Mitchell responds to Mankiw's apologetic for the "job creators" — after a short comment on Japan.
Bill Mitchell – billy blog
It is hard to defend the 1 per cent by claiming their contribution added value
Bill Mitchell
See also Lars Syll, Suggestion for Mankiw’s reading list
Mankiw "defends" himself against an Internet firestorm.
Gred Mankiw's Blog
In Defense of Me
Gregory K. Mankiw | Professor of Economics and Chairman of the Economics Department at Harvard University
(h/t Ramanan)
See also Lars Syll, Suggestion for Mankiw’s reading list
Mankiw "defends" himself against an Internet firestorm.
Gred Mankiw's Blog
In Defense of Me
Gregory K. Mankiw | Professor of Economics and Chairman of the Economics Department at Harvard University
(h/t Ramanan)
As long as half the population sees some gain in wealth, they vote to enable the rich to impoverish the poor. This explains the current politics of the country. In the chart in the link below the problem lies in in center of the distribution where the gains in wealth are small. These people identify with the people at the very top and are more concerned about handouts to the poor than handouts to the wealthy and corporations in the form of tax breaks and loopholes, so they vote to dismantle unions and squeeze the working people that are losing wealth. As long as the wealthy elite that run the country can continue to throw this middle group a bone to keep them voting in the interest of the wealthy, inequality will continue to increase.
ReplyDeletehttp://thecurrentmoment.files.wordpress.com/2012/04/share-total-wealth-1983-2009.png
@ elwood
ReplyDeleteYes, as Marx pointed out the problem is the petite bourgeoisie or lower middle class. Their economic interest is with the lower class but continued rule of the haute bourgeoisie or upper middle class who are the ownership class in capitalist societies that are representative democracies depends on their convincing the lower middle class to vote with them against their real economic interests. The ownership class does this with the considerable power that ownership bestows.
At the time of Marx, the ownership class consisted of the haute bourgeoisie as the owners of the means of industrial production ("capitalists") and the owners of agricultural production (the landed aristocracy and titled gentry). With the ending of the landed aristocracies post-WWI, the haute bourgeoisie became the dominant class to which "everyone" could aspire.
Did anyone read Mankiws essay defending the 1%?
ReplyDeleteI couldnt get through it all but one of his starting points was taking a position where everyone starts out exactly equal..... no stratification. This starting point is so absurd (No one is suggesting nor longing for it) that it makes the rest of his argument silly.
Would Mankiw agree that if 1 person had all the wealth that that level of inequality was unsustainable, or at least fraught with problems that even he wouldnt like?
So lets agree that these two extremes are bad and get to haggling about what is the right level of inequality. Of course to do this we have to admit that our policies can affect the inequality.... and in fact have.
I think elwoods is onto something. It's not just about the 1% against everyone else. It's about the much larger proportion of the economy that derives income from the labor of the schlubs. Look how much of the "economics" blogosphere is just about trading and chasing yield - i.e. giving and debating advice about how to turn money into more money. You give some guys some money to buy a financial "product", sit back and - voila! - you magically have more money. Where do people think all of that value comes from?
ReplyDeleteAnswer: from the woman who works in my office in a back brace, schlepping crates and cartons to load trucks for relative peanuts, while the company's stockholders sit on their asses and draw down the added value she created.
It's not just the 1% who are engaged in parasitism.
Mankiw's a tool. He's been telling and re-telling the same plutocratic sob story for years. That's how he got his gig. Mediocre minds can rise to the top if they are willing to play court stooge and apologist for the rulers.
ReplyDelete"Mankiw's a tool. He's been telling and re-telling the same plutocratic sob story for years. That's how he got his gig. Mediocre minds can rise to the top if they are willing to play court stooge and apologist for the rulers."
ReplyDeleteThere is not a single word, comma or period in that quote I could disagree with. I just hope I had written it.
I'd only add two more words: suck-up and repugnant.
It's not just the 1% who are engaged in parasitism. Dan K
ReplyDeleteWithout the counterfeiting cartel, the banking system, it is likely that workers would have been paid with common stock, thus eliminating the distinction capital and labor long ago.
It's ironic that liberals and Progressives have to be taught the virtue of "sharing." Didn't they go to kindergarten? :)
Yes, it's hard to defend arbitrary distortions of asset allocation. It's a tough job, so they'll hire fools to do it.
ReplyDeleteThen the bulk of us get distracted calling the fools fools.
Classic divide and conquer strategy.
It's referred to as the "Straw Mankiw" I believe.
It's been a long time since the ownership of stock, by itself, was equivalent to the control of the means of production.
ReplyDeleteNowadays, anyone following the business media knows that ownership of stock, per se, means little: what matters is who runs the business.
In other words, "Mum and Dad Investors" (as small-fry shareholders are called in Australia) may own shares in a firm, but they have no real influence; it's the firm's CEO who's the boss.
But you don't need to take my word for it. Check the last bit in the comment of this Bob Smith guy (June 21, 2013 at 08:53 AM), in a comment in Worthwhile Canadian Initiative:
"Arguably, the problem with the US financial sector is that its [sic] been captured by its insiders - its employees [i.e. CEOs and other corporate chieftains] skim off all the cream as employment income, leaving equityholders (and the treasury) holding the bag when things go south. They get the upside return but don't bear much of the downside risk. There's an ironic Marxist twist to this, in the cheap money-era, the insiders to the financial servcies [sic] sector control the scarce means of production (human capital)[???] and can exploit the holders of the more common means of production (unskilled labour, capital)."
http://worthwhile.typepad.com/worthwhile_canadian_initi/2013/06/labour-share.html#more
The guy may be a self-described "right wing-nut" and his explanation may be a bit simplistic (he offers no evidence, either; and uses fairy-tale explanations, like the "human capital" BS), but, all things considered, I don't think he is far off the mark.