Global Inequality
Why 20th century tools cannot be used to address 21st century income inequality?
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
1 comment:
Meh.
There are only 2 proven systems to achieve low inequality in a capitalist economy.
The Japanese system relies on social mores to voluntarily limit executive compensation and to voluntarily provide steady employment for workers.
The Scandinavian system relies on taxation and a generous welfare state that includes universal education, health care, parental leave, etc.. In Finland public school attendance is mandatory, so everyone gets the same quality of education. In Finland health care is nationalized so everyone gets the same quality of health care. Government spending is typically ~50% of GDP so effectively their economies are half socialism, half capitalism.
(Note that unions remain intact in Scandinavia despite the shift to a service economy, so Branko's claim that unionization is not feasible for service jobs does not hold water. I would say that the difficulty of unionizing America has more to do with our John Wayne - Ayn Rand culture).
Those are the facts. No other capitalist systems have been proven to produce low inequality.
Re: Branko's claim that taxes are not politically feasible. In fact, polls show that even Republican voters believe the rich should pay more taxes, so progressive taxation is politically feasible in a real democracy, the problem is that much of the West is a plutocracy with sham elections where we only get to vote on personalities, not on issues.
But at least people are recognizing that we need to do something about inequality.
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