Posts Tagged ‘history’

14055218-mmmaintop 1 percent

It has become part of the liberal common sense in the United States (buttressed by the publication of Thomas Piketty’s Capital in the Twenty-First Century) that rising inequality is a top priority, with little discussion of poverty. Conservatives, of course, are pushing back—with the argument (currently being peddled by Deirdre McCloskey, basically a more libertarian version of the argument that more conventionally conservative Martin Feldstein was making in the late-1990s) that we really should be worried about poverty, and forget about inequality.

They’re both wrong. Poverty and inequality are, in fact, connected—both in the long term and in the short term. They’re connected in the long term in the sense that the period of rising inequality, beginning in the late 1970s (measured, as above, by the income share going to the top 1 percent) is also the period during which the poverty rate stopped declining and the number of Americans living below the poverty began a dramatic increase (reaching 46.5 million in 2012).

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And, in the short term, we can see that the “recovery” that has been engineered to the benefit of those at the very top (again, measured in terms of the share of income going to the top 1 percent) has been accompanied by a dramatic growth in poverty (as measured in both monthly and annual rates).

Clearly, we can’t afford to choose between poverty and inequality. Current economic policies and arrangements, as they have been implemented since the mid-1970s and kept intact in the midst of the Second Great Depression, have led to growing inequality and consigned a growing segment of the population to living in conditions of poverty. Long live the rich, and to hell with the poor! Is it really so difficult to understand the following proposition: a society that lets a tiny elite capture an obscene portion of its income and wealth is also prone to force a large portion of its citizenry to try to survive in conditions of abject poverty?

Fundamentally changing the economic policies and arrangements of such a society—for example, by changing the way the surplus is appropriated and distributed—can serve to eliminate grotesque levels of inequality and, at the same time, the enduring legacy of massive poverty.

Chart of the day

Posted: 5 August 2014 in Uncategorized
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As Bill McBride explains,

A big difference between the presidencies has been public sector employment.  Note the bumps in public sector employment due to the decennial Census in 1980, 1990, 2000, and 2010.

The public sector grew during Mr. Carter’s term (up 1,304,000), during Mr. Reagan’s terms (up 1,414,000), during Mr. G.H.W. Bush’s term (up 1,127,000), during Mr. Clinton’s terms (up 1,934,000), and during Mr. G.W. Bush’s terms (up 1,744,000 jobs).

However the public sector has declined significantly since Mr. Obama took office (down 657,000 jobs). These job losses have mostly been at the state and local level, but more recently at the Federal level.  This has been a significant drag on overall employment.

 

Here is my friend and former fellow graduate student Antonio Callari in an interview on Marxism he did for a group that produces educational videos directed at students and teachers. He starts with Marx’s biography, discusses changes in Marx’s thought and politics during the nineteenth century, and concludes with a discussion of the ways Marxism has (and has not) worked over the course of the past century.

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Special mention

Global Inequality Cartoon and073014web-600x451

Chart of the day

Posted: 19 June 2014 in Uncategorized
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source*

The current World Cup finals in Brazil have had fewer draws (or, in American, tied games) than in many recent World Cup tournaments. There have been only three thus far (through 20 matches).

Not that a draw, even a scoreless draw, is necessarily boring. The Brazil-Mexico game, which ended 0-0, is a perfect example. It was, in fact, thrilling—with end-to-end action, great interchanges and goalscoring opportunities, lots of shots, and spectacular saves (especially by Mexican goalkeeper Ochoa).

Interestingly enough (especially for the Economist), the column that accompanies the chart blames globalization for leveling the game, such that “football has been ‘normalised’ into 90 minutes of boredom.”

I don’t think that’s correct. It is true that some teams (like Spain and Brazil) in these finals have not played up to their potential. But other teams (such as Costa Rica, Croatia, Mexico, and the United States) seem to be punching above their weight. That, and the generally higher quality of play overall, has made this one of the most entertaining and exciting World Cup finals in memory.

 

*I haven’t checked all the numbers but there is one glaring mistake in the chart: the 1994 World Cup finals held in the United States had 24, not 32, teams participating.

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The argument behind our course, A Tale of Two Depressions, was not that the depression of the 1930s and the one today are exactly the same but, instead, that we might learn a lot more about each depression by comparing it to the other.

David Cay Johnston offers a different perspective. In his view, the majority of Americans actually fared better in the midst of the First Great Depression than they’re doing today.

Indeed, coming out of the Great Depression eight decades ago, the vast majority fared vastly better than most people have coming out of the Great Recession, which officially ended on June 30 six years ago.

It may be jarring to hear that the vast majority of Americans, the 90 percent, enjoyed bigger income gains in the 1930s than in recent years, but that is what the data show.

The data also indicate tandem increases in both want and wealth, with the vast majority worse off in 2013 than in 2009, while those at the apex of the economy are enjoying a much larger — and growing — share of national income.

Read the rest of Johnston’s essay for his survey of the data on jobs, earnings, and inequality in comparing the two eras.

Robert Jacob Hamerton, illustration from Punch, 29 July 1843

No, I haven’t had a chance to read Thomas Piketty’s book yet. But I’ve just finished my end-of-semester grading. So, soon…

In the meantime, Thomas Frank [ht: ra] offers a few things to look out for, such as:

1. Piketty’s critique of the discipline of economics.

One of the best things about Piketty’s masterwork is his systematic demolition of his own discipline. Academic economics, especially in the United States, has for decades been gripped by a kind of professional pretentiousness that is close to pathological. From time to time its great minds have grown so impressed by their own didactic awesomeness that they celebrate economics as “the imperial science”— “imperial” not merely because economics is the logic of globalization but because its math-driven might is supposedly capable of defeating and colonizing every other branch of the social sciences. Economists, the myth goes, make better historians, better sociologists, better anthropologists than people who are actually trained in those disciplines. One believable but possibly apocryphal tale I heard as a graduate student in the ’90s was that economists at a prestigious Midwestern university had actually taken to wearing white lab coats—because they supposedly were the real scientific deal, unlike their colleagues in all those soft disciplines.

Piketty blasts it all to hell. His fellow economists may have mastered the art of spinning abstract mathematical fantasies, he acknowledges, but they have forgotten that measuring the real world comes first. In the book’s Introduction this man who is now the most famous economist in the world accuses his professional colleagues of a “childish passion for mathematics and for purely theoretical and often highly ideological speculation”; he laughs at “their absurd claim to greater scientific legitimacy, despite the fact that they know almost nothing about anything.” In a shocking reversal, he calls on the imperial legions of economic pseudo-science to lay down their arms, to “avail ourselves of the methods of historians, sociologists, and political scientists”; the six-hundred-page book that follows, Piketty declares, is to be “as much a work of history as of economics.”

2. His lack of knowledge of U.S. history.

Whenever Piketty moves away from numbers and tries to describe life in the United States, things go wrong in a hurry. The worst example first: Piketty tells us that, unlike the French, Americans feel “no nostalgia for the postwar period” because our economy didn’t grow rapidly in those years. In fact, American GDP often grew by 5 and 6 percent in the ’50s and ’60s and Americans have felt intense sweet wistfulness for those days ever since “American Graffiti” came out in 1973. To be fair, Piketty corrects himself several hundred pages on, but then not because he’s looked around and noticed the four decades of ’50s-revival crap Americans have so eagerly consumed, but because of a stray nostalgic remark by his fellow economist Paul Krugman. It’s all moot, I guess, because before long and without any explanation he reverts to his original position of nostalgia denialism.

Piketty’s command of American political history is, quite simply, abysmal. He announces that the U.S. “never became a colonial power,” which would be news to the people of the Philippines, not to mention the Sioux. He describes Herbert Hoover as a “liquidationist” though that was Hoover’s own term for the policies that Hoover rejected. About the presidency of Franklin Roosevelt—ordinarily an important period for students of inequality—Piketty seems to know almost nothing, except that FDR used wage and price controls during World War II. At one point, he comes close to denying the existence of Rooseveltian liberalism altogether, writing that for we benighted Americans “the twentieth century is not synonymous with a great leap forward in social justice.” As for the great right turn of the Eighties, he asserts repeatedly and with virtually no documentary evidence that it happened because America was falling behind Germany and Japan in economic growth—in other words, that the galaxy of nutty anxieties that fuel modern right-wing politics can be easily deduced from a few lines on a graph.

3. And Piketty’s blind spot when it comes to unions.

Turning to the problem of income inequality here in the United States, there is an even simpler solution, by which I mean a more realistic solution, a solution that builds on familiar American traditions,that works by empowering average people, that requires few economists or experts, that would involve a minimum of government interference, and that proceeds by expanding democracy and participation rather than by building some kind of distant and unapproachable global tax authority: Allow workers to organize. Let people have a say on the basic issues affecting their lives.

Piketty’s biggest blind spot is that he has virtually nothing to say about labor unions. He starts Chapter 1 of “Capital” with an anecdote about a bloody strike in South Africa and he returns to that same tragic episode at the very end of the book, but in between he addresses the matter almost not at all. Piketty talks a good game about democracy, but like other economists who have made inequality their subject, he prefers solutions that are handed down from the lofty heights of expertise.

The best remedy for inequality, however, is the one that comes up from below. Economists may not think very highly of those hardened people in SEIU t-shirts—some of them smoke too much, some are suspicious of “free trade,” some of them (gasp!) didn’t go to college—but the fact remains that in nearly every particular they represent the obvious and just about the only social force on the ground in America that might bend the inequality curve the other way.

In all honesty, one can go even further than Frank. Letting people have a say on the basic issues affecting their lives means more than forming unions. It means letting them having a say in the way the surplus is appropriated and distributed in their workplaces. Now, that’s a solution to the battle between capital and labor that has been going on since the mid-nineteenth century.