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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: 2) by VLM on Saturday July 29 2017, @02:49PM (6 children)
If by today this meant "boomer economic era beginning in the 70s" then its pretty accurate. Income inequality didn't begin in 2017.
(Score: 3, Informative) by Anonymous Coward on Saturday July 29 2017, @04:28PM (5 children)
No, it didn't, but that's about when the modern period of it getting obscene happened. We've always had gaps between the wealthiest and the poorest amongst us. To an extent that's healthy and necessary in order to spur innovation and production capabilities. One of the big problems the Soviets had was that since pretty much everybody was making the same amount of money, there was no real point in doing any work. You got the same amount of money whether or not you were a good worker. So, people did the bare minimum in most cases.
The problem here is that the people at the bottom haven't made so little since the previous age of the robber barons. These days it's completely plausible for somebody making minimum wage to have less money at the end of the month than at the beginning even without wasting it on pointless bullshit. That kind of thing corrodes the moral underpinnings in a similar way to when we had actual slaves as a legal thing. The people abusing their power would come up with reasons to rationalize why it wasn't so bad and even today over 150 years later, that corrosion remains causing problems.
In the post-war period we had a lot of prosperity, in large part because the wealth wasn't so concentrated with a small portion of the population and there was a very real possibility of moving up in society if you were willing to work at it. These days, though, the people with all the money, insist on getting more of it. They insist on keeping wages as low as possible so they can siphon off as much as possible. It's a vicious cycle where people can't get ahead because the wealthiest Americans burned the latter after they got up by demanding tax cuts that required cutting services that people need to advance and cutting wages that people earn for their work.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:04AM (2 children)
Yeah. We weren't talking about The 0.1 Percent in the 1970s.
There weren't any mentions of fewer than 100 individuals in aggregate having more wealth than half the planet's population in aggregate.
That came in this decade. [google.com]
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:07AM (1 child)
It's getting worse. It's down to eight individuals.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:57AM
Yup.
...and that's down from 82 just a couple of years ago.
Talk about your geometric progression!
What could someone do with that much money?
...beside cause trouble?
They sure as hell aren't creating jobs.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:47AM (1 child)
Yep! Clear as the pimples on the ol' man's behind! You see, that is why the Russians lost WWII to the Germans. Germans worked on the profit motive, and some people were, um, "paid" less than others, in the work camps. And it is also why the Soviets did not manage to put the first artificial satellite into orbit. And not why the Americans now have to rely on them to launch stuff to the International Space Station, that was in no way based on the Soviet Mir space station, which did not exist, because there was no incentive in the Soviet Union. And Russians are very much better off now, they only have to worry about being poisoned by something that is not actually vodka, or being killed by an oligarch, or starving to death. They work harder now! And it's good for them!
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @07:47PM
The Suma cooperative in the UK is the largest co-op there.
The co-op's workers have democratically decided that everyone in the company will have the same pay rate. [google.com]
It seems to work quite well for them.
(It's not a poverty wage by any stretch of the imagination; they brought up all the workers to the -higher- level.)
that is why the Russians lost WWII to the Germans [I'll add the /sarc tag for you here]
So many USAians think that USA is the reason Hitler was defeated.
USAians are very weak on History--but they do lap up propaganda willingly (especially nationalist propaganda).
...and, having incurred 27M dead Soviet citizens because of that war, and having a long cultural memory, the Russians want to avoid war--contrary to USA's propaganda. [dissidentvoice.org]
Russians are very much better off now
Heh. Well done.
Hurray for Capitalism and Oligarchs! /sarc
-- OriginalOwner_ [soylentnews.org]