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Javier E

Worldly Philosophers Wanted - NYTimes.com - 1 views

www.nytimes.com/...rldly-philosophers-wanted.html

economics paradigm model crisis

shared by Javier E on 07 Nov 11 - No Cached
  • Keynes himself was driven by a powerful vision of capitalism. He believed it was the only system that could create prosperity, but it was also inherently unstable and so in need of constant reform. This vision caught the imagination of a generation that had experienced the Great Depression and World War II and helped drive policy for nearly half a century.
  • Friedrich Hayek and Milton Friedman, who envisioned an ideal economy involving isolated individuals bargaining with one another in free markets. Government, they contended, usually messes things up. Overtaking a Keynesianism that many found inadequate to the task of tackling the stagflation of the 1970s, this vision fueled neoliberal and free-market conservative agendas of governments around the world.
  • It took extensive government action to prevent another Great Depression, while the enormous rewards received by bankers at the heart of the meltdown have led many to ask whether unfettered capitalism produced an equitable distribution of wealth. We clearly need a new, alternative vision of capitalism. But thanks to decades of academic training in the “dentistry” approach to economics, today’s Keynes or Friedman is nowhere to be found.
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  • To refuse to discuss ideas such as types of capitalism deprives us of language with which to think about these problems. It makes it easier to stop thinking about what the economic system is for and in whose interests it is working.
  • Perhaps the protesters occupying Wall Street are not so misguided after all. The questions they raise — how do we deal with the local costs of global downturns? Is it fair that those who suffer the most from such downturns have their safety net cut, while those who generate the volatility are bailed out by the government? — are the same ones that a big-picture economic vision should address. If economists want to help create a better world, they first have to ask, and try to answer, the hard questions that can shape a new vision of capitalism’s potential.
Javier E

'The Half Has Never Been Told,' by Edward E. Baptist - NYTimes.com - 0 views

www.nytimes.com/...-told-by-edward-e-baptist.html

slavery capitalism us history exceptionalism

shared by Javier E on 04 Oct 14 - No Cached
  • the history of American capitalism has emerged as a thriving cottage industry. This new work portrays capitalism not as a given (something that “came in the first ships,” as the historian Carl Degler once wrote) but as a system that developed over time, has been constantly evolving and penetrates all aspects of society.
  • Slavery plays a crucial role in this literature. For decades, historians depicted the institution as unprofitable and on its way to extinction before the Civil War (a conflict that was therefore unnecessary).
  • cotton, the raw material of the early Industrial Revolution, was by far the most important commodity in 19th-century international trade and that capital accumulated through slave labor flowed into the coffers of Northern and British bankers, merchants and manufacturers. And far from being economically backward, slave owners pioneered advances in modern accounting and finance.
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  • The sellers of slaves, Baptist insists, were not generally paternalistic owners who fell on hard times and parted reluctantly with members of their metaphorical plantation “families,” but entrepreneurs who knew an opportunity for gain when they saw one. As for the slave traders — the middlemen — they excelled at maximizing profits. They not only emphasized the labor abilities of those for sale (reinforced by humiliating public inspections of their bodies), but appealed to buyers’ salacious fantasies. In the 1830s, the term “fancy girl” began to appear in slave-trade notices to describe young women who fetched high prices because of their physical attractiveness. “Slavery’s frontier,” Baptist writes, “was a white man’s sexual playground.”
  • After the legal importation of slaves from outside the country ended in 1808, the spread of slavery into the states bordering the Gulf of Mexico would not have been possible without the enormous uprooting of people from Maryland and Virginia. Almost one million slaves, Baptist estimates, were transported to the cotton fields from the Upper South in the decades before the Civil War.The domestic slave trade was highly organized and economically efficient, relying on such modern technologies as the steamboat, railroad and telegraph. For African-Americans, its results were devastating. Since buyers preferred young workers “with no attachments,” the separation of husbands from wives and parents from children was intrinsic to its operation, not, as many historians have claimed, a regrettable side effect.
  • The cotton kingdom that arose in the Deep South was incredibly brutal. Violence against Native Americans who originally owned the land, competing imperial powers like Spain and Britain and slave rebels solidified American control of the Gulf states. Violence, Baptist contends, explains the remarkable increase of labor productivity on cotton plantations. Without any technological innovations in cotton picking, output per hand rose dramatically between 1800 and 1860. Some economic historians have attributed this to incentives like money payments for good work and the opportunity to rise to skilled positions. Baptist rejects this explanation.
  • Slavery was essential to American development and, indeed, to the violent construction of the capitalist world in which we live.
  • Planters called their method of labor control the “pushing system.” Each slave was assigned a daily picking quota, which increased steadily over time. Baptist, who feels that historians too often employ circumlocutions that obscure the horrors of slavery, prefers to call it “the ‘whipping-machine’ system.” In fact, the word we should really use, he insists, is “torture.” To make slaves work harder and harder, planters utilized not only incessant beating but forms of discipline familiar in our own time — sexual humiliation, bodily mutilation, even waterboarding. In the cotton kingdom, “white people inflicted torture far more often than in almost any human society that ever existed.”
  • in the 1830s Southern banks developed new financial instruments, bonds with slaves as collateral, that enabled planters to borrow enormous amounts of money to acquire new land, and how lawmakers backed these bonds with the state’s credit. A speculative bubble ensued, and when it collapsed, taxpayers were left to foot the bill. But rather than bailing out Northern and European bondholders, several states simply defaulted on their debts. Many planters fled with their slaves to Texas, until 1845 an independent republic, to avoid creditors. “Honor,” a key element in Southern notions of masculinity, went only so far.
  • As the railroad opened new areas to cultivation and cotton output soared, slave owners saw themselves as a modern, successful part of the world capitalist economy. They claimed the right to bring their slaves into all the nation’s territories, and indeed into free states. These demands aroused intense opposition in the North, leading to Lincoln’s election, secession and civil war.
  • It is hardly a secret that slavery is deeply embedded in our nation’s history. But many Americans still see it as essentially a footnote, an exception to a dominant narrative of the expansion of liberty on this continent.
  • Where Baptist breaks new ground is in his emphasis on the centrality of the interstate trade in slaves to the regional and national economies and his treatment of the role of extreme violence in the workings of the slave system.
  • ArtsBeat Book Review Podcast: Walter Isaacson’s ‘The Innovators’
Javier E

Why the Rich Are So Much Richer by James Surowiecki | The New York Review of Books - 0 views

www.nybooks.com/...tz-why-rich-are-so-much-richer

inequality redistribution rent politics economics economic policy

shared by Javier E on 21 Sep 15 - No Cached
  • Historically, inequality was not something that academic economists, at least in the dominant neoclassical tradition, worried much about. Economics was about production and allocation, and the efficient use of scarce resources. It was about increasing the size of the pie, not figuring out how it should be divided.
  • “Of the tendencies that are harmful to sound economics, the most seductive, and…the most poisonous, is to focus on questions of distribution.”
  • Stiglitz argues, what we’re stuck with isn’t really capitalism at all, but rather an “ersatz” version of the system.
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  • Stiglitz has made the case that the rise in inequality in the US, far from being the natural outcome of market forces, has been profoundly shaped by “our policies and our politics,” with disastrous effects on society and the economy as a whole. In a recent report for the Roosevelt Institute called Rewriting the Rules, Stiglitz has laid out a detailed list of reforms that he argues will make it possible to create “an economy that works for everyone.”
  • his entire career in academia has been devoted to showing how markets cannot always be counted on to produce ideal results. In a series of enormously important papers, for which he would eventually win the Nobel Prize, Stiglitz showed how imperfections and asymmetries of information regularly lead markets to results that do not maximize welfare.
  • He also argued that this meant, at least in theory, that well-placed government interventions could help correct these market failures
  • in books like Globalization and Its Discontents (2002) he offered up a stinging critique of the way the US has tried to manage globalization, a critique that made him a cult hero in much of the developing world
  • Stiglitz has been one of the fiercest critics of the way the Eurozone has handled the Greek debt crisis, arguing that the so-called troika’s ideological commitment to austerity and its opposition to serious debt relief have deepened Greece’s economic woes and raised the prospect that that country could face “depression without end.”
  • For Stiglitz, the fight over Greece’s future isn’t just about the right policy. It’s also about “ideology and power.
  • there’s a good case to be made that the sheer amount of rent-seeking in the US economy has expanded over the years. The number of patents is vastly greater than it once was. Copyright terms have gotten longer. Occupational licensing rules (which protect professionals from competition) are far more common. Tepid antitrust enforcement has led to reduced competition in many industries
  • The Great Divide is somewhat fragmented and repetitive, but it has a clear thesis, namely that inequality in the US is not an unfortunate by-product of a well-functioning economy. Instead, the enormous riches at the top of the income ladder are largely the result of the ability of the one percent to manipulate markets and the political process to their own benefit.
  • Inequality obviously has no single definition. As Stiglitz writes:There are so many different parts to America’s inequality: the extremes of income and wealth at the top, the hollowing out of the middle, the increase of poverty at the bottom. Each has its own causes, and needs its own remedies.
  • his preoccupation here is primarily with why the rich today are so much richer than they used to be.
  • the main reason people at the top are so much richer these days than they once were (and so much richer than everyone else) is not that they own so much more capital: it’s that they get paid much more for their work than they once did, while everyone else gets paid about the same, or less
  • while incomes at the top have risen in countries around the world, nowhere have they risen faster than in the US.
  • One oft-heard justification of this phenomenon is that the rich get paid so much more because they are creating so much more value than they once did
  • as companies have gotten bigger, the potential value that CEOs can add has increased as well, driving their pay higher.
  • Stiglitz will have none of this. He sees the boom in the incomes of the one percent as largely the result of what economists call “rent-seeking.”
  • from the perspective of the economy as a whole, rent-seeking is a waste of time and energy. As Stiglitz puts it, the economy suffers when “more efforts go into ‘rent seeking’—getting a larger slice of the country’s economic pie—than into enlarging the size of the pie.”
  • The work of Piketty and his colleague Emmanuel Saez has been instrumental in documenting the rise of income inequality, not just in the US but around the world. Major economic institutions, like the IMF and the OECD, have published studies arguing that inequality, far from enhancing economic growth, actually damages it. And it’s now easy to find discussions of the subject in academic journals.
  • . After all, while pretax inequality is a problem in its own right, what’s most destructive is soaring posttax inequality. And it’s posttax inequality that most distinguishes the US from other developed countries
  • All this rent-seeking, Stiglitz argues, leaves certain industries, like finance and pharmaceuticals, and certain companies within those industries, with an outsized share of the rewards
  • within those companies, the rewards tend to be concentrated as well, thanks to what Stiglitz calls “abuses of corporate governance that lead CEOs to take a disproportionate share of corporate profits” (another form of rent-seeking)
  • This isn’t just bad in some abstract sense, Stiglitz suggests. It also hurts society and the economy
  • It alienates people from the system. And it makes the rich, who are obviously politically influential, less likely to support government investment in public goods (like education and infrastructure) because those goods have little impact on their lives.
  • More interestingly (and more contentiously), Stiglitz argues that inequality does serious damage to economic growth: the more unequal a country becomes, the slower it’s likely to grow. He argues that inequality hurts demand, because rich people consume less of their incomes. It leads to excessive debt, because people feel the need to borrow to make up for their stagnant incomes and keep up with the Joneses. And it promotes financial instability, as central banks try to make up for stagnant incomes by inflating bubbles, which eventually burst
  • exactly why inequality is bad for growth turns out to be hard to pin down—different studies often point to different culprits. And when you look at cross-country comparisons, it turns out to be difficult to prove that there’s a direct connection between inequality and the particular negative factors that Stiglitz cites
  • This doesn’t mean that, as conservative economists once insisted, inequality is good for economic growth. In fact, it’s clear that US-style inequality does not help economies grow faster, and that moving toward more equality will not do any damage
  • Similarly, Stiglitz’s relentless focus on rent-seeking as an explanation of just why the rich have gotten so much richer makes a messy, complicated problem simpler than it is
  • When we talk about the one percent, we’re talking about two groups of people above all: corporate executives and what are called “financial professionals” (these include people who work for banks and the like, but also money managers, financial advisers, and so on)
  • The emblematic figures here are corporate CEOs, whose pay rose 876 percent between 1978 and 2012, and hedge fund managers, some of whom now routinely earn billions of dollars a year
  • Shareholders, meanwhile, had fewer rights and were less active. Since then, we’ve seen a host of reforms that have given shareholders more power and made boards more diverse and independent. If CEO compensation were primarily the result of bad corporate governance, these changes should have had at least some effect. They haven’t. In fact, CEO pay has continued to rise at a brisk rate
  • So what’s really going on? Something much simpler: asset managers are just managing much more money than they used to, because there’s much more capital in the markets than there once was
  • that means that an asset manager today can get paid far better than an asset manager was twenty years ago, even without doing a better job.
  • there’s no convincing evidence that CEOs are any better, in relative terms, than they once were, and plenty of evidence that they are paid more than they need to be, in view of their performance. Similarly, asset managers haven’t gotten better at beating the market.
  • More important, probably, has been the rise of ideological assumptions about the indispensability of CEOs, and changes in social norms that made it seem like executives should take whatever they could get.
  • It actually has important consequences for thinking about how we can best deal with inequality. Strategies for reducing inequality can be generally put into two categories: those that try to improve the pretax distribution of income (this is sometimes called, clunkily, predistribution) and those that use taxes and transfers to change the post-tax distribution of income
  • he has high hopes that better rules, designed to curb rent-seeking, will have a meaningful impact on the pretax distribution of income. Among other things, he wants much tighter regulation of the financial sector
  • t it would be surprising if these rules did all that much to shrink the income of much of the one percent, precisely because improvements in corporate governance and asset managers’ transparency are likely to have a limited effect on CEO salaries and money managers’ compensation.
  • Most importantly, the financial industry is now a much bigger part of the US economy than it was in the 1970s, and for Stiglitz, finance profits are, in large part, the result of what he calls “predatory rent-seeking activities,” including the exploitation of uninformed borrowers and investors, the gaming of regulatory schemes, and the taking of risks for which financial institutions don’t bear the full cost (because the government will bail them out if things go wrong).
  • The redistributive policies Stiglitz advocates look pretty much like what you’d expect. On the tax front, he wants to raise taxes on the highest earners and on capital gains, institute a carbon tax and a financial transactions tax, and cut corporate subsidies
  • It’s also about investing. As he puts it, “If we spent more on education, health, and infrastructure, we would strengthen our economy, now and in the future.” So he wants more investment in schools, infrastructure, and basic research.
  • The core insight of Stiglitz’s research has been that, left on their own, markets are not perfect, and that smart policy can nudge them in better directions.
  • Of course, the political challenge in doing any of this (let alone all of it) is immense, in part because inequality makes it harder to fix inequality. And even for progressives, the very familiarity of the tax-and-transfer agenda may make it seem less appealing.
  • the policies that Stiglitz is calling for are, in their essence, not much different from the policies that shaped the US in the postwar era: high marginal tax rates on the rich and meaningful investment in public infrastructure, education, and technology. Yet there’s a reason people have never stopped pushing for those policies: they worked
Javier E

How Obama Saved Capitalism and Lost the Midterms - NYTimes.com - 0 views

opinionator.blogs.nytimes.com/...pitalism-and-lost-the-midterms

Obama politics US capitalism

shared by Javier E on 04 Nov 10 - No Cached
  • For no matter your view of President Obama, he effectively saved capitalism. And for that, he paid a terrible political price. Suppose you had $100,000 to invest on the day Barack Obama was inaugurated
  • As of election day, Nov. 2, 2010, your $100,000 was worth about $177,000 if invested strictly in the NASDAQ average for the entirety of the Obama administration, and $148,000 if bet on the Standard & Poors 500 major companies. This works out to returns of 77 percent and 48 percent.
Javier E

For Stanford Class of '94, a Gender Gap More Powerful Than the Internet - NYTimes.com - 0 views

www.nytimes.com/...gender-gaps-stanford-94.html

stanford gender entrepreneur silicon valley sexism boom internet

shared by Javier E on 23 Dec 14 - No Cached
  • “The Internet was supposed to be the great equalizer,” said Gina Bianchini, the woman who had appeared on the cover of Fortune. “So why hasn’t our generation of women moved the needle?”
  • identity politics pushed many people into homogeneous groups; Scott Walker, one of the only African-Americans in the class to try founding a start-up, said in an interview that he regretted spending so much time at his all-black fraternity, which took him away from the white friends from freshman year who went on to found and then invest in technology companies.
  • But there were still many hoops women had greater trouble jumping through — components that had to be custom-built, capital that needed to be secured from a small number of mostly male-run venture firms.
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  • But with the web, “all of the sudden we began moving to a market where first mover advantage became enormous,” he said. Connection speeds were growing faster, Americans were starting to shop online, and multiplying e-commerce sites fought gladiatorial battles to control most every area of spending.
  • If the dawn of the start-up era meant that consumer-oriented ideas were becoming more important than proprietary technology, he asked himself aloud, shouldn’t more women have flooded in?
  • “The notion that diversity in an early team is important or good is completely wrong,” he added. “The more diverse the early group, the harder it is for people to find common ground.”
  • David Sacks, on the other hand, was unmarried and unencumbered, and in 1999 he left politics, his law degree and a job at the consulting firm McKinsey & Company to join his Stanford Review friends at a technology start-up, because of “the desire to live on the edge, to fight an epic battle, to experience in a very diluted way what previous generations must have felt as they prepared to go to war,” he wrote at the time. For his generation, he wrote, “instead of violence, unbridled capitalism has become the preferred vehicle for channeling their energy, intellect and aggression.”
  • his lack of social grace became an asset, according to Mr. Thiel and other former colleagues. He did not waste time on meetings that seemed pointless, and he bluntly insisted that the engineers whittle an eight-page PayPal registration process down to one.
  • But those debates did a great deal for Mr. Sacks. After graduation, he and Mr. Thiel published “The Diversity Myth,” a book-length critique of Stanford’s efforts. Within a few more years, he, Mr. Thiel, Mr. Rabois and others had transformed themselves into a close-knit network of technology entrepreneurs — innovators who created billion-dollar business after billion-dollar business, using the ideas, ethos and group bonds they had honed at The Stanford Review.
  • he and Mr. Thiel now had a setting in which to try out their ideas about diversity and meritocracy. “In the start-up crucible, performing is all that matters,” Mr. Sacks wrote about that time. He wanted to give all job applicants tests of cognitive ability, according to his colleague Keith Rabois, and when the company searched for a new chief executive, one of the requirements was an I.Q. of 160 — genius level.
  • intentionally or not, he stated something many people quietly believed: The same thing that made Silicon Valley phenomenally successful also kept it homogeneous, and start-ups had an almost inevitable like-with-like quality.
  • The kind of common ground shared by the early PayPal leaders “is always the critical ingredient on the founding teams,” Mr. Thiel said in an interview. “You have these great friendships that were built over some period of time. Silicon Valley flows out of deep relationships that people have built. That’s the structural reality.”
  • Another woman from the class of 1994 was quoted in the Fortune article: Trae Vassallo, who was Traci Neist when she built the taco-eating machine all those years ago, attended Stanford Business School with Ms. Herrin and Ms. Bianchini, co-founded a mobile device company, and then joined Kleiner Perkins, a premier venture capital firm.
  • The success of the struggle to create PayPal, and its eventual sale price, gave the men a new power: the knowledge to create new companies and the ability to fund their own and one another’s. Billion-dollar start-ups had been rare. But in the next few years, the so-called PayPal Mafia went on to found seven companies that reached blockbuster scale, including YouTube, LinkedIn, Yelp and a business-messaging service called Yammer, founded by Mr. Sacks and sold a few years later to Microsoft for $1.2 billion.
  • Since 1999, the number of female partners in venture capital has declined by nearly half, from 10 percent to 6 percent, according to a recent Babson College study.
  • in early 2014, Ms. Vassallo was quietly let go. The firm was downsizing over all, especially in green technology, one of Ms. Vassallo’s specialties, and men were shown the exit as well. But in interviews, several former colleagues said it was far from an easy environment for women, with all-male outings and fierce internal competition for who got which board seat — meaning internal credit — for each company, not to mention a sexual discrimination lawsuit filed by a female junior partner, scheduled for trial in early 2015.
  • They also said that Ms. Vassallo, earnest and so technical that she started a robotics program at a local girls’ school, had not been as forceful, or as adept a politician, as some of her male peers.
  • Less than 10 years after graduation, he and Mr. Thiel had been transformed from outcasts into favorites with a reputation for seeing the future. Far from the only libertarians in Silicon Valley, they had finally found an environment that meshed perfectly with their desire for unfettered competition and freedom from constraints. The money they made seemed like vindication of their ideas.
  • As classmates started conversations with greetings like “How’s your fund?” some of those who did not work in technology joked that they felt like chumps. The Stanford campus had gone computer science crazy, with the majority of students taking programming courses. A career in technology didn’t feel like a risk anymore — it felt like a wise bet, said Jennifer Widom, a programming professor turned engineering dean. Computer science “is a degree that guarantees you a future, regardless of what form you decide to take it in,” she said.
  • The nature of start-ups was shifting again, too, this time largely in women’s favor. From servers onward, many components could be inexpensively licensed instead of custom-built. Founders could turn to a multiplying array of investment sources, meaning they no longer had to be supplicants at a handful of male-run venture firms. The promise that the Internet would be a leveler was finally becoming a bit more fulfilled.
  • The frenzy had an unlikely effect on the some members of the Stanford Review group: They were becoming cheerleaders for women in technology, not for ideological reasons, but for market-based ones.
  • Like many others, he was finding that the biggest obstacle to starting new companies was a dearth of technical talent so severe they worried it would hinder innovation.
  • The real surprise of the reunion weekend, however, was that more of the women in the class of ’94 were finally becoming entrepreneurs, later and on a smaller scale than many of the men, but founders nonetheless.
  • The rhythms of their lives and the technology industry were finally clicking: Companies were becoming easier to start just as their children were becoming more self-sufficient, and they did not want to miss another chance.
jlessner

In Ellen Pao's Suit vs. Kleiner Perkins, World of Venture Capital Is Under Microscope -... - 0 views

www.nytimes.com/...pital-is-under-microscope.html

venture capital culture

shared by jlessner on 07 Mar 15 - No Cached
  • Ms. Pao contends she was discriminated against.
  • What is really under examination in this trial is the question of why there are so few women in leadership positions in Silicon Valley. At stake is any hope that the tech world can claim to be a progressive place, or even a fair one.
  • Were women simply not interested in becoming venture capitalists, “or did the venture capital world fight them off?”
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  • On the other hand, he said that Ms. Pao had “a female chip on her shoulder,” according to a report by an independent investigator hired by Kleiner.
  • Yet even allowing for the fact that all the witnesses so far were called by Ms. Pao’s team, documents and testimony in the trial show a firm whose attitudes derived from an earlier era. When Mr. Hirschfeld asked for a copy of Kleiner’s manual on discrimination, it could not be found.
  • Sheryl Sandberg, wrote a popular book telling women to “lean in,” by, for instance, seizing a seat at the table during meetings instead of hanging back at the edges.
  • “I feared somewhat for her safety,” Mr. Lane testified. Later, he underscored his alarm, adding: “This could have gone in a different direction. He could have pushed his way into the room.”
  • The men and women sitting in judgment of all this behavior look nothing like what Silicon Valley would consider a jury of its peers. Instead of being young, white and male, with a sprinkling of Asians — what critics say is the furthest limit in Silicon Valley in terms of diversity — the jury is half female and ethnically diverse. Testimony ended abruptly Thursday afternoon when one of the jurors had a family emergency.
Javier E

Inequality Is Not Inevitable - NYTimes.com - 0 views

opinionator.blogs.nytimes.com/...inequality-is-not-inevitable

inequality ideology corruption politics interests

shared by Javier E on 30 Jun 14 - No Cached
  • The Great Divide, a series in The New York Times for which I have served as moderator, has also presented a wide range of examples that undermine the notion that there are any truly fundamental laws of capitalism. The dynamics of the imperial capitalism of the 19th century needn’t apply in the democracies of the 21st.
  • We don’t need to have this much inequality in America.
  • Our current brand of capitalism is an ersatz capitalism.
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  • For proof of this go back to our response to the Great Recession, where we socialized losses, even as we privatized gains. Perfect competition should drive profits to zero, at least theoretically, but we have monopolies and oligopolies making persistently high profits. C.E.O.s enjoy incomes that are on average 295 times that of the typical worker, a much higher ratio than in the past, without any evidence of a proportionate increase in productivity.
  • f it is not the inexorable laws of economics that have led to America’s great divide, what is it? The straightforward answer: our policies and our politics.
  • Sweden, Finland and Norway have all succeeded in having about as much or faster growth in per capita incomes than the United States and with far greater equality.
  • why has America chosen these inequality-enhancing policies? Part of the answer is that as World War II faded into memory, so too did the solidarity it had engendered.
  • As America triumphed in the Cold War, there didn’t seem to be a viable competitor to our economic model. Without this international competition, we no longer had to show that our system could
  • Some drew the wrong lesson from the collapse of the Soviet system. The pendulum swung from much too much government there to much too little here.
  • Corporate interests argued for getting rid of regulations
  • But this ideology was hypocritical. The bankers, among the strongest advocates of laissez-faire economics, were only too willing to accept hundreds of billions of dollars from the government
  • The American political system is overrun by money. Economic inequality translates into political inequality, and political inequality yields increasing economic inequality
  • Economic and geographic segregation have immunized those at the top from the problems of those down below. Like the kings of yore, they have come to perceive their privileged positions essentially as a natural right.
  • The true test of an economy is not how much wealth its princes can accumulate in tax havens, but how well off the typical citizen is — even more so in America where our self-image is rooted in our claim to be the great middle-class society. But median incomes are lower than they were a quarter-century ago.
  • With almost a quarter of American children younger than 5 living in poverty, and with America doing so little for its poor, the deprivations of one generation are being visited upon the next
  • why is America one of the advanced countries where the life prospects of the young are most sharply determined by the income and education of their parents?
  • Those with only a high school diploma have seen their incomes decline by 13 percent over the past 35 years.
  • mass incarceration has come to define America — a country, it bears repeating, with about 5 percent of the world’s population but around a fourth of the world’s prisoners.
  • access to health care is among the most universally accepted rights, at least in the advanced countries. America, despite the implementation of the Affordable Care Act, is the exception. It has become a country with great divides in access to health care, life expectancy and health status.
  • Obamacare’s objective — to ensure that all Americans have access to health care — has been stymied: 24 states have not implemented the expanded Medicaid program, which was the means by which Obamacare was supposed to deliver on its promise to some of the poorest.
  • The problem of inequality is not so much a matter of technical economics. It’s really a problem of practical politics. Ensuring that those at the top pay their fair share of taxes — ending the special privileges of speculators, corporations and the rich — is both pragmatic and fair
  • We are not embracing a politics of envy if we reverse a politics of greed.
  • Inequality is not just about the top marginal tax rate but also about our children’s access to food and the right to justice for all. If we spent more on education, health and infrastructure, we would strengthen our economy, now and in the future.
  • We have located the underlying source of the problem: political inequities and policies that have commodified and corrupted our democracy.
Javier E

The Ambition Explosion - NYTimes.com - 0 views

www.nytimes.com/...ks-the-ambition-explosion.html

capitalism contradiction cultural morality ambition china

shared by Javier E on 28 Nov 14 - No Cached
  • The real contradiction of capitalism is that it arouses enormous ambition, but it doesn’t help you define where you should focus it. It doesn’t define an end to which you should devote your life. It nurtures the illusion that career and economic success can lead to fulfillment, which is the central illusion of our time.
  • Capitalism on its own breeds people who are vaguely aware that they are not living the spiritually richest life, who are ill-equipped to know how they might do so, who don’t have the time to do so, and who, when they go off to find fulfillment, end up devoting themselves to scattershot causes and light religions.
  • To survive, capitalism needs to be embedded in a moral culture that sits in tension with it, and provides a scale of values based on moral and not monetary grounds.
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  • The personal ambition it arouses is always threatening to blot out the counterculture it requires.
  • many Chinese sensed that there was a spiritual void at the core of their society. They sought to fill it any way they could, with revived Confucianism, nationalism, lectures by the Harvard philosopher Michael Sandel and Christianity.
Javier E

Will Economics Finally Get Its Paradigm Shift? - HBR - 0 views

hbr.org/...finally-get-its-paradigm-shift

economics paradigm economic crisis social science

shared by Javier E on 05 Apr 15 - No Cached
  • A Kuhnian paradigm is a set of assumptions that allows scientists in a particular field to avoid time-wasting arguments over the basics and spend their days solving small but useful puzzles
  • Scientific assumptions are never perfect mirrors of reality, though (“all models are wrong; but some are useful“). When evidence piles up that contradicts the paradigm, a science sometimes needs to go through the painful process of a paradigm shift.
  • Financial economics adopted its own, narrower paradigm, in which the starting point was that the prices prevailing on financial markets were more or less correct (a belief that in those days went under the name Efficient Market Hypothesis
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  • Just as Kuhn was writing this, economics was finally settling into what looked like a scientific paradigm, in which mathematical models built around rational agents trying to maximize something called utility were presumed capable of answering all the questions that needed to be answered
  • in the 1960s and 1970s. The most famous assertion of the then-reigning hubris of financial economics, Michael Jensen’s “I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis,” was followed a few sentences later by this: Yet, in a manner remarkably similar to that described by Thomas Kuhn in his book, The Structure of Scientific Revolutions, we seem to be entering a stage where widely scattered and as yet incohesive evidence is arising which seems to be inconsistent with the theory.
  • That evidence has just kept on piling up in finance
  • On the theoretical side, there seems to be much less consensus than there was 50 years ago about what rational behavior under uncertainty even looks like.
  • while mainstream academic economists have become more open to alternative approaches and willing to acknowledge gaps in their knowledge (see my interview from a couple weeks ago with Harvard’s John Campbell, or the generally friendly reception among mainstream economists to Thomas Piketty’s jeremiads against mainstream economics in Capital in the Twenty-First Century), they haven’t really changed how they go about their work.
redavistinnell

The Death Penalty Election: A Louisiana Parish Is Ground Zero for the Capital Punishmen... - 0 views

www.thedailybeast.com/...capital-punishment-debate.html

death penalty election louisiana parish ground capital punishment

shared by redavistinnell on 26 Oct 15 - No Cached
  • The Death Penalty Election: A Louisiana Parish Is Ground Zero for the Capital Punishment Debate
  • For a county of around 250,000 residents, Caddo Parish, Louisiana, has attracted an outsize share of attention of late: long-form articles in The New Yorker and the New York Times, a Super-PAC funded by billionaire George Soros, and Saturday’s closely watched election for the office of district attorney, now headed for a runoff.
  • “Our community does not need any more controversy,” Cox told the Shreveport Times, when he decided not to run.
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  • There’s the murder conviction of Rodricus Crawford, which Cox secured despite thin evidence and racist appeals to the all-white jury.
  • Then there’s the case of Glen Ford, another black man sent to death row by Caddo Parish. He spent 30 years on death row, much of it in solitary confinement, before a court declared him innocent in 2014. Ford died of lung cancer within a year of being released
  • At the same time, it’s possible that Cox didn’t run for office because he has his sights set higher.
  • He’s justified the death penalty as an expression of “revenge;” he’s said “we need to kill more people;” he’s said of racism, “I don’t get this discrimination business, I really don’t.” And he has a portrait of a Confederate general turned Ku Klux Klan leader hanging in his office.
  • “George Soros reflects an anti-American sentiment that does not reflect the values of Caddo Parish,” said the Republican chairman, Louis Avallone.
  •  “My campaign knows nothing about where the funding for this PAC comes from,” he said. “Just like my campaign cannot force a PAC to stop a negative ad, my campaign cannot stop a positive ad.”
kirkpatrickry

The strange death of Indian Communism | The Indian Express - 0 views

indianexpress.com/...ange-death-of-indian-communism

communism politics history

shared by kirkpatrickry on 18 Jan 16 - No Cached
  • Few can imagine how unlikely this is. From the Fifties to the Seventies, there was serious debate on how imminent the Communist Revolution was in India. The future was red. Now of course no one takes Communists or even Communism seriously. The Soviet Union collapsed without anyone firing a shot. Leninism proved to be a delusion which could not survive the 20th century.
  • Why did Communism fail so abysmally? Marx had a fascination with Capitalism and admired its immense productive potential. He and Engels advertised the advent of globalisation in their youthful Communist Manifesto. His ideal of Socialism was timed for well after the maturity of Capitalism.
  • Communism’s luck continued and Capitalism suffered the Great Depression. It looked like the Revolution was imminent. Lenin had conflated Imperialism and Capitalism. This enhanced the appeal of Communism for the colonies. Stalin consigned millions to concentration camps but the idea that the Soviet Union was the hope of the world remained strong. Victory in the Second World War and then taking over Eastern European countries enhanced the reputation of the Soviet Union. China had its own Revolution which confirmed Lenin’s wisdom that the Communist revolution would start in the backward countries, not developed ones as Marx may have thought. India was supposed to be the next ripe fruit to fall. The CPI had blotted its copybook by supporting the British rulers during the war, as for them the fight was for defence of the Soviet Union. They denounced independence as illusory and launched a premature Revolution in Telangana. Stal
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  • n thought India was not ready for a Revolution. So the Communists began to play the democracy game under orders waiting for the signal to revolt.
Javier E

Looking Back at the Economic Crash of 2008 - The New York Times - 0 views

www.nytimes.com/...adam-tooze-crashed.html

crash financial crisis great recession populism crisis trump

shared by Javier E on 13 Aug 18 - No Cached
  • e has persisted and produced an intelligent explanation of the mechanisms that produced the crisis and the response to it. We continue to live with the consequences of both today.
  • By 2007, many were warning about a dangerous fragility in the system. But they worried about America’s gargantuan government deficits and debt
  • it was not a Chinese sell-off of American debt that triggered the crash, but rather, as Tooze writes, a problem “fully native to Western capitalism — a meltdown on Wall Street driven by toxic securitized subprime mortgages.”
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  • Tooze calls it a problem in “Western capitalism” intentionally. It was not just an American problem.
  • One of the great strengths of Tooze’s book is to demonstrate the deeply intertwined nature of the European and American financial systems.
  • In 2006, European banks generated a third of America’s riskiest privately issued mortgage-backed securities. By 2007, two-thirds of commercial paper issued was sponsored by a European financial entity.
  • “Between 2001 and 2006,” Tooze writes, “Greece, Finland, Sweden, Belgium, Denmark, the U.K., France, Ireland and Spain all experienced real estate booms more severe than those that energized the United States.”
  • while the crisis may have been caused in both America and Europe, it was solved largely by Washington. Partly, this reflected the post-Cold War financial system, in which the dollar had become the hyperdominant global currency and, as a result, the Federal Reserve had truly become the world’s central bank.
  • therein lies the unique feature of the crash of 2008. Unlike that of 1929, it was not followed by a Great Depression. It was not so much the crisis as the rescue and its economic, political and social consequences that mattered most
  • The Fed acted aggressively and also in highly ingenious ways, becoming a guarantor of last resort to the battered balance sheets of American but also European banks. About half the liquidity support the Fed provided during the crisis went to European banks
  • Before the rescue and even in its early stages, the global economy was falling into a bottomless abyss. In the first months after the panic on Wall Street, world trade and industrial production fell at least as fast as they did during the first months of the Great Depression. Global capital flows declined by a staggering 90 percent
  • The Federal Reserve, with some assistance from other central banks, arrested this decline. The Obama fiscal stimulus also helped to break the fall.
  • China, with its own gigantic stimulus, created an oasis of growth in an otherwise stagnant global economy.
  • The rescue worked better than almost anyone imagined
  • The governing elite did not anticipate the crisis — as few elites have over hundreds of years of capitalism. But once it happened, many of them — particularly in America — acted quickly and intelligently, and as a result another Great Depression was averted. The system worked
  • But Tooze also convincingly shows that the European Central Bank mismanaged things from the start
  • On the left, the entire episode discredited the market-friendly policies of Tony Blair, Bill Clinton and Gerhard Schroeder, disheartening the center-left and emboldening those who want more government intervention in the economy
  • On the right, it became a rallying cry against bailouts and the Fed, buoying an imaginary free-market alternative to government intervention. Unlike in the 1930s, when the libertarian strategy was tried and only deepened the Depression, in the last 10 years it has been possible for the right to argue against the bailouts, secure in the knowledge that their proposed policies will never actually be implemented.
  • The crash brought together many forces that were around anyway — stagnant wages, widening inequality, anger about immigration and, above all, a deep distrust of elites and government — and supercharged them. The result has been a wave of nationalism, protectionism and populism in the West today.
  • confirmation of this can be found in the one major Western country that did not have a financial crisis and has little populism in its wake — Canada.
  • No government handled the crisis better than that of the United States, which acted in a surprisingly bipartisan fashion in late 2008 and almost seamlessly coordinated policy between the outgoing Bush and incoming Obama administrations. And yet, the backlash to the bailouts has produced the most consequential result in the United States.
  • experts are considering the new vulnerabilities of a global economy
  • we are confronting a quite different problem — an erratic, unpredictable United States led by a president who seems inclined to redo or even scrap the basic architecture of the system that America has painstakingly built since 1945. How will the world handle this unexpected development? What will be its outcome? This is the current crisis that we will live through and that historians will soon analyze.
runlai_jiang

Jerusalem embassy: Abbas says Trump plan 'slap of the century' - BBC News - 0 views

www.bbc.com/...world-us-canada-42684082

shared by runlai_jiang on 15 Jan 18 - No Cached
  • Jerusalem embassy: Abbas says Trump plan 'slap of the century'
  • Speaking earlier this month, Mr Trump insisted recognition of Jerusalem took the hugely divisive issue "off the table" for new peace talks. Palestinians argue the move shows the US cannot be a neutral broker.
  • Mr Abbas had already rejected Mr Trump's proposals last month, after the UN General Assembly voted to express regret at US recognition of Jerusalem.
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  • "What would you want, if Jerusalem were to be lost?" he asked rhetorically, according to the Jerusalem Post. "Would you want to make a state with Abu Dis as its capital?"
  • Israel claims the whole of the city as its capital. The Palestinians want East Jerusalem, occupied by Israel in the 1967 Middle East war, to be the capital of a future Palestinian state.
manhefnawi

Madrid: City of The Enlightenment | History Today - 0 views

www.historytoday.com/...madrid-city-enlightenment

Enlightenment Spain Architecture Culture

shared by manhefnawi on 21 May 18 - No Cached
  • In 1785 Tomas Lopez, Royal Geographer to King Charles III and Spain's foremost cartographer, published his Piano Geometrico de Madrid
  • That Lopez should include on his map uncompleted structures is not surprising. Since the accession of Charles III (1759-88) to the throne of Spain and its extensive and increasingly prosperous overseas empire, much of Madrid had been turned into a dusty construction site.
  • The Enlightenment was as varied and multifaceted in Spain as in most other European societies, the ideas and programmes of enlightened reformers moulded by differing social and cultural conditions
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  • Despite its demographic growth, it remained throughout the old regime period a court city, dominated by the king's household and government and their interests, as well as by the courtiers and other nobles and commoners attracted by the prospect of jobs, pensions, good marriages and high status
  • The threat this implied to order inspired some of the most significant of the reforms undertaken under Charles III
  • Not surprisingly, when Charles III -who had lived in Italy since 1731 as Duke of Parma and, from 1734 to 1759, as the first Bourbon king of Naples - arrived in his capital for the first time since he left it as a young boy, he was depressed by almost all that he saw. His determination to impose change provided a major impetus for the coming reforms
  • To Charles III and his ministers they seemed unworthy of the greatness of the Spanish imperial monarchy. Equally significant, they seemed to reinforce too strongly the presence of the church in an era in which enlightened thought set out to undermine baroque religiosity and clerical influence in secular life
  • Madrid had only been Spain's capital since 1561, when Philip II made what had been a town of purely secondary importance the political centre of his empire
  • But the characteristics which most typified Enlightenment reform in Spain were - apart from the heavy the arts as means of improvement -the impetus it received from Charles III and most of his ministers and the significant role played by some noblemen
  • Only during the reaction of the 1790s against the excesses of the French Revolution did most progressive thinkers find themselves effectively hedged in by the ministers and inquisitors of the new king, Charles IV (1788-1808). Under Charles HI, however, the king and his family, his ministers, sundry aristocrats in Madrid and elsewhere, many clerics and royal officials and some men and women of the professional and commercial middle classes harboured reformist ideas and patronised broadly enlightened artists and writers
  • This culture of the wealthy, enlightened elite, so heavily gallicised and secular-minded, was increasingly alienated from the ordinary people of Madrid, as well as the more traditionalist middle and upper ranks who chose to play no role in enlightened society
  • High food prices and the shortage of necessities could easily spark riots, as they did in the spring of 1766. The so-called Esquilache uprising, named after the Sicilian-born minister who was a principal target of the crowd's anger, spread from Madrid to many cities across Spain
  • The Manzanares was canalised and the Municipal Charity Committee, devised by Armona, was so successful that Charles III ordered similar bodies to be set up elsewhere. Free primary schools, essentially vocational, were established in each neighbourhood
  • Charles III, who had added numerous important buildings to Naples and nearby towns during his years as king there, sought from his first months in Spain to enhance his new capital
  • Travellers describing the capital in the 1770s and 1780s were impressed by its well lit, clean and impeccably paved streets; by the Paseo del Prado, which became one of Europe's finest thoroughfares; and by most of the structures Charles III had had built
Javier E

Meritocracy Harms Everyone - The Atlantic - 0 views

www.theatlantic.com/...594760

meritocracy despair happiness inequality elites success work students history culture

shared by Javier E on 26 Aug 19 - No Cached
  • the dominant causes of this skew toward wealth can be traced to meritocracy.
  • On average, children whose parents make more than $200,000 a year score about 250 points higher on the SAT than children whose parents make $40,000 to $60,000
  • Only about one in 200 children from the poorest third of households achieves SAT scores at Yale’s median
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  • Meanwhile, the top banks and law firms, along with other high-paying employers, recruit almost exclusively from a few elite colleges.
  • Hardworking outsiders no longer enjoy genuine opportunity. According to one study, only one out of every 100 children born into the poorest fifth of households, and fewer than one out of every 50 children born into the middle fifth, will join the top 5 percent
  • Absolute economic mobility is also declining—the odds that a middle-class child will outearn his parents have fallen by more than half since mid-century—and the drop is greater among the middle class than among the poor.
  • because meritocratic inequality does not in fact serve anyone well, escaping meritocracy’s trap would benefit virtually everyone.
  • Nearly three-fifths of Republicans believe that colleges and universities are bad for America
  • Outrage at nepotism and other disgraceful forms of elite advantage-taking implicitly valorizes meritocratic ideals. Yet meritocracy itself is the bigger problem, and it is crippling the American dream. Meritocracy has created a competition that, even when everyone plays by the rules, only the rich can win.
  • Even meritocracy’s beneficiaries now suffer on account of its demands. It ensnares the rich just as surely as it excludes the rest, as those who manage to claw their way to the top must work with crushing intensity, ruthlessly exploiting their expensive education in order to extract a return.
  • But what, exactly, have the rich won
  • Meritocracy frames this exclusion as a failure to measure up, adding a moral insult to economic injury.
  • Wealthy students show higher rates of drug and alcohol abuse than poor students do. They also suffer depression and anxiety at rates as much as triple those of their age peers throughout the country
  • Where aristocratic children once reveled in their privilege, meritocratic children now calculate their future—they plan and they scheme, through rituals of stage-managed self-presentation, in familiar rhythms of ambition, hope, and worry.
  • Elite middle and high schools now commonly require three to five hours of homework a night; epidemiologists at the Centers for Disease Control and Prevention have warned of schoolwork-induced sleep deprivation.
  • education—whose benefits are concentrated in the extravagantly trained children of rich parents—must become open and inclusive. Private schools and universities should lose their tax-exempt status unless at least half of their students come from families in the bottom two-thirds of the income distribution
  • A recent study of a Silicon Valley high school found that 54 percent of students displayed moderate to severe symptoms of depression and 80 percent displayed moderate to severe symptoms of anxiety.
  • Elite universities that just a few decades ago accepted 30 percent of their applicants now accept less than 10 percent.
  • Parents—sometimes reluctantly, but feeling that they have no alternative—sign their children up for an education dominated not by experiments and play but by the accumulation of the training and skills, or human capital, needed to be admitted to an elite college and, eventually, to secure an elite job
  • A person whose wealth and status depend on her human capital simply cannot afford to consult her own interests or passions in choosing her job. Instead, she must approach work as an opportunity to extract value from her human capital, especially if she wants an income sufficient to buy her children the type of schooling that secured her own eliteness. She must devote herself to a narrowly restricted class of high-paying jobs, concentrated in finance, management, law, and medicine
  • In 1962, when many elite lawyers earned roughly a third of what they do today, the American Bar Association could confidently declare, “There are … approximately 1,300 fee-earning hours per year” available to the normal lawyer.
  • In 2000, by contrast, a major law firm pronounced with equal confidence that a quota of 2,400 billable hours, “if properly managed,” was “not unreasonable,” which is a euphemism for “necessary for having a hope of making partner.” Because not all the hours a lawyer works are billable, billing 2,400 hours could easily require working from 8 a.m. until 8 p.m. six days a week, every week of the year, without vacation or sick days
  • Today, the higher a person climbs on the org chart, the harder she is expected to work. Amazon’s “leadership principles” call for managers to have “relentlessly high standards” and to “deliver results.” The company tells managers that when they “hit the wall” at work, the only solution is to “climb the wall.”
  • Americans who work more than 60 hours a week report that they would, on average, prefer 25 fewer weekly hours. They say this because work subjects them to a “time famine” that, a 2006 study found, interferes with their capacity to have strong relationships with their spouse and children, to maintain their home, and even to have a satisfying sex life.
  • The capacity to bear these hours gracefully, or at least grimly, has become a criterion for meritocratic success
  • Meritocracy traps entire generations inside demeaning fears and inauthentic ambitions: always hungry but never finding, or even knowing, the right food.
  • As the meritocracy trap closes in around elites, the rich themselves are turning against the prevailing system. Plaintive calls for work/life balance ring ever louder. Roughly two-thirds of elite workers say that they would decline a promotion if the new job demanded yet more of their energy
  • it is simply not possible to get rich off your own human capital without exploiting yourself and impoverishing your inner life, and meritocrats who hope to have their cake and eat it too deceive themselves
  • Building a society in which a good education and good jobs are available to a broader swath of people—so that reaching the very highest rungs of the ladder is simply less important—is the only way to ease the strains that now drive the elite to cling to their status
  • The University of Chicago admitted 71 percent of its applicants as recently as 1995. In 2019 it admitted less than 6 percent.
  • How can that be done
  • A parallel policy agenda must reform work, by favoring goods and services produced by workers who do not have elaborate training or fancy degrees
  • For example, the health-care system should emphasize public health, preventive care, and other measures that can be overseen primarily by nurse practitioners, rather than high-tech treatments that require specialist doctors
  • In finance, regulations that limit exotic financial engineering and favor small local and regional banks can shift jobs to mid-skilled workers.
  • The main obstacle to overcoming meritocratic inequality is not technical but political. Today’s conditions induce discontent and widespread pessimism, verging on despair.
  • In his book Oligarchy, the political scientist Jeffrey A. Winters surveys eras in human history from the classical period to the 20th century, and documents what becomes of societies that concentrate income and wealth in a narrow elite. In almost every instance, the dismantling of such inequality has been accompanied by societal collapse, such as military defeat (as in the Roman empire) or revolution (as in France and Russia).
  • Rebuilding a democratic economic order will be difficult. But the benefits that economic democracy brings—to everyone—justify the effort. And the violent collapse that will likely follow from doing nothing leaves us with no good alternative but to try.
Javier E

Thomas Piketty Turns Marx on His Head - The New York Times - 0 views

www.nytimes.com/...d-ideology-thomas-piketty.html

inequality capitalism social democracy property politics crisis history

shared by Javier E on 09 Mar 20 - No Cached
  • Economists already knew about rising income inequality. What excited them was Piketty’s novel hypothesis about the growing importance of disparities in wealth, especially inherited wealth, as opposed to earnings. We are, Piketty suggested, returning to the kind of dynastic, “patrimonial” capitalism that prevailed in the late 19th century.
  • “Capital in the Twenty-First Century” seems to have been an “event” book that many buyers didn’t stick with; an analysis of Kindle highlights suggested that the typical reader got through only around 26 of its 700 pages. Still, Piketty was undaunted.
  • Piketty, however, sees inequality as a social phenomenon, driven by human institutions. Institutional change, in turn, reflects the ideology that dominates society: “Inequality is neither economic nor technological; it is ideological and political.”
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  • But where does ideology come from? At any given moment a society’s ideology may seem immutable, but Piketty argues that history is full of “ruptures” that create “switch points,” when the actions of a few people can cause a lasting change in a society’s trajectory.
  • He describes four broad inequality regimes
  • First are “ternary” societies divided into functional classes — clergy, nobility and everyone else
  • Second are “ownership” societies, in which it’s not who you are that matters but what you have legal title to
  • Then come the social democracies that emerged in the 20th century, which granted considerable power and privilege to workers, ranging from union representation to government-provided social benefits
  • Finally, there’s the current era of “hypercapitalism,” which is sort of an ownership society on steroids.
  • ether Piketty is a reliable guide to such a large territory. His book combines history, sociology, political analysis and economic data for dozens of societies. Is he really enough of a polymath to pull that off?
  • I was struck, for example, by his extensive discussion of the evolution of slavery and serfdom, which made no mention of the classic work of Evsey Domar of M.I.T., who argued that the more or less simultaneous rise of serfdom in Russia and slavery in the New World were driven by the opening of new land, which made labor scarce and would have led to rising wages in the absence of coercion
  • This happens to be a topic about which I thought I knew something; how many other topics are missing crucial pieces of the literature?
  • Eventually, however, Piketty comes down to the meat of the book: his explanation of what caused the recent surge in inequality and what can be done about it.
  • For Piketty, rising inequality is at root a political phenomenon. The social-democratic framework that made Western societies relatively equal for a couple of generations after World War II, he argues, was dismantled, not out of necessity, but because of the rise of a “neo-proprietarian” ideology
  • Indeed, this is a view shared by many, though not all, economists. These days, attributing inequality mainly to the ineluctable forces of technology and globalization is out of fashion, and there is much more emphasis on factors like the decline of unions, which has a lot to do with political decisions.
  • Piketty places much of the blame on center-left parties, which, as he notes, increasingly represent highly educated voters. These more and more elitist parties, he argues, lost interest in policies that helped the disadvantaged, and hence forfeited their support.
  • his clear implication is that social democracy can be revived by refocusing on populist economic policies, and winning back the working class.
  • most political scientists would disagree. In the United States, at least, they stress the importance of race and social issues in driving the white working class away from Democrats, and doubt that a renewed focus on equality would bring those voters back
Javier E

Why Americans Are Dying from Despair | The New Yorker - 0 views

www.newyorker.com/...ericans-are-dying-from-despair

despair crisis death rate mortality economic inequality income health-care

shared by Javier E on 01 May 20 - No Cached
  • Outside of wars or pandemics, death rates for large populations across the world have been consistently falling for decades
  • Yet working-age white men and women without college degrees were dying from suicide, drug overdoses, and alcohol-related liver disease at such rates that, for three consecutive years, life expectancy for the U.S. population as a whole had fallen. “The only precedent is a century ago, from 1915 through 1918, during the First World War and the influenza epidemic that followed it,”
  • Between 1999 and 2017, more than six hundred thousand extra deaths—deaths in excess of the demographically predicted number—occurred just among people aged forty-five to fifty-four.
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  • their explanation begins by dismantling several others.
  • Was the source of the problem America’s all-too-ready supply of prescription opioids?
  • About a million Americans now use heroin daily or near-daily. Many others use illicitly obtained synthetic opioids like fentanyl.
  • As Case and Deaton note, most people who abuse or become addicted to opioids continue to lead functional lives and many eventually escape their dependence
  • The oversupply of opioids did not create the conditions for despair. Instead, it appears, the oversupply fed upon a white working class already adrift.
  • although opioid deaths plateaued, at least temporarily, in 2018, suicides and alcohol-related deaths continue upward.
  • Could deaths of despair be related to the rising incidence of obesity?
  • Case and Deaton report that we’re seeing the same troubling health trends “among the underweight, normal weight, overweight, and obese.”
  • Is the problem poverty?
  • Overdose deaths are most common in high-poverty Appalachia and along the low-poverty Eastern Seaboard, in places such as Massachusetts, New Hampshire, Delaware, and Connecticut. Meanwhile, some high-poverty states, such as Arkansas and Mississippi, have been less affected. Black and Hispanic populations are poorer but less affected, too.
  • How about income inequality? Case and Deaton have found that patterns of inequality, like patterns of poverty, simply don’t match the patterns of mortality by race or region.
  • A consistently strong economic correlate, by contrast, is the percentage of a local population that is employed
  • In the late nineteen-sixties, Case and Deaton note, all but five per cent of men of prime working age, from twenty-five to fifty-four, had jobs; by 2010, twenty per cent did not.
  • What Case and Deaton have found is that the places with a smaller fraction of the working-age population in jobs are places with higher rates of deaths of despair—and that this holds true even when you look at rates of suicide, drug overdoses, and alcohol-related liver disease separately. They all go up where joblessness does.
  • Conservatives tend to offer cultural explanations
  • People are taking the lazy way out of responsibilities, the argument goes, and so they choose alcohol, drugs, and welfare and disability checks over a commitment to hard work, family, and community. And now they are paying the price for their hedonism and decadence—with addiction, emptiness, and suicide.
  • Yet, if the main problem were that a large group of people were withdrawing from the workforce by choice, wages should have risen in parallel.
  • Case and Deaton argue that the problem arises from the cumulative effect of a long economic stagnation and the way we as a nation have dealt with it
  • For the first few decades after the Second World War, per-capita U.S. economic growth averaged between two and three per cent a year. In the nineties, however, it dipped below two per cent. In the early two-thousands, it was less than one per cent. This past decade, it remained below 1.5 per cent.
  • Different populations have experienced this slowdown very differently
  • Anti-discrimination measures improved earnings and job prospects for black and Hispanic Americans. Though their earnings still lag behind those of the white working class, life for this generation of people of color is better than it was for the last.
  • Not so for whites without a college education. Among the men, median wages have not only flattened; they have declined since 1979. The work that the less educated can find isn’t as stable: hours are more uncertain, and job duration is shorter
  • Among advanced economies, this deterioration in pay and job stability is unique to the United States.
  • In the past four decades, Americans without bachelor’s degrees—the majority of the working-age population—have seen themselves become ever less valued in our economy. Their effort and experience provide smaller rewards than before, and they encounter longer periods between employment.
  • The problem isn’t that people are not the way they used to be. It’s that the economy and the structure of work are not the way they used to be
  • Today, about seventy-five per cent of college graduates are married by age forty-five, but only sixty per cent of non-college graduates are
  • Nonmarital childbearing has reached forty per cent among less educated white women.
  • Religious institutions previously played a vital role in connecting people to a community. But the number of Americans who attend religious services has declined markedly over the past half century, falling to just one-third of the general population today.
  • Case and Deaton see a picture of steady economic and social breakdown, amid over-all prosperity.
  • climate—the amount of social and economic instability not only in your life but also in your family and community—matters, too. Émile Durkheim pointed out more than a century ago that despair and then suicide result when people’s material and social circumstances fall below their expectations.
  • why has the steep rise in deaths of despair been so uniquely American
  • The United States has provided unusually casual access to means of death.
  • The availability of opioids has indeed played a role, and the same goes for firearms
  • The U.S. has also embraced automation and globalization with greater alacrity and fewer restrictions than other countries have. Displaced workers here get relatively little in the way of protection and support.
  • And we’ve enabled capital to take a larger share of the economic gains. “Economists long thought that the ratio of wages to profits was an immutable constant, about two to one,” Case and Deaton point out. But since 1970, they find, it has declined significantly.
  • A more unexpected culprit identified by Case and Deaton is our complicated and costly health-care system.
  • The focus of Case and Deaton’s indictment is on the fact that America’s health-care system is peculiarly reliant on employer-provided insurance.
  • As they show, the premiums that employers pay amount to a perverse tax on hiring lower-skilled workers.
  • According to the Kaiser Family Foundation, in 2019 the average family policy cost twenty-one thousand dollars, of which employers typically paid seventy per cent.
  • “For a well-paid employee earning a salary of $150,000, the average family policy adds less than 10 percent to the cost of employing the worker,” Case and Deaton write. “For a low-wage worker on half the median wage, it is 60 percent.”
  • between 1970 and 2016, the earnings that laborers received fell twenty-one per cent. But their total compensation, taken to include the cost of their benefits (in particular, health care), rose sixty-eight per cent. Increases in health-care costs have devoured take-home pay for those below the median income.
  • this makes American health care itself a prime cause of our rising death rates.
  • we must change the way we pay for health care. Instead of preserving a system that discourages employers from hiring, retaining, and developing workers without bachelor’s degrees, we need to make health-care payments proportional to wages—as with tax-based systems like Medicare.
  • So far, the American approach to the rise in white working-class mortality has been to pour resources into addiction-treatment centers and suicide-prevention programs. Yet the rates of suicide and addiction remain sky-high. It’s as if we’re using pressure dressings on a bullet wound to the chest instead of getting at the source of the bleeding.
  • Case and Deaton want us to recognize that the more widespread response is a sense of hopelessness and helplessness. And here culture does play a role.
  • When it comes to people whose lives aren’t going well, American culture is a harsh judge: if you can’t find enough work, if your wages are too low, if you can’t be counted on to support a family, if you don’t have a promising future, then there must be something wrong with you
  • We Americans are reluctant to acknowledge that our economy serves the educated classes and penalizes the rest. But that’s exactly the situation, and “Deaths of Despair” shows how the immiseration of the less educated has resulted in the loss of hundreds of thousands of lives, even as the economy has thrived and the stock market has soared.
  • capitalism, having failed America’s less educated workers for decades, must change, as it has in the past. “There have been previous periods when capitalism failed most people, as the Industrial Revolution got under way at the beginning of the nineteenth century, and again after the Great Depression,” they write. “But the beast was tamed, not slain.”
  • Today, the battles are over an employer-based system for financing health care, corporate governance that puts shareholders’ interests ahead of workers’, tax plans that benefit capital holders over wage earners.
  • We are better at addressing fast-moving crises than slow-building ones. It wouldn’t be surprising, then, if we simply absorbed current conditions as the new normal.
Javier E

The Disturbing New Facts About American Capitalism - WSJ - 0 views

www.wsj.com/...american-capitalism-1488580706

capitalism concentration marx corporate

shared by Javier E on 05 Mar 17 - No Cached
  • “Let your winners run” is one of the oldest adages in investing. One of the newest ideas is that the winners may be running away with everything.
  • Modern capitalism is built on the idea that as companies get big, they become fat and happy, opening themselves up to lean and hungry competitors that can underprice and overtake them. That cycle of creative destruction may be changing in ways that help explain the seemingly unstoppable rise of the stock market.
  • U.S. companies are moving toward a winner-take-all system in which giants get stronger, not weaker, as they expand.
  • ...12 more annotations...
  • That’s the latest among several recent studies by economists working independently, all arriving at similar findings: A few “superstar firms” have grown to dominate their industries, crowding out competitors and controlling markets to a degree not seen in many decades.
  • The U.S. had more than 7,000 public companies 20 years ago, the professors say; nowadays, it’s fewer than 4,000.
  • Consider real-estate services. In 1997, according to Profs. Grullon, Larkin and Michaely, that sector had 42 publicly traded companies; the four largest generated 49% of the group’s total revenue. By 2014, only 20 public firms were left, and the top four— CBRE Group, Jones Lang LaSalle, Realogy Holdings and Wyndham Worldwide—commanded 78% of the group’s combined revenue.
  • Or look at supermarkets. In 1997, there were 36 publicly traded companies in that industry, with the top four accounting for more than half of total sales. By 2014, only 11 were left. The top four—Kroger, Supervalu, Whole Foods Market and Roundy’s (since acquired by Kroger)—held 89% of the pie.
  • Let’s look beyond such obvious winner-take-all examples as Apple or Alphabet, the parent of Google.
  • The winners are also grabbing most of the profits
  • At the end of 1996, the 25 companies in the S&P 500 with the highest net profit margins—income as a percentage of revenue—earned a median of just under 21 cents on every dollar of sales. Last year, the top 25 such companies earned a median of 39 cents on the dollar.
  • Two decades ago, the median net margin among all S&P 500 members was 6.7%. By the end of 2016, that had increased to 9.7%.
  • So while companies as a whole became more profitable over the past 20 years, the winners have become vastly more profitable, nearly doubling the gains they got on each dollar of sales.
  • Why might it be easier now for winners to take all? Prof. Michaely suggests two theories. Declining enforcement of antitrust rules has led to bigger mergers, less competition and higher profits.
  • The other is technology. “If you want to compete with Google or Amazon,” he says, “you’ll have to invest not just billions, but tens of billions of dollars.”
  • Still, history offers a warning. Many times in the past, winners have taken all but seldom for long.
knudsenlu

UN votes resoundingly to reject Trump's recognition of Jerusalem as capital | World new... - 0 views

www.theguardian.com/...-donald-trump-jerusalem-israel

jerusalem capital world news UN Palestine

shared by knudsenlu on 22 Dec 17 - No Cached
  • The United Nations general assembly has delivered a stinging rebuke to Donald Trump, voting by a huge majority to reject his unilateral recognition of Jerusalem as Israel’s capital.
  • Although largely symbolic, the vote in emergency session of the world body had been the focus of days of furious diplomacy by both the Trump administration and Israel, including Trump’s threat to cut US funding to countries that did not back the US recognition.
  • “I must also say today: when we make generous contributions to the UN, we also have expectation that we will be respected,” she said. “What’s more, we are being asked to pay for the dubious privileges of being disrespected.”
  • ...1 more annotation...
  • The threatening US posture, which had been denounced as both counter-productive and “bullying”, only seemed to have hardened the resolve of countries in opposing Trump’s 6 December move.
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