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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) 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?