You should ask Argentina how well their socialist policies have worked for them these past few decades. Frankly, I think you can ascribe the dismal state of South America due to their pink-wave. South America is an example of how socialism destroys market forces, meritocracy, and therefore wealth, happiness and freedom. Ultimately, it even increases inequality, as people aren't owners of their own labour and capital --> it just means the government and people close to the government controls all the resources. Latin America is an example of where socialism leads.
I love Milei. It's quite striking that 'The West' thinks he is a loon. When you listen to him talk for a few hours he's clearly an intelligent man who deeply understands economics and who was voted in by his populace mostly for his deep understanding of economics and the problems that plague Argentinian society.
For example. In his 'Political Rallies' with an audience of 30.000 people he just goes through hours of economic theory. That's it. Those are his 'rallies'. Economic theory, diagnosing the problems of argentinian society and giving solutions. It's almost mindblowing to me that a politician like that can exist.
In the West we mostly talk about 'social justice' and other nonsense: here is Milei's warning from him to the West "Argentina has gone through the same issues the West is going through right now --> Be aware. We had our 'social justice' movement and it led tot the dismanteling of market-forces, meritocracy, and ultimately freedom and happiness" (pharaphrasing, near direct quote)
I encourage everyone to step outside of the New York Times/Fox News/Western Media bubble.
"When you listen to him talk for a few hours" lol. People think he's a loon because talking for a few hours straight about anything is not something that well-adjusted people do.
Perhaps what the nation needs is someone not well-adjusted to the customs of the nation itself. Espeically when the nation is run by corrupt self-serving elites. Some type of shock therapy as you will.
I think the notable thing about Argentina is that it's not that bad. You make the worst possible economic decisions for decades and that's all that happens? The thing everyone knows Argentinians for is still eating a lot of beef and not mass starvation? Makes it seem like not a big deal.
Especially the part where they keep defaulting on sovereign debt and yet people keep lending to them.
Why this fetish for equality? Isn't absolute wealth more important? If I'm poor, I'd be happy to double my income and gain ground on a rich guy, but I'd be even happier to triple it, even if the rich guy quintuples his, making inequality "worse."
I understand that inequality can cause a lot of resentment, but I think that can be greatly mitigated if the poor are getting richer in absolute terms.
Hard agree. Inequality is a first world problem, something to tackle once you've already achieved low poverty rates.
For Latin America the focus should be on reducing poverty. Chile's poverty rate had gone from 45% in 1990 to 10% in 2020. That's a huge success that has impacted millions of people and will have a generational impact. If you look at their gini coefficient you'll miss it entirely though, on the same time it went from 0.52 to 0.49.
It's worth noting that 0.49 Gini coefficient is pre-taxes and pre-transfers. Inequality decreased even without taking into account the enormous increase in transfers that the Chilean state can now afford.
There is an argument to be made that greater inequality leads to a class of elites with too much influence; which leads to governments prioritizing these elites in their decision making, therefore misaligning with the wellbeing of the nation which leads to bad policy.
In my opinion you can start to see this happening in the entire Western World.
The global elite macroculture is dismantling the very foundation of how a nation-state is supposed to function, and why we are so all stressed out right now.
I think the canonical example would be that if the USA had listened to their 'White Trash' it would have been able to prevent the 1st China Shock.
Another one: Canada with its near explicit policy of driving as much immigration to get to 100m population as soon as possible through immigration. Ofcourse, that will destroy the foundation that your nation is built on, and ultimately the nation itself. --> Which is why people will vote in a government to prevent it, and it won't happen (likely, hopefully).
Elites should listen to the population that built these great nations we all live in instead of looking too much at numbers, figures and their real estate portfolio.
I am personally on the winning side of the inequality divide -- I started with upper-middle class parents, got a top-tier education, and despite very mixed _luck_ (entering the job market in a recession twice, and narrowly missing joining a couple of start-ups that would've moved me from "well-off" to "absurdly wealthy" if I'd taken the right offers at the right times) that foundation ensured I came out doing just fine. My politics are basically grounded in the theory that an enlightened elite should practice something akin to the "noblesse oblige" of the pre-modern era, because it is both morally right, _and_ the correct move for self-interest, if you take a sufficiently long-term perspective.
If you don't want peasants with pitchforks and torches to burn the whole system down, you need to make sure not to engage in callous "let them eat cake" antics. Both right-wing and left-wing populist movements are threats to the cosmopolitan liberal order in which people like me thrive. My solution to that is to make sure that my version of the cosmopolitan liberal order very visibly helps _lots_ of people thrive. You need continuous, gradualist reforms that improve the lot of families who are below the median income and wealth level. Members of the elite who pursue bread-and-circuses policies where they actually let living standards erode, while periodically doing showy hand-outs (like stimulus checks with Trump's signature on them), and mostly just distracting the masses with culture-war bullshit, are playing with fire. Folks like the Kochs thought they were using the rubes, but then Trump came along and proved that the rubes were using them. And billionaires who are backing Trump for low taxes should take a look at what Putin did to Mikhail Khodorkovsky. No amount of money will insulate you from an authoritarian leader's whims, if you let him consolidate power.
Social-democratic liberal democracy: The worst, messiest system of government... except for everything else we've tried.
You mean like student loan foregiveness checks to buy votes or Salt -property tax breaks to suburbanites or all the other stimulus checks to buy votes of his special interests. Pope Medici Biden and his indulgences.
Yeah, I think the limitation of the SALT deduction is fine-to-good and am annoyed at Dems who've lobbied to restore it. (I'd also love to phase down the amount of mortgage that you can take the mortgage interest tax deduction on, over time, given that realistically it's more a subsidy to mortgage-issuing banks than to homebuyers, anyhow.) And the student loan thing definitely seems poorly targeted if your goal is equity / reducing inequality, though that depends somewhat on how you structure it... Mostly I think Biden has pursued it because it's a thing the law lets him do. It does seem stubborn to keep pursuing it when we're already in a hot economy and don't need it as stimulus at all.
I always say that the Democrats are a "normally corrupt" party -- they're the kind of thing we've had for a century and more. The modern GOP is... something else.
"There is an argument to be made that greater inequality leads to a class of elites with too much influence; which leads to governments prioritizing these elites in their decision making, therefore misaligning with the wellbeing of the nation which leads to bad policy."
Welcome to the USA. Where wealthy trust funders, divorcees, and wreak havoc through NGOs.
The US is fighting against it. Ending neo-liberalism is a step along the way. The realignment of something like a center in Congress is underway practically as I write helps. GOP ascendancy in state government seems to have ended and even the UAW won a unionization vote in TN. There's lots more to do though.
Nancy, I don't see the US (do you mean federal government?) fighting against the class of elites. Just the opposite. I don't know what you mean by "neo-liberalism" or why you want to end it. UAW unionization vote? I'm not seeing the connection.
Certainly the states have been something of a prelude to curtailing elitist power in the US
. (Elitism isn't only money. It is also thought police like the White Christian types.) Protecting women's rights at the state level is another sign and after the AZ SCOTAZ decision will certainly leap to the Federal level. I consider those who would deny women bodily autonomy elitists.
Most Federal legislation this year has been passed by bi-partisan coalitions of GOP and Dem Reps, certainly a sign of a move to the center which required a bi-partisan coalition to isolate the nut-jobs. It's a start.
As for neo-liberalism, it is supremely responsible for the rise of America's current elites. It is a failed economic system as the Great Recession showed and is slowly if inchoately being replaced. All to the good.
"A class of elites with too much influence" is a tautology. Elites, BY DEFINITION, are supposed to be a class with too much influence. The influence is the essence of elitists, a small group of people commanding disproportionate power.
Elitism is also protean, or shape-shifting. Whatever scarce resource, social position of high status, or military hierarchy is coveted because of its inherent rarity, elitism is a consequence of this competitive dynamic and is an immutable fact of life.
Boogaloo: "Elites should listen to the population that built these great nations we all live in instead of looking too much at numbers, figures and their real estate portfolio."
You mean like the Volkswagen workers who unionized Friday in the right-to-shirk state of Tennessee? You gotta love it, right? Right?
Ya. I'm not a fan of unions and i'm elitist to the core. I love elites, i'm part of the elite, and our influence in western civilization has been incredibly good, and a society that does not have an effective system of sorting people within a good elitist hierarchy is a weak and poor society by definition.
two things:
1. It is possible for there to be no unions but still address some of the issues that workers are complaining about if you listen carefully enough (e.g., don't send our manufacturing base to china)
2. intra-elite competition: the elite base expands in civilization as it grows more powerful. Which means you get greater intra-elite competition, which leads to divide at the elite level, which leads to divide at the level of the nation. People with more than 10m has gone up per capita by tenfold the past few decades for example. If anything Reps VS Dems nowadays are just elites who made their wealth in vastly different ways (e.g., oil/gas/real-estate vs tech) trying to guard their wealth in different ways and needing different legislation for that.
You know to rest of us, it sounds like you just want your serfs to be obedient. Unions is a way to force Elites to listen to people, since for the last 40 years, the elite have not listened.
This is not sorting society based on talent. There are less than handful of people that can become elite as you call it without substantial help from their parents. Your position in elite group right now is just based on your parent position in elite group and a huge amount of luck. You want to be a feudal lord but you just don't want to admit it. Hence, the neoliberal bullshit.
Hopefully in America, that goes away soon and you won't be able to do anything about it anymore.
I'm from a western european nation; there are no unions in my nation. We just redistribute the wealth effectively through a generous social welfare state. We basically have UBI here, although somehow people don't call it that. This makes sure everyone feels comfortable, and nobody has to sleep on the street and be hungry if they don't want to be. (some people are mentally ill tho)
This is why I don't want unions, it distorts the capitalist process. Allow capitalism to generate the wealth, and then effectively redistribute it in a way that is fair such that we can all live happy lives (assuming there is enough wealth to do so, which there is in my nation)
unions place the burden on competitive firms. This makes your country less competitive. Just allow firms to be competitive, tax some of the wealth created, distribute it fairly and efficiently.
And can you name this eutopia you are living in, the only country in the entire world that nobody has to sleep on the street and be hungry is Finland. Are you from there. In other Nordic countries, you will sleep in the streets and Finland is heavily unionized.
That being said, your entire promise is wrong. Unions don't distort capitalist process, the model in Germany actually enhances it. Capitalism is useful when capitalist improve efficiency, improve the process, improve the technology. All of those hard and it happens only in specific industries where there is a gain to be made by adopting new technologies, it is barely 10% of economic activities.
For the 90% of rest, union prevent firms from getting an advantage by exploiting, abusing and bullying their workers. That is a very positive outcome, let capitalist compete by actually improving their products or process, not by cutting the wages of their workforce.
Your opening statement and your first of two things are contradictory.
Elitism is conceding Corey Robin's definition of conservatism in "The Reactionary Mind." In plain English it's "Defend your status and the Hierarchy that feeds you." Elitism is context-dependent; claims to truth, wealth and power have always been contested.
Elites know they face challenges from below and competition to the side; there are several terms referring to the same elitist consciousness. Nietzsche's master morality, Gramsci's cultural hegemony, Marx's theory of social reproduction and the sociological term of art known as legitimizing ideology are all talking about the same thing.
It is not non-elites failure to listen to elites, carefully or not, that is the issue. For four decades, elites have not only profited by sending manufacturing to China, but also have pretty much gotten all of their policy prerogatives fulfilled through neoliberalism. Those manufacturing jobs are not coming back, manufacturing workers who lost those jobs don't want those jobs back, and the heart of conflict is about what did happen over those 40 years and not what should have happened.
LatAm has been bedeviled by its elites for a very long time, whether they are to the left or to the right. Perhaps education helps to erode that proclivity as well. It sure looks like Colombia is sliding back into its old ways but Milei might just break Argentina out of it. And I agree high inequality easily turns into government by elites.
I don't disagree, but human nature is what it is. People measure themselves by comparing themselves to others. So, to use your example, some people would be happier to lose ground, so long as people wealthier than them lost even more ground. Socialism/Communism = everyone (except those in power) are poor, but at least there is very little income inequality.
I agree with Bob and also you, David. I think "inequality" is overplayed and driven by resentment, as Bob points out. At the same time, "inequality" is going to keep being overplayed, and so elites need to pretend to care, to keep the pitchforks at bay.
The redistributive policies will, of course, make the pitchforks poorer over time, but they won't realize it. On the other hand, stopping the pitchforks from destroying everything is crucial for growth. It's a delicate dance.
The US is very good at this. A lot of the public have libertarian leanings in the US and so the country is a bit to the right of our developed peers. This is apparent when you look at the faster growth of the US compared to all other developed nations, over the past several decades.
Ya, the USA has a good thing going for itself! As a european I would say that if USA was safer in terms of violence than it would just be an all round superior nation to any european country. As it stands, I'd probably prefer to be in Europe due to safety concerns, but the USA as a nation is immensely powerful because of its belief in capitalism and markets.
As a venezuelan who studied economics in undergrad, this topic strikes close to home.
Worth noting that Spain focused on "exploiting" its colonies in contrast to Britain focused on "colonizing" the foreign lands it controlled. Spain held an iron grip on its colonies, as described in Marie Arana's amazing biography titled "Bolivar". Britain in its colonies even built bureaucracies staffed with locals, these were useful institutions which remained after the Brits left.
Bolivia's Evo Morales is far left but respected the independence of Bolivia's Central Bank, in contrast to Venezuela's Chavez who did the opposite on steroids by not only taking over Venezuela's Central Bank but also by creating opaque funds which at one point accounted for over two-thirds of "government revenue" which was ballooning due to the increase of the price of oil from $10/bbl when Chavez was elected to a high of $154/bbl in 2008.
Note that Friday evening the venezuelan opposition agreed on a candidate to oppose Maduro on the elections on July 28. Keep an eye on Venezuela, change is in the air!
You are an extremely open minded thinker, and I wish you would similarly “open up” the discussion on inequality. In brief, though extreme inequality is often correlated with dysfunctional institutions and cultures, it is not actually negative in and of itself. This is something that I am absolutely sure you both know and appreciate. The inequality of incomes is not a negative side effects of markets, it is an essential part of how and why they work, and “solving” inequality therefore emasculates and destroys any effective market dynamic.
Of course the real question is in regards not to “inequality” but to “excessive inequality.” But the devil here is in the details. What is excessive, and what are the underlying causes contributing to this? As the report you link to explains, the solution for improved growth in SA has been education. This increases the productivity of the bottom quintile, and also increases the complexity potential of the market.
In the wealthier economies, it should not be taken for granted that higher inequality is necessarily a bad thing (it can be of course, in some ways). Higher inequality reflects the market signaling and incentivizing higher education and skill development, relocation to higher productivity areas, additional investment and entrepreneurial activity, and so on. Higher equality can also reflect excessive transfers that are discouraging work and education and mobility and investment and entrepreneurship.
My point is that inequality is a mathematical concept. Increasing or decreasing inequality is not in itself a good or bad thing. It depends. And what it depends upon are the things that make your insights into economics so interesting.
"What did affect pretty much every country in the region, however, were two things: 1) faster economic growth, and 2) increased education."
Let's spend a little more time talking about item 1.
The countries that grew in the region were those that practiced freer trade, more property rights, market friendly reforms, etc over the past couple of decades. Ie Chile, Peru, Colombia. Those that didn't have stagnated growth or become worse: Brazil, Argentina, Venezuela.
As an Argentine it's pretty clear to me why we've failed to solve poverty, and it's our penchant for seemingly simple populist solutions.
Støstad's data comes from wid.world. That is Piketty, Saez, Zucman, etc... not what I would consider an unbiased source. Also, he doesn't mention whether he's using Piketty's post-tax income, or post-tax disposable income. Disposable is useless (or maybe not if you want an index that you can abuse in order to score ideological points).
A few gems:
- "There are many ways to reduce inequality... minimum wages"
- "We seek to distribute the entirety of national income among resident households (including... to and from the foreign sector)".
- "Our estimate of missing net foreign income is based on the work of Zucman (2013). A well-established anomaly of balance of payment statistics is that, when summing net foreign incomes at the world level, the total tends to be consistently negative rather than around zero. As if the world as a whole was a net debtor. Since this is not possible, the main explanation for that fact — given by Zucman (2013) — is that assets hidden in offshore tax havens get recorded as a liability but never as an asset"
Latin America is also probably the most crime-ridden region of the world, although perhaps it is the inequality that fuels the drug cartels in the first place?
And as for Venezuela, how much of its collapse was down to incompetence, and how much was it down to Chávez being a massive Fidel Castro fanboy who basically turned Venezuela into Cuba's oil colony?
During the 2010's, I would regularly read what the Chavistas had to say on https://www.aporrea.org "Price controls would work, except for those greedy shop keepers." "The value of the Bolivar (this was at least 8 added zeros ago) was under attack by a web site dolartoday.com run by the CIA". It had nothing to do with, say, giving insiders US dollars at a fake official exchange rate, so they could go exchange them at the black market (i.e., actual) rate and get rich. "Printing money does not cause inflation. Failure to enforce price controls was the real source." "The destroyed oil company, electrical grid, water systems, etc., are all due to CIA sabotage; not to corruption and incompetence." And so on. I quit following at some point, because the stunning ignorance went from amusing to sad.
The point about the shopkeeper really made me think years ago, highlighted the fact that the solution was not to punish the last shopkeeper standing but rather to create conditions for many shopkeepers to appear and reduce prices by competing in the market. Adam Smith's butcher reincarnated, so to speak.
I was never particularly interested in Venezuela until I hired a professional (lawyer by training) Venezuelan back in the early 2000s. Shed had recently immigrated to the US. She had vitriolic hatred of Chavez (and also Castro). The same kind that AWFLs in the US have for Trump. She became a US citizen, and also passed the California bar after only 6 years in the country. She and her brothers were able to leave, but her father (who had originally immigrated to Venezuela from Spain) reused to leave his business, etc., and also developed Alzheimer's. I received quite an education on Venezuela.
The true believers on Aporrea are mostly old men. One wrote an article explaining that the law of supply and demand was a lie. They would have huge dust ups over their right to receive "the leg" (pig hindquarter) for Christmas, or their right to free gasoline. A bunch of obviously educated people absolutely clueless as to how inflation happens. If a factory cannot produce goods to sell at the price we demand, the expropriate the factory and close it down. Hey, how come we no longer have breakfast cereal? No shopkeeper can do business in a hyper-inflationary environment. Even if the government agreed to a price, it would be impossible two weeks later. They have to make enough profit of their current inventory to pay for new inventory, which now costs twice as much. Lenin wanted shopkeepers hanging from trees and lampposts, so I suppose it could have been worse.
There was a woman (I forget her name - but she had a face made for radio) who was in some official capacity for Maduro, who was absolutely certain that printing money while decreasing production has nothing to do with inflation. Nope. The entire problem was a website. Yes, that's right. A website can destroy a currency. And she was supposed to be in charge?
I've mentioned before that we have a huge influx of Venezuelan migrants in Denver. It's interesting to see the differences between the younger migrants and the older ones. The folks over 40 seem to be more functional and certainly more literate. One of the over-40 folks said that it's because she and her cohort actually got educated. The younger group are barely literate. There are Facebook groups trying to connect locals to migrants to provide support and the migrants sometimes can't make themselves understood because they can't read, write, or spell. Local Denverites who are fluent in Spanish have as much trouble as those of us using translation apps.
And of course migrants who have no work permit, no documents, AND no literacy or numeracy are at a huge disadvantage when trying to find any kind of work or even work training. It's all quite distressing.
My generation had to immigrate to USA by first gaining a well-paying job in USA by either studying in USA or by working in company which then transferred to USA, feels very unfair for newer generation of Venezuelans to just walk in.
Note that almost all are law-abiding, few of us would drop entire lives and walk 3 thousand miles to then jeopardize it all by willingly turning to crime. But there are a few idiots, who then get played up by the clickbait media.
The younger people seem to be completely unaware of how the U.S. works. They're stunned that they can't work without permits, can't legally drive without licenses and insurance (not that that stops them), can't get affordable housing, etc. I don't think they're mostly criminals at all. Well, a few are criminals, a few are total sweethearts, and most are just ordinary people trying to get by. There's a lot of suffering and it's hard to see, especially since I can't magically create jobs or change the immigration system.
Venezuela is a power-based society whereas USA is a rule-based society. This influences how individuals learn to interact with each other and with authorities in ways that are pervasive.
The graphs that you cited ends in 2012-2014, which is roughly before the commodity prices crashed (most notably, oil prices), and with that, the GDP growth for nearly all Latin American countries. (Just note that Argentina for now has known GDP per capita decline for over a decade, for example).
Also, the pink tide largely receded from roughly the same time; even though there are more left-wing leaders like Boric or Petro, they are less radical compare to people like Chavez though. Just some ideas for you to improve your analysis 😀
Instituting high school in the U.S. made an Economic Leap Forward possible. The world soon followed, institutionalizing high school in their societies.
I could say that thermonuclear war is the greatest threat to the survival of America. I’d be right but since that is global ending threat it does’t apply. What is the problem which threatens the survival of America? Our public schools continuing inability to educate our youth.
People believe that a good school depends on clean nice buildings, safety, good teachers and administrators. Sorry but the answer is no, they only matter on the margins. The single thing that matters most is the cohort of children. What makes a good cohort? Children who go to school to learn. Parents have the most control over whether children come to school to learn or not.
Why do charter schools do so well? It is largely due to parents who want their kids to go to one because they value education. My wife, a 6th grade language arts teacher in a good suburban school with largely middle to upper middle class homes can point to why her kids don’t do well. They don’t want to. They’d rather talk, have fun, do anything other than school work. How does the school treat kids who choose not to do their work? Spend time talking instead of working on their work?
Nothing. the worst punishment you can get at her school is lunch detention. 25 min. You don’t get to go to the cafeteria and spend that time with friends. There is no holding children back who don’t do their work. There is no suspension. No after school detention and no Saturday suspension.
When notes are sent home they have no effect. I could go on but I’ll share one email from a frustrated parent. “We have tried everything but he simply doesn’t mind. Frankly we are close to giving up”
Have parenting skills been lost? My solution is to start holding kids back. If parents cannot instill a culture of learning, explain that school is their job, something has to be done to motivate these kids.
I will also say, everybody seemingly has ADD ADHD, anxiety or depression or something that affects their learning....Without some discipline our schools are going to hell in a hand basket.
I wonder to what degree cell-phones have helped enrich the poor and increase the middle class. Now obviously you need some education to use a phone so this isn't exactly competing with the educationa hypothesis. However once you hit that base the main thing a cellphone does is make it easy to communicate with potential customers and suppliers and to search for better deals/offers.
That's great and all, but actually the compass icon (red + white) does point north in Google Maps. The "your location" icon points in the direction of travel.
I was also a north-oriented map purist for a few years until I realized that the direction of travel is a superior way to orient a map.
Also the first compasses actually pointed south, and the Chinese word for compass is "south pointing needle" - a fact that I coincidentally learned earlier today watching an educational video - on a smartphone.
Very useful stuff but I live in Mexico in the center of the country and have worked extensively in many parts of the country and there is some reliable evidence that the numbers for Mexico are somehow inaccurate. During the time(3 decades) I have worked there the number and breadth of secondary and tertiary educational opportunities have expanded significantly. At the same time if you move around the country you see large numbers of middle class housing projects being built - the fastest growing city in the country (Queretaro) is replete with many developments. The recent moves in several countries to the left (with the counter example of Milei in Argentina - if he can stay the course) have not exactly been a harbinger of improving the GINI.
I would question the assumption that minimum wages have anything to do with progress. Depending on where the minimum wage is set in relation to the market value of labor, it can cause unemployment and the substitution of automation at the lowest rung of the economy--especially for those trying to enter the labor market for the first time. In other words, a minimum wage has the strong potential to increase, not decrease, inequality.
You should ask Argentina how well their socialist policies have worked for them these past few decades. Frankly, I think you can ascribe the dismal state of South America due to their pink-wave. South America is an example of how socialism destroys market forces, meritocracy, and therefore wealth, happiness and freedom. Ultimately, it even increases inequality, as people aren't owners of their own labour and capital --> it just means the government and people close to the government controls all the resources. Latin America is an example of where socialism leads.
At least they are finally trying an alternative. A libertarian of all things. Plus, the "hair" guy is amusing (to me).
I love Milei. It's quite striking that 'The West' thinks he is a loon. When you listen to him talk for a few hours he's clearly an intelligent man who deeply understands economics and who was voted in by his populace mostly for his deep understanding of economics and the problems that plague Argentinian society.
For example. In his 'Political Rallies' with an audience of 30.000 people he just goes through hours of economic theory. That's it. Those are his 'rallies'. Economic theory, diagnosing the problems of argentinian society and giving solutions. It's almost mindblowing to me that a politician like that can exist.
In the West we mostly talk about 'social justice' and other nonsense: here is Milei's warning from him to the West "Argentina has gone through the same issues the West is going through right now --> Be aware. We had our 'social justice' movement and it led tot the dismanteling of market-forces, meritocracy, and ultimately freedom and happiness" (pharaphrasing, near direct quote)
I encourage everyone to step outside of the New York Times/Fox News/Western Media bubble.
"When you listen to him talk for a few hours" lol. People think he's a loon because talking for a few hours straight about anything is not something that well-adjusted people do.
Could be worse. Could be Hugo Chavez singing for hours.
Perhaps what the nation needs is someone not well-adjusted to the customs of the nation itself. Espeically when the nation is run by corrupt self-serving elites. Some type of shock therapy as you will.
I think the notable thing about Argentina is that it's not that bad. You make the worst possible economic decisions for decades and that's all that happens? The thing everyone knows Argentinians for is still eating a lot of beef and not mass starvation? Makes it seem like not a big deal.
Especially the part where they keep defaulting on sovereign debt and yet people keep lending to them.
Why this fetish for equality? Isn't absolute wealth more important? If I'm poor, I'd be happy to double my income and gain ground on a rich guy, but I'd be even happier to triple it, even if the rich guy quintuples his, making inequality "worse."
I understand that inequality can cause a lot of resentment, but I think that can be greatly mitigated if the poor are getting richer in absolute terms.
Hard agree. Inequality is a first world problem, something to tackle once you've already achieved low poverty rates.
For Latin America the focus should be on reducing poverty. Chile's poverty rate had gone from 45% in 1990 to 10% in 2020. That's a huge success that has impacted millions of people and will have a generational impact. If you look at their gini coefficient you'll miss it entirely though, on the same time it went from 0.52 to 0.49.
It's worth noting that 0.49 Gini coefficient is pre-taxes and pre-transfers. Inequality decreased even without taking into account the enormous increase in transfers that the Chilean state can now afford.
There is an argument to be made that greater inequality leads to a class of elites with too much influence; which leads to governments prioritizing these elites in their decision making, therefore misaligning with the wellbeing of the nation which leads to bad policy.
In my opinion you can start to see this happening in the entire Western World.
The global elite macroculture is dismantling the very foundation of how a nation-state is supposed to function, and why we are so all stressed out right now.
I think the canonical example would be that if the USA had listened to their 'White Trash' it would have been able to prevent the 1st China Shock.
Another one: Canada with its near explicit policy of driving as much immigration to get to 100m population as soon as possible through immigration. Ofcourse, that will destroy the foundation that your nation is built on, and ultimately the nation itself. --> Which is why people will vote in a government to prevent it, and it won't happen (likely, hopefully).
Elites should listen to the population that built these great nations we all live in instead of looking too much at numbers, figures and their real estate portfolio.
I am personally on the winning side of the inequality divide -- I started with upper-middle class parents, got a top-tier education, and despite very mixed _luck_ (entering the job market in a recession twice, and narrowly missing joining a couple of start-ups that would've moved me from "well-off" to "absurdly wealthy" if I'd taken the right offers at the right times) that foundation ensured I came out doing just fine. My politics are basically grounded in the theory that an enlightened elite should practice something akin to the "noblesse oblige" of the pre-modern era, because it is both morally right, _and_ the correct move for self-interest, if you take a sufficiently long-term perspective.
If you don't want peasants with pitchforks and torches to burn the whole system down, you need to make sure not to engage in callous "let them eat cake" antics. Both right-wing and left-wing populist movements are threats to the cosmopolitan liberal order in which people like me thrive. My solution to that is to make sure that my version of the cosmopolitan liberal order very visibly helps _lots_ of people thrive. You need continuous, gradualist reforms that improve the lot of families who are below the median income and wealth level. Members of the elite who pursue bread-and-circuses policies where they actually let living standards erode, while periodically doing showy hand-outs (like stimulus checks with Trump's signature on them), and mostly just distracting the masses with culture-war bullshit, are playing with fire. Folks like the Kochs thought they were using the rubes, but then Trump came along and proved that the rubes were using them. And billionaires who are backing Trump for low taxes should take a look at what Putin did to Mikhail Khodorkovsky. No amount of money will insulate you from an authoritarian leader's whims, if you let him consolidate power.
Social-democratic liberal democracy: The worst, messiest system of government... except for everything else we've tried.
You mean like student loan foregiveness checks to buy votes or Salt -property tax breaks to suburbanites or all the other stimulus checks to buy votes of his special interests. Pope Medici Biden and his indulgences.
You had me until the weird pope thing.
Yeah, I think the limitation of the SALT deduction is fine-to-good and am annoyed at Dems who've lobbied to restore it. (I'd also love to phase down the amount of mortgage that you can take the mortgage interest tax deduction on, over time, given that realistically it's more a subsidy to mortgage-issuing banks than to homebuyers, anyhow.) And the student loan thing definitely seems poorly targeted if your goal is equity / reducing inequality, though that depends somewhat on how you structure it... Mostly I think Biden has pursued it because it's a thing the law lets him do. It does seem stubborn to keep pursuing it when we're already in a hot economy and don't need it as stimulus at all.
I always say that the Democrats are a "normally corrupt" party -- they're the kind of thing we've had for a century and more. The modern GOP is... something else.
"normally corrupt"...definitely incorporating that into my political lexicon. Thanks!
"There is an argument to be made that greater inequality leads to a class of elites with too much influence; which leads to governments prioritizing these elites in their decision making, therefore misaligning with the wellbeing of the nation which leads to bad policy."
Welcome to the USA. Where wealthy trust funders, divorcees, and wreak havoc through NGOs.
The US is fighting against it. Ending neo-liberalism is a step along the way. The realignment of something like a center in Congress is underway practically as I write helps. GOP ascendancy in state government seems to have ended and even the UAW won a unionization vote in TN. There's lots more to do though.
Nancy, I don't see the US (do you mean federal government?) fighting against the class of elites. Just the opposite. I don't know what you mean by "neo-liberalism" or why you want to end it. UAW unionization vote? I'm not seeing the connection.
Certainly the states have been something of a prelude to curtailing elitist power in the US
. (Elitism isn't only money. It is also thought police like the White Christian types.) Protecting women's rights at the state level is another sign and after the AZ SCOTAZ decision will certainly leap to the Federal level. I consider those who would deny women bodily autonomy elitists.
Most Federal legislation this year has been passed by bi-partisan coalitions of GOP and Dem Reps, certainly a sign of a move to the center which required a bi-partisan coalition to isolate the nut-jobs. It's a start.
As for neo-liberalism, it is supremely responsible for the rise of America's current elites. It is a failed economic system as the Great Recession showed and is slowly if inchoately being replaced. All to the good.
Nancy, We view the "US and elites" very differently. But, have a good day.
"A class of elites with too much influence" is a tautology. Elites, BY DEFINITION, are supposed to be a class with too much influence. The influence is the essence of elitists, a small group of people commanding disproportionate power.
Elitism is also protean, or shape-shifting. Whatever scarce resource, social position of high status, or military hierarchy is coveted because of its inherent rarity, elitism is a consequence of this competitive dynamic and is an immutable fact of life.
Boogaloo: "Elites should listen to the population that built these great nations we all live in instead of looking too much at numbers, figures and their real estate portfolio."
You mean like the Volkswagen workers who unionized Friday in the right-to-shirk state of Tennessee? You gotta love it, right? Right?
Ya. I'm not a fan of unions and i'm elitist to the core. I love elites, i'm part of the elite, and our influence in western civilization has been incredibly good, and a society that does not have an effective system of sorting people within a good elitist hierarchy is a weak and poor society by definition.
two things:
1. It is possible for there to be no unions but still address some of the issues that workers are complaining about if you listen carefully enough (e.g., don't send our manufacturing base to china)
2. intra-elite competition: the elite base expands in civilization as it grows more powerful. Which means you get greater intra-elite competition, which leads to divide at the elite level, which leads to divide at the level of the nation. People with more than 10m has gone up per capita by tenfold the past few decades for example. If anything Reps VS Dems nowadays are just elites who made their wealth in vastly different ways (e.g., oil/gas/real-estate vs tech) trying to guard their wealth in different ways and needing different legislation for that.
You know to rest of us, it sounds like you just want your serfs to be obedient. Unions is a way to force Elites to listen to people, since for the last 40 years, the elite have not listened.
This is not sorting society based on talent. There are less than handful of people that can become elite as you call it without substantial help from their parents. Your position in elite group right now is just based on your parent position in elite group and a huge amount of luck. You want to be a feudal lord but you just don't want to admit it. Hence, the neoliberal bullshit.
Hopefully in America, that goes away soon and you won't be able to do anything about it anymore.
I'm from a western european nation; there are no unions in my nation. We just redistribute the wealth effectively through a generous social welfare state. We basically have UBI here, although somehow people don't call it that. This makes sure everyone feels comfortable, and nobody has to sleep on the street and be hungry if they don't want to be. (some people are mentally ill tho)
This is why I don't want unions, it distorts the capitalist process. Allow capitalism to generate the wealth, and then effectively redistribute it in a way that is fair such that we can all live happy lives (assuming there is enough wealth to do so, which there is in my nation)
unions place the burden on competitive firms. This makes your country less competitive. Just allow firms to be competitive, tax some of the wealth created, distribute it fairly and efficiently.
And can you name this eutopia you are living in, the only country in the entire world that nobody has to sleep on the street and be hungry is Finland. Are you from there. In other Nordic countries, you will sleep in the streets and Finland is heavily unionized.
That being said, your entire promise is wrong. Unions don't distort capitalist process, the model in Germany actually enhances it. Capitalism is useful when capitalist improve efficiency, improve the process, improve the technology. All of those hard and it happens only in specific industries where there is a gain to be made by adopting new technologies, it is barely 10% of economic activities.
For the 90% of rest, union prevent firms from getting an advantage by exploiting, abusing and bullying their workers. That is a very positive outcome, let capitalist compete by actually improving their products or process, not by cutting the wages of their workforce.
Your opening statement and your first of two things are contradictory.
Elitism is conceding Corey Robin's definition of conservatism in "The Reactionary Mind." In plain English it's "Defend your status and the Hierarchy that feeds you." Elitism is context-dependent; claims to truth, wealth and power have always been contested.
Elites know they face challenges from below and competition to the side; there are several terms referring to the same elitist consciousness. Nietzsche's master morality, Gramsci's cultural hegemony, Marx's theory of social reproduction and the sociological term of art known as legitimizing ideology are all talking about the same thing.
It is not non-elites failure to listen to elites, carefully or not, that is the issue. For four decades, elites have not only profited by sending manufacturing to China, but also have pretty much gotten all of their policy prerogatives fulfilled through neoliberalism. Those manufacturing jobs are not coming back, manufacturing workers who lost those jobs don't want those jobs back, and the heart of conflict is about what did happen over those 40 years and not what should have happened.
LatAm has been bedeviled by its elites for a very long time, whether they are to the left or to the right. Perhaps education helps to erode that proclivity as well. It sure looks like Colombia is sliding back into its old ways but Milei might just break Argentina out of it. And I agree high inequality easily turns into government by elites.
I don't disagree, but human nature is what it is. People measure themselves by comparing themselves to others. So, to use your example, some people would be happier to lose ground, so long as people wealthier than them lost even more ground. Socialism/Communism = everyone (except those in power) are poor, but at least there is very little income inequality.
I agree with Bob and also you, David. I think "inequality" is overplayed and driven by resentment, as Bob points out. At the same time, "inequality" is going to keep being overplayed, and so elites need to pretend to care, to keep the pitchforks at bay.
The redistributive policies will, of course, make the pitchforks poorer over time, but they won't realize it. On the other hand, stopping the pitchforks from destroying everything is crucial for growth. It's a delicate dance.
The US is very good at this. A lot of the public have libertarian leanings in the US and so the country is a bit to the right of our developed peers. This is apparent when you look at the faster growth of the US compared to all other developed nations, over the past several decades.
Ya, the USA has a good thing going for itself! As a european I would say that if USA was safer in terms of violence than it would just be an all round superior nation to any european country. As it stands, I'd probably prefer to be in Europe due to safety concerns, but the USA as a nation is immensely powerful because of its belief in capitalism and markets.
North America: Canada, US, Mexico
Mexico is NOT part of Central America; though it’s part of Latin America.
It pisses off (this Mexican) to no end when Mexico is grouped w Central America.
As a venezuelan who studied economics in undergrad, this topic strikes close to home.
Worth noting that Spain focused on "exploiting" its colonies in contrast to Britain focused on "colonizing" the foreign lands it controlled. Spain held an iron grip on its colonies, as described in Marie Arana's amazing biography titled "Bolivar". Britain in its colonies even built bureaucracies staffed with locals, these were useful institutions which remained after the Brits left.
Bolivia's Evo Morales is far left but respected the independence of Bolivia's Central Bank, in contrast to Venezuela's Chavez who did the opposite on steroids by not only taking over Venezuela's Central Bank but also by creating opaque funds which at one point accounted for over two-thirds of "government revenue" which was ballooning due to the increase of the price of oil from $10/bbl when Chavez was elected to a high of $154/bbl in 2008.
Note that Friday evening the venezuelan opposition agreed on a candidate to oppose Maduro on the elections on July 28. Keep an eye on Venezuela, change is in the air!
Noah,
You are an extremely open minded thinker, and I wish you would similarly “open up” the discussion on inequality. In brief, though extreme inequality is often correlated with dysfunctional institutions and cultures, it is not actually negative in and of itself. This is something that I am absolutely sure you both know and appreciate. The inequality of incomes is not a negative side effects of markets, it is an essential part of how and why they work, and “solving” inequality therefore emasculates and destroys any effective market dynamic.
Of course the real question is in regards not to “inequality” but to “excessive inequality.” But the devil here is in the details. What is excessive, and what are the underlying causes contributing to this? As the report you link to explains, the solution for improved growth in SA has been education. This increases the productivity of the bottom quintile, and also increases the complexity potential of the market.
In the wealthier economies, it should not be taken for granted that higher inequality is necessarily a bad thing (it can be of course, in some ways). Higher inequality reflects the market signaling and incentivizing higher education and skill development, relocation to higher productivity areas, additional investment and entrepreneurial activity, and so on. Higher equality can also reflect excessive transfers that are discouraging work and education and mobility and investment and entrepreneurship.
My point is that inequality is a mathematical concept. Increasing or decreasing inequality is not in itself a good or bad thing. It depends. And what it depends upon are the things that make your insights into economics so interesting.
"What did affect pretty much every country in the region, however, were two things: 1) faster economic growth, and 2) increased education."
Let's spend a little more time talking about item 1.
The countries that grew in the region were those that practiced freer trade, more property rights, market friendly reforms, etc over the past couple of decades. Ie Chile, Peru, Colombia. Those that didn't have stagnated growth or become worse: Brazil, Argentina, Venezuela.
As an Argentine it's pretty clear to me why we've failed to solve poverty, and it's our penchant for seemingly simple populist solutions.
"For example, Morten N. Støstad"
Støstad's data comes from wid.world. That is Piketty, Saez, Zucman, etc... not what I would consider an unbiased source. Also, he doesn't mention whether he's using Piketty's post-tax income, or post-tax disposable income. Disposable is useless (or maybe not if you want an index that you can abuse in order to score ideological points).
A few gems:
- "There are many ways to reduce inequality... minimum wages"
- "We seek to distribute the entirety of national income among resident households (including... to and from the foreign sector)".
- "Our estimate of missing net foreign income is based on the work of Zucman (2013). A well-established anomaly of balance of payment statistics is that, when summing net foreign incomes at the world level, the total tends to be consistently negative rather than around zero. As if the world as a whole was a net debtor. Since this is not possible, the main explanation for that fact — given by Zucman (2013) — is that assets hidden in offshore tax havens get recorded as a liability but never as an asset"
You usually cite very reliable sources.
Latin America is also probably the most crime-ridden region of the world, although perhaps it is the inequality that fuels the drug cartels in the first place?
And as for Venezuela, how much of its collapse was down to incompetence, and how much was it down to Chávez being a massive Fidel Castro fanboy who basically turned Venezuela into Cuba's oil colony?
More of the first than the second, and you also have to add the greatest plunder in modern history by Chavez and his friends. So probably like this:
1. Massive plunder
2. Gross incompetence by Chavez cronies who destroyed PDVSA and other smaller industries
3. Socialist / communist policies
The culture is entirely corrupt. Even people who would prefer not to be corrupt are corrupt, because it's the only way to survive.
During the 2010's, I would regularly read what the Chavistas had to say on https://www.aporrea.org "Price controls would work, except for those greedy shop keepers." "The value of the Bolivar (this was at least 8 added zeros ago) was under attack by a web site dolartoday.com run by the CIA". It had nothing to do with, say, giving insiders US dollars at a fake official exchange rate, so they could go exchange them at the black market (i.e., actual) rate and get rich. "Printing money does not cause inflation. Failure to enforce price controls was the real source." "The destroyed oil company, electrical grid, water systems, etc., are all due to CIA sabotage; not to corruption and incompetence." And so on. I quit following at some point, because the stunning ignorance went from amusing to sad.
As a venezuelan, thank you for your comment.
The point about the shopkeeper really made me think years ago, highlighted the fact that the solution was not to punish the last shopkeeper standing but rather to create conditions for many shopkeepers to appear and reduce prices by competing in the market. Adam Smith's butcher reincarnated, so to speak.
I was never particularly interested in Venezuela until I hired a professional (lawyer by training) Venezuelan back in the early 2000s. Shed had recently immigrated to the US. She had vitriolic hatred of Chavez (and also Castro). The same kind that AWFLs in the US have for Trump. She became a US citizen, and also passed the California bar after only 6 years in the country. She and her brothers were able to leave, but her father (who had originally immigrated to Venezuela from Spain) reused to leave his business, etc., and also developed Alzheimer's. I received quite an education on Venezuela.
The true believers on Aporrea are mostly old men. One wrote an article explaining that the law of supply and demand was a lie. They would have huge dust ups over their right to receive "the leg" (pig hindquarter) for Christmas, or their right to free gasoline. A bunch of obviously educated people absolutely clueless as to how inflation happens. If a factory cannot produce goods to sell at the price we demand, the expropriate the factory and close it down. Hey, how come we no longer have breakfast cereal? No shopkeeper can do business in a hyper-inflationary environment. Even if the government agreed to a price, it would be impossible two weeks later. They have to make enough profit of their current inventory to pay for new inventory, which now costs twice as much. Lenin wanted shopkeepers hanging from trees and lampposts, so I suppose it could have been worse.
There was a woman (I forget her name - but she had a face made for radio) who was in some official capacity for Maduro, who was absolutely certain that printing money while decreasing production has nothing to do with inflation. Nope. The entire problem was a website. Yes, that's right. A website can destroy a currency. And she was supposed to be in charge?
I've mentioned before that we have a huge influx of Venezuelan migrants in Denver. It's interesting to see the differences between the younger migrants and the older ones. The folks over 40 seem to be more functional and certainly more literate. One of the over-40 folks said that it's because she and her cohort actually got educated. The younger group are barely literate. There are Facebook groups trying to connect locals to migrants to provide support and the migrants sometimes can't make themselves understood because they can't read, write, or spell. Local Denverites who are fluent in Spanish have as much trouble as those of us using translation apps.
And of course migrants who have no work permit, no documents, AND no literacy or numeracy are at a huge disadvantage when trying to find any kind of work or even work training. It's all quite distressing.
As an over-40 venezuelan in USA, I hear ya.
My generation had to immigrate to USA by first gaining a well-paying job in USA by either studying in USA or by working in company which then transferred to USA, feels very unfair for newer generation of Venezuelans to just walk in.
Note that almost all are law-abiding, few of us would drop entire lives and walk 3 thousand miles to then jeopardize it all by willingly turning to crime. But there are a few idiots, who then get played up by the clickbait media.
The younger people seem to be completely unaware of how the U.S. works. They're stunned that they can't work without permits, can't legally drive without licenses and insurance (not that that stops them), can't get affordable housing, etc. I don't think they're mostly criminals at all. Well, a few are criminals, a few are total sweethearts, and most are just ordinary people trying to get by. There's a lot of suffering and it's hard to see, especially since I can't magically create jobs or change the immigration system.
Venezuela is a power-based society whereas USA is a rule-based society. This influences how individuals learn to interact with each other and with authorities in ways that are pervasive.
Bus them up to Bolder, and drop 2-3 off at each house with a virtue signaling sign (i.e, every house in Bolder). Problem solved
The graphs that you cited ends in 2012-2014, which is roughly before the commodity prices crashed (most notably, oil prices), and with that, the GDP growth for nearly all Latin American countries. (Just note that Argentina for now has known GDP per capita decline for over a decade, for example).
Also, the pink tide largely receded from roughly the same time; even though there are more left-wing leaders like Boric or Petro, they are less radical compare to people like Chavez though. Just some ideas for you to improve your analysis 😀
Who cares about equality? what really matters is poverty, we can have very little inequality and have generalized poverty
Instituting high school in the U.S. made an Economic Leap Forward possible. The world soon followed, institutionalizing high school in their societies.
I could say that thermonuclear war is the greatest threat to the survival of America. I’d be right but since that is global ending threat it does’t apply. What is the problem which threatens the survival of America? Our public schools continuing inability to educate our youth.
People believe that a good school depends on clean nice buildings, safety, good teachers and administrators. Sorry but the answer is no, they only matter on the margins. The single thing that matters most is the cohort of children. What makes a good cohort? Children who go to school to learn. Parents have the most control over whether children come to school to learn or not.
Why do charter schools do so well? It is largely due to parents who want their kids to go to one because they value education. My wife, a 6th grade language arts teacher in a good suburban school with largely middle to upper middle class homes can point to why her kids don’t do well. They don’t want to. They’d rather talk, have fun, do anything other than school work. How does the school treat kids who choose not to do their work? Spend time talking instead of working on their work?
Nothing. the worst punishment you can get at her school is lunch detention. 25 min. You don’t get to go to the cafeteria and spend that time with friends. There is no holding children back who don’t do their work. There is no suspension. No after school detention and no Saturday suspension.
When notes are sent home they have no effect. I could go on but I’ll share one email from a frustrated parent. “We have tried everything but he simply doesn’t mind. Frankly we are close to giving up”
Have parenting skills been lost? My solution is to start holding kids back. If parents cannot instill a culture of learning, explain that school is their job, something has to be done to motivate these kids.
I will also say, everybody seemingly has ADD ADHD, anxiety or depression or something that affects their learning....Without some discipline our schools are going to hell in a hand basket.
I wonder to what degree cell-phones have helped enrich the poor and increase the middle class. Now obviously you need some education to use a phone so this isn't exactly competing with the educationa hypothesis. However once you hit that base the main thing a cellphone does is make it easy to communicate with potential customers and suppliers and to search for better deals/offers.
In the case of Venezuela, I have seen that youths from terrible schools are nonetheless able to read and write on their smartphone quicker than I can!
I don’t think it has anything to do with creating equality. It keeps people ignorant and dependent.
For example, on Google maps, there is a function where the compass points whatever direction you’re going.
THAT ISNT A THING!
The damn compass always points North.
If you can’t read a map, are ignorant of geographical direction, I suppose you need an arrow to tell you you’re moving forward in some direction.
“That way”?
Pfffft
That way.
That's great and all, but actually the compass icon (red + white) does point north in Google Maps. The "your location" icon points in the direction of travel.
I was also a north-oriented map purist for a few years until I realized that the direction of travel is a superior way to orient a map.
Also the first compasses actually pointed south, and the Chinese word for compass is "south pointing needle" - a fact that I coincidentally learned earlier today watching an educational video - on a smartphone.
Education over indoctrination, beautiful isn't it. That way.
Wut? Only for the cognitively challenged.
Very useful stuff but I live in Mexico in the center of the country and have worked extensively in many parts of the country and there is some reliable evidence that the numbers for Mexico are somehow inaccurate. During the time(3 decades) I have worked there the number and breadth of secondary and tertiary educational opportunities have expanded significantly. At the same time if you move around the country you see large numbers of middle class housing projects being built - the fastest growing city in the country (Queretaro) is replete with many developments. The recent moves in several countries to the left (with the counter example of Milei in Argentina - if he can stay the course) have not exactly been a harbinger of improving the GINI.
I would question the assumption that minimum wages have anything to do with progress. Depending on where the minimum wage is set in relation to the market value of labor, it can cause unemployment and the substitution of automation at the lowest rung of the economy--especially for those trying to enter the labor market for the first time. In other words, a minimum wage has the strong potential to increase, not decrease, inequality.
It can also do the opposite; in fact both are theoretically possible, but the good outcome has better empirical evidence for it.
(The theoretical justification being that employers are monopsonistic and lack pricing information.)