Sunday, March 26, 2017

Branko Milanovic — The welfare state in the age of globalization

In my previous post that looked at policies to reduce inequality in the 21st century, I mentioned that I will next discuss the welfare state. Here it is...
Global Inequality
The welfare state in the age of globalization
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

17 comments:

Bob said...

(1) policies that would lead toward equalization of endowments so that eventually taxation of current income can be reduced and the size of the welfare state be brought down, and (2) that the nature of migration be changed so that it be much more akin to temporary labor without automatic access to citizenship and the entire gamut of welfare benefits.

(1) 'Equalization of endowments' will be recognized as socialism.
(2) Has been the case for decades, in both the 'nature of migration' (i.e. desperation), immigration policy (e.g. work visas) and through the joys of illegal status.

The lack of a welfare state in developing countries forces people to (1) emigrate, and (2) send money back to support those they leave behind. Relying on the generosity of the host countries safety net is not an option for those who have dependents back home.

Offering "solutions" based on perception is not a good idea.

Matt Franko said...

"The lack of a welfare state in developing countries forces people to (1) emigrate,"

Negative doesnt attract, positive does... so you cant say that the turd world conditions "repels" people to the US (west) they are already there in the turd world in the first place... so its not that the turd world forces people away its that the positive conditions here ATTRACTS...

Zombies are ATTRACTED towards not repelled away....



And if they are allowed in to work legally (ie pay taxes) then they should certainly gain access to "welfare" benefits...

iow current legals should have access to ACA, Medicaid, education, due process, etc...

Otherwise dont let them in at all in the first place....

Matt Franko said...

Here Bob:

"Q: Do electrons flow from the positive end of a battery to the negative end (via a simple series circuit) or from the negative end to the positive?
- Mike, Pocatello, Id

A: Electrons are negatively charged, and so are attracted to the positive end of a battery and repelled by the negative end. So when the battery is hooked up to something that lets the electrons flow through it, they flow from negative to positive."

https://van.physics.illinois.edu/qa/listing.php?id=583


Everything works this way... flow is from negative (turd world) towards positive (US/west)...

Bob said...

Electrostatics would serve as a better analogy. Electrons (migrants) are attracted to areas of positive charge (better opportunities). At the same time, electrons repel each other. If allowed to reach equilibrium, there would be an equal distribution of positive and negative charges.

Economic zombies leaving turd world, finding employment, and sending remittances reduces pressure in source country. It's a redistribution of pressure that wouldn't otherwise occur...

Matt Franko said...

The underlying condition is surplus so you cant look at it like economists with simple unconditional "supply and demand!" allegedly creating "equilibrium!" in one sub-system...

We are not in equilibrium (system wide) we are in surplus...

so the flow is towards the areas where there is better recognition/distribution of the surplus...

Matt Franko said...

"sending remittances reduces pressure in source country. "

I might agree IF the nation receiving the remittances changed out the currency 1:1 rather than accrue a foreign financial claim... but we have exchange rates that are adjusted/regulated by fiscal agents of the govts.... so pressures can still build in real terms as the financial terms are allowed to adjust...

You cant have both... iow if we adjust the financial terms the real terms are going to become unstable or perhaps 'under pressure' with real limits of pressure ... if we held the financial terms fixed then the real could adjust which is what we need to have happen...

Bob said...

Increase the flow. Problem resolved sooner rather than later. But the better half doesn't want that. So they build walls...

Bob said...

The plight of migrants is not on the radar when governments fiddle with the exchange rate. What happens when money is wired overseas?

Matt Franko said...

Well the fiscal agents rob a bunch of it for starters ....

Noah Way said...

@Matt

The lack of a welfare state does force people to immigrate. Case in point: after NAFTA, which unemployed millions of Mexicans (due to dumping of overproduced US taxpayer-subsidized corn), illegal immigration exploded.

As to 'sending remittances', Reagan's War on Drugs was economic, launched to stem the outflow of billions of dollars in cash.

Matt Franko said...

"dumping of overproduced US .... corn"

well this is a recognition/distribution of the real surplus originating in the US nation .... so perhaps those looking for more positive conditions will be attracted to that nation...

You know if I had one serious criticism of Trump (besides his "we're out of money!" beliefs...) it would be that he wont turn his criticism/sarcasm on the pathetic leadership of these turd world nations being led in disgrace... I'd like to see some of that...

Noah Way said...

@Matt

real surplus originating in the US

ARTIFICIAL surplus in the form of direct subsidies for corn production paid by taxpayers. So much surplus that it is force-fed to cows (ruminants that eat grass) and used to produce ethanol (which requires 30% more energy to generate than it produces AND lowers fuel efficiency [mpg] by 15-27%).

If production wasn't subsidized and guaranteed artificial markets were eliminated, production would be radically reduced to eliminate the artificial surplus. If NAFTA was repealed the corn wouldn't be dumped in Mexico for 20% less than a subsistence farmer's cost to produce it.

Detroit Dan said...

Thanks for posting this, Tom. Important topic, and Branko Milanovic appears to be a real authority on the issues.

Matt Franko said...

The financial terms don't (directly) effect the real terms so the US can in real terms produce a real surplus which can be exported...

The financial terms have a non-material effect on the people in US ag ... iow they want to be paid for what they produce ... but that doesn't effect the real (material) terms they are in permanent surplus...

Look you can plant one little apple seed and then like a bazillion apples come out of it... munnie has no direct influence on this process we are in permanent surplus (in real terms) ...

These morons THINK "were out of money !" so munnie is often thought of as scarce...

Tom Hickey said...

Capitalism (favoring capital as a factor) leads to inequality in distribution of income and wealth (the surplus) and this creates a power elite that oppose more equitable distribution.

The solution. End capitalism as favoring capital over labor (workers) and land (the environment), whence the surplus is extracted and funneled to capital (owners of financial and real assets).

I would favor an integralism that involves balancing the factors iaw priority of importance.

Bob said...

The crisis in Puerto Rico is encouraging a flow of US citizens towards the US mainland.

Noah Way said...

End capitalism as favoring capital over labor

Exactly. The guy who pumps your cesspool is infinitely more valuable than the Jamie Dimons of the world. Capitalism is a crime against humanity.