sestdiena, 2017. gada 1. jūlijs

Social Inequality as the Antagonism of Humanity


    Social Inequality as the Antagonism of Humanity
   The intensification of the social inequality in the world creates a fertile ground for aggressive actions against the existing political order, undermines democracy and actually stimulates terrorism, extremism, crime, migration, degrades human personality .
   The materials published here reveal such an alarming and shocking picture that they require urgent and effective actions to limit this antisocial trend and ensure its reversion, using all the opportunities and achievements provided by the fourth industrial revolution for this truly humane goal!... Read more: https://www.amazon.com/HOW-GET-RID-SHACKLES-TOTALITARIANISM-ebook/dp/B0C9543B4L/ref=sr_1_1?crid=19WW1TG75ZU79&keywords=HOW+TO+GET+RID+OF+THE+SHACKLES+OF+TOTALITARIANISM&qid=1687700500&s=books&sprefix=how+to+get+rid+of+the+shackles+of+totalitarianism%2Cstripbooks-intl-ship%2C181&sr=1-1

14 октября 2024 года

The Royal Swedish Academy of Sciences has decided to award the 2024 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Daron Acemoglu, Simon Johnson and James A. Robinson “for studies of how institutions are formed and affect prosperity.”


 Why Nations Fail: The Origins of Power, Prosperity, and Poverty

 

 Institutions as the Fundamental Cause of Long-Run Growth

Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?

D. Acemoglu, Simon Johnson, James A. Robinson

https://doi.org/10.3386/W10481

This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on wo quasi-natural experiments" in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the world by European powers starting in the fifteenth century. We then develop the basic outline of a framework for thinking about why economic institutions differ across countries. Economic institutions determine the incentives of and the constraints on economic actors, and shape economic outcomes. As such, they are social decisions, chosen for their consequences. Because different groups and individuals typically benefit from different economic institutions, there is generally a conflict over these social choices, ultimately resolved in favor of groups with greater political power. The distribution of political power in society is in turn determined by political institutions and the distribution of resources. Political institutions allocate de jure political power, while groups with greater economic might typically possess greater de facto political power. We therefore view the appropriate theoretical framework as a dynamic one with political institutions and the distribution of resources as the state variables. These variables themselves change over time because prevailing economic institutions affect the distribution of resources, and because groups with de facto political power today strive to change political institutions in order to increase their de jure political power in the future. Economic institutions encouraging economic growth emerge when political institutions allocate power to groups with interests in broad-based property rights enforcement, when they create effective constraints on power-holders, and when there are relatively few rents to be captured by power holders. We illustrate the assumptions, the workings and the implications of this framework using a number of historical examples." https://www.openread.academy/en/paper/reading?corpusId=263020556

 

«Economic Backwardness in Political Perspective» Экономическая отсталость в политической перспективе»)

Daron Acemoglu & James A. Robinson

We construct a simple model where political elites may block technological and institutional development, because of a 'political replacement effect'. Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development. We also show that such blocking is more likely to arise when political stakes are higher, and that external threats may reduce the incentives to block. We argue that this model provides an interpretation for why Britain, Germany and the U.S. industrialized during the nineteenth century, while the landed aristocracy in Russia and Austria-Hungary blocked development…: https://www.nber.org/papers/w8831

Economic Development and Democracy: Predispositions and Triggers

Treisman, Daniel

Scholars continue to disagree about the relationship between economic development and democracy. I review the history of the debate and summarize patterns visible in data available today. I find a strong and consistent relationship between higher income and both democratization and democratic survival in the medium term (10–20 years), but not necessarily in shorter time windows. Building on several recent studies, I sketch out a new conditional modernization theory, which can account for such lags. The key idea is that the effect of development on democracy is triggered by disruptive events such as economic crises, military defeats, or—most generally—leader change. Political outcomes depend on both the development level and, at intermediate income ranges, how citizens coordinate. Waves of leader turnover in autocracies correlate with temporarily stronger links between income and democratization, which, in turn, coincide with the first two waves of democracy…: https://www.semanticscholar.org/paper/Economic-Development-and-Democracy%3A-Predispositions-Treisman/2de2b81d72ce70db72e9593c6a1f0cc1a11c9057

Daron AcemoğluJames A. Robinson

Brilliant and engagingly written, Why Nations Fail answers the question that has stumped the experts for centuries: Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?

Is it culture, the weather, geography? Perhaps ignorance of what the right policies are?

Simply, no. None of these factors is either definitive or destiny. Otherwise, how to explain why Botswana has become one of the fastest growing countries in the world, while other African nations, such as Zimbabwe, the Congo, and Sierra Leone, are mired in poverty and violence?

Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities. The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Sadly, the people of the north have endured decades of famine, political repression, and very different economic institutions—with no end in sight. The differences between the Koreas is due to the politics that created these completely different institutional trajectories.

Based on fifteen years of original research Acemoglu and Robinson marshall extraordinary historical evidence from the Roman Empire, the Mayan city-states, medieval Venice, the Soviet Union, Latin America, England, Europe, the United States, and Africa to build a new theory of political economy with great relevance for the big questions of today, including:

   - China has built an authoritarian growth machine. Will it continue to grow at such high speed and overwhelm the West?
   - Are America’s best days behind it? Are we moving from a virtuous circle in which efforts by elites to aggrandize power are resisted to a vicious one that enriches and empowers a small minority?
   - What is the most effective way to help move billions of people from the rut of poverty to prosperity? More
philanthropy from the wealthy nations of the West? Or learning the hard-won lessons of Acemoglu and Robinson’s breakthrough ideas on the interplay between inclusive political and economic institutions?

https://www.goodreads.com/book/show/12158480-why-nations-fail



The Poverty and Shared Prosperity series provides a global audience with the latest and most accurate estimates on trends in global poverty and shared prosperity, as well as in-depth research into policies and interventions that can make a difference for the world’s poorest. The 2016 edition takes a close look at the role that inequality reduction plays in ending extreme poverty and improving the livelihoods of the poorest in every country. It looks at recent country experiences that have been successful in reducing inequality, provides key lessons from those experiences, and synthesizes the rigorous evidence on public policies that can shift inequality in a way that bolsters poverty reduction and shared prosperity in a sustainable manner. In doing so, the report addresses some myths about the global picture of inequality, and what works to reduce it.  

Poverty
1 in 10 people in the world live under $1.90 a day, and half of the extreme poor live in Sub-Saharan Africa
Global extreme poverty continues to fall rapidly. In 2013, the year for which the most comprehensive data on global poverty is available, 767 million people, or 10.7 percent of the population, were estimated to be living below the international poverty line of $1.90 per person per day. Around 100 million people moved out of extreme poverty from 2012 to 2013, and since 1990, nearly 1.1 billion people have escaped extreme poverty.  The global poor are predominantly rural, young, poorly educated, are mostly employed in the agricultural sector, and live in larger households with more children.
Despite progress, extreme poverty remains unacceptably high, especially in Sub-Saharan Africa. The region now has the largest number of extreme poor in the world, 389 million, which accounts for half of the total number of extreme poor in the world, and more than all the other regions combined. The decline in extreme poverty was largely fueled by the rapid advances in two regions – East Asia and the Pacific and South Asia –specifically in China, Indonesia, and India.          

Shared Prosperity
In 60 of 83 countries monitored, the incomes of the poorest 40 percent grew
The larger the growth rate in the income of the bottom 40, the more quickly prosperity is shared among the poor. Despite the global financial crisis of 2008 and 2009, in 60 of the 83 countries studied, the bottom 40 experienced positive income growth, representing 67 percent of the world’s population. In 49 countries, the income growth of the poorest 40 percent of people exceeded that of the top 60. However, in 23 countries, mostly high-income industrialized ones, the poorest 40 percent saw their incomes actually decline. 
East Asia and the Pacific, Latin America and the Caribbean, and South Asia registered the best average growth performance among the bottom 40 with annualized rates of 5.0 percent, 4.1 percent, and 3.7 percent, respectively. On the other hand, the bottom 40 in the industrialized countries experienced an average contraction of 1 percent of their income. 
*Note: an earlier version of the report erroneously reported inaccurate shared prosperity data for Israel, which have since been removed.
Inequality
Tackling inequality vital to ending extreme poverty by 2030
As sluggish growth threatens to roll back the gains of the last 25 years, tackling income inequality can play an important role in ending extreme poverty. If countries act strategically to cut inequality, they’ll lift more people out of poverty faster. If families have vastly different economic resources, some children in some families will face an unfair start in life and policies have to make greater efforts to overcome these differences at a later stage.
Inequality between people in the world has been going down since 1990, driven by a convergence in average incomes across countries, especially rising incomes in China and India. And though within-country inequality is higher than it was 25 years ago, progress since 2008 shows that for every country in which inequality widened, there were two countries in which inequality narrowed. This positive news aside, there remains real concern over the share of incomes controlled by top earners, and it is important to gather more information on this issue. 
Country Perspectives
In the past decade many low- and middle-income countries have successfully cut their levels of poverty and income inequality. These countries have shown that it’s possible to reduce inequality under widely different circumstances and contextual factors not under their control have played a substantial role in enabling their progress against inequality. The countries analyzed are – Brazil, Cambodia, Mali, Peru, and Tanzania.
·         Brazil’s rising minimum wage and expanding safety net programs have accounted for 80 percent of the decline in inequality.
·         Before the outbreak of conflict, Mali’s high cereal production helped raise farm production and off-farm labor income resulting in reduced inequality.
·         Boosted by prudent macroeconomic policies and high commodity prices, Peru’s labor market, which closed the wage gap between formal and inform workers and provided higher participation rates, was the main driver for the country translating higher growth into reducing inequality and poverty.
·         Cambodia’s diversification of the economy from agriculture into light manufacturing opened labor opportunities for the poor.
·         Tanzania’s commitment to policies explicitly aimed at rendering income distribution more equitable and a surge in retail trade and manufacturing, which has allowed the inclusion of less well skilled workers into the economy, have contributed to the progress in reducing poverty.
When we analyze the drivers of inequality reduction, we find several constants including strong growth, good macroeconomic management, and well-functioning labor markets that create jobs and enable the poorest to take advantage of the available opportunities.
Policy Perspectives
Many effective policy options exist for countries that decide to tackle inequality. Evidence points to six high-impact strategies that have helped reduce inequality and poverty, and so have contributed to better opportunities and stronger growth in a number of contexts.
·         Early childhood development and nutrition interventions
·         Universal health coverage
·         Universal access to quality education
·         Cash transfers to poor families
·         Rural infrastructure – especially roads and electrification
·         Progressive taxation
Some of these measures can rapidly affect income inequality while others deliver benefits more gradually. However, these policies have worked repeatedly in different settings around the world and credible versions of some are within the financial and technical reach of virtually all countries. 

OECD Income Distribution Database (IDD): Gini, poverty, income, Methods and Concepts


24 November 2016: Release of OECD Inequality Update 2016 "Income inequality remains high in the face of weak recovery" : http://www.oecd.org/social/OECD2016-Income-Inequality-Update.pdf

Box 1. The OECD Income Distribution Database (IDD - at http://oe.cd/idd)

To benchmark and monitor income inequality and poverty across countries, the OECD relies on a database based on national sources (household surveys and administrative records) and on common definitions. Indicators are based on the concept of “equivalised household disposable income”, i.e. the total market income received by all household members (gross earnings, self-employment income, capital income), plus the current cash transfers they receive, less income and wealth taxes, social security contributions and current transfers that they pay to other households. Household income is adjusted with an equivalence scale that divides total household income by the square root of household size. Standard concepts and definitions of household incomes are provided by the Canberra Group Handbook on Household Income Statistics (United Nations, 2011).
 In 2015, the OECD changed its standard definition of household income. The revision goes in the direction of bringing the OECD income definition closer to the “operational definition” recommended by the 2011 Canberra Group Handbook. Key changes in the new definition include: i) the inclusion of the value of goods produced by households for their own consumption, as an element of self-employed income; and ii) the deduction of current transfers paid by households to non-profit institutions and other households (e.g. alimonies). As a result, current transfers paid by households now distinguish among: i) taxes on income and wealth and social security contributions paid by workers; ii) contributions to employment-related occupational schemes; and iii) current transfers paid by households to non-profit institutions and other households.
 In addition, a more detailed breakdown of current transfers received by households was implemented. This distinguishes among transfers received from: i) social security schemes; ii) employment-related occupational schemes; and iii) other households and non-profit institutions. This change allows more fine-grained measures of redistribution by distinguishing between “primary income” (income from work and capital and net transfers from other households), “market income”( primary income plus transfers received from employment-related schemes), “gross income” (market income, plus transfers received from social security schemes, less transfers paid to employment-related occupational schemes) and “disposable income” (gross income less taxes and other current transfers paid). Current transfers paid by households to non-profit institutions and other households, which were previously included in “capital income”, are now separately identified as a component of “current transfers paid by households”.
 While the new income definition implies a break in OECD historical series (data based on both the old and new definition are shown separately in OECD.Stat), data are available for at least one common year (typically either 2011 or 2012) based on both definitions. The pre-2011 data described in this brief have been corrected for this break. The corrected values proved to be significantly different from original values only in a handful of countries (notably Chile and Israel) and very limited or insignificant in the others. The inclusion of the value of goods produced by households for own consumption provides the basis for the progressive integration in the OECD database of estimates for selected middle-income countries, where subsistence agriculture accounts for a significant share of household economic resources. In most OECD countries for which information is available, the value of goods produced by households for own consumption is generally below 1% of household income but much higher in Mexico, where it accounts for 4% of household income (see Table 1). This income item is also more important for low-income households. The inclusion of goods produced by households for their own consumption lowers both income inequality and the proportion of people falling below the poverty-threshold. In Mexico, the ratio between the income received by people in the highest quintile to that received by those in the lowest one decreases from 13.7 to 11.5 in 2012; the Gini coefficient for disposable income falls from 0.482 to 0.457 and the share of people below the poverty line, from 21.4% to 18.9% (although these changes also reflect methodological changes introduced by the statistical office to measure income at the bottom of the income scale). The effect on inequality and poverty measures is smaller in all other countries.

 7 Importance of goods produced by households for their own consumption among the entire population and the lowest quintile of the income distribution
( Percentage of household disposable income)

Database managers: Benoit.Arnaud@oecd.org, Maxime.Ladaique@oecd.org and Elena.Tosetto@oecd.org.

Gini coefficient of disposable income inequality in 2014 (or latest year), 2010 and 2007, total population
Real disposable income growth between 2007 and 2014 (or latest year) by income group,  total population, OECD average
Panel A. Real labour income growth 2007-2014, by income group, OECD average
Panel B. Annual average real labour income growth, 2010-2014, by income group
Inequality before and after redistribution though transfers and taxes, respectively, 2007=100, working-age population, OECD average
Percentage reduction of market income inequality due to taxes and transfers, 2007 – 2014
Change in market and disposable incomes, public cash transfers and taxes (real terms), 2007=100, working-age population, OECD average

Percentage of household disposable income


Billionaire fortunes grew by $2.5 billion a day last year as poorest saw their wealth fall 


public-good-private-wealth-210119-summary:

https://oxfam.app.box.com/s/f9meuz1jrd9e1xrkrq59e37tpoppqup0/file/385579401962 


                                              Global MPI 2018
The United Nations development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) developed a new version of the global Multidimensional Poverty Index (MPI). The global MPI covers 105 countries in total, which are home to 77 per cent of the world’s population, or 5.7 billion people. Of this proportion, 23 per cent of people (1.3 billion) are identified as multidimensionally poor.
For the 2018 global MPI, five of the ten indicators have been revised jointly by OPHI and UNDP to align the MPI with the 2030 Agenda. This is in response to the Agenda’s call for a better measure of progress toward Sustainable Development Goal (SDG) 1 – “to end poverty in all its forms” – and to help achieve the principle of leaving no one behind.
Our analysis of 2018 global multidimensional poverty offer both a global headline and fine-grained analysis for children, rural areas, 1127 subnational regions across 88 countries, 640 districts in India, and other critical subgroups. The purpose is only in part to inform and at times alarm: more fundamentally, the purpose is to empower and incite action that ends acute poverty across many dimensions.
On this page, you can read the Global MPI 2018 Reportkey findings that include global, regional and subgroups highlights, the latest MPI Methodological Note (No. 46) and download the data tables of this update of the global MPI. You can also access the detailed algorithms (Stata do-files) underlying the global MPI 2018 for each country. OPHI Working Paper 121, by Sabina Alkire and Selim Jahan, gives an overview of the structure of the global MPI 2018.
Do visit our new Interactive Databank to explore the data intuitively.
If you are interested and download in individual countries, we have Country Briefings for each of the 105 countries that make up the global MPI 2018.
This animation provides an overview of the global MPI 2018.



An End in Itself and a Means to Good Ends:            
Why Income Equality is Important

Arthur MacEwan[1]

“The social system is not an unchangeable order beyond human control but a pattern of human action.”—John Rawls (1971, p. 102)

        In recent years “poverty reduction” has become the watchword in development agencies, in international lending institutions, and among development economists generally.  The focus on poverty reduction reached a high point perhaps with the articulation of the Millennium Development Goals (MDGs) and with the extensive analytic work that has accompanied the MDGs.[2]  Yet, much of the discussion of poverty reduction and economic development in low and middle income countries has either ignored the issue of income distribution or has tended to view income distribution only in terms of its impact on economic growth.

        Poverty and inequality, however, are intimately bound up with one another.[3]  Both as an analytic issue and as a policy issue, there are severe limitations in attempting to deal with poverty – or, more broadly, with economic well-being – without also examining income inequality.  Indeed, it is questionable that we can even define poverty independently of income distribution.

        In this essay, I want to develop the argument that economists and economic policy-makers should focus much greater attention on inequality as measured by the distribution of income (and wealth).  The traditional focus simply on absolute levels of income as a measure of poverty and economic well-being is fundamentally flawed.  My argument here has thee parts:

·         Poverty or, more generally, economic well-being cannot be effectively defined as distinct from income distribution.

·         Income distribution is fundamental to our understanding of justice (fairness) and human rights, and relative economic equality has intrinsic value.  Especially important, the dichotomy commonly drawn in discussions of societal values between “equality of opportunity” and “equality of outcome” is largely non-existent. 

·         Greater equality of income distribution tends to bring about other desirable social outcomes – for example, in the realms of health and crime.

The following sections will take up each of these parts of the argument.[4]

        Although relative equality is a widely shared value, policies that would engender greater equality are often opposed on the grounds that they would violate liberty or undermine economic growth or both.  I will comment on these objections in the conclusion.

        A point of clarification:  When I assert that income inequality is a problem and that equalization of the income distribution is desirable, my concern is with a direction of change, not with a particular outcome.  In most parts of the world today – to say nothing of the world as a whole – income is very unequally distributed.  For reasons I will explain this is highly undesirable.  That does not mean, however, that equality in some absolute sense, either in terms of people’s incomes or capabilities, should be the goal of societies.  To argue for significantly less inequality leaves open the question of what degree of inequality, if any, should be the social goal.  (I will sometimes use the term “relative equality” to indicate this direction of change, meaning relative to the widespread high degree of inequality that widely exists.)


The Meaning of Poverty[5]

“Poverty is not a certain amount of goods, nor is it just a relation between means and ends; above all it is a relation among people.  Poverty is a social status.”— Marshall Sahlins (1974, p. 37)

“At the risk of oversimplification, I would like to say that poverty is an absolute notion in the space of capabilities but very often it will take a relative form in the space of commodities…”—Amartya Sen (1983, p 161)
       
        In recent years, as I have noted, there has been an increasing concern among economists and policy makers with poverty in the sense that poverty itself is seen as an important focus of policy.  This is true with regard to low-income countries, and it has also been an issue at various times in the relatively high-income countries. 

        It has not always been this way.  With the burgeoning of development economics in the era of decolonization after World War II, attention was almost exclusively focused on economic growth.  This approach was based on the assumption that economic growth would – at least in the long run – improve everyone’s position, the position of the poor as well as the position of the rich.  As it became increasingly clear, however, that economic growth, when it took place, was not relieving the material deprivation of huge numbers of people – or at least not doing so with sufficient speed – it began to become apparent that it would be necessary to address poverty more directly.[6] 

        As attention then shifted directly to poverty, it became necessary to specify just what poverty meant – or, more generally, what economic well-being meant.  Usually, poverty has been defined in terms of some absolute standard, the amount of income needed to provide basic needs.  In the United States, for example, the poverty line in 2008 for a family of four was $21,200.  For low-income countries, a similar absolute standard, though at a very different level, is generally used.  The World Bank’s definition, which is widely accepted (though also widely criticized), is set at $2/day, in terms of 1990 purchasing power parity.  Dollar inflation since 1990 would make this figure about $3.25 in 2008 prices, or $4,745 annually for a family of four.  The Bank defines “extreme poverty” as half of this, or $2,372.50 for a family of four.  While there is a great deal of controversy over these numbers and how they are calculated – especially over how the number of people “in poverty” has changed over time – there is little dispute about the idea that poverty, or well-being, is defined in terms of some amount of goods and services, the basic needs – or the money it takes to meet those basic needs.[7]

        Yet there are several problems with this definition.  As Amartya Sen has argued, basic needs are best understood as capabilities, and not all capabilities can be achieved simply with money.  The capability to be free from disease, for example, depends upon a broad set of social conditions; the capability to travel depends in part on the public good of a transportation infrastructure; and the capability to be educated also relies heavily on public goods.  Sen sees poverty as absolute in terms of these capabilities, but in terms of commodities (income) poverty becomes relative, determined by the standards of the particular society.[8]

        The concept of basic needs – the concept generally used to define poverty – when expressed in terms of commodities, is highly socially contingent.  This social contingency is clear, for example, in the dramatic difference between the $21,200 that marks the poverty line in the United States and the $4,745 that defines the line in the low-income countries of the world.  People’s standards, their concept of basic needs, depend on the societies in which they live. 

        Furthermore, the definition and extent of poverty will depend not only on the level of a society’s income, but also on the distribution of income.  It seems reasonable to assume that a society’s standards, the norm of what is needed, are largely determined by the standard of living of those people in the middle.  Then, if we consider two societies in which the bottom segments, say the bottom quintiles, have the same level of income, poverty will be greater in the society where income is more unequally distributed.  In the more unequal society, the bottom quintile will be further from the middle and thus further from meeting the standards of that society; the greater the inequality, the less the group at the bottom will be able to meet society’s socially determined needs and thus the more will the members of this group be in poverty.

        All this is very well, but even in this relative concept of poverty, people’s condition, their poverty, is defined as a relation between people and things (the quantity of things represented by the level of income).  Yet implicit in the relative concept of poverty is that poverty is a social condition, a relation among people – as stated in the quotation above from Marshall Sahlins.  In making his point, Sahlins (1974, p. 37) argues, “The world’s most primitive people have few possessions, but they are not poor.”  When a whole society – hunter-gatherer societies, are the case in point – has few possessions, there is no segment of that society that is considered poor.  It is only when these peoples are incorporated into larger societies, conceptually and practically, that they become “poor” – failing to meet the standards of basic needs in that larger society.  Thus it is their social status, their relation to others in society, that places them in poverty.[9]

        The point here is not that people’s absolute deprivation is irrelevant to their material well-being.   The point is simply that people’s relative position is also not irrelevant to their material well-being.  We cannot eliminate poverty while the distribution of income remains highly unequal.

Justice, Fairness and Inequality

The Intrinsic Value of Equality

“Why is equality a value?... the basic reason it matters to us is because we believe that there is something valuable about human relationships that are – in certain crucial respects at least – unstructured by differences of rank, power, or status.”—Samuel Scheffler (2005, p. 17)

                Material equality, or at least the absence of extreme inequality, has intrinsic value and is in some sense a human right.  There is a variety of rationales behind this assertion.  One follows directly from the observation that basic needs are socially contingent (as argued in the previous section).  Andrei Marmor (2003), for example, argues from the assumption that people have a fundamental right to meet their basic needs and that basic needs are socially determined. Therefore with greater inequality the larger will be the group of people who cannot meet those needs, who are being denied by the economic structure this fundamental right.  Then, since there is intrinsic value in people having their fundamental rights and, in particular, this right of meeting their basic needs, material equality (at least a good degree of material equality) becomes of intrinsic value.

                Within the realm of modern philosophy, it is perhaps the ideas of John Rawls (1971) that are most strongly associated with the concept that a just or fair society is one of relative equality.  Rawls argues that reasonable people choosing a social order from behind a “veil of ignorance” – that is, ignorance about where they themselves would be situated in that society – would choose a society with a high degree of material equality.  From his basic postulates about fairness, justice, human behavior and needs, he defines his “difference principle” as the guide for judging social policy and social change: “The intuitive idea [of the difference principle] is that the social order is not to establish and secure the more attractive prospects of those better off unless dong so is to the advantage of those less fortunate.”(p. 75).

                Yet Rawls is not arguing for equality of outcome (or condition) but stays within the realm of advocating equality of opportunity.  He avows (p. 100): “…in order to treat all persons equally, to provide genuine equal opportunity, society must give more attention to those with fewer native assets and to those born into the less favorable social positions.” And Rawls takes a relatively broad view of “native assets,” arguing that there is no good reason why people with less natural skills, intelligence, or innate characteristics of personality that would often (in most circumstance of the real world) contribute to economic success should be consigned to a lower economic condition because of these traits.  He argues that society should provide redress for these traits, and thus rejects the idea of what he calls a “callous meritocratic society.”  In this sense, the thing of intrinsic value for Rawls is not so much equality itself as fairness or equality of opportunity.  Yet the outcome, given his rejection of “callous” meritocracy, would be relative equality of outcome.[10]

                There are several other philosophers whose work is associated with valuing equality who develop their argument from postulating the intrinsic value of equality of opportunity – for example, Ronald Dworkin (1981), G.A. Cohen (1989) and John Roemer (1998).  These authors, and Rawls, have various outlooks on what constitutes “native assets,” some adopting a broader view (e.g., including tastes or personality traits) and some adopting a narrower view (e.g., rejecting the idea that tastes or personality traits are part of an individual’s “native assets”).  Nonetheless, they – and many other liberal egalitarians –  argue from the position that equality of opportunity means that inequalities of outcome are not legitimate if they arise from characteristics for which people themselves are not responsible.  Indeed, one might go so far as to argue that conservatives, who give greater emphasis to the difference between equality of opportunity and equality of outcome, differ from the liberals largely in terms of what they view as the individual’s responsibility.[11]  Conservatives (at least modern conservatives) would tend to include only such characteristics as race, ethnicity and gender as traits for which the individual is not responsible.  Conservatives, however, would tend not to advocate redress for these characteristics, but simply advocate that society not use them as a basis for discrimination.  The issue of the connection between equality of opportunity and equality of outcome will be given more attention shortly.

                The argument, however, that equality of outcome – or, at least, the absence of extreme inequalities – derives from the intrinsic value of equality of opportunity is not the same as claiming that equality of outcome itself has intrinsic value.  Fairness as embodied in equal opportunity is good, but it is not all that is good in relation to economic equality.  Even leaving aside the argument (noted above) that follows from defining economic well-being and basic needs in relative terms, there are strong reasons to view equality of outcome as having intrinsic value.

                This intrinsic value of equality of outcome is well captured in the Sheffler quotation above, that “there is something valuable about human relationships that are …unstructured by differences of rank, power, or status.”  Sheffler is not directly addressing differences of income and wealth.  Yet, while it is conceptually possible to have differences of income and wealth that are not accompanied by differences of “rank, power, or status,” this seems highly unlikely, to say the least, in the real world.             

A similar idea is expressed by Erik Olin Wright (2000, p. 145): “…income inequality … fractures community, generates envy and resentment, and makes social solidarity more precarious.”  The pernicious impacts of income inequality that concern Wright depend at least in part on the origins and degree of the inequality.  If, for example, the inequality is largely based on race or ethnicity or gender, as is so often the case, then it will be generally perceived as unfair (except, perhaps, by those at top) and generate considerable resentment.  Similarly, when inequalities are seen as arising from family privilege, they will tend to be viewed by many people as illegitimate and unfair.  Income inequalities that are seen as arising from differences in skills or efforts are less likely to be viewed as illegitimate (the views of Rawls and some other liberal egalitarians notwithstanding).   Nonetheless, if inequality is large as it is in much of the world today, it is likely to be viewed as unfair – and thereby undermine social solidarity – because few people would view legitimate bases of inequality (e.g., differences in effort) as generating large inequalities.[12]

                Thus the intrinsic value of relative economic equality (of outcome) exists because it is a foundation for the type of social relations that we consider desirable – relations of solidarity, trust, and amiability.  In this sense, the value of relative equality can be seen in terms of its role in creating and being part of a democratic social order.  The connection between relative equality and the social relations of a democratic social order is so intimate that the equality is really part of those relations, not an instrument that generates their existence.  (As we shall see, however, equality and the social relations that go with it are an important instrument for a set of positive social outcomes.  Also, but beyond my scope here, they are an instrument as well for the effective operation of political democracy.)

Equality of Opportunity and Equality of Outcome

“…more effort should be directed specifically towards exploring the hypothesis that, within the class structure of industrial societies, inequality of opportunity will be the greater, the greater the inequality of condition – as a derivative, that is, of the argument that members of more advantaged and powerful classes will seek to use their superior resources to preserve their own and their families’ positions.”—Robert Erikson and John Goldthorpe (1992, p. 396)

“A society with highly unequal results is, more of less inevitably, a society with highly unequal opportunity, too”Paul Krugman (2007, p. 249)

                Yet there remains the continuing dispute over whether we should value equality of opportunity or equality of outcome.  Having finally recognized that equity is an issue, the World Bank (2006) has been adamant in arguing (p. 3) that the focus in economic development should be on equality of opportunity and that “the policy aim is not equality in outcomes.”  The Bank does include in its concept of equity, along with equal opportunity, “that individuals should…be spared from extreme deprivation in outcomes.” (p. 2)  Yet this seems a very limited qualification of its rejection of equality of outcomes and is far from a push towards economic equality.  The problem is that equality of opportunity for one generation is to a large degree dependent on equality of condition (outcome) in the previous generation. 

                That is, there are strong reasons to believe that there is a large degree of dependence of equal opportunity for generation X on the equality of condition for generation X-1, which is to say that equal opportunity within generation X depends largely on the conditions under which members of generation X spend their childhood.  The point can be stated in the most narrow terms of human capital formation.  Children’s schooling and their healthcare in virtually all societies are highly dependent on the social position and income level of their families.  This dependence is somewhat attenuated by the spread of public education and by the existence of national healthcare programs in many advanced industrial countries.  But public schools are highly unequal in a way that is associated with income inequality, and, where public schools are less unequal, the upper classes tend to send their children to private schools.  Moreover, neither school outcomes nor healthcare outcomes are determined simply by the formal systems of education and healthcare, but also by a broad array of social conditions – inside and outside the family – that are more advantageous for the progeny of the wealthy than for those of the poor.[13]  Yet if there is not equality in the formation of these basic aspects of human capital, there can hardly be equality of opportunity.  And we might well stretch the argument to point out that economically important aspects of personality – most notably self-confidence and expectations – are affected to a significant extent by one’s childhood social status and thus reinforce the dependence of opportunity upon condition.[14]

                Jonathan Schwabish et al (2004) have examined the way these processes operate in the connection between income inequality and social expenditures in a set of fourteen relatively high-income countries (including observations on several of those countries at different times).  They work from the hypothesis “that high levels of income inequality reduce public support for redistributive social spending” and summarize their findings as follows: “The results suggest that as the ‘rich’ become more distant from the middle and lower classes, they find it easier to opt out of public programs and to either self insure or to buy substitutes in the private market… The conclusion is that higher economic inequality produces lower levels of those publicly shared goods which foster greater equality of opportunity, income insurance and greater upward mobility.” (pp. 32-33).[15]  The power of those with high incomes, they suggest, works through the political process to undermine mobility (very much in accord with the hypothesis suggested by Erikson and Goldthorpe in the quotation above).

                To the extent that income inequality (inequality of outcome) is in conflict with equality of opportunity, we would expect a positive association between relative equality in the distribution of income and a higher degree of social or economic mobility, which would tend to indicate a higher degree of equality of opportunity.  While the data on these issues are sparse and contested and are even less available for low-income countries than for high income countries, they tend to be consistent with these expectations.  For example, Robert Erikson and John Goldthorpe (1992, ch. 11) present results of a multivariate analysis of social mobility across class groupings for a dozen “industrialized countries” showing a significant role for income inequality in reducing mobility.  They are, however, cautious about the significance of their results, and (as the quotation above indicates) see the need for more examination of the issue.

                Jo Blanden et al (2005, Table 2) report intergenerational partial correlations for eight European and North American countries (Britain, Canada, Denmark, Finland, Norway, Sweden, West Germany, and the United States).  Their data cover fathers’ and sons’ earnings, with data on sons born between 1958 and 1970 (depending on the country).  Combining these data with Gini coefficients from the World Bank (2006, Table A2), we obtain the results shown in Figure 1 – that is, a clear simple correlation between mobility and equality. These results, of course, must be taken as only suggestive, as there are many problems with the cross-country compatibility of the data, the number of observations is very small, and the figure shows only the simple correlation. 

                Data for the U.S. at different points of time tend to support the same conclusion.  Daniel Aaronson and Bhashkar Mazumder (2005/2007) have calculated the relationship between adult men’s log annual earnings and log of annual family income in the previous generation.  Their regression coefficients, or intergenerational elasticities (IGEs), describe how much economic differences between families persists.  They report (their Table 1) the IGE for forty year olds at the beginning of each decade from 1950 to 2000.  These IGE’s show the same pattern as do the Gini coefficients for family income for these years – i.e., a decline from 1950 into the 1970s and then a upward movement to 2000.  The two sets of data are shown in Figure 2.  While the patterns are not identical, they are certainly suggestive of the positive relationship between equality and mobility.[16]

Using a different set of data and different methodology, Katherine Bradbury and Jane Katz (2002) obtain similar results.  They present calculations (their Appendix Table A1) showing a notable reduction in mobility across income quintiles for families from the 1970s through the 1990s.  For example, they report that in the 1970s 49.4 percent of families in the bottom income quintile were still in the bottom quintile in 1979.  For the 1980s and 1990s, the comparable figures were 50.4 percent and 53.3 percent respectively.  On the other extreme, while 49.1 percent of those families in the top quintile remained in the top quintile over the 1970s, 50.9 percent remained there in the 1980s and 53.2 percent remained there during the 1990s.[17] The 1970s through the 1990s were of course a period of rising income inequality in the United States, suggesting the inequality-immobility connection.  As noted, however, these findings of an equality-mobility connection are not uncontested.[18]

                There is one study of a set of African countries that yields some support for the equality-mobility connection.  Denis Cogneau and Sandrine Mesplé-Somps (2008) examine equal opportunity in terms of social and economic mobility in Ivory Coast, Ghana (at two points in time), Guinea, Madagascar and Uganda.  While the results are not strong, the authors conclude (p. 17): “Inequality of opportunity for income seems to correlate with overall income inequality more than with national average income…”  These results, however, are confounded by numerous factors, including, for example, substantial regional differences within countries and the difference associated with differences in colonial history.  Nonetheless, as with the results noted above for high-income countries, this information is suggestive.[19]

                It would be reassuring to have more extensive data that would allow a meaningful test of the hypothesis of an equality-mobility connection and thereby support or undermine the argument that equality of opportunity is dependent on equality of outcome/condition.  However, given the implications of the data we do have and the character of the argument for such a connection, there is good basis to reject the idea that we can separate economic of opportunity from equality of outcome.


Relative Equality as a Positive Instrument

“Using income inequality as an indicator and determinant of the scale of socioeconomic stratification in a society, we show that many problems associated with relative deprivation are more prevalent in more unequal societies.  We summarise previously published evidence suggesting that this may be true of morbidity and mortality, obesity, teenage birth rates, mental illness, homicide, low social capital, hostility, and racism.  To these we add new analyses which suggest that this is also true of poor educational performance among school children, the proportion of the population imprisoned, drug overdose mortality and low social mobility.”—Richard Wilkinson and Kate E. Pickett (2007, p. 1965) 

Beyond questions of definition and beyond philosophic disputes over the value of relative equality, the distribution of income appears to play some important roles in affecting various social outcomes that are widely valued.  In particular, for example, a more equal distribution of income appears to be a causal factor bringing about better health outcomes and a reduction in violent crime.  More precisely, a more equal distribution of income is an indicator (a “marker”) for and a part of a set of social relations that tend to generate these favorable outcomes.  In this sense, income equality has instrumental value as can be shown using the health and crime examples.[20]

Equality and Health Outcomes[21]

No one disputes that absolute poverty is bad for one’s health.  “Better to be rich and healthy than poor and sick,” as the sardonic statement puts the matter.  Whether one examines the data within a particular society or across various societies, the correlation between the level of income of an individual or a society and health outcomes of the individual or society (e.g., morbidity or mortality) is fairly clear.  In both cases, however, the impact of income on health outcomes appears to be much stronger at lower than at higher levels of income – that is, at low levels of income a small increase of income is associated with a large improvement of health outcomes, but at high levels of income an increase of income has little impact on health outcomes.

                Yet it is also true that if we look across societies (leaving aside for the moment how we define “societies,” which turns out to be an important issue), there is a negative correlation between the degree of income inequality and health outcomes.  More unequal societies tend to have worse health outcomes.  This is a controversial statement, as recognized even by its proponents (e.g., Wilkinson and Pickett, 2006, and Subramanian and Kawachi, 2004), and some aspects of the controversy will be taken up shortly.  Before I do so, however, it will be useful to consider the reasons why inequality may cause poor health.

                First, there is the phenomenon that a change of income makes more difference for health outcomes at low levels of income than at high levels of income. Thus in two societies with the same average level of income we would expect the more equal one to have better health outcomes on average, but only at the (small) expense in terms of health outcomes of those at the top; overall – that is, the health outcomes of the more equal society would not be better at every level.[22]

                Second, as noted above, more unequal societies appear to spend less on social programs than do more equal societies. Accordingly, we would expect public health services and the provision of health care for the low-income part of the populace to be smaller in the more unequal societies.  Thus, again we would expect a more equal society to have better health outcomes on average, but health outcomes would not necessarily be better for those at the upper income levels – or, at least, the impacts would be small at the upper income levels.[23] 

                Third, more unequal societies tend to generate greater stress levels, and stress can work through psychosocial pathways to generate poor health.  Income inequality “pollutes” the social environment (to use Subramanian and Kawachi’s term), creating divisions, resentments, and worries at all levels.  Those people in subordinate positions tend to be in a chronic state of tension, as they are unable to attain the material standards of the society; those people higher up tend to worry that they may not be able to maintain their position.  Fear, it has sometimes been noted, is a powerful motivator; it is also a powerful generator of stress.  Stress, it is well recognized, is a factor in a great variety of health outcomes.  Perhaps the most important implication of the psychosocial explanation is that it would explain the finding of some studies that health outcomes at all levels are better in more equal societies (e.g., Banks et al, 2006)

                In many ways the psychosocial explanation of the role of inequality in affecting health is the most compelling, but it is also difficult to establish and controversial (e.g., Lynch et al, 2000).  Indeed, the entire argument that health outcomes are significantly affected by income distribution is controversial.  In an extensive review, Angus Deaton (2003) maintains that income distribution itself is not a major determinant of population health.  When controlled for several other social variables, the relation between income distribution and health, Deaton argues, drops from sight.  But it seems that Deaton does not recognize the point that income distribution is a “marker” for a whole set of measures of social-economic differentiation.  Controlling for other measures of this differentiation will reduce, if not eliminate the significance of income distribution itself, but the basic connection between the differentiation (for which income distribution is marker) will not be refuted. 

Another source of dispute over the role of income distribution in affecting health outcomes arises from the way “society” is defined in various studies.  In general, studies that focus on larger social units – countries, states or provinces, and large metropolitan areas – find more support for the connection between inequality and ill-health than do studies where the units of observations are small – e.g., towns or counties.  Yet it would seem that the comparisons of hierarchy and status that would affect stress tend to be derived from the larger society in which people live.  Social differences measured within the smaller units are less likely, according to the psychosocial argument at least, to have a great impact on health outcomes.[24]

                Although the equality-health connection remains controversial, the evidence from a great many studies provides substantial support for the argument that inequality (measured by income distribution or some other indicators of social position) is a significant factor effecting negative health outcomes.  The points made by critics, while relevant, are not convincing.  At the same time, it is important to keep in mind that income level is still an important factor affecting positive health.  This is especially the case in low-income countries, where rising per capita income is strongly associated with improved health outcomes.  This does not mean, however, that income distribution is irrelevant for health outcomes in low-income countries.  Not only does it appear to have some direct effect outside the high-income countries (e.g., Subramanian et al, 2003), but, in addition, patterns of inequality once established tend to persist.  As low-income countries experience economic growth, the impact of inequalities already well-established will tend to have a greater role in health conditions.

Equality and Crime

                It seems likely that inequality would increase crime.  With a high degree of inequality, people at the bottom would tend to see themselves as especially deprived and also see their position as unfair.  They would then be more likely to rationalize and engage in burglary and theft, crimes against property.  Moreover, the narrowly economic theories of crime, which see crime as a decision based on a calculation of potential gains relative to potential costs (deriving from Gary Becker, 1968), postulate a positive relation between income inequality and crime based on the larger wealth differences between the rich and the poor – and therefore the greater potential gain.

                Yet, it is the connection between inequality and crimes of violence that is found to be strong in various studies.  For example, Morgan Kelly (2000, p. 530) in a study based on data for U.S. counties and cities, finds that, “The behavior of property and violent crime are quite different.  Inequality has no effect on property crime but a strong and robust impact on violent crime…By contrast, [absolute] poverty and police activity have significant effects on property crime, but little on violent crime.”  In a cross-country study of inequality and violent crime, Daniel Lederman et al (2002), using data from 39 countries, more than half of which are low- or moderate-income countries, find a positive causal connection between inequality and violent crime rates.  (Both the studies by Kelly and by Lederman et al control for a variety of related variables and use a variety of statistical tests.)  Gabriel Demombynes and Berk Ozler (2002) examine the crime-inequality connection in South Africa, focusing on local areas.  They find a positive association between inequality and crime for both violent crime and crimes against property. 

                While the argument based in the narrow economics approach pioneered by Becker may have some relevance to the explanation of the inequality-crime connection, it fails to come to grips with the strong relation between inequality and violent crime.  Explanations of the role of income inequality in effecting violent crime tend to focus on the social impact of inequality, the impact of inequality on social solidarity referred to earlier.  In a 1982 article that has been a reference point for the crime-distribution connection, Judith Blau and Peter Blau, examining the issue in the United States, find a strong connection between violent crime and racial and economic inequality.  They offer as an explanation: “In a society founded on the principle ‘that all men are created equal,’ economic inequalities rooted in ascribed positions violate the spirit of democracy and are likely to create alienation, despair, and conflict.” (Blau and Blau, 1982, p. 126).  This argument overlaps with the explanation, offered above, regarding the intrinsic value of economic equality.[25]


Conclusion

        Many of the particular arguments I have made may be widely accepted.  Yet this does not automatically lead to an acceptance of my general proposition that economists and economic policy makers should focus much greater attention on inequality as measured by the distribution of income (and wealth).   While relative equality is a desirable social goal, it is not the only social goal.  When other social goals – such as liberty or economic growth – come into conflict with greater equality, many people would choose to meet these other goals rather than the goal of greater equality.

        There is no denying the potential for conflict among social goals, and there is no general way to resolve such conflicts prior to their appearance.  When policy makers are faced with a conflict, the only legitimate means of resolution is through a democratic process (though of course this may be a problem when democracy itself is undermined by inequality).  However, to a large degree the conflict between equality and other social goals is often exaggerated.

        Such exaggeration – indeed, actual incorrect characterization – has been the case with the possible conflict between economic growth and a relatively equal distribution of income.  For generations and across the ideological spectrum, it was widely accepted that such a conflict existed.  In recent decades, however, as the empirical evidence has been examined, it has become clear that there is no such general conflict.  While one cannot conclude that equality automatically yields more repid growth, neither can one claim that a conflict necessarily exists.  Many countries with more equal income distributions have grown more rapidly than have other countries with more inequality.  It appears to depend on the way economic growth is organized, the way an economy is structured in terms of the types of institutions and policies that are established.  Thus the evidence suggests that instead of being presented with the challenge of a choice between relative equality and growth, societies are presented with the challenge of structuring their economies so as to promote both goals.

        As to the assertion that relative equality undermines liberty, here too there is no necessary conflict.  The establishment of more extensive social programs that would raise the well-being of the poor, tax the rich more heavily, and generate greater equality does not amount to some incursion on the liberty of the rich.  Even extensive land confiscations can hardly be seen as violations of liberty if those lands were obtained, as has sometimes been the case, through some illicit means.  The view that any effort at reallocation is an encroachment on liberty is based on the assumption that the existing distribution of income has been created by completely legitimate means, an assumption that would defy credulity.  None of this is to say that any reallocation or confiscation is acceptable.  It is simply to say that a good deal of economic reorganization in the direction of greater equality is possible without doing offense to liberty.  Moreover, one could easily argue that the only way to promote the liberty of those at the bottom of societies’ hierarchies is to establish a greater degree of equality.

        Ultimately, the matter may come down to a very practical issue, which may outweigh both these arguments about conflicts of goals and the arguments I have developed in this essay.  If we want to something about the condition of the poor, we had better pay attention to income distribution.  This practical matter lies in arithmetic and has been summed up by Azizur Rahman Khan (2005, p. 8) with the observation:

“A crude estimation of the elasticities of headcount rate poverty … shows that the partial elasticity with respect to the Gini ratio of expenditure is higher than the absolute value of the partial elasticity with respect to PPP$ income.”


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Global Wealth Report 2019: Global wealth rises by 2.6% driven by US & China, despite trade tensions
Credit Suisse Research Institute publishes its tenth edition of the Global Wealth Report, the most comprehensive and up-to-date source of information on global household wealth.
21.10.2019
Global wealth grew during the past year by 2.6% to USD 360tn and wealth per adult reached a new record high of USD 70,850, 1.2% above the level of mid-2018. US, China and Europe contributed the most towards global wealth growth with USD 3.8tn, USD 1.9tn and USD 1.1tn respectively...



DAVID B. GRUSKY
The Past, Present, and Future of Social Inequality : http://homepage.ntu.edu.tw/~khsu/mobile/sup2.pdf

In advanced industrial societies, much rhetoric and social policy have been directed against economic and social inequality, yet despite such efforts the brute facts of poverty and massive inequality are still everywhere with us. The human condition has so far been a fundamentally unequal one; indeed, all known societies have been characterized by inequalities of some kind, with the most privileged individuals or families enjoying a disproportionate share of power, prestige, and other valued resources. The task of contemporary stratification research is to describe the contours and distribution of inequality and to explain its persistence despite modern egalitarian or anti-stratification values.
The term stratification system refers to the complex of social institutions that generate observed inequalities of this sort. The key components of such systems are (1) the institutional processes that define certain types of goods as valuable and desirable, (2) the rules of allocation that distribute these goods across various positions or occupations in the division of labor (e.g., doctor, farmer, "housewife"), and (3) the mobility mechanisms that link individuals to occupations and thereby generate unequal control over valued resources. It follows that inequality is produced by two types of matching processes: The social roles in society are first matched to "reward packages" of unequal value, and individual members of society are then allocated to the positions so defined and rewarded.' In all societies, there is a constant flux of occupational incumbents as newcomers enter the labor force and replace dying, retiring, or outmigrating workers, yet the positions themselves and the reward packages attached to them typically change only gradually. As Schumpeter (1953, 171) puts it, the occupational structure can be seen as "a hotel . . . which is always occupied, but always by different persons."
 The contents of these reward packages may well differ across modern societies, but the range of variability appears not to be great. We have listed in Table 1 the various goods and assets that have been socially valued in past or present societies (for related listings, see Kerbo 2000, 43-44; Rothman 1999, 2-4; Gilbert 1998, 11-14; Duncan 1968, 686-90; Runciman 1968; Svalastoga 1965,70).2 In constructing this table, we have followed the usual objective of including all those goods that are valuable in their own right (i.e., consumption goods) while excluding any "second-order goods" (i.e., investments) that are deemed valuable only insofar as they provide access to other intrinsically desirable goods. The resulting list nonetheless includes resources and assets that serve some investment functions. (continue: http://homepage.ntu.edu.tw/~khsu/mobile/sup2.pdf )
  




[1] Paper to be included in a Festschrift volume in honor of Azizur Rahman Khan.  The author is Professor Emeritus, Department of Economics, and Senior Fellow, Center for Social Policy, University of Massachusetts Boston.  Contact: arthur.macewan@umb.edu.

[2] The most extensive and probably most important analytic work directly connected to the MDGs is the Sachs Report, Investing in Development: A Practical Plan to Achieve the Millennium Development Goals. (UN Millennium Project, 2005).  As I have emphasized elsewhere, MacEwan (2008), in its examination of poverty, the Sachs report ignores income (and wealth) distribution.

[3] The poverty-inequality connection has been effectively demonstrated in many writings by Azizur Rahman Khan and his collaborators, from his earlier publications – e.g., Khan (1967) and (1972) – through his more recent work – e.g., Khan (2005), Griffin et al (2002), and Khan and Riskin (2001).

[4] My list of arguments is not exhaustive.  It would be relatively easy to maintain that a high degree of income inequality is in conflict with democracy.  That is an argument, however, that I will leave to others.

[5] This section draws heavily on MacEwan (2008), where the argument is developed more fully.

[6] Ironically, poverty became an issue in the United States before it became a central issue for development economics.  With the publication of Michael Harrington’s The Other America (1962) and the subsequent “War On Poverty,” economists began to give attention to poverty as an issue separate from economic growth per se.  It was more than a decade later, with the formulation of the basic needs concept, that the economics of low-income countries began a re-orientation towards poverty alleviation as not simply a concomitant of economic growth.  Also, during the era in which growth was the focus of development economics not only was poverty an issue of subsidiary focus, but income inequality, insofar as it was an issue, was usually seen as a basis for more rapid growth and thus, at least to a degree, desirable.

[7] While such an absolute standard is used in the United States and generally in low-income countries, European Union countries have come to define poverty in relative terms – generally as living on less than half the national average income.  In this EU definition, at any level of average income, poverty will be greater the greater is the income inequality (as explained below).

[8] Adam Smith, for example, saw the capability to appear in public without shame as a basic need, the lack of which placed a person in poverty.  Smith saw the possession of a linen shirt as a requirement for meeting this need.  Referring to Smith’s linen shirt example, Sen points out that the capability to appear in public without shame is an absolute capability, but the need for a linen shirt in order to fulfill this capability is a socially determined, relative need.  (Sen 1983, p. 161)

[9] The approach of seeing poverty as a social status is not peculiar to Sahlins, but is more generally the approach of anthropology.  See, for example, Green (2006, p. 1109), who comments, “Anthropological perspectives on poverty prioritise poverty not as an absolute measurable condition but as a qualitative social relation. Anthropological accounts of poverty examine how the groups categorised as poor come to be so classified and by whom.”


[10] There are two problems with Rawls related to the discussion here.  First, there is no reason why “trickle-down” approaches to economic policy could not be justified by his difference principle.  Indeed, the argument that providing direct benefits to the wealthy helps the poor is exactly the argument that supporters of these sorts of policies put forth.  The difference principle would seem consistent with all sorts of disequalizing policies, as long as the absolute level of income of those at the bottom was increased.  And this is the second problem: Rawls appears to accept the idea that people are materially better or worse off as a function of their absolute level of income.  This is, as argued in the previous section, a problem.

[11] I have been drawn to these points and related exchanges by Sheffler (2005).

[12] Aside from the question of the intrinsic value of equality, the resentment, envy and lack of social solidarity that can come with inequality might generate social conflict, a phenomenon that is sometimes cited as an explanation for why income inequality may retard economic growth. (Alesina and Rodrik, 1994, and Persson and Tabellini, 1995)


[13] Richard Rothstein (2004) provides analysis and numerous particulars of these factors in the U.S. context.  Donald Hirsch (2007, p. 5), focusing on the U.K., sums up his study as follows: “Child poverty and unequal educational opportunities are inextricably linked.  Children’s educational prospects reflect the disadvantages of their families.” 

[14] Schools play a role here too.  The quality difference between the schools for the poor and those for the rich is not only one along the good-bad dimension.  Even “good” schools channel students from different social classes in different directions and affect their expectations and self-confidence.  See, for example, the study described by Martin Carnoy and Henry Levin (1985, ch. 5).

[15] Schwabish et al also find, however, find that inequality between the middle and the poor (as measured  by the 50/10 percentile ratio) has a positive, though small, impact on social spending. 

[16] Aaronson and Mazumder use data from the Integrated Public Use Microdata Series (IPUMS) of the decennial Censuses.  In their abstract, they summarize their method and results as follows: “We estimate a time series of intergenerational economic mobility using a two sample estimation approach that matches individuals in the Census to synthetic parents in the prior generation based on state of birth and cohort.  We find that mobility increased from 1950 to 1980 but has declined sharply since 1980.”

[17] Bradbury and Katz base their calculations on the Panel Study of Income Dynamics.  Not all the decade-to-decade comparisons show decreasing mobility.  For example, whereas 3.3 percent of families rose from the bottom income quintile to the top income quintile in the 1970s, 4.3 percent made this transition in the 1990s.

[18] For example, Tom Hertz (2006), examining the 1990-91 to 2003-2004 period in the United States does not find any general decrease in mobility across income deciles or quintiles.  Hertz also uses data from the Panel Study of Income Dynamics, but his method, as well as his years of focus, differ from those of Bradbury and Katz.

[19] I am unable to find other studies for low-income countries that would provide systematic treatment of the mobility-equality connection.  I would expect, however, that while the distribution of income is important, the rate of growth would also have important impacts on economic and social mobility.  The structural change that accompanies rapid growth in the development process would be likely to bring about opportunities and disruptions that would effect a relatively high degree of mobility, all else equal.  However, all else is seldom equal.  For example, Munshi and Rosenzweig (2005) find that rising income inequality in India during the country’s recent period of more rapid growth appears to be associated with greater geographic immobility largely because with rising income inequality households at the bottom of the distribution are less likely to leave the supportive networks of their, largely local, caste support systems.  While Munshi and Rosenzweig focus on geographic mobility, there is probably a strong connection to economic and social mobility. 

[20] As the quotation at the outset of this section from Wilkinson and Pickett (2007) indicates, many other social maladies beyond ill-health and crime might be attributed at least in part to inequality.  Beyond their list, a negative impact of inequality on the environment should also be noted. (Boyce, 2007).

[21] In addition to other works cited, the argument here draws heavily upon Wilkinson (2005) and Kawachi and Kennedy (2006).  Also, see the reviews by Wilkinson and Pickett (2006) and Subramanian and Kawachi (2004).  I am grateful to both Richard Wilkinson and Ichiro Kawachi for correspondence that helped me understand these issues – though they are not to blame for any errors in my argument.  Deaton (2003) reviews the issue and argues the contrary position – i.e., against the connection between income inequality and poor health outcomes.

[22] Subramanian and Kawachi (2004) describe this phenomenon and distinguish the “concavity-induced income inequality effect” (referring to the shape of the curve relating health outcomes to income) from the “pollution effect” of income inequality.  Explaining the “pollution effect,” they state (p. 80): “In addition to the concavity effect just described, researchers have posited an additional effect of income inequality on health…This is the hypothesis that the distribution of income in society, over and above individual incomes as well as societal average income, matters for population health such that individuals (regardless of their individual incomes) tend to have worse health in societies that are more unequal.  Thus, income inequality per se may be damaging to the public’s health by causing a downward shift in the income/health curve. …[W]e shall refer to the independent contextual income inequality effect as the ‘pollution effect’ of income inequality on health.”

[23] However, Deon Filmer and Lant Pritchett (1997) in a cross-sectional analysis of 104 countries, while finding a significant impact of income inequality on child mortality, also find that public spending on health had relatively little impact.  Filmer and Pritchett’s study demonstrates that most of the variation in child mortality is accounted for by the average income levels of the countries.


[24] In this connection, Wilkinson and Pickett (2006, p. 1774) note: “The broad impression is that social class stratification establishes itself primarily as a national social structure, though there are perhaps also some more local civic hierarchies—for instance within cities and US states. But it should go without saying that classes are defined in relation to each other: one is higher because the other is lower, and vice versa. The lower class identity of people in a poor neighbourhood is inevitably defined in relation to a hierarchy which includes a knowledge of the existence of superior classes who may live in other areas some distance away.”


[25] While there is dispute over the relative roles of absolute poverty and income inequality in contributing to crime, there seems to be little disagreement that inequality has a positive impact on crime.  A meta-analysis carried out by Ching-Chi Hsieh and M. D. Pugh (1993) found that poverty and income inequality are each associated with violent crime, though they find a good deal of variation among studies in the size of the impacts.

The Case for 'Universal Property'

An idea pioneered by Alaska could inoculate society against extreme inequality

When voters went to the polls in November, one outcome was certain: America would emerge as a nation deeply divided. President-elect Biden’s pledge to “unite and heal” will do little to remedy this reality unless good intentions are matched by bold policies that truly bring Americans together. Universal property—an innovative idea that goes beyond income to the economic bedrock of wealth—offers a way to move in that direction, one that could win support on both sides of the political aisle.

Americans cherish both equality and liberty. The problem is that when these appear to be in conflict, the nation is torn between those willing to sacrifice some liberty for greater equality and those willing to do the opposite. This underlying fault line was in evidence between those who voted for Biden and those who voted for Trump. It is also a source of ambivalence among the many Americans on both sides who value both.

The notion that equality is the enemy of liberty, and vice versa, is founded on the view that government is the ultimate guarantor of equality, and private property the ultimate guarantor of liberty. The balance between equality and liberty thus morphs into the balance between the state and the market. A quintessential exposition of this line of thinking can be found in the writings of antebellum South Carolina Senator John C. Calhoun. In his Disquisition on Government, published in 1851, Calhoun juxtaposed “two great classes”: one comprised of taxpayers (including slaveholders like himself) who fund the government, the other of “tax-consumers” who live on government handouts. The 20th-century free-market avatar Ayn Rand gave Calhoun’s classes more vivid labels: “The creator produces,” she wrote in her 1943 novel The Fountainhead, “the parasite loots.”

Around the same time that Calhoun was penning his Disquisition, across the Atlantic two German émigrés offered a very different notion of class struggle. In the Communist Manifesto, Karl Marx and Friedrich Engels portrayed the working class as the true creators of wealth, and the owners of capital as parasites. A key plank in their program for building a more egalitarian society was state ownership of “the means of production.” The shortcomings of this recipe became all too clear with the advent of Communist regimes in the 20th century. The belief that state property would in a meaningful sense belong to all was belied by the rise of new elites, whose power like that of capitalists rested on control of property—property nominally belonging to the governments they ran. In Russia, three decades after elite “reformers” in the U.S.S.R. leveraged their political status to reinvent themselves as post-communist oligarchs, wealth is distributed even more unequally than in the United StatesAnd in China inequality has reemerged with a vengeance.

The lesson: Neither private property nor state-owned property is sufficient to guarantee equality and liberty for all. The first can allow economic elites to monopolize wealth and power, the second can allow political elites to do the same. But there is an alternative type of property that can never be concentrated in the hands of an elite. It was pioneered in, of all places, Alaska.

In 1976, as oil production commenced on Alaska’s North Slope, the state amended its constitution to create a new entity called the Alaska Permanent Fund. The idea was the brainchild of Republican governor Jay Hammond, who believed that Alaska’s oil wealth belonged to all its residents, and that all should receive equal annual dividends from its extraction. The fund is “permanent” because some of the money is invested so that future generations will receive dividends too once oil production ends. “That money and the resources it comes from belong to all Alaskans,” Hammond wrote, “not to government or to a few ‘J.R. Ewings’ who in states like Texas own almost all the oil.” Not surprisingly, the fund has proven enormously popular across the state’s political spectrum. The record payout, more than $3,000 per person including a one-time rebate, came under Governor Sarah Palin in 2008.

The Permanent Fund is neither private property nor public property in the conventional senses. Unlike public property, the right to the revenue belongs to the people, not the government. Unlike private property, this right cannot be bought or sold, owned by corporations, or concentrated in a few hands. It is universal property: individual, inalienable and perfectly egalitarian.

In 2001 Peter Barnes, a solar energy entrepreneur and co-founder of the Working Assets Long Distance telephone company, wrote a book called Who Owns the Sky?, in which he proposed to treat the atmosphere’s limited capacity to safely absorb carbon emissions like Alaska treats its oil: as a joint inheritance that belongs in equal measure to each and every person. To protect this precious inheritance for future generations, Barnes argued that we ought to strictly limit the use of fossil fuels, charge prices for the carbon emissions we do permit, and recycle the revenue to the public as dividends. Hammond, for one, found the idea intriguing. “Pie in the sky?” he mused. “Perhaps, but provocative.”

In his forthcoming book Ours: How Universal Property Can Transform the World, Barnes extends the possibilities for this alternative type of property beyond natural assets to include assets we have created as a society, such as the legal and institutional architecture of the financial system that underpins individual prosperity. The gifts of society and the gifts of nature would be treated as a joint inheritance belonging to all: universal property. Those who benefit from using them would pay according to their use, and the money received from their use would be paid out equally to all.

If implemented on a significant scale, universal property would inoculate the society against extreme inequality. It would provide an asset-based source for a universal basic income, not dependent on redistributive taxation. Charging for use of the sky’s carbon-absorption capacity would help stabilize the Earth’s climate by curbing emissions; similarly, financial transaction taxes would help stabilize the economy by curbing hair-trigger speculation.

Universal property is a bold idea that does not fit neatly into old labels. It is neither Democratic nor Republican, neither liberal nor conservative, neither socialist nor libertarian. Or rather, it is both. It would advance equality and liberty together. And by bringing everyone into the same boat as co-owners, it could help bridge the divides that keep us apart.

https://www.scientificamerican.com/article/the-case-for-universal-property/


The new elite’s phoney crusade to save the world – without changing anything

Today’s titans of tech and finance want to solve the world’s problems, as long as the solutions never, ever threaten their own wealth and power. By Anand Giridharadas
Tue 22 Jan 2019 06.00 
 Asuccessful society is a progress machine. It takes in the raw material of innovations and produces broad human advancement. America’s machine is broken. The same could be said of others around the world. And now many of the people who broke the progress machine are trying to sell us their services as repairmen. When the fruits of change have fallen on the US in recent decades, the very fortunate have basketed almost all of them. For instance, the average pretax income of the top 10th of Americans has doubled since 1980, that of the top 1% has more than tripled, and that of the top 0.001% has risen more than sevenfold – even as the average pretax income of the bottom half of Americans has stayed almost precisely the same. These familiar figures amount to three-and-a-half decades’ worth of wondrous, head-spinning change with zero impact on the average pay of 117 million Americans. Globally, over the same period, according to the World Inequality Report, the top 1% captured 27% of new income, while the bottom half of humanity – presently, more than 3 billion people – saw 12% of it.
That vast numbers of Americans and others in the west have scarcely benefited from the age is not because of a lack of innovation, but because of social arrangements that fail to turn new stuff into better lives. For example, American scientists make the most important discoveries in medicine and genetics and publish more biomedical research than those of any other country – but the average American’s health remains worse and slower-improving than that of peers in other rich countries, and in some years life expectancy actually declines. American inventors create astonishing new ways to learn thanks to the power of video and the internet, many of them free of charge – but the average US high-school leaver tests more poorly in reading today than in 1992. The country has had a “culinary renaissance”, as one publication puts it, one farmers’ market and Whole Foods store at a time – but it has failed to improve the nutrition of most people, with the incidence of obesity and related conditions rising over time.
The tools for becoming an entrepreneur appear to be more accessible than ever, for the student who learns coding online or the Uber driver – but the share of young people who own a business has fallen by two-thirds since the 1980s. America has birthed both a wildly successful online book superstore, Amazon, and another company, Google, that has scanned more than 25m books for public use – but illiteracy has remained stubbornly in place, and the fraction of Americans who read at least one work of literature a year has dropped by almost a quarter in recent decades. The government has more data at its disposal and more ways of talking and listening to citizens – but only a quarter as many people find it trustworthy as did in the tempestuous 1960s.
Meanwhile, the opportunity to get ahead has been transformed from a shared reality to a perquisite of already being ahead. Among Americans born in 1940, those raised at the top of the upper middle class and the bottom of the lower middle class shared a roughly 90% chance of realising the so-called American dream of ending up better off than their parents. Among Americans born in 1984 and maturing into adulthood today, the new reality is split-screen. Those raised near the top of the income ladder now have a 70% chance of realising the dream. Meanwhile, those close to the bottom, more in need of elevation, have a 35% chance of climbing above their parents’ station. And it is not only progress and money that the fortunate monopolise: rich American men, who tend to live longer than the average citizens of any other country, now live 15 years longer than poor American men, who endure only as long as men in Sudan and Pakistan.
Thus many millions of Americans, on the left and right, feel one thing in common: that the game is rigged against people like them. Perhaps this is why we hear constant condemnation of “the system”, for it is the system that people expect to turn fortuitous developments into societal progress. Instead, the system – in America and across much of the world – has been organised to siphon the gains from innovation upward, such that the fortunes of the world’s billionaires now grow at more than double the pace of everyone else’s, and the top 10% of humanity have come to hold 85% of the planet’s wealth. New data published this week by Oxfam showed that the world’s 2,200 billionaires grew 12% wealthier in 2018, while the bottom half of humanity got 11% poorer. It is no wonder, given these facts, that the voting public in the US (and elsewhere) seems to have turned more resentful and suspicious in recent years, embracing populist movements on the left and right, bringing socialism and nationalism into the centre of political life in a way that once seemed unthinkable, and succumbing to all manner of conspiracy theory and fake news. There is a spreading recognition, on both sides of the ideological divide, that the system is broken, that the system has to change.
Some elites faced with this kind of gathering anger have hidden behind walls and gates and on landed estates, emerging only to try to seize even greater political power to protect themselves against the mob. (We see you, Koch brothers!) But in recent years a great many fortunate Americans have also tried something else, something both laudable and self-serving: they have tried to help by taking ownership of the problem. All around us, the winners in our highly inequitable status quo declare themselves partisans of change. They know the problem, and they want to be part of the solution. Actually, they want to lead the search for solutions. They believe their solutions deserve to be at the forefront of social change. They may join or support movements initiated by ordinary people looking to fix aspects of their society. More often, though, these elites start initiatives of their own, taking on social change as though it were just another stock in their portfolio or corporation to restructure. Because they are in charge of these attempts at social change, the attempts naturally reflect their biases.
For the most part, these initiatives are not democratic, nor do they reflect collective problem-solving or universal solutions. Rather, they favour the use of the private sector and its charitable spoils, the market way of looking at things, and the bypassing of government. They reflect a highly influential view that the winners of an unjust status quo – and the tools and mentalities and values that helped them win – are the secret to redressing the injustices. Those at greatest risk of being resented in an age of inequality are thereby recast as our saviours from an age of inequality. Socially minded financiers at Goldman Sachs seek to change the world through “win-win” initiatives such as “green bonds” and “impact investing”. Tech companies such as Uber and Airbnb cast themselves as empowering the poor by allowing them to chauffeur people around or rent out spare rooms. Management consultants and Wall Street brains seek to convince the social sector that they should guide its pursuit of greater equality by assuming board seats and leadership positions.
Conferences and ideas festivals sponsored by plutocrats and big business – such as the World Economic Forum, which is under way in Davos, Switzerland, this week – host panels on injustice and promote “thought leaders” who are willing to confine their thinking to improving lives within the faulty system rather than tackling the faults. Profitable companies built in questionable ways and employing reckless means engage in corporate social responsibility, and some rich people make a splash by “giving back” – regardless of the fact that they may have caused serious societal problems as they built their fortunes. Elite networking forums such as the Aspen Institute and the Clinton Global Initiative groom the rich to be self-appointed leaders of social change, taking on the problems people like them have been instrumental in creating or sustaining. A new breed of community-minded so-called B Corporations has been born, reflecting a faith that more enlightened corporate self-interest – rather than, say, public regulation – is the surest guarantor of the public welfare. A pair of Silicon Valley billionaires fund an initiative to rethink the Democratic party, and one of them can claim, without a hint of irony, that their goals are to amplify the voices of the powerless and reduce the political influence of rich people like them.
This genre of elites believes and promotes the idea that social change should be pursued principally through the free market and voluntary action, not public life and the law and the reform of the systems that people share in common; that it should be supervised by the winners of capitalism and their allies, and not be antagonistic to their needs; and that the biggest beneficiaries of the status quo should play a leading role in the status quo’s reform. This is what I call MarketWorld – an ascendant power elite defined by the concurrent drives to do well and do good, to change the world while also profiting from the status quo. It consists of enlightened businesspeople and their collaborators in the worlds of charity, academia, media, government and thinktanks. It has its own thinkers, whom it calls “thought leaders”, its own language, and even its own territory – including a constantly shifting archipelago of conferences at which its values are reinforced and disseminated and translated into action. MarketWorld is a network and community, but it is also a culture and state of mind.
The elites of MarketWorld often speak in a language of “changing the world” and “making the world a better place” – language more typically associated with protest barricades than ski resorts. Yet we are left with the inescapable fact that even as these elites have done much to help, they have continued to hoard the overwhelming share of progress, the average American’s life has scarcely improved, and virtually all of the US’s institutions, with the exception of the military, have lost the public’s trust.
One of the towering figures in this new approach to changing the world is the former US president Bill Clinton. After leaving office in 2001, he came to champion, through his foundation and his annual Clinton Global Initiative gatherings in New York, a mode of public-private world improvement that brought together actors like Goldman Sachs, the Rockefeller Foundation and McDonald’s, sometimes with a governmental partner, to solve big problems in ways plutocrats could get on board with.
After the populist eruption that resulted in Hillary Clinton’s defeat in the 2016 US election, I asked the former president what he thought lay behind the surge of public anger. “The pain and road rage we see reflected in the election has been building a long time,” he said. He thought the anger “is being fed in part by the feeling that the most powerful people in the government, economy and society no longer care about them or look down on them. They want to become part of our progress toward shared opportunities, shared stability and shared prosperity.” But when it came to his proposed solution, it sounded a lot like the model to which he was already committed: “The only answer is to build an aggressive, creative partnership involving all levels of government, the private sector and nongovernment organisations to make it better.” In other words, the only answer is to pursue social change outside of traditional public forums, with the political representatives of mankind as one input among several, and corporations having the big say in whether they would sponsor a given initiative or not. The public’s anger, of course, has been directed in part at the very elites he had sought to convene, on whom he had gambled his theory of post-political problem-solving, who had lost the trust of so many millions of people, making them feel betrayed, uncared for and scorned.
What people have been rejecting in the US – as well as in Britain, Hungary and elsewhere – was, in their view, rule by global elites who put the pursuit of profit above the needs of their neighbours and fellow citizens. These were elites who seemed more loyal to one another than to their own communities; elites who often showed greater interest in distant humanitarian causes than in the pain of people 10 miles to the east or west. Frustrated citizens felt they possessed no power over the spreadsheet- and PowerPoint-wielding elites commensurate with the power these elites had gained over them – whether in switching around their hours or automating their plant or quietly slipping into law a new billionaire-made curriculum for their children’s school. What they did not appreciate was the world being changed without them.
Which raises a question for all of us: are we ready to hand over our future to the plutocratic elites, one supposedly world-changing initiative at a time? Are we ready to call participatory democracy a failure, and to declare these other, private forms of change-making the new way forward? Is the decrepit state of American self-government an excuse to work around it and let it further atrophy? Or is meaningful democracy, in which we all potentially have a voice, worth fighting for?
There is no denying that today’s American elite may be among the more socially concerned elites in history. But it is also, by the cold logic of numbers, among the more predatory. By refusing to risk its way of life, by rejecting the idea that the powerful might have to sacrifice for the common good, it clings to a set of social arrangements that allow it to monopolise progress and then give symbolic scraps to the forsaken – many of whom wouldn’t need the scraps if society were working right. It is vital that we try to understand the connection between these elites’ social concern and predation, between the extraordinary helping and the extraordinary hoarding, between the milking – and perhaps abetting – of an unjust status quo and the attempts by the milkers to repair a small part of it. It is also important to understand how the elites see the world, so that we might better assess the merits and limitations of their world-changing campaigns. There are many ways to make sense of all this elite concern and predation. One is that the elites are doing the best they can. The world is what it is, the system is what it is, the forces of the age are bigger than anyone can resist, and the most fortunate are helping. This view may allow that elite helpfulness is just a drop in the bucket, but reassures itself that at least it is something. The slightly more critical view is that this sort of change is well-meaning but inadequate. It treats symptoms, not root causes – it does not change the fundamentals of what ails us. According to this view, elites are shirking the duty of more meaningful reform.
But there is still another, darker way of judging what goes on when elites put themselves in the vanguard of social change: that doing so not only fails to make things better, but also serves to keep things as they are. After all, it takes the edge off of some of the public’s anger at being excluded from progress. It improves the image of the winners. By using private and voluntary half-measures, it crowds out public solutions that would solve problems for everyone, and do so with or without the elite’s blessing. There is no question that the outpouring of elite-led social change in our era does great good and soothes pain and saves lives. But we should also recall Oscar Wilde’s words about such elite helpfulness being “not a solution” but “an aggravation of the difficulty”. More than a century ago, in an age of churn like our own, he wrote: “Just as the worst slave-owners were those who were kind to their slaves, and so prevented the horror of the system being realised by those who suffered from it, and understood by those who contemplated it, so, in the present state of things in England, the people who do most harm are the people who try to do most good.” Wilde’s formulation may sound extreme to modern ears. How can there be anything wrong with trying to do good? The answer may be: when the good is an accomplice to even greater, if more invisible, harm. In our era that harm is the concentration of money and power among a small few, who reap from that concentration a near monopoly on the benefits of change. And do-gooding pursued by elites tends not only to leave this concentration untouched, but actually to shore it up. For when elites assume leadership of social change, they are able to reshape what social change is – above all, to present it as something that should never threaten winners. In an age defined by a chasm between those who have power and those who don’t, elites have spread the idea that people must be helped, but only in market-friendly ways that do not upset fundamental power equations. Society should be changed in ways that do not change the underlying economic system that has allowed the winners to win and fostered many of the problems they seek to solve.
The broad fidelity to this law helps make sense of what we observe all around: powerful people fighting to “change the world” in ways that essentially keep it the same, and “giving back” in ways that sustain an indefensible distribution of influence, resources and tools. Is there a better way? The secretary-general of the Organisation for Economic Co-operation and Development (OECD), a research and policy organisation that works on behalf of the world’s richest countries, has compared the prevailing elite posture to that of the fictional 19th-century Italian aristocrat Tancredi Falconeri, from Giuseppe Tomasi di Lampedusa’s novel The Leopard, who declares: “If we want things to stay as they are, things will have to change.” If this view is correct, then much of today’s charity and social innovation and buy-one-give-one marketing may not be measures of reform so much as forms of conservative self-defence – measures that protect elites from more menacing change. Among the kinds of issues being sidelined, the OECD leader wrote, are “rising inequalities of income, wealth and opportunities; the growing disconnect between finance and the real economy; mounting divergence in productivity levels between workers, firms and regions; winner-take-most dynamics in many markets; limited progressivity of our tax systems; corruption and capture of politics and institutions by vested interests; lack of transparency and participation by ordinary citizens in decision-making; the soundness of the education and of the values we transmit to future generations.” Elites, he wrote, have found myriad ways to “change things on the surface so that in practice nothing changes at all”. The people with the most to lose from genuine social change have placed themselves in charge of social change – often with the passive assent of those most in need of it.
It is fitting that an era marked by these tendencies should culminate in the election of Donald Trump. He is at once an exposer, an exploiter and an embodiment of the cult of elite-led social change. He tapped, as few before him successfully had, into a widespread intuition that elites were phonily claiming to be doing what was best for most Americans. He exploited that intuition by whipping it into frenzied anger and then directing most of that anger not at elites, but at the most marginalised and vulnerable Americans. And he came to incarnate the very fraud that had fuelled his rise, and that he had exploited. He became, like the elites he assailed, the establishment figure who falsely casts himself as a renegade. He became the rich, educated man who styles himself as the ablest protector of the poor and uneducated – and who insists, against all evidence, that his interests have nothing to do with the change he seeks. He became the chief salesman for the theory, rife among plutocratic change agents, that what is best for powerful him is best for the powerless too. Trump is the reductio ad absurdum of a culture that tasks elites with reforming the very systems that have made them and left others in the dust.
One thing that unites those who voted for Trump and those who despaired at his being elected – and the same might be said of those for and against Brexit – is a sense that the country requires transformational reform. The question we confront is whether moneyed elites, who already rule the roost in the economy and exert enormous influence in the corridors of political power, should be allowed to continue their conquest of social change and of the pursuit of greater equality. The only thing better than controlling money and power is to control the efforts to question the distribution of money and power. The only thing better than being a fox is being a fox asked to watch over hens.
What is at stake is whether the reform of our common life is led by governments elected by and accountable to the people, or rather by wealthy elites claiming to know our best interests. We must decide whether, in the name of ascendant values such as efficiency and scale, we are willing to allow democratic purpose to be usurped by private actors who often genuinely aspire to improve things but, first things first, seek to protect themselves. Yes, the American government is dysfunctional at present. But that is all the more reason to treat its repair as our foremost national priority. Pursuing workarounds of our troubled democracy makes democracy even more troubled. We must ask ourselves why we have so easily lost faith in the engines of progress that got us where we are today – in the democratic efforts to outlaw slavery, end child labour, limit the workday, keep drugs safe, protect collective bargaining, create public schools, battle the Great Depression, electrify rural America, weave a nation together by road, pursue a Great Society free of poverty, extend civil and political rights to women and African Americans and other minorities, and give our fellow citizens health, security and dignity in old age.
Much of what appears to be reform in our time is in fact the defense of stasis. When we see through the myths that foster this misperception, the path to genuine change will come into view. It will once again be possible to improve the world without permission slips from the powerful.
This is an edited extract from Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas, published by Allen Lane on 24 January and available to buy at guardianbookshop.com


Socialism for the rich’: the evils of bad economics
The economic arguments adopted by Britain and the US in the 1980s led to vastly increased inequality – and gave the false impression that this outcome was not only inevitable, but good. By Jonathan Aldred
Thu 6 Jun 2019 06.00 
In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it. After all, the argument goes, globalisation and new technology have created an economy in which those with highly valued skills or talents can earn huge rewards. Inequality inevitably rises. Attempting to reduce inequality via redistributive taxation is likely to fail because the global elite can easily hide their money in tax havens. Insofar as increased taxation does hit the rich, it will deter wealth creation, so we all end up poorer.
One strange thing about these arguments, whatever their merits, is how they stand in stark contrast to the economic orthodoxy that existed from roughly 1945 until 1980, which held that rising inequality was not inevitable, and that various government policies could reduce it. What’s more, these policies appear to have been successful. Inequality fell in most countries from the 1940s to the 1970s. The inequality we see today is largely due to changes since 1980.
In both the US and the UK, from 1980 to 2016, the share of total income going to the top 1% has more than doubled. After allowing for inflation, the earnings of the bottom 90% in the US and UK have barely risen at all over the past 25 years. More generally, 50 years ago, a US CEO earned on average about 20 times as much as the typical worker. Today, the CEO earns 354 times as much.
Any argument that rising inequality is largely inevitable in our globalised economy faces a crucial objection. Since 1980 some countries have experienced a big increase in inequality (the US and the UK); some have seen a much smaller increase (Canada, Japan, Italy), while inequality has been stable or falling in others (France, Belgium and Hungary). So rising inequality cannot be inevitable. And the extent of inequality within a country cannot be solely determined by long-run global economic forces, because, although most richer countries have been subject to broadly similar forces, the experiences of inequality have differed.
The familiar political explanation for this rising inequality is the huge shift in mainstream economic and political thinking, in favour of free markets, triggered by the elections of Ronald Reagan and Margaret Thatcher. Its fit with the facts is undeniable. Across developed economies, the biggest rise in inequality since 1945 occurred in the US and UK from 1980 onwards.
The power of a grand political transformation seems persuasive. But it cannot be the whole explanation. It is too top-down: it is all about what politicians and other elites do to us. The idea that rising inequality is inevitable begins to look like a convenient myth, one that allows us to avoid thinking about another possibility: that through our electoral choices and decisions in daily life we have supported rising inequality, or at least acquiesced in it. Admittedly, that assumes we know about it. Surveys in the UK and US consistently suggest that we underestimate both the level of current inequality and how much it has recently increased. But ignorance cannot be a complete excuse, because surveys also reveal a change in attitudes: rising inequality has become more acceptable – or at least, less unacceptable – especially if you are not on the wrong end of it.
Inequality is unlikely to fall much in the future unless our attitudes turn unequivocally against it. Among other things, we will need to accept that how much people earn in the market is often not what they deserve, and that the tax they pay is not taking from what is rightfully theirs.
One crucial reason why we have done so little to reduce inequality in recent years is that we downplay the role of luck in achieving success. Parents teach their children that almost all goals are attainable if you try hard enough. This is a lie, but there is a good excuse for it: unless you try your best, many goals will definitely remain unreachable.
Ignoring the good luck behind my success helps me feel good about myself, and makes it much easier to feel I deserve the rewards associated with success. High earners may truly believe that they deserve their income because they are vividly aware of how hard they have worked and the obstacles they have had to overcome to be successful.
But this is not true everywhere. Support for the idea that you deserve what you get varies from country to country. And in fact, support for such beliefs is stronger in countries where there seems to be stronger evidence that contradicts them. What explains this?
Attitude surveys have consistently shown that, compared to US residents, Europeans are roughly twice as likely to believe that luck is the main determinant of income and that the poor are trapped in poverty. Similarly, people in the US are about twice as likely as Europeans to believe that the poor are lazy and that hard work leads to higher quality of life in the long run.
Yet in fact, the poor (the bottom 20%) work roughly the same total annual hours in the US and Europe. And economic opportunity and intergenerational mobility is more limited in the US than in Europe. The US intergenerational mobility statistics bear a striking resemblance to those for height: US children born to poor parents are as likely to be poor as those born to tall parents are likely to be tall. And research has repeatedly shown that many people in the US don’t know this: perceptions of social mobility are consistently over-optimistic.
European countries have, on average, more redistributive tax systems and more welfare benefits for the poor than the US, and therefore less inequality, after taxes and benefits. Many people see this outcome as a reflection of the different values that shape US and European societies. But cause-and-effect may run the other way: you-deserve-what-you-get beliefs are strengthened by inequality.
Psychologists have shown that people have motivated beliefs: beliefs that they have chosen to hold because those beliefs meet a psychological need. Now, being poor in the US is extremely tough, given the meagre welfare benefits and high levels of post-tax inequality. So Americans have a greater need than Europeans to believe that you deserve what you get and you get what you deserve. These beliefs play a powerful role in motivating yourself and your children to work as hard as possible to avoid poverty. And these beliefs can help alleviate the guilt involved in ignoring a homeless person begging on your street.
This is not just a US issue. Britain is an outlier within Europe, with relatively high inequality and low economic and social mobility. Its recent history fits the cause-and-effect relationship here. Following the election of Margaret Thatcher in 1979, inequality rose significantly. After inequality rose, British attitudes changed. More people became convinced that generous welfare benefits make poor people lazy and that high salaries are essential to motivate talented people. However, intergenerational mobility fell: your income in Britain today is closely correlated with your parents’ income.
If the American Dream and other narratives about everyone having a chance to be rich were true, we would expect the opposite relationship: high inequality (is fair because of) high intergenerational mobility. Instead, we see a very different narrative: people cope with high inequality by convincing themselves it is fair after all. We adopt narratives to justify inequality because society is highly unequal, not the other way round. So inequality may be self-perpetuating in a surprising way. Rather than resist and revolt, we just cope with it. Less Communist Manifesto, more self-help manual.
Inequality begets further inequality. As the top 1% grow richer, they have more incentive and more ability to enrich themselves further. They exert more and more influence on politics, from election-campaign funding to lobbying over particular rules and regulations. The result is a stream of policies that help them but are inefficient and wasteful. Leftwing critics have called it “socialism for the rich”. Even the billionaire investor Warren Buffett seems to agree: “There’s been class warfare going on for the last 20 years and my class has won,” he once said.
This process has been most devastating when it comes to tax. High earners have most to gain from income tax cuts, and more spare cash to lobby politicians for these cuts. Once tax cuts are secured, high earners have an even stronger incentive to seek pay rises, because they keep a greater proportion of after-tax pay. And so on.
Although there have been cuts in the top rate of income tax across almost all developed economies since 1979, it was the UK and the US that were first, and that went furthest. In 1979, Thatcher cut the UK’s top rate from 83% to 60%, with a further reduction to 40% in 1988. Reagan cut the top US rate from 70% in 1981 to 28% in 1986. Although top rates today are slightly higher – 37% in the US and 45% in the UK – the numbers are worth mentioning because they are strikingly lower than in the post-second-world-war period, when top tax rates averaged 75% in the US and were even higher in the UK.
Some elements of the Reagan-Thatcher revolution in economic policy, such as Milton Friedman’s monetarist macroeconomics, have subsequently been abandoned. But the key policy idea to come out of microeconomics has become so widely accepted today that it has acquired the status of common sense: that tax discourages economic activity and, in particular, income tax discourages work.
This doctrine seemingly transformed public debate about taxation from an endless argument over who gets what, to the promise of a bright and prosperous future for all. The “for all” bit was crucial: no more winners and losers. Just winners. And the basic ideas were simple enough to fit on the back of a napkin.
One evening in December 1974, a group of ambitious young conservatives met for dinner at the Two Continents restaurant in Washington DC. The group included the Chicago University economist Arthur Laffer, Donald Rumsfeld (then chief of staff to President Gerald Ford), and Dick Cheney (then Rumsfeld’s deputy, and a former Yale classmate of Laffer’s).
While discussing Ford’s recent tax increases, Laffer pointed out that, like a 0% income tax rate, a 100% rate would raise no revenue because no one would bother working. Logically, there must be some tax rate between these two extremes that would maximise tax revenue. Although Laffer does not remember doing so, he apparently grabbed a napkin and drew a curve on it, representing the relationship between tax rates and revenues. The Laffer curve was born and, with it, the idea of trickle-down economics.
The key implication that impressed Rumsfeld and Cheney was that, just as tax rates lower than 100% must raise more revenue, cuts in income tax rates more generally could raise revenue. In other words, there could be winners, and no losers, from tax cuts. But could does not mean will. No empirical evidence was produced in support of the mere logical possibility that tax cuts could raise revenue, and even the economists employed by the incoming Reagan administration six years later struggled to find any evidence in support of the idea.
Yet it proved irresistible to Reagan, the perennial optimist, who essentially overruled his expert advisers, convinced that the “entrepreneurial spirit unleashed by the new tax cuts would surely bring in more revenue than his experts imagined”, as the historian Daniel T Rodgers put it. (If this potent brew of populist optimism and impatience with economic experts seems familiar today, that might be explained in part by the fact that Laffer was also a campaign adviser to Donald Trump.)
For income tax cuts to raise tax revenue, the prospect of higher after-tax pay must motivate people to work more. The resulting increase in GDP and income may be enough to generate higher tax revenues, even though the tax rate itself has fallen. Although the effects of the big Reagan tax cuts are still disputed (mainly because of disagreement over how the US economy would have performed without the cuts), even those sympathetic to trickle-down economics conceded that the cuts had negligible impact on GDP – and certainly not enough to outweigh the negative effect of the cuts on tax revenues.
But the Laffer curve did remind economists that a revenue-maximising top tax rate somewhere between 0% and 100% must exist. Finding the magic number is another matter: the search continues today. It is worth a brief dig into this research, not least because it is regularly used to veto attempts to reduce inequality by raising tax on the rich. In 2013, for example, the UK chancellor of the exchequer George Osborne reduced the top rate of income tax from 50% to 45%, arguing Laffer-style that the tax cut would lead to little, if any, loss of revenue. Osborne’s argument relied on economic analysis suggesting that the revenue-maximising top tax rate for the UK is about 40%.
Yet the assumptions behind this number are shaky, as most economists involved in producing such figures acknowledge. Let’s begin with the underlying idea: if lower tax rates raise your after-tax pay, you are motivated to work more. It seems plausible enough but, in practice, the effects are likely to be minimal. If income tax falls, many of us cannot work more, even if we wanted to. There is little opportunity to get paid overtime, or otherwise increase our paid working hours, and working harder during current working hours does not lead to higher pay. Even for those who have these opportunities, it is far from clear that they will work more or harder. They may even decide to work less: since after-tax pay has risen, they can choose to work fewer hours and still maintain their previous income level. So the popular presumption that income tax cuts must lead to more work and productive economic activity turns out to have little basis in either common sense or economic theory.
There are deeper difficulties with Osborne’s argument, difficulties not widely known even among economists. It is often assumed that if the top 1% is incentivised by income tax cuts to earn more, those higher earnings reflect an increase in productive economic activity. In other words, the pie gets bigger. But some economists, including the influential Thomas Piketty, have shown this was not true for CEOs and other top corporate managers following the tax cuts in the 1980s. Instead, they essentially funded their own pay rises by paying shareholders less, which led in turn to lower dividend tax revenue for the government. In fact, Piketty and colleagues have argued that the revenue-maximising top income tax rate may be as high as 83%.
The income tax cuts for the rich of the past 40 years were originally justified by economic arguments: Laffer’s rhetoric was seized upon by politicians. But to economists, his ideas were both familiar and trivial. Modern economics provides neither theory nor evidence proving the merit of these tax cuts. Both are ambiguous. Although politicians can ignore this truth for a while, it suggests that widespread opposition to higher taxes on the rich is ultimately based on reasons beyond economics.
When the top UK income tax rate was raised to 50% in 2009 (until Osborne cut it to 45% four years later) the composer Andrew Lloyd Webber, one of Britain’s wealthiest people, responded bluntly: “The last thing we need is a Somali pirate-style raid on the few wealth creators who still dare to navigate Britain’s gale-force waters.” In the US, Stephen Schwarzman, CEO of private equity firm Blackstone, likened proposals to remove a specialised tax exemption to the German invasion of Poland.
While we may scoff at these moans from the super-rich, most people unthinkingly accept the fundamental idea behind them: that income tax is a kind of theft, taking income which is rightfully owned by the person who earned it. It follows that tax is, at best, a necessary evil, and so should be minimised as far as possible. On these grounds, the 83% top tax rate discussed by Piketty is seen as unacceptable.
There is an entire cultural ecosystem that has evolved around the idea of tax-as-theft, recognisable today in politicians’ talk about “spending taxpayers’ money”, or campaigners celebrating “tax freedom day”. This language exists outside the world of politics, too. Tax economists, accountants and lawyers refer to the so-called “tax burden”.
But the idea that you somehow own your pre-tax income, while obvious, is false. To begin with, you could never have ownership rights prior to, or independent from, taxation. Ownership is a legal right. Laws require various institutions, including police and a legal system, to function. These institutions are financed through taxation. The tax and the ownership rights are effectively created simultaneously. We cannot have one without the other.
 ‘There’s been class warfare going on for the last 20 years, and my class has won’ … US billionaire Warren Buffett. Photograph: Kevin Lamarque/Reuters
However, if the only function of the state is to support private ownership rights (maintaining a legal system, police, and so on), it seems that taxation could be very low – and any further taxation on top could still be seen as a form of theft. Implicit in this view is the idea of incomes earned, and so ownership rights created, in an entirely private market economy, with the state entering only later, to ensure these rights are maintained. Many economics textbooks picture the state in this way, as an add-on to the market. Yet this, too, is a fantasy.
In the modern world, all economic activity reflects the influence of government. Markets are inevitably defined and shaped by government. There is no such thing as income earned before government comes along. My earnings partly reflect my education. Earlier still, the circumstances of my birth and my subsequent health reflects the healthcare available. Even if that healthcare is entirely “private”, it depends on the education of doctors and nurses, and the drugs and other technologies available. Like all other goods and services, these in turn depend on the economic and social infrastructure, including transport networks, communications systems, energy supplies and extensive legal arrangements covering complex matters such as intellectual property, formal markets such as stock exchanges, and jurisdiction across national borders. Lord Lloyd-Webber’s wealth depends on government decisions about the length of copyright on the music he wrote. In sum, it is impossible to isolate what is “yours” from what is made possible, or influenced, by the role of government.
Talk of taxation as theft turns out to be a variation on the egotistical tendency to see one’s success in splendid isolation, ignoring the contribution of past generations, current colleagues and government. Undervaluing the role of government leads to the belief that if you are smart and hard-working, the high taxes you endure, paying for often wasteful government, are not a good deal. You would be better off in a minimal-state, low-tax society.
One reply to this challenge points to the evidence on the rich leaving their home country to move to a lower tax jurisdiction: in fact, very few of them do. But here is a more ambitious reply from Warren Buffett: “Imagine there are two identical twins in the womb … And the genie says to them: ‘One of you is going to be born in the United States, and one of you is going to be born in Bangladesh. And if you wind up in Bangladesh, you will pay no taxes. What percentage of your income would you bid to be born in the United States?’ … The people who say: ‘I did it all myself’ … believe me, they’d bid more to be in the United States than in Bangladesh.”
Much of the inequality we see today in richer countries is more down to decisions made by governments than to irreversible market forces. These decisions can be changed. However, we have to want to control inequality: we must make inequality reduction a central aim of government policy and wider society. The most entrenched, self-deluding and self-perpetuating justifications for inequality are about morality, not economy. The great economist John Kenneth Galbraith nicely summarised the problem: “One of man’s oldest exercises in moral philosophy … is the search for a superior moral justification for selfishness. It is an exercise which always involves a certain number of internal contradictions and even a few absurdities. The conspicuously wealthy turn up urging the character-building value of privation for the poor.”
Adapted from Licence to be Bad: How Economics Corrupted Us by Jonathan Aldred, published by Allen Lane and available at guardianbookshop.co.uk
https://www.theguardian.com/inequality/2019/jun/06/socialism-for-the-rich-the-evils-of-bad-economics?utm_



 Michael J. Sandel's "Justice. What's the Right Thing to Do? "


 Justice offers readers the same exhilarating journey that captivates Harvard students.
What are our obligations to others as people in a free society? Should government tax the rich to help the poor? Is the free market fair? Is it sometimes wrong to tell the truth? Is killing sometimes morally required? Is it possible, or desirable, to legislate morality? Do individual rights and the common good conflict?
This book is a searching, lyrical exploration of the meaning of justice, one that invites readers of all political persuasions to consider familiar controversies in fresh and illuminating ways. Affirmative action, same-sex marriage, physician-assisted suicide, abortion, national service, patriotism and dissent, the moral limits of markets—Sandel dramatizes the challenge of thinking through these conflicts, and shows how a surer grasp of philosophy can help us make sense of politics, morality, and our own convictions as well. Justice is lively, thought-provoking, and wise—an essential new addition to the small shelf of books that speak convincingly to the hard questions of our civic life...: https://www.goodreads.com/book/show/6452731-justice

Global Wealth Report 2018

The ninth edition of the Global Wealth Report published by the Credit Suisse Research Institute provides the most comprehensive and up-to-date source of information available on global household wealth. During the twelve months to mid-2018, aggregate global wealth rose by $14.0 trillion (4.6%) to a combined total of $317 trillion, outpacing population growth. Wealth per adult grew by 3.2%, raising global mean wealth to a record high of $63,100 per adult. The US contributed most to global wealth adding $6.3 trillion and taking its total to $98 trillion. This continues its unbroken run of growth in both total wealth and wealth per adult every year since 2008. Unsurprisingly, China is now clearly established in second place of the world wealth hierarchy. The country overtook Japan with respect to the number of ultra-high net worth (UHNW) individuals in 2009, total wealth in 2011 and the number of millionaires in 2014.
This year's report also provides new insights on female wealth holdings. Women now account for an estimated 40% of global wealth overall and their share of wealth has grown considerably throughout the 20th century. The report explores global variations in female wealth accumulation, along with differences in portfolio composition, risk aversion and the impact on female Millennials.
Interesting Facts & Figures
317
trillion USD global wealth in 2018
42
million millionaires worldwide
 63100
USD average 2018 wealth per adult
 399
trillion USD global wealth by 2023


Basic Economics: A Citizen's Guide to the Economy

by Thomas Sowell

Why are some countries rich and others poor?

Basic Economics is a citizen's guide to economics-for those who want to understand how the economy works but have no interest in jargon or equations. Sowell reveals the general principles behind any kind of economy-capitalist, socialist, feudal, and so on. In readable language, he shows how to critique economic policies in terms of the incentives they create, rather than the goals they proclaim. With clear explanations of the entire field, from rent control and the rise and fall of businesses to the international balance of payments, this is the first book for anyone who wishes to understand how the economy functions.: https://www.goodreads.com/book/show/3023.Basic_Economics

Promise of Access: Technology, Inequality, and the Political Economy of Hope 

by Daniel Greene

Why simple technological solutions to complex social issues continue to appeal to politicians and professionals who should (and often do) know better.
Why do we keep trying to solve poverty with technology? What makes us feel that we need to learn to code--or else? In The Promise of Access, Daniel Greene argues that the problem of poverty became a problem of technology in order to manage the contradictions of a changing economy. Greene shows how the digital divide emerged as a policy problem and why simple technological solutions to complex social issues continue to appeal to politicians and professionals who should (and often do) know better.: https://www.goodreads.com/book/show/54609485-the-promise-of-access

The Journey of Humanity: The Origins of Wealth and Inequality

by Oded Galor

A landmark, radically uplifting account of our species' progress from one of the world's pre-eminent thinkers - with breakthrough insights into the power of diversity and our capacity to tackle climate change.
"Completely brilliant and utterly original...a book for our epoch." -- Jon Snow, former presenter Channel 4 News
"Astounding in scope and insight...provides the keys to the betterment of our species." -- Nouriel Roubini, author of Crisis Economics
"A masterful sweep through the human odyssey...if you liked Sapiens, you'll love this." -- Lewis Dartnell, author of Origins
In a captivating journey from the dawn of human existence to the present, world-renowned economist and thinker Oded Galor offers an intriguing solution to two of humanity's great mysteries.

Why are humans the only species to have escaped - only very recently - the subsistence trap, allowing us to enjoy a standard of living that vastly exceeds all others? And why have we progressed so unequally around the world, resulting in the great disparities between nations that exist today? Immense in scope and packed with astounding connections, Galor's gripping narrative explains how technology, population size, and adaptation led to a stunning "phase change" in the human story a mere two hundred years ago. But by tracing that same journey back in time and peeling away the layers of influence - colonialism, political institutions, societal structure, culture - he arrives also at an explanation of inequality's ultimate causes: those ancestral populations that enjoyed fruitful geographical characteristics and rich diversity were set on the path to prosperity, while those that lacked it were disadvantaged in ways still echoed today.
As we face ecological crisis across the globe, The Journey of Humanity is a book of urgent truths and enduring relevance, with lessons that are both hopeful and profound: gender equality, investment in education, and balancing diversity with social cohesion are the keys not only to our species' thriving, but to its survival. https://www.goodreads.com/en/book/show/58502650-the-journey-of-humanity




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