Prize

Detailing a raft of arguments against Dholera, the article concludes by stating, “For some Indians, the only way Dholera can be a smart city is if it never gets built at all.” While the author notes the relentless urbanization trend, the article stands mute on a key corollary to the author’s point of view: namely, how else might India reckon with the inevitable pressures of people, pollution, and strained resources. 13 There are excellent arguments supporting the limits on affluence and rising living standards in India and other populous nations. For more extended discussion, see Chapter 9. 14 Steve Hamm, “Inside Cisco’s Bangalore Play,” Bloomberg Businessweek, December 12, 2006, http://www.bloomberg.com/news/articles/2006-12-12/inside-ciscos-bangalore-play. THE INTERNET OF EVERYTHING TRANSFORMS BROWNFIELDS AND BEYOND IF THE SUCCESS OF A TECH COMPANY’S IoE growth depended solely on the progress of huge projects, such as India’s DMIC, it would take either great courage or foolishness to keep at the game of building smart cities.


pages: 183 words: 17,571

Broken Markets: A User's Guide to the Post-Finance Economy by Kevin Mellyn

banking crisis, banks create money, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, buy and hold, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, crony capitalism, currency manipulation / currency intervention, disintermediation, eurozone crisis, fiat currency, financial innovation, financial repression, floating exchange rates, Fractional reserve banking, global reserve currency, global supply chain, Home mortgage interest deduction, index fund, information asymmetry, joint-stock company, Joseph Schumpeter, labor-force participation, light touch regulation, liquidity trap, London Interbank Offered Rate, market bubble, market clearing, Martin Wolf, means of production, mobile money, money market fund, moral hazard, mortgage debt, mortgage tax deduction, negative equity, Ponzi scheme, profit motive, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, rising living standards, Ronald Coase, seigniorage, shareholder value, Silicon Valley, statistical model, Steve Jobs, The Great Moderation, the payments system, Tobin tax, too big to fail, transaction costs, underbanked, Works Progress Administration, yield curve, Yogi Berra, zero-sum game

The United Kingdom stood somewhere in the middle, with perhaps as little as 20 percent of the population properly banked in the 1960s, but up to and above American levels by the 1990s. Now, it is possible to make a case, as historian Louis Hyman does well in Debtor Nation (Princeton University Press, 2011), for a view that almost universal access to finance led to abusive practices and helped addict the American consumer to credit. Most development economists, however, would support the view that access to finance helps drive economic growth, social inclusion, and rising living standards. The balance of regulatory and political thinking before the crisis was on the side of maximizing financial inclusion, and the Broken Markets World Bank and other national and multilateral development agencies made it a priority. Now, for better or worse, the pendulum has swung sharply in the opposite direction in the developed world. There is often a presumption by well-meaning politicians and reformers that all businesses are predatory and all customers are victims if not protected by government paternalism.


pages: 255 words: 75,172

Sleeping Giant: How the New Working Class Will Transform America by Tamara Draut

affirmative action, Affordable Care Act / Obamacare, always be closing, American ideology, battle of ideas, big-box store, blue-collar work, collective bargaining, creative destruction, David Brooks, declining real wages, deindustrialization, desegregation, Detroit bankruptcy, Donald Trump, Edward Glaeser, ending welfare as we know it, Ferguson, Missouri, financial deregulation, full employment, immigration reform, income inequality, invisible hand, job satisfaction, knowledge economy, knowledge worker, low skilled workers, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, plutocrats, Plutocrats, Powell Memorandum, profit motive, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, shared worldview, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trickle-down economics, union organizing, upwardly mobile, War on Poverty, white flight, women in the workforce, young professional

The civil rights movement was just getting started, and it would be two decades before our nation’s laws mandated equal treatment of black Americans under the law. America’s great economic expansion was overwhelmingly a white affair, with implications that I discuss more deeply in the next chapter. But it was a historic expansion. Backed by the force of law, workers who were paid wages and built this industrial, consumption-soaked era had the nation’s politics and spirit on their side. American workers experienced rising living standards that would have been unthinkable at the turn of the century. Quite extraordinarily, incomes grew fastest among workers at the bottom of the wage scale between 1947 and 1979.16 Workers in the bottom fifth experienced income gains of 116 percent, compared to 86 percent among those in the top fifth of the income distribution.17 Gross domestic product (GDP) grew a whopping 37 percent in the fifteen years after the war.18 Productivity gains enriched both corporations and workers, and for the first time in the nation’s history, large numbers of workers found themselves with enough disposable income to consume well beyond their daily needs.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

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

Half of child workers work part time, and many do so to finance their schooling. If they were to lose their jobs, as a result of prohibitions or boycotts, a difficult situation would be made even worse. To tackle the problems, we have to distinguish which problems—prostitution and the enslavement of children, for example—must be fought by every available means, and which can only be counteracted through economic improvements and rising living standards. Save the Children, Sweden, continues: General assertions that child labor is a good or bad thing serve little purpose. . . . To regard all occupations as equally unacceptable is to simplify a complicated issue and makes it more difficult to concentrate forces against the worst forms of exploitation.5 Child labor in Sweden was primarily eliminated not by prohibitions but by the economy growing to such an extent that parents were able to give their children education instead—thereby maximizing the children’s incomes in the longer term.


pages: 330 words: 77,729

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen

"Robert Solow", Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, business cycle, creative destruction, David Ricardo: comparative advantage, delayed gratification, experimental economics, financial independence, Financial Instability Hypothesis, full employment, Hernando de Soto, housing crisis, Hyman Minsky, inflation targeting, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, laissez-faire capitalism, liberation theology, liquidity trap, means of production, microcredit, minimum wage unemployment, money market fund, open economy, paradox of thrift, Pareto efficiency, Paul Samuelson, price stability, pushing on a string, rent control, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Coase, Ronald Reagan, school choice, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, unorthodox policies, Vilfredo Pareto, zero-sum game

Like every worker, Smith desired high wages, but he thought they should come about through the natural workings of the labor market, not government edict. Finally, natural liberty includes the right to save, invest, and accumulate capital without government restraint—important keys to economic growth. Adam Smith endorsed the virtues of thrift, capital investment, and labor-saving machinery as essential ingredients to promote rising living standards (326). In his chapter on the accumulation of capital (Chapter 3, Book II) in The Wealth of Nations, Smith emphasized saving and frugality as keys to economic growth, in addition to stable government policies, a competitive business environment, and sound business management. Smith's Classic Work Receives Universal Acclaim Adam Smith's eloquent advocacy of natural liberty fueled the minds of a rising generation.


pages: 270 words: 73,485

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

"Robert Solow", 3D printing, bank run, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, market bubble, market clearing, means of production, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

The Role of Globalization As we are going through a crunch in the West, many economies in Asia, Latin America and Africa – the so-called “emerging economies” of China, India, Brazil, Indonesia and Nigeria – are debating “problems” of maintaining their growth at 5 percent or 8 percent or even 10 percent. What are they doing right that we are not? Could it be that what we had for three-quarters of a century – guaranteed prosperity and rising living standards – are about to disappear and become the experience of these countries who have been stuck in misery for the same long period? As they emerge, are we submerging? Is this the consequence of what is called globalization? Globalization became a buzzword in the 1990s sometime after the fall of the Berlin Wall. It opened up an era of freer capital movements and freer trade across the world. It is hard to remember now that between 1992 and 2007 the developed and emerging economies enjoyed an unprecedentedly long period of growth with low inflation.


pages: 271 words: 77,448

Humans Are Underrated: What High Achievers Know That Brilliant Machines Never Will by Geoff Colvin

Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, Black Swan, call centre, capital asset pricing model, commoditize, computer age, corporate governance, creative destruction, deskilling, en.wikipedia.org, Freestyle chess, future of work, Google Glasses, Grace Hopper, industrial cluster, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, Marc Andreessen, meta analysis, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, social intelligence, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, theory of mind, Tim Cook: Apple, transaction costs

Advancing technology continually required better educated workers, and Americans responded by educating themselves with unprecedented ambition. The high school graduation rate rocketed from 4 percent in 1890 to 77 percent in 1970, a national intellectual upgrade such as the world had never seen. As long as workers could keep up with the increasing demands of technology, the two remained complements. The result was an economic miracle of fast-rising living standards. But then the third major turning point arrived, starting in the 1980s. Information technology had developed to a point where it could take over many medium-skilled jobs—bookkeeping, back-office jobs, repetitive factory work. The number of jobs in those categories diminished, and wages stagnated for the shrinking group of workers who still did them. Yet the trend was limited. At both ends of the skill spectrum, people in high-skill jobs and low-skill service jobs did much better.


The Rise of Carry: The Dangerous Consequences of Volatility Suppression and the New Financial Order of Decaying Growth and Recurring Crisis by Tim Lee, Jamie Lee, Kevin Coldiron

active measures, Asian financial crisis, asset-backed security, backtesting, bank run, Bernie Madoff, Bretton Woods, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, debt deflation, distributed ledger, diversification, financial intermediation, Flash crash, global reserve currency, implied volatility, income inequality, inflation targeting, labor-force participation, Long Term Capital Management, Lyft, margin call, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, negative equity, Network effects, Ponzi scheme, purchasing power parity, quantitative easing, random walk, rent-seeking, reserve currency, rising living standards, risk/return, sharing economy, short selling, sovereign wealth fund, Uber and Lyft, uber lyft, yield curve

The “margin call” risk is sharply reduced by the willingness of the global network of central banks to provide liquidity in any currency. Very few financial market commentators question the direct involvement of central banks in funding for foreign currency borrowing or the cooperation between central banks globally; it all seems very reasonable if it reduces market stresses and prevents crisis. Except that it is not. Free market economies work to produce rising living standards over time through a process in which the millions of people who make up an economy make decisions on working, spending, and saving (and investing), guided by prices and their assessment of risk and potential return. Certainly, the rise in living standards that this process produces over time does not usually occur in a straight line; it can be three steps forward and two steps back at times.


pages: 859 words: 204,092

When China Rules the World: The End of the Western World and the Rise of the Middle Kingdom by Martin Jacques

Admiral Zheng, Asian financial crisis, Berlin Wall, Bob Geldof, 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, lateral thinking, Malacca Straits, Martin Wolf, Naomi Klein, Nelson Mandela, new economy, New Urbanism, one-China policy, open economy, Pearl River Delta, 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, Westphalian system, Xiaogang Anhui farmers, zero-sum game

None of the first Asian tigers - South Korea, Taiwan, Hong Kong and Singapore - achieved take-off under democratic conditions: South Korea and Taiwan were governed by far-sighted military dictatorships, Hong Kong was a British colony devoid of democracy, while Singapore enjoyed what might be described as a highly authoritarian and contrived democracy. All, though, were blessed with efficient and strategic administrations. As developmental states, the legitimacy of their governments rested in large part on their ability to deliver rapid economic growth and rising living standards rather than a popular mandate. Each of these countries has now achieved a level of development and standard of living commensurate with parts of Western Europe. Hong Kong, under Chinese rule since 1997, enjoys very limited elements of democracy; Singapore’s governance remains a highly authoritarian democracy; while South Korea and Taiwan have both acquired universal suffrage and multi-party systems.

Popular accountability in a recognizable Western form has remained absent. During the Maoist period, the legitimacy of the state was expressed in terms of a new class system in which the workers and peasants were pronounced as the new rulers; during the reform period this has partly been superseded by a de facto results-based compact between the state and the people, in which the state is required to deliver economic growth and rising living standards. As testament to the historical continuity of the Chinese state, the same key elements continue to define the nature of the Chinese polity. There is the continuing absence of any form of popular accountability, with no sign or evidence that this is likely to change - apart from the election of Hong Kong’s chief executive, which may be introduced in 2012, and the present election of half its Legislative Council.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

That principle has underpinned the nation’s prosperity and stability for a century.”33, 34, 35 The spread to near-universal appreciation of the concept of livable wages accounts for voter determination there and in the other family capitalism countries that all economic actors should strive for ever-rising family prosperity. Prioritizing family prosperity also drives the Australian focus on education and upskilling. Here is how Australian Treasury Secretary Martin Parkinson explained it: “As competition intensifies globally, as the global economy transforms and as our population ages, we are going to only be able to deliver rising living standards if we are going to be able to deliver greater productivity…. Productivity is not about working harder or working longer, it’s actually about working smarter. This requires … top-notch management skills that would innovate and capture opportunities.”36 The urgency of upskilling drives an inclusive education system where “every Australian is offered the opportunity to succeed and reach their full potential,” explained Chris Evans, Australian Minister for Tertiary Education, Skills, Jobs and Workplace Relations in November 2010.

As the home of the Reformation, the Renaissance, John Calvin, John Locke, Rousseau, Voltaire, Adam Smith, and Friedrich Hayek, it is no surprise that northern Europe also became the center over the last century of reforms to strengthen capitalism. The explanation for that outcome is straightforward: voters have expectations of superior corporate governance. Enterprises are the device rich democracies have crafted to create rising living standards for all; maximizing that goal requires high-quality management committed to productivity growth and amenable to broadcasting the gains from such growth throughout society. Codetermination is the black box that achieves that duality, and it’s gone viral across northern Europe since World War II, spreading from its German roots. Firm for firm, that nation enjoys the world’s most competitive capitalist base, and is the world’s second-greatest exporter after China from an economic base barely one-fifteenth as large.


pages: 287 words: 81,970

The Dollar Meltdown: Surviving the Coming Currency Crisis With Gold, Oil, and Other Unconventional Investments by Charles Goyette

bank run, banking crisis, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, business cycle, buy and hold, California gold rush, currency manipulation / currency intervention, Deng Xiaoping, diversified portfolio, Elliott wave, fiat currency, fixed income, Fractional reserve banking, housing crisis, If something cannot go on forever, it will stop - Herbert Stein's Law, index fund, Lao Tzu, margin call, market bubble, McMansion, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, oil shock, peak oil, pushing on a string, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Saturday Night Live, short selling, Silicon Valley, transaction costs

Historical precedents insist that as conditions worsen, the transformation into a command economy will accelerate. It is astonishing that this should be taking place, especially at a time in which three billion people around the globe have rejected the poverty, want, and shortages of their command economies to begin to experience the blessings of abundance. It is not as though object lessons are wanting. China’s stunning economic growth, its modernization and rising living standards are the result of nothing more complicated than freeing the command economy. Although lessons abound, Americans are choosing—or perhaps failing to choose and therefore letting the choice be made for them—to go in much the same direction as the command economy of postwar Great Britain. That period saw the nationalization of entire sectors of the British economy, a currency crisis and prolonged economic decline including crippling unemployment and choking inflation.


pages: 272 words: 83,798

A Little History of Economics by Niall Kishtainy

"Robert Solow", Alvin Roth, British Empire, Capital in the Twenty-First Century by Thomas Piketty, car-free, central bank independence, clean water, Corn Laws, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Eugene Fama: efficient market hypothesis, first-price auction, floating exchange rates, follow your passion, full employment, George Akerlof, greed is good, Hyman Minsky, inflation targeting, invisible hand, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Arrow, loss aversion, market clearing, market design, means of production, moral hazard, Nash equilibrium, new economy, Occupy movement, Pareto efficiency, Paul Samuelson, prisoner's dilemma, RAND corporation, rent-seeking, Richard Thaler, rising living standards, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, sealed-bid auction, second-price auction, The Chicago School, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, Vickrey auction, Vilfredo Pareto, washing machines reduced drudgery, wealth creators, Winter of Discontent

On the other hand, if the economy was running too fast so that inflation was high, then the government could reduce spending or raise taxes to slow it down. Keynesian economics seemed secure when in 1971 President Richard Nixon, whose Republican Party was often wary of Keynesian fiddling with taxes and spending, said ‘I am now a Keynesian’. Despite some ups and downs, the decades following the Second World War hadn’t seen a repeat of the terrible depression of the 1930s. Economies grew steadily and brought rising living standards. But in the 1970s Keynesian economics lost its shine. Economists questioned whether Keynesian policies really were responsible for the good economic performance. Perhaps too much government spending was causing economies to become more unstable by pushing up inflation. New schools of economics emerged that attacked Keynesianism – we’ll come to them in Chapters 29 and 30. Many of their ideas were in tune with the older tradition of economics that Keynes had attacked.


pages: 394 words: 85,734

The Global Minotaur by Yanis Varoufakis, Paul Mason

active measures, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business climate, business cycle, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, correlation coefficient, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, declining real wages, deindustrialization, endogenous growth, eurozone crisis, financial innovation, first-past-the-post, full employment, Hyman Minsky, industrial robot, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, light touch regulation, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, market fundamentalism, Mexican peso crisis / tequila crisis, money market fund, mortgage debt, Myron Scholes, negative equity, new economy, Northern Rock, paper trading, Paul Samuelson, planetary scale, post-oil, price stability, quantitative easing, reserve currency, rising living standards, Ronald Reagan, special economic zone, Steve Jobs, structural adjustment programs, systematic trading, too big to fail, trickle-down economics, urban renewal, War on Poverty, WikiLeaks, Yom Kippur War

Nevertheless, despite the conflicting effects, the Global Minotaur’s brilliance deserves to be marvelled at. Guess what the Germans and Japanese did with the profits from their new, energy-conscious, innovative products: they invested them in, or through, Wall Street! Cheapened, productive labour The American Dream may always have been based on a shared fiction. But the reality of more than a century of rising living standards was never in dispute. Things changed in the 1970s. The fear inspired by the collapse of Bretton Woods, the hike in oil prices and the impending loss of the Vietnam War polarized society and created a playing field on which the strong could do as they pleased, while the weak had to bear their burdens stoically. With energy prices rising, long queues forming at petrol stations and factories suspending production due to lack of raw materials or electricity, a new setting emerged in which all prior deals were off.


pages: 309 words: 79,414

Going Dark: The Secret Social Lives of Extremists by Julia Ebner

23andMe, 4chan, Airbnb, anti-communist, anti-globalists, augmented reality, Ayatollah Khomeini, bitcoin, blockchain, Boris Johnson, citizen journalism, cognitive dissonance, crowdsourcing, cryptocurrency, Donald Trump, Elon Musk, feminist movement, game design, glass ceiling, Google Earth, job satisfaction, Mark Zuckerberg, mass immigration, Menlo Park, Mikhail Gorbachev, Network effects, off grid, pattern recognition, pre–internet, QAnon, RAND corporation, ransomware, rising living standards, self-driving car, Silicon Valley, Skype, Snapchat, social intelligence, Steve Jobs, Transnistria, WikiLeaks, zero day

A common logical fallacy in alt-right arguments is that if A came before B then it caused B (the post hoc, ergo propter hoc error). It is true that since the 1950s North America and Europe have experienced sharply falling fertility rates. It is also true that many Western countries abolished their sodomy laws and loosened their anti-abortion laws in the second half of the twentieth century. But the reasons for the declining birthrates over the past fifty years lie somewhere else. Research shows that rising living standards are responsible, with women’s education, the availability of contraceptives and the enhanced health and well-being of children being the important factors.8 This idea of a Great Replacement has fed into many new variations of anti-left or anti-Semitic conspiracy theories that draw on older concepts such as the ‘Hooton Plan’. In 1943, the US professor Earnest Albert Hooton published an essay that advocated a plan to ‘breed war strain out of Germans’ by crossbreeding Germans with non-German populations.


pages: 310 words: 90,817

Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown by Detlev S. Schlichter

bank run, banks create money, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, currency peg, fixed income, Fractional reserve banking, German hyperinflation, global reserve currency, inflation targeting, Kenneth Rogoff, Kickstarter, Long Term Capital Management, market clearing, Martin Wolf, means of production, money market fund, moral hazard, mortgage debt, open economy, Ponzi scheme, price discovery process, price mechanism, price stability, pushing on a string, quantitative easing, reserve currency, rising living standards, risk tolerance, savings glut, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Y2K

But even before we conduct such an analysis it should be fairly clear that the notion that elastic money is required for a growing economy is rather unconvincing. Obviously, human societies have made great advances throughout history while using practically inelastic commodity money. The Industrial Revolution occurred in what was basically a commodity money environment. Between 1880 and 1914 most of the developed world was on what came to be called the Classical Gold Standard. This was a time of rapidly growing international trade, of rising living standards, and stable and harmonious monetary relations between states. Additionally, a quick look at present monetary arrangements with their fully elastic money supply reveals that a growing supply of money does not even require a corresponding growth in demand for money. Today’s paper money can be created and placed with the public whether there is demand for it or not. This may affect the purchasing power of the monetary unit, but lack of demand is no obstacle to a growing supply.


pages: 209 words: 89,619

The Precariat: The New Dangerous Class by Guy Standing

8-hour work day, banking crisis, barriers to entry, basic income, Bertrand Russell: In Praise of Idleness, call centre, Cass Sunstein, centre right, collective bargaining, corporate governance, crony capitalism, deindustrialization, deskilling, fear of failure, full employment, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, mass immigration, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, old age dependency ratio, Panopticon Jeremy Bentham, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

But jobs in the middle six deciles shrank. What this trend means, and it is repeated in many countries, is that the ‘middle class’ is suffering from income insecurity and stress, being pushed into the precariat. Conclusions There was a crude social compact in the globalisation era – workers were required to accept flexible labour in return for measures to preserve jobs so that the majority experienced rising living standards. It was a Faustian bargain. Living standards were maintained by allowing consumption to exceed incomes and earnings to exceed what jobs were worth. While the latter fostered inefficiency and market distortions, the former put swathes of the population into bewildering debt. Sooner or later, the devil would have his due, a moment that for many came with the crash of 2008, when their diminished incomes fell below what was needed to pay off debts they had been encouraged to build.


pages: 346 words: 90,371

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

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

As a result of direct state action to build council homes, by 1939 the percentage of households socially renting had risen to 10% (ONS, 2013b). The interwar period also saw the beginnings of the growth in homeownership that was to continue for the rest of the century. While in 1918 23% of households were owner-occupiers, by 1939 this had increased to 32% (ONS, 2013b). In the 1930s low interest rates, rising living standards and greater availability of affordable mortgages – mainly from mutually owned building societies – created a boom in private sector housing development. This was the period when the speculative model of private house building got going: relatively small-scale builders could buy agricultural land around cities and towns, and develop it as new suburban retail and housing for sale (see Box 4.2 below).


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Boris Johnson, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, post-work, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, The Future of Employment, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population

This includes the reservoir of proto-proletarians (including peasants), but this group also includes unwaged domestic labourers, as well as salaried professionals who are under threat of being returned to the proletariat, often through deskilling (for example, medical professionals, lawyers and academics).41 The importance of this group is that it forms an additional reservoir of labour for capitalism when existing labour markets are tight.42 Finally, in addition to the other strata, a vast number of people are considered economically inactive (including the discouraged, the disabled and students).43 Overall, determining the precise size and nature of the global surplus population is difficult with existing data, and subject to fluctuations as individuals move in and out of categories, but a variety of measures converge to suggest it significantly outnumbers the active working class.44 This is the crisis of work that capitalism faces in the coming years and decades: a lack of formal or decent jobs for the growing numbers of the proletarian population. In an earlier generation, the identification of surplus populations as a problem was an idea that was often derided. During the ‘golden age’ of capitalism, low unemployment, stable jobs, rising wages and rising living standards meant the idea that capitalism produced a surplus humanity enjoyed little material support. Yet, while most leftist thinkers turned to the economic problems of growth for capitalism, an occluded intellectual tradition has instead emphasised the social reproduction problem of surplus populations. It is no surprise that it was often those outside the functioning capitalist order who saw the potential in this surplus class.45 Writing from Algiers in the 1970s, Eldridge Cleaver presciently argued that ‘When workers become permanently unemployed, displaced by the streamlining of production, they revert back to their basic [proletarian] condition’ and that ‘the real revolutionary element of our era is the [proletariat]’.46 From the capitalist core, Paul Mattick called it ‘the most important of all capitalistic contradictions’.47 And more recently, communisation theorists have made important contributions to analysing the crisis of wage labour, and Fredric Jameson has argued that Capital ‘is not a book about politics, and not even a book about labour: it is a book about unemployment’.48 Indeed, it is often forgotten that Marx argued that the expulsion of surplus populations was part of ‘the absolute general law of capitalist accumulation’.49 In the wake of the 2008 crisis and continued sluggishness in the labour market, it is no surprise that the issue of surplus populations should emerge again.


pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

"Robert Solow", 3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, Kickstarter, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

When it became clear who would win World War II, the Allies—especially the United States and United Kingdom—started designing the postwar architecture and they were dead set on avoiding the kind of international governance vacuum that had emerged after World War I. One of the key institutions they set up to avoid this was the General Agreement on Tariffs and Trade—or GATT, as it came to be known universally. The GATT’s mission was to foster rising living standards and sustainable development. Its members set out to accomplish this by establishing some basic “rules of the road” for international trade. They also committed themselves to negotiate reciprocal and mutually advantageous reductions in tariffs. While the GATT rules are complex, they were absolutely essential in fostering modern globalization, so it is worth distilling the GATT’s essence into one general principle and five specific principles.


pages: 327 words: 90,542

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

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

John Maynard Keynes, in considering this phenomenon, concluded: “too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.”2 In reality, economics is religion, with different sects. Governments profess faith in whichever prophet is fashionable, as long as it is consistent with their ideological framework and delivers growth and rising living standards. Clannish economists rarely agree on anything. A feud between prominent economists prompted a 2013 article entitled “The Paranoid Style in Economics.”3 There are disagreements on fundamental issues like the role of money and banks. Key assumptions about rational maximization behavior, efficient markets, stable preferences, and equilibriums are unrealistic. Model forecasts are unreliable.


pages: 323 words: 90,868

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

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

And so capitalists kept saving and investing and earning handsome returns on those savings, just as the wages earned by labourers grew in line with expanding economic activity. The rising tide didn’t wash away inequities, but it kept both capital and labour satisfied enough to hold the revolution at bay. From 1875 until the eve of the First World War, the world’s industrialized economies were extraordinarily unequal, but rising living standards for workers kept revolutionary fervour in check. Yet societies were not exactly living harmoniously, either. As Thomas Piketty notes, in Capital in the Twenty-First Century, it took the turmoil of the first half of the twentieth century to undo the inequality that developed in the nineteenth. War, taxation, inflation and economic depression destroyed many of the great fortunes of the industrial era.


pages: 325 words: 89,374

Municipal Dreams: The Rise and Fall of Council Housing by John Boughton

British Empire, deindustrialization, full employment, garden city movement, ghettoisation, housing crisis, Jane Jacobs, laissez-faire capitalism, manufacturing employment, negative equity, Neil Kinnock, neoliberal agenda, new economy, New Urbanism, profit motive, rent control, Right to Buy, rising living standards, starchitect, The Death and Life of Great American Cities, the market place, upwardly mobile, urban decay, urban planning, urban renewal, young professional

Slum clearance in the 1930s combined with the impact of the Great Depression brought a poorer working class into council housing for the first time, and with it some of the perceived problems and demonising stereotypes applied to council tenants more generally in recent years. The policy shift reflected a political division between Conservative politicians who believed council housing should properly be reserved for the neediest (the market would provide for the rest) and those on the left who saw it as serving ‘general needs’. Full employment and rising living standards after the Second World War reinvigorated the sense that council housing catered predominantly for a relatively prosperous and aspirational working class. But, from the 1970s, politics and economics combined to lower its status and that of its community. The National Rent Rebate Scheme implemented in 1973 (it became Housing Benefit in 1982), increasing access to council housing for the less well-off, was a significant factor in the shift.


pages: 736 words: 233,366

Roller-Coaster: Europe, 1950-2017 by Ian Kershaw

airport security, anti-communist, Ayatollah Khomeini, banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, British Empire, business cycle, centre right, colonial rule, cuban missile crisis, deindustrialization, Deng Xiaoping, Donald Trump, European colonialism, eurozone crisis, Exxon Valdez, failed state, Fall of the Berlin Wall, falling living standards, feminist movement, first-past-the-post, fixed income, floating exchange rates, Francis Fukuyama: the end of history, full employment, illegal immigration, income inequality, Johann Wolfgang von Goethe, labour market flexibility, land reform, late capitalism, liberal capitalism, liberation theology, low skilled workers, mass immigration, means of production, Mikhail Gorbachev, mutually assured destruction, Nelson Mandela, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open borders, precariat, price stability, quantitative easing, race to the bottom, reserve currency, rising living standards, road to serfdom, Ronald Reagan, Ronald Reagan: Tear down this wall, Sinatra Doctrine, The Chicago School, trade liberalization, union organizing, upwardly mobile, washing machines reduced drudgery, Washington Consensus, Winter of Discontent, young professional

As the name of the new institution suggested, economic integration was the priority. But it was to be the start, not the finish. The long-term political objective was embedded in the Treaty of Rome itself: this was ‘to establish the foundations of an ever closer union among the European peoples’. The short- to medium-term objectives of the Treaty, which came into effect on 1 January 1958, were ambitious enough. They sought to consolidate and promote rising living standards through economic growth. There was to be free movement of labour and capital, the ending of trade restrictions, together with coordinated policies of social welfare and the creation of a European Investment Bank. The aim was to create a common market, free of internal tariffs. External tariffs, though generally reduced, were retained. And agriculture, facing quite specific difficulties, was protected.

Not just the Red Brigades in Italy and the Baader-Meinhof Group in West Germany, but nationalists in Northern Ireland and separatists in the Basque Country were using terror as an intrinsic part of their campaigns. But nowhere was there a radical, let alone revolutionary, momentum. The underlying consensus that had developed in the post-war years, on the central role of the state to provide for the welfare of the population and to ensure constantly rising living standards, still held in its essentials. In fact, Social Democrats, the most staunch champions of the ‘big state’, under which high government expenditure (and taxation levels) paid for social welfare and improved living conditions for the poorer sections of society, generally gained ground in the 1960s and early 1970s. Sometimes this occurred alongside other left-wing parties, and it was usually at the expense of conservative and Church-aligned parties.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

Alvin Roth, 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, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, 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, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

But population growth was no match for the pace of material improvement. Between 1801 and 1901 the English population more than trebled, to around 30 million. Yet Londoners’ real wages more than doubled over the period. It is hard to overstate the importance of this economic transition. With the exception of newly settled colonies, never before had a country been able to achieve the double feat of a growing population and rising living standards. Yet England’s prosperity spread in the nineteenth century as the ships made with British steel brought Europe closer to the abundant natural resources and the sparsely populated land of the New World. From 1820 to the year 2000 economic activity sustained by the planet multiplied by almost sixty: the world’s population grew sixfold, to roughly 6 billion. Per capita income jumped by a factor of almost ten.


pages: 357 words: 99,684

Why It's Still Kicking Off Everywhere: The New Global Revolutions by Paul Mason

anti-globalists, back-to-the-land, balance sheet recession, bank run, banking crisis, Berlin Wall, business cycle, capital controls, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, creative destruction, credit crunch, Credit Default Swap, currency manipulation / currency intervention, currency peg, do-ocracy, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, Francis Fukuyama: the end of history, full employment, ghettoisation, illegal immigration, informal economy, land tenure, low skilled workers, mass immigration, means of production, megacity, Mohammed Bouazizi, Naomi Klein, Network effects, New Journalism, Occupy movement, price stability, quantitative easing, race to the bottom, rising living standards, short selling, Slavoj Žižek, Stewart Brand, strikebreaker, union organizing, We are the 99%, Whole Earth Catalog, WikiLeaks, Winter of Discontent, women in the workforce, working poor, working-age population, young professional

Now however, the realization is dawning that the generation who started work in 2010, and who will retire in 2050, will have been poor through much of their working lives; they will be ‘asset poor’—unless the house-price bubble can be pumped up again—and dependent on a generation being born today to join the ‘race to the bottom’ in terms of wages and lifestyles. 10. This evaporation of a promise is compounded in the more repressive societies and emerging markets because—even where you get rapid economic growth—it cannot absorb the demographic bulge of young people fast enough to deliver rising living standards for enough of them. 11. To amplify: I can’t find the quote, but one of the historians of the French Revolution of 1789 wrote that it was not the product of poor people but of poor lawyers. You can have political/economic setups that disappoint the poor for generations—but if lawyers, teachers and doctors are sitting in their garrets freeing and starving, you get revolution. Now, in their garrets, they have a laptop and broadband connection.


pages: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

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

But the book's impact had less to do with the provocative title and everything to do with the fact that class is back with a vengeance. During the boom period it was possible to at least pretend class was no more-that 'we're all middle class now', as politicians and media pundits put it. As chancellor of the exchequer, Gordon Brown had pro- nounced the end of 'boom and bust', and it seemed as though a future of rising living standards beckoned for all. At a time of economic chaos, this period looks like a golden age-even if we now know our sense of prosperity was built on sand. Yes, it was true that real wages stagnated for the bottom half and declined for the bottom third from 2004 onwards--that is, four years before the economic collapse began. But the availability of cheap credit helped paper over Britain's growing class divisions, which, despite the hubris of the political and media elite, were as entrenched as ever.


pages: 334 words: 100,201

Origin Story: A Big History of Everything by David Christian

Albert Einstein, Arthur Eddington, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Cepheid variable, colonial rule, Colonization of Mars, Columbian Exchange, complexity theory, cosmic microwave background, cosmological constant, creative destruction, cuban missile crisis, dark matter, demographic transition, double helix, Edward Lorenz: Chaos theory, Ernest Rutherford, European colonialism, Francisco Pizarro, Haber-Bosch Process, Harvard Computers: women astronomers, Isaac Newton, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, Marshall McLuhan, microbiome, nuclear winter, planetary scale, rising living standards, Search for Extraterrestrial Intelligence, Stephen Hawking, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, trade route, Yogi Berra

In just two hundred years, between 1800 and 2000, total energy consumption rose by about twenty-two times, from 20 million gigajoules (20 exajoules) to 52 million gigajoules (520 exajoules). That rise is the equivalent of an increase of 2,500 exajoules every thousand years, a rate of increase twenty thousand times as fast as in the agrarian era. The energy bonanza from fossil fuels, like the energy bonanza from farming, paid for population growth, for the complexity taxes demanded by entropy, and, finally, for rising living standards, but on a much larger scale than in the agrarian era. And this time, the rise in living standards was not confined to a tenth of the human population but extended to a much larger emerging middle class. Much of the energy bonanza from fossil fuels paid for increasing numbers of humans. It fed, clothed, and housed the five to six billion people added to the world’s population in the past two centuries.


Work Less, Live More: The Way to Semi-Retirement by Robert Clyatt

asset allocation, backtesting, buy and hold, delayed gratification, diversification, diversified portfolio, employer provided health coverage, estate planning, Eugene Fama: efficient market hypothesis, financial independence, fixed income, future of work, index arbitrage, index fund, lateral thinking, Mahatma Gandhi, McMansion, merger arbitrage, money market fund, mortgage tax deduction, passive income, rising living standards, risk/return, Silicon Valley, Thorstein Veblen, transaction costs, unpaid internship, upwardly mobile, Vanguard fund, working poor, zero-sum game

The approach has merit for those over 65 or with very large savings relative to their spending needs who are able to lock in most or all of their income needs with an annuity and still have money left over to invest in appreciating assets. Those who must put their entire life savings into an annuity to fund decades of daily living expenses risk having all their eggs in one basket —and perhaps worse, risk having the inflation-adjustments in the annuity fail to keep up with rising living standards over time. One interesting approach to annuities is to keep them in the family, with a private annuity. For example, a parent can pay a large initial sum, often in the form of appreciated securities or real estate, to a grown child, who is then obligated to pay the parent a regular monthly or annual payment for life. Between the tax benefits and the appeal of keeping the money in the family, this approach may eventually become chapter 3 | Put Your Investing on Autopilot | 181 standard practice—though experts advise it makes the most sense when parents are physically well but quite elderly.


pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, creative destruction, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, Frederick Winslow Taylor, high net worth, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, money market fund, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, plutocrats, Plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, zero-sum game, Zipcar

Like the Collinses of Wallquest before 2008, most American businesses were content to sell to their friends and neighbors and never gave much thought to selling overseas. But the math and the logic are inescapable. On one side: a home market of 320 million chastened consumers struggling to make ends meet in a slow-growth economy, shorn of the debt and rising home values that fueled so much consumption. On the other: an international market of 6.6 billion people with (Europe aside) generally rising living standards and a willingness to pay through the nose for what Americans are selling. Service exports are somewhat oxymoronic, because they often involve working with customers who come from abroad. Just as foreigners are helping to recapitalize America through foreign direct investment, they’re replenishing American coffers by coming here and spending money on service exports. Universities and colleges have long acted as magnets for foreign students: the Islamist Sayyid Qutb, who studied at Colorado State Teachers College in 1949; Barack Obama Sr., who attended the University of Hawaii in the 1950s; the aristocratic Greek in my freshman dorm at Cornell who muttered darkly about the “bloody Turks” and “the bloody socialists.”


The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us by Robert H. Frank, Philip J. Cook

accounting loophole / creative accounting, air freight, Alvin Roth, Apple's 1984 Super Bowl advert, business cycle, Daniel Kahneman / Amos Tversky, delayed gratification, global village, haute couture, income inequality, invisible hand, labor-force participation, longitudinal study, Marshall McLuhan, medical malpractice, Network effects, positional goods, prisoner's dilemma, rent-seeking, rising living standards, Ronald Reagan, school choice, Shoshana Zuboff, Stephen Hawking, transaction costs, trickle-down economics, winner-take-all economy

The broad-based upward movement in earnings provided an ever larger group with the trappings of the American dream-a house in the suburbs, two cars, a college educa­ tion for the kids. All this came to an end with the Arab oil embargo of 1974. Since then, wages and salaries have generally lagged behind inflation, espe­ cially for males of average skills and education. So accustomed had most of us become to steadily rising living standards that it remains something of a shock to realize that the all-time peak in the average wage rate occurred more than two decades ago. Since then the in­ crease in labor force participation by women has mitigated the loss in male earnings, but despite this, median family income has grown little since the early 1970s. Yet while members of the middle class have struggled to hold their own, the rich have grown considerably richer.


pages: 565 words: 122,605

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

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

This Italian city-state pioneered the use of industrial districts built largely to meet export demand. Venice was primarily a mercantile city, dependent on the export of goods and services to the rest of the world for its livelihood.25 Arguably, the most evolved of the early producer cities emerged in the Netherlands, a place that limited both imperial and ecclesiastical power. The Netherlands crafted a great urban legacy that, in its initial phases, involved rising living standards and remarkable social mobility. These trends led the Dutch to be widely denounced as avaricious people who valued physical possessions more than spiritual or cultural values. Yet this urban culture, as English historian Simon Schama noted, offered a high quality of life to its middle and working classes and even served its poorest class reasonably well.26 These Dutch cities—home to over 40 percent of Netherlanders—not only remained wealthier than those of other European countries but also managed to improve such things as hygiene and provide a better environment for children and families.


pages: 331 words: 104,366

Deep Thinking: Where Machine Intelligence Ends and Human Creativity Begins by Garry Kasparov

3D printing, Ada Lovelace, AI winter, Albert Einstein, AltaVista, barriers to entry, Berlin Wall, business process, call centre, Charles Lindbergh, clean water, computer age, Daniel Kahneman / Amos Tversky, David Brooks, Donald Trump, Douglas Hofstadter, Drosophila, Elon Musk, Erik Brynjolfsson, factory automation, Freestyle chess, Gödel, Escher, Bach, job automation, Leonard Kleinrock, low earth orbit, Mikhail Gorbachev, Nate Silver, Norbert Wiener, packet switching, pattern recognition, Ray Kurzweil, Richard Feynman, rising living standards, rolodex, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, Skype, speech recognition, stem cell, Stephen Hawking, Steven Pinker, technological singularity, The Coming Technological Singularity, The Signal and the Noise by Nate Silver, Turing test, Vernor Vinge, Watson beat the top human players on Jeopardy!, zero-sum game

We can either see these changes as a robotic hand closing around our necks or one that can lift us up higher than we can reach on our own, as has always been the case. Romanticizing the loss of jobs to technology is little better than complaining that antibiotics put too many grave diggers out of work. The transfer of labor from humans to our inventions is nothing less than the history of civilization. It is inseparable from centuries of rising living standards and improvements in human rights. What a luxury to sit in a climate-controlled room with access to the sum of human knowledge on a device in your pocket and lament how we don’t work with our hands anymore! There are still plenty of places in the world where people work with their hands all day, and also live without clean water and modern medicine. They are literally dying from a lack of technology.


pages: 374 words: 114,660

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

"Robert Solow", Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, creative destruction, declining real wages, Downton Abbey, end world poverty, financial innovation, germ theory of disease, Gini coefficient, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, very high income, War on Poverty

The success and exhilaration of the escape are all but extinguished by the end of the film; for most of the escapees, their freedom is only temporary. Humanity’s escape from death and deprivation began around 250 years ago, and it goes on to this day. Yet there is nothing to say that it must continue forever, and many threats—climate change, political failures, epidemics, and wars—could bring it to an end. Indeed, there were many pre-modern escapes in which rising living standards were choked off by precisely such forces. We can and should celebrate the successes, but there is no basis for a thoughtless triumphalism. Economic Growth and the Origins of Inequality Many of the great episodes of human progress, including those that are usually described as being entirely good, have left behind them a legacy of inequality. The Industrial Revolution, beginning in Britain in the eighteenth and nineteenth centuries, initiated the economic growth that has been responsible for hundreds of millions of people escaping from material deprivation.


pages: 395 words: 116,675

The Evolution of Everything: How New Ideas Emerge by Matt Ridley

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Alfred Russel Wallace, AltaVista, altcoin, anthropic principle, anti-communist, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Boris Johnson, British Empire, Broken windows theory, Columbian Exchange, computer age, Corn Laws, cosmological constant, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, cryptocurrency, David Ricardo: comparative advantage, demographic transition, Deng Xiaoping, discovery of DNA, Donald Davies, double helix, Downton Abbey, Edward Glaeser, Edward Lorenz: Chaos theory, Edward Snowden, endogenous growth, epigenetics, Ethereum, ethereum blockchain, facts on the ground, falling living standards, Ferguson, Missouri, financial deregulation, financial innovation, Frederick Winslow Taylor, Geoffrey West, Santa Fe Institute, George Gilder, George Santayana, Gunnar Myrdal, Henri Poincaré, hydraulic fracturing, imperial preference, income per capita, indoor plumbing, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Khan Academy, knowledge economy, land reform, Lao Tzu, long peace, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, meta analysis, meta-analysis, mobile money, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, Necker cube, obamacare, out of africa, packet switching, peer-to-peer, phenotype, Pierre-Simon Laplace, price mechanism, profit motive, RAND corporation, random walk, Ray Kurzweil, rent-seeking, reserve currency, Richard Feynman, rising living standards, road to serfdom, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, sharing economy, smart contracts, South Sea Bubble, Steve Jobs, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, twin studies, uber lyft, women in the workforce

Yet when Smith wrote his Wealth of Nations, there was little good evidence for his central idea that free exchange of goods and services would produce general prosperity. Up until the late eighteenth century much wealth creation had been by plunder in one form or another, and there was nothing remotely resembling a free-market government in power anywhere in the world. Yet in the decades that followed the book’s publication, Britain in particular (and then much of Europe and North America) played out an extraordinary story of rising living standards, falling inequality and declining violence – thanks largely to the partial and hesitant following of Smith’s recipe. Sceptics might argue that the accumulation of plundered capital from the empire was the source of that wealth, but this is plainly nonsense. As Smith so clearly saw, colonies were mostly a drain and a military distraction. Nor can capital explain the sheer scale of what happened to living standards.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

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

After the end of post-war growth, governments in the ‘free world’ avoided conflicts with strong trade unions over wage increases and unemployment by allowing for high rates of inflation. Inflation, much like credit, served to pull forward in time as yet non-existing resources, enabling employers and workers to realize in nominal money terms claims whose sum total was in excess of what was in fact available for distribution. While workers believed they were achieving what they perceived to be their moral-economic right to a steadily rising living standard combined with secure employment in their present jobs, employers were able to reap profits in line with expectations of a proper return as established in the decades of post-war reconstruction. As inflation continued, however, it devalued accumulated savings and increasingly distorted price relations. Its conquest in the early 1980s, in the course of the ‘Volcker revolution’, did not bring stability, however.


pages: 523 words: 111,615

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

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, 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, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), 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, zero-sum game

And their quality also depends on the amount of time and effort spent on their delivery. There is no or only limited scope for standardization and the use of technology to increase productivity. The increase in output is tightly limited by the amount of time spent by an individual performer—or teacher or nurse. If these workers are paid more as the years go by—just like everyone else in the economy thanks to economic growth and rising living standards—the cost consumers must pay for their services will rise relative to other prices. Baumol wasn’t alone in noting this phenomenon—a number of economists at that time, thirty or forty years ago, made the point in different ways. In his well-known book The Social Limits to Growth, Fred Hirsch diagnosed the problem as affluence allowing more and more people to demand “positional” goods whose output could not be expanded in line with incomes.


pages: 435 words: 127,403

Panderer to Power by Frederick Sheehan

"Robert Solow", Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, British Empire, business cycle, buy and hold, call centre, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversification, financial deregulation, financial innovation, full employment, inflation targeting, interest rate swap, inventory management, Isaac Newton, John Meriwether, margin call, market bubble, McMansion, Menlo Park, money market fund, mortgage debt, Myron Scholes, new economy, Norman Mailer, Northern Rock, oil shock, Paul Samuelson, place-making, Ponzi scheme, price stability, reserve currency, rising living standards, rolodex, Ronald Reagan, Sand Hill Road, savings glut, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, stocks for the long run, supply-chain management, supply-chain management software, The Great Moderation, too big to fail, transaction costs, trickle-down economics, VA Linux, Y2K, Yom Kippur War, zero-sum game

It doesn’t suggest that there has been a radical revolution over this decade relative to where we were running before.”6 At the same meeting, Alan Blinder, vice chairman of the Federal Reserve, warned the FOMC not to “get excited about something that is not there.”7 Daniel Sichel, an economist on the Fed staff, who resigned and wrote a book. The Computer Revolution, published in 1997, rebutted the acceleration of productivity: it was a myth.8 Greenspan was not to be deterred. Years later, the Wall Street Journal reviewed the chairman’s campaign: Alan Greenspan began to push a reluctant Federal Reserve to embrace his New Economy vision of rapid productivity growth and rising living standards. . . . In October 1995, a group of supply managers from various industries visited the Fed to discuss the latest in high-efficiency “just-in-time” inventory management. . . . [One of the] executives described routing goods to drugstores: “They would load up a truck and without having orders send the truck out. The drugstore computer system would call the supplier, which would call the truck on the road and say, ‘Go to suchand-such store and deliver the following items’” . . .


pages: 386 words: 122,595

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

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

But let’s do a simple exercise to illustrate why it may be terribly wrong to impose our environmental preferences on the rest of the world. Here is the task: Ask four friends to name the world’s most pressing environmental problem. It’s a fair bet that at least two of them will say global warming and none will mention clean water. Yet inadequate access to safe drinking water—a problem easily cured by rising living standards—kills two million people a year and makes another half billion seriously ill. Is global warming a serious problem? Yes. Would it be your primary concern if children in your town routinely died from diarrhea? No. The first fallacy related to trade and the environment is that poor countries should be held to the same environmental standards as the developed world. (The debate over workplace safety is nearly identical.)


pages: 452 words: 126,310

The Case for Space: How the Revolution in Spaceflight Opens Up a Future of Limitless Possibility by Robert Zubrin

Ada Lovelace, Albert Einstein, anthropic principle, battle of ideas, Charles Lindbergh, Colonization of Mars, complexity theory, cosmic microwave background, cosmological principle, discovery of DNA, double helix, Elon Musk, en.wikipedia.org, flex fuel, Francis Fukuyama: the end of history, gravity well, if you build it, they will come, Internet Archive, invisible hand, Jeff Bezos, Johannes Kepler, John von Neumann, Kuiper Belt, low earth orbit, Mars Rover, Menlo Park, more computing power than Apollo, Naomi Klein, nuclear winter, off grid, out of africa, Peter H. Diamandis: Planetary Resources, Peter Thiel, place-making, Pluto: dwarf planet, private space industry, rising living standards, Search for Extraterrestrial Intelligence, self-driving car, Silicon Valley, telerobotics, Thomas Malthus, transcontinental railway, uranium enrichment

If we consider the energy consumed not only in daily life but in transportation and the production of industrial and agricultural goods, then Americans in the electrified 1990s used approximately three times as much energy per capita as their predecessors of the steam-and-gaslight 1890s, who in turn had nearly triple the per capita energy consumption of those of the preindustrial 1790s. Some have decried this trend as a direct threat to the world's resources, but the fact of the matter is that such rising levels of energy consumption have historically correlated rather directly with rising living standard, and, if we compare living standards and per capita energy consumption of the advanced sector nations with those of the impoverished third world, continue to do so today. This relationship between energy consumption and the wealth of nations will place extreme demands upon our current set of available resources. In the first place, simply to raise the entire present world population to current American living standards (and in a world of global communications, it is doubtful that any other arrangement will be acceptable in the long run) would require increasing global energy consumption at least ten times.


pages: 409 words: 125,611

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

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

But overall equality across humanity, considered as individuals, has improved very little. (The Gini coefficient, a measurement of inequality, improved by just 1.4 points from 2002 to 2008.) So while nations in Asia, the Middle East, and Latin America, as a whole, might be catching up with the West, the poor everywhere are left behind, even in places like China where they’ve benefited somewhat from rising living standards. From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent.


pages: 497 words: 123,778

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

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

And as the technological gap between center and periphery has narrowed, the instigators of instability have won an advantage over the forces of order.31 We are only now starting to understand what has caused the existential crisis of liberal democracy, let alone how to fight it. But if we take the major drivers of our populist age seriously, we should recognize that we need to take action on at least three fronts. First, we need to reform economic policy, both domestically and internationally, to temper inequality and live up to the promise of rapidly rising living standards. A more equitable distribution of economic growth, on this vision, is not just a question of distributive justice; it is a question of political stability. Some economists have argued that we cannot have democracy, globalization, and the nation state all at the same time. And some philosophers have embraced the abandonment of the nation state, dreaming up predominantly international solutions to the economic problems we now face.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

addicted to oil, Affordable Care Act / Obamacare, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, obamacare, oil shock, pension reform, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, WikiLeaks

Manufacturers in Korea and Taiwan concentrated on cheap plastics, consumer electronics, and textiles, although they later entered the semiconductor business. The United States was able to vacuum up the best minds from India, China, the Arab world, and Latin America, where there were few opportunities for unfettered innovation or academic research. Wall Street firms dominated global markets and America had the world’s only developed venture capital system. It wasn’t that Americans were not hard workers or that our rising living standard was some fluke of history. We did work hard. Our success was based on real innovation, real education, real research, real industries, real markets, and real growth—but the playing field was also tilted in our direction. Now we have to try to sustain all those good things without all those structural advantages. Your children will only know that world when everything was tilted America’s way from reading history books.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"Robert Solow", bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, Edward Glaeser, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, global rebalancing, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, Long Term Capital Management, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Despite the technological and social progress, this period also saw an upsurge of anticapitalist thinking and action with the publication of Marx’s Das Kapital (1867); the foundation of the first American trade union (1869), the Knights of Labor; and the revolutionary uprising of the Paris Commune in 1871. These social and technological upheavals, far from undermining capitalism, laid the foundation for a period of unprecedented prosperity and peace that Keynes described in a poetic passage suffused with his characteristic blend of irony and affection: “After 1870, there was developed on a large scale an unprecedented situation [of rising living standards and expanding production] . . . In this economic Eldorado, in this economic Utopia, as the earlier economists would have deemed it, most of us were brought up.”9 It is impossible to better Keynes’s wistful evocation of capitalism’s exuberant spirit in this prelapsarian Golden Age: What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914!


To the Ends of the Earth: Scotland's Global Diaspora, 1750-2010 by T M Devine

agricultural Revolution, British Empire, deindustrialization, deskilling, full employment, ghettoisation, housing crisis, invention of the telegraph, invisible hand, joint-stock company, Khartoum Gordon, land tenure, manufacturing employment, mass immigration, new economy, New Urbanism, oil shale / tar sands, railway mania, Red Clydeside, rising living standards, Robert Gordon, Scramble for Africa, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, transcontinental railway, women in the workforce

The National Health Service, established in 1948, extended free treatment to all while by the Education (Scotland) Acts of 1945 and 1947 local authorities could insist on the medical inspection of pupils and provide free treatment. Antibiotics were introduced for the first time on a large scale in the mid-1940s and soon wiped out tuberculosis, the killer disease of young adults in the very recent past. By 1960, Scotland’s infant mortality rate was the same as that of the USA and close to the figures for England and Wales. Rising living standards in the 1950s were shown by the steady increase in the range of new household appliances, such as washing machines, vacuum cleaners and electric cookers, which made homes easier to run. Leisure patterns were transformed by the television and, for a long time after its introduction, cinema audience figures tumbled. The number of TV sets in Scotland grew from 41,000 in 1952 to well over 1 million ten years later, fuelled partly by the huge demand for televisions at the time of the Coronation in 1953.


pages: 493 words: 145,326

Fire and Steam: A New History of the Railways in Britain by Christian Wolmar

accounting loophole / creative accounting, Beeching cuts, carbon footprint, collective bargaining, computer age, Corn Laws, creative destruction, cross-subsidies, financial independence, hiring and firing, James Watt: steam engine, joint-stock company, low cost airline, railway mania, rising living standards, Silicon Valley, South Sea Bubble, strikebreaker, union organizing, upwardly mobile, working poor, yield management

The collapse of the mania, therefore, was not so much the cause of the downturn but rather one of its consequences, intensified by the changes brought about by the repeal of the Corn Laws. It is easy to exaggerate the damaging aspects of the mania because they affected so many people, but in the long term the positive consequences outweigh the negative. As we saw in the last chapter, the railway network in 1843 was insufficiently developed and had not yet become a national system that could cater for the burgeoning economy and rising living standards. It needed expansion and while the mania might have resulted in over-rapid growth, there had been many gaps to fill. While clearly some unviable schemes were promoted during that period, that does not diminish the contribution of the mania in creating a vital part of Britain’s infrastructure which survives to this day. Indeed, the very fact that virtually the entire network of main line railways, with the notable exception of what became the Great Central, had been authorized by the end of the period tends to suggest that, arbitrary as the process appears in hindsight, it did deliver a largely coherent network of railways.


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, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, 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, zero-sum game

Today, while China is saving 42 percent of its GDP, it is also receiving more than $50 billion every year in foreign direct investment, an amount close to 4 percent of its GDP.5 And in recent years, the flow of knowledge from the developed to the undeveloped countries has accelerated. It will take decades to fully overcome the knowledge gap and the capital shortage in the developing world. The good news is that there will be a strong force pulling up wages in China and India. The downside is that there will be a strong force pushing down wages for unskilled workers in the West. So, while Americans and Europeans can rejoice in the rising living standards of unskilled workers in the developing world, they will be worrying about what is happening at home. The issue is not just the total number of jobs that will be outsourced—lost—to China or India. The real problem is that even a relatively small gap between the demand for and the supply of labor can create large problems, leading to wage stagnation and decline, and creating high levels of anxiety among the many workers who feel their jobs are at risk.


pages: 431 words: 129,071

Selfie: How We Became So Self-Obsessed and What It's Doing to Us by Will Storr

Albert Einstein, autonomous vehicles, banking crisis, bitcoin, computer age, correlation does not imply causation, Donald Trump, Douglas Engelbart, Douglas Engelbart, Elon Musk, en.wikipedia.org, gig economy, greed is good, invisible hand, job automation, John Markoff, Kickstarter, longitudinal study, Lyft, Menlo Park, meta analysis, meta-analysis, Mont Pelerin Society, mortgage debt, Mother of all demos, Nixon shock, Peter Thiel, QWERTY keyboard, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Silicon Valley startup, Steve Jobs, Steven Levy, Stewart Brand, The Future of Employment, The Rise and Fall of American Growth, Tim Cook: Apple, Travis Kalanick, twin studies, Uber and Lyft, uber lyft, War on Poverty, Whole Earth Catalog

But, of course, for the people to truly change, there first had to be a change in the ways they got along and got ahead. The long nineteenth century was a time of intellectual and economic revolution in which developments in the realms of science, technology and industry had an explosive impact on the nature of who we were. This was the era of Darwin and Pasteur and Dr John Snow, of steam power, mass production, the railroad, electrification, rising living standards; the beginnings of class mobility; of magnetism, mesmerism, electricity, genes, heredity, adaptation, evolution, germs, infections, forces of nature, all unseen, all-surrounding, inside our bodies, under the earth, out there on the wind. This great storm inevitably stirred the Western self. In previous eras, when the fate of humans was still so dependent upon the physical environment, that physical environment retained its power to define who we are.


pages: 464 words: 139,088

The End of Alchemy: Money, Banking and the Future of the Global Economy by Mervyn King

"Robert Solow", Andrei Shleifer, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crowdsourcing, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Doha Development Round, Edmond Halley, Fall of the Berlin Wall, falling living standards, fiat currency, financial innovation, financial intermediation, floating exchange rates, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, German hyperinflation, Hyman Minsky, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, large denomination, lateral thinking, liquidity trap, Long Term Capital Management, manufacturing employment, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Nick Leeson, North Sea oil, Northern Rock, oil shale / tar sands, oil shock, open economy, paradox of thrift, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, quantitative easing, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Satoshi Nakamoto, savings glut, secular stagnation, seigniorage, stem cell, Steve Jobs, The Great Moderation, the payments system, The Rise and Fall of American Growth, Thomas Malthus, too big to fail, transaction costs, Tyler Cowen: Great Stagnation, yield curve, Yom Kippur War, zero-sum game

Over that period, national income in the advanced world more than doubled, and in the so-called developing world hundreds of millions of people were lifted out of extreme poverty. And yet runaway inflation in the 1970s was followed in 2007–9 by the biggest financial crisis the world has ever seen. How do we make sense of it all? Was the post-war period a success or a failure? The origins of economic growth The history of capitalism is one of growth and rising living standards interrupted by financial crises, most of which have emanated from our mismanagement of money and banking. My Chinese colleague spoke an important, indeed profound, truth. The financial crisis of 2007–9 (hereafter ‘the crisis’) was not the fault of particular individuals or economic policies. Rather, it was merely the latest manifestation of our collective failure to manage the relationship between finance – the structure of money and banking – and a capitalist system.


pages: 669 words: 150,886

Behind the Berlin Wall: East Germany and the Frontiers of Power by Patrick Major

anti-communist, Berlin Wall, centre right, falling living standards, land reform, Mikhail Gorbachev, mittelstand, open borders, Panopticon Jeremy Bentham, post-materialism, refrigerator car, rising living standards, Ronald Reagan, Sinatra Doctrine

We—that is, my wife and I—are individualists and cannot identify with this state any longer.’⁹⁶ A high proportion of women applicants were seeking to join husbands who had left on previous trips, and surveys conducted with arrivees in the Federal Republic confirmed family reunion as a cardinal factor.⁹⁷ The files are filled with countless other ‘apolitical’, personal cases (without wishing to suggest that the family crises were anything but genuine, or that the state’s control of one’s personal life is anything but political).⁹⁸ Another set of justifications concerned the poor state of the economy. Here one was on relatively safe ground since the SED’s ‘unity of economics and politics’ programme had implicitly conceded rising living standards as a citizen’s right. Moreover, it was easier for the party to suspect leavers of base materialism than high principle. One couple, for example, criticized the lack of tourist destinations, fresh fruit and the fact that ‘we have been running around Leipzig for two months in search of coffee filters’. A whole catalogue of living and working conditions was appended.⁹⁹ ‘I know from western television that you can earn a lot more there and live better than in the GDR’, explained a 26-year-old waiter.


pages: 487 words: 147,891

McMafia: A Journey Through the Global Criminal Underworld by Misha Glenny

anti-communist, Anton Chekhov, Berlin Wall, blood diamonds, BRICs, colonial rule, crony capitalism, Deng Xiaoping, Doha Development Round, failed state, Fall of the Berlin Wall, financial deregulation, Firefox, forensic accounting, friendly fire, glass ceiling, illegal immigration, joint-stock company, market bubble, Mikhail Gorbachev, Nelson Mandela, Nick Leeson, offshore financial centre, Pearl River Delta, place-making, rising living standards, Ronald Reagan, Skype, special economic zone, Stephen Hawking, trade liberalization, trade route, Transnistria, unemployed young men, upwardly mobile

Then the former Yugoslavia dissolved into a murderous civil war, presenting the new united Europe with a challenge that it was entirely unable to meet. The new circumstances bewildered old international institutions. All had to improvise and no party quite understood the implications of its actions or their unintended consequences. One group of people, however, saw real opportunity in this dazzling mixture of upheaval, hope, and uncertainty. These men, and occasionally women, understood instinctively that rising living standards in the West, increased trade and migration flows, and the greatly reduced ability of many governments to police their countries combined to form a gold mine. They were criminals, organized and disorganized, but they were also good capitalists and entrepreneurs, intent on obeying the laws of supply and demand. As such, they valued economies of scale, just as multinational corporations did, and so they sought out overseas partners and markets to develop industries that were every bit as cosmopolitan as Shell, Nike, or McDonald’s.


pages: 497 words: 150,205

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

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

The conventional case for central-bank independence rests on three planks: common agreement that low inflation is a good thing; the absence of a trade-off between low inflation and other desirable goals such as low unemployment, high growth or financial stability; and the belief that independent central banks are better placed to deliver low inflation at lower cost than politicians are. Yet in practice, most people care as much, if not more, about low unemployment, rising living standards and stable credit as they do about low inflation – and the ECB should take this into account in its decision making. Focusing exclusively on keeping inflation (too) low has come at the expense of financial stability and living standards, while privileging creditors over debtors. At the very least, then, the ECB needs a broader mandate that takes account of both asset-price and consumer-price inflation, financial and price stability, as well as growth and employment.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, business cycle, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, creative destruction, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liberal capitalism, light touch regulation, Long Term Capital Management, Louis Pasteur, low cost airline, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, mass immigration, means of production, Mikhail Gorbachev, millennium bug, money market fund, moral hazard, moral panic, mortgage debt, Myron Scholes, Neil Kinnock, new economy, Northern Rock, offshore financial centre, open economy, plutocrats, Plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, Satyajit Das, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Vilfredo Pareto, Washington Consensus, wealth creators, working poor, zero-sum game, éminence grise

Closed political systems beget closed and monopolised economies; closed and monopolised economies beget closed and silted-up economies. As I argue in this book, the Enlightenment’s great achievement was to set Western economies and societies on a virtuous circle that broke this loop – and Britain was the first to join it. The Industrial Revolution was a tribute to the fecundity of the interaction between open-access political, economic and social systems. The great unleashing of human ingenuity and rising living standards over the last 250 years is tribute to the success of this model. Despite the attractions of utopias of left and right, this is the best approximation to an achievable utopia that we have. Democracy and the public realms are too precious to diminish the politicians who make them work on a day-to-day basis. But democracy, the idea of politics and the public realm are all under siege from a constituency that purports to be their hand-maiden and fundamental ally – the free media.


pages: 537 words: 158,544

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

"Robert Solow", Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, Deng Xiaoping, different worldview, Dissolution of the Soviet Union, Donald Trump, Edward Glaeser, energy security, European colonialism, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, Gini coefficient, global reserve currency, global supply chain, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, Khyber Pass, Kickstarter, knowledge economy, land reform, low cost airline, low skilled workers, mass immigration, means of production, megacity, Monroe Doctrine, Nelson Mandela, oil shale / tar sands, oil shock, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, rising living standards, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

Ski resorts are also emerging in the Tien Shan range—to which Europeans may soon flock, if global warming diminishes snowfall in the Alps. Kazakhstan is becoming a nation of individual consumers rather than cogs in a Soviet-style machine. The private sector now accounts for most of the workforce and economy, and private banks raise funds on the London Stock Exchange. Government assistance to small enterprises, privatized land ownership, agrarian subsidies, and higher government salaries have all contributed to rising living standards—in both cities and rural areas. The poverty rate has declined, unemployment is the region’s lowest, and the country is the destination of choice for migrant laborers. New homes and apartment blocks are sprouting around Almaty and Astana, with professionals commuting to jobs with international energy and consulting firms. “We aren’t smuggling capital overseas, instead we’re taking out mortgages,” boasted a young Almaty consultant who works for a Kazakh-multinational joint venture.


pages: 538 words: 145,243

Behemoth: A History of the Factory and the Making of the Modern World by Joshua B. Freeman

anti-communist, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, Corn Laws, corporate raider, deindustrialization, Deng Xiaoping, disruptive innovation, en.wikipedia.org, factory automation, Ford paid five dollars a day, Frederick Winslow Taylor, global supply chain, indoor plumbing, interchangeable parts, invisible hand, James Hargreaves, joint-stock company, knowledge worker, mass immigration, means of production, mittelstand, Naomi Klein, new economy, On the Economy of Machinery and Manufactures, Panopticon Jeremy Bentham, Pearl River Delta, post-industrial society, Ralph Waldo Emerson, rising living standards, Ronald Reagan, Silicon Valley, special economic zone, spinning jenny, Steve Jobs, strikebreaker, technoutopianism, the built environment, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Cook: Apple, transaction costs, union organizing, Upton Sinclair, urban planning, Vanguard fund, women in the workforce, working poor, Works Progress Administration, zero-sum game

By the late 1970s, many communists came to believe that China’s continuing poverty, and its lag behind not only developed Western countries but also rapidly developing Asian nations like Singapore, stemmed from the country’s lack of markets. To stimulate growth, the reformers sought at least the limited introduction of markets. They also pressed for a shift away from state investment in heavy industry. Somewhat like Bukharin and others in the Soviet Union a half century earlier, they argued that labor-intensive production of consumer goods would provide a more effective path to economic growth and rising living standards in a country lacking in capital but with plenty of underutilized labor. Over time, funds generated by light manufacturing could be channeled into more advanced, capital-intensive endeavors.15 Deng and his allies sought foreign capital and expertise to help expand industry without having a long-term blueprint. Instead, Deng called for “crossing the river by feeling the stones.” As an experiment, in 1979 the government established “special economic zones” in Guangdong and Fujian provinces, designed to attract foreign businesses.


pages: 459 words: 144,009

Upheaval: Turning Points for Nations in Crisis by Jared Diamond

anti-communist, Asian financial crisis, Berlin Wall, British Empire, California gold rush, clean water, correlation coefficient, cuban missile crisis, Dissolution of the Soviet Union, Gini coefficient, illegal immigration, interchangeable parts, invention of writing, Jeff Bezos, medical malpractice, mutually assured destruction, Nelson Mandela, nuclear winter, oil shale / tar sands, peak oil, post-work, purchasing power parity, rising living standards, risk tolerance, Ronald Reagan, The Spirit Level, traffic fines, transcontinental railway, women in the workforce, World Values Survey

The Soviet Union and its Eastern Bloc partners reached the conclusion that West Germany was now to be valued as a major trade partner, and was no longer to be feared as a military or territorial threat. Brandt’s treaty, and Schmidt’s and Kohl’s subsequent agreements, between the two Germany’s enabled hundreds of thousands of West Germans to visit East Germany, and a small number of East Germans to visit West Germany. Trade between the two Germany’s grew. Increasingly, East Germans succeeded in watching West German television. That enabled them to compare for themselves the high and rising living standards in West Germany, and the low and declining living standards in East Germany. Economic and political difficulties were also growing in the Soviet Union itself, which was becoming less able to impose its will on other Eastern Bloc countries. Against that background, the beginning of the end for East Germany was a step completely beyond the control of either West or East Germany: on May 2 of 1989, Hungary, an Eastern Bloc country separated from East Germany to the north by another Eastern Bloc country (Czechoslovakia), decided to remove the fence separating it on the west from Austria, a Western democracy bordering on West Germany.


pages: 497 words: 153,755

The Power of Gold: The History of an Obsession by Peter L. Bernstein

Albert Einstein, Atahualpa, Bretton Woods, British Empire, business cycle, California gold rush, central bank independence, double entry bookkeeping, Edward Glaeser, Everybody Ought to Be Rich, falling living standards, financial innovation, floating exchange rates, Francisco Pizarro, German hyperinflation, Hernando de Soto, Isaac Newton, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, large denomination, liquidity trap, long peace, money: store of value / unit of account / medium of exchange, old-boy network, Paul Samuelson, price stability, profit motive, random walk, rising living standards, Ronald Reagan, seigniorage, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, trade route

Unlike the leaders responsible for putting the world back together after World War II, the statesmen and economists of the 1920s were in uncharted territory, without any guide or precedent to help them find their way through the dark wilderness before them. Not a single episode in the history of gold or money recounted so far in this book could have been of much)help. Nothing like the war of 1914-1918 had ever occurred before, in terms of scope, casualties, cost, or pain. It was natural to seek a return to the structure that most people believed had held the world together during the long peace and rising living standards of the Victorian and Edwardian eras, Disraeli's warning notwithstanding. In addition, experience had shown that mistrust in the value of money can have a powerful and destructive impact on social structures, the established order of property ownership, and economic progress. Newfangled experiments in the insecure environment of the postwar world had no attraction for the authorities, and for only a tiny number of the experts, especially in the world of finance.


India's Long Road by Vijay Joshi

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

As argued above in the section on ‘deep fiscal adjustment’, they should be substituted by an unconditional and universal cash transfer set at a level that would abolish extreme poverty. The resulting pay-​off for growth and inclusion would be very large. The fiscal implications would be quite easily manageable if the dysfunctional explicit and implicit subsidies were wound up, which would in any case be desirable for several other reasons. Social protection is an essential feature of a good society. However, in the medium and long run, rising living standards for poor people depend much more on expansion of employment (discussed above), and provision of education and health care, than on redistributive transfers. Education and health care contribute to raising the growth rate by augmenting human capital. They are also of crucial importance in spreading the fruits of growth widely and enabling individuals to achieve their full potential and lead fulfilling lives.


pages: 535 words: 144,827

1939: A People's History by Frederick Taylor

Albert Einstein, anti-communist, Berlin Wall, British Empire, collective bargaining, delayed gratification, facts on the ground, full employment, mass immigration, rising living standards, the market place, women in the workforce

* By contrast, Britain in the late 1930s, although gradually losing its grip on Empire and suffering from setbacks to its traditional mining and heavy industrial sectors, was on the whole in good shape economically. The decision to abandon the gold standard in 1931 had permitted a more flexible economy than in other advanced countries, and thus a speedier recovery. High unemployment in the still depressed north of the country – leading to desperate popular protests such as the Jarrow March – contrasted with rising living standards in the English south and Midlands, where modern consumer-directed manufacturing (including motor-vehicle production, electrical equipment, radio communications and latterly aircraft production) and new service industries brought unheard-of prosperity. Owing to cheap credit, the 1930s was also an era of enormous expansion in house building, leading to a booming construction sector. From 1936, and with reluctance, after it grew clear that Germany was rearming, the British government paid reluctant heed to expanding its armed forces.


pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business cycle, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost airline, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, MITM: man-in-the-middle, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

A recent International Monetary Fund study came to a similar conclusion—that a high level of income inequality can be “destructive” to sustained growth and that the best condition for long-term growth is “more equality in the income distribution.” The Unraveling The opposite has happened in America since the late 1970s. The soaring wealth of the super-rich has brought the unraveling of the American Dream for the middle class—the dream of a steady job with decent pay and health benefits, rising living standards, a home of your own, a secure retirement, and the hope that your children would enjoy a better future. As a country, we have declined from an era of middle-class prosperity and middle-class power from the 1940s to the 1970s to an era of vast fortunes and mass economic insecurity. We have fallen from being the envy of the world, with the most widely shared economic prosperity and the most affluent middle class of any place on earth, to losing our title as “the land of opportunity.”


pages: 564 words: 163,106

The Rise and Fall of Modern Medicine by M. D. James le Fanu M. D.

Barry Marshall: ulcers, clean water, cuban missile crisis, discovery of penicillin, double helix, experimental subject, Gary Taubes, Isaac Newton, lateral thinking, meta analysis, meta-analysis, rising living standards, selective serotonin reuptake inhibitor (SSRI), stem cell, telerobotics, The Design of Experiments, the scientific method, V2 rocket

McKeown, it seems, overlooked, presumably deliberately, this important point, for as a historian subsequently observed: McKeown mis-stated, or failed to understand, the point demonstrated with brilliant clarity in the classic book The Prevention of Tuberculosis published in 1908, namely that the effect of placing consumptive patients in poor law infirmaries was to separate them from the general populace and to restrict the spread of the disease – the proportion of consumptive patients thus segregated corresponded closely to the progressive rate of decline of tuberculosis in England and Wales. Certainly, rising living standards and particularly improvements in housing would have contributed to tuberculosis’s decline, but ‘medical intervention’ – the identification of those with tuberculosis by examining their sputum and their subsequent incarceration in a sanatorium – was also very important. This might not be a conventional view of ‘medical intervention’, but it was instigated and co-ordinated by doctors with the clear intention of reducing the spread of the disease, so medical intervention it must be.6 When the slightest breath of scepticism is sufficient to undermine McKeown’s argument, perhaps a similar attitude will prove just as damaging to The Social Theory he instigated.


pages: 604 words: 161,455

The Moral Animal: Evolutionary Psychology and Everyday Life by Robert Wright

"Robert Solow", agricultural Revolution, Andrei Shleifer, Asian financial crisis, British Empire, centre right, cognitive dissonance, double entry bookkeeping, double helix, fault tolerance, Francis Fukuyama: the end of history, George Gilder, global village, invention of gunpowder, invention of movable type, invention of the telegraph, invention of writing, invisible hand, John Nash: game theory, John von Neumann, Marshall McLuhan, Norbert Wiener, planetary scale, pre–internet, profit motive, Ralph Waldo Emerson, random walk, Richard Thaler, rising living standards, Silicon Valley, social intelligence, social web, Steven Pinker, talking drums, the medium is the message, The Wealth of Nations by Adam Smith, trade route, your tax dollars at work, zero-sum game

.† Indeed, we might just as well attribute the blossoming of freedom and democracy in Europe to the corruption and tyranny of the later Roman Empire. This desertion of Rome’s earlier ideals may well have hastened the empire’s collapse, bringing the fluidity that allowed the competitive experimentation which fostered capitalism. (Perhaps analogously, it is only after the famous Mayan collapse that archaeologists find evidence in Mayan culture of a “mercantile pragmatism,” featuring the mass production of pottery, rising living standards for commoners, and the apparent demise of a theocratic elite in favor of a merchant class.) The story of the Middle Ages is the story of new technologies of non-zero-sumness restructuring society in their image. Their upshot ran counter to, and ultimately prevailed over, the generic ambitions of ancient imperial regimes. Once the synergistic power of these technologies crystallized in the form of capitalism, they would allow the entire populace—including descendants of slaves and serfs—to play complex non-zero-sum games with people they would never meet.


pages: 626 words: 167,836

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

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

One reason that you are likely to pass dozens of bookstores while taking a walk in Paris is that France recently passed a so-called anti-Amazon law, which says that online sellers cannot offer free shipping on discounted books. The law is part of a drive in France to promote “biblio-diversity” by helping independent bookstores compete.70 France decided to forgo productivity and consumer benefits in the interest of keeping jobs. This example is not offered as an endorsement of anti-automation policies. As history shows, labor-saving technology and rising productivity are a prerequisite for rising living standards over the long run. One reason why growth was so slow before the Industrial Revolution was precisely the resistance to technologies that threatened to render the skills of the workforce obsolete. The point is that there is nothing to ensure that technology will always be allowed to progress uninterrupted. It is perfectly possible for automation to become a political target. The twentieth century was an extraordinary period in human history in that it saw very little resistance to machines.


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

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

Specifically, those who think about economics should spell out the economic conditions for a decent migration policy. V I I I. R e for m i ng E conom ic s 51 Economics has a crucial part to pay in preserving the liberal political system. But to do so political liberalism must be detached from neoliberal economics. Economic policy is a central element in statecraft. If it helps societies to realize full employment, rising living standards and a fair distribution of opportunities and rewards, it can take a lot of the sting out of populist politics, which trades on economic discontent to push recidivist political agendas. Voters get annoyed by many things other than economic misfortune. Many don’t like immigration or gay rights, but they are normally not sufficiently annoyed by these things to vote for parties promising to cancel them, unless the economy is faltering as well.


Cultural Backlash: Trump, Brexit, and Authoritarian Populism by Pippa Norris, Ronald Inglehart

affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Berlin Wall, Bernie Sanders, Boris Johnson, Cass Sunstein, centre right, cognitive dissonance, conceptual framework, declining real wages, desegregation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, feminist movement, first-past-the-post, illegal immigration, immigration reform, income inequality, job automation, knowledge economy, labor-force participation, land reform, liberal world order, longitudinal study, low skilled workers, mass immigration, meta analysis, meta-analysis, obamacare, open borders, open economy, post-industrial society, post-materialism, precariat, purchasing power parity, rising living standards, Ronald Reagan, sexual politics, Silicon Valley, statistical model, stem cell, War on Poverty, white flight, winner-take-all economy, women in the workforce, working-age population, World Values Survey, zero-sum game

The fact that Authoritarian-­Populist parties have become powerful, even in societies with widespread prosperity and comprehensive welfare services such as Norway, Denmark, Switzerland, the Netherlands, and Sweden, implies that the economic grievance thesis alone cannot explain their electoral success. In Central and Eastern Europe, Hungary, Poland, the Czech Republic, and Slovakia have enjoyed rising living standards and rapid economic growth, compared with other post-­communist societies, yet they have also experienced a series of populist gains. A comparative study of the region concluded that the emergence of this party family cannot be linked 154 Economic Grievances straightforwardly to adverse economic conditions.68 Nor do populist parties follow a common economic philosophy; thus, some such as SNS in Slovakia are market oriented, while others such as Ataka in Bulgaria and Jobbik in Hungary favor a partial return to state ownership.


Ellul, Jacques-The Technological Society-Vintage Books (1964) by Unknown

Bretton Woods, conceptual framework, do-ocracy, double entry bookkeeping, Frederick Winslow Taylor, full employment, James Hargreaves, James Watt: steam engine, John Maynard Keynes: technological unemployment, liberal capitalism, means of production, Norbert Wiener, price mechanism, profit motive, rising living standards, road to serfdom, spinning jenny, Thorstein Veblen, urban planning, Vilfredo Pareto

Some optimists of good will assert that they have rediscovered a Humanism to which the technical movement is subordinated. The orientation of this Humanism may be Communist or non-Communist, but it hardly makes any dif­ ference. In both cases it is merely a pious hope with no chance whatsoever of influencing technical evolution. The further we ad­ vance, the more the purpose of our techniques fades out of sight Even things which not long ago seemed to be immediate objectives — rising living standards, hygiene, comfort— no longer seem to have that character, possibly because man finds the endless adaptation to new circumstances disagreeable. In many cases, indeed, a higher technique obliges him to sacrifice comfort and hygienic amenities to the evolving technology which possesses a monopoly T h e T e c h n o lo g ic a l S o c ie ty (431 of the instruments necessary to satisfy them.


The Oil Kings: How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the Middle East by Andrew Scott Cooper

addicted to oil, anti-communist, Ayatollah Khomeini, banking crisis, Boycotts of Israel, energy security, falling living standards, friendly fire, full employment, interchangeable parts, Kickstarter, land reform, MITM: man-in-the-middle, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, RAND corporation, rising living standards, Robert Bork, rolodex, Ronald Reagan, strikebreaker, unbiased observer, uranium enrichment, urban planning, Yom Kippur War

Indeed, the Johnson administration had produced an internal report a year later that concluded that “the nation’s total energy resources seem adequate to satisfy expected requirements through the remainder of the century at costs near present levels.” The United States was still the world’s biggest producer of oil in 1970. But that year American oil production peaked at 11.3 million barrels per day ending a happy era of low inflation, full employment, and rising living standards. To fill the growing chasm between consumer demand and energy supplies the Nixon administration loosened the import quotas of the Eisenhower era, then discarded them entirely in April. Foreign crude imports rocketed commensurately from 2.2 million barrels of oil per day in 1967 to 6.2 million barrels per day in 1973. The figures were even more striking when viewed in percentage terms, rising from 19 percent of domestic consumption in 1967 to 35 percent six years later.


The Rise and Fall of the British Nation: A Twentieth-Century History by David Edgerton

active measures, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, British Empire, business cycle, call centre, centre right, collective bargaining, colonial exploitation, Corn Laws, corporate governance, deglobalization, deindustrialization, dematerialisation, deskilling, Donald Davies, double helix, endogenous growth, Etonian, European colonialism, feminist movement, first-past-the-post, full employment, imperial preference, James Dyson, knowledge economy, labour mobility, land reform, land value tax, manufacturing employment, means of production, Mikhail Gorbachev, Neil Kinnock, new economy, non-tariff barriers, North Sea oil, offshore financial centre, old-boy network, packet switching, Philip Mirowski, Piper Alpha, plutocrats, Plutocrats, post-industrial society, rising living standards, road to serfdom, Ronald Reagan, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, trade liberalization, union organizing, very high income, wages for housework, wealth creators, Winter of Discontent, women in the workforce, working poor

The United Kingdom and the European Communities (1971)3 The Conservatives were returned in 1951, remaining in office for thirteen years, under Churchill, then Anthony Eden, Harold Macmillan and lastly Sir Alec Douglas-Home, formerly the 14th Earl of Home. These were, in the conventional view, the years of attempts to hold on to both imperial and great power status, evident in the invasion of Egypt in 1956, which was followed by rapid decolonization. Imperial illusions were such that the British government missed the European unity bus in the late 1950s. They were, however, the years of affluence, of rising living standards, of the birth of the consumer society. These were the years of social democracy, of the welfare state. Yet the relative performance of the British economy came into question, the British decline became a live issue. Through immigration from the ‘New Commonwealth’ the United Kingdom was becoming a multiracial, multicultural society. Thus we can sum up much of British history in this period.


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The Taste of War: World War Two and the Battle for Food by Lizzie Collingham

agricultural Revolution, American ideology, British Empire, centre right, clean water, colonial exploitation, distributed generation, European colonialism, fixed income, full employment, global village, indoor plumbing, labour mobility, land reform, mass immigration, means of production, profit motive, rising living standards, trade route, V2 rocket, women in the workforce

This perspective on the causes of the Second World War is relevant to the contemporary global food situation. The problem which confronted Germany and Japan in the 1930s, of how to feed a growing urban population with the more nutritious but also more costly food which it demands, has returned to confront the developing world with even greater force and with the potential for an equally global impact at the beginning of the twenty-first century. Rising living standards among the growing urban middle classes in developing countries such as China, India, Indonesia and Brazil have led to marked changes in eating habits. Zhang Xiuwen grew up a member of a poor farming family in the rural province of Yunnan. He often went hungry and he only ever ate meat on special holidays once or twice a year. He never drank milk. Now he is a tennis coach in Beijing and he and his family can afford to eat meat and drink milk every day.


The Empire Project: The Rise and Fall of the British World-System, 1830–1970 by John Darwin

anti-communist, banking crisis, Bretton Woods, British Empire, capital controls, cognitive bias, colonial rule, Corn Laws, European colonialism, floating exchange rates, full employment, imperial preference, Joseph Schumpeter, Khartoum Gordon, Kickstarter, labour mobility, land tenure, liberal capitalism, liquidationism / Banker’s doctrine / the Treasury view, Mahatma Gandhi, Monroe Doctrine, new economy, New Urbanism, open economy, railway mania, reserve currency, Right to Buy, rising living standards, Scientific racism, South China Sea, the market place, The Wealth of Nations by Adam Smith, trade route, transaction costs, transcontinental railway, undersea cable

This had to be met by further borrowing.96 But the scale was comparatively modest (perhaps £6 million per year) and part of it was due to new investment in railways and irrigation in a period of commercial expansion. It was also true that the domestic impact of India's deepening involvement in international trade was muffled by the vast scale of the rural economy much of it close to subsistence and threatened by periodic famine – although export-producing regions did experience rising living standards.97 The bar on tariffs imposed by London made diversification into industry more difficult. Overall, however, the pre-war years saw the closer integration of India into the British world-system. India remained Britain's largest market. Its export surpluses were larger. Its payments to Britain were met without strain. Most important of all, perhaps, financial stability and economic growth underwrote the political system of the Civilian Raj.


pages: 1,373 words: 300,577

The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin

"Robert Solow", addicted to oil, Albert Einstein, Asian financial crisis, Ayatollah Khomeini, banking crisis, Berlin Wall, bioinformatics, borderless world, BRICs, business climate, carbon footprint, Carmen Reinhart, cleantech, Climategate, Climatic Research Unit, colonial rule, Colonization of Mars, corporate governance, cuban missile crisis, data acquisition, decarbonisation, Deng Xiaoping, Dissolution of the Soviet Union, diversification, diversified portfolio, Elon Musk, energy security, energy transition, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, fear of failure, financial innovation, flex fuel, global supply chain, global village, high net worth, hydraulic fracturing, income inequality, index fund, informal economy, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), James Watt: steam engine, John von Neumann, Kenneth Rogoff, life extension, Long Term Capital Management, Malacca Straits, market design, means of production, megacity, Menlo Park, Mikhail Gorbachev, Mohammed Bouazizi, mutually assured destruction, new economy, Norman Macrae, North Sea oil, nuclear winter, off grid, oil rush, oil shale / tar sands, oil shock, Paul Samuelson, peak oil, Piper Alpha, price mechanism, purchasing power parity, rent-seeking, rising living standards, Robert Metcalfe, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Silicon Valley startup, smart grid, smart meter, South China Sea, sovereign wealth fund, special economic zone, Stuxnet, technology bubble, the built environment, The Nature of the Firm, the new new thing, trade route, transaction costs, unemployed young men, University of East Anglia, uranium enrichment, William Langewiesche, Yom Kippur War

All this, along with the end of the Cold War and rapidly growing world trade, inaugurated a new self-confident era of globalization. “Distance” was disappearing, along with borders, as both finance and supply chains tied production and commerce together around the planet. It was an increasingly open world, freely communicating, freely trading, freely traveling—and, as it turned out very definitely, “visa-lite.” It was a world of rising living standards and ever-wider possibilities. It was an optimistic time. THE DAY THAT CHANGED EVERYTHING On September 11, 2001, two jets hijacked by Al Qaeda operatives slammed into the twin towers of the World Trade Center, and a third into the Pentagon. The fourth, aimed at the Capitol, was brought down by passengers in a cornfield in Pennsylvania. For the first time since the Japanese air raid on Pearl Harbor, December 7, 1941, which had taken the United States into World War II, America had been directly attacked, and with a greater loss than on that unsuspecting Sunday morning in Hawaii.


pages: 1,123 words: 328,357

Post Wall: Rebuilding the World After 1989 by Kristina Spohr

American Legislative Exchange Council, Andrei Shleifer, anti-communist, banking crisis, Berlin Wall, Bonfire of the Vanities, Bretton Woods, central bank independence, colonial exploitation, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Doomsday Clock, facts on the ground, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, G4S, Kickstarter, mass immigration, means of production, Mikhail Gorbachev, open economy, price stability, rising living standards, Ronald Reagan, Ronald Reagan: Tear down this wall, software patent, South China Sea, special economic zone, Thomas L Friedman, Transnistria, uranium enrichment, zero-coupon bond

The command economy was loosened to free many goods from price controls and to introduce a new programme for agricultural collectivisation, including revised household plot regulations that permitted people to grow food for the market on private land.[25] This was the origin of Hungary’s so-called ‘goulash economy’ of the 1960s – officially termed the ‘New Economic Mechanism’.[26] Kádár’s economic and political reforms made possible rising living standards and a relatively relaxed ideological climate. He also cautiously opened up Hungary socially; Western radio broadcasts were no longer jammed and the restrictions on travel across the Iron Curtain were relaxed. In 1963, 120,000 Hungarians travelled to the West, four times more than in 1958. All this made the country one of the most prosperous and tolerant states in the Soviet bloc.[27] Kádár became a popular figure – at least for the moment.