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This article is a little odd - it mentions Branko Milanovic yet completely dismisses without argument Milanovic's primary and extremely well supported result: g

This article is a little odd - it mentions Branko Milanovic yet completely dismisses without argument Milanovic's primary and extremely well supported result: globalization drastically reduces inequality. Before globalization, some people (e.g. American auto workers) held extremely privileged positions by virtue of threats of violence against economic competitors - particularly those overseas. Globalization has reduced (though not eliminated) these violent threats and has drastically reduced inequality. This is one of Milanovic's key graphs: http://www.demos.org/sites/default/files/imce/fig2_0.png http://www.demos.org/sites/default/files/imce/fig2_0.png This is his other key graph: http://2.bp.blogspot.com/-0we_c3Ob8Ds/UrDEMjcK3MI/AAAAAAAAEb8/Izydk1Hsi8I/s1600/milanovic+1.jpg http://2.bp.blogspot.com/-0we_c3Ob8Ds/UrDEMjcK3MI/AAAAAAAAEb... One of his more detailed arguments: http://siteresources.worldbank.org/INTPOVRES/Resources/477227-1142020443961/Module5_chap9_10.pdf http://siteresources.worldbank.org/INTPOVRES/Resources/47722... Economics has already answered why inequality has dropped drastically in the past 20-30 years. Some folks just don't like the fact that the answer is capitalism.

RobertoG 11y ago
Is it fair to talk about inequality inside a country and between countries as it is the same? Obviously, if you move the production to other countries you are investing in those countries. That should raise the living standards for the people there (and this is a good thing). But this don't, I think, invalidate Piketty and others arguments that tell us about the general trend in the system. Maybe, you don't like that capitalism as answer to everything is not a good answer. Markets are great as tools but terrible as goods.
- yummyfajitas 11y ago
  I'm talking about inequality between humans - I care nothing about inequality between countries. I have lived in India, and I can state based on extensive experience that Indians are also humans. Piketty's entire case is looking at stats in the US, UK and France, ignoring the east and the world as a whole. He mentions Balzac more frequently than India and China, which is ridiculously myopic in a book on inequality. Ignoring his other flaws (which I've discussed at length) global data does invalidate him.
  - RobertoG 11y ago
    Piketty is trying to describe a trend in the system. His message is very clear: If (rate of return on capital > rate of growth) then inequality happens. This is not a so absurd thing to say. In support of this, he contribute massive data where data was available. You can agree with it or not, but it should discuss in its own merits and don't dismiss it because it is not convenient.
    - yummyfajitas 11y ago
      I am indeed arguing the claim has no merit, rather than simply dismissing it. Pikettys message (or at least your interpretation of it) is simply wrong. You need more than r>g as simple math examples show: https://www.chrisstucchio.com/blog/2014/piketty_and_inequality.html https://www.chrisstucchio.com/blog/2014/piketty_and_inequali... (Piketty does have a paper where he provides sufficient, albeit wildly unrealistic, conditions where it is true. I.e. you need a lot more than r>g.) I'm also arguing that brankovics data is more complete than pikettys, and invalidates it. This is precisely an argument against rather than a dismissal. Dismissal is what the op did to brankovic - ignore the argument rather than show why it's wrong.
    - ajuc 11y ago
      Isn't it like measuring temperature in non-isolated system and saying "entropy decreases spontanously"?
      - RobertoG 11y ago
        I like your metaphor, I think I'm going to use it in the future. Entropy is going down in India and China but it's going up in the States and Europe. Does it means that the entropy trend, of all the system, is going down or up?
    - qubex 11y ago
      The thing that annoys me is that compounding (of interest, or economic growth) is order-dependent: given an average but unequal rate of either, you always maximise the outcome by placing the higher values earlier, and the smaller values later, so that the low rates (of interest, or of economic growth) compound upon what is already a maximally expanded base. So speaking of averages is actually rather misleading.
asgard1024 11y ago
> globalization drastically reduces inequality Maybe it reduces inequality between countries, but does it reduce inequality between people (different social classes within countries)? > some people (e.g. American auto workers) held extremely privileged positions by virtue of threats of violence against economic competitors - particularly those overseas Really? I thought they produced cars mainly for the internal market.. I don't see much evidence of any "threats of violence" coming from auto workers to the rest of the world. To make myself more clear, I am willing to accept the globalization (or capitalism) reducing inequality globally as a positive thing, if it wouldn't increase inequality inside the developed countries. But that's not what really happened (profits of Western corporations are all-time high) and that's why it's a cause for concern.
- yummyfajitas 11y ago
  It reduces inequality between people, such as an American auto worker and a Chinese auto worker. I don't see much evidence of any "threats of violence" coming from auto workers to the rest of the world. Think about what happens when a Mexican attempts to walk to Detroit and apply for a job at GM. Violence will be used against him, and against GM, if they voluntarily transact. Or think of what happens today when a Brazilian sugar manufacturer attempts to sell sugar to willing purchasers in the US. If you care so much about inequality within political boundaries, why not just move the boundaries to reduce inequality?
  - blfr 11y ago
    Think about what happens when a Mexican attempts to walk to Detroit and apply for a job at GM. Violence will be used against him, and against GM, if they voluntarily transact. GM and Mexicans can't also voluntarily transact in my kitchen or in the foyer of my building regardless of what impact it would have on inequality. Violence would be used against them if they tried. Other citizens have certain rights, that are a lot like property rights in condominiums or HoAs for example, to decide what happens in their country. If GM and Mexicans want to voluntarily transact, they can do it in Mexico, should Mexicans allow it, or some third country where they're both welcome. Your argument is basically an argument for communism (as in common ownership, not any particular political system): if some people have what others need, why not just redistribute it?
Mikeb85 11y ago
> Economics has already answered why inequality has dropped drastically in the past 20-30 years. Except this isn't quite true. In most countries inequality has increased, although baseline poverty has indeed been raised somewhat (and probably for different reasons than you think). > Some folks just don't like the fact that the answer is capitalism. In countries where inequality has actually decreased, it's been mainly because of socialist-style politics. Even the decrease in base poverty in many countries is caused by transfers of wealth from migrants back to their families. The reduction in inequality this century was because of 2 world wars, and 50+ years of Marxism/communism in various parts of the world. Data shows that in many countries (especially fiercely capitalist ones) inequality is actually increasing...
deleted 11y ago
[deleted]

RobertoG 11y ago

Is it fair to talk about inequality inside a country and between countries as it is the same? Obviously, if you move the production to other countries you are investing in those countries. That should raise the living standards for the people there (and this is a good thing). But this don't, I think, invalidate Piketty and others arguments that tell us about the general trend in the system. Maybe, you don't like that capitalism as answer to everything is not a good answer. Markets are great as tools but terrible as goods.

yummyfajitas 11y ago
I'm talking about inequality between humans - I care nothing about inequality between countries. I have lived in India, and I can state based on extensive experience that Indians are also humans. Piketty's entire case is looking at stats in the US, UK and France, ignoring the east and the world as a whole. He mentions Balzac more frequently than India and China, which is ridiculously myopic in a book on inequality. Ignoring his other flaws (which I've discussed at length) global data does invalidate him.
- RobertoG 11y ago
  Piketty is trying to describe a trend in the system. His message is very clear: If (rate of return on capital > rate of growth) then inequality happens. This is not a so absurd thing to say. In support of this, he contribute massive data where data was available. You can agree with it or not, but it should discuss in its own merits and don't dismiss it because it is not convenient.
  - yummyfajitas 11y ago
    I am indeed arguing the claim has no merit, rather than simply dismissing it. Pikettys message (or at least your interpretation of it) is simply wrong. You need more than r>g as simple math examples show: https://www.chrisstucchio.com/blog/2014/piketty_and_inequality.html https://www.chrisstucchio.com/blog/2014/piketty_and_inequali... (Piketty does have a paper where he provides sufficient, albeit wildly unrealistic, conditions where it is true. I.e. you need a lot more than r>g.) I'm also arguing that brankovics data is more complete than pikettys, and invalidates it. This is precisely an argument against rather than a dismissal. Dismissal is what the op did to brankovic - ignore the argument rather than show why it's wrong.
  - ajuc 11y ago
    Isn't it like measuring temperature in non-isolated system and saying "entropy decreases spontanously"?
    - RobertoG 11y ago
      I like your metaphor, I think I'm going to use it in the future. Entropy is going down in India and China but it's going up in the States and Europe. Does it means that the entropy trend, of all the system, is going down or up?
  - qubex 11y ago
    The thing that annoys me is that compounding (of interest, or economic growth) is order-dependent: given an average but unequal rate of either, you always maximise the outcome by placing the higher values earlier, and the smaller values later, so that the low rates (of interest, or of economic growth) compound upon what is already a maximally expanded base. So speaking of averages is actually rather misleading.

asgard1024 11y ago

> globalization drastically reduces inequality Maybe it reduces inequality between countries, but does it reduce inequality between people (different social classes within countries)? > some people (e.g. American auto workers) held extremely privileged positions by virtue of threats of violence against economic competitors - particularly those overseas Really? I thought they produced cars mainly for the internal market.. I don't see much evidence of any "threats of violence" coming from auto workers to the rest of the world. To make myself more clear, I am willing to accept the globalization (or capitalism) reducing inequality globally as a positive thing, if it wouldn't increase inequality inside the developed countries. But that's not what really happened (profits of Western corporations are all-time high) and that's why it's a cause for concern.

yummyfajitas 11y ago
It reduces inequality between people, such as an American auto worker and a Chinese auto worker. I don't see much evidence of any "threats of violence" coming from auto workers to the rest of the world. Think about what happens when a Mexican attempts to walk to Detroit and apply for a job at GM. Violence will be used against him, and against GM, if they voluntarily transact. Or think of what happens today when a Brazilian sugar manufacturer attempts to sell sugar to willing purchasers in the US. If you care so much about inequality within political boundaries, why not just move the boundaries to reduce inequality?
- blfr 11y ago
  Think about what happens when a Mexican attempts to walk to Detroit and apply for a job at GM. Violence will be used against him, and against GM, if they voluntarily transact. GM and Mexicans can't also voluntarily transact in my kitchen or in the foyer of my building regardless of what impact it would have on inequality. Violence would be used against them if they tried. Other citizens have certain rights, that are a lot like property rights in condominiums or HoAs for example, to decide what happens in their country. If GM and Mexicans want to voluntarily transact, they can do it in Mexico, should Mexicans allow it, or some third country where they're both welcome. Your argument is basically an argument for communism (as in common ownership, not any particular political system): if some people have what others need, why not just redistribute it?

Mikeb85 11y ago

> Economics has already answered why inequality has dropped drastically in the past 20-30 years. Except this isn't quite true. In most countries inequality has increased, although baseline poverty has indeed been raised somewhat (and probably for different reasons than you think). > Some folks just don't like the fact that the answer is capitalism. In countries where inequality has actually decreased, it's been mainly because of socialist-style politics. Even the decrease in base poverty in many countries is caused by transfers of wealth from migrants back to their families. The reduction in inequality this century was because of 2 world wars, and 50+ years of Marxism/communism in various parts of the world. Data shows that in many countries (especially fiercely capitalist ones) inequality is actually increasing...

deleted 11y ago

[deleted]