The truth about extreme global inequality - Opinion. The crisis of capital, the rise of the Occupy movement and the crash of Southern Europe have brought the problem of income inequality into mainstream consciousness in the West for the first time in many decades. Now everyone is talking about how the richest 1 percent have captured such a disproportionate share of wealth in their respective countries. This point came crashing home once again when an animated video, illustrating wealth disparities in the US, went viral last month. When an infographic catches the attention of tens of millions of internet users, you know it is hitting a nerve. But the global scale of inequality remains largely absent from this story. While this information is not new, it is still startling. But we wanted to do more than just illustrate the brutal extent of inequality; we also wanted to demonstrate that it has been getting progressively worse.
The video shows how this widening disparity operates between countries. Capital flows from poor to rich. Why the Rich Are Getting Richer. The U.S. economy appears to be coming apart at the seams. Unemployment remains at nearly ten percent, the highest level in almost 30 years; foreclosures have forced millions of Americans out of their homes; and real incomes have fallen faster and further than at any time since the Great Depression. Many of those laid off fear that the jobs they have lost -- the secure, often unionized, industrial jobs that provided wealth, security, and opportunity -- will never return.
They are probably right. And yet a curious thing has happened in the midst of all this misery. The wealthiest Americans, among them presumably the very titans of global finance whose misadventures brought about the financial meltdown, got richer. This is what the political scientists Jacob Hacker and Paul Pierson call the "winner-take-all economy. " Your subscription includes: Full website and iPad access Magazine issues New! Why Inequality Doesn't Matter. From the corridors of power in Washington to protest encampments on Wall Street, economic inequality is once again at the forefront of American public debate.
The combination of rising fortunes at the upper end of the income distribution and stagnation lower down has led to calls from the left for actions to redress the imbalance and punish what Theodore Roosevelt called "malefactors of great wealth. " If the immediate circumstances are new, however, battles over the significance and implications of inequality are not, and in this context we feel it useful to resurrect a skeptical perspective on the subject from a previous era. Irving Kristol's 1980 essay "Some Personal Reflections on Economic Well-Being and Income Distribution," originally prepared for the National Bureau of Economic Research and published in Reflections of a Neoconservative, is thus reprinted below. --The Editors Does it matter? Why? It can, however, be quite easily recognized as "ideological. " --Irving Kristol, 1980. Global finance: new thinking on regulating speculative capital markets - Google Books.
Inequality and U.S. Economic Hegemony. In my last two posts, I've discussed Beale's Law (see here and here). Beale's Law posits that pre-tax income inequality has an "inverse" relationship to top tax rates. Today's post explores the more complex reality underlying the increased economic inequality in the United States. The Decline of U.S. Economic Hegemony The political left has convinced itself that inequality of income and wealth is primarily a function of tax rates. The left clings to this narrative for a several reasons. During the second half of the 20th century, the United States had the world's largest, strongest and most stable economy. Fast forward to 2011. With that historical context, we can isolate on the major causes of U.S. economic inequality: - On a macro level, the U.S. has been dragged into intense economic competition with its major trading partners and developing economies.
. - On a micro level, the low-skilled U.S. worker has become far less valuable than his or her counterpart in the mid-20th century. Capitalism and the roots of inequality. By Fred Goldstein Published Feb 29, 2012 9:09 PM The Occupy Wall Street movement has made the inequality in capitalist society an issue that has put the rich on the defensive, at least in public. The growth of inequality in the last 30 years, and especially in the last decade, has been talked about for years in many quarters by economic analysts and even some politicians.
But before the Occupy Wall Street movement raised the slogan of the 1% versus the 99%, this condition went entirely unchallenged and was merely observed as an inevitable, undesirable (unless you were part of the 1%) fact of life. The inequalities that gave the OWS its battle cry are truly obscene, reminiscent of the gap between monarchs of old and the peasant serfs. On the one hand, 50 million people live on food stamps, 47 million live in official poverty, half the population is classified as poor [i], 30 million are unemployed or underemployed, and tens of millions of workers live on low wages. [ii] Jacob S. Economist Joseph Stiglitz on income inequality in the U.S. Kai Ryssdal: We've been making the rounds of deep-thinker economists this week. Paul Krugman Monday; John Taylor yesterday.
Trying to get a sense of how the economy might fix what ails it. For some, the big problem isn't the economy -- but what it's done. Rising inequality, and how fast the gap is growing. Not just the gap between the rich and the poor, but between the super-rich and everyone else. Today, another Nobel Prize-winning economist: Joseph Stiglitz. Joseph Stiglitz: Nice to be here. Ryssdal: So I hate to be the one to break this to you, but it's not like this is new news, right? Stiglitz: Well, it is new news in the following sense: Of course we've always had inequality, but the magnitude of our inequality has actually increased dramatically. Ryssdal: I'm going to quote yourself back to you here, as a way to sort of crystallize your thoughts on this: 'Growing inequality,' you say, 'is the flipside of something else -- shrinking opportunity.' Stiglitz: That's right.
The Price of Inequality by Joseph E. Stiglitz. Exit from comment view mode. Click to hide this space NEW YORK – America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?
Nowadays, these numbers show that the American dream is a myth. This is one of the reasons that America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. It would be one thing if the high incomes of those at the top were the result of greater contributions to society, but the Great Recession showed otherwise: even bankers who had led the global economy, as well as their own firms, to the brink of ruin, received outsize bonuses. Defenders of America’s inequality argue that the poor and those in the middle shouldn’t complain. Inequality and Discontent by Ralf Dahrendorf. Exit from comment view mode. Click to hide this space In the last two decades, the world as a whole has gotten richer, but, while some national economies have advanced sharply, others have fallen farther behind.
The increase in aggregate wealth has not led to the abolition, or even reduction, of poverty. Much the same is true within countries. Almost everywhere, globalization has produced both a new class of multi-millionaires and an underclass comprising people who are not just poor in the statistical sense of earning less than half the national average, but who are excluded from opportunities that are supposed to be open to all. Globalization’s dynamism has benefited many, but it has also increased inequality.
Is that necessarily a bad thing? But, while it is comfortable to live in the social-democratic world of Scandinavia, Germany, and other European countries, many of them have purchased their equality on credit from future generations. Inequality and its Discontents. As income inequality increased in the past quarter century in most parts of the world, it was strangely absent from mainstream economic discussions and publications. One would be hard-pressed, for example, to find many macroeconomic models that incorporated income or wealth inequality. Even in the run-up to and immediate aftermath of the 2007–2008 financial crisis, when income inequality returned to levels not seen since the Great Depression, it did not elicit much attention.
Since then, however, the growing disparity in incomes between the rich and poor has taken a place at the top of the public agenda. From Tunisia to Egypt, from the United States to Great Britain, inequality is cited as a chief cause of revolution, economic disintegration, and unrest. For the poor, the gap has been palpable. To continue reading, please log in. Don't have an account? Register Register now to get three articles each month. As a subscriber, you get unrestricted access to ForeignAffairs.com. A surprise viral hit: Income inequality, the movie. You may have seen this video recently, about wealth inequality. It's gone viral over the last week or so, which isn’t news in itself, of course. Stuff goes viral all the time. But usually it’s cute kids dressed as turtles, strange and hilarious music videos and music video spoofs. But wealth inequality? Not the sexiest of subjects. It's not a flashy video. So why does this video suddenly have more than 3 million hits?
I decided to work backwards and follow the viral chain. Brent’s theory is basically right. Duke Marketing professor Dan Ariely happens to be one of those professors. That actor, George Takei, who played Sulu on "Star Trek," told me he posted the video right after the sequester kicked into gear, because he'd been thinking a lot about how the across the board budget cuts might affect an already shrinking middle class.
“I thought that video captured it so visually, so powerfully,” Takei told me. Why Inequality Matters: The Housing Crisis, The Justice System & Capitalism | It Could Happen Here, Bruce Judson's Blog. Extreme economic inequality is among the most destructive forces in a society. As inequality grows, it undermines the effective functioning of the economy, the basic tenets of capitalism, and the foundations of democracy. Unfortunately, the housing crisis and now the housing settlement increasingly look like an example of how this mechanism works. One of the central characteristics of highly unequal societies is that two sets of laws develop: One set for the rich and powerful and one set for everyone else.
The more unequal societies become, the more easily they accept the unacceptable, and with each unrebuked violation, the powerful actors at the top of the society gain an ever greater sense of entitlement and an ever greater sense that the laws that govern everyone else don’t apply to them. As a result, their behavior becomes increasingly egregious. First, the robo-mortgage scandal was discovered. What is noteworthy, however, is that Coakley filed a civil suit. The Globalisation Paradox – Why Global Markets, States, and Democracy Can’t Coexist - 2011. Global Policy public lecture Date: Thursday 17 March 2011 Time: 5-6.15pm Venue: Sheikh Zayed Theatre, New Academic Building Speaker: Professor Dani Rodrik Chair: Professor David Held Managing globalisation requires that we get the balance between markets and regulation and between the global economy and the nation-state right.
A healthy globalisation is one that is not pushed too far. Esteemed economist Dani Rodrik examines the pressure points in the global economy and what can be done about them, and looks at the situation from its seventeenth-century origins through the milestones of the gold standard, the Bretton Woods Agreement, and the Washington Consensus, to the present day. Dani Rodrik is Rafiq Hariri Professor of International Political Economy at John F. The book The Globalization Paradox| is published by Oxford University Press this month. This event is free and open to all with no ticket required. Podcast. Capitalism Against Capitalists.