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Today the trend to greater equality of incomes which characterised the postwar period has been reversed. Inequality is now rising rapidly. Contrary to the rising-tide hypothesis, the rising tide has only lifted the large yachts, and many of the smaller boats have been left dashed on the rocks. This is partly because the extraordinary growth in top incomes has coincided with an economic slowdown.
The trickle-down notion— along with its theoretical justification, marginal productivity theory— needs urgent rethinking. That theory attempts both to explain inequality— why it occurs— and to justify it— why it would be beneficial for the economy as a whole. This essay looks critically at both claims. It argues in favour of alternative explanations of inequality, with particular reference to the theory of rent-seeking and to the influence of institutional and political factors, which have shaped labour markets and patterns of remuneration. And it shows that, far from being either necessary or good for economic growth, excessive inequality tends to lead to weaker economic performance. In light of this, it argues for a range of policies that would increase both equity and economic well-being.
Five minutes to midnight, marginal productivity theory "needs urgent rethinking."
[Wikipedia: Joseph Eugene Stiglitz is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal. He is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the Council of Economic Advisers. --Ed.]
(Score: 0, Troll) by The Mighty Buzzard on Saturday July 29 2017, @02:41PM (51 children)
Someone from the strongest bastion of socialist ideals in the nation (higher ed institutes) is saying capitalism is bad? Say it ain't so!
My rights don't end where your fear begins.
(Score: -1, Flamebait) by VLM on Saturday July 29 2017, @02:53PM
Traditionally, triple parentheses. Although I'm sure the demographics are just a coincidence.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @03:17PM (1 child)
And someone who has theirs and cares not for anyone else points it out.
(Score: -1, Flamebait) by Anonymous Coward on Saturday July 29 2017, @03:24PM
Look how successful Niggery Uzzard is. White crackers want to be him. You jealous bro?
(Score: 1, Funny) by Anonymous Coward on Saturday July 29 2017, @03:38PM
Don't worry, you will be economically equalized with the select multiculturals and they will compensated for unearned income, with your income. It's a strength! ;^)
(Score: 5, Touché) by Phoenix666 on Saturday July 29 2017, @03:50PM (26 children)
I'm afraid in this case you can't dismiss a guy with the credentials he has with a zinger. It's like either one of us calling Stephen Hawking a moron; yeah, we could say that but it would have all the snap of a limp noodle. In fact it would rebound on us as the inadequate ones.
So come up with a better counter. You can.
Washington DC delenda est.
(Score: 4, Insightful) by Ethanol-fueled on Saturday July 29 2017, @04:00PM (7 children)
Economists are pretty much practitioners of voodoo. You could argue the same about mathematicians, but at least mathematicians have a solid foundation based on repeatable, verifiable results.
Economics is based on a foundation of pop psychology with some sociology, opinion, personal politics, and adolescent-level algebra. Some people sprinkle a little higher-level math on top to make it appear to be more credible, but as the old saying goes, "garbage in, garbage out*."
* Also, the machine processing the garbage is itself garbage
(Score: 1, Touché) by Anonymous Coward on Saturday July 29 2017, @04:11PM (3 children)
So what's your alternative? Actual voodoo? Just give up and not even think about economics?
If it's too hard for you to understand you can just go back to your mathematics instead, leave the real thinking to the grown ups.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @07:54PM (2 children)
Everything we've done is wrong, but we can't consider alternatives - we must keep doing what we know as a historical fact is wrong!
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:46AM (1 child)
The fucking article itself shows that people are thinking about alternatives. Everything we have tried so far is a bit wrong. So lets try nothing and hope without any evidence it will be right?
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:48AM
Welcome to SN
(Score: 3, Interesting) by HiThere on Saturday July 29 2017, @04:53PM
The reason economics is so bad is that models are always based on what will benefit some particular collection of people. Experimentation in this area is difficult, and generally requires lots of political support...so it needs to be designed to please the people who authorize it...and it results are usually ignored.
The only way to do real economics is to test your models of past events...but even doing that rigorously is quite difficult. Even getting the data to validate against uncontaminated by political bias (at the time the data was generated) is quite difficult. And every government figures the results they collect differently....e.g., how do you measure unemployment? There isn't even a consistent measure from decade to decade.
The economists deserve a lot of the blame heaped on them, but an equal amount should go to the politicians who intentionally tamper with the data.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @11:52PM (1 child)
The stupidity is strong in this one.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @06:46AM
He actually has somewhat of a point. The field of economics is wholly unscientific and its predictive powers are very poor.
(Score: 1, Interesting) by Anonymous Coward on Saturday July 29 2017, @06:07PM
OK, how about I dismiss him because he's not even giving an adequate reflection of the current understanding of neoclassical economics.
I'm not even a neoclassicist, and I can tell he's building a strawman. Nary an investigation of friction in the market and the causes of those frictions - at best some rather hand-waving discussion of artificially created monopolies.
If I were his editor, here are some of the remarks I would have added:
1) inadequate investigation of counterarguments. Neoclassicists have spoken about friction in the market and money illusion for a long time now; address those points or you're building a strawman.
2) You're not adequately examining the reshaping of the market in terms of higher productivity coming at the expense of employability of the broad population owing to ancillary expenses of retaining labour. This is a perfect example of a more interventionist policy reducing employment and prompting arguably inefficient capital investment. If you can't investigate and dispense with this, you're missing a key countervailing proposition.
3) While you call out things like rising housing stock values, you don't quantify those or differentiate the condition of productive capital stock, nor invested/uninvested financial resources.
4) You don't account for rising standards of living, or lowering costs of parity in standard of living compared with 1950. This has been a massive boon to a wide range of the population, and you don't cover it when considering relative or absolute standing.
There is more, but that alone is enough to render it pretty bad.
(Score: 4, Insightful) by jmorris on Saturday July 29 2017, @06:49PM (6 children)
Yes we can. For example most of what Hawking babbles about these days has nothing to do with his specialty. This is a very common pattern where an expert in a narrow field gains fame and then begins attempting to transfer it to fields they have no more expertise in than most other knowledgeable laymen... which is what Hawking is when he goes outside theoretical astrophysics.
We can ignore Stiglitz because he is from a school of political economics that we know is a dead end. It has been literally tried a hundred or more times now on every continent other than Antarctica and failed. It usually accumulates a large body count at some point in the failing. It isn't failing because of the "wrong people", it isn't failing because of nefarious dark forces, it isn't failing by random chance, it is failing because it does not work. Anyone still following it is either hopelessly deluded or Evil, pushing it for ulterior motives of political power knowing full well the expense in human suffering.
The only economics that isn't utter garbage is Mises in Human Action, since he uses no fake math to obscure an agenda, arguing only from logic derived from first principles. Economics is a solved problem. What we lack is a political system that can allow the solution. Authoritarian political systems must, by definition, forbid the individual decision making and initiative needed to make a free market work and all we have as an alternative is Republics that seem to quickly decay into universal franchise Democracy and then to Socialism... which is authoritarian and incompatible with free markets. And that is the rise and fall of every society since we discovered fire.
(Score: 1, Insightful) by Anonymous Coward on Saturday July 29 2017, @09:53PM (1 child)
So is trickle-down. And shock doctrine. And Keynesianism. And all the others actually, because if there is one working great somewhere on this planet, tell me, I'd like to move over there.
Most of it is para-psychological voodoo using unrealistic hypothesis and scenario, one of them being that Humans are perfectly predictable and rational creatures. So if by "solved problem" you mean "we should just burn the whole thing and restart from scratch", yeah, maybe.
Uh? Republic, democracy and socialism are three independent axes. One cannot "decay" (whatever that was suppose to mean, but I guess it was a judgment of value on your behalf) into another.
And yes, Hawking should stick to astrophysics.
(Score: 2) by jmorris on Saturday July 29 2017, @10:48PM
No, that is the sperg libertarians. A society made only them might actually approximate "perfectly rational" enough to work. But humans aren't like that and Mises doesn't make the mistake of believing they are. Go read the book, economics IS a solved problem. Our politics is what we still don't know how to do. All of the proposed political systems have obvious flaws and when put into practice they fail exactly like they can be predicted to do. So we keep rotating through the same cycles.
Anonymous Conservative is probably on the right track defining the base problem but how we use that knowledge to build a better political system to resist the cycle is still an open problem.
(Score: 1) by Prune on Sunday July 30 2017, @04:13AM (2 children)
Here's something your precious Mises didn't know: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1773169 [ssrn.com]
(Score: 2) by jmorris on Sunday July 30 2017, @04:58AM
According to Mises, bringing advanced math to the subject of economics means you don't understand the problem. When was the last time you saw someone using so much as a calculator when making an buying decision? Yes it happens, but not enough to matter. Most economic decisions are "Do I want THIS more than THAT" and it isn't usually something that can be quantified with advanced math. Even billion dollar decisions more often than not end up turning on things that math can't accurately capture. Math is a tool, nothing more; some humans will use it in their decision making and some won't and if no two tax accountants can agree on what you owe the tax collector, good luck applying math to determine which house you should buy. That is why his book is called Human Action and not Economic Calculus or How to Model Economic Behavior. It helps if you actually read the books before burning (if only rhetorically) them, it works a lot better that way.
Humans are well adapted to operate in an environment where perfect information isn't possible. In fact, even if such information were possible and made available to them, many wouldn't use it. A system of economics for humans must account for these things.
(Score: 2) by jmorris on Sunday July 30 2017, @05:02AM
Damn, forgot the zinger. I'm pretty sure that is the paper that does put finished to Socialism / Communism since those ARE dependent on a single central authority being able to possess complete knowledge. But no, not even with a super computer beyond our current tech is such knowledge possible in real time. Any intellect or group of them short of divine must fail. So when somebody proposes Socialism as the answer, the critical question from Ghostbusters should be used, "Are you a God?"
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:22AM
Conversely, outside of Bizzarro world:
Amazing how many are trying to argue with jmorris as if they were debating a rational person. All this effort will be in vain. It is like trying to explain "recusal" to Trump. Just ain't gonna happen.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @08:21PM
Stephan Hawking is a moron. He's done some interesting work with that blackhole radiation business, but his field is cosmology, not all that different from economics - i.e., observational studies, experimental (and therefore verifiable) studies. More importantly, much of the recent BS he spews out puts him closer to Trump than Einstein.
(Score: 0, Troll) by The Mighty Buzzard on Saturday July 29 2017, @09:58PM (6 children)
Yes, I most certainly can. Everyone in the entire tech field except HR guys know the precise value of credentials: zero.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:21AM (2 children)
So your experience as an economist (clearly zero) + your special snowflake gut feelings, is better than an actual economist working and studying the economy?
So, knowing more about it than him, why have you still failed to offer any insight or anything at all for that matter?
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @08:53AM (1 child)
Yeah, misusing the term snowflake isn't going to butthurt me. Sorry.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:46PM
Can't butthurt someone whose entire existence is that of a pained butt.
Don't worry, the snow might help your butthurt, embrace you existence as part of the shit blizzard.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:25AM (2 children)
So, This is why you dropped out of college? Confirmation bias? Or just ignorant ideological blindness?
And just because you think that the experts are not experts, that does not mean that your bullshit is any more valuable that it was before you made such an asinine claim. False equivalency, bozo!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:10PM (1 child)
No, because they taught too slowly.
FTFY
If the certifying authority does not have useful standards for gaining a certificate, it is worthless. End of story.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:50PM
Lol, you want to claim genius status? It is readily apparent that you are average at best. Maybe you have some aspbergers or some other disorder that makes you really good at learning tech, but oh boy from your arguments here you are a reactionary type that hides behind an illusion of calm. You truly believe that the person who gets upset first is wrong, and by remaining calm you maintain superiority. If it wasn't so lame it might be funny, but after years of seeing it, it is just kinda sad.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:00AM (1 child)
http://steshaw.org/economics-in-one-lesson/ [steshaw.org]
Lets go with this then. Most socialist ideals start with 'lets take the money from the shop owner'.
We are not sure capitalism works. We are however *VERY* sure socialism/communism does not and why.
One thing I have learned after getting a degree in economics is everybody has an opinion on it. The top people disagree on just about everything. The formulas only work in very specific conditions. They quickly go off the rails once you apply any real people into it. None of them have a real idea what is going on. They have general ideas that *might* *maybe* *possibly* *kinda* work in very specific conditions. You can only use the existing formulas in the most broad terms to kinda point out trends and possibilities. You can not make any real monetary decisions with them. Economics is a bunch of snake oil dressed up in silk suits.
At this point you may say I am full of shit and a liar. Think on this. Name one economist or theory that has predicted the last 3 recessions. Not a 'I think it will' pundit, but with actual theory and numbers to back it up. They do not exist.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:31AM
One thing I learned after getting a terminal degree in economics is that anyone who claims to have a degree in econ after having made such a factually incorrect description of socialism, ignorant statement about the state of understanding of capitalism, and politically fascist statement about communism, does not in fact have a degree in economics. But, don't let your mendacity stop you. Maybe you also have a law degree? Medical? Commerical aviation? Are you not, in fact, Matt Damon? Or was it Leo Craprio?
(Score: 1, Interesting) by Anonymous Coward on Saturday July 29 2017, @04:01PM (17 children)
To be expected. If you cant argue against the argument, go for the man.
Why don't you explain to us how increasing inequality is actually a good thing after all.
Capitalism is working quite well for the capitalists, who would have thought...
(Score: 3, Interesting) by http on Saturday July 29 2017, @06:45PM (1 child)
...on top of that, the thing that the people with capital don't want you realizing: owning your own business does not mean you are a capitalist. Having a nest egg that feeds you and grows, owning your house, does not mean you are a capitalist. But they've spent decades and billions convincing that you you're a temporarily embarrassed billionaire, so you'll vote for politicians who set the laws and policies that benefit actual capitalists.
I browse at -1 when I have mod points. It's unsettling.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @11:35PM
owning your own business does not mean you are a capitalist
True. It means that you are an entrepreneur.
...if you are the -only- worker and if you paid for everything out of your own wealth or you got a loan.
...but you left out explaining what a Capitalist is.
If you needed investors, who expect an ongoing return on that investment (especially without them performing any labor in the company), then -those- folks are Capitalists.
If you have workers^W employees whose labor you will exploit, without them having any ownership in the company, then -you- are a Capitalist.
Having a nest egg that feeds you [...] and grows does not mean you are a capitalist
Actually, it does.
owning your house
There was a time when a house was looked on as a place to live.
People didn't view at that as an "investment" that would appreciate in value.
The nest egg thing applied to housing is pretty bizarre (especially the hock-your-house thing).
The FIRE sector has REALLY perverted people's view of economics.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by The Mighty Buzzard on Saturday July 29 2017, @09:56PM (14 children)
Sure, why not?
You can't otherwise teach the greedy fucks at the bottom that how much more the greedy fucks at the top have is utterly irrelevant to anything but their own avarice.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:56AM
So circle jerking cxo's giving each other pay rises is supposed to incentivise everyone to be a cxo. Right gotcha, but who is going to do the actual work in your bukake system?
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:54AM (7 children)
God DAMN you would benefit from a formal education. Your ideas for how to solve the world's problems are just so infantile in their naivety. You just never got past the shock of losing 1/4 - 1/3 of your paycheck to taxes huh?
Those damn gov thieves!!!! Rarrrgh!!!!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @08:50AM (6 children)
Formal education in this nation isn't. Education I mean, not formal. The radical left (no, not just ordinary old Democrats) has owned the higher education system for longer than I've been alive.
My rights don't end where your fear begins.
(Score: 3, Insightful) by aristarchus on Sunday July 30 2017, @11:40AM (5 children)
Yes? So? That does not mean that they are wrong (they are more educated, you know), or that you would not benefit from some higher learning yourself. Everyone here with some college experience can see plainly how your ignorance is harming you, and has utterly destroyed your ability to make a coherent and persuasive argument on matters of economics. Go back to school, Buzzard. We promise not to hurt you.
(Score: 1, Troll) by The Mighty Buzzard on Sunday July 30 2017, @12:01PM (4 children)
FTFY
My rights don't end where your fear begins.
(Score: 3, Informative) by aristarchus on Sunday July 30 2017, @12:19PM (3 children)
No, you just re-asserted your ignorant presumption stemming from a lack of actual education. When you are not educated, a lot of things you do not understand can seem like indoctrination. You may say to yourself, "How could anyone believe that?" And if you cannot answer this question, then it must have been brainwashing. On the other hand, educated people can understand how people can believe what they do, and so there are far fewer cases where this question does not have a reasonable, or at least plausible, answer. But it also means they do know why they believe what they believe, and can give reasoned arguments for their positions. The uneducated, deprived of this tactic, more generally resort to name-calling, like "libtard" or "SJW", or in your case, "indoctrinated". Come through the looking-glass, Buzzard! It's a whole new world!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:32PM (2 children)
Sweety, darlin, honey...
Education = the learning of stuffs
Education != attending a degree mill/indoctrination center
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:54PM
Well you learned tech and then stopped, you are worse than Hawkings because you are an ignorant ass who doesn't even have fame in an advanced field yet you claim superiority over everyone else. You are such a massive toooooool.
Oh, and it is easy to tell when you are triggered, you hop back to overly sweet crap mixed with shitpoints.
(Score: 3, Insightful) by aristarchus on Sunday July 30 2017, @06:49PM
Easily avoided. Just do not attend a for-profit school, or one that has waco right-wing religious sponsorship. That rules out Univ. of Phoenix, Regent, and Liberty Universities. Just follow that pattern. (Oh, the scam schools usually offer to teach you stuffs that will make you more money, watch out for that. Education is not the same thing as training. But you know that, you were in a military.)
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:36AM (4 children)
Is this what you meant? Because it doesn't make sense otherwise. And, "We're coming for your capital gains, Chuck!"
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:06PM (3 children)
You think the poor aren't greedy fucks as well? I'm sorry but that is the only way to see anyone who gets butthurt just because someone else has more than them.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:24PM (2 children)
Come now, Buzz! You are a coder? Living in Tennessee? I have vastly more than you will ever see. I am so rich, I don't know what to do with all my money! So I invest in Social Justice Stocks. And, I am a socialist. I believe in taxing the rich. This is not a matter of greed. I certainly do not need any of these avaricious rich people's wealth, but I do think we should violently rip it from them, just to make the point. That is because they are sociopaths and criminals, in thought if not yet in deed. We need to neuter them, before they do real harm to society. So drop your petty projections of jealousy, it does not become you.
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:30PM (1 child)
Pretty fair shitpost. It did make me laugh.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:01PM
You're still able to laugh?? Good! Now quick, step back into the light before the devil claims the rest of your soul!!
(Score: 2) by c0lo on Saturday July 29 2017, @11:32PM
It ain't so.... (there, happy to oblige)
---
(now, mod me +Informative. Grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by mcgrew on Sunday July 30 2017, @03:24PM
Read it again, your comprehension appears to be limited. They are NOT saying capitalism is bad, they're saying that the vast income equality that has developed is bad.
You're calling an orange a razor blade.
mcgrewbooks.com mcgrew.info nooze.org