rising living standards

54 results back to index


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

affirmative action, Affordable Care Act / Obamacare, barriers to entry, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, 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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, low skilled workers, market clearing, Martin Wolf, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

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.

 

When the Money Runs Out: The End of Western Affluence by Stephen D. King

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

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: 355 words: 92,571

Capitalism: Money, Morals and Markets by John Plender

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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: 128 words: 35,958

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, collective bargaining, declining real wages, full employment, George Akerlof, income inequality, inflation targeting, minimum wage unemployment, new economy, price stability, quantitative easing, Report Card for America’s Infrastructure, rising living standards, 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: 236 words: 67,953

Brave New World of Work by Ulrich Beck

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

affirmative action, Asian financial crisis, Berlin Wall, collective bargaining, conceptual framework, Fall of the Berlin Wall, feminist movement, full employment, future of work, 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, postnationalism / post nation state, profit maximization, purchasing power parity, rising living standards, Silicon Valley, working poor, working-age population

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: 268 words: 89,761

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

back-to-the-land, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, call centre, centre right, cognitive dissonance, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, 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, lake wobegon effect, Long Term Capital Management, market fundamentalism, Martin Wolf, McMansion, medical malpractice, mortgage debt, Naomi Klein, new economy, oil shock, 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: 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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business process, call centre, combinatorial explosion, corporate governance, 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, job automation, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, labour mobility, Loebner Prize, low skilled workers, minimum wage unemployment, patent troll, pattern recognition, 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!, winner-take-all economy

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: 94 words: 26,453

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

3D printing, Black Swan, British Empire, Buckminster Fuller, Clayton Christensen, crowdsourcing, deliberate practice, fear of failure, Filter Bubble, future of work, Google Glasses, Isaac Newton, James Dyson, Jaron Lanier, Jeff Bezos, job automation, Lean Startup, low skilled workers, Mark Zuckerberg, move fast and break things, Paul Erdős, Paul Graham, recommendation engine, rising living standards, Robert Shiller, Robert Shiller, Silicon Valley, Silicon Valley startup, skunkworks, 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: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, Plutocrats, plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, wage slave, working poor, working-age population, Y2K, Yogi Berra

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

call centre, collective bargaining, conceptual framework, credit crunch, deindustrialization, deskilling, Downton Abbey, financial independence, full employment, income inequality, manufacturing employment, New Urbanism, Red Clydeside, rent control, rising living standards, 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: 223 words: 10,010

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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 process, call centre, capital controls, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, 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, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, 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: 324 words: 92,805

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, corporate governance, corporate social responsibility, crony capitalism, David Brooks, delayed gratification, double helix, factory automation, financial deregulation, financial innovation, full employment, game design, greed is good, If something cannot go on forever, it will stop, impulse control, income inequality, inflation targeting, invisible hand, job automation, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, 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: 391 words: 102,301

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, moral hazard, mutually assured destruction, Naomi Klein, offshore financial centre, open borders, open economy, Peace of Westphalia, peak oil, pension reform, Plutocrats, plutocrats, 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

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: 475 words: 155,554

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, 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, ghettoisation, global rebalancing, global reserve currency, hiring and firing, inflation targeting, Irish property bubble, Just-in-time delivery, labour market flexibility, 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, North Sea oil, Northern Rock, offshore financial centre, open economy, paradox of thrift, pension reform, price mechanism, price stability, profit motive, quantitative easing, quantitative trading / quantitative finance, race to the bottom, regulatory arbitrage, reserve currency, reshoring, 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, working-age population

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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: 179 words: 43,441

The Fourth Industrial Revolution by Klaus Schwab

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, conceptual framework, continuous integration, crowdsourcing, disintermediation, 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, 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, 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, The Spirit Level, total factor productivity, transaction costs, Uber and 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: 222 words: 70,559

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Buckminster Fuller, diversified portfolio, fixed income, hydrogen economy, income per capita, index fund, mortgage debt, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit motive, reserve currency, rising living standards, Ronald Reagan, shareholder value, Silicon Valley, Vanguard fund, Yom Kippur War, zero-coupon bond

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: 183 words: 17,571

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, call centre, Carmen Reinhart, central bank independence, centre right, cloud computing, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, 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, joint-stock company, Joseph Schumpeter, labor-force participation, labour market flexibility, liquidity trap, London Interbank Offered Rate, lump of labour, market bubble, market clearing, Martin Wolf, means of production, mobile money, moral hazard, mortgage debt, mortgage tax deduction, 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

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: 287 words: 81,970

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

bank run, banking crisis, Ben Bernanke: helicopter money, Berlin Wall, Bernie Madoff, Bretton Woods, British Empire, Buckminster Fuller, 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, index fund, Lao Tzu, margin call, market bubble, McMansion, 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: 330 words: 77,729

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Albert Einstein, banking crisis, Berlin Wall, Bretton Woods, business climate, 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, laissez-faire capitalism, liquidity trap, means of production, microcredit, minimum wage unemployment, open economy, paradox of thrift, 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

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: 271 words: 77,448

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, Black Swan, call centre, capital asset pricing model, computer age, corporate governance, deskilling, en.wikipedia.org, Freestyle chess, future of work, Google Glasses, Grace Hopper, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, meta analysis, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, 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.

 

pages: 239 words: 70,206

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

23andMe, Affordable Care Act / Obamacare, Albert Einstein, big data - Walmart - Pop Tarts, bioinformatics, 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, John von Neumann, Mark Zuckerberg, market bubble, meta analysis, meta-analysis, 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: 255 words: 75,172

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

affirmative action, Affordable Care Act / Obamacare, battle of ideas, big-box store, blue-collar work, collective bargaining, 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, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, Plutocrats, plutocrats, profit motive, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, 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: 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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Admiral Zheng, Asian financial crisis, Berlin Wall, Bretton Woods, BRICs, British Empire, credit crunch, Dava Sobel, deindustrialization, Deng Xiaoping, deskilling, discovery of the americas, Doha Development Round, energy security, European colonialism, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global reserve currency, global supply chain, illegal immigration, income per capita, invention of gunpowder, James Watt: steam engine, joint-stock company, Kenneth Rogoff, land reform, land tenure, Malacca Straits, Martin Wolf, Naomi Klein, new economy, New Urbanism, open economy, pension reform, price stability, purchasing power parity, reserve currency, rising living standards, Ronald Reagan, Scramble for Africa, Silicon Valley, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, spinning jenny, Spread Networks laid a new fibre optics cable between New York and Chicago, the scientific method, Thomas L Friedman, trade liberalization, urban planning, Washington Consensus, Xiaogang Anhui farmers

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: 310 words: 90,817

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

bank run, banks create money, British Empire, capital controls, Carmen Reinhart, central bank independence, currency peg, Fractional reserve banking, German hyperinflation, global reserve currency, inflation targeting, Kenneth Rogoff, Long Term Capital Management, market clearing, Martin Wolf, means of production, 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: 353 words: 98,267

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, new economy, New Urbanism, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, women in the workforce, World Values Survey, Yom Kippur War, young professional

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: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Asperger Syndrome, banking crisis, Berlin Wall, 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, Hugh Fearnley-Whittingstall, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, Occupy movement, pension reform, place-making, Plutocrats, plutocrats, race to the bottom, 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%, 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: 523 words: 111,615

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop, illegal immigration, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey

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: 357 words: 99,684

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

back-to-the-land, balance sheet recession, bank run, banking crisis, Berlin Wall, capital controls, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, credit crunch, Credit Default Swap, currency manipulation / currency intervention, currency peg, 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, 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: 394 words: 85,734

The Global Minotaur by Yanis Varoufakis, Paul Mason

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

banking crisis, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business climate, capital controls, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, correlation coefficient, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, debt deflation, declining real wages, deindustrialization, eurozone crisis, financial innovation, first-past-the-post, full employment, Hyman Minsky, industrial robot, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, market fundamentalism, Mexican peso crisis / tequila crisis, mortgage debt, new economy, Northern Rock, paper trading, 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, 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: 209 words: 89,619

The Precariat: The New Dangerous Class by Guy Standing

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

8-hour work day, banking crisis, barriers to entry, 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, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, 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: 357 words: 95,986

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, battle of ideas, blockchain, Bretton Woods, 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, late capitalism, low skilled workers, manufacturing employment, market design, Martin Wolf, 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, post scarcity, 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, 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: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Asian financial crisis, capital controls, clean water, correlation does not imply causation, 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, informal economy, Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, manufacturing employment, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, profit motive, race to the bottom, rising living standards, school vouchers, 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

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 199 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: 391 words: 97,018

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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 process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, 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, illegal immigration, index fund, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, 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, 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.”

 

pages: 323 words: 90,868

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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: 606 words: 87,358

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial robot, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, New Economic Geography, out of africa, paper trading, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, 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: 441 words: 136,954

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

3D printing, 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, 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, job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low skilled workers, Mark Zuckerberg, market design, 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: 487 words: 147,891

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, Nick Leeson, offshore financial centre, 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: 669 words: 150,886

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

anti-communist, Berlin Wall, centre right, falling living standards, land reform, Mikhail Gorbachev, mittelstand, open borders, Post-materialism, 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: 484 words: 136,735

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, bonus culture, Bretton Woods, BRICs, Carmen Reinhart, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, 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, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, laissez-faire capitalism, Long Term Capital Management, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, oil shock, paradox of thrift, 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 Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Washington Consensus

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!

 

pages: 543 words: 147,357

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, 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, Long Term Capital Management, Louis Pasteur, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, means of production, Mikhail Gorbachev, millennium bug, moral hazard, mortgage debt, 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, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, 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, Washington Consensus, working poor, 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: 497 words: 150,205

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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: 374 words: 114,660

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, declining real wages, Downton Abbey, 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: 435 words: 127,403

Panderer to Power by Frederick Sheehan

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, British Empire, 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, Long Term Capital Management, margin call, market bubble, McMansion, Menlo Park, mortgage debt, new economy, Northern Rock, oil shock, 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, 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

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, 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, 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, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, 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, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, 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

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: 493 words: 145,326

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

accounting loophole / creative accounting, Beeching cuts, carbon footprint, collective bargaining, computer age, Corn Laws, cross-subsidies, financial independence, hiring and firing, James Watt: steam engine, joint-stock company, 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.

 

pages: 564 words: 163,106

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Barry Marshall: ulcers, clean water, cuban missile crisis, discovery of penicillin, double helix, experimental subject, Gary Taubes, Isaac Newton, meta analysis, meta-analysis, rising living standards, 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: 497 words: 153,755

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Albert Einstein, Atahualpa, Bretton Woods, British Empire, California gold rush, central bank independence, double entry bookkeeping, Edward Glaeser, 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, money: store of value / unit of account / medium of exchange, 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.

 

pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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

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.

 

Making Globalization Work by Joseph E. Stiglitz

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, inventory management, invisible hand, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus

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 outsourcedlost—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: 537 words: 158,544

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

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

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, crony capitalism, Deng Xiaoping, 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, knowledge economy, land reform, low skilled workers, means of production, megacity, Monroe Doctrine, oil shale / tar sands, oil shock, open borders, open economy, Pax Mongolica, 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: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

Amazon: amazon.comamazon.co.ukamazon.deamazon.fr

Affordable Care Act / Obamacare, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, 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, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mortgage debt, new economy, Occupy movement, Own Your Own Home, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, 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.”