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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 Runaway1956 on Saturday July 29 2017, @03:39PM (15 children)
I would like to see what life in a free market would be like. And, I mean "free". There is no free market today, you can be sure of that. In fact, many businesses are granted monopolies by the government. In essence, most large corporations enjoy near monopoly status. The richer the owners/boardmembers/CEO's are, the more stroke they have in Washington, not to mention the state capitals.
Free market. I've heard that touted many times, by many different people, under several different banners. I'd sure like to see what it's like.
Unfortunately, not in this lifetime.
(Score: 4, Insightful) by Anonymous Coward on Saturday July 29 2017, @04:02PM
I wouldn't because I've yet to hear a reasonable plan for maintaining the conditions needed for a successful free market such as making sure externalities are paid for or that information isn't suppressed.
(Score: 5, Insightful) by ed271 on Saturday July 29 2017, @04:10PM
I don't think a free market is even possible. The trouble is that some people will be better at it than others, and they'll start to accumulate money. Money turns into power, and pretty soon people use that power to rewrite the rules and the market is no longer free.
The funny thing is it's kind of like communism, it would be a great system if everyone cooperated, which is never going to happen.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @04:13PM (2 children)
Do you read, sir?
Hard Times [wikipedia.org]
Les Misérables [wikipedia.org]
The Grapes of Wrath [wikipedia.org]
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @06:21PM (1 child)
Why, no, he doesn't! Amazing how many autodidacts don't actually read, but claim to know so much.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @07:03PM
Why read when you can get everything you need to be thinking and saying in an easy-to-digest, convenient package of "conservative" talk radio and Faux News?
Books are for fags.
(Score: 1) by fustakrakich on Saturday July 29 2017, @04:25PM
All markets are 'free'. The government is just another cog, usually to serve at the pleasure of bankers and merchants, if not be them. Everybody else is chum (shark bait). It is true anarchy, they can do what they want and nobody can stop them. "Might makes right" is still as valid as it always was.
La politica e i criminali sono la stessa cosa..
(Score: 2) by Whoever on Saturday July 29 2017, @04:29PM (4 children)
You can see a free market in action in places such as Somalia.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @06:01PM (2 children)
https://en.wikipedia.org/wiki/Somali_Democratic_Republic [wikipedia.org]
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @08:15PM (1 child)
Oooh! African history is a subject I don't know a whole lot about. Can we start in ancient times and work our way forwards? These looks like some good starting material, though not "ancient:"
https://en.wikipedia.org/wiki/Somali_architecture [wikipedia.org]
https://en.wikipedia.org/wiki/Somali_aristocratic_and_court_titles [wikipedia.org]
https://en.wikipedia.org/wiki/Walashma_dynasty [wikipedia.org] (1185 - 1403)
https://en.wikipedia.org/wiki/Warsangali_Sultanate [wikipedia.org] (1200? - 1880? [late 17th century])
https://en.wikipedia.org/wiki/Ajuran_Sultanate [wikipedia.org] (1218 - 1886)
https://en.wikipedia.org/wiki/Adal_Sultanate [wikipedia.org] (1415 - 1577)
I'm excited!
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @08:18PM
https://en.wikipedia.org/wiki/Warsangali_Sultanate [wikipedia.org] [wikipedia.org] (1200? - 1680? [late 17th century])
Whoops! lol
(Score: 1, Troll) by jmorris on Saturday July 29 2017, @10:25PM
Well that is how people with a 68 average IQ do it I guess. Look at Singapore or pre handover Hong Kong to see how slightly smarter people do it.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @06:43PM (1 child)
Life in a truly free market it would be dictatorial. In capitalism capital is power. Power without restraint is a dictatorship, even if benevolent.
Relative equality would preclude this endgame, but I think it's clear that competition alone is insufficient to ensure this. And I think there's one very specific reason for this - a very bizarre characteristic of capitalism. In the capitalism the more successful you are, the easier it becomes to become even more successful. In most of any normal competitive venture, the higher up you go - the harder and harder it becomes to go even higher. A world class swimmer taking half a second off his laps would be a superhuman accomplishment. A beginner to intermediate swimmer taking seconds off his laps is standard. Now imagine if in basketball, for instance, professionals could somehow absorb the power of other athletes - similar to an economic acquisition. The entire field would be a complete cannibalistic shit show that would ultimately result in whoever gets to the top first growing absurdly hugely out of control. And while there are exceptions in capitalism (Google, for instance, literally did not exist 20 years ago) they are definitely the exception to the rule.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @10:31PM
It would suffice to make a rule that in cup tournaments, round winning team's coach is free to take whichever players from defeated team he wishes and keep them in his team until the end of tournament. It would make things a tad more interesting.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:38AM
I would like to see what life in a free market would be like
Would you, now?
Here's an example of regulations being in place but not enforced till after the fact.
Duke Energy poisons river by dumping coal ash [google.com]
Extrapolate for -no- regulations/enforcement.
What you'll see is MASSIVE externalizing of costs.
...and Somalia has already been mentioned multiple times.
I'm SHOCKED that there hasn't been a YUUUGE exodus to that Libertarian paradise.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by mcgrew on Sunday July 30 2017, @03:26PM
Look at the 19th century US. Horrible century.
mcgrewbooks.com mcgrew.info nooze.org