Re:How People Get Rich Now
by FabHK on Monday April 12, 2021 @03:13PM
(#26783765)
Hmmm. The traditional (1960's) view (Kuznet's "Inverted U") is that starting from low-tech societies where everyone has more or less the same, inequality rises with the advent of technology, then falls again as democracy and the welfare state kick in.
Thomas Piketty in his magnum opus Capital in the Twenty-First Century argues that the rise in inequality is inevitable (his famous r > g) and only interrupted by wars, depression, hyper inflation, and similar catastrophes that destroy a lot of wealth. That's rather more exciting than stagnation.
Branko Milanović’s more recent (2016) Global Inequality: A New Approach for the Age of Globalization (which originated the famous elephant graph [2]) notes that 1) inequality has risen recently within nations, but decreased among nations; 2) the Kuznet inverted-U needs to be replaced by Kuznet waves; 3) there does not seem to be an efficiency-equity trade-off in the long-term 4) social mobility seems to be falling (such that accidents of birth basically determine your station in life again, as in previous centuries).
> periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.
Here, Milanović distinguishes "malign" equalisers, which reduce both inequality and average income (namely the ones noted by Piketty: wars, epidemics, depression, etc.), and "benign" ones: widespread education, greater social transfers, and progressive taxation. [3]
Thomas Piketty in his magnum opus Capital in the Twenty-First Century argues that the rise in inequality is inevitable (his famous r > g) and only interrupted by wars, depression, hyper inflation, and similar catastrophes that destroy a lot of wealth. That's rather more exciting than stagnation.
Branko Milanović’s more recent (2016) Global Inequality: A New Approach for the Age of Globalization (which originated the famous elephant graph [2]) notes that 1) inequality has risen recently within nations, but decreased among nations; 2) the Kuznet inverted-U needs to be replaced by Kuznet waves; 3) there does not seem to be an efficiency-equity trade-off in the long-term 4) social mobility seems to be falling (such that accidents of birth basically determine your station in life again, as in previous centuries).
> periods of great inequality are correlated with significant economic growth (usually related to advances in automation, which tend not to be universally distributed) whereas periods of equality can generally be attributed to stagnation.
Here, Milanović distinguishes "malign" equalisers, which reduce both inequality and average income (namely the ones noted by Piketty: wars, epidemics, depression, etc.), and "benign" ones: widespread education, greater social transfers, and progressive taxation. [3]
[1] https://en.wikipedia.org/wiki/Kuznets_curve
[2] https://en.wikipedia.org/wiki/The_Elephant_Curve
[3] https://economics.hse.ru/data/2015/12/23/1132608306/TOC_may....