Wednesday, December 5, 2018

Branko Milanovic — Why inequality matters?

This is the question that I am often asked and will be asked in two days. So I decided to write my answers down.…
The reasons can be formally broken down into three groups: instrumental reasons having to do with economic growth, reasons of fairness, and reasons of politics....
Contra trickle down, on  one hand, and, more importantly, critiquing the engine that drives capitalism— profit as surplus value over subsistence. The consequence of this is paradox, which Marxians call "internal contradictions."
We have to go back to the beginning and instead of seeing high inequality as promoting investments and growth, we begin to see it, over time, as producing exactly the opposite effects: reducing investments and growth.
The is a very clear exposition of key issues affecting the capitalist model in a very short space. It suggests that capitalism cannot be fixed without altering fundamental assumptions about how it works.

Global Inequality
Why inequality matters?
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


Andrew Anderson said...

More fundamentally: Why ethical finance matters - so that profits are justly shared.

Instead, we have the kludged-up remnants of the Gold Standard, which is itself fundamentally unjust since fiat should be as inexpensive as practical so that all citizens may use it directly and not have to use bank deposits.

Yes, we now have inexpensive fiat but may the entire population use it? Nope. Just like under the Gold Standard, only "the banks" may use fiat except for unhygienic, unsafe, inconvenient, totally inadequate for modern commerce physical fiat, aka "cash."

Noah Way said...

Trickle-down has nothing to do with economics but is an entirely accurate description of the guiding principles of culture. When those at the top are rewarded by lying, and theft, and protected from or immune from any legal consequences for these behaviors, these activities ‘trickle-down’ through society. It’s now every man for himself - and the way to advance is by stomping on others.