America is separating into peasants and scholar-gentry
noahpinionblog.blogspot.ch
noahpinionblog.blogspot.ch
Worldwide inequality is falling, that is well documented. So the Keynesian prognostication about a life of desirable idleness based on re-investment of capital into local markets and automation was slowed because the capital found cheaper means than automation for growth.
So when you want to talk about social equality look at the impact global capitalism had on South Korea from 1950-today (as just one example).
There's plenty of anecdotal evidence to support this, eg. the richest person in the world was Mexican from 2010-2013, and it also makes a lot of sense when you consider how globalization works.
...but now that you ask, yes, I do think this is a good thing. It strikes me as a ridiculous injustice that the biggest single determinant of your lifetime income is the geographic location of your birth. Anything that makes that less arbitrary and more under your control will lead to a more just world, in my book.
Yes, that means that the economic system is chaotic at present and some people are getting left behind. However, it's far easier to pick up the skills needed to survive in today's economy than it was to move to the U.S. and get American citizenship in past generations.
Over the past half century, China has brought the most people out of poverty in world history. These are the forces at play.
A globalized economy will eventually pull everyone towards the mean. That's not good news for your descendants if you live in the west.
It's a dark moral place. It's also why realpolitik rules the day.
Also, China may have brought a lot of people out of poverty but they're doing so partially by sacrificing the health and in effect lives of hundred of millions of citizens with pollution way off the safety scale.
Kings College 2013[2]: In this paper we explore who have been the winners and losers from global growth since 1990
Economist Special Section 2012[3] - More nuanced and could offer a slightly alternative if generally positive example
[1] http://siteresources.worldbank.org/INTPOVCALNET/Resources/Gl...
[2] http://www.kcl.ac.uk/aboutkings/worldwide/initiatives/global...
0. http://news.bbc.co.uk/2/shared/spl/hi/picture_gallery/04/afr...
The Nigerian GDP is a hockey stick from 2000 to today while the GINI is mixed.
2002 0.71 2005 0.68
I was under the impression that this is mostly or solely due to extravagant growth pulling hundreds of millions of Chinese out of poverty, and that once you factor this out (which you should, since the Chinese are employing protectionist, state-capitalist policies rather than standard IMF/WTO-flavored neoliberal ones), global inequality has been rising.
Nicely said.
The people that fought for social equality are the ones who are responsible for making it politically desirable. After their fight came the post-war economic boom which made US labor an economically valuable resource worth treating well. Globalization and the rise of automation now brings us back to considering US labor a surplus to be had cheap. Government policy will likely claw back expenses that contribute to social equality accordingly until unrest grows.
Absolutely, but I'm pretty sure when writing for a US audience it's foolish to so much as hint that good working conditions may in any way relate to the work of union organisation.
There's one very, very important difference: aristocrats were generally in a heritable position that couldn't be taken from them, and peasants were generally in a heritable position from which they couldn't rise. In the U.S., at least, relatively wealthy / successful people can fall and relatively poor / unsuccessful people can rise. In classic feudal societies, this was basically impossible without revolutions.
To be honest, I have no idea what will do the trick. There is unlikely to be another WW2, another G.I. bill, another 50s-type broad-based economic boom.
This is really true, and it's arguably the most important part of this blog post, of Tyler Cowen's recent book Average is Over, and in many of the more honest discussions by people who are trying to get a handle of what's going on in the larger world.
That's true for now. But the way things are heading; the rich get richer and the poor get poorer. The barrier dividing the 2 gets a little harder to cross every year.
The postwar US was a totally different story. Europe and Asia's losses were our gain. The government had billions of dollars in off book debt, (ie. social security trust fund) and used that capital to launch the computer revolution.
Will it happen again? I wouldn't dismiss it... No nation is more strategically embedded in the new information economy than the US. At the end of the day, the US is the devil the world knows and needs.
Probably easy to grasp and agree with this political thought when you're being part of the US, bot otherwise... could you elaborate?
Consider 2013 vs 1913. A 21st century WW1 scenario could be set off by some two bit nuclear power like Pakistan without US dominance.
Everything isn't all roses, but I think the net impact is positive.
That was nice.
For that matter, a hell of a lot of startups are predicated on the existence of a large middle class as a mass consumer market.
For anyone who depends on a healthy, growing economy for their livelihood and/or wealth, there's a pretty good case to be made that it is in your enlightened self-interest to do anything within reason to promote a large, prosperous middle class with the surplus purchasing power to drive future economic growth.
All it says is HN is more of a general social media site instead of one with a laser focus on startups.
And an economy dominated by the Finance, Insurance and Real-Estate sector can't support the mass consumer market start-ups need.
I think that a lot of less qualified people recognized the quality of HN and began browsing here. When a general interest topic comes up, it's their opportunity to have an opinion.
With that comes upvotes and comments. I really don't care about your passionate, unnuanced assessment of American politics, or the articles you want me to read because they echo your beliefs. I want the stuff that doesn't make sense to me so I can make it make sense. I want to follow the economic and professional climate of this engine of innovation.
I found HN by following a link in a comment on reddit, to which someone had directed the admonishment, "Please don't ruin that." I won't say that HN has been ruined since I came here but it has undeniably changed.
Well everyone on the Internet "is-an-economist-too" -- so by implication: of course!
I find the non-tech links to usually be an interesting diversion but I have to resist the temptation of adding my own hot air to all of the arm chair philosophy in the comment section. I often fail in this attempt.
Murray also does great analysis on what he calls "SuperZIPs": the zip codes in the top 5% of combined income and education. You can see you score here:
http://www.washingtonpost.com/sf/local/2013/11/09/washington...
It's not just neighborhoods where the elites cluster -- it's entire regions.
http://www.thedailybeast.com/articles/2012/02/06/charles-mur...
One particularly interesting bit:
> As I looked backward and forward in time, however, I had to face this awkward fact: America became more culturally stable between 1910 and 1960 as it became less economically and socially libertarian. As it became more economically and socially libertarian after 1970, America became culturally less stable:
> "The greatest generation was also the statist generation. Like them or loathe them, the middle decades of the twentieth century were an entirely anomalous period in American history. Never had the state been so strong, never had people submitted as uncomplainingly, never had the country been more economically equal, never had it been more ethnically homogeneous, seldom was its political consensus more overpowering."
OK, this is HN, so I'm sure you lifted yourself by your bootstraps out of the dirt. But the majority of your neighbors did not.
Hm. My barber talks that way too, in fact that could easily be a direct quote. And his shop is in a very liberal, progressive university town. Maybe that's just the way guys talk when there's no women around?
i would posit that you're not getting as whole a picture (definitely of men, possibly of women) as you could if nobody you know does.
Well, we aren't stupid either, and I'm sure most of us didn't take it that way, so if you want to address the contextual nature of his comment then maybe do that instead of scandalizing yourself in pity for the silent nongeneralizers.
Labor laws make it difficult for people in lower income tiers to climb up the income ladder. It's difficult for people who are working less than fulltime jobs to work more hours because of the "40hr = benefits" laws, so instead folks have to work multiple jobs which adds transportation costs and scheduling complexities. The preponderance of regulations and complex taxes has made it more difficult to start many types of companies as an individual, putting them out of reach of folks who don't have significant savings and existing income.
Public education is no longer as much of a guarantor of basic literacy as it once was, so college education is increasingly becoming a necessary credential for many office work, knowledge work, and "professional" jobs, putting those out of the reach of many low income folks who are put off by taking on so much student loan debt or can't afford to support themselves and put themselves through college at the same time.
Similarly, anti-blue-collar sentiment has grown, devaluing such jobs culturally and discouraging people from pursuing such positions, even though many are well paying and can serve as spring boards to even higher paying jobs (e.g. self-employment). Moreover, the reduction in vocational training, shop classes, and so forth in public schooling has pushed a lot of those jobs even farther away from the average American adult.
The War on Drugs: which impacts lower income, blue-collar, and non-white people more. If you get caught with weed as a sub-urban white teen you'll face different consequences than if you're an inner-city black teen.
Some of these trends will hopefully turn around, especially with the help of the internet in terms of education, crowd funding, and so forth, but it's still going to be a pretty difficult problem for some time.
We prefer to be called "Eloi-American".
The upper middle class are collaborators, taking part in the oppression of the working class in exchange for being lifted above it. The mercenaries of class warfare.
Yes, I know how that sounds. Sorry, but I don't want to maintain and support a system in which my parents, my friends, and my children all face a steady worsening of their lives just because they're not programmers and don't have a million in assets. This society can either fix itself, or it is becoming something worth destroying.
I think it would take a lot of people collectively thinking and acting differently than we do now. I am just one person, but it is my goal to live my life with the intent of turning this situation around. I believe the spirit of entrepreneurship, which is generally well-supported on HN, is a piece of this - designing and building the next generation of companies who choose to conduct business in ways that support (rather than exploit) the middle class. Hence, I am an entrepreneur.
Petite bourgeoisie. How wonderful, everything that was old is new again.
Ultimately, I think business, whether you're talking about small ones or big ones, socially responsible ones or irresponsible ones, are neither the problem nor the solution. In a market economy, the health of the middle class is function of the supply versus the demand for labor.
Being a well-intentioned entrepreneur isn't going to have any impact on the equilibrium. The minute you become big enough to have a non-zero impact, you'll be big enough to feel the heat of competition from China, India, etc, and will be forced to adopt whatever labor-saving measures they adopt.
I could only interpret the response as a glib remark that to be an entrepreneur in any sense necessarily makes you an imitator of this establishment. My view on this, however, is slightly less cynical.
Well said.
Is there a game going on already.. once you get in, you are just another player that must play by the rules.. so how you could change the rules?
The way i see it, you need to create new games, with distinct rules, in a way this alternative game could get so big as the other one to make a stand against it in the first place..
Some ideas that can subvert the current rules for instance, are the ones like the social entrepreneurship.. companies that do profit, with a proper working economical engine; but are not for-profit..
The libertarians would solve this problem by eliminating barriers to success. Lessen business owner regulatory burdens, eliminate federal income taxes, eliminate the minimum wage, and impose as few hurdles as possible to whomever wants to hang their own shingle and provide a service.
I'm not sure what the Republicans would want, really, or at least not specifically enough to enunciate it here on their behalf, but let's say it's somewhere in the middle.
If you're able to succeed as an entrepreneur enough to be able to have some degree of influence on the problem, then you'd be a spokesperson for either the democrats or the libertarians. By your success, you'll be advocating the possibility of one to pull themselves up by their bootstraps, hang their own shingle, and become financially stable in the process, but by having attained that success, you would similarly be the target of progressive taxation, and would now be a sympathetic Belmont, from whom riches will be collected and distributed to Fishtown.
My understanding is that liberals prefer welfare programs with significantly more oversight and targeting. They want fine control over who gets the money and how they can spend it, promoting specific causes like education or environmentalism.
Pure libertarianism not considered with pandering to socialists would not propose a nit or basic income.
I see it this way:
What practices have resulted in things being the way they are now? These practices are largely attributable to businesses whose policies are endorsed and enacted through government. Government politics are a complete morass and you've done an excellent job of painting how various parties might try and solve the problem.
So if government is a morass, how do you approach the problem? Certainly a career in politics is out of the question based on this presupposition. One might consider simply adapting how they act in their daily interactions with others. Personally I think this idea is too small-scale.
In my opinion, one strategy would be through the business side. Create a business whose policies create the type of change necessary for closing the gap between the mega-rich and "middle" class. The argument has been made in this thread that in order to compete, it is impossible to instate these types of policies. However, I believe this to be a false assumption. Certainly companies, even large ones, fall into a spectrum of "good" and "bad" practices. There appears to be no bound to either side. I take the David Deutschian view that any problem can be solved with the right knowledge¹. So the question is, can we think creatively, critically, and intelligently enough to solve this problem in business?
I believe the answer is yes.
¹ EDIT: Any problem whose solution is not explicitly prohibited by the nature of reality.
A couple of simple rules that would take you a very long way towards being the "right" kind of company:
- Pay better than minimum wage. Pay a lot better than minimum wage, in fact; even for the lowest employee.
- Pay your highest paid executives less than we're used to seeing. I don't know why, but people just absolutely hate it when CEO of such and such is making $x million dollars a year, while the cashiers of so and so are absolutely starving on minimum wage. Cap executive wages to some multiple of the lowest wage. If the CEO wants to make a $10 million a year, then the janitor would have to make $1 million a year; as an example.
- Don't cap employee position pay. Have starting wages, of course, and make them generous, but if a cashier has been with you for 172 years, she should have received raises (assuming they were merited) every year, or be let go, if she didn't merit them.
- Don't lobby Congress for personal / business gain. I've argued it extensively elsewhere on HN recently, so I won't go into it again now, but I think that people's problems with capitalism aren't actually complaints with capitalism, but a complaint with the crony capitalism that we have in America. IBM lobbies for increased patent protections, makes a billion dollars, pays the guy who thought of it $10 million, and now everybody hates IBM, and especially that guy. If the system were both fair and fairly applied, sure, the Fishtowners might complain, but there would be more in the way of income mobility for the motivated, which should elevate the lower class to a true middle class for those willing to earn it, which would act as a bulwark against unruliness.
When Warren Buffet complains that he's being taxed too little, the cynic in me thinks that he wants his less rich competitors to be taxed out of being able to truly compete, while he enjoys his largesse, knowing that no amount of taxation would really have any impact on his lifestyle. For as generous as progressive seems when taken away from the uber-rich, it actually is a penalty for those just on the cusp of wealthy, and keeps them stuck in middle class without an effective means of pushing past it.
In particular, you nailed it when you talked about the difference between "capitalism" and "crony capitalism". I personally do not have a problem with capitalism in its pure form (as I understand it). At the risk of sounding like I am parroting a platitude - perhaps I am - I think that capitalism is too often understood to be a zero-sum entity.
I believe that the best way to do this is to set a standard of ethics by which you operate your company and then to be as successful as possible within that context. Be competitive; don't use competition as an excuse to contribute to the American economic divide.
And now I really will parrot the Buckminster Fuller quote that many people are intimately familiar with:
"We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest."
That is assumption somewhat based on the current marginal tax brackets. There would be no reason that a progressive tax could not be designed so that moderately wealthy individuals would pay a similar effective tax rates compared to the "middle class", and then require the to X% pay significantly more (those earning more than say 10 million, for example).
Or better yet, do as Warren Buffet himself proposes, which is harmonizing the capital gains and marginal tax brackets such there is a flat effective tax for all income levels. Buffet generally argues that he and his secretary should be paying the same effective tax rate, not that high-income individuals should be coercively taxed. (funnily enough, President Reagan made an identical argument comparing a secretary's tax rate to their boss).
A flat tax could potentially be lower for most or all taxpayers, there's nothing in it that requires it to increase the tax burden.
I'm not selling anything, nor trying to sell anybody on anything, so I didn't see the harm in being forthcoming.
Even a casual read of your comment leaves one with little question which group you think are the "good guys", and which ones you think are full of shit.
Simplistic analyses like that are a big part of why politics in America are as fucked up as they are: because we've been conditioned to generalize about huge numbers of people on the basis of affiliation with one or the other of a more or less completely "forced choice" between political parties.
But, yeah, go ahead and assert that everyone in the progressive left wants to siphon money from investment accounts in Belmont and deposit it into checking accounts in Fishtown. Go ahead and suggest that all libertarians (note, small-l, per original) want to abolish the minimum wage, or Federal income taxes.
That's what I'm talking about when I observe the breadth of your brush. It's impossibly broad.
If you'd like to know my personal preference, I'd be happy to discuss that offline, but spoiler alert, it isn't either of the solutions I presented.
As far as the generalizations, if I miscategorized anyone's beliefs, then I'm sorry. None of what I presented was meant as a critique... really. But progressive taxation seems to be the prevailing theory coming out of the progressive camp, and tax abolitionism seems to be the prevailing theory coming out of the libertarian camp.
As for the stereotype though, I will say that I relied upon the reader to reject the assertion that "all" of any demographic wants a particular thing, because I agree that is an impossibly broad assertion. Again though, if I gave cause for offense, I apologize.
If I hadn't put the party affiliations, and had gotten something wrong, I'm not naive enough to think that anybody would have been fooled by that. Had anybody felt that I misrepresented either party, I'd have been corrected, labels or not, only instead of being able to respond directly, I'd have hard to parse through layers of obscurity to figure out which metric was even the topic of discussion.
People are going to be pissed if they feel that their positions are slighted; I just figure the better tactic is to avoid insulting the position vs. obscuring which position I insult. And, as I stated, each of the positions I referenced is, to my knowledge, equally as likely of standing a chance at solving the matter at hand as the other.
It's not always so easy to peg down where we're at though. I grew up with a Fishtown income and family life but got the Belmont education. I've been wedged in between both groups my whole life and don't really feel a belonging to either. I know very well how both live.
There are a lot of problems; class divide is rapidly getting worse. It looks like this is something that a lot of people are worried about too, so some large change in either direction might be on the horizon. I'd like to hope that change is the right one, but I can't.
Which is beside the point -- the point being that modern society was supposed (for most of the 20th century) to be moving AWAY from all that, not back to Dickensian times or worse.
Also I'd note that the "educated sophisticates" are a far higher proportion of population today than before.
The Urban Archipaelogo[0] is the new era of politics, not this false stratification/dichotomy of proletariat, bourgeoise, and archetypes in between, which cannot explain network effects.
Class is a spectrum condition/disorder of society.
Poverty is a disease of economies.
Source: former one, fall from grace, mostly by choice.