income per capita

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pages: 272 words: 71,487

Getting Better: Why Global Development Is Succeeding--And How We Can Improve the World Even More by Charles Kenny

"Robert Solow", agricultural Revolution, Berlin Wall, British Empire, Charles Lindbergh, clean water, demographic transition, double entry bookkeeping, experimental subject, Fall of the Berlin Wall, germ theory of disease, Gunnar Myrdal, income inequality, income per capita, Indoor air pollution, inventory management, Kickstarter, Milgram experiment, off grid, open borders, purchasing power parity, randomized controlled trial, structural adjustment programs, The Wealth of Nations by Adam Smith, total factor productivity, Toyota Production System, trade liberalization, transaction costs, very high income, Washington Consensus, X Prize

It suggests considerable long-term divergence in incomes between rich and poor countries worldwide, and a forty-year stagnation in African incomes that has left the average sub-Saharan country little richer than it was at independence. To take but one example, Senegal had an income per capita of $1,776 at independence in 1960 and of $1,407 in 2004. The United States, in contrast, had a GDP per capita a little more than seven times larger than Senegal in 1960. By 2004, the United States was around twenty-six times richer. This divergence in incomes over the past fifty years, reflecting slower growth in poorer countries than in wealthy ones, spreads far beyond the Sahara. It is a worldwide phenomenon, brooking only limited exceptions, which are mostly concentrated in Asia. Consider Brazil, one of the bright spots in the South American economic scene. In 1975, Brazil’s income per capita was 30 percent of the United States’. By 2003, this had dropped to just above 20 percent.3 Evidence of a growing gap in global incomes—what Harvard economist Lant Pritchett calls “Divergence, Big Time”—fosters a broader sense of doom regarding development because income per capita has become the most common gauge for the overall quality of life in a country.

Because of massive divergence in income per capita over time across countries, the world is now an economically very unequal place. And this inequality lies at the heart of complaints about the failures of development. About 4.5 billion people out of the 5 billion for whom we have data lived on less than $10,000 a year in 1993. And the bottom 10 percent of the world’s population shared only 0.6 percent of global income—an average of just $291 a year. Meanwhile, the richest 10 percent of the world’s population controlled over one-half of the world’s income, living on an average of $30,081 a year. Give or take, this is a 100-fold difference in incomes between the world’s richest and the world’s poorest.10 The picture is particularly stark for the continent of Africa. Many countries in Africa have incomes per capita lower than those in Britain at the time of the Roman occupation or in the midst of the Dark Ages.

Indeed, from 1200 to 1650 there was seemingly complete stagnation of the production technology of the British economy; GDP changed hardly at all, and any rise in population was offset by a proportionate fall in income per capita. More people working the same land made each individual worker less productive, as suggested by Malthus.2 From 1650 until the nineteenth century, innovation in the UK did allow for a slow expansion in output, but not at a fast enough rate to outpace population growth, so GDP per capita remained stagnant. Only with the Industrial Revolution did the link between population and wages break down, allowing for rising income per capita. The final escape from the Malthusian trap in the UK involved moving from a stagnant economy accompanied by cycling population growth to comparatively rapid output expansion (GDP growth) accompanied by declining birthrates, improved health, and a growing population.3 The exact nature of the relationship between rising incomes, declining fertility, and improved health in the nineteenth century in the UK is debated—all three changed at the same time, so it’s difficult to see what caused what.


pages: 192

Kicking Awaythe Ladder by Ha-Joon Chang

Asian financial crisis, business cycle, central bank independence, clean water, colonial rule, Corn Laws, corporate governance, creative destruction, David Ricardo: comparative advantage, fear of failure, income inequality, income per capita, joint-stock company, joint-stock limited liability company, land reform, liberal world order, moral hazard, open economy, purchasing power parity, rent-seeking, short selling, Simon Kuznets, The Wealth of Nations by Adam Smith, trade liberalization, Washington Consensus

Africa 133, 136t, 138t see also individual countries agriculture 52 Denmark 109, 112-13 France 38 Germany 23, 33 Sweden 39, 40 UK 4, 13, 23, 61 USA 5, 26, 29, 30 aid 140 America see USA 'American System' 28, 32 anti-trust regulations 11, 93-5, 117 Argentina 79t auditing 91-2, 115, 117, 121t, 123t Australia income, per capita 79t, 124,126t, 127t, 134, 135t social welfare institutions 106t, 117, 122t suffrage 75t, 76, 116 Austria 17, 49, 85 child labour 108,110c, 122t income, per capita 79t, 124,126t, 127t, 135, 135t intellectual property rights 57, 86, 114 protectionism 43, 60 social welfare institutions 106t suffrage 75t tariffs 17t Bangladesh 79t, 124, 126t banking 16, 95-9, 114-16, 117, 121t, 123t see also central banking bankruptcy laws 89-91, 114, 115, 121t, 123t, 124 Belgium 19-21, 23, 42-3, 44, 56 banking 48, 96, 97-8, 99t bureaucracy 81-2 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 limited liability 89,115 social welfare institutions 106t suffrage 75t tariffs 17t, 60 tax, income 103 Bhagwati 2, 15, 29 'big push' theory 15 Brazil 15, 68, 79t, 102, 116, 124, 127t Britain see UK Bulgaria 79t bureaucracy 1,73,78-82,114,115,120,121t UK 80, 124 USA 80-2, 103, 116-17 Burma 79t, 126t Canada income, per capita 79t, 126t, 127t, 134, 135t intellectual property rights 121t social welfare 106t, 117, 122t suffrage 75t cartels 66, 93, 94, 117 East Asia 49-50 Germany 14, 35, 117 Sweden 40 central banking 1, 3, 10, 11,16, 96-9,119, 1231 Italy 117, 124' note issue monopoly 114, 115 Sweden 121t UK 118, 121t, 124 USA 117, 118, 121t, 125 child labour 107-10, 114, 116, 118, 122t, 123t, 124-5 Chile 79t, 104 China 133, 141 . income, per capita 124, 127t unequal treaties 16, 54 Classical economics 32 Clay, Henry 28, 32 Cobden, Richard 23,38,52, 61 Cobden-Chevalier treaty (1860) 23, 38 Colbert, Jean-Baptiste 36, 62 Colombia 68, 79t, 116, 124, 127t colonialism 16, 21, 22, 25, 52-3, 139-40 Communism 15, 72, 89, 99, 133 Competiton law see anti-trust regulations copyrights 52, 84, 86-7, 121t, 123t, 125 Corn Laws Belgium 43 UK 13, 16, 23, 29, 43, 52, 61 Cote d'lvoire 124, 126t Defoe, Daniel 20-1 democracy 1, 71, 73-8, 84, 121t, 124, 141 Denmark 56, 95 child labour 109, llOt income, per capita 79t, 126t, 127t, 135t labour regulations 111, 112-13 social welfare institutions 106t, 117 suffrage 75t, 115 tariffs 17t, 68-9 tax, income 103, 114 deregulation 1 dirigisme 4, 14, 62 disclosure of corporate information 91-2, 115, 117, 121t, 123t East Asia 15, 22, 25, 41, 46-51, 61, 64 see also individual countries East India Company British 43, 88, 118 Dutch 43 economic growth 2, 8, 9, 132-3, 134-8, 142-3, 144 and property rights 84-5 and social welfare institutions 104 education 18, 104 East Asia 51 France 37 Germany 34 Japan 48, 64 Netherlands 45 Sweden 41 USA 30-1 Edward III 19-20, 61, 130 Egypt 79t, 124, 126t Elizabeth I 20-1 employment 14, 48, 105, 106t England see UK espionage, industrial 18, 34, 36, 41, 56, 65 Ethiopia 68, 79t, 126t exports 2, 18, 66 East Asia 50 France 38 Prussia 33 Sweden 39 UK 19-23, 52, 55, 61 USA 32 Finland 40 income, per capita 68, 79t, 124, 126t, 127t, 135t social welfare 106t, 117 suffrage 75t, 76, 77 First World War 14, 28-9 foreign investment 46, 51, 99, 140-2 France 8, 10, 16, 23, 35-9, 56 bankruptcy law 90 banks 95, 97, 99t bureaucracy 80, 81 child labour 108, llOt competition law 93 free trade 33, 62 income, per capita 79t, 124,126t, 127t, 135t intellectual property rights 57,86,114 interventionism 1, 2,13 judiciary 83 labour regulations 112 limited liability 89, 115 nationalization 85, 135 social welfare 105, 106t, 117, 122t subsidies 38 suffrage 74,75t, 76,77,115,116,118, 121t tariffs 17t tax 80 Frederick the Great 33^1, 56, 82, 130 Frederick William I 33, 81-2 free trade 1, 7-8, 53, 65-6, 131, 144 Belgium 42 France 36-7 Germany 37 Netherlands 44 Sweden 39 Switzerland 46 UK 3-5, 13-14, 16, 23-4, 61 USA 2, 27-8, 29, 32, 62 GATT (General Agreement on Trade and Tariffs) 14 GDP (Gross Domestic Product) 30, 40, 132-3, 138t German Historical School 6, 105 Germany 3-4, 14, 24, 32-5, 40, 65, 129 see also Prussia, Saxony, Wiirttemberg banks 96, 98, 99t, 115 bureaucracy 80-2, 114 child labour 107, 108, llOt competition law 94, 117 income, per capita 45, 79t, 124,126t, 127t, 135, 135t intellectual property rights 46, 58-9, 85, 87, 115 judiciary 83 labour regulations 111 limited liability 89 social welfare 105-6, 106t, 122t subsidies 33, 35, 63 suffrage 75t, 116 tariffs 17t, 49, 61, 63, 66 zollverein (customs union) 4, 32-3 Ghana 79t, 124, 126t Gladstone, William 24, 103 globalization 15, 99, 140 Gold Standard 14 Great Depression 1, 14, 29, 49, 94, 98 Greece 126t Gross Domestic Product see GDP Hamilton, Alexander 25, 26, 61, 98, 130 health see social welfare institutions Henry VII 20-2, 61 Holland 109, llOt see also Netherlands Hong Kong 43, 50 Hungary 79t, 133 IDPE (international development policy establishment) 71, 131, 134, 138, 140, 142-4 banks 95 democracy 74, 141 IMF 104, 140, 145 imports France 37 Sweden 39 UK 19-20, 21, 22, 37, 52, 61 USA 25, 26-7, 28 income, per capita 67-9, 79t, 120, 124, 126-7t, 134-5 India 15, 22-3, 53, 137, 142 income, per capita 68, 79t, 124, 126t tariffs 68 Indonesia 79t, 124, 127t industrial espionage 18, 34, 36, 41, 56, 65 Industrial Revolutions 8, 60 Belgium 42 Switzerland 45 UK 21, 22 industrial, trade and technology policies see ITT policies industrialization 7, 54, 105, 113-18 France 36, 37, 39 Japan 47 Netherlands 43-5 Sweden 42 Switzerland 45 UK 21 USA 52 infant industries 130 protection of 2,3,10,15,18,61,67,131 France 62 Germany 32, 63 Japan 48-9, 60 Sweden 40, 60 Switzerland 46 UK 3, 20, 21, 65 USA 5, 24-6, 28, 30, 31, 62 inflation 11 infrastructure 18 Belgium 43 France 37 Japan 47 Netherlands 45 Sweden 40, 64 USA 31, 62 insurance, social 105,106,112,116-7,119, 122-3t Germany 105, 116 USA 112 intellectual property rights 1, 2, 57, 84-7, 115, 121t see also copyrights; patents; trademarks international development policy establishment see IDPE International Monetary Fund see IMF interventionism 3, 15, 16-18, 130-1, 132 see also tariffs; protectionism, infant industries France 1, 2, 13, 36, 62 Germany 34-5, 63 Japan 64 Netherlands 45 UK 19 investment planning 16 IPR see intellectual property rights Iran see Persia Ireland 79t, 106t, 117, 126t, 127t Italy 3, 4, 50, 124 banks 96, 98, 99t, 114, 115, 117 bureaucracy 81 child labour 109, HOt, 116 income, per capita 79t, 126t, 127t, 134, 135, 135t intellectual property rights 121t judiciary 83 labour regulations 112 social welfare 106t suffrage 74, 75t tariffs 17t I T T (industrial, trade and technology) policies 9, 59-60, 66-7, 130-2, 144 Belgium 43 East Asia 50, 51 Japan 61, 64 UK 18, 61 USA 18 Japan 8, 14, 22, 46-51, 100 banks 16 cartels 14, 49-50 income, per capita 68, 79t 126t, 135 intellectual property rights 86 ITT policies 61 judiciary 83 property rights 85 subsidies 47, 64 suffrage 75t, 121t tariffs 17t, 44, 54, 66 joint stock companies see limited liability judiciary 1, 71, 82-3, 121t Kenya 79t, 124, 126t Keynes, John Maynard 99-100, 135 Korea 16, 50, 51, 61, 65, 79t, 85 tariffs 22, 39, 54 labour regulations 72, 111-13, 114, 118— 19, 122t laissez-faire 13-16, 65-6 France 36, 37 Germany 33, 63 Netherlands 44-5 Switzerland 46 UK 1, 14, 19, 24, 61-2 Latin America 15,16, 54,132-3, 136t, 138t see also individual countries liberalism 3, 13-14, 15, 29, 37-8 liberalization of trade 1,14,15,16,23-4,69 limited liability 3,10, 88-9,114,115,118, 121t, 123t France 37 UK 92,117 Lincoln, Abraham 27-8, 32 List, Friedrich 3-6,25,32,44,52,61,129-30 Low Countries 19, 20, 42 see also Belgium; Netherlands Malawi 68 manufacturing 18 France 38 Germany 33 Japan 48 Sweden 39 UK 20-4, 26, 52, 61 USA 25, 26, 28-9, 52, 62, 89 Marxism 15 McCulloch, John 88,103 mercantilism 13-14, 23, 33, 43 Mexico 15, 79t, 116, 124, 127t monopolies 66, 87, 93, 94-5 banknote-issue 97, 98, 99, 114, 115 East Asia 50 Germany 33 Netherlands 44 UK 85 USA 31 Morocco 124, 127t NAFTA (North American Free Trade Agreement) 15 Napoleonic Wars 8, 39, 60, 103, 114 nationalization 16, 47, 85, 135 see also state-owned enterprises Neoclassical economics 6, 7 Neo-liberalism 15, 59, 132-3 Netherlands 43-5, 60, 131 banks 97, 99t bureaucracy 80 income, per capita 68, 79t, 126t, 127t infant industry protection 18 intellectual property rights 9, 57-8, 86-7, 121t social welfare 106t, 117 subsidies 44, 45 suffrage 75t tariffs 17t tax 80 technology 55-6 New Zealand income, per capita 79t, 124, 127t social welfare 105, 106t, 117 suffrage 75t, 76, 116, 121t Nicaragua 68 Nigeria 79t, 124, 126t Norway 17, 56, 92, 94-5 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t labour regulations 111 social welfare 106t, 117 suffrage 75t, 76, 77 Ottoman Empire 16, 54 see also Turkey Pakistan 79t, 124, 126t patents 2, 18, 57-8, 65, 85-7, 114-15, 121-2t see also intellectual property rights Netherlands 9, 44 Switzerland 9, 46 pensions 105, 106, 106t, 117, 119, 122t Persia 16, 54 Peru 79t, 124, 127t Philippines 79t, 124, 127t Poland 5,133 Portugal banks 95, 97, 99t child labour 109, llOt, 122t income, per capita 79t, 126t intellectual property rights 86 limited liability 89,115 social welfare 106t, 117 suffrage 75t tariffs 67 tax, income 103 PPP (purchasing power parity) 68-9 property rights 1, 2, 83-5, 114, 139, 141 see also intellectual property rights protectionism 15, 16, 59, 67, 107, 130-1 see also infant industries Belgium 43 France 37, 38 Japan 46, 48-9 Netherlands 60 Sweden 39 Switzerland 60 UK 4 - 5 , 1 3 , 24 USA 1, 5, 24-5, 27-31, 62 Prussia 8, 17t, 32-5, 47, 56, 62 see also Germany banks 95 bureaucracy 80-2, 114, 115, 121t child labour 108, llOt, 116, 122t intellectual property rights 86 suffrage 75, 77 tariffs 32 quotas 29 R & D see research and development race 75, 76, 77, 124 railways 16, 27, 40, 47, 112 Raymond, Daniel 25, 31, 61 research and development 18, 56, 66 East Asia 51 France 37 Sweden 40, 41, 64 USA 30-1, 62 resources 11 Ricardo, David 13-14, 32 Roosevelt, Theodore 78, 93-4 Russia 17t, 28, 39, 56, 67, 86 Saxony 75-6, 85-6, 89, 108, llOt see also Germany Schmoller, Gustav 105 Second World War 8, 39, 60,103, 114 securities 99-102, 114, 116-17, 121-3t slavery 27-8, 142 Smith, Adam 4, 5, 13-14, 24, 88 Smoot-Hawley Tariff 1-2, 14, 29 social welfare institutions 72, 103-6, 114, 116-17, 122t, 142 Soviet Union 133,140 Spain auditing 93 banking 97, 99t bureaucracy 81, 116 child labour 109, llOt income, per capita 126t, 127t intellectual property rights 86, 121t labour regulations 112 limited liability 89 social welfare 106t, 117 suffrage 75t, 76 tariffs 17t, 67 tax, income 103 state-owned enterprises 39, 40, 47-8 see also nationalization stock market see securities structural adjustment 72 structuralism 15 suborning 55 subsidies 2, 18, 63, 66, 67, 130, 145 East Asia 50, 51, 61 France 38 Germany 33, 35, 63 Japan 47, 64 Netherlands 44, 45 Sweden 39, 40 UK 22, 52, 61 USA 26, 29, 31 suffrage 74-8,79t, 105,113,115,116,121t see also democracy Sweden 39-42, 56, 60, 66 banking 95, 97, 99t, 121t child labour 107, 108-9, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 labour regulations 111, 112 limited liability 88, 115, 121t social welfare 106t, 117 suffrage 75t tariffs 17t, 38, 63-4 tax, income 103 Switzerland 10, 18, 23, 45-6, 60, 131 banks 98, 99t, 115 child labour llOt income, per capita 68, 79t, 127t intellectual property rights 2 , 9 , 5 7 - 8 , 86, 87, 121t patents 2, 9, 58, 87 social welfare 106t, 117, 122t suffrage 75t, 76, 118, 119, 121t tariffs 17t Taiwan 16, 22, 50, 51, 61, 79t, 85 Tanzania 68, 79t tariffs 3, 9, 17t, 53, 54, 65-6, 67-9 Belgium 43 East Asia 57 France 38 Germany 33, 35, 63 Japan 46-7, 48-9, 50-1 Netherlands 44 protection 3, 59,130 Sweden 39, 40, 64 UK 22-4 USA 1-2, 14, 16, 25-7, 62 tax 16, 19, 28, 43, 80, 101, 120 income 102-3, 104, 122t, 141, 142 technology 7, 18, 55-7, 60, 65 Belgium 42 France 36, 39 Germany 34 Japan 48, 50 Sweden 40, 41 Switzerland 45-6 UK 20, 22, 23, 54, 55 USA 31 Thailand 16, 54, 116, 124, 127t trade-related intellectual property rights (TRIPS) 57, 86, 87 trade sanctions 29, 107 trade unions see unions trademarks 58, 65, 84, 86, 87, 121t TRIPS (trade-related intellectual property rights) 57, 86, 87 Turkey 16, 54, 79t, 116, 127t see also Ottoman Empire UK 1, 19, 24, 51-9, 121-3t, 132 anti-trust regulations 94 auditing 92, 117 banking 95-6, 97, 99t, 114, 118, 121t bankruptcy law 90-1, 115 and Belgium 19-21, 23, 42 bureaucracy 80, 82 child labour 107-8, llOt, 116, 122t and East Asia 22, 50 and France 23, 36, 37t, 38, 39, 55, 56 free trade 3-5, 7 - 8 , 1 3 - 1 4 , 1 6 , 61, 62 income, per capita 68, 69, 79t, 124, 126t, 127t, 135t and India 22-3, 53 and Ireland 22, 53 infant industry protection 65 intellectual property rights 85-6,114, 121t judiciary 83 labour institutions 111 limited liability 88, 115, 117 and Netherlands 43, 44 property rights 85 securities 100-1, 116, 117 social welfare institutions 106t suffrage 74, 75t, 77 and Switzerland 45-6 tariffs 17t, 39 tax 80, 102 income 103, 114, 122t technology 18, 20, 22-3, 54-5 unemployment see employment unions 41, 94, 105, 107 and the USA 5, 23-6, 28, 32, 52-3 USA 1-2, 3, 24-32, 102, 115-18, 121-3t banking 96, 98, 99t bankruptcy laws 90-1 bureaucracy 80-1, 82, 119 child labour 107, 109-10, llOt civil war 2, 25, 27-9 competition law 93-4 disclosure 92 free trade 7-8, 65 income, per capita 68, 79t, 124, 126t, 127t, 135t, 142 industrialization 52 infant industry protection 5,61-2,66, 131 intellectual property rights 57, 58, 114 judiciary 83 labour regulations 111-12, 113 limited liability 89 securities 99-100, 101 social welfare 104, 106t subsidies 26, 29, 31 suffrage 75t, 77-8 tariffs 16, 17t, 47, 66, 67 tax, income 103 Venezuela 79t Vietnam 133 voting see democracy; suffrage Walpole, Robert 21, 25, 52, 61,130 wars 102, 103 America Civil War 2, 25, 27-9 War of Independence 26 First World War 14, 28-9 Napoleonic War 39, 60 Second World War 8,14,17, 49 Washington consensus 1, 13 Weber, Max 6, 80, 82 welfare state see social welfare institutions women 111-12, 116, 118, 124 workers, migration of 54-6, 57, 65 World Bank 71, 104, 136t, 138t, 140, 145 tariffs 17t, 53-4, 67 World Trade Organization 2, 15, 71, 107, 131-2, 140, 145 intellectual property rights 57, 86, 87 tariffs 67, 68-9, 145 Wiirttemberg 86, 89 see also Germany Zaire 79t Zimbabwe 68 zollverein (German customs union) 4, 32-3

Africa 133, 136t, 138t see also individual countries agriculture 52 Denmark 109, 112-13 France 38 Germany 23, 33 Sweden 39, 40 UK 4, 13, 23, 61 USA 5, 26, 29, 30 aid 140 America see USA 'American System' 28, 32 anti-trust regulations 11, 93-5, 117 Argentina 79t auditing 91-2, 115, 117, 121t, 123t Australia income, per capita 79t, 124,126t, 127t, 134, 135t social welfare institutions 106t, 117, 122t suffrage 75t, 76, 116 Austria 17, 49, 85 child labour 108,110c, 122t income, per capita 79t, 124,126t, 127t, 135, 135t intellectual property rights 57, 86, 114 protectionism 43, 60 social welfare institutions 106t suffrage 75t tariffs 17t Bangladesh 79t, 124, 126t banking 16, 95-9, 114-16, 117, 121t, 123t see also central banking bankruptcy laws 89-91, 114, 115, 121t, 123t, 124 Belgium 19-21, 23, 42-3, 44, 56 banking 48, 96, 97-8, 99t bureaucracy 81-2 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 limited liability 89,115 social welfare institutions 106t suffrage 75t tariffs 17t, 60 tax, income 103 Bhagwati 2, 15, 29 'big push' theory 15 Brazil 15, 68, 79t, 102, 116, 124, 127t Britain see UK Bulgaria 79t bureaucracy 1,73,78-82,114,115,120,121t UK 80, 124 USA 80-2, 103, 116-17 Burma 79t, 126t Canada income, per capita 79t, 126t, 127t, 134, 135t intellectual property rights 121t social welfare 106t, 117, 122t suffrage 75t cartels 66, 93, 94, 117 East Asia 49-50 Germany 14, 35, 117 Sweden 40 central banking 1, 3, 10, 11,16, 96-9,119, 1231 Italy 117, 124' note issue monopoly 114, 115 Sweden 121t UK 118, 121t, 124 USA 117, 118, 121t, 125 child labour 107-10, 114, 116, 118, 122t, 123t, 124-5 Chile 79t, 104 China 133, 141 . income, per capita 124, 127t unequal treaties 16, 54 Classical economics 32 Clay, Henry 28, 32 Cobden, Richard 23,38,52, 61 Cobden-Chevalier treaty (1860) 23, 38 Colbert, Jean-Baptiste 36, 62 Colombia 68, 79t, 116, 124, 127t colonialism 16, 21, 22, 25, 52-3, 139-40 Communism 15, 72, 89, 99, 133 Competiton law see anti-trust regulations copyrights 52, 84, 86-7, 121t, 123t, 125 Corn Laws Belgium 43 UK 13, 16, 23, 29, 43, 52, 61 Cote d'lvoire 124, 126t Defoe, Daniel 20-1 democracy 1, 71, 73-8, 84, 121t, 124, 141 Denmark 56, 95 child labour 109, llOt income, per capita 79t, 126t, 127t, 135t labour regulations 111, 112-13 social welfare institutions 106t, 117 suffrage 75t, 115 tariffs 17t, 68-9 tax, income 103, 114 deregulation 1 dirigisme 4, 14, 62 disclosure of corporate information 91-2, 115, 117, 121t, 123t East Asia 15, 22, 25, 41, 46-51, 61, 64 see also individual countries East India Company British 43, 88, 118 Dutch 43 economic growth 2, 8, 9, 132-3, 134-8, 142-3, 144 and property rights 84-5 and social welfare institutions 104 education 18, 104 East Asia 51 France 37 Germany 34 Japan 48, 64 Netherlands 45 Sweden 41 USA 30-1 Edward III 19-20, 61, 130 Egypt 79t, 124, 126t Elizabeth I 20-1 employment 14, 48, 105, 106t England see UK espionage, industrial 18, 34, 36, 41, 56, 65 Ethiopia 68, 79t, 126t exports 2, 18, 66 East Asia 50 France 38 Prussia 33 Sweden 39 UK 19-23, 52, 55, 61 USA 32 Finland 40 income, per capita 68, 79t, 124, 126t, 127t, 135t social welfare 106t, 117 suffrage 75t, 76, 77 First World War 14, 28-9 foreign investment 46, 51, 99, 140-2 France 8, 10, 16, 23, 35-9, 56 bankruptcy law 90 banks 95, 97, 99t bureaucracy 80, 81 child labour 108, llOt competition law 93 free trade 33, 62 income, per capita 79t, 124,126t, 127t, 135t intellectual property rights 57,86,114 interventionism 1, 2,13 judiciary 83 labour regulations 112 limited liability 89, 115 nationalization 85, 135 social welfare 105, 106t, 117, 122t subsidies 38 suffrage 74,75t, 76,77,115,116,118, 121t tariffs 17t tax 80 Frederick the Great 33^1, 56, 82, 130 Frederick William I 33, 81-2 free trade 1, 7-8, 53, 65-6, 131, 144 Belgium 42 France 36-7 Germany 37 Netherlands 44 Sweden 39 Switzerland 46 UK 3-5, 13-14, 16, 23-4, 61 USA 2, 27-8, 29, 32, 62 GATT (General Agreement on Trade and Tariffs) 14 GDP (Gross Domestic Product) 30, 40, 132-3, 138t German Historical School 6, 105 Germany 3-4, 14, 24, 32-5, 40, 65, 129 see also Prussia, Saxony, Wiirttemberg banks 96, 98, 99t, 115 bureaucracy 80-2, 114 child labour 107, 108, llOt competition law 94, 117 income, per capita 45, 79t, 124,126t, 127t, 135, 135t intellectual property rights 46, 58-9, 85, 87, 115 judiciary 83 labour regulations 111 limited liability 89 social welfare 105-6, 106t, 122t subsidies 33, 35, 63 suffrage 75t, 116 tariffs 17t, 49, 61, 63, 66 zollverein (customs union) 4, 32-3 Ghana 79t, 124, 126t Gladstone, William 24, 103 globalization 15, 99, 140 Gold Standard 14 Great Depression 1, 14, 29, 49, 94, 98 Greece 126t Gross Domestic Product see GDP Hamilton, Alexander 25, 26, 61, 98, 130 health see social welfare institutions Henry VII 20-2, 61 Holland 109, llOt see also Netherlands Hong Kong 43, 50 Hungary 79t, 133 IDPE (international development policy establishment) 71, 131, 134, 138, 140, 142-4 banks 95 democracy 74, 141 IMF 104, 140, 145 imports France 37 Sweden 39 UK 19-20, 21, 22, 37, 52, 61 USA 25, 26-7, 28 income, per capita 67-9, 79t, 120, 124, 126-7t, 134-5 India 15, 22-3, 53, 137, 142 income, per capita 68, 79t, 124, 126t tariffs 68 Indonesia 79t, 124, 127t industrial espionage 18, 34, 36, 41, 56, 65 Industrial Revolutions 8, 60 Belgium 42 Switzerland 45 UK 21, 22 industrial, trade and technology policies see ITT policies industrialization 7, 54, 105, 113-18 France 36, 37, 39 Japan 47 Netherlands 43-5 Sweden 42 Switzerland 45 UK 21 USA 52 infant industries 130 protection of 2,3,10,15,18,61,67,131 France 62 Germany 32, 63 Japan 48-9, 60 Sweden 40, 60 Switzerland 46 UK 3, 20, 21, 65 USA 5, 24-6, 28, 30, 31, 62 inflation 11 infrastructure 18 Belgium 43 France 37 Japan 47 Netherlands 45 Sweden 40, 64 USA 31, 62 insurance, social 105,106,112,116-7,119, 122-3t Germany 105, 116 USA 112 intellectual property rights 1, 2, 57, 84-7, 115, 121t see also copyrights; patents; trademarks international development policy establishment see IDPE International Monetary Fund see IMF interventionism 3, 15, 16-18, 130-1, 132 see also tariffs; protectionism, infant industries France 1, 2, 13, 36, 62 Germany 34-5, 63 Japan 64 Netherlands 45 UK 19 investment planning 16 IPR see intellectual property rights Iran see Persia Ireland 79t, 106t, 117, 126t, 127t Italy 3, 4, 50, 124 banks 96, 98, 99t, 114, 115, 117 bureaucracy 81 child labour 109, HOt, 116 income, per capita 79t, 126t, 127t, 134, 135, 135t intellectual property rights 121t judiciary 83 labour regulations 112 social welfare 106t suffrage 74, 75t tariffs 17t I T T (industrial, trade and technology) policies 9, 59-60, 66-7, 130-2, 144 Belgium 43 East Asia 50, 51 Japan 61, 64 UK 18, 61 USA 18 Japan 8, 14, 22, 46-51, 100 banks 16 cartels 14, 49-50 income, per capita 68, 79t 126t, 135 intellectual property rights 86 ITT policies 61 judiciary 83 property rights 85 subsidies 47, 64 suffrage 75t, 121t tariffs 17t, 44, 54, 66 joint stock companies see limited liability judiciary 1, 71, 82-3, 121t Kenya 79t, 124, 126t Keynes, John Maynard 99-100, 135 Korea 16, 50, 51, 61, 65, 79t, 85 tariffs 22, 39, 54 labour regulations 72, 111-13, 114, 118— 19, 122t laissez-faire 13-16, 65-6 France 36, 37 Germany 33, 63 Netherlands 44-5 Switzerland 46 UK 1, 14, 19, 24, 61-2 Latin America 15,16, 54,132-3, 136t, 138t see also individual countries liberalism 3, 13-14, 15, 29, 37-8 liberalization of trade 1,14,15,16,23-4,69 limited liability 3,10, 88-9,114,115,118, 121t, 123t France 37 UK 92,117 Lincoln, Abraham 27-8, 32 List, Friedrich 3-6,25,32,44,52,61,129-30 Low Countries 19, 20, 42 see also Belgium; Netherlands Malawi 68 manufacturing 18 France 38 Germany 33 Japan 48 Sweden 39 UK 20-4, 26, 52, 61 USA 25, 26, 28-9, 52, 62, 89 Marxism 15 McCulloch, John 88,103 mercantilism 13-14, 23, 33, 43 Mexico 15, 79t, 116, 124, 127t monopolies 66, 87, 93, 94-5 banknote-issue 97, 98, 99, 114, 115 East Asia 50 Germany 33 Netherlands 44 UK 85 USA 31 Morocco 124, 127t NAFTA (North American Free Trade Agreement) 15 Napoleonic Wars 8, 39, 60, 103, 114 nationalization 16, 47, 85, 135 see also state-owned enterprises Neoclassical economics 6, 7 Neo-liberalism 15, 59, 132-3 Netherlands 43-5, 60, 131 banks 97, 99t bureaucracy 80 income, per capita 68, 79t, 126t, 127t infant industry protection 18 intellectual property rights 9, 57-8, 86-7, 121t social welfare 106t, 117 subsidies 44, 45 suffrage 75t tariffs 17t tax 80 technology 55-6 New Zealand income, per capita 79t, 124, 127t social welfare 105, 106t, 117 suffrage 75t, 76, 116, 121t Nicaragua 68 Nigeria 79t, 124, 126t Norway 17, 56, 92, 94-5 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t labour regulations 111 social welfare 106t, 117 suffrage 75t, 76, 77 Ottoman Empire 16, 54 see also Turkey Pakistan 79t, 124, 126t patents 2, 18, 57-8, 65, 85-7, 114-15, 121-2t see also intellectual property rights Netherlands 9, 44 Switzerland 9, 46 pensions 105, 106, 106t, 117, 119, 122t Persia 16, 54 Peru 79t, 124, 127t Philippines 79t, 124, 127t Poland 5,133 Portugal banks 95, 97, 99t child labour 109, llOt, 122t income, per capita 79t, 126t intellectual property rights 86 limited liability 89,115 social welfare 106t, 117 suffrage 75t tariffs 67 tax, income 103 PPP (purchasing power parity) 68-9 property rights 1, 2, 83-5, 114, 139, 141 see also intellectual property rights protectionism 15, 16, 59, 67, 107, 130-1 see also infant industries Belgium 43 France 37, 38 Japan 46, 48-9 Netherlands 60 Sweden 39 Switzerland 60 UK 4 - 5 , 1 3 , 24 USA 1, 5, 24-5, 27-31, 62 Prussia 8, 17t, 32-5, 47, 56, 62 see also Germany banks 95 bureaucracy 80-2, 114, 115, 121t child labour 108, llOt, 116, 122t intellectual property rights 86 suffrage 75, 77 tariffs 32 quotas 29 R & D see research and development race 75, 76, 77, 124 railways 16, 27, 40, 47, 112 Raymond, Daniel 25, 31, 61 research and development 18, 56, 66 East Asia 51 France 37 Sweden 40, 41, 64 USA 30-1, 62 resources 11 Ricardo, David 13-14, 32 Roosevelt, Theodore 78, 93-4 Russia 17t, 28, 39, 56, 67, 86 Saxony 75-6, 85-6, 89, 108, llOt see also Germany Schmoller, Gustav 105 Second World War 8, 39, 60,103, 114 securities 99-102, 114, 116-17, 121-3t slavery 27-8, 142 Smith, Adam 4, 5, 13-14, 24, 88 Smoot-Hawley Tariff 1-2, 14, 29 social welfare institutions 72, 103-6, 114, 116-17, 122t, 142 Soviet Union 133,140 Spain auditing 93 banking 97, 99t bureaucracy 81, 116 child labour 109, llOt income, per capita 126t, 127t intellectual property rights 86, 121t labour regulations 112 limited liability 89 social welfare 106t, 117 suffrage 75t, 76 tariffs 17t, 67 tax, income 103 state-owned enterprises 39, 40, 47-8 see also nationalization stock market see securities structural adjustment 72 structuralism 15 suborning 55 subsidies 2, 18, 63, 66, 67, 130, 145 East Asia 50, 51, 61 France 38 Germany 33, 35, 63 Japan 47, 64 Netherlands 44, 45 Sweden 39, 40 UK 22, 52, 61 USA 26, 29, 31 suffrage 74-8,79t, 105,113,115,116,121t see also democracy Sweden 39-42, 56, 60, 66 banking 95, 97, 99t, 121t child labour 107, 108-9, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 labour regulations 111, 112 limited liability 88, 115, 121t social welfare 106t, 117 suffrage 75t tariffs 17t, 38, 63-4 tax, income 103 Switzerland 10, 18, 23, 45-6, 60, 131 banks 98, 99t, 115 child labour llOt income, per capita 68, 79t, 127t intellectual property rights 2 , 9 , 5 7 - 8 , 86, 87, 121t patents 2, 9, 58, 87 social welfare 106t, 117, 122t suffrage 75t, 76, 118, 119, 121t tariffs 17t Taiwan 16, 22, 50, 51, 61, 79t, 85 Tanzania 68, 79t tariffs 3, 9, 17t, 53, 54, 65-6, 67-9 Belgium 43 East Asia 57 France 38 Germany 33, 35, 63 Japan 46-7, 48-9, 50-1 Netherlands 44 protection 3, 59,130 Sweden 39, 40, 64 UK 22-4 USA 1-2, 14, 16, 25-7, 62 tax 16, 19, 28, 43, 80, 101, 120 income 102-3, 104, 122t, 141, 142 technology 7, 18, 55-7, 60, 65 Belgium 42 France 36, 39 Germany 34 Japan 48, 50 Sweden 40, 41 Switzerland 45-6 UK 20, 22, 23, 54, 55 USA 31 Thailand 16, 54, 116, 124, 127t trade-related intellectual property rights (TRIPS) 57, 86, 87 trade sanctions 29, 107 trade unions see unions trademarks 58, 65, 84, 86, 87, 121t TRIPS (trade-related intellectual property rights) 57, 86, 87 Turkey 16, 54, 79t, 116, 127t see also Ottoman Empire UK 1, 19, 24, 51-9, 121-3t, 132 anti-trust regulations 94 auditing 92, 117 banking 95-6, 97, 99t, 114, 118, 121t bankruptcy law 90-1, 115 and Belgium 19-21, 23, 42 bureaucracy 80, 82 child labour 107-8, llOt, 116, 122t and East Asia 22, 50 and France 23, 36, 37t, 38, 39, 55, 56 free trade 3-5, 7 - 8 , 1 3 - 1 4 , 1 6 , 61, 62 income, per capita 68, 69, 79t, 124, 126t, 127t, 135t and India 22-3, 53 and Ireland 22, 53 infant industry protection 65 intellectual property rights 85-6,114, 121t judiciary 83 labour institutions 111 limited liability 88, 115, 117 and Netherlands 43, 44 property rights 85 securities 100-1, 116, 117 social welfare institutions 106t suffrage 74, 75t, 77 and Switzerland 45-6 tariffs 17t, 39 tax 80, 102 income 103, 114, 122t technology 18, 20, 22-3, 54-5 unemployment see employment unions 41, 94, 105, 107 and the USA 5, 23-6, 28, 32, 52-3 USA 1-2, 3, 24-32, 102, 115-18, 121-3t banking 96, 98, 99t bankruptcy laws 90-1 bureaucracy 80-1, 82, 119 child labour 107, 109-10, llOt civil war 2, 25, 27-9 competition law 93-4 disclosure 92 free trade 7-8, 65 income, per capita 68, 79t, 124, 126t, 127t, 135t, 142 industrialization 52 infant industry protection 5,61-2,66, 131 intellectual property rights 57, 58, 114 judiciary 83 labour regulations 111-12, 113 limited liability 89 securities 99-100, 101 social welfare 104, 106t subsidies 26, 29, 31 suffrage 75t, 77-8 tariffs 16, 17t, 47, 66, 67 tax, income 103 Venezuela 79t Vietnam 133 voting see democracy; suffrage Walpole, Robert 21, 25, 52, 61,130 wars 102, 103 America Civil War 2, 25, 27-9 War of Independence 26 First World War 14, 28-9 Napoleonic War 39, 60 Second World War 8,14,17, 49 Washington consensus 1, 13 Weber, Max 6, 80, 82 welfare state see social welfare institutions women 111-12, 116, 118, 124 workers, migration of 54-6, 57, 65 World Bank 71, 104, 136t, 138t, 140, 145 tariffs 17t, 53-4, 67 World Trade Organization 2, 15, 71, 107, 131-2, 140, 145 intellectual property rights 57, 86, 87 tariffs 67, 68-9, 145 Wiirttemberg 86, 89 see also Germany Zaire 79t Zimbabwe 68 zollverein (German customs union) 4, 32-3

Africa 133, 136t, 138t see also individual countries agriculture 52 Denmark 109, 112-13 France 38 Germany 23, 33 Sweden 39, 40 UK 4, 13, 23, 61 USA 5, 26, 29, 30 aid 140 America see USA 'American System' 28, 32 anti-trust regulations 11, 93-5, 117 Argentina 79t auditing 91-2, 115, 117, 121t, 123t Australia income, per capita 79t, 124,126t, 127t, 134, 135t social welfare institutions 106t, 117, 122t suffrage 75t, 76, 116 Austria 17, 49, 85 child labour 108,110c, 122t income, per capita 79t, 124,126t, 127t, 135, 135t intellectual property rights 57, 86, 114 protectionism 43, 60 social welfare institutions 106t suffrage 75t tariffs 17t Bangladesh 79t, 124, 126t banking 16, 95-9, 114-16, 117, 121t, 123t see also central banking bankruptcy laws 89-91, 114, 115, 121t, 123t, 124 Belgium 19-21, 23, 42-3, 44, 56 banking 48, 96, 97-8, 99t bureaucracy 81-2 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 limited liability 89,115 social welfare institutions 106t suffrage 75t tariffs 17t, 60 tax, income 103 Bhagwati 2, 15, 29 'big push' theory 15 Brazil 15, 68, 79t, 102, 116, 124, 127t Britain see UK Bulgaria 79t bureaucracy 1,73,78-82,114,115,120,121t UK 80, 124 USA 80-2, 103, 116-17 Burma 79t, 126t Canada income, per capita 79t, 126t, 127t, 134, 135t intellectual property rights 121t social welfare 106t, 117, 122t suffrage 75t cartels 66, 93, 94, 117 East Asia 49-50 Germany 14, 35, 117 Sweden 40 central banking 1, 3, 10, 11,16, 96-9,119, 1231 Italy 117, 124' note issue monopoly 114, 115 Sweden 121t UK 118, 121t, 124 USA 117, 118, 121t, 125 child labour 107-10, 114, 116, 118, 122t, 123t, 124-5 Chile 79t, 104 China 133, 141 . income, per capita 124, 127t unequal treaties 16, 54 Classical economics 32 Clay, Henry 28, 32 Cobden, Richard 23,38,52, 61 Cobden-Chevalier treaty (1860) 23, 38 Colbert, Jean-Baptiste 36, 62 Colombia 68, 79t, 116, 124, 127t colonialism 16, 21, 22, 25, 52-3, 139-40 Communism 15, 72, 89, 99, 133 Competiton law see anti-trust regulations copyrights 52, 84, 86-7, 121t, 123t, 125 Corn Laws Belgium 43 UK 13, 16, 23, 29, 43, 52, 61 Cote d'lvoire 124, 126t Defoe, Daniel 20-1 democracy 1, 71, 73-8, 84, 121t, 124, 141 Denmark 56, 95 child labour 109, llOt income, per capita 79t, 126t, 127t, 135t labour regulations 111, 112-13 social welfare institutions 106t, 117 suffrage 75t, 115 tariffs 17t, 68-9 tax, income 103, 114 deregulation 1 dirigisme 4, 14, 62 disclosure of corporate information 91-2, 115, 117, 121t, 123t East Asia 15, 22, 25, 41, 46-51, 61, 64 see also individual countries East India Company British 43, 88, 118 Dutch 43 economic growth 2, 8, 9, 132-3, 134-8, 142-3, 144 and property rights 84-5 and social welfare institutions 104 education 18, 104 East Asia 51 France 37 Germany 34 Japan 48, 64 Netherlands 45 Sweden 41 USA 30-1 Edward III 19-20, 61, 130 Egypt 79t, 124, 126t Elizabeth I 20-1 employment 14, 48, 105, 106t England see UK espionage, industrial 18, 34, 36, 41, 56, 65 Ethiopia 68, 79t, 126t exports 2, 18, 66 East Asia 50 France 38 Prussia 33 Sweden 39 UK 19-23, 52, 55, 61 USA 32 Finland 40 income, per capita 68, 79t, 124, 126t, 127t, 135t social welfare 106t, 117 suffrage 75t, 76, 77 First World War 14, 28-9 foreign investment 46, 51, 99, 140-2 France 8, 10, 16, 23, 35-9, 56 bankruptcy law 90 banks 95, 97, 99t bureaucracy 80, 81 child labour 108, llOt competition law 93 free trade 33, 62 income, per capita 79t, 124,126t, 127t, 135t intellectual property rights 57,86,114 interventionism 1, 2,13 judiciary 83 labour regulations 112 limited liability 89, 115 nationalization 85, 135 social welfare 105, 106t, 117, 122t subsidies 38 suffrage 74,75t, 76,77,115,116,118, 121t tariffs 17t tax 80 Frederick the Great 33^1, 56, 82, 130 Frederick William I 33, 81-2 free trade 1, 7-8, 53, 65-6, 131, 144 Belgium 42 France 36-7 Germany 37 Netherlands 44 Sweden 39 Switzerland 46 UK 3-5, 13-14, 16, 23-4, 61 USA 2, 27-8, 29, 32, 62 GATT (General Agreement on Trade and Tariffs) 14 GDP (Gross Domestic Product) 30, 40, 132-3, 138t German Historical School 6, 105 Germany 3-4, 14, 24, 32-5, 40, 65, 129 see also Prussia, Saxony, Wiirttemberg banks 96, 98, 99t, 115 bureaucracy 80-2, 114 child labour 107, 108, llOt competition law 94, 117 income, per capita 45, 79t, 124,126t, 127t, 135, 135t intellectual property rights 46, 58-9, 85, 87, 115 judiciary 83 labour regulations 111 limited liability 89 social welfare 105-6, 106t, 122t subsidies 33, 35, 63 suffrage 75t, 116 tariffs 17t, 49, 61, 63, 66 zollverein (customs union) 4, 32-3 Ghana 79t, 124, 126t Gladstone, William 24, 103 globalization 15, 99, 140 Gold Standard 14 Great Depression 1, 14, 29, 49, 94, 98 Greece 126t Gross Domestic Product see GDP Hamilton, Alexander 25, 26, 61, 98, 130 health see social welfare institutions Henry VII 20-2, 61 Holland 109, llOt see also Netherlands Hong Kong 43, 50 Hungary 79t, 133 IDPE (international development policy establishment) 71, 131, 134, 138, 140, 142-4 banks 95 democracy 74, 141 IMF 104, 140, 145 imports France 37 Sweden 39 UK 19-20, 21, 22, 37, 52, 61 USA 25, 26-7, 28 income, per capita 67-9, 79t, 120, 124, 126-7t, 134-5 India 15, 22-3, 53, 137, 142 income, per capita 68, 79t, 124, 126t tariffs 68 Indonesia 79t, 124, 127t industrial espionage 18, 34, 36, 41, 56, 65 Industrial Revolutions 8, 60 Belgium 42 Switzerland 45 UK 21, 22 industrial, trade and technology policies see ITT policies industrialization 7, 54, 105, 113-18 France 36, 37, 39 Japan 47 Netherlands 43-5 Sweden 42 Switzerland 45 UK 21 USA 52 infant industries 130 protection of 2,3,10,15,18,61,67,131 France 62 Germany 32, 63 Japan 48-9, 60 Sweden 40, 60 Switzerland 46 UK 3, 20, 21, 65 USA 5, 24-6, 28, 30, 31, 62 inflation 11 infrastructure 18 Belgium 43 France 37 Japan 47 Netherlands 45 Sweden 40, 64 USA 31, 62 insurance, social 105,106,112,116-7,119, 122-3t Germany 105, 116 USA 112 intellectual property rights 1, 2, 57, 84-7, 115, 121t see also copyrights; patents; trademarks international development policy establishment see IDPE International Monetary Fund see IMF interventionism 3, 15, 16-18, 130-1, 132 see also tariffs; protectionism, infant industries France 1, 2, 13, 36, 62 Germany 34-5, 63 Japan 64 Netherlands 45 UK 19 investment planning 16 IPR see intellectual property rights Iran see Persia Ireland 79t, 106t, 117, 126t, 127t Italy 3, 4, 50, 124 banks 96, 98, 99t, 114, 115, 117 bureaucracy 81 child labour 109, HOt, 116 income, per capita 79t, 126t, 127t, 134, 135, 135t intellectual property rights 121t judiciary 83 labour regulations 112 social welfare 106t suffrage 74, 75t tariffs 17t I T T (industrial, trade and technology) policies 9, 59-60, 66-7, 130-2, 144 Belgium 43 East Asia 50, 51 Japan 61, 64 UK 18, 61 USA 18 Japan 8, 14, 22, 46-51, 100 banks 16 cartels 14, 49-50 income, per capita 68, 79t 126t, 135 intellectual property rights 86 ITT policies 61 judiciary 83 property rights 85 subsidies 47, 64 suffrage 75t, 121t tariffs 17t, 44, 54, 66 joint stock companies see limited liability judiciary 1, 71, 82-3, 121t Kenya 79t, 124, 126t Keynes, John Maynard 99-100, 135 Korea 16, 50, 51, 61, 65, 79t, 85 tariffs 22, 39, 54 labour regulations 72, 111-13, 114, 118— 19, 122t laissez-faire 13-16, 65-6 France 36, 37 Germany 33, 63 Netherlands 44-5 Switzerland 46 UK 1, 14, 19, 24, 61-2 Latin America 15,16, 54,132-3, 136t, 138t see also individual countries liberalism 3, 13-14, 15, 29, 37-8 liberalization of trade 1,14,15,16,23-4,69 limited liability 3,10, 88-9,114,115,118, 121t, 123t France 37 UK 92,117 Lincoln, Abraham 27-8, 32 List, Friedrich 3-6,25,32,44,52,61,129-30 Low Countries 19, 20, 42 see also Belgium; Netherlands Malawi 68 manufacturing 18 France 38 Germany 33 Japan 48 Sweden 39 UK 20-4, 26, 52, 61 USA 25, 26, 28-9, 52, 62, 89 Marxism 15 McCulloch, John 88,103 mercantilism 13-14, 23, 33, 43 Mexico 15, 79t, 116, 124, 127t monopolies 66, 87, 93, 94-5 banknote-issue 97, 98, 99, 114, 115 East Asia 50 Germany 33 Netherlands 44 UK 85 USA 31 Morocco 124, 127t NAFTA (North American Free Trade Agreement) 15 Napoleonic Wars 8, 39, 60, 103, 114 nationalization 16, 47, 85, 135 see also state-owned enterprises Neoclassical economics 6, 7 Neo-liberalism 15, 59, 132-3 Netherlands 43-5, 60, 131 banks 97, 99t bureaucracy 80 income, per capita 68, 79t, 126t, 127t infant industry protection 18 intellectual property rights 9, 57-8, 86-7, 121t social welfare 106t, 117 subsidies 44, 45 suffrage 75t tariffs 17t tax 80 technology 55-6 New Zealand income, per capita 79t, 124, 127t social welfare 105, 106t, 117 suffrage 75t, 76, 116, 121t Nicaragua 68 Nigeria 79t, 124, 126t Norway 17, 56, 92, 94-5 child labour 109, llOt, 116 income, per capita 79t, 126t, 127t, 135t labour regulations 111 social welfare 106t, 117 suffrage 75t, 76, 77 Ottoman Empire 16, 54 see also Turkey Pakistan 79t, 124, 126t patents 2, 18, 57-8, 65, 85-7, 114-15, 121-2t see also intellectual property rights Netherlands 9, 44 Switzerland 9, 46 pensions 105, 106, 106t, 117, 119, 122t Persia 16, 54 Peru 79t, 124, 127t Philippines 79t, 124, 127t Poland 5,133 Portugal banks 95, 97, 99t child labour 109, llOt, 122t income, per capita 79t, 126t intellectual property rights 86 limited liability 89,115 social welfare 106t, 117 suffrage 75t tariffs 67 tax, income 103 PPP (purchasing power parity) 68-9 property rights 1, 2, 83-5, 114, 139, 141 see also intellectual property rights protectionism 15, 16, 59, 67, 107, 130-1 see also infant industries Belgium 43 France 37, 38 Japan 46, 48-9 Netherlands 60 Sweden 39 Switzerland 60 UK 4 - 5 , 1 3 , 24 USA 1, 5, 24-5, 27-31, 62 Prussia 8, 17t, 32-5, 47, 56, 62 see also Germany banks 95 bureaucracy 80-2, 114, 115, 121t child labour 108, llOt, 116, 122t intellectual property rights 86 suffrage 75, 77 tariffs 32 quotas 29 R & D see research and development race 75, 76, 77, 124 railways 16, 27, 40, 47, 112 Raymond, Daniel 25, 31, 61 research and development 18, 56, 66 East Asia 51 France 37 Sweden 40, 41, 64 USA 30-1, 62 resources 11 Ricardo, David 13-14, 32 Roosevelt, Theodore 78, 93-4 Russia 17t, 28, 39, 56, 67, 86 Saxony 75-6, 85-6, 89, 108, llOt see also Germany Schmoller, Gustav 105 Second World War 8, 39, 60,103, 114 securities 99-102, 114, 116-17, 121-3t slavery 27-8, 142 Smith, Adam 4, 5, 13-14, 24, 88 Smoot-Hawley Tariff 1-2, 14, 29 social welfare institutions 72, 103-6, 114, 116-17, 122t, 142 Soviet Union 133,140 Spain auditing 93 banking 97, 99t bureaucracy 81, 116 child labour 109, llOt income, per capita 126t, 127t intellectual property rights 86, 121t labour regulations 112 limited liability 89 social welfare 106t, 117 suffrage 75t, 76 tariffs 17t, 67 tax, income 103 state-owned enterprises 39, 40, 47-8 see also nationalization stock market see securities structural adjustment 72 structuralism 15 suborning 55 subsidies 2, 18, 63, 66, 67, 130, 145 East Asia 50, 51, 61 France 38 Germany 33, 35, 63 Japan 47, 64 Netherlands 44, 45 Sweden 39, 40 UK 22, 52, 61 USA 26, 29, 31 suffrage 74-8,79t, 105,113,115,116,121t see also democracy Sweden 39-42, 56, 60, 66 banking 95, 97, 99t, 121t child labour 107, 108-9, llOt, 116 income, per capita 79t, 126t, 127t, 135t intellectual property rights 86 labour regulations 111, 112 limited liability 88, 115, 121t social welfare 106t, 117 suffrage 75t tariffs 17t, 38, 63-4 tax, income 103 Switzerland 10, 18, 23, 45-6, 60, 131 banks 98, 99t, 115 child labour llOt income, per capita 68, 79t, 127t intellectual property rights 2 , 9 , 5 7 - 8 , 86, 87, 121t patents 2, 9, 58, 87 social welfare 106t, 117, 122t suffrage 75t, 76, 118, 119, 121t tariffs 17t Taiwan 16, 22, 50, 51, 61, 79t, 85 Tanzania 68, 79t tariffs 3, 9, 17t, 53, 54, 65-6, 67-9 Belgium 43 East Asia 57 France 38 Germany 33, 35, 63 Japan 46-7, 48-9, 50-1 Netherlands 44 protection 3, 59,130 Sweden 39, 40, 64 UK 22-4 USA 1-2, 14, 16, 25-7, 62 tax 16, 19, 28, 43, 80, 101, 120 income 102-3, 104, 122t, 141, 142 technology 7, 18, 55-7, 60, 65 Belgium 42 France 36, 39 Germany 34 Japan 48, 50 Sweden 40, 41 Switzerland 45-6 UK 20, 22, 23, 54, 55 USA 31 Thailand 16, 54, 116, 124, 127t trade-related intellectual property rights (TRIPS) 57, 86, 87 trade sanctions 29, 107 trade unions see unions trademarks 58, 65, 84, 86, 87, 121t TRIPS (trade-related intellectual property rights) 57, 86, 87 Turkey 16, 54, 79t, 116, 127t see also Ottoman Empire UK 1, 19, 24, 51-9, 121-3t, 132 anti-trust regulations 94 auditing 92, 117 banking 95-6, 97, 99t, 114, 118, 121t bankruptcy law 90-1, 115 and Belgium 19-21, 23, 42 bureaucracy 80, 82 child labour 107-8, llOt, 116, 122t and East Asia 22, 50 and France 23, 36, 37t, 38, 39, 55, 56 free trade 3-5, 7 - 8 , 1 3 - 1 4 , 1 6 , 61, 62 income, per capita 68, 69, 79t, 124, 126t, 127t, 135t and India 22-3, 53 and Ireland 22, 53 infant industry protection 65 intellectual property rights 85-6,114, 121t judiciary 83 labour institutions 111 limited liability 88, 115, 117 and Netherlands 43, 44 property rights 85 securities 100-1, 116, 117 social welfare institutions 106t suffrage 74, 75t, 77 and Switzerland 45-6 tariffs 17t, 39 tax 80, 102 income 103, 114, 122t technology 18, 20, 22-3, 54-5 unemployment see employment unions 41, 94, 105, 107 and the USA 5, 23-6, 28, 32, 52-3 USA 1-2, 3, 24-32, 102, 115-18, 121-3t banking 96, 98, 99t bankruptcy laws 90-1 bureaucracy 80-1, 82, 119 child labour 107, 109-10, llOt civil war 2, 25, 27-9 competition law 93-4 disclosure 92 free trade 7-8, 65 income, per capita 68, 79t, 124, 126t, 127t, 135t, 142 industrialization 52 infant industry protection 5,61-2,66, 131 intellectual property rights 57, 58, 114 judiciary 83 labour regulations 111-12, 113 limited liability 89 securities 99-100, 101 social welfare 104, 106t subsidies 26, 29, 31 suffrage 75t, 77-8 tariffs 16, 17t, 47, 66, 67 tax, income 103 Venezuela 79t Vietnam 133 voting see democracy; suffrage Walpole, Robert 21, 25, 52, 61,130 wars 102, 103 America Civil War 2, 25, 27-9 War of Independence 26 First World War 14, 28-9 Napoleonic War 39, 60 Second World War 8,14,17, 49 Washington consensus 1, 13 Weber, Max 6, 80, 82 welfare state see social welfare institutions women 111-12, 116, 118, 124 workers, migration of 54-6, 57, 65 World Bank 71, 104, 136t, 138t, 140, 145 tariffs 17t, 53-4, 67 World Trade Organization 2, 15, 71, 107, 131-2, 140, 145 intellectual property rights 57, 86, 87 tariffs 67, 68-9, 145 Wiirttemberg 86, 89 see also Germany Zaire 79t Zimbabwe 68 zollverein (German customs union) 4, 32-3


pages: 264 words: 76,643

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, centre right, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, falling living standards, financial deregulation, financial intermediation, financial repression, Gini coefficient, Goldman Sachs: Vampire Squid, Google Hangouts, Hans Rosling, happiness index / gross national happiness, income inequality, income per capita, informal economy, invisible hand, job satisfaction, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

With no better place to go they had chosen to make their beds outside Delhi’s international airport. The year was 1985 and India was an extraordinarily poor country. In dollar terms, according to the World Bank, its income per capita was around $300. Life expectancy was fifty-six. The most abject poverty was visible everywhere, with gangs of shoeless children roaming the streets and beggars jauntily waving deformities at passersby. Sickness, malnourishment, and destitution were in plain view, in the cities, in the towns and in the villages. India today is still very poor. But it is another country. Its income per capita has quintupled to more than $1,500—or roughly $6,000 if you adjust for local prices—and life expectancy has improved by more than a decade to sixty-eight.* Infant mortality has fallen by almost two-thirds from one in ten live births in 1985 to thirty-seven per thousand today.1 Though poverty is still endemic and India retains the capacity to shock, the trappings of modern life are everywhere: cars, motorbikes, flyovers, mobile phones, supermarkets, tall buildings, call centers, pace, energy.

But from the early 1990s, by which time the new accounting practices had been fully adopted, the picture changed. With a consistency that has often been called into question, China registered growth of around 10 percent in virtually every year from 1992 to 2010.5 In the process, it catapulted itself from poor peasant economy to modern powerhouse. The results were astonishing. In 1979 income per capita was a miserable $272. That was the year when Deng embraced market-driven policies by allowing farmers to sell surpluses and by establishing free-trade manufacturing zones to attract foreign investment. By 2015 income per capita had surged to $8,000, pushing China comfortably into middle-income status. Because of its huge population, China was also becoming a power to be reckoned with on the world stage. In 2000 its economy surpassed that of Italy, one of the world’s so-called Group of Seven. In 2005 it overhauled France, in 2006 Britain, in 2007 Germany, and in 2010—the sweetest moment of all—it supplanted bitter rival Japan as the world’s second-largest economy.

When I went to see him on the top floor of the central bank, a dimly lit tower block in Nairobi’s old business district, he was clutching a battered brown leather suitcase, an accoutrement that, by all accounts, rarely leaves his side and is said to contain sheets of statistics dating back to the 1960s. At eighty-two, he was as sharp as a razor. Ryan is proud of Kenyan statistics, which he says are among the best in Africa. Kenya has a competent civil service and a reasonably sophisticated economy, with cash crops, a cut-flower industry, light manufacturing, and a well-developed tourism sector. It is also relatively prosperous by African standards, with income per capita of about $3,200 adjusted for local prices.7 Kenya follows the UN national accounts guidelines to the letter, though Ryan calls the income numbers it collects “very iffy.” Adherence to standard methodology notwithstanding, Ryan is at pains to point out that Kenya’s economic statistics are in no way comparable with those of, say, the US. “You are measuring elephants and rhubarb,” he says, conjuring up a metaphor that makes the comparison of apples and oranges seem mundane.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

Meanwhile, for former members of the Soviet Empire, openness is, in some cases, resulting in a mini-version of China’s experience. 1917 marked the start of the ‘short-century’ economic and political mistake in Russia, and, through its repressive influence, Russia’s western and southern neighbours. Taken together, the emerging nations are now at least as big economically as the US and they’re growing around three times faster. Admittedly, despite their gains, many in the emerging nations are still very poor. For example, the median income per capita for China’s rural workers in 2008 stood at RMB4, 700 or, in 2008 dollars, $691. Yet, for urban workers, life is getting better; income per capita for Chinese urbanites in 2008 was RMB15,000 or $2,205. Within this urban group, there are now millions of people earning annual incomes in the $5,000–10,000 range. At these levels, citizens begin to place increasing demands on the world’s scarce resources. They want cars, holidays, central heating, air-conditioning and all the paraphernalia of modern life.20 They aspire to Western diets.

By the beginning of the twentieth century, the world economy was completely dominated by the Western powers, who directly produced more than 50 per cent of the world’s GDP, a result of their rapid economic growth over many previous decades. By the mid-twentieth century, other nations just didn’t seem to matter: their shares of world income were tiny and their incomes per capita were minute. Across East Asia, for example, incomes per capita were less than one-tenth of those of the United States. THE NEW FORCES OF GLOBALIZATION While the progress of Western economies was, thus, hugely impressive compared with the competition, their progress did not depend purely on technology gains and the benefits of free markets, important though these sometimes were. There were three other vital ingredients.

No productivity miracle is likely to be big enough to cope with this demographic pressure. China is the first economy of size still to have remarkably low per-capita incomes by global standards. In the past, there has been a strong correlation between overall output and output per head. For example, the US is the world’s biggest economy and, of the major industrial nations, has one of the highest levels of income per capita. Conversely, the majority of poor countries are poor both in per-capita terms and also in total. China is unique. Following thirty years of rapid economic growth it is still poor in relation to the industrialized world, but already it has become a huge global player in resource markets. Imagine, then, that China keeps growing at its current rate. In thirty years’ time China would be roughly the same size in economic terms as the US.


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Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"Robert Solow", bank run, banking crisis, banks create money, Basel III, basic income, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, David Graeber, decarbonisation, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, Mahatma Gandhi, mass immigration, means of production, meta analysis, meta-analysis, moral hazard, mortgage debt, Naomi Klein, new economy, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, profit motive, purchasing power parity, quantitative easing, Richard Thaler, road to serfdom, Robert Gordon, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

The Eagles (‘Long Road out of Eden’, 2007) CONTENTS LIST OF FIGURES ACKNOWLEDGEMENTS FOREWORD TO THE FIRST EDITION PROLOGUE TO THE SECOND EDITION 1 The limits to growth 2 Prosperity lost 3 Redefining prosperity 4 The dilemma of growth 5 The myth of decoupling 6 The ‘iron cage’ of consumerism 7 Flourishing – within limits 8 Foundations for the economy of tomorrow 9 Towards a ‘post-growth’ macroeconomics 10 The progressive State 11 A lasting prosperity NOTES REFERENCES INDEX FIGURES 1.1 Global Commodity Price Index, 1992–2015 2.1 US government debt and private sector credit, 1955–2015 2.2 Productivity growth in advanced economies, 1950–2015 3.1 Income per capita and the Genuine Progress Indicator (GPI) 3.2 Subjective wellbeing (SWB) and income per capita 4.1 Life expectancy at birth and income per capita 4.2 Under-5 mortality rate and income per capita 4.3 Mean years of schooling and income per capita 4.4 Life expectancy through times of economic crisis 5.1 Annual carbon dioxide emission intensities, 1965–2015 5.2 Annual carbon dioxide emissions by world region, 1965–2015 5.3 Carbon dioxide emissions in richer and poorer nations, 1965–2015 5.4 The material footprint of OECD nations, 1990–2014 5.5 Global trends in resource production, 1990–2014 5.6 Carbon dioxide intensities: now and required to meet carbon targets 6.1 The ‘engine of growth’ in market economies 7.1 UK household debt and savings ratios, 1990–2016 7.2 An evolutionary map of the human heart 8.1 Greenhouse gas intensity v. employment intensity across sectors 9.1 The rise and fall of UK labour productivity growth 9.2 The stabilising role of countercyclical public spending 10.1 The health and social benefits of equality ACKNOWLEDGEMENTS I owe a huge debt of gratitude to the many people who generously gave me their help and support during the writing of this book: both in the original and in the revised editions.

The GDP is broadly speaking a measure of the overall ‘busyness’ of the economy; or, in more precise terms, of the monetary value of the goods and services that are being produced and consumed within a given nation or region. Economic growth takes place when the GDP is rising – usually at a given ‘rate of growth’ – across the economy.4 It’s worth pointing out that a rising GDP will lead to rising income (per capita GDP) only if the economy grows faster than the population does. If the population expands but GDP remains constant, then income levels will fall. Conversely, if the GDP rises but the population stabilises (or declines) then incomes will rise even faster. In general, the GDP must rise at least as fast as population just to conserve the average level of people’s income. As we shall see, there are good grounds to question whether such a crude measure as the GDP per capita is really sufficient to the task of reflecting real prosperity.

Using a measure first put together in 1989 by US economist Herman Daly and his colleague John Cobb, recent studies suggest (Figure 3.1) that the conventional measure of GDP could be a gross overestimation of social progress, at least since about the beginning of the 1980s.22 Bar a couple of short interruptions, per capita income rose more or less continuously between 1950 right up until the financial crisis. But the Genuine Progress Indicator (GPI) levelled off in the late 1970s and even began to decline slowly over the subsequent two decades. The average growth rate of the GDP per capita was around 2.3 per cent over the period. The average growth rate in GPI was barely 0.5 per cent. And from the mid-1970s onwards it declined at 0.3 per cent per year.23 Figure 3.1 Income per capita and the Genuine Progress Indicator (GPI) Source: Data from Kubiszewski et al. (2013) and World Bank (see note 23) Such a radical departure from the GDP is a worrying indication that the exchange value is a poor proxy for the overall utility that goods and services provide us with. When we start to subtract out the ‘disutility’ – the damage caused by the production of those goods and service, for instance – then economic growth can even begin to look a bit like ‘uneconomic growth’, as Daly has described it.24 Happiness wars The suggestion that income is a poor proxy for utility draws further support from evidence of people’s life-satisfaction.


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The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

"Robert Solow", air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, clean water, colonial rule, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Francisco Pizarro, fundamental attribution error, germ theory of disease, greed is good, Gunnar Myrdal, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, risk/return, road to serfdom, Silicon Valley, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, WikiLeaks, World Values Survey, young professional

The difference between 6 percent growth and the global average of 2 percent growth for one year is a 4 percent difference in income, which is good but hardly merits miracle designation. But if the 6 percent growth of income per capita were really permanent, the consequences indeed would be miraculous. Over fifty years, a sustained average of 6 percent growth produces an eighteen-fold increase in income per capita. Average global growth of 2 percent per capita increases income over the same period at less than three-fold. A three-fold increase in income is great, but it is a lot less than the eighteen-fold increased produced by the 6 percent growth-miracle cases. The power of compound growth has attracted a lot of effort to reach the lasting miracle growth of 6 percent. Almost all these hopes have been disappointed in the long run. We now have annual data on growth of income per capita for 101 countries over fifty years, and data for shorter periods for another 103 countries.

While the average Nigerian may find it difficult to afford adequately nutritious meals every day, the average citizen of Luxembourg need not worry too much about buying the latest generation cell phone on the market.21 There are two commonly used measures of overall development success: the growth of income per capita and the level already attained of income per capita. This chapter has already discussed the small share of national differences in growth, but what about levels of development as measured by income per capita? Is it time to salute the remarkable performance of the Luxembourg development experts? One answer to that question is evident in the map of life expectancy shown in Figure 10.1. Income, infant mortality, and life expectancy are characteristics much more of regions than they are of nations.

If there is one number to which the rights of millions will be happily sacrificed, it is the national GDP growth rate. National leaders believe national growth takes place as the result of national actions. These leaders take great pride in rapid national growth, as do their expert advisers who think their advice is paying off. The unofficial line for a “growth miracle” seems to be annual growth of income per capita of 6 percent. Grow 6 percent, and all will be forgiven. The national state justifies itself partly as the custodian of economic management charged with promoting growth. The development agencies and experts justify themselves as advisors to these states on how to raise growth. Their claims to be able to raise growth are part of the justification for nation-states and their technocratic advisors to have more power.


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Melting Pot or Civil War?: A Son of Immigrants Makes the Case Against Open Borders by Reihan Salam

Affordable Care Act / Obamacare, Bonfire of the Vanities, charter city, delayed gratification, Donald Trump, Edward Glaeser, ghettoisation, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, industrial robot, interchangeable parts, job automation, low skilled workers, low-wage service sector, mass immigration, megacity, new economy, obamacare, open borders, race to the bottom, self-driving car, Silicon Valley, special economic zone, two tier labour market, upwardly mobile, urban decay, working poor

Michael Clemens, a champion of low-skill immigration, has found1 that development reduces emigration only at fairly high levels of income per capita. Once a country’s income per capita is in the neighborhood of $8,000 or so,2 adjusted for purchasing power, which we can think of as the threshold for upper-middle-income status, its residents become less inclined to leave the country as their incomes rise. Before the upper-middle-income threshold is reached, however, rising income tends to spur more emigration, presumably because it gives truly impoverished people the means to pack up and leave. And it’s not as though emigration suddenly comes to an end above the $8,000 threshold, which is, of course, a moving target; even as countries reach upper-middle-income status, emigration typically remains above the levels seen in the poorest countries, those with incomes per capita of $1,000 or below. By way of comparison, income per capita in the United States is $59,500, and in India and Nigeria, two of the world’s most populous countries, it is $7,200 and $5,900, respectively.

And it’s not as though emigration suddenly comes to an end above the $8,000 threshold, which is, of course, a moving target; even as countries reach upper-middle-income status, emigration typically remains above the levels seen in the poorest countries, those with incomes per capita of $1,000 or below. By way of comparison, income per capita in the United States is $59,500, and in India and Nigeria, two of the world’s most populous countries, it is $7,200 and $5,900, respectively. In other words, India and Nigeria have yet to reach upper-middle-income status, and they’re markedly better off than the world’s poorest countries, such as Burundi and the Central African Republic. What this means is that global migration pressures are almost certain to rise as poor countries, and particularly poor countries in sub-Saharan Africa, develop. Before turning to the global scene, though, let’s start by considering migration pressures in our own neighborhood, the northern half of the Americas. Consider Mexico and Central America, which have long sent large numbers of workers to the United States.

Right now, Guatemala ($8,200), Honduras ($5,500), and El Salvador ($8,900) are right at the point when you’d expect migration pressures to start easing up. They are wealthy enough that Central Americans might see rising prosperity at home as a realistic possibility. One of the reasons migration from Mexico to the United States has slowed so sharply in recent years is that Mexico’s GDP per capita (PPP) is now $19,500. This is still substantially lower than income per capita in the United States, and this gap remains big enough to tempt Mexican workers northward. Yet as the standard of living has improved in Mexico, its people are less eager to leave their families and neighborhoods behind. Something similar can happen in Central America, provided the United States and Mexico work together. Mexico has now become prosperous enough, and its population is aging quickly enough,3 that it ought to consider welcoming more immigrants from Central America itself.


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The Globalization of Inequality by François Bourguignon

Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, income inequality, income per capita, labor-force participation, liberal capitalism, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

France’s Gini coefficient, as defined earlier, was 0.29. This means that on average, the gap between the standard of living of two people This difference is due to corporate and state income that is not distributed, as well as the differences in how income is defined in household surveys and the national accounts (see above). In what follows, standard of living will generally refer to the mean income per capita given by household surveys. 10 Global Inequality21 taken at random was 58% of average income, thus slightly less than $12,000. Among wealthy countries, France has moderate levels of inequality. The ratio of the standard of living of the richest 10% to the poorest 10% was lower (slightly less than 5, to be precise) in the Scandinavian countries, which have the highest levels of equality among wealthy countries.

Of course, there are other dimensions to inequality and poverty than income: access to basic infrastructure, health, education, access to the legal system, or ability to participate in public decision-­making, among others. We could Global Inequality25 have covered them in more detail, even though they are often harder to observe on an individual basis.13 Across countries, on the other hand, they turn out to be highly, but not perfectly, correlated with differences in income per capita. This is the sad snapshot of world inequality today. Any snapshot, however, is marked by the moment in which it was taken. The global distribution of standard of living is certainly dramatically unequal, but has this always been the case? Are things on track to improve or, on the contrary, are they getting worse? A Historic Turning Point Opinion is divided on the subject of the evolution of global standard of living inequality.

There were approximately 2 billion people living in extreme poverty in the early 1980s; however, the last twenty years have witnessed a considerable decline in that number. Since 1990, the number of people in poverty has dropped by around 500 million individuals. For the first time since the Industrial Revolution two centuries ago, economic progress is moving more quickly than population growth, in part because the latter has slowed down but overwhelmingly because of accelerated growth in average income per capita in the developing world. This is a stunning turn of events. Given these undeniable statistics, why do we still read and hear that global inequality continues to worsen? The answer to this question has two parts. The first is purely statistical. As we have seen, the numbers for the recent period in figure 1 refer to the standard of living distribution after normalization to a particular country’s GDP per person.


The Limits of the Market: The Pendulum Between Government and Market by Paul de Grauwe, Anna Asbury

"Robert Solow", banking crisis, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, conceptual framework, crony capitalism, Erik Brynjolfsson, eurozone crisis, Honoré de Balzac, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kitchen Debate, means of production, moral hazard, Paul Samuelson, price discrimination, price mechanism, profit motive, Robert Gordon, Ronald Coase, Simon Kuznets, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, trickle-down economics, ultimatum game, very high income

Based on this fact, Kuznets decided that capitalism contains a law which ensures that as a country becomes richer, income inequality drops. He expressed this in what would later be called the Kuznets curve, as shown in Figure .. The horizontal axis represents income per capita, the vertical axis income inequality. We can see that when income per capita rises, inequality initially rises. Once a certain level of wealth is achieved, income inequality begins to fall.  T HE U TO PIA OF SE LF - RE GUL ATIO N INCOME INEQUALITY INCOME PER CAPITA Figure .. The Kuznets curve The Kuznets curve had a great influence on generations of economists and policy makers, debunking the Marxist idea that capitalism would lead to increasing inequality. This optimistic theory implied that as capitalism developed it would lose the unattractive feature of income inequality and become more socially acceptable.

.  Gini coefficients b global capitalism b global financial crisis ()  immigration – imperialism  import protection  income, share of total going to top % f,   INDEX income distribution –b, , , –,  income equality and economic growth trade-off , f,  income inequality , f, , , ,  reformist scenario  United Kingdom and United States  income per capita , f income redistribution policies  income tax f, ,  on highest incomes , , –, , , – productivity, labour costs and public sector  in selected countries f India five-year plans  gross domestic product (GDP) per capita f individual rationality and collective rationality –, –, ,  environment (external limit)  external limits of governments  industrial production, worldwide  inequality –,  assets – reduction  and social and political instability , f wealth ,  world –b see also income inequality inflation and lender of last resort –b insolvency/bankruptcy , ,  interbank market  interest rates , –, – on Spanish and British ten-year government bonds f internal contradictions of capitalism –,  internal limits of capitalism – internal limits of free market system –, , ,  internal limits of government – winner-takes-all phenomenon – International Monetary Fund (IMF) ,  investment boom  in eurozone  projects (efficiency)  public  as share of GDP  ‘invisible hand’ ,  Ireland eurozone government bond spreads, ten-year f global financial crisis ()  labour costs, gross hourly f Italy eurozone government bond spreads, ten-year f gross domestic product (GDP) per capita f labour costs, gross hourly f social security spending as percentage of government spending f Jacobson Schwartz, A.


When the Money Runs Out: The End of Western Affluence by Stephen D. King

Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

said the master at length, in a faint voice. ‘Please, sir,’ replied Oliver, ‘I want some more.’ The master aimed a blow at Oliver’s head with the ladle; pinioned him in his arm; and shrieked aloud for the beadle. (Charles Dickens, Oliver Twist) 43 4099.indd 43 29/03/13 2:23 PM When the Money Runs Out Thanks to persistent economic growth, twenty-­first century Britain is a very different proposition. Incomes per capita have risen twelvefold since Dickens published Oliver Twist in 18386 and, thankfully, we no longer have workhouses. Yes, poverty still exists and vulnerable individuals are still, at times, poorly treated. Amazingly, during the Queen’s Diamond Jubilee celebrations in June 2012, up to 30 unemployed people bussed in from the West Country to work as stewards in the Jubilee Thames Pageant found themselves having to sleep rough under London Bridge before performing their (unpaid) duties.7 But, for the most part, twenty-­first century Britain has a different and more enlightened attitude.

Opposition 196 4099.indd 196 29/03/13 2:23 PM From Economic Disappointment to Political Instability was squashed, patronage was handed out where necessary, and the whiff of corruption began to permeate all aspects of Indonesian society. None of this mattered too much so long as the economy was performing well. Suharto’s initial success in the late 1960s was to stamp out the hyperinflation that had proved so incredibly debilitating under his predecessor, Sukarno. Suharto’s so-­called ‘New Order’ delivered significant increases in living standards, with incomes per capita quadrupling between the mid-­1960s and the mid-­1990s. Nevertheless, Indonesia was still a poor country and, even before the Asian crisis, was losing ground to others. China, in particular, was catching up rapidly. Meanwhile, on the home front, the mid-­1990s saw an increase in political opposition, led by Megawati Sukarnoputri, the head of the Indonesian Democratic Party and, by happy coincidence, the daughter of Sukarno, Indonesia’s former leader.

He managed to avoid domestic upheaval – preventing the majority Malays and minority Chinese from fighting each other – by aiming the nation’s ire at the rest of the world. 201 4099.indd 201 29/03/13 2:23 PM When the Money Runs Out Korea: Democracy and Self-­S acrifice Unlike either Indonesia or Malaysia, Korea was already a reasonably wealthy country at the onset of the Asian crisis. It had a properly developed – if relatively new – democracy.16 Its incomes per capita averaged around $13,000 a year, higher than in either Portugal or Greece. Yet, for all its success, it was nevertheless unable to avoid the perils of the crisis. Korea, too, had become dependent on capital inflows from abroad: its current account deficit exceeded 4 per cent of GDP in 1996. And, like the other two nations, there was a whiff of corruption in the air: the connections between government and the chaebol (translated literally as ‘wealth clan’ or ‘wealth faction’), Korea’s large industrial conglomerates, were seen by many as yet another example of Asian crony capitalism.


Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus, zero-sum game

Countries in the upper right portion—that is, countries 142 The Politics of Underdevelopment in Latin America Number of Regime Changes 8 Panama 7 6 5 Ecuador Argentina Bolivia Brazil Dominican Republic Paraguay Peru 4 Venezuela El Salvador 3 Colombia Guatemala 2 Costa Rica Uruguay 1 Nicaragua 0 0 Chile 2000 Mexico 4000 6000 8000 10000 Average Annual per Capita Income ($) figure 6.4 Per Capita Income and Regime Change in Latin America, 1940–1970. Note: Income per capita expressed in 1996 purchasing power parity dollars. Sources: Data elaborated from the Penn World Table, http://pwt.econ.upenn.edu/php_site/pwt_index.php; and the Third World Government Stability database, http://colfa.utsa.edu/govstability. Number of Regime Changes 8 7 6 Argentina Panama 5 4 Bolivia 3 2 Nicaragua El Salvador Dominican Republic Peru Ecuador Brazil Guatemala Chile Mexico 1 Colombia 0 0 2000 4000 Costa Rica Uruguay Venezuela 6000 8000 10000 Average Annual per Capita Income ($) figure 6.5 Per Capita Income and Regime Change in Latin America, 1970–2000. Note: Income per capita expressed in 1996 purchasing power parity dollars. Sources: Data elaborated from the Penn World Table, http://pwt.econ.upenn.edu/php_site/pwt_index.php; and the Third World Government Stability database, http://colfa.utsa.edu/ govstability.

The Politics of Underdevelopment in Latin America part iii INSTITUTIONAL FACTORS IN LATIN AMERICA’S DEVELOPMENT This page intentionally left blank 7 The Latin American Equilibrium james a. robinson O ne of the enduring puzzles of Latin American history is its comparative economic performance.1 At the time of conquest and settlement, though Latin American countries were relatively poor and economically backward compared to their colonists from Spain and Portugal, the gap was small in relation to what it is today. For example, in 1500, Spain’s income per capita was probably about 50 percent greater than the Latin American average. Today, average income in Spain is about 300 percent greater.2 Even more puzzling, at the time of conquest, the most prosperous parts of the Americas were not those which are today the richest. In 1492, it was not Canada, the United States, or the Southern Cone of Latin America that were the most economically advanced; it was Mexico, Peru, and Bolivia with their complex centralized societies.3 Though the technology of the Mexicas or Tawantinsuyu may not have been very advanced by modern standards, they had developed extraordinary abilities to provide public goods, irrigation works, and infrastructure, and they had systems of taxation and resource mobilization that would be the envy of many modern developing countries.

George Lovell and Christopher Lutz, “Conquest and Population: Maya Demography in Historical Perspective,” Latin American Research Review 29 (1994): 133–140. 180 175 170 Cms 165 160 155 150 145 140 8250 BC 1500 AD1750 AD1873 1900 1920 1930 1940 1950 1960 1970 1980 1989 Year Men Women figure 7.2 Height of Latin American Adult Men and Women in Guatemala (Cubic Fit). Source: Barry Bogin and Ryan Keep, “Eight Thousand Years of Economic and Political History in Latin America Revealed by an Anthropometry,” Annals of Human Biology 26 (1999): 333–351. between Europe and the Americas which had existed in 1492 probably stayed about constant over the colonial period, with Europe remaining about 50 percent more prosperous, even though the level of income per capita had grown slowly everywhere. In some sense, then, the real puzzle begins in the nineteenth century, the epoch of rapid economic divergence. By the 1820s, Latin American countries had emerged from colonialism, and though it was once believed that they remained in the grip of a British-initiated “informal empire” in the nineteenth century, the more plausible view is that rather it was Latin Americans and their governments who decided, possibly inadvertently, how their societies would evolve.


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A Pelican Introduction Economics: A User's Guide by Ha-Joon Chang

Affordable Care Act / Obamacare, Albert Einstein, Asian financial crisis, asset-backed security, bank run, banking crisis, banks create money, Berlin Wall, bilateral investment treaty, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collateralized debt obligation, colonial rule, Corn Laws, corporate governance, corporate raider, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, discovery of the americas, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Akerlof, Gini coefficient, global value chain, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Gunnar Myrdal, Haber-Bosch Process, happiness index / gross national happiness, high net worth, income inequality, income per capita, information asymmetry, intangible asset, interchangeable parts, interest rate swap, inventory management, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, laissez-faire capitalism, land reform, liberation theology, manufacturing employment, Mark Zuckerberg, market clearing, market fundamentalism, Martin Wolf, means of production, Mexican peso crisis / tequila crisis, Nelson Mandela, Northern Rock, obamacare, offshore financial centre, oil shock, open borders, Pareto efficiency, Paul Samuelson, post-industrial society, precariat, principal–agent problem, profit maximization, profit motive, purchasing power parity, quantitative easing, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, shareholder value, Silicon Valley, Simon Kuznets, sovereign wealth fund, spinning jenny, structural adjustment programs, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Vilfredo Pareto, Washington Consensus, working-age population, World Values Survey

The fact is that capitalism developed first in Western Europe. Before the rise of capitalism, the Western European societies, like all the other pre-capitalist societies, changed very slowly. The society was basically organized around farming, which used virtually the same technologies for centuries, with a limited degree of commerce and handicraft industries. Between 1000 and 1500, the medieval era, income per capita, namely, income per person, in Western Europe grew at 0.12 per cent per year.1 This means that income in 1500 was only 82 per cent higher than that in 1000. To put it into perspective, this is a growth that China, growing at 11 per cent a year, experienced in just six years between 2002 and 2008. This means that, in terms of material progress, one year in China today is equivalent to eighty-three years in medieval Western Europe (which were equivalent to three-and-a-half medieval lifetimes, as the average life expectancy at the time was only twenty-four years)

Those economies were only a step away from a fully planned economy, it was argued, because their economic activities were already planned to a high degree by large enterprises and cartels of those enterprises. The Soviet Union – even its more developed European part – was a very backward economy in which capitalism had been hardly developed, where socialism really had no business emerging. To everyone’s surprise, the early Soviet industrialization was a big success, most graphically proven by its ability to repel the Nazi advance on the Eastern Front during the Second World War. Income per capita is estimated to have grown at 5 per cent per year between 1928 and 1938 – an astonishingly rapid rate in a world in which income typically grew at 1–2 per cent per year.15 This growth came at the cost of millions of deaths – from political repression and the 1932 famine.* However, the scale of the famine was not known at the time, and many were impressed by Soviet economic performance, especially given that capitalism was then on its knees, following the Great Depression of 1929.

Even the larger middle-income developing countries (30–50 million people), such as Colombia or South Africa, may have GDP of $300–400 billion. These are only as large as the GDP of a mid-sized US state, such as Washington or Minnesota. In terms of GDP per capita figures, we have a huge range. Since these figures are similar – actually identical in theory, although not necessarily so in practice – to income per capita figures that we discuss shortly, suffice it to say here that we are talking about differentials over 500 times. Income Gross Domestic Income, or GDI GDP may be seen as a sum of incomes, rather than outputs, as everyone who is involved in the production activity is paid for his/her contribution (whether the amounts paid are ‘fair’ is another matter). Going back to the baker’s example, having paid for flour, eggs and other intermediate inputs, the bakery will divide up its value-added between wages for its workers, profits for its shareholders, interest payments for the loan it may have contracted and the indirect taxes that are automatically included in the revenue that it generates (that is, value added tax (VAT) or sales tax).


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Capital in the Twenty-First Century by Thomas Piketty

"Robert Solow", accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, German hyperinflation, Gini coefficient, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, market bubble, means of production, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, The Nature of the Firm, the payments system, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

These effects are all the more significant because the growth rate that figures in the law β = s / g is the overall rate of growth of national income, that is, the sum of the per capita growth rate and the population growth rate.3 In other words, for a savings rate on the order of 10–12 percent and a growth rate of national income per capita on the order of 1.5–2 percent a year, it follows immediately that a country that has near-zero demographic growth and therefore a total growth rate close to 1.5–2 percent, as in Europe, can expect to accumulate a capital stock worth six to eight years of national income, whereas a country with demographic growth on the order of 1 percent a year and therefore a total growth rate of 2.5–3 percent, as in the United States, will accumulate a capital stock worth only three to four years of national income. And if the latter country tends to save a little less than the former, perhaps because its population is not aging as rapidly, this mechanism will be further reinforced as a result. In other words, countries with similar growth rates of income per capita can end up with very different capital/income ratios simply because their demographic growth rates are not the same.

Like all averages, this average income figure hides enormous disparities. In practice, many people earn much less than 2,500 euros a month, while others earn dozens of times that much. Income disparities are partly the result of unequal pay for work and partly of much larger inequalities in income from capital, which are themselves a consequence of the extreme concentration of wealth. The average national income per capita is simply the amount that one could distribute to each individual if it were possible to equalize the income distribution without altering total output or national income.11 Similarly, private per capita wealth on the order of 180,000 euros, or six years of national income, does not mean that everyone owns that much capital. Many people have much less, while some own millions or tens of millions of euros’ worth of capital assets.

Nevertheless, they represent real progress in comparison with national accounts from the early postwar years, which were concerned solely with endless growth in output.18 These are the official series that I use in this book to analyze aggregate wealth and the current capital/income ratio in the wealthy countries. One conclusion stands out in this brief history of national accounting: national accounts are a social construct in perpetual evolution. They always reflect the preoccupations of the era when they were conceived.19 We should be careful not to make a fetish of the published figures. When a country’s national income per capita is said to be 30,000 euros, it is obvious that this number, like all economic and social statistics, should be regarded as an estimate, a construct, and not a mathematical certainty. It is simply the best estimate we have. National accounts represent the only consistent, systematic attempt to analyze a country’s economic activity. They should be regarded as a limited and imperfect research tool, a compilation and arrangement of data from highly disparate sources.


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The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

"Robert Solow", airline deregulation, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, ending welfare as we know it, financial deregulation, financial innovation, fixed income, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Growth in a Time of Debt, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Long Term Capital Management, low cost airline, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, oil shock, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, price stability, profit motive, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Peltzman, Silicon Valley, Simon Kuznets, starchitect, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus

The early settlers found a little gold, then turned to raising animals and wheat, dividing the available lands into a handful of great estates worked by tenant farmers. Charles Darwin, visiting in the 1830s, observed that the “feudal-like” system kept most Chileans in extreme poverty. In the decades that followed, Chileans found a measure of prosperity by exporting the ground beneath their feet, first mining nitrates and then copper.10 But as the United States industrialized and prospered, Chile stagnated. In 1913, income per capita in Chile was 50 percent of income per capita in the United States. By 1975, the figure was 27 percent.11 After World War II, as Chile’s population boomed — and as voting rights were expanded — political leaders began to pursue economic growth with greater urgency, attempting to break up the great agricultural estates and to promote industrialization.12 Raúl Prebisch, an Argentine economist hired by the United Nations to run a think tank devoted to South America’s development, advanced the influential view that the continent needed to turn inward.

Huebner, one of the first academics to study insurance, was particularly influential in popularizing the idea that life had a dollar value. “The most important new development in economic thought,” he said in 1924, “will be the recognition of the economic value of human life.”37 In assigning a value to accident victims nearly a half century later, Gates borrowed the insurance industry’s logic. He calculated the difference between the age of the average victim and average life expectancy, and multiplied that by annual income per capita. The result was a figure of $140,000, or about $885,000 in 2019 dollars.38 The National Highway Traffic Safety Administration added a few more items to the ledger later that same year, including the price of a funeral and the inconvenience to the victim’s employer, which raised the value of life to $200,700. The agency described this as a minimum value. “We are not arguing that it is unwise to spend more than the amounts calculated,” it said.39 But numbers have a habit of shedding their footnotes.

“I have not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende,”he said.42 But his methodology may have been compromised by his inability to interview the many thousands already killed or exiled. Four years later, in 1981, Hayek’s free-market Mont Pelerin Society held a meeting in Chile, a decision widely seen as a seal of approval. But there was little cause for celebration. The growth of the late 1970s and early 1980s only served to offset the recession of the early Pinochet years. In 1973, when Pinochet seized power, income per capita in Chile was about 12 percent higher than the average for Latin America. By 1981, the difference once again was approaching 12 percent.43 Then de Castro and the Chicago Boys crashed the Chilean economy for the second time. Economists in the midcentury had supported the freedom to trade across borders, but not the freedom to invest across borders. They regarded limits on the international movement of money as necessary to preserve economic stability, especially in smaller countries.


Economic Gangsters: Corruption, Violence, and the Poverty of Nations by Raymond Fisman, Edward Miguel

accounting loophole / creative accounting, Andrei Shleifer, Asian financial crisis, barriers to entry, blood diamonds, clean water, colonial rule, congestion charging, crossover SUV, Donald Davies, European colonialism, failed state, feminist movement, George Akerlof, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, mass immigration, megacity, oil rush, prediction markets, random walk, Scramble for Africa, selection bias, Silicon Valley, South China Sea, unemployed young men

Market-oriented reforms have since produced an astounding industrial transformation. The countryside has started to empty as China’s rural masses seek their fortunes in coastal cities. More than twice as many Chinese lived in 127 CH A PTER F I VE urban areas in 2005 than they did twenty-five years earlier, when the reforms began. This economic miracle has brought higher living standards to hundreds of millions of people in a few short decades: China’s income per capita was at African levels in the 1970s before the reforms, but now workers there earn many times as much as their African counterparts. But China’s modern economic growth is fuelled, literally, by burning coal, gas, and oil. The torrid rate of expansion of Chinese manufacturing is outstripped only by its growing fossil fuel consumption. Between 2002 and 2004, energy use in China increased by a staggering 33 percent, and the resulting increase in carbon dioxide (CO2) emissions made China the world’s biggest polluter of greenhouse gases by 2007—far ahead of predictions for when China would edge out the United States.18 Together, these two countries account for over 40 percent of global CO2 emissions, the main culprit behind global warming.

And no matter how rapid the recovery, the war, in addition to all the direct pain and suffering the conflict wrought, was definitely a short-run economic disaster since so much time and energy was spent fighting rather than working at economically productive activities. Vietnam’s southeast Asian neighbors—like the “Tiger economies” of Malaysia and Thailand—didn’t suffer from the American War. Income per capita is now $4,970 in Malaysia and $2,720 in Thailand—but only $620 in Vietnam.9 Yet for all the suffering it caused, the war did have at least a hint of a silver lining for the Vietnamese people. The conflict generated a stronger sense of Vietnamese national identity, forged through shared struggles and sacrifice. In the long-run, this feeling of common purpose can help to foster peace, consensus, and political stability—and even indirectly boost economic growth.

Before, the government had faced a constant budget crunch, and in its desperation to obtain hard currency to purchase arms, was forced to accept unfavorable terms. Peace meant that diamond firms no longer got the same sweetheart deals. Royalty payments to the government for mining concessions jumped from $37.5 million in 2002 to nearly $110 million one year later, despite only a modest increase in the value of the diamonds extracted. Overall, the Angolan economy has taken off since the war’s end, with income per capita rising by more than 20 percent between 2003 and 2005— proving once again that the poorest economies can quickly rebound from war. If the old diamond companies are suffering, the rest of the country isn’t. In the oil rush that has seized much of Africa in recent years, we may be witnessing another disconnect 184 TH E RO A D BA CK F RO M WAR between economic prosperity and business profits.


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The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics by William R. Easterly

"Robert Solow", Andrei Shleifer, business climate, business cycle, Carmen Reinhart, central bank independence, clean water, colonial rule, correlation does not imply causation, creative destruction, endogenous growth, financial repression, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, inflation targeting, interchangeable parts, inventory management, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, large denomination, manufacturing employment, Network effects, New Urbanism, open economy, Productivity paradox, purchasing power parity, rent-seeking, Ronald Reagan, selection bias, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade liberalization, urban sprawl, Watson beat the top human players on Jeopardy!, Yogi Berra, Yom Kippur War

For example, suppose that you got one percentage point of growth for every four percentage points of investment. A country that wanted to triple growth from 1 percent to 4 percent had to raise its investment rate from 4 percent Aid for Investment 31 of GDP to 16 percent of GDP. The 4 percent GDP growth would give a per capita growth rate of 2 percent if population growth was 2 percent. At a 2 percent per year rate of growth, income per capita would double every thirty-six years. Investment had to keep ahead of population growth. Development was a race between machines and motherhood. How do you get investment highenough? Say thatcurrent national saving is 4 percent of GDP. The early development economists thought that poor countries were so poor they had little hope of increasing their saving. There was thus a ”financing gap” of 12 percent of GDP between the ”required investment” (16 percent of GDP) and the current 4 percent of GDP level of national savings.

This was at the same time that their real per capita capital stocks weregrowingat over 1 percent per year andeducational attainment was also increasing. I wouldn't argue that Costa Rica, Ecuador, Peru, and Syria had technological regress, but clearly other factors got in the way of technological progress. Technologically driven growth is anything but automatic. Just as productivity growth explains most of the difference in per capita growth across countries, so differences in technological levels explain most of the differences in income per capita. U.S.workers produce twenty times the output per worker that Chinese workers do. If Chinese workershad the same technology as U.S. workers, then U.S. workers would produce only twice as much as Chinese workers (which wouldbe explained by more education and machinery for U.S. workers). Most of the higher output of American workers compared to Chinese workers is explained by higher technological productivity.l0 Poor countries like China continue to lag behind technologically, despite the widespread availability of advanced technology.

*O Harvard economist Jeffrey Frankel and Berkeley economist David Romer find apositive effect of theshare of trade(exportsplus imports) in GDP on income levels. They argue that this is a causal relationship, by identifying the geographic component of trade (the tendency for neighbors to trade more with each other and the tendency for larger economies to have more internaltrade).21 The effect is large: a 1 point rise in the shareof trade in GDP raises income per capita by 2 percent. Maryland economist Francisco Rodriguez and Harvard economist DaniRodrik express a contrarian view. They argue that many of these measures do not really capture trade interventions and that they are not robust to changes in the sample period or other control variables (they did not study all of the results mentioned here, however).22Still, few variables in the research on growth captureexactly a specific policy or are robust to all possible control variables.It is too easy to drive out individual associations with other controlvariables.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe van Parijs, Yannick Vanderborght

"Robert Solow", Airbnb, Albert Einstein, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, centre right, collective bargaining, cryptocurrency, David Graeber, declining real wages, diversified portfolio, Edward Snowden, eurozone crisis, Fall of the Berlin Wall, feminist movement, full employment, future of work, George Akerlof, illegal immigration, income per capita, informal economy, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, Marshall McLuhan, means of production, minimum wage unemployment, open borders, Paul Samuelson, pension reform, precariat, price mechanism, profit motive, purchasing power parity, quantitative easing, race to the bottom, road to serfdom, Second Machine Age, secular stagnation, selection bias, sharing economy, sovereign wealth fund, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, universal basic income, urban planning, urban renewal, War on Poverty, working poor

Even in a closed economy, the high tax rate could induce many Â�people to perform alienated activities in the informal sphere or to earn part of their income in the form of untaxed perks.70 In this case, a significant part of total income would escape taxation and would keep growing as the tax rate rises. In Figure 5.1, therefore, total income per capita Y' would exceed taxable income per capita Y and fall more slowly than Y in response 125 BASIC INCOME Levels of average income, average taxable income, and basic income Y GMax Y G G* 1 2 Tax rate Figure 5.1╇╉Optimal level of basic income from a “real-Â�libertarian” and a “market-Â� communist” perspective Y: taxable income per capita Y': total income per capita Tax rate t: normal range from 0 to (1), prohibitive range from (1) to 100 Â�percent. Real-Â�libertarian optimal tax rate (1): corresponds to the maximum sustainable level of basic income GMax Market-Â�communist optimal tax rate (2): highest tax rate consistent with basic income meeting fundamental needs G* to higher taxation.

�These illustrative amounts are calculated using Word Bank estimates for GDP per capita in 2015: http://�data╉.�worldbank╉.�org╉/�indicator╉/ �N Y╉.�GDP╉.�PCAP╉.�CD and http://�data╉ .�worldbank╉.�org╉/�indicator╉/ �N Y╉.�GDP╉.�PCAP╉.�PP╉.�CD. Both �here and in the pre�sen�ta�tion of specific schemes and proposals, we use Gross Domestic Product (GDP) per capita rather than the Gross National Product (GNP) per capita (which includes net receipts from the rest of the world) or the national income per capita (which excludes the consumption of fixed capital by government and �house�holds), mainly �because of the easy availability of relevant data. In most cases, this choice is unimportant. In some, however, especially when the entities considered are small, the sum of the incomes earned by the residents of a territory (GNP) can diverge significantly, upward or downward, from the incomes generated within that territory (GDP).

Yunker (1977: 113–121) estimated for the US in 1972 that the “social dividend” (that is, “the direct distribution equally among all the citizen body of property income accruing to the state-Â�owned enterprises Â�under socialism” would amount to $417 per year and per adult, or about 7 Â�percent of GDP per capita at the time). 27. According to some (for example, Van Trier 1992), the transition from socialism to capitalism in East-Â�European countries was a missed opportunity to get Â�there without too much difficulty. 28. Â�Meade 1989: 34–8; 1995: 54–62. 29. Â�Meade 1995: 62. 30. Atkinson (1993d) estimates that a basic income at 15 Â�percent of national income per capita could be funded sustainably in this way (to be supplemented, as proposed by Â�Meade, by part of the yield of an expenditure tax). Getting Â�there is not ecoÂ�nomÂ�ically impossible, he argues—Â�from the late 1940s to the late 1970s, the UK Â�rose from a public debt of over 100 Â�percent of GDP to a net worth of the public sector of 100 Â�percent—Â�but the unfairness to the transition generations is a decisive obstacle. 291 NO TES TO PAGES 150–151 31.


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23 Things They Don't Tell You About Capitalism by Ha-Joon Chang

"Robert Solow", affirmative action, Asian financial crisis, bank run, banking crisis, basic income, Berlin Wall, Bernie Madoff, borderless world, Carmen Reinhart, central bank independence, collateralized debt obligation, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, deskilling, ending welfare as we know it, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, full employment, German hyperinflation, Gini coefficient, hiring and firing, Hyman Minsky, income inequality, income per capita, invisible hand, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market fundamentalism, means of production, Mexican peso crisis / tequila crisis, microcredit, Myron Scholes, North Sea oil, offshore financial centre, old-boy network, post-industrial society, price stability, profit maximization, profit motive, purchasing power parity, rent control, shareholder value, short selling, Skype, structural adjustment programs, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, Toyota Production System, trade liberalization, trickle-down economics, women in the workforce, working poor, zero-sum game

This makes the PPP incomes extremely sensitive to the methodologies and the data used. For example, when the World Bank changed its method of estimating PPP incomes in 2007, China’s PPP income per capita fell by 44 per cent (from $7,740 to $5,370), while Singapore’s rose by 53 per cent (from $31,710 to $48,520) overnight. Despite these limits, a country’s income in international dollars probably gives us a better idea of its living standard than does its dollar income at the market exchange rate. And if we calculate incomes of different countries in international dollars, the US (almost) comes back to the top of the world. It depends on the estimate, but Luxemburg is the only country that has a higher PPP income per capita than that of the US in all estimates. So, as long as we set aside the tiny city-state of Luxemburg, with less than half a million people, the average US citizen can buy the largest amount of goods and services in the world with her income.

Index active economic citizenship xvi, xvii Administrative Behaviour (Simon) 173–4 Africa see Sub-Saharan Africa AIG 172–3 Air France 131 AOL 132–3 apartheid 214–16 Argentina education and growth 181 growth 73 hyperinflation 53–4 Austria geography 121 government direction 132 protectionism 70 balance of payments 97–100, 101 Baldursson, Fridrik 235 Bangladesh entrepreneurship 159–60 and microfinance 161–2, 163, 164 Bank of England 252 (second) Bank of the USA 68 Bank for International Settlements (BIS) 262 bankruptcy law 227–8 Barad, Jill 154 Bard College 172 Bateman, Milford 162 Baugur 233 Baumol, William 250 Bebchuk, Lucian 154 behaviouralist school 173–4 Belgium ethnic division 122 income inequality 144, 146 manufacturing 70, 91 R&D funding 206 standard of living 109 Benin, entrepreneurship 159 Bennett, Alan 214 Besley, Tim 246 big government 221–2, 260–61 and growth 228–30 see also government direction; industrial policy BIS (Bank for International Settlements) 262 Black, Eugene 126 Blair, Tony 82, 143, 179 borderless world 39–40 bounded rationality theory 168, 170, 173–7, 250, 254 Brazilian inflation 55 Britain industrial dominance/decline 89–91 protectionism 69–70 British Academy 246–7 British Airways 131 brownfield investment 84 Brunei 258 Buffet, Warren 30, 239 Bukharin, Nikolai 139 Bunning, Senator Jim 8 Burkina Faso (formerly Upper Volta) 121, 200 Bush, George W. 8, 158, 159, 174 Bush Sr, George 207 business sector see corporate sector Cameroon 116 capital mobility 59–60 nationality 74–5, 76–7 capitalism Golden Age of 142, 147, 243 models 253–4 capitalists, vs. workers 140–42 captains of industry 16 Carnegie, Andrew 15 Case, Steve 132–3 Cassano, Joe 172–3 CDOs (collateralized debt obligations) 238 CDSs (credit default swaps) 238 CEO compensation see executive pay, in US Cerberus 77–8 Chavez, Hugo 68 chess, complexity of 175–6 child-labour regulation 2–3, 197 China business regulation 196 communes 216 economic officials 244 industrial predominance 89, 91, 93, 96 as planned economy 203–4 PPP income 107 protectionism and growth 63–4, 65 Chocolate mobile phone 129 Chrysler 77–8, 191 Chung, Ju-Yung 129 Churchill, Winston 253 climate factors 120–21 Clinton, Bill 143 cognitive psychology 173–4 collateralized debt obligations (CDOs) 238 collective entrepreneurship 165 communist system 200–204 Concorde project 130–31 conditions of trade 5 Confucianism 212–13 Congo (Democratic Republic) 116, 121 consumption smoothing 163 cooperatives 166 corporate sector importance 190–91 planning in 207–9 regulation effect 196–8 suspicion of 192–3 see also regulation; transnational corporations Cotton Factories Regulation Act 1819 2 credit default swaps (CDSs) 238 Crotty, Jim 236–8 culture issues 123, 212–13 Daimler-Benz 77–8 Darling, Alistair 172 de-industrialization 91 balance of payments 97–100, 101 causes 91–6 concerns 96–9 deflation, Japan 54 deliberation councils 134 Denmark cooperatives 166 protectionism 69 standard of living 104, 106, 232–3 deregulation see under regulation derivatives 239 Detroit car-makers 191–2 developing countries entrepreneurship and poverty 158–60 and free market policies 62–3, 71–3, 118–19, 261–2 policy space 262–3 digital divide 39 dishwashers 34 distribution of income see downward redistribution of income; income irregularity; upward redistribution of income domestic service 32–3 double-dip recession xiii downward redistribution of income 142–3, 146–7 Dubai 235 Duménil, Gérard 236 East Asia economic officials 249–50 educational achievements 180–81 ethnic divisions 122–3 government direction 131–2 growth 42, 56, 243–4 industrial policy 125–36, 205 École Nationale d’Administration (ENA) 133 economic crises 247 Economic Policy Institute (EPI) 144, 150 economists alternative schools 248–51 as bureaucrats 242–3 collective imagination 247 and economic growth 243–5 role in economic crises 247–8 Ecuador 73 Edgerton, David 37 Edison, Thomas 15, 165, 166 education and enterprise 188–9 higher education effect 185–8 importance 178–9 knowledge economy 183–5 mechanization effect 184–5 outcome equality 217–18 and productivity 179–81 relevance 182–3 Elizabeth II, Queen 245–7 ENA (École Nationale d’Administration) 133 enlightened self-interest 255–6 entrepreneurship, and poverty 157–8 and collective institutions 165–7 as developing country feature 158–60 finance see microfinance environmental regulations 3 EPI (Economic Policy Institute) 144, 150 equality of opportunity 210–11, 256–7 and equality of outcome 217–20, 257 and markets 213–15 socio-economic environment 215–17 equality of outcome 217–20 ethnic divisions 122–3 executive pay and non-market forces 153–6 international comparisons 152–3 relative to workers’ pay 149–53, 257 US 148–9 fair trade, vs. free trade 6–7 Fannie Mae 8 Far Eastern Economic Review 196 Federal Reserve Board (US) 171, 172, 246 female occupational structure 35–6 Fiat 78 financial crisis (2008) xiii, 155–6, 171–2, 233–4, 254 financial derivatives 239, 254–5 financial markets deregulation 234–8, 259–60 effects 239–41 efficiency 231–2, 240–41 sector growth 237–9 Finland government direction 133 income inequality 144 industrial production 100 protectionism 69, 70 R&D funding 206 welfare state and growth 229 Fischer, Stanley 54 Ford cars 191, 237 Ford, Henry 15, 200 foreign direct investment (FDI) 83–5 France and entrepreneurship 158 financial deregulation 236 government direction 132, 133–4, 135 indicative planning 204–5 protectionism 70 Frank, Robert H 151 Franklin, Benjamin 65–6, 67 Freddie Mac 8 free market boundaries 8–10 and developing countries 62–3, 71–3, 118–19, 261–2 labour see under labour nineteenth-century rhetoric 140–43 as political definition 1–2 rationale xiii–xiv, 169–70 results xiv–xv, xvi–xvii system redesign 252, 263 see also markets; neo-liberalism free trade, vs. fair trade 6–7 Fried, Jesse 154 Friedman, Milton 1, 169, 214 Galbraith, John Kenneth 16, 245 Garicano, Luis 245 Gates, Bill 165, 166, 200 General Electric (GE) 17, 45, 86, 237 General Motors Acceptance Corporation (GMAC) 194, 237 General Motors (GM) 20, 22, 45, 80, 86, 154, 190–98 decline 193–6 financialization 237 pre-eminence 191–2 geographical factors 121 Germany blitzkrieg mobility 191 CEO remuneration 152–3 cooperatives 166 emigration 69 hyperinflation 52–4 industrial policy 205 manufacturing 90 R&D funding 206 welfare state and growth 228–9 Ghana, entrepreneurship 159 Ghosn, Carlos 75–6, 78 globalization of management 75–6 and technological change 40 GM see General Motors GMAC (General Motors Acceptance Corporation) 194, 237 Golden Age of Capitalism 142, 147, 243 Goldilocks economy 246 Goodwin, Sir Fred 156 Gosplan 145 government direction balance of results 134–6 and business information 132–4 failure examples 130–31 and market discipline 44–5, 129–30, 134 share ownership 21 success examples 125–6, 131–4 see also big government; industrial policy Grameen Bank 161–4 Grant, Ulysses 67 Great Depression 1929 24, 192, 236, 249, 252 greenfield investment 84 Greenspan, Alan 172, 246 Hamilton, Alexander 66–7, 69 Hayami, Masaru 54 Hennessy, Peter 246–7 higher education 185–8 Hirschman, Albert 249 History Boys (Bennett) 214 Hitler, Adolf 54 home country bias 78–82, 83, 86–7 Honda 135 Hong Kong 71 household appliances 34–6, 37 HSBC 172 Human relations school 47 Hungary, hyperinflation 53–4 hyperinflation 52–4 see also inflation Hyundai Group 129, 244 Iceland financial crisis 232–4, 235 foreign debt 234 standard of living 104–5 ICT (Information and Communication Technology) 39 ILO (International Labour Organization) 32, 143–4 IMF see International Monetary Fund immigration control 5, 23, 26–8, 30 income per capita income 104–11 see also downward redistribution of income; income inequality; upward redistribution of income income inequality 18, 72–3, 102, 104–5, 108, 110, 143–5, 147, 247–8, 253, 262 India 99, 121 indicative planning 205 indicative planning 204–6 Indonesia 234 industrial policy 84, 125–36, 199, 205, 242, 259, 261 see also government direction Industrial Revolution 70, 90, 243 infant industry argument 66–8, 69–70, 71–2 inflation control 51–2 and growth 54–6, 60–61 hyperinflation 52–4 and stability 56–61 Information and Communication Technology (ICT) 39 institutional quality 29–30, 112–13, 115, 117, 123–4, 165–7 interest rate control 5–6 international dollar 106–7 International Labour Organization (ILO) 32, 143–4 International Monetary Fund (IMF) 54–5, 57, 66, 72, 244, 262 SAPs 118 International Year of Microcredit 162 internet revolution 31–2 impact 36–7, 38, 39 and rationality 174 investment brownfield/greenfield 84 foreign direct investment 83–5 share 18–19 invisible reward/sanction mechanisms 48–50 Ireland financial crisis 234–5 Italy cooperatives 166 emigrants to US 103 Jackson, Andrew 68 Japan business regulation 196 CEO remuneration 152–3 deflation 54 deliberation councils 134 government direction 133–4, 135, 259 indicative planning 205 industrial policy 131, 135, 242–5 industrial production 100 production system 47, 167 protectionism 62, 70 R&D funding 206 Jefferson, Thomas 67–8, 239 job security/insecurity 20, 58–61, 108–9, 111, 225–8, 247, 253, 259 Journal of Political Economy 34 Kaldor, Nicolas 249 Keynes, John Maynard 249 Kindleberger, Charles 249 knowledge economy 183–5 Kobe Steel 42–3, 46 Kong Tze (Confucius) 212 Korea traditional 211–13 see also North Korea; South Korea Koufax, Sandy 172 Kuwait 258 labour free market rewards 23–30 job security 58–60 in manufacturing 91–2 market flexibility 52 regulation 2–3 relative price 33, 34 Latin America 32–3, 55, 73, 112, 122, 140, 196–7, 211, 245, 262 Latvia 235 Lazonick, William 20 Lenin, Vladimir 138 Levin, Jerry 133 Lévy, Dominique 236 LG Group 129, 134 liberals neo-liberalism xv, 60, 73 nineteenth-century 140–42 limited liability 12–15, 21, 228, 239, 257 Lincoln, Abraham 37, 67 List, Friedrich 249 London School of Economics 245–6 LTCM (Long-Term Capital Management) 170–71 Luxemburg, standard of living 102, 104–5, 107, 109, 232–3, 258 macro-economic stability 51–61, 240, 259, 261 Madoff, Bernie 172 Malthus, Thomas 141 managerial capitalism 14–17 Mandelson, Lord (Peter) 82–3, 87 manufacturing industry comparative dynamism 96 employment changes 91–2 importance 88–101, 257–9 productivity rise 91–6, 184–5 relative prices 94–5 statistical changes 92–3 Mao Zedong 215–16 Marchionne, Sergio 78 markets and bounded rationality theory 168, 173–6, 177, 254 conditions of trade 5 and equality of opportunity 213–15 failure theories 250 financial see financial markets government direction 44–5, 125–36 government regulation 4–6, 168–9, 176–7 participation restrictions 4 price regulations 5–6 and self-interest 44–5 see also free market Marx, Karl 14, 198, 201, 208, 249 Marxism 80, 185, 201–3 mathematics 180, 182–3 MBSs (mortgage-backed securities) 238 medicine’s popularity 222–4 Merriwether, John 171 Merton, Robert 170–71 Michelin 75–6 microfinance critique 162 and development 160–62 Microsoft 135 Minsky, Hyman 249 Monaco 258 morality, as optical illusion 48–50 Morduch, Jonathan 162 mortgage-backed securities (MBSs) 238 motivation complexity 46–7 Mugabe, Robert 54 NAFTA (North American Free Trade Agreement) 67 National Health Service (UK) 261 nationality of capital 74–87 natural resources 69, 115–16, 119–20, 121–2 neo-liberalism xv, 60, 73, 145 neo-classical school 250 see also free market Nestlé 76–7, 79 Netherlands CEO remuneration 152–3 cooperatives 166 intellectual property rights 71 protectionism 71 welfare state and growth 228–9 New Public Management School 45 New York Times 37, 151 New York University 172 Nissan 75–6, 84, 135, 214 Nobel Peace Prize 162 Prize in economics 170, 171–2, 173, 208, 246 Nobel, Alfred 170 Nokia 135, 259–60 North American Free Trade Agreement (NAFTA) 67 North Korea 211 Norway government direction 132, 133, 205 standard of living 104 welfare state and growth 222, 229 Obama, Barack 149 OECD (Organization for Economic Cooperation and Development) 57, 159, 229 Oh, Won-Chul 244 Ohmae, Kenichi 39 Opel 191 Opium War 9 opportunities see equality of opportunity Organization for Economic Cooperation and Development (OECD) 57, 159, 229 organizational economy 208–9 outcomes equality 217–20 Palin, Sarah 113 Palma, Gabriel 237 Park, Chung-Hee 129 Park, Tae-Joon 127–8 participation restrictions 4 Perot, Ross 67 Peru 219 PGAM (Platinum Grove Asset Management) 171 Philippines, education and growth 180, 181 Phoenix Venture Holdings 86 Pigou, Arthur 250 Pinochet, Augusto 245 PISA (Program for International Student Assessment) 180 Plain English Campaign 175 planned economies communist system 200–204 indicative systems 204–6 survival 199–200, 208–9 Platinum Grove Asset Management (PGAM) 171 Pohang Iron and Steel Company (POSCO) 127–8 pollution 3, 9, 169 poor individuals 28–30, 140–42, 216–18 Portes, Richard 235 Portman, Natalie 162 POSCO (Pohang Iron and Steel Company) 127–8 post-industrial society 39, 88–9, 91–2, 96, 98, 101, 257–8 Poverty Reduction Strategy Papers (PRSPs) 118 see also SAPs PPP (purchasing power parity) 106–9 Preobrazhensky, Yevgeni 138–40, 141 price regulations 5–6 stability 51–61 Pritchett, Lant 181 private equity funds 85–6, 87 professional managers 14–22, 44–5, 166, 200 Program for International Student Assessment (PISA) 180 protectionism and growth 62–3, 72–3 infant industry argument 66–8, 69–70, 71–2 positive examples 63–5, 69 PRSPs see Poverty Reduction Strategy Papers purchasing power parity (PPP) 106–9 R&D see research and development (R&D) Rai, Aishwarya 162 Rania, Queen 162 rationality see bounded rationality theory RBS (Royal Bank of Scotland) 156 real demand effect 94 regulation business/corporate 196–8 child labour 2–3, 197 deregulation 234–8, 259–60 legitimacy 4–6 markets 4–6, 168–9, 176–7 price 5–6 Reinhart, Carmen 57, 59 Renault 21, 75–6 Report on the Subject of Manufactures (Hamilton) 66 The Rescuers (Disney animation) 113–14 research and development (R&D) 78–9, 87, 132, 166 funding 206 reward/sanction mechanisms 48–50 Ricardo, David 141 rich individuals 28–30, 140–42 river transport 121 Rogoff, Kenneth 57, 59 Roodman, David 162 Roosevelt, Franklin 191 Rover 86 Royal Bank of Scotland (RBS) 156 Rubinow, I.M. 34 Ruhr occupation 52 Rumsfeld, Donald 174–5 Rwanda 123 Santander 172 SAPs (Structural Adjustment Programs) 118, 124 Sarkozy, Nicolas 90 Scholes, Myron 170–71 Schumpeter, Joseph 16, 165–7, 249 Second World War planning 204 (second) Bank of the USA 68 self-interest 41–2, 45 critique 42–3 enlightened 255–6 invisible reward/sanction mechanisms 48–50 and market discipline 44–5 and motivation complexity 46–7 Sen, Amartya 250 Senegal 118 service industries 92–3 balance of payments 97–100, 101 comparative dynamism 94–5, 96–7 knowledge-based 98, 99 Seychelles 100 share buybacks 19–20 shareholder value maximisation 17–22 shareholders government 21 ownership of companies 11 short-term interests 11–12, 19–20 shipbuilders 219 Simon, Herbert 173–6, 208–9, 250 Singapore government direction 133 industrial production 100 PPP income 107 protectionism 70 SOEs 205 Sloan Jr, Alfred 191–2 Smith, Adam 13, 14, 15, 41, 43, 169, 239 social dumping 67 social mobility 103–4, 220 socio-economic environment 215–17 SOEs (state-owned enterprises) 127, 132, 133, 205–6 South Africa 55, 121 and apartheid 213–16 South Korea bank loans 81 economic officials 244 education and growth 181 ethnic divisions 123 financial drive 235 foreign debt 234 government direction 126–9, 133–4, 135, 136 indicative planning 205 industrial policy 125–36, 205, 242–5 inflation 55, 56 job insecurity effect 222–4, 226, 227 post-war 212–14 protectionism 62, 69, 70 R&D funding 206 regulation 196–7 Soviet Union 200–204 Spain 122 Spielberg, Steven 172 Sri Lanka 121 Stalin, Josef 139–40, 145 standard of living comparisons 105–7 US 102–11 Stanford, Alan 172 state owned enterprises (SOEs) 127, 132, 133, 205–6 steel mill subsidies 126–8 workers 219 Stiglitz, Joseph 250 Structural Adjustment Programs (SAPs) 118, 124 Sub-Saharan Africa 73, 112–24 culture issues 123 education and growth 181 ethnic divisions 122–3 free market policies 118–19, 262 geographical factors 121 growth rates 73, 112, 116–19 institutional quality 123 natural resources 119–20, 121–2 structural conditions 114–16, 119–24 underdevelopment 112–13, 124 Sutton, Willie 52 Sweden 15, 21–2 CEO remuneration 152 income inequality 144 industrial policy 205 industrial production 100 per capita income 104 R&D funding 206 welfare state and growth 229 Switzerland CEO remuneration 152–3 ethnic divisions 122 geography 121 higher education 185–6, 188 intellectual property rights 71 manufacturing 100, 258 protectionism 69, 71 standard of living 104–6, 232–3 Taiwan business regulation 196 economic officials 244 education and growth 180 government direction 136 indicative planning 205 protectionism 69, 70 Tanzania 116 TARP (Troubled Asset Relief Program) 8 tax havens 258 technological revolution 31–2, 38–40 telegraph 37–8 Telenor 164 Thatcher, Margaret 50, 225–6, 261 Time-Warner group 132–3 TIMSS (Trends in International Mathematics and Science Study) 180, 183 Toledo, Alejandro 219 Toyota and apartheid 214 production system 47 public money bail-out 80 trade restrictions 4 transnational corporations historical debts 80 home country bias 78–82, 83, 86–7 nationality of capital 74–5, 76–7 production movement 79, 81–2 see also corporate sector Trends in International Mathematics and Science Study (TIMSS) 180, 183 trickle-down economics 137–8 and upward distribution of income 144–7 Trotsky, Leon 138 Troubled Asset Relief Program (TARP) 8 2008 financial crisis xiii, 144, 155–6, 171–2, 197–8, 233–4, 236, , 238–9, 245–7, 249, 254 Uganda 115–16 uncertainty 174–5 unemployment 218–19 United Kingdom CEO remuneration 153, 155–6 financial deregulation 235–6, 237 NHS 261 shipbuilders 219 see also Britain United Nations 162 United States economic model 104 Federal Reserve Board 171, 172, 246 financial deregulation 235–8 immigrant expectations 103–4 income inequality 144 inequalities 107–11 protectionism and growth 64–8, 69 R&D funding 206 standard of living 102–11 steel workers 219 welfare state and growth 228–30 United States Agency for International Development (USAID) 136 university education effect 185–8 Upper Volta (now Burkina Faso) 200 upward redistribution of income 143–4 and trickle-down economics 144–7 Uruguay growth 73 income inequality 144 USAID (United States Agency for International Development) 136 vacuum cleaners 34 Venezuela 144 Versailles Treaty 52 Vietnam 203–4 Volkswagen government share ownership 21 public money bail-out 80 wage gaps political determination 23–8 and protectionism 23–6, 67 wage legislation 5 Wagoner, Rick 45 Wall Street Journal 68, 83 Walpole, Robert 69–70 washing machines 31–2, 34–6 Washington, George 65, 66–7 Welch, Jack 17, 22, 45 welfare economics 250 welfare states 59, 110–43, 146–7, 215, 220, 221–30 and growth 228–30 Wilson, Charlie 192, 193 Windows Vista system 135 woollen manufacturing industry 70 work to rule 46–7 working hours 2, 7, 109–10 World Bank and free market 262 and free trade 72 and POSCO 126–8 government intervention 42, 44, 66 macro-economic stability 56 SAPs 118 WTO (World Trade Organization) 66, 262 Yes, Minister/Prime Minister (comedy series) 44 Yunus, Muhammad 161–2 Zimbabwe, hyperinflation 53–4


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Economists Arvind Subramanian and Martin Kessler have shown that such globalisation only started in earnest in the 1990s, as illustrated by Figure 5.2, which traces the relative average income of the trading partners of the United States, the European Union, and Japan, weighted by their share of trade.15 FIGURE 5.2. Average income per capita of three major economies’ trading partners, as a ratio of their own income levels. “EU” is 27 European Union member states as of 2013. Source: Arvind Subramanian and Martin Kessler, “The Hyperglobalization of Trade and Its Future” (Peterson Institute Working Paper 13-6, July 2013), https://piie.com/publications/working-papers/hyperglobalization-trade-and-its-future, with updated data provided by the authors. For decades, the United States’ trade partners consistently hovered around two-thirds of American income per capita, until 1991, when poorer countries began to increase their share in US exports and imports. Europe’s trading partners were even richer—richer than the European Union itself on average—and stayed richer until the end of the 1990s.

See also antisystem proponents; nationalism immigration: arguments for restricting, 14–15; economic discouragement of, 217; economic downturns coinciding with, 84–85; employment market effects of, 82–83, 215–16, 224–25, 250n17; exposure to, as factor in attitudes toward, 47, 85, 251n24; globalisation and, 82–85; home countries as affected by, 251n23; labour standards compatible with, 224–25; in Norway, 213–14, 269n4; policy restrictions on, 11; populist criticisms of, 85; public finances affected by, 83–84, 216, 250n20; in United Kingdom, 270n5; voter opposition to, 47 income growth, 19–21, 19, 52, 241n3 income inequality: cultural values influenced by, 31; economic insecurity linked to, 58–60; in Germany, 60; incomes of lower 50 percent, 63; market power as factor in, 127; Scandinavia as counterexample to, 99–100; postwar decline in, 53; regional character of, 153; in Sweden, 43–44; tax policy as contributing factor to, 56–57, 169, 171; technology as factor in, 30; trade not a factor in, 79–82; union declines linked to, 56–58, 121; voter behaviour influenced by, 43–44; wages as factor in, 79–80; and wealth concentration, 169; in Western countries, 20 income per capita, of trading partners, 80 Independent Workers’ Union, 125 industry: China’s role in, 25, 75; in emerging economies, 75; employment in, as share of total employment, 76, 76; geographical effects of changes in, 70, 81; income inequality arising from decline of, 56; output of, 23–25, 24, 25; skill levels required in, 81, 106, 199–200, 204; social contract linked to, 52, 54, 61; successful policies to reverse declines in, 203–4; technology in, 79; unemployment linked to, 22–27, 22, 77; urbanization and, 29 Inglehart, Ronald, 42 interest rates, 163–65 International Monetary Fund, 20, 64, 121, 140, 145, 155, 182 in-work tax credits, 117–18 Ireland, 64, 86, 270n6 Italy: banking crisis in, 150; economic insecurity in, 59; populism in, 31; regional economic decline in, 192; voter behaviour in, 41–42 Japan: manufacturing technology in, 79; negative interest rates in, 164–65; public spending in, 234; response to global financial crisis in, 133; Western social order influential on, 6 Jews, blamed for financial problems, 89 job mobility, 31–33, 107, 107, 114–15, 117, 119–20, 125, 128 jobs.


pages: 421 words: 125,417

Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, global pandemic, Haber-Bosch Process, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, low skilled workers, mass immigration, microcredit, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population

By 2050, today’s developing countries would have an average income of $40,000 per person, roughly equal to U.S. income in 2005, and the United States would have a projected 2050 level of $90,000. Of course, this scenario is highly optimistic in that it assumes the world avoids any prolonged crisis, that the United States grows at the historical average, and that all other countries achieve convergent growth. Figure 2.2(a): The Convergence of Global Income per Capita through 2050 Source: Calculated using data from World Bank (2007) Note: Vertical axis on logarithmic scale. Income is measured in purchasing power parity (PPP) to adjust for difference in price levels across countries. More People and Higher Incomes Not only will most of the world be richer, but there will be a lot more people around enjoying those higher incomes. The world’s population continues to grow rapidly, even though the proportional rate of population growth (each year’s increase relative to the size of the global population) has declined.

Man-made climate change is not a sin of humanity, or even a result we could have easily predicted and avoided; it is, rather, an accident of chemistry, specifically, the accident that carbon dioxide has greenhouse climate effects (described in detail in Chapter 4). This accident is so novel and has come upon us so recently that global society has been caught largely unawares as to how it should respond. Figure 3.2(a): World Income per Capita from 1500 to 2001 Source: Data from Maddison (2001) Figure 3.2(b): World Income from 1500 to 2001 Source: Calculated using data from Maddison (2001) A tenfold increase in human population since 1750 and a similar increase in production per person on the planet mean that human society’s level of economic activity is perhaps one hundred times what it was at the start of the industrial era.

The natural prey is simply no match for the incredible power and technology of modern fishing fleets, complete with fishnets that stretch for miles and satellite-based tracking of open-sea schools of fish. As a recent study shows, perhaps two thirds or more of the world’s major marine fisheries are “fully exploited, overexploited, or depleted.” RISING PRESSURES Today’s rates of economic activity, if they were to be maintained at current rates into the future with current technologies, would be environmentally unsustainable. Yet both population and income per capita are rising rapidly. The pressures on the ecological systems are intensifying, and development and dissemination of sustainable technologies are far too slow. If we do little more than scale up what we are consuming today, we will drive many of the planet’s ecosystems, and countless species, to the point of collapse. The most famous early doomsday prediction came in 1798 from the Reverend Thomas Malthus, who noted that populations tend to rise geometrically (in compounded multiples) while food production only rises arithmetically (in added increments).


pages: 363 words: 28,546

Portfolio Design: A Modern Approach to Asset Allocation by R. Marston

asset allocation, Bretton Woods, business cycle, capital asset pricing model, capital controls, carried interest, commodity trading advisor, correlation coefficient, diversification, diversified portfolio, equity premium, Eugene Fama: efficient market hypothesis, family office, financial innovation, fixed income, German hyperinflation, high net worth, hiring and firing, housing crisis, income per capita, index fund, inventory management, Long Term Capital Management, mortgage debt, passive investing, purchasing power parity, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, Sharpe ratio, Silicon Valley, stocks for the long run, superstar cities, survivorship bias, transaction costs, Vanguard fund

E 97 P1: a/b c06 P2: c/d QC: e/f JWBT412-Marston T1: g December 8, 2010 17:41 98 Printer: Courier Westford PORTFOLIO DESIGN WHAT IS AN EMERGING MARKET? How is an emerging market defined? The International Finance Corporation traditionally used one criterion, gross national income per capita.2 Any country that was classified by the World Bank as a low income or middle income country was also classified as an emerging market. In 2008, China had a total gross national income of $3,899 billion, but a per capita income of only $2,940. Singapore, in contrast, had a gross national income of $168 billion, but a per capita income of $34,760.3 So China is classified as an emerging market even though its total output was many times that of Singapore because its income per capita is so low. The bulk of the world’s income is earned by the high income countries. Figure 6.1 shows the division of the world’s gross national income (GNI) in 2008.

China’s huge GNI must be shared by a huge population. When measuring national income, it’s sensible to adjust for the cost of living. That is certainly true within a single country over time. If you want to measure the income of the average American today relative to decades ago, the only sensible way to measure income is to adjust for changes in the cost of living. So we might compare gross national income per capita in the year 1960 versus that of 2010 in terms of today’s cost of living (2010 dollars). A similar approach might be used in comparing GNI per capita between countries at the same time since there might be substantial differences in the cost of living across countries. A basket of goods might be much less expensive in China than in Japan even if the basket itself were identical in both countries.

See Federal Housing Finance Agency fixed income, 121–122 fixed income arbitrage, 171 forecast error, 240–241 foreign bonds, 135 correlation with currency, 139 correlation with U.S. bonds, 137 interest rates, 135 returns, 135–136 foreign stocks correlation with U.S. stocks, 87–88 currency and, 79–85 diversification benefits, 85–90 key features, 93–94 owning, 90–93 returns, 79–85 shortcuts to owning, 90–93 U.S. versus, 75–79 foundations, 285–286 spending rules, 5, 286–288 French, Kenneth, 33, 35, 37–38, 49–50, 57, 65 frontier markets, 103 fund of funds, 172, 182–186 Fung, K.H., 187 G geometric averages, 16, 46 Getmansky, Mila, 176 global macro, 172 GNI. See gross national income Goetzmann, William N., 117–118 gold, 249–251 Goldman Sachs Commodity Index (GSCI), 240–243 Gorton, Gary, 236, 239 gross national income (GNI), 98–99 gross national income per capita, 98, 103 growth index, value versus, 59–64 growth indexes, 64–65 growth portfolios, 69–71 growth stocks in portfolios, 69–71 key features, 71 GSCI. See Goldman Sachs Commodity Index Gyourko, Joseph, 221 H He, Guangliang, 154–155 health care, 195 hedge funds, 167 Hedge Funds Research (HFR), 173 hedge funds biases, 178–181 databases, 172–173 fund of funds, 182–186 investment strategies, 169–172 investors, 168 key features, 187 managers, 181–183 portfolio, 186–187 returns, 172–178 hedges, currency, 138–139 HFR.


pages: 159 words: 45,073

GDP: A Brief but Affectionate History by Diane Coyle

"Robert Solow", Asian financial crisis, Berlin Wall, big-box store, Bretton Woods, BRICs, business cycle, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, en.wikipedia.org, endogenous growth, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, hedonic treadmill, income inequality, income per capita, informal economy, Johannes Kepler, John von Neumann, Kevin Kelly, Long Term Capital Management, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, purchasing power parity, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population

The economist Amartya Sen, who subsequently won the Nobel Memorial Prize, had electrified the world of development economics with the argument that famines had nothing to do with income and poverty; rather, they were caused when governments were not responsive to the needs of their people, and in particular when there were no newspapers or broadcasters with sufficient independence to challenge and criticize government decisions. Democracies did not suffer famines, at any level of GDP per capita.9 Sen went on to argue that although income per capita was important, it was not as complete a measure of people’s welfare as their capabilities—this would include income or command over resources but also variables such as health, education, women’s freedom, and access to key technologies such as electricity and roads.10 The HDI measures these separate indicators and combines them into a single ranking. This is published every year by the United Nations Development Program.

Ironically, those people who argue most strongly for using an alternative to GDP for the developed economies tend to be focused on income and poverty measures above all else when it comes to developing countries. The difference between GDP per capita and human development does matter for how you assess the efforts to assist developing countries, all those trillions of dollars in aid. The results in terms of GDP have been disappointing. The gap between incomes per capita of the world’s poorest and richest countries has soared in the past half century. But in many other ways—the indicators included in the HDI—there is good news. The gap between rich and poor countries in terms of life expectancy and infant mortality has narrowed significantly, despite the scourge of HIV/AIDS in sub-Saharan Africa. Access to education has improved substantially in poor countries.


pages: 268 words: 89,761

Unhealthy societies: the afflictions of inequality by Richard G. Wilkinson

attribution theory, business cycle, clean water, correlation coefficient, experimental subject, full employment, fundamental attribution error, Gini coefficient, income inequality, income per capita, Indoor air pollution, invisible hand, land reform, longitudinal study, means of production, purchasing power parity, rising living standards, twin studies, upwardly mobile

RA418.W45 1996 306.4´61–dc20 96–21560 ISBN 0-203-42168-X Master e-book ISBN ISBN 0-203-72992-7 (Adobe eReader Format) ISBN 0-415-09234-5 (hbk) ISBN 0-415-09235-3 (pbk) Contents List of illustrations Preface 1 Introduction: the social economy of health vii ix 1 Part I The health of societies 2 Health becomes a social science 13 3 Rising life expectancy and the epidemiological transition 29 Part II Health inequalities within societies 4 The problem of health inequalities 53 5 Income distribution and health 72 Part III Social cohesion and social conflict 6 A small town in the USA, wartime Britain, Eastern Europe and Japan 113 7 An anthropology of social cohesion 137 8 The symptoms of disintegration 153 Part IV How society kills 9 The psychosocial causes of illness 10 Baboons, civil servants and children’s height 175 193 vi Contents Part V Redistribution, economic growth and the quality of life 11 Social capital: putting Humpty together again 211 Bibliography Name index Subject index 233 247 251 Illustrations FIGURES 3.1 3.2 4.1 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Life expectancy and income per capita for selected countries and periods Increases in life expectancy in relation to percentage increase in GDPpc Relative risk of death from coronary heart disease according to employment grade, and proportions of differences that can be explained statistically by various risk factors Income and mortality among white US men GDP per capita and life expectancy in OECD countries in 1990 The cross-sectional relationship between income distribution and life expectancy (M&F) at birth in developed countries, c. 1981 The annual rate of change of life expectancy in twelve European Community countries and the rate of change in the percentage of the population in relative poverty, 1975–85 The relationship between income distribution and mortality among fifty states of the USA in 1990 Life expectancy (M&F) and Gini coefficients of posttax income inequality (standardised for household size) Social class differences in infant mortality in Sweden compared with England and Wales Social class differences in mortality of men 20–64 years: Sweden compared with England and Wales 34 37 65 73 74 76 77 79 84 87 88 viii Illustrations 5.9 Widening income differences: distribution of disposable income adjusted for household size, UK 5.10 Indices showing changes in death rates among young adults, children and infants (M&F combined, England and Wales, 1975–92) 5.11 Trends in life expectancy among blacks and whites in the USA (M&F combined) 5.12 Three measures of self-reported health in relation to income (M&F combined) 65 years and over living alone or in two-person households 8.1 The relationship between income distribution and homicide among the states of the USA in 1990 8.2 The decline in reading standards.

The broad picture is shown in figure 3.1. It sets out the relationship between Gross National Product per capita (GNPpc) and life expectancy at birth for men and women combined among countries at all stages of development. Each point is a country, and the four curves show the relationship between GNPpc and life expectancy as it was in 1900, 1930, 1960 and 1990. 34 The health of societies Figure 3.1 Life expectancy and income per capita for selected countries and periods Source: World Bank, World Development Report, 1993 At lower levels of GNPpc there was, at each point in time, an apparent relationship with life expectancy in that the two seem to rise together. However, at higher levels of GNPpc the relationship seems to disappear: at each point in time the curve flattens out towards the horizontal. This suggests that once countries have reached some threshold level of income (around $5000 per capita in 1990), life expectancy plateaus out and further increases in GNPpc are no longer associated with increases in life expectancy.

Not only are data available for fifty states, but they are less affected by low response rates. The same is true in relation to questions about which equivalence scales should be used. Equivalence scales is the name given to the system used for adjusting aggregate household incomes to allow for the number of people living in each household. You could simply divide household income by the number of people in the household to get household income per capita. But as it is much cheaper for Income distribution and health 91 (say) four people to live together, sharing a washing machine, fridge, television, heating bills and the costs of services, it would seem appropriate to use an equivalence scale which took account of those kinds of economies. But clearly the economies of scale with things like heating costs are much greater than the economies of scale for the costs of food or clothing.


pages: 312 words: 91,835

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

"Robert Solow", Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, Paul Samuelson, place-making, plutocrats, Plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

But when we look at changes in inequality versus income per capita (where income is really a proxy for structural changes such as industrialization or the movement of people from rural to urban areas), we expect to find a pattern such as that shown in Figure 2.4.12 At low income levels (say, below $1,000 or $2,000 per year in 1990 international dollars), there would be both increases and decreases of inequality while the mean income is stagnant, resulting in a scrambled picture resembling a noise signal.13 But with the first and second technological revolutions, we would expect to find a much clearer picture of rises and then declines in inequality with increasing income. FIGURE 2.4. Expected pattern of changes in inequality versus income per capita from the preindustrial through the postindustrial period and into the future (dotted line) This graph shows that the pattern of regular cycles of inequality unfolding over time (as shown in Figure 2.3) changes when inequality is plotted against mean income instead of time.

Frontier expansion led to a reduction in inequality in Chile because there was no migration. Hence unskilled laborers became scarcer and their wages went up. In contrast, in New Zealand and Argentina, where there was migration, expansion led to increased inequality. 31. These Kuznets waves, which are well-delineated when plotted against time, are much more difficult to find, or rather vanish, when we plot them against income per capita. It is, however, only in the first period identified by Rodríguez Weber (1850–1903) that we can treat the evolution in Chile as that of the evolution in a country with no increase in mean income—where, indeed, we do not expect to see a relationship between Gini value and income level. During that half century, per capita income growth was around 1 percent per annum; afterward, that is, for the entire twentieth century, it exceeded 2 percent per annum. 32.


pages: 296 words: 87,299

Portfolios of the poor: how the world's poor live on $2 a day by Daryl Collins, Jonathan Morduch, Stuart Rutherford

Cass Sunstein, clean water, failed state, financial innovation, financial intermediation, income per capita, informal economy, job automation, M-Pesa, mental accounting, microcredit, moral hazard, profit motive, purchasing power parity, RAND corporation, randomized controlled trial, The Fortune at the Bottom of the Pyramid, transaction costs

In our study, these households were able to “leverage” their more regular sources of income to engage in larger-scale financial intermediation: with a regular income, they were more comfortable taking on higher levels of debt and lenders were more willing to provide loans. As table 2.4 shows, regular wage earners in South Africa are usually better off in terms of both absolute income and income per capita than those earning irregularly (those whose income 44 T H E DA I LY G R I N D Table 2.4 Regular versus Irregular Income Households, South Africa Wage-earning households Share of sample in profile Financial statistics Average monthly income Average monthly income per capita Debt/service ratio Debt/equity ratio Grant-receiving households Irregular income households 49% 27% 21% $635 $188 $235 $219 13% 22% $61 17% 23% $87 7% 19% Note: US$ converted from South African rand at $ = 6.5 rand, market rate. comes from a small business piecemeal work, or remittances from relatives).

South Africa: Urban 1 60 households in a township outside Johannesburg; 11 dropped out during the study year, so results are based on 49 households in this area. South Africa: Urban 2 60 households in a township outside Cape Town; 15 households dropped out during the study year, so results are based on 45 households from this area. Half the urban sample was drawn from the township of Diepsloot, about a 45-minute car ride outside Johannesburg. This sample includes only two households that have PPP income per capita per day less than $2. Fifty-six percent of the able-bodied adults in this sample have regular jobs. The area was originally developed as a relocation area for residents of another flooded and overcrowded township. Diepsloot residents were ultimately promised Reconstruction and Development Programme homes supplied by the governments, but many were still waiting. Three-quarters of the sample lived in tiny one-room shacks.


pages: 850 words: 254,117

Basic Economics by Thomas Sowell

affirmative action, air freight, airline deregulation, American Legislative Exchange Council, bank run, barriers to entry, big-box store, British Empire, business cycle, clean water, collective bargaining, colonial rule, corporate governance, correlation does not imply causation, cross-subsidies, David Brooks, David Ricardo: comparative advantage, declining real wages, Dissolution of the Soviet Union, diversified portfolio, European colonialism, fixed income, Fractional reserve banking, full employment, global village, Gunnar Myrdal, Hernando de Soto, hiring and firing, housing crisis, income inequality, income per capita, index fund, informal economy, inventory management, invisible hand, John Maynard Keynes: technological unemployment, joint-stock company, Just-in-time delivery, Kenneth Arrow, knowledge economy, labor-force participation, land reform, late fees, low cost airline, low cost carrier, low skilled workers, means of production, Mikhail Gorbachev, minimum wage unemployment, moral hazard, offshore financial centre, oil shale / tar sands, payday loans, price discrimination, price stability, profit motive, quantitative easing, Ralph Nader, rent control, road to serfdom, Ronald Reagan, Silicon Valley, surplus humans, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transcontinental railway, Vanguard fund, War on Poverty

Those decisions and their consequences can be more important than the resources themselves, for there are poor countries with rich natural resources and countries like Japan and Switzerland with relatively few natural resources but high standards of living. The values of natural resources per capita in Uruguay and Venezuela are several times what they are in Japan and Switzerland, but real income per capita in Japan and Switzerland is more than double that of Uruguay and several times that of Venezuela.{4} Not only scarcity but also “alternative uses” are at the heart of economics. If each resource had only one use, economics would be much simpler. But water can be used to produce ice or steam by itself or innumerable mixtures and compounds in combination with other things. Similarly, from petroleum comes not only gasoline and heating oil, but also plastics, asphalt and Vaseline.

At that time, Ghana was not only more prosperous than the Ivory Coast, it had more natural resources, so the bet might have seemed reckless on the part of the president of the Ivory Coast. However, he knew that Ghana was committed to a government-run economy and the Ivory Coast to a freer market. By 1982, the Ivory Coast had so surpassed Ghana economically that the poorest 20 percent of its people had a higher real income per capita than most of the people in Ghana.{23} This could not be attributed to any superiority of the country or its people. In fact, in later years, when the government of the Ivory Coast eventually succumbed to the temptation to control more of their country’s economy, while Ghana finally learned from its mistakes and began to loosen government controls on the market, these two countries’ roles reversed—and now Ghana’s economy began to grow, while that of the Ivory Coast declined.{24} Similar comparisons could be made between Burma and Thailand, the former having had the higher standard of living before instituting socialism, and the latter a much higher standard of living afterwards.

If we count as genuinely poor that 5 percent of the population which remains in the bottom 20 percent over a period of years, then the genuinely rich and the genuinely poor—put together—add up to less than 10 percent of the American population. Nevertheless, some political rhetoric might suggest that most people are either “haves” or “have nots.” Trends over Time If our concern is with the economic well-being of flesh-and-blood human beings, as distinguished from statistical comparisons between income brackets, then we need to look at real income per capita, because people do not live on percentage shares. They live on real income. Among those Americans who were in the bottom 20 percent in 1975, 98 percent had higher real incomes in 1991—and two-thirds had higher real incomes in 1991 than the average American had back in 1975, when they were in the bottom 20 percent.{313} Even when narrowly focusing on income brackets, the fact that the share of the bottom 20 percent of households declined from 4 percent of all income in 1985 to 3.5 percent in 2001 did not prevent the real income of the households in this bracket from rising by thousands of dollars in absolute terms,{314} quite aside from the movement of actual people out of the bottom 20 percent between the two years.


pages: 401 words: 109,892

The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon

airline deregulation, Amazon Mechanical Turk, Amazon Web Services, Andrei Shleifer, barriers to entry, bitcoin, blockchain, business cycle, business process, buy and hold, Carmen Reinhart, carried interest, central bank independence, commoditize, crack epidemic, cross-subsidies, disruptive innovation, Donald Trump, Erik Brynjolfsson, eurozone crisis, financial deregulation, financial innovation, financial intermediation, gig economy, income inequality, income per capita, index fund, intangible asset, inventory management, Jean Tirole, Jeff Bezos, Kenneth Rogoff, labor-force participation, law of one price, liquidity trap, low cost airline, manufacturing employment, Mark Zuckerberg, market bubble, minimum wage unemployment, money market fund, moral hazard, natural language processing, Network effects, new economy, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, price discrimination, profit maximization, purchasing power parity, QWERTY keyboard, rent-seeking, ride hailing / ride sharing, risk-adjusted returns, Robert Bork, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, Silicon Valley, Snapchat, spinning jenny, statistical model, Steve Jobs, supply-chain management, Telecommunications Act of 1996, The Chicago School, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, Travis Kalanick, Vilfredo Pareto, zero-sum game

In the standard economic model competition has an impact on the level of GDP but not on its long-term rate of growth. Imagine a change in policy that leads to an increase in competition in domestic markets. This leads to a temporary increase in the rate of growth of the economy. Afterward, GDP remains permanently higher than it would have been without the policy change, but it eventually grows at the same rate as before because the long-term rate of growth of income per capita depends only on technological progress. Competition can have a permanent impact on growth if it encourages technological innovation. This is a hotly debated issue. The evidence suggests that competition induces more innovation, but there is no consensus on the size of this effect. We will discuss the links between competition, investment, and productivity in Chapter 4. CHAPTER 2 Bad Concentration, Good Concentration TO ASSESS THE DEGREE of competition in an industry, economists look at three main variables: the degree of concentration (that is, whether there are lots of small firms or whether the industry is dominated by a few large firms); the profits that these firms are making, and the prices that customers pay.

Health care, then, should also be more expensive in rich countries. FIGURE 12.3  Health-care cost versus GDP per capita in select countries. US = United States; CH = Switzerland; NO = Norway; IE = Ireland; LU = Luxembourg. Data source: Kaiser Family Foundation analysis of OECD data Figure 12.3 shows the Balassa-Samuelson effect for health care. You can see that per-capita health-care costs increase systematically with income per capita. However, Figure 12.3 also shows that US health-care costs are completely off the chart (or off the regression line, to be precise). Health-care costs per capita are much higher in the US than in Norway or Switzerland, both of which have similar levels of GDP per capita. (GDP per capita in Luxembourg and Ireland is biased by the activities of large multinationals.) Figure 12.4 shows the shares of GDP spent on health care for the US and for the average of comparable OECD countries.

profit margin: A firm’s profit over total sales, measured in percent. profit rate: The ratio of income net of depreciation over the stock of capital at the beginning of the year. purchasing power parity (PPP): A measurement tool to compare standards of living between countries by using the price of a common basket of goods and services. PPP can be used to define exchange rates and to compare real income per capita. The Big Mac index is PPP using the price of Big Mac sandwiches. pure monopoly: A situation in which there is only one seller in a market, such as when a firm is the only supplier of a particular product in a particular location. Cases of pure monopoly are relatively rare. real GDP: Gross domestic product adjusted for inflation. regulatory capture: The influence or domination by industry or interest groups of the government agency intended to regulate that industry.


pages: 547 words: 172,226

Why Nations Fail: The Origins of Power, Prosperity, and Poverty by Daron Acemoglu, James Robinson

"Robert Solow", Admiral Zheng, agricultural Revolution, Albert Einstein, Andrei Shleifer, Atahualpa, banking crisis, Bartolomé de las Casas, Berlin Wall, blood diamonds, BRICs, British Empire, central bank independence, clean water, collective bargaining, colonial rule, conceptual framework, Corn Laws, creative destruction, crony capitalism, Deng Xiaoping, desegregation, discovery of the americas, en.wikipedia.org, European colonialism, failed state, Fall of the Berlin Wall, falling living standards, financial independence, financial innovation, financial intermediation, Francis Fukuyama: the end of history, Francisco Pizarro, full employment, income inequality, income per capita, indoor plumbing, invention of movable type, invisible hand, James Hargreaves, James Watt: steam engine, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kickstarter, land reform, mass immigration, Mikhail Gorbachev, minimum wage unemployment, Mohammed Bouazizi, Paul Samuelson, price stability, profit motive, Rosa Parks, Scramble for Africa, Simon Kuznets, spice trade, spinning jenny, Steve Ballmer, Steve Jobs, trade liberalization, trade route, transatlantic slave trade, union organizing, upwardly mobile, Washington Consensus, working poor

The countries shaded in the darkest color are the poorest in the world, those where average per-capita incomes (called by economists GDP, gross domestic product) are less than $2,000 annually. Most of Africa is in this color, as are Afghanistan, Haiti, and parts of Southeast Asia (for example, Cambodia and Laos). North Korea is also among this group of countries. The countries in white are the richest, those with annual income per-capita of $20,000 or more. Here we find the usual suspects: North America, western Europe, Australasia, and Japan. Another interesting pattern can be discerned in the Americas. Make a list of the nations in the Americas from richest to poorest. You will find that at the top are the United States and Canada, followed by Chile, Argentina, Brazil, Mexico, and Uruguay, and maybe also Venezuela, depending on the price of oil.

Though these details are all important and interesting, the more critical lessons are in the big picture, which reveals that in each of these cases, extractive political institutions have created extractive economic institutions, transferring wealth and power toward the elite. The intensity of extraction in these different countries obviously varies and has important consequences for prosperity. In Argentina, for example, the constitution and democratic elections do not work well to promote pluralism, but they do function much better than in Colombia. At least the state can claim the monopoly of violence in Argentina. Partly as a consequence, income per capita in Argentina is double that of Colombia. The political institutions of both countries do a much better job of restraining elites than those in Zimbabwe and Sierra Leone, and as a result, Zimbabwe and Sierra Leone are much poorer than Argentina and Colombia. The vicious circle also implies that even when extractive institutions lead to the collapse of the state, as in Sierra Leone and Zimbabwe, this doesn’t put a conclusive end to the rule of these institutions.

The party’s apparatus immediately sprang into action and was not only able to prevent Chinese media from covering the case but also managed to selectively block stories about the case on the New York Times and Financial Times Web sites. Because of the party’s control over economic institutions, the extent of creative destruction is heavily curtailed, and it will remain so until there is radical reform in political institutions. Just as in the Soviet Union, the Chinese experience of growth under extractive political institutions is greatly facilitated because there is a lot of catching up to do. Income per capita in China is still a fraction of that in the United States and Western Europe. Of course, Chinese growth is considerably more diversified than Soviet growth; it doesn’t rely on only armaments or heavy industry, and Chinese entrepreneurs are showing a lot of ingenuity. All the same, this growth will run out of steam unless extractive political institutions make way for inclusive institutions.


pages: 409 words: 118,448

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson

affirmative action, airline deregulation, banking crisis, Big bang: deregulation of the City of London, Boycotts of Israel, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, car-free, Carmen Reinhart, central bank independence, centre right, clean water, deindustrialization, endogenous growth, falling living standards, financial deregulation, floating exchange rates, full employment, George Gilder, Gini coefficient, global supply chain, income inequality, income per capita, indoor plumbing, informal economy, intermodal, invisible hand, Kenneth Rogoff, knowledge economy, late capitalism, linear programming, manufacturing employment, new economy, Nixon shock, North Sea oil, oil shock, Paul Samuelson, pension reform, price stability, purchasing power parity, refrigerator car, Right to Buy, rising living standards, Robert Gordon, rolodex, Ronald Coase, Ronald Reagan, Simon Kuznets, statistical model, strikebreaker, structural adjustment programs, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, unorthodox policies, upwardly mobile, War on Poverty, Washington Consensus, Winter of Discontent, Wolfgang Streeck, women in the workforce, working-age population, yield curve, Yom Kippur War, zero-sum game

During the same period many developing countries turned in impressive records of economic growth, as governments tried to wean their countries from dependence on crops or minerals and push them down the road toward industrialization. Newly independent Kenya grew at an annualized rate of more than 6 percent between 1960 and 1975, Pakistan and Bolivia almost as much. Collectively, the developing countries outperformed North America and Europe by a considerable margin. Even with rapid population growth, income per capita in many poor countries rose by more than half over those fifteen years. In the fifty-eight countries the World Bank designated as middle-income countries, manufactured goods accounted for a scant 5 percent of exports in 1960. In just over a decade, that share tripled. The urban slums mushrooming around every major city were the best indicator of success; for the landless peasants who fled penury in the countryside to take jobs in new factories, city life, with all its filth, crime, and tension, was immeasurably better than village life.23 On the surface, Prebisch’s formula seemed to work.

., 63 Dance of Death (Strindberg), 164 Davignon, Étienne, 127 Davignon Plan, 127 de Gasperi, Alcide, 24 de Gaulle, Charles, 24, 162, 200, 201 de Larosière, Jacques, 244, 249 debt crisis, 243–256; cause of and solution to, 253–256; emergency loans and, 247–249; impact on First World, 251–252; inflation and, 246; unemployment and, 246 deindustrialization, 124 Delors, Jacques, 209, 210 demand-pull inflation, 75–76 democracy, 268 Denison, Edward, 231 Denmark: anti-tax movement in, 151–153, 154; income per person in, 160 dependency theory (government intervention re: raw materials and manufacturing), 42 Der Spiegel, 89 deregulation, 12, 99–114, 237; of aviation, 113; of electricity, 113; of energy sector, 99–109, 110, 113; of gas, 99–100, 102, 103–104, 107–108, 109, 113; of interest rates on deposits and loans, 112, 113; of natural gas, 103, 104, 108–109, 110, 113; of oil, 99, 101, 102, 103, 104–106, 107–108, 109, 110, 113; positive and negative results of, 113–114; of telecommunications sector, 107, 113; of transportation sector, 106–107, 110–112, 113–114. See also regulation Derthick, Martha, 107 developing countries, 35–46; commonality among, 41; debt crisis in (see Third World debt crisis); economic growth in, 44, 45–46; economies of, and Prebisch, 40–43; hardship in, 44; income per capita in, 44; industrialization in, 36; new industries vs. raw materials and, 45–46. See also specific countries; Third World Diefenbaker, John, 24 discontents, 21 Dresdner Bank, 94 DuPont, 66 Earth Day, 61, 62 East Asia, 265 East Germany, 29; ungovernability in, 156, 157 East Pakistan, 44 Eastern Europe, 29; debt crisis in, 246; democracy in, 179; income per person in, 160–161; ungovernability in, 160–162 ECLA.

See International Monetary Fund import substitution, 40, 43, 45 income: defined, 136 income distribution, 136–138, 235–236; destruction of capital and loss of wealth and, 138; economic development and, 134–135; explanations for increasing disparities in, 140–143; income equality reversal in mid-1970s and, 138–140; labor share and, 141–142; labor/trade unions and, 137–138; tax rate and, 137 income equality: reversal of, in mid-1970s, 138–140 income inequality: U-curve and, 135 income per capita, 265; in developing countries, 44; in Japan, 116 income per person, 5, 160–161; productivity bust and, 261 income tax: economic crisis of 1970s and, 164–167; individual earnings and, 150; inflation and, 149; welfare state and, 145–147, 149–151. See also taxes/tax rate/tax policy; under specific countries India, 241; hardship/poverty in, 21; license raj and, 45 Indonesia, 46, 124, 245 industrialization, 37–38, 58, 134–135, 161; in developing countries, 36 inflation, 11–12; cost-push inflation, 75–77; debt crisis and, 246; demand-pull inflation, 75–76; income tax and, 149; jawboning and, 76–77; monetary policy and, 51–56; oil crisis of 1973 and, 74–77, 78; political pressure and, 76; price and wage controls and, 53–54; price controls and, 76–77; productivity bust and, 261; Third World debt crisis and, 246; as unavoidable nuisance, 75; varieties of, 75–77.


pages: 222 words: 70,559

The Oil Factor: Protect Yourself-and Profit-from the Coming Energy Crisis by Stephen Leeb, Donna Leeb

Buckminster Fuller, buy and hold, diversified portfolio, fixed income, hydrogen economy, income per capita, index fund, mortgage debt, North Sea oil, oil shale / tar sands, oil shock, peak oil, profit motive, reserve currency, rising living standards, Ronald Reagan, shareholder value, Silicon Valley, Vanguard fund, Yom Kippur War, zero-coupon bond

This point has been made frequently and cogently, in particular by the New York Times columnist Thomas Friedman, who has noted that the Saudis have used their oil revenues not to foster economic growth in their country but to keep their populace oppressed and in tow. Friedman’s arguments have been based in part on his personal observations, but there is ample hard data leading to the same conclusion. As figure 3b, “Declining Saudi GDP,” shows, income per capita in Saudi Arabia has been in a steady downtrend over the past decade. This has occurred despite the fact that the country has been receiving massive amounts of money—nearly $100 billion, or $4,500 per capita, a year—in oil revenues for very little effort. Given this tremendous influx of funds, it seems almost unimaginable that Saudi Arabia hasn’t managed to provide a vibrant economy for its citizens, and it is evidence of repression with a capital R.

But no matter how you measure it, China is the fastest-growing major economy in the world. This means that for a while to come China is likely to be the world’s leading economic engine, even more important than the U.S. China’s economic heft comes from the sheer size of its population, in contrast to the U.S., where it is a matter of population in conjunction with an elevated standard of living, or income per capita. On a per capita basis, income in China is modest by world standards. Most important for our argument, per capita oil consumption in China is currently just one-half or so of the world’s average. And it’s about one-tenth that of many modern industrialized economies, such as the U.S. Like other major world economies, China also is making a significant transition. But in China’s case, it’s not a transition from manufacturing to services, but from agriculture to manufacturing.


pages: 232 words: 70,361

The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez, Gabriel Zucman

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Berlin Wall, business cycle, Cass Sunstein, collective bargaining, corporate governance, Donald Trump, financial deregulation, income inequality, income per capita, informal economy, intangible asset, Jeff Bezos, labor-force participation, Lyft, Mark Zuckerberg, market fundamentalism, Mont Pelerin Society, mortgage debt, mortgage tax deduction, new economy, offshore financial centre, oil shock, patent troll, profit maximization, purchasing power parity, race to the bottom, rent-seeking, ride hailing / ride sharing, Ronald Reagan, shareholder value, Silicon Valley, single-payer health, Skype, Steve Jobs, The Wealth of Nations by Adam Smith, transfer pricing, trickle-down economics, uber lyft, very high income, We are the 99%

The national income of the United States was about 5 billion current US dollars (the Historical Statistics of the United States report a total “private production income” of $4.1 billion in 1859 in series A154, which is likely to be slightly on the low end and must be adjusted upward for the small amount of government production), and hence average income per capita was around $150 in 1860, i.e., a fourth of the exemption threshold of $600. From 1860 to 1864 the price index increases by about 75% (Atack and Passell, 1994, p. 367, Table 13.5), so the average income per capita reached about $250 in 1864. 8. Huret (2014), p. 25. 9. The price index was multiplied by a factor of about forty between 1860 and 1864 in the Confederacy but increased only by about 75% in the Union. Confederacy: Lerner (1955); Union: Atack and Passell (1994), p. 367, Table 13.5. 10.


pages: 809 words: 237,921

The Narrow Corridor: States, Societies, and the Fate of Liberty by Daron Acemoglu, James A. Robinson

Affordable Care Act / Obamacare, agricultural Revolution, AltaVista, Andrei Shleifer, bank run, Berlin Wall, British Empire, California gold rush, central bank independence, centre right, collateralized debt obligation, collective bargaining, colonial rule, Computer Numeric Control, conceptual framework, Corn Laws, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Dava Sobel, David Ricardo: comparative advantage, Deng Xiaoping, discovery of the americas, double entry bookkeeping, Edward Snowden, en.wikipedia.org, equal pay for equal work, European colonialism, Ferguson, Missouri, financial deregulation, financial innovation, Francis Fukuyama: the end of history, full employment, income inequality, income per capita, industrial robot, information asymmetry, interest rate swap, invention of movable type, Isaac Newton, James Watt: steam engine, John Harrison: Longitude, joint-stock company, Kula ring, labor-force participation, land reform, Mahatma Gandhi, manufacturing employment, mass incarceration, Maui Hawaii, means of production, megacity, Mikhail Gorbachev, Nelson Mandela, obamacare, openstreetmap, out of africa, PageRank, pattern recognition, road to serfdom, Ronald Reagan, Skype, spinning jenny, Steven Pinker, the market place, transcontinental railway, War on Poverty, WikiLeaks

Though Wong (1997) and Pomeranz (2001) argued that in fact China, or at least the most developed parts of it such as the Yangtze River valley, had standards of living in the eighteenth century similar to the most developed parts of Western Europe, subsequent research has not supported their claims. Broadberry, Guan, and Li (2017) provide a synthesis of work on historical measures of average living standards suggesting that while Song China had the highest levels of income per capita in the world in the medieval period, they subsequently stagnated, with fluctuations, for example, falls during the Ming and late Qing. In their data, income per capita in China was about one-third of that in the Netherlands in 1800 and only 30 percent of the British figure. Even the focus on the Yangtze as the relative comparison doesn’t change the big picture, with Bozhong and van Zanden (2012) finding average living standards there to be about half of the contemporary Dutch level in the 1820s.

This is largely because China’s high-speed rail system had presented an unrivaled opportunity for graft. But so do most other aspects of Chinese economic expansion. Though Liu fell from grace, most don’t. In 2012, 160 of China’s wealthiest 1,000 people were members of the Communist Party Congress. Their net worth was $221 billion, about twenty times that of the top 660 officials in all three branches of the government of the United States, a country whose income per capita is over seven times that of China. All of this shouldn’t be completely surprising. Controlling corruption, whether in the bureaucracy or in the education system, requires cooperation from society. The state needs to trust that people will report to it truthfully, and the people need to trust state institutions to the extent that they put their neck on the line by sharing their information.

Their belongings were destroyed and their houses burned to the ground. Nyabiondo was systematically looted with even the tiles being stolen from rooftops. This is Warre with obvious and wrenching human consequences. The economic consequences are just as evident. The economy of the Kivus is devastated and the same is true for much of the rest of the Congo. The result is abject poverty. Income per capita in the Congo is about 40 percent of the level it was in 1960 when the country became independent. At about $400, less than 1 percent of the U.S. level, it’s as poor as any country in the world. Life expectancy is twenty years less than it is in the United States. In the Democratic Republic of the Congo, Hobbes was right. The life of men is indeed “poore, nasty, brutish, and short.” It is even worse for women.


pages: 877 words: 182,093

Wealth, Poverty and Politics by Thomas Sowell

affirmative action, Albert Einstein, British Empire, Capital in the Twenty-First Century by Thomas Piketty, colonial exploitation, colonial rule, correlation does not imply causation, Deng Xiaoping, desegregation, European colonialism, full employment, Gunnar Myrdal, income inequality, income per capita, invention of the sewing machine, invisible hand, low skilled workers, mass immigration, means of production, minimum wage unemployment, New Urbanism, profit motive, rent control, Scramble for Africa, Simon Kuznets, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, transatlantic slave trade, transcontinental railway, trickle-down economics, very high income, War on Poverty

Among nations, as among individuals and groups, there is a fundamental difference between measuring what is happening over time to particular statistical categories and what is happening over time to specific sets of human beings. For example, data from the World Bank show that in 1960 the average per capita income of the 20 nations with the highest incomes per capita was about 23 times the average per capita income of the 20 nations with the lowest incomes per capita— and that this ratio rose to about 36 times as high by the year 2000. This fits the familiar notion of a growing gap between “the rich” and “the poor.” But, comparing the same set of nations initially in the top and bottom categories, and following those particular nations over the same years, leads to the directly opposite conclusion, for the ratio between the per capita incomes of the particular nations initially in each category fell from about 23-to-one to less than 10-to-one.63 As for the more general question of the reasons for large economic disparities between nations, genetic determinists offer the simplest answer to that question— namely, that some races are genetically superior and others genetically inferior.

Landes Geography is an influence but not predestination. Much of the influence of geography on income and wealth derives from its effects on the size of the cultural universe available to different peoples in different physical settings. An enumeration of places with rich concentrations of natural resources, such as oil in Saudi Arabia or gold in South Africa, would be a very poor guide to places with high incomes per capita. As The Economist magazine said of Nigeria, it is “rich in oil reserves but otherwise desperately poor.”1 Without the cultural prerequisites for developing natural resources into real wealth, the raw physical resources themselves are of little or no value. The natural resources we use today were even more abundant in the era of the cave man, but the people of that prehistoric era were culturally not yet able to use most of those resources.

In 2014, for example, a New York Times writer referred to Malthus’ population theory as being based on “an eminently sensible premise: that the earth’s carrying capacity has a limit.”5 But to say that there is a limit— on anything— is not to say that we are nearing that limit. As we have seen with false alarms about an exhaustion of natural resources, a finite limit, as such, tells us nothing about whether or not we are nearing that limit. However plausible the Malthusian theory might seem, it has consistently failed the test of empirical evidence, even in Malthus’ own lifetime.6 There is no consistent correlation between population size or density and real income per capita. Poverty-stricken sub-Saharan Africa has a population density that is only a fraction of that in prosperous Japan,7 which has several times the number of people per square mile. It is possible to find some poverty-stricken countries with greater population densities than some prosperous countries. But there is no consistent relationship between population density and either wealth or poverty.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

"Robert Solow", 3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Charles Lindbergh, clean water, collective bargaining, computer age, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the sewing machine, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Rise and Fall of American Growth, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, undersea cable, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

Annual Growth Rate of Two Concepts of Income by Distributional Group, 1979 to 2011 Income Group Market Income Post-Tax Post-Transfer Income (1) (2) Top One Percent 3.82 4.05 81–99 Percentile 1.39 1.60 20–80 Percentile 0.46 1.05 1–20 Percentile 0.46 1.23 Average All Percentiles 1.16 1.48 Average 1–99 Percentile 0.87 1.28 Difference, All vs. 1–99 0.29 0.20 Difference, All vs. Median 0.70 0.43 Source: CBO, The Distribution of Household Income and Federal Taxes, 2011 When we consider the future of American growth, we care not just about growth of average income per capita, but also about growth of income per capita for the median American household. Figure 18–2 exhibits the differences between the annual growth rate of the average and bottom 90 percent for Piketty–Saez, as well as the differences between average and median growth for the census data and for the CBO data without and with the adjustments for taxes and transfers. Because the CBO data are superior to the other data sources, and because well-being depends on income after taxes and transfers, we take the right-hand bar in figure 18–2 as most relevant.6 It shows that the difference between average and median growth in the adjusted CBO data is 0.43 percent per year for 1979–2011.

Taking into account that by 1920 the electric light was ten times more powerful than a kerosene lamp, the same $20 would purchase 4.4 million candle hours per year. Filament incandescent bulbs cost about the same per lumen in 1990 as in 1920 in nominal terms, but in real terms, their cost was much lower, by another factor of eight. None of this decline in prices has been heretofore captured by official price indexes, and the consumer surplus captured by this decline in prices is one of many reasons to consider the growth of real income per capita during 1890–1940 substantially understated. Note that these price comparisons are all based on the quantity of light emitted by a device, so all the price declines are understated thanks to the improvement in the quality of light. All those improvements in quality—no more odors, no need to clean lamp chimneys, no more danger of fires, no more flickering—are completely missed not only by traditional measures of the cost of living, but also by Nordhaus’s creative attempts to link together the prices per lumen of candles, fuel lamps, and electric light bulbs.87 Only 3 percent of American homes had electric service in 1900.

Finally, the black line shows an even greater decline in the ratio of the quality-adjusted price to nominal disposable income per person, demonstrating that much of the rapid adoption of the automobile between 1910 and 1929 reflected a substitution response to a rapid decline in price relative to income. Figure 5–3. Prices of Selected Automobile Models, with or without Quality Adjustment, and Relative to Nominal Disposable Income per Capita, 1906–1940 Sources: See table 5–2. AUTOMOBILES AND PAVED ROADS: CHICKEN AND EGG The most important hindrance to the development of motor transport was the lack of paved roads. The revolutionary 1901 Mercedes, commonly called the “first modern automobile,” sold in the United States at the price of $12,450 in an era when the average annual income was less than $1,000, and it could cruise at a speed of fifty miles per hour, faster than the elapsed railroad times for 1900 shown in table 5–1.


pages: 275 words: 82,640

Money Mischief: Episodes in Monetary History by Milton Friedman

Bretton Woods, British Empire, business cycle, currency peg, double entry bookkeeping, fiat currency, financial innovation, fixed income, floating exchange rates, full employment, German hyperinflation, income per capita, law of one price, money market fund, oil shock, price anchoring, price stability, transaction costs

But wages both for farm and factory labour sank as economic conditions worsened, and suffering extended further and further" (p. 60). Still another example of a contemporary observation, though published much later, is Young (1971, pp. 208–11, 220–23). [back] *** * Such a low ratio was not reached in the United States until after the Civil War, by which time real income per capita in the United States was about ten times as large as estimated real income per capita in China in 1933. Such a low ratio was not reached in. France until 1952 (Saint Marc 1983, pp. 38–39)! [back] *** † Some percentages for underdeveloped countries for 1988, based on IMF estimates, are 60 for India, 62 for Syria and Mexico, 65 for Chad, 68 for Zaire and Nepal, 74 for Yemen Arab Republic, 78 for Central African Republic. [back] *** * The decline in the smaller total may be an overestimate because Rawski does not allow for a probable decline in the silver reserve held behind bank notes.


pages: 193 words: 63,618

The Fair Trade Scandal: Marketing Poverty to Benefit the Rich by Ndongo Sylla

British Empire, carbon footprint, corporate social responsibility, David Ricardo: comparative advantage, deglobalization, Doha Development Round, Food sovereignty, global value chain, illegal immigration, income inequality, income per capita, invisible hand, Joseph Schumpeter, labour mobility, land reform, market fundamentalism, mass immigration, means of production, Mont Pelerin Society, Naomi Klein, non-tariff barriers, offshore financial centre, open economy, Philip Mirowski, plutocrats, Plutocrats, price mechanism, purchasing power parity, Ronald Reagan, Scientific racism, selection bias, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, transatlantic slave trade, trickle-down economics, Washington Consensus, zero-sum game

In order to accommodate this heterogeneity, several classifications are available. Here I refer only to those that are the most widely used (see Table 1.1). The first approach, at once the most basic and most widespread, consists in classifying countries on the basis of geographical location. The second approach, as used by the World Bank, differentiates developing countries based on the gross national income per capita: upper middle-income countries (between $3,946 and $12,195 per capita), lower middle-income countries (between $996 and $3,945 per capita) and low-income countries ($995 per capita or less). The third approach, developed by UNCTAD, identifies groups of developing countries that are defined through their foreign trade structure or their economic dynamism: major petroleum exporters (those for which oil exports account for at least 50 per cent of export revenue); major manufactured goods exporters (those for which manufactured products account for at least 50 per cent of export revenue); emerging countries; newly industrialised countries (a group which includes first-generation and second-generation countries).

Yet, to realise how small the benefits from Fair Trade are, one can simply compare this export revenue to the number of workers in each 123 Sylla T02779 01 text 123 28/11/2013 13:04 the fair trade scandal case. We obtain an average of €415 for producers and €716 for wage workers.5 For all workers combined, we obtain on average €454 in annual revenue. When taking into account workers and their families, there would be, according to FLO, close to 6 million people who rely on Fairtrade.6 Based on this estimation, the annual average income per capita amounted to €74 in 2008. It goes without saying, obviously, that the purchasing power for this amount varies according to the context. Pronouncing any judgement on the benefits that one or the other might gain from such an amount becomes a delicate task. In spite of this obvious difficulty, there is no possible ambiguity on this subject. First of all, we should point out that these sums of €74 only represent 16 per cent of the average GDP per capita of LDCs.7 Second, we ought to point out that the averages calculated so far are the gross income – in other words, costs (of production, transport, packaging, etc.) were not deducted (see Table 5.1).8 Given how low they are, it is not random that these averages do not appear in the ‘Facts and figures’ section of the websites of some labelling initiatives.


The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good by William Easterly

airport security, anti-communist, Asian financial crisis, bank run, banking crisis, Bob Geldof, Bretton Woods, British Empire, call centre, clean water, colonial exploitation, colonial rule, Edward Glaeser, end world poverty, European colonialism, failed state, farmers can use mobile phones to check market prices, George Akerlof, Gunnar Myrdal, Hernando de Soto, income inequality, income per capita, Indoor air pollution, invisible hand, Kenneth Rogoff, laissez-faire capitalism, land reform, land tenure, Live Aid, microcredit, moral hazard, Naomi Klein, Nelson Mandela, publication bias, purchasing power parity, randomized controlled trial, Ronald Reagan, Scramble for Africa, structural adjustment programs, The Fortune at the Bottom of the Pyramid, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, War on Poverty, Xiaogang Anhui farmers

Note that African growth over the previous ten years had been a respectable 2 percent up to about 1975 (with modest aid), contradicting the idea that Africa is always and everywhere condemned to low growth without aid. There is a negative association, but I don’t think the increase in aid caused the fall in growth. Rather, the fall in growth probably caused the increase in aid. But the surge of aid was not successful in reversing or halting the slide in growth of income per capita toward zero. Let us do more formal statistical testing. Long and inconclusive literature on aid and economic growth was produced in the 1960s, 1970s, and 1980s, which was hampered by the limited data availability and inconclusive debate about the mechanisms by which aid would affect growth. The possible reverse causality made conclusions difficult: if donors gave greater aid in response to slower growth, then interpreting how aid flow affected growth could be difficult.

The governor-general of India from 1828 to 1835 spoke of the “improvement” of India, “founding British greatness on Indian happiness.26 A British commentator on India concurred in 1854: “when the contrast between the influence of a Christian and a Heathen government is considered; when the knowledge of the wretchedness of the people forces us to reflect on the unspeakable blessings to millions that would follow the extension of British rule, it is not ambition but benevolence that dictates the desire for the whole country.27 The nineteenth-century economist John Stuart Mill saw the British empire as furnishing what sounds like a colonial combination of the Big Push and structural adjustment: “a better government: more complete security of property; moderate taxes; a more permanent…tenure of land…the introduction of foreign arts…and the introduction of foreign capital, which renders the increase of production no longer exclusively dependent on the thrift or providence of the inhabitants themselves.28 Refuting criticism that Manchester capitalists dictated imperial policy, Lord Palmerston said in 1863, “India was governed for India and…not for the Manchester people.29 In India, the British doubled the area under irrigation from 1891 to 1938, introduced a postal and telegraph system, and built forty thousand miles of railroad track.30 Railways had been part of India’s “development plan” since the 1820s, the key to “opening up” the country to commerce.31 The Indian civil servant Charles Trevelyan in 1853 had told a Commons committee that railways would be “the greatest missionary of all.32 The development efforts were not any more successful than today’s foreign aid or nation-building, however: Indian income per capita failed to rise from 1820 to 1870, grew at only 0.5 percent per annum from 1870 to 1913, then failed to grow again from 1913 to independence in 1947.33 In the American empire in the Philippines, American teachers and their Filipino successors imparted at least a rough education, raising literacy and making English the lingua franca in the ethnically fragmented islands. Americans also contributed dams and irrigation facilities, mines and timber concessions, roads, railways, and ports, legal reforms, a tax system, and currency reform.

We see in figure 32 (which has a logarithmic scale in which every unit increase means a doubling of income) that these variations are minor in the long run. Starting in 1870, the Japanese economy registered miraculous growth. It recovered quickly from the destruction of World War II to post even more miraculous growth. It became a full democracy after the evil militarist detour of the 1930s and 1940s. Today, income per capita is thirty-two times higher than what it was in 1870. And it did all this without the White Man’s Burden—the West never colonized Japan. Instead, Japan had homegrown Searchers. Fig. 32. Japan Per Capita Income, 1820–2001 The first reaction to Matthew Perry’s visits to Japan in 1853–1854 was “revere the Emperor; expel the barbarians.” But when a group of samurai rebels overthrew the shogun and restored power to the Meiji emperor in 1868, the new catchphrase became “Japanese spirit, Western learning.1 The young revolutionaries combined patriotism with pragmatism—they realized the West was ahead, and they wanted to borrow Western methods to catch up, while preserving Japanese institutions, culture, and independence.


pages: 262 words: 83,548

The End of Growth by Jeff Rubin

Ayatollah Khomeini, Bakken shale, banking crisis, Berlin Wall, British Empire, business cycle, call centre, carbon footprint, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, decarbonisation, deglobalization, energy security, eurozone crisis, Exxon Valdez, Fall of the Berlin Wall, fiat currency, flex fuel, full employment, ghettoisation, global supply chain, Hans Island, happiness index / gross national happiness, housing crisis, hydraulic fracturing, illegal immigration, income per capita, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Kickstarter, McMansion, Monroe Doctrine, moral hazard, new economy, Occupy movement, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, quantitative easing, race to the bottom, reserve currency, Ronald Reagan, South China Sea, sovereign wealth fund, The Chicago School, The Death and Life of Great American Cities, Thomas Malthus, Thorstein Veblen, too big to fail, uranium enrichment, urban planning, urban sprawl, women in the workforce, working poor, Yom Kippur War, zero-sum game

Faltering income growth is inconsistent with the world most Western consumers have come to know. But having less disposable income may not be as painful as you think. A growing body of research shows that consumer satisfaction hasn’t kept pace with increasing consumer expenditures. Similarly, other studies in OECD countries show that our sense of individual well-being lags behind increases in personal income growth. In the United States, for example, real income per capita has more than doubled since the Second World War. Despite increased wealth, however, studies find that Americans are no more satisfied than they were sixty-five years ago. In polls that gauge well-being, citizens in countries with less personal consumption, such as Denmark, consistently score higher than Americans. An international study on life satisfaction conducted by Gallup ranked the United States 19th, a disproportionately low standing in relation to its per capita income and consumption.

In the summer of 2011, half of Pakistan’s power-generating capacity was off line, because utilities couldn’t pay for fuel. Cities in Pakistan are routinely subjected to electricity outages that last upward of fourteen hours. In rural areas, the power rationing is even more extreme and blackouts can last even longer. Energy shortages have not only turned off the power for millions of Pakistanis, they’ve also shackled the country’s economic growth. Pakistan’s income per capita is increasing at its slowest rate since 1951, and now sits at a quarter of the pace enjoyed by neighboring India. Faced with mounting power outages, multinational firms are pulling out of the country and the economy is collapsing. And social and fiscal conditions will only get worse as Pakistan’s population continues to grow. People in Karachi may be able to live without air-conditioning and even cars, but they can’t go without food.


The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff

"Robert Solow", affirmative action, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, George Gilder, Gunnar Myrdal, immigration reform, income inequality, income per capita, invisible hand, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, Paul Samuelson, peak oil, pensions crisis, profit motive, Ralph Waldo Emerson, road to serfdom, Ronald Reagan, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trickle-down economics, urban planning, urban sprawl, wage slave, War on Poverty, white flight, zero-sum game

On the whole, however, economists believed that pockets of overpopulation were part of a broader national pattern of population pressing on resources. Hess, for example, advocated more efficient population and industrial location within a broader context of the US population becoming “superabundant” with people.166 Baker in particular espoused Malthusian ideas, writing, “Our nation is probably near, possibly past, the crest of average income per capita; and every increment in population is likely to increase the complaint of the high cost of living.”167 Baker, notes historian David Wrobel, was one whose Malthusianism was entirely divorced from any racism.168 In the end, optimum theory and a desire among social scientists to distance themselves from polemicists fostered a moderate Malthusianism. Examining the history of America’s resource exploitation, University of Wisconsin economist Ralph Hess captured the prevailing view when he wrote: Over-population and over-consumption constantly menace the economic prosperity which should accompany industrial maturity.

Now we can begin on the really worth-while things.”104 King wrote more directly, “Complete cessation of population growth would tend to enhance the economic welfare of the nation; in other words, it would aid in accelerating rather than retarding the upward movement of per capita income.”105 King’s logic incorporated the traditional Malthusian obsession with the food supply, but it also included the consumptionist core of SPK. Whereas rapidly growing societies spend to meet the basic needs of all the new people, he suggested, demographically flat societies would spend to enhance the lives of the existing population, resulting in a “marked increase in production of consumable goods and hence in average income per capita.”106 King’s sepia portrait of plantation life also shows how some individuals believed that population leveling would usher in the Good Life, one defined by the pursuit of goals loftier than material gain. No population watcher prioritized this noneconomic, aesthetic argument, traceable to John Stuart Mill and Alfred Marshall,107 but many deployed it from time to time, suggesting that if economic growth could not be preserved in the coming stable-population era, then more humane values and ample leisure were second-best outcomes.

Brown argued that the potential for new resource-stretching technologies was vast indeed, but he also urged consideration of what would happen to resource consumption levels when the developing world caught up to the West. He predicted an uncomfortable future for the entire globe unless population could be stabilized.61 Among the economists, Joseph Spengler reigned as the leading Malthusian, though he now showed glimmers of optimism. He continued to argue that rising numbers of people would exert pressure against finite natural resources, ultimately reducing income per capita.62 In the Harvard Business Review, Spengler announced that the United States was not immune from the resource problems endured by developed nations, and, in response to the optimists who looked to the wonders of science, asked whether a diet of plankton would really be satisfying.63 He emphasized that water was no longer virtually free in the US,64 and he warned of potential global shortages of copper, lead, zinc, tin, and chromite as consumption begat more consumption.65 Although resource utopianists and Malthusians wrote memorable copy, most social scientists’ discussion of population and resources in the 1950s took place between those two extremes.


pages: 250 words: 88,762

The Logic of Life: The Rational Economics of an Irrational World by Tim Harford

activist fund / activist shareholder / activist investor, affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, business cycle, colonial rule, Daniel Kahneman / Amos Tversky, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, endowment effect, European colonialism, experimental economics, experimental subject, George Akerlof, income per capita, invention of the telephone, Jane Jacobs, John von Neumann, law of one price, Martin Wolf, mutually assured destruction, New Economic Geography, new economy, plutocrats, Plutocrats, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, spinning jenny, Steve Jobs, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, women in the workforce, zero-sum game

The income of the richest countries today is around one hundred dollars per person per day. Subsistence income—that is, the income that most people have relied on for most of history—is about a dollar a day, a sum that will provide food, rudimentary shelter, and almost nothing else. The halfway point between today’s living standards in the United States and those of 1 million B.C. (or 100,000 B.C., or 10,000 B.C., since little changed) is as recent as 1880: Income per capita increased tenfold, to about ten dollars a day, in the entirety of the existence of humankind running up to A.D. 1880, and it increased another ten times in the 125 years since then. Remember that these figures do not even make allowances for the Nordhaus effect. Of course, we do not have any persuasive way of measuring income in prehistoric times. But we can be fairly sure that for most of human history, it was roughly zero.

An alternative way of raising revenue: Details of the fiscal regime before 1688 are from North and Weingast, “Constitutions and Commitment.” 9. A MILLION YEARS OF LOGIC Imagine compressing: For the chronology, I have relied on Eric Beinhocker’s summary in The Origins of Wealth (London: Random House, 2007) and encyclopedias. But economic growth didn’t simply: For the Stone Age, I am using population data from Kremer and assuming no appreciable increase in income per capita. Michael Kremer, “Population Growth and Technological Change: One Million B.C. to 1990,” Quarterly Journal of Economics 108, no. 3(1993): 681–716. For modern population growth, see U.S. Census Bureau, www.census.gov/ipc/www/idb. Data for after A.D. 1 are from Angus Maddison, the world’s foremost calculator of historical economic data, at www.ggdc.net/maddison/Historical_Statistics/ horizontal-file_10-2006.xls.


pages: 257 words: 94,168

Oil Panic and the Global Crisis: Predictions and Myths by Steven M. Gorelick

California gold rush, carbon footprint, energy security, energy transition, flex fuel, income per capita, invention of the telephone, meta analysis, meta-analysis, North Sea oil, oil shale / tar sands, oil shock, peak oil, price stability, profit motive, purchasing power parity, RAND corporation, statistical model, Thomas Malthus

The concern is that when China and India improve their standards of living, their annual oil consumption will not remain at 2.2 and 0.9 barrels per person but will mirror the US annual value of 25.1 barrels per person.124 30 USA Canada Annual oil consumption in 2007 20 (barrels per person) Australia Spain Japan 10 China 0 Russia India 0 Italy Mexico Sweden France Denmark United Kingdom Germany Brazil Indonesia 20,000 40,000 60,000 Income in 2007 (per capita GDP in 2007 dollars) Figure 4.45 Oil consumption per capita versus income per capita in 2007 (2007$), based on gross domestic product (GDP) of countries shown. (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) Consider China. In terms of GDP, China’s 2007 per capita income was one-twenty-sixth (4 percent) that of the US (in 2007, estimated average annual income in China was $1,970 versus $46,300 in the US (2007$)),125 and its per capita oil use was less than one-tenth that of the US.

The US used less than half as much oil per GDP in 2007 as it did in 1975 (Figure 4.49). 30 Canada Annual oil consumption in 1980 20 (barrels per person) USA Sweden Denmark Australia Japan Russia 10 Spain France Germany Italy United Kingdom Mexico China Brazil 0 India 0 Indonesia 10,000 20,000 30,000 40,000 50,000 60,000 Income in 1980 (per capita GDP in 2007 dollars) Figure 4.46 Oil use per capita versus per capita income in 1980 (in 2007$).127 (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) 50 Trend 1980 Annual oil consumption (barrels per person) 40 30 USA 1980 USA 2007 20 Trend 2007 10 China 0 India 0 40,000 Income (per capita GDP in 2007 dollars) 20,000 60,000 Figure 4.47 Per capita oil use versus per capita income in 2007 in comparison to the trend in 1980 (both in 2007$). Intensity of oil use (the slope of the trend line) has diminished since 1980. (Data: oil consumption, EIA; population and GDP, Economic Research Service, USDA) 150 Counter-Arguments to Imminent Global Oil Depletion Global oil-use intensity 1.0 (billion barrels per year per trillion 2007 dollars of GWP) 0.8 0.6 1950 1960 1970 1980 1990 2000 2010 Figure 4.48 World oil use per GWP over time.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, plutocrats, Plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

New Urban Crisis Index: This index combines four measures into an overall index: wage inequality, income inequality, the Overall Economic Segregation Index, and housing unaffordability, based on the ratio of housing costs to income. Each measure is equally weighted. Other Variables Other key variables used in various statistical analyses presented in the book include: Income per capita: Average income per capita, from the ACS. Wages: Average wages, from the BLS. Economic output per person: Based on gross regional product per capita, from the US Department of Commerce’s Bureau of Economic Analysis (BEA). College graduates: The share of adults with a college degree or higher, from the ACS. High-tech industry: Based on the Milken Institute’s Tech-Pole Index, which compares a metro’s share of high-tech industry output to the nation’s as a whole.3 The data are from the US Department of Commerce’s County Business Patterns.


pages: 357 words: 100,718

The Limits to Growth: The 30-Year Update by Donella H. Meadows, Jørgen Randers, Dennis L. Meadows

agricultural Revolution, Buckminster Fuller, clean water, Climatic Research Unit, conceptual framework, dematerialisation, demographic transition, financial independence, game design, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), longitudinal study, means of production, new economy, purchasing power parity, Ralph Waldo Emerson, Ronald Reagan, University of East Anglia, urban sprawl, Whole Earth Review

Figure 2-7 shows, for example, the correlation between per capita income (measured as the gross national income, or GNI,8 per person per year) and birth rates in various countries of the world. Clearly there is a strong relationship between high incomes and low birth rates. Just as clearly, especially at low incomes, there are striking exceptions. China, for example, has anomalously low birth rates for its level of income. Some Middle Eastern and African countries have anomalously high birth rates for theirs. FIGURE 2-7 Birth Rates and Gross National Income per Capita in 2001 As a society becomes wealthier, the birth rate of its people tends to decline. The poorest nations experience birth rates from 20 to more than 50 births per 1,000 people per year. None of the richest nations has a birth rate above 20 per 1,000 per year. (Source: PRB; World Bank.) The factors believed to be most directly important in lowering birth rates are not so much the size or wealth of the economy, but the extent to which economic improvement actually touches the lives of all families, and especially the lives of women.

United Kingdom Office for National Statistics (ONS), National Statistics Online: Birth Statistics: Births and patterns of family building England and Wales (FM1), http: / / www.statistics.gov.uk/ STATBASE / Product. asp?vlnk= 5 768. Statistical Yearbook of the Republic of China (Taipei: Directorate-General of Budget, Accounting & Statistics, Executive Yuan, Republic of China, 1995). Figure 2-7 Birth Rates and Gross National income per Capita in 2001 World Population Data Sheet 2001 (Washington, DC: Population Reference Bureau, 200i)http://www.prb.org. World Bank, "World Development Indicators (WDI) Database," http: / / www.worldbank.org/ data / dataquery.html (accessed 1/ 15 / 04). Figure 2-8 Flows of Physical Capital in the Economy of World3 Figure 2-9 U.S. Gross National Income by Sector U.S. Dept. of Commerce, Bureau of Economic Analysis Interactive Access to National Income and Product Accounts Tables, http: / /www.bea.doc.gov/bea/dn/nipaweb/.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

THE AMERICAN TRADE-OFF But we shouldn’t despair just yet. The treadmill of happiness is a metaphor too far. And Easterlin overstates his case. The evidence arrayed against the proposition that progress—economic or otherwise—can make us consistently happier is weaker than it appears. Economic progress can still do a lot for humankind. American happiness remains peculiarly impervious to progress. Between 1946 and 1991 income per capita in the United States rose by a factor of 2.5—ownership of consumer durables from TV sets to cars soared, educational attainment jumped, and life expectancy at birth climbed. Still, Americans’ average happiness measured by surveys fell slightly. The United States was one of only four industrialized countries—alongside Hungary, Portugal, and Canada—where life satisfaction fell between 2000 and 2006.

In the mid-1990s, their fertility rate was 7.6 children per woman. By contrast, the fertility rate of other Jews in Israel is about 2.3. In the United States, the most religious states tend to be the most fertile and the poorest. New Hampshire is probably the least God-fearing state in the Union: 21.4 percent of its population report being atheist or having no religious belief. It is relatively rich, with a median income per capita of $74,625 in 2007. And it had only forty-two births per one thousand women in 2006. In Mississippi, by contrast, there were sixty-two births per thousand. Mississippi is poor: its median family income was $44,769. And only 5.8 percent of Mississippians report no religion. Despite the wave of secularization experienced over the past hundred years, I suspect the world might be about to become more religious, not less.


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

Specific recipes for success do not travel well. It is the broad vision behind them that needs emulation. These lessons were put to good use in the most astounding development success the world has ever known. Marching to Its Own Drum: China and Globalization The feat that China’s economy pulled off would have been difficult to imagine had it not happened in front of our eyes. Since 1978, income per capita in China has grown at an average rate of 8.3 percent per annum—a rate that implies a doubling of incomes every nine years. Thanks to this rapid economic growth, half a billion people were lifted out of extreme poverty.18 During the same period China transformed itself from near autarky to the most feared competitor on world markets. That this happened in a country with a complete lack of private property rights (until recently) and run by the Communist Party only deepens the mystery.

The SEZs generated incentives for export-oriented investments without pulling the rug from under state enterprises. What fueled China’s growth, along with these institutional innovations, was a dramatic productive transformation. The Chinese economy latched on to advanced, high-productivity products that no one would expect a poor, labor-abundant country like China to produce, let alone export. By the end of the 1990s, China’s export portfolio resembled that of a country with an income-per-capita level at least three times higher than China’s.22 This was the result not of natural, market-led processes but of a determined push by the Chinese government. Low labor costs did help China’s export drive, but they don’t tell the whole story. In areas such as consumer electronics and auto parts China made stupendous productivity gains, catching up with countries at much higher levels of income.


pages: 1,034 words: 241,773

Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker

3D printing, access to a mobile phone, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, anti-communist, Anton Chekhov, Arthur Eddington, artificial general intelligence, availability heuristic, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, Black Swan, Bonfire of the Vanities, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, clockwork universe, cognitive bias, cognitive dissonance, Columbine, conceptual framework, correlation does not imply causation, creative destruction, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, decarbonisation, deindustrialization, dematerialisation, demographic transition, Deng Xiaoping, distributed generation, diversified portfolio, Donald Trump, Doomsday Clock, double helix, effective altruism, Elon Musk, en.wikipedia.org, end world poverty, endogenous growth, energy transition, European colonialism, experimental subject, Exxon Valdez, facts on the ground, Fall of the Berlin Wall, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, frictionless, frictionless market, germ theory of disease, Gini coefficient, Hans Rosling, hedonic treadmill, helicopter parent, Hobbesian trap, humanitarian revolution, Ignaz Semmelweis: hand washing, income inequality, income per capita, Indoor air pollution, Intergovernmental Panel on Climate Change (IPCC), invention of writing, Jaron Lanier, Joan Didion, job automation, Johannes Kepler, John Snow's cholera map, Kevin Kelly, Khan Academy, knowledge economy, l'esprit de l'escalier, Laplace demon, life extension, long peace, longitudinal study, Louis Pasteur, Martin Wolf, mass incarceration, meta analysis, meta-analysis, Mikhail Gorbachev, minimum wage unemployment, moral hazard, mutually assured destruction, Naomi Klein, Nate Silver, Nathan Meyer Rothschild: antibiotics, Nelson Mandela, New Journalism, Norman Mailer, nuclear winter, obamacare, open economy, Paul Graham, peak oil, Peter Singer: altruism, Peter Thiel, precision agriculture, prediction markets, purchasing power parity, Ralph Nader, randomized controlled trial, Ray Kurzweil, rent control, Republic of Letters, Richard Feynman, road to serfdom, Robert Gordon, Rodney Brooks, rolodex, Ronald Reagan, Rory Sutherland, Saturday Night Live, science of happiness, Scientific racism, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Kuznets, Skype, smart grid, sovereign wealth fund, stem cell, Stephen Hawking, Steven Pinker, Stewart Brand, Stuxnet, supervolcano, technological singularity, Ted Kaczynski, The Rise and Fall of American Growth, the scientific method, The Signal and the Noise by Nate Silver, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, total factor productivity, union organizing, universal basic income, University of East Anglia, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, urban renewal, War on Poverty, We wanted flying cars, instead we got 140 characters, women in the workforce, working poor, World Values Survey, Y2K

The international and global Gini curves show that despite the anxiety about rising inequality within Western countries, inequality in the world is declining. That’s a circuitous way to state the progress, though: what’s significant about the decline in inequality is that it’s a decline in poverty. Figure 9-2: Global inequality, 1820–2011 Source: Milanović 2016, fig. 3.1. The left-hand curve shows 1990 international dollars of disposable income per capita; the right-hand curve shows 2005 international dollars, and combines household surveys of per capita disposable income and consumption. The version of inequality that has generated the recent alarm is the inequality within developed countries like the United States and the United Kingdom. The long view of these countries is shown in figure 9-3. Until recently, both countries traveled a Kuznets arc.

Until recently, both countries traveled a Kuznets arc. Inequality rose during the Industrial Revolution and then began to fall, first gradually in the late 19th century, then steeply in the middle decades of the 20th. But then, starting around 1980, inequality bounced into a decidedly un-Kuznetsian rise. Let’s examine each segment in turn. Figure 9-3: Inequality, UK and US, 1688–2013 Source: Milanović 2016, fig. 2.1, disposable income per capita. The rise and fall in inequality in the 19th century reflects Kuznets’s expanding economy, which gradually pulls more people into urban, skilled, and thus higher-paying occupations. But the 20th-century plunge—which has been called the Great Leveling or the Great Compression—had more sudden causes. The plunge overlaps the two world wars, and that is no coincidence: major wars often level the income distribution.27 Wars destroy wealth-generating capital, inflate away the assets of creditors, and induce the rich to put up with higher taxes, which the government redistributes into the paychecks of soldiers and munition workers, in turn increasing the demand for labor in the rest of the economy.

Milanović has combined the two inequality trends of the past thirty years—declining inequality worldwide, increasing inequality within rich countries—into a single graph which pleasingly takes the shape of an elephant (figure 9-5). This “growth incidence curve” sorts the world’s population into twenty numerical bins or quantiles, from poorest to richest, and plots how much each bin gained or lost in real income per capita between 1988 (just before the fall of the Berlin Wall) and 2008 (just before the Great Recession). Figure 9-5: Income gains, 1988–2008 Source: Milanović 2016, fig. 1.3. The cliché about globalization is that it creates winners and losers, and the elephant curve displays them as peaks and valleys. It reveals that the winners include most of humanity. The elephant’s bulk (its body and head), which includes about seven-tenths of the world’s population, consists of the “emerging global middle class,” mainly in Asia.


pages: 267 words: 79,905

Creating Unequal Futures?: Rethinking Poverty, Inequality and Disadvantage by Ruth Fincher, Peter Saunders

barriers to entry, ending welfare as we know it, financial independence, full employment, Gini coefficient, income inequality, income per capita, labour market flexibility, labour mobility, longitudinal study, low skilled workers, low-wage service sector, marginal employment, minimum wage unemployment, New Urbanism, open economy, pink-collar, positional goods, purchasing power parity, shareholder value, spread of share-ownership, The Bell Curve by Richard Herrnstein and Charles Murray, urban planning, urban renewal, very high income, women in the workforce, working poor, working-age population

TABLES 2.1 Relationship between poverty and social exclusion 2.2 Income inequality in OECD countries, late 1980s 2.3 Income inequality in countries in LIS database, mid-1980s 2.4 Comparison of estimates of poverty in Australia from LIS studies 2.5 Alternative estimates of relative low income in developed economies in the early 1990s 3.1 Articles on poverty and welfare in international news: 1 July–30 September 1998 3.2 Articles on poverty and welfare in domestic news: 1 July–30 September, 1998 4.1 Child poverty rates: relative poverty line 4.2 Child poverty rates: ‘real poverty line’ 4.3 Children aged 0–4 years and 5–14 years to 2006 4.4 Living circumstances of children, 1992 and 1996 4.5 Labour force status of parents with children aged under 15 years 4.6 Access and participation indicators for low socioeconomic status group, 1991–95, age group 15–24 4.7 18- to 19-year-old school leavers engaged in marginalising and non-marginalising activities, May 1996 4.8 Characteristics of 19-year-olds in 1994 and 1995 who have been consistently engaged in marginalising activities from age 16 years 5.1 Head count measures of poverty as measured by the per cent of households and income units with income below various percentages of the Australian median income, 1994–95 5.2 Multi-dimensional nature of indigenous poverty, 1994 5.3 Factors potentially correlated with poverty among indigenous households, 1994 6.1 Five-yearly population growth rate, Cairns, Kelsey, Australia, 1981–86 6.2 Dwelling structure, Cairns, Kelsey, Australia, 1996 6.3 Housing tenure, Cairns, Kelsey, Australia, 1996 6.4 Age profile, Kelsey, Cairns, Australia, 1996 6.5 Total weekly household income, Cairns, Kelsey and Australia, 1996 52 58 59 60 62 79 81 103 104 105 106 110 113 118 120 145 147 150 164 165 166 166 167 xii PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xii FIGURES AND TABLES 7.1 Comparison between static and dynamic accounts of the labour market, Australia, mid-1990s 7.2 Proportion of dual wage-earning households by wage levels, Australia 1988–89 7.3 Occupation of spouse for various categories of wage-earning household reference persons, Australia 1988–89 7.4 Occupational composition of households 7.5 Access to training for salesworkers, labourers and plant and machine operators, Australia 1993 7.6 Overview of low-wage firms in Australia, 1995–96 7.7 Characteristics of low-wage firms in Australia, 1995–96 205 210 211 212 218 218 219 xiii PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xiii Abbreviations ABBREVIATIONS ABC ABR ABS ACA ACIRRT ACOSS ACTU ADAM AFR ALP ATSIC AWIRS AWOTE BBC BCA BFS CDC CDEP CNN DEETYA EITC ESCAP FNQ GDP Australian Broadcasting Commission Aboriginals Benefit Reserve Australian Bureau of Statistics ‘A Current Affair’ Australian Centre for Industrial Relations Research and Training Australian Council of Social Service Australian Council of Trade Unions Agreements Database and Monitor Australian Financial Review Australian Labor Party Aboriginal and Torres Strait Islander Commission Australian Workplace Industrial Relations Survey Average Weekly Ordinary Time Earnings British Broadcasting Corporation Business Council of Australia Business Funding Scheme Commercial Development Corporation Community Development Employment Projects Cable News Network Department of Employment, Education, Training and Youth Affairs earned income tax credit Economic and Social Commission for Asia and the Pacific Far North Queensland Gross Domestic Product xiv PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xiv ABBREVIATIONS HDI HDIPC IBIP ILC IMF LIS MIRE NATSIS OECD PPPs PR RMI SMH UN UNICEF Human Development Index Household Disposable Income Per Capita Indigenous Business Incentives Program Indigenous Land Corporation International Monetary Fund Luxembourg Income Study Mission Recherche National Aboriginal and Torres Strait Islander Survey Organisation for Economic Co-operation and Development Purchasing Power Parties public relations Revenu minimum d’insertion Sydney Morning Herald United Nations United Nations International Children’s Emergency Fund xv PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xv This page intentionally left blank PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\PRELIMS p: (02) 6232 5991 f: (02) 6232 6232 36 DAGLISH STREET CURTIN ACT 2605 xvi 1 The complex contexts of Australian inequality Ruth Fincher and Peter Saunders CREATING UNEQUAL FUTURES THE COMPLEX CONTEXTS OF AUSTRALIAN INEQUALITY The eminent economist and commentator, John Kenneth Galbraith, recently identified persistent inequality in the distribution of income (and urban poverty in particular) as a major piece of ‘unfinished business’ at the end of the twentieth century (Galbraith 1999).

This assumption was justified on the basis that it produced a standard ‘so austere as, we believe, to make it unchallengeable. No one can seriously argue that those we define as poor are not so’ (Henderson, Harcourt and Harper 1970, quoted in Saunders 1994). Subsequent updating, first according to movements in average weekly earnings, but since the early 1980s in line with Household Disposable Income Per Capita (HDIPC) from the National Accounts, means that the Henderson line has evolved into a purely relative measure, currently around 60 per cent of median income. 5 This does not mean that all choices are equally valid—there are specific equivalence scales, for example, that differ markedly from the consensus of this research. In contrast, the comprehensiveness of the income measure is of fundamental importance. 6 The de-commodification scores attempt to measure variables, such as the prohibitiveness of eligibility conditions, the strength of 67 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 67 CREATING UNEQUAL FUTURES?


pages: 335 words: 104,850

Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business by John Mackey, Rajendra Sisodia, Bill George

Berlin Wall, Buckminster Fuller, business process, carbon footprint, collective bargaining, corporate governance, corporate social responsibility, creative destruction, crony capitalism, cross-subsidies, en.wikipedia.org, Everything should be made as simple as possible, Fall of the Berlin Wall, fear of failure, Flynn Effect, income per capita, invisible hand, Jeff Bezos, job satisfaction, lone genius, Mahatma Gandhi, microcredit, Nelson Mandela, Occupy movement, profit maximization, Ralph Waldo Emerson, shareholder value, six sigma, social intelligence, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steven Pinker, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, too big to fail, union organizing, wealth creators, women in the workforce, zero-sum game

It has enabled humankind to progress at a rate unprecedented in all of history. Consider these facts: Just 200 years ago, 85 percent of the world’s population lived in extreme poverty (defined as less than $1 a day); that number is now only about 16 percent.1 Free-enterprise capitalism has created prosperity not just for a few, but for billions of people everywhere. As figure 1-1 shows, average income per capita globally has increased 1,000 percent since 1800.2 It has increased 1,600 percent in developed countries. Japan’s income per capita has increased by 3,500 percent since 1700. Adjusting for affordability and quality improvements, the standard of living of ordinary Americans has increased 10,000 percent since 1800!3 Perhaps most startling, the gross domestic product (GDP) of South Korea has grown 260-fold since 1960, transforming it from one of the poorest countries in the world to one of the richest and most advanced.4 Over tens of thousands of years, the human population grew very slowly and declined frequently as huge epidemics such as the plague and influenza claimed millions of lives.


pages: 352 words: 107,280

Good Times, Bad Times: The Welfare Myth of Them and Us by John Hills

Capital in the Twenty-First Century by Thomas Piketty, credit crunch, Donald Trump, falling living standards, full employment, Gini coefficient, income inequality, income per capita, longitudinal study, mortgage debt, pension reform, plutocrats, Plutocrats, precariat, quantitative easing, Right to Buy, unpaid internship, very high income, We are the 99%, working-age population, World Values Survey

Thus, each member of the generation born between 1901 and 1906 received average total receipts equivalent to about nine years’ worth of national income per person.30 Even projecting spending and taxes – heroically – through to 2051, however, the generations born after 1961 would still have more to come, so the projections for them are incomplete and are not included here. The immediate thing that leaps out is that the scale of what we are talking about doubled in relation to incomes between those born at the start of the 1900s and those born after 1950. Those born in the early 1950s (like the author) look set to benefit from public spending on health, education and social security equivalent to well over 20 years’ worth of national income per capita on average over their lives. Since those calculations were done, improved life expectancy, more generous plans for state pensions, and increased resources for the NHS will have pushed this up further for that generation and its successors. The other side of the coin is who pays for all of this. Figure 3.13 also shows, using the same accounting system, how much each generation has paid or will pay in towards it through taxes.

As well as benefits, tax credits, and direct taxes like Income Tax and NICs, the analysis includes the impact of indirect tax changes, such as in VAT rates, which offset some of the progressive effects of the last government’s direct tax reforms.14 The two bars show the comparison against, first, a price-indexed base, and then, against one where the inherited system was uprated in line with average incomes (per capita GDP). If the comparison is between the 2009–10 tax benefit system and the 1997 system just adjusted for price inflation, Labour increased the incomes of the poorest two tenths by around 15 per cent, while the higher income groups were comparatively unaffected. But if the benchmark is taken as the inherited system adjusted in line with income growth, gains were more modest (3–4 per cent) for the bottom four income groups, while there were modest losses (up to 2 per cent) for the top four groups.


pages: 456 words: 185,658

More Guns, Less Crime: Understanding Crime and Gun-Control Laws by John R. Lott

affirmative action, Columbine, crack epidemic, Donald Trump, Edward Glaeser, G4S, gun show loophole, income per capita, More Guns, Less Crime, Sam Peltzman, selection bias, statistical model, the medium is the message, transaction costs

I know from personal communication that some critics (such as Black and Nagin) did indeed examine numerous different specifications.15 A more systematic, if time-consuming, approach is to try all possible combinations of these so-called control variables—factors which may be interesting but are included so that we can be sure of the importance of some other “focus” variables.16 In my regressions to explain crime rates there are at least nine groups of control variables—population density, waiting periods and background checks, penalties for using guns in the commission of a crime, per-capita income, per-capita unemployment insurance payments, per-capita income maintenance payments, retirement payments per person for those over sixty-five, state poverty rate, and state unemployment rate.17 To run all possible combinations of these nine groups of control variables requires 512 regressions. The regressions for murder rates also require a tenth control variable for the death-penalty execution rate and thus results in 1,024 combinations of control variables.

As with the right-to-carry laws, simple before-and-after trends were included to measure the changing impact of these rules over time. Let us return to the main focus, guns and crime. To examine the impact of right-to-carry laws, the following list of variables has been accounted for: city population, arrest rate by type of crime, unemployment rate, percentage of families headed by females, family poverty rate, median family income, per-capita income, percentage of the population living below poverty, percentage of the population that is white, percentage that is black, percentage that is Hispanic, percentage that is female, percentage that is less than five years of age, percentage that is between five and seventeen, percentage that is between eighteen and twenty-five, percentage that is between twenty-six and sixty-four, percentage that is sixty-five and older, median population age, percentage of the population over age twenty-five with a high school diploma, percentage of the population over age twenty-five with a college degree, and other types of gun-control laws (waiting periods, background checks, and additional penalties for using guns in the commission of a crime).

So do increases in either gun magazine sales or survey data precede changes in murder? To answer this I added the sales of the different gun magazines into the crime regressions reported earlier in this book. This allows us to account for the impact that other factors have on murder rates. These include the arrest rate for murder, the death penalty execution rate, the population density, the unemployment rate, the poverty rate, per capita income, per capita welfare payments, and detailed demographic information on the share of the population by age, sex, and race.6 The results are reported in table A7.1. If more sales of a gun magazine lead in a year or two to higher murder rates, it appears to occur only for the fourth largest magazine, Guns and Ammo, where a 1 percent increase in magazine sales increases murder rates by 0.24 percent the following year and by 0.17 percent two years later.


pages: 482 words: 117,962

Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global pandemic, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, longitudinal study, low skilled workers, low-wage service sector, Malacca Straits, mass immigration, microcredit, Nelson Mandela, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, women in the workforce, working-age population

In a study comparing the wages for migrant workers in the United States to what they could have earned at home, the average migrant worker (the mean across forty-two countries) would make more than five times as much in the United States than at home.24 Some of the individual country wage ratios are presented in table 7.1. Even the most conservative estimate of the welfare gain to a moderately skilled worker in the median country of their sampling who moves to the United States is $10,000 (PPP adjusted) per worker, per year—which is double the average income per capita in the developing world.25 TABLE 7.1 ESTIMATES OF WAGE RATIOS FOR MIGRANT WORKERS IN THE U.S. (COMPARING HOME WAGES WITH U.S. WAGES). Source: Michael A. Clemens, Claudio E. Montenegro, and Lant Pritchett. 2009. “The Place Premium: Wage Differences for Identical Workers across the U.S. Border,” Harvard Kennedy School Faculty Research Working Paper Series, RWP 09-004. This table presents model 6 in table 1.

Southern European and East Asian countries saw emigration initially rise with per capita incomes and then gradually fall as rising wages reduced migration incentives. These countries transitioned from being primarily source countries to become migration destinations. In this section, we are concerned with the first part of this process, or what Timothy J. Hatton and Jeffrey G. Williamson call the “emigration life cycle”: Country-specific emigration life cycles across the long nineteenth century make it clear that real wage or income per capita gaps will not by themselves explain emigration: during the course of modern economic growth in Europe, country emigration rates rose steeply at first from very low levels, after which the rise began to slow down as the emigration rates climbed to a peak, and subsequently they fell. This life cycle stylized fact has emerged from study after study, both for aggregate time series as country emigration rates and for regional emigration rates within countries.26 People in poor, agrarian countries generally do not move in large numbers, so the rising rate of emigration follows their emergence from what Hatton and Williamson call “the poverty trap” of low wages and low mobility.


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

"Robert Solow", Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global pandemic, global supply chain, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, Nelson Mandela, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, standardized shipping container, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor

American political scientist Seymour Martin Lipset argued, as part of “modernization theory,” that democracy was much more likely to occur in countries that had achieved at least moderate levels of education and income, and that had formed a large middle class.23 To become a democracy, a country had to develop economically, or so the story went. This idea was not just popular with academics but also provided convenient cover for authoritarian leaders making economic progress, who argued that democracy could wait: Park in South Korea, Suharto in Indonesia, Pinochet in Chile, and so on. Yet when Mali became a democracy in 1992, it had an income per capita of just $300 (in constant price 2005 US dollars), making it one of the poorest countries in the world. Nepal’s income was just $230 per person in 1990 when King Birendra Bir Bikram Shah Dev began a political transition. Timor-Leste launched its long-awaited independence in 1999 with an average income of $430, and Malawi made the jump in 1994 with an average income of barely $200. Today twenty-two democracies have average incomes below $1,000, the World Bank’s cutoff that it uses to define “low-income countries,” and fifteen of those have average incomes below $500.

Far from Zheng He’s great armada that traversed the seas, China could not control its own territory. With the upheaval of the early twentieth century—the end of imperial rule, the long civil war, the emergence of the People’s Republic in 1949, the disasters of the Great Leap Forward and the Cultural Revolution—China made little development progress. While there was some slow income growth alongside larger improvements in health, it remained a poor country. In 1970 its income per capita was around $350 (in constant 2005 PPP prices)—less than today’s Democratic Republic of the Congo, now the poorest country in the world. China, largely disconnected from the global economy, was no longer a source of innovation and technology. In 1970 its exports accounted for a paltry 3 percent of GDP, the lowest among all developing countries. Today, just a few decades later, all has changed.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

The “anti” camp argues that globalization has helped a few prosper but left behind the majority, leading to the greatest degree of inequality in history. Both hold some truth, depending on how you look at inequality. In particular, there is a distinction between inequality within countries and inequality between countries. Starting with the latter, and looking at average income per capita nation by nation, countries such as the United States and United Kingdom have pulled much further ahead of the poorest countries such as Zimbabwe and Niger. At the same time, there has been a huge rise in average income per capita in China and India such that they have narrowed the gap with the richest countries. This latter development means global inequality has decreased substantially, but inequality within nations has not.14 In general developing countries divide into sheep and goats—a group including India and China that have been gaining ground on the rich countries in average per capita incomes and a group concentrated in sub-Saharan Africa where this process (which economists term convergence) has not been taking place.


pages: 409 words: 125,611

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"Robert Solow", accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Asian financial crisis, banking crisis, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, clean water, collapse of Lehman Brothers, collective bargaining, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, Plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Ronald Reagan, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

They needed assistance from the advanced countries, and as a condition of that assistance, officials at the IMF and elsewhere imposed conditions—that the developing countries liberalize their financial markets and open up their domestic markets to a flood of goods from the advanced countries, even as the advanced countries refused to open their markets to the agricultural goods of the South. The policies failed: Africa saw its per capita income fall; Latin America saw stagnation, with the benefits of the limited growth going to a small sliver at the top. Meanwhile, East Asia took a different course; with governments leading the development effort (“the developmental state,” as it was called), incomes per capita rapidly doubled, tripled—eventually increasing eightfold. In the third of a century that Americans saw their incomes stagnate, China went from being an impoverished country, with a per capita income less than 1 percent that of the United States and a GDP that was less than 5 percent that of the United States, to being the largest economy in the world (measured in what economists called purchasing power parities).

China has now become the world’s largest economy—which simply means that because it has roughly five times the population, its income per head is only one-fifth that of the United States (based on standard statistics, called “purchasing power parities,” designed to convert the income in one country into an equivalent income in another). Still, that’s much better than it was even 25 years ago, when purchasing-power-parity income per capita was less than 5 percent that of the United States. But at the same time there has been an enormous growth of inequality in China—more millionaires, more billionaires. Although India’s growth spurt has not been as long or as fast as China’s, it did peak at 9 percent per year. But while fewer people and a smaller percentage of the population moved out of poverty, the increase in millionaires and even billionaires was equally impressive.


Making Globalization Work by Joseph E. Stiglitz

affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus, zero-sum game

Arrow and Debreu’s analysis also assumed that technology was unchanging, or at least unaffected by actions of market participants; yet changes in technology are at the center of development. 4.Gunnar Myrdal, Asian Drama: An Inquiry into the Poverty of Nations (New York: Pantheon, 1968). 5.Its performance in the past fifteen years has been a little bit better—a measly annual increase in per capita income of 0.2 percent. 6.See World Bank, China 2020: Development Challenges in the New Century (Washington, DC: World Bank, 1997), p. 3; available at http://www-wds.world bank.org/servlet/WDSContentServer/WDSP/IB/1997/09/01/000009265_398 0625172933/Rendered/PDF/multi0page.pdf. 7.Since 1970, the total (average annual rate of ) increase in income per capita has been: China, 923 percent (6.8 percent); Indonesia, 286 percent (4.0 percent); Korea, 566 percent (5.6 percent); Malaysia, 283 percent (3.9 percent); Thailand, 347 percent (4.4 percent). Though data on poverty over such longtime spans are unreliable and spotty, it appears that in less than two decades, using the $2-per-day measure of poverty, China’s poverty rate dropped from 67 percent to 47 percent between 1987 and 2001, Indonesia’s poverty rate dropped from 76 percent to 52 percent between 1987 and 2002, Malaysia’s poverty rate dropped from 15 percent to 9 percent between 1987 and 1997, and Thailand’s poverty rate dropped from 37 percent to 32 percent between 1992 and 2000.

See Sandra Polaski, “Mexican Employment, Productivity, and Income a Decade after NAFTA,” Carnegie Endowment for International Peace, brief submitted to the Canadian Standing Senate Committee on Foreign Affairs, February 25, 2004. 7.See Gruben, “Was Nafta Behind Mexico’s High Maquiladora Growth?,” op. cit. In the case of Mexico, the debate is complicated by its 1994–95 financial crisis. A World Bank study concluded that without NAFTA, Mexican income per capita would have been 4 percent lower. (Daniel Lederman, William F. Maloney, and Luis Servén, Lessons from NAFTA for Latin America and the Caribbean Countries: A Summary of Research Findings, World Bank, December 2003.) But there were serious flaws with that study. See, for instance, Mark Weisbrot, David Rosnick, and Dean Baker, “Getting Mexico to Grow with NAFTA: The World Bank Analysis,” Center for Economic Policy Research, September 20, 2004, available at www.cepr.net/publications/nafta_2004_10.htm.


pages: 511 words: 132,682

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants by Maurice E. Stucke, Ariel Ezrachi

affirmative action, Airbnb, Albert Einstein, Andrei Shleifer, Bernie Sanders, Boeing 737 MAX, Cass Sunstein, choice architecture, cloud computing, commoditize, corporate governance, Corrections Corporation of America, Credit Default Swap, crony capitalism, delayed gratification, Donald Trump, en.wikipedia.org, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Google Chrome, greed is good, hedonic treadmill, income inequality, income per capita, information asymmetry, invisible hand, job satisfaction, labor-force participation, late fees, loss aversion, low skilled workers, Lyft, mandatory minimum, Mark Zuckerberg, market fundamentalism, mass incarceration, Menlo Park, meta analysis, meta-analysis, Milgram experiment, mortgage debt, Network effects, out of africa, payday loans, Ponzi scheme, precariat, price anchoring, price discrimination, profit maximization, profit motive, race to the bottom, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Shoshana Zuboff, Silicon Valley, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Stanford prison experiment, Stephen Hawking, The Chicago School, The Market for Lemons, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Davenport, Thorstein Veblen, Tim Cook: Apple, too big to fail, transaction costs, Uber and Lyft, uber lyft, ultimatum game, Vanguard fund, winner-take-all economy

Krueger, “Developments in the Measurement of Subjective Well-Being,” Journal of Economic Perspectives 20, no. 1 (Winter 2006): 3, 15–16, http://www.aeaweb.org/articles?id=10.1257/089533006776526030 (stating that despite China’s real income per capita increasing by a factor of 2.5 between 1994 and 2005, there has been no increase in reported life satisfaction, and an increase in percentage who are dissatisfied); Bruno S. Frey and Alois Stutzer, “What Can Economists Learn from Happiness Research?,” Journal of Economic Literature 40, no. 2 (June 2002): 402, 413, http://www.aeaweb.org/articles?id=10.1257/002205102320161320 (stating that Japan’s income per capita increased sixfold between 1958 and 1991, while average life satisfaction remained unchanged). 66.For a review of the happiness literature, see Maurice E. Stucke, “Should Competition Policy Promote Happiness?


pages: 140 words: 91,067

Money, Real Quick: The Story of M-PESA by Tonny K. Omwansa, Nicholas P. Sullivan, The Guardian

BRICs, business process, business process outsourcing, call centre, cashless society, cloud computing, creative destruction, crowdsourcing, delayed gratification, dematerialisation, disruptive innovation, financial exclusion, financial innovation, financial intermediation, income per capita, Kibera, Kickstarter, M-Pesa, microcredit, mobile money, Network effects, new economy, reserve currency, Silicon Valley, software as a service, transaction costs

Kenya’s capital of Nairobi has long been the trading and financial capital of the East African Community, which includes Tanzania and Uganda (and recently added Rwanda and Burundi). Mombasa, on the Indian Ocean, and Kisimu, on Lake Victoria, are the other two big cities, but the country’s population is 78% rural. Kenya is an enterprising country, with a largely agricultural base (tea, coffee, corn, wheat, sugarcane, fruit, vegetables, dairy products, beef, pork, poultry, eggs), but suffers high unemployment (circa 40%) and a 50% poverty rate (average income per capita is about $1600). From its independence (from the British) in 1963 until 2002, Kenya had two presidents, Jomo Kenyatta and Daniel Moi. President Mwai Kibaki has been in power since, but his reelection in December 2007 brought charges of vote rigging, which led to two months of horrendous tribal violence in early 2008 in which 1,500 died. That led to a five-year power-sharing agreement with the opposition leader, Raila Amolo Odinga, as the Prime Minister.


Rethinking Islamism: The Ideology of the New Terror by Meghnad Desai

Ayatollah Khomeini, battle of ideas, Berlin Wall, full employment, global village, illegal immigration, income per capita, invisible hand, liberal capitalism, liberation theology, Mahatma Gandhi, Martin Wolf, means of production, Nelson Mandela, oil shock, purchasing power parity, Ronald Reagan, structural adjustment programs, The Wealth of Nations by Adam Smith, Yom Kippur War

The฀ countries฀ in฀ Arabia฀ are฀ in฀ a฀ middle-income฀ rather฀ than฀ low-income฀ range฀ by฀ international฀ standards,฀ richer฀ than฀ Africa฀  ฀  and฀South฀Asia,฀if฀not฀Southeast฀Asia฀as฀well.฀The฀United฀Nations฀ Development฀Programme฀(UNDP)฀has฀published฀a฀Human฀Development฀Report฀since฀.฀It฀publishes฀a฀Human฀Development฀Index฀ (HDI)฀which฀summarises฀three฀measures฀of฀well-being฀–฀longevity,฀ literacy฀and฀access฀to฀resources฀as฀measured฀by฀income฀per฀capita฀(in฀ purchasing฀power฀parity฀units฀to฀make฀international฀comparisons฀ easier).฀For฀each฀of฀the฀three฀dimensions฀measures฀are฀calibrated฀to฀ lie฀between฀฀and฀,฀with฀one฀representing฀the฀highest฀achievable฀ level.฀The฀three฀separate฀measures฀are฀then฀combined฀in฀an฀overall฀ measure,฀ also฀ lying฀ between฀ ฀ and฀ ,฀ which฀ gives฀ us฀ the฀ HDI.฀ Countries฀are฀also฀ranked฀from฀฀to฀฀by฀their฀HDI฀score,฀with฀฀ for฀the฀country฀with฀the฀highest฀HDI.


pages: 462 words: 150,129

The Rational Optimist: How Prosperity Evolves by Matt Ridley

"Robert Solow", 23andMe, agricultural Revolution, air freight, back-to-the-land, banking crisis, barriers to entry, Bernie Madoff, British Empire, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, charter city, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, colonial exploitation, colonial rule, Corn Laws, creative destruction, credit crunch, David Ricardo: comparative advantage, decarbonisation, dematerialisation, demographic dividend, demographic transition, double entry bookkeeping, Edward Glaeser, en.wikipedia.org, everywhere but in the productivity statistics, falling living standards, feminist movement, financial innovation, Flynn Effect, food miles, Gordon Gekko, greed is good, Hans Rosling, happiness index / gross national happiness, haute cuisine, hedonic treadmill, Hernando de Soto, income inequality, income per capita, Indoor air pollution, informal economy, Intergovernmental Panel on Climate Change (IPCC), invention of agriculture, invisible hand, James Hargreaves, James Watt: steam engine, Jane Jacobs, John Nash: game theory, joint-stock limited liability company, Joseph Schumpeter, Kevin Kelly, Kickstarter, knowledge worker, Kula ring, Mark Zuckerberg, meta analysis, meta-analysis, mutually assured destruction, Naomi Klein, Northern Rock, nuclear winter, oil shale / tar sands, out of africa, packet switching, patent troll, Pax Mongolica, Peter Thiel, phenotype, plutocrats, Plutocrats, Ponzi scheme, Productivity paradox, profit motive, purchasing power parity, race to the bottom, Ray Kurzweil, rent-seeking, rising living standards, Silicon Valley, spice trade, spinning jenny, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, supervolcano, technological singularity, Thales and the olive presses, Thales of Miletus, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, ultimatum game, upwardly mobile, urban sprawl, Vernor Vinge, Vilfredo Pareto, wage slave, working poor, working-age population, Y2K, Yogi Berra, zero-sum game

Later in this book I will argue that the wrong kind of government can be a disastrous long-term impoverishing factor – the Ming empire is my prime example. Zimbabwe today needs better rules before it can have better markets. But note here that a country’s economic freedom predicts its prosperity better than its mineral wealth, education system or infrastructure do. In a sample of 127 countries, the sixty-three with the higher economic freedom had more than four times the income per capita and nearly twice the growth rate of the countries that did not. A few years ago the World Bank published a study of ‘intangible wealth’ – trying to measure the value of education, the rule of law and other such nebulous things. It simply added up the natural capital (resources, land) and produced capital (tools, property) and measured what was left over to explain each country’s per capita income.

Abbasids 161, 178 Abelard, Peter 358 aborigines (Australian): division of labour 62, 63, 76; farming 127; technological regress 78–84; trade 90–91, 92 abortion, compulsory 203 Abu Hureyra 127 Acapulco 184 accounting systems 160, 168, 196 Accra 189 Acemoglu, Daron 321 Ache people 61 Acheulean tools 48–9, 50, 275, 373 Achuar people 87 acid rain 280, 281, 304–6, 329, 339 acidification of oceans 280, 340–41 Adams, Henry 289 Aden 177 Adenauer, Konrad 289 Aegean sea 168, 170–71 Afghanistan 14, 208–9, 315, 353 Africa: agriculture 145, 148, 154–5, 326; AIDS epidemic 14, 307–8, 316, 319, 320, 322; colonialism 319–20, 321–2; demographic transition 210, 316, 328; economic growth 315, 326–8, 332, 347; international aid 317–19, 322, 328; lawlessness 293, 320; life expectancy 14, 316, 422; per capita income 14, 315, 317, 320; poverty 314–17, 319–20, 322, 325–6, 327–8; prehistoric 52–5, 65–6, 83, 123, 350; property rights 320, 321, 323–5; trade 187–8, 320, 322–3, 325, 326, 327–8; see also individual countries African-Americans 108 agricultural employment: decline in 42–3; hardships of 13, 219–20, 285–6 agriculture: early development of 122–30, 135–9, 352, 387, 388; fertilisers, development of 135, 139–41, 142, 146, 147, 337; genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358; hybrids, development of 141–2, 146, 153; and trade 123, 126, 127–33, 159, 163–4; and urbanisation 128, 158–9, 163–4, 215; see also farming; food supply Agta people 61–2 aid, international 28, 141, 154, 203, 317–19, 328 AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 AIG (insurance corporation) 115 air conditioning 17 air pollution 304–5 air travel: costs of 24, 37, 252, 253; speed of 253 aircraft 257, 261, 264, 266 Akkadian empire 161, 164–5 Al-Ghazali 357 Al-Khwarizmi, Muhammad ibn Musa 115 Al-Qaeda 296 Albania 187 Alcoa (corporation) 24 Alexander the Great 169, 171 Alexander, Gary 295 Alexandria 171, 175, 270 Algeria 53, 246, 345 alphabet, invention of 166, 396 Alps 122, 178 altruism 93–4, 97 aluminium 24, 213, 237, 303 Alyawarre aborigines 63 Amalfi 178 Amazon (corporation) 21, 259, 261 Amazonia 76, 138, 145, 250–51 amber 71, 92 ambition 45–6, 351 Ames, Bruce 298–9 Amish people 211 ammonia 140, 146 Amsterdam 115–16, 169, 259, 368 Amsterdam Exchange Bank 251 Anabaptists 211 Anatolia 127, 128, 164, 165, 166, 167 Ancoats, Manchester 214 Andaman islands 66–7, 78 Andes 123, 140, 163 Andrew, Deroi Kwesi 189 Angkor Wat 330 Angola 316 animal welfare 104, 145–6 animals: conservation 324, 339; extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9; humans’ differences from other 1, 2–4, 6, 56, 58, 64 Annan, Kofi 337 Antarctica 334 anti-corporatism 110–111, 114 anti-slavery 104, 105–6, 214 antibiotics 6, 258, 271, 307 antimony 213 ants 75–6, 87–8, 192 apartheid 108 apes 56–7, 59–60, 62, 65, 88; see also chimpanzees; orang-utans ‘apocaholics’ 295, 301 Appalachia 239 Apple (corporation) 260, 261, 268 Aquinas, St Thomas 102 Arabia 66, 159, 176, 179 Arabian Sea 174 Arabs 89, 175, 176–7, 180, 209, 357 Aral Sea 240 Arcadia Biosciences (company) 31–2 Archimedes 256 Arctic Ocean 125, 130, 185, 334, 338–9 Argentina 15, 186, 187 Arikamedu 174 Aristotle 115, 250 Arizona 152, 246, 345 Arkwright, Sir Richard 227 Armenians 89 Arnolfini, Giovanni 179 art: cave paintings 2, 68, 73, 76–7; and commerce 115–16; symbolism in 136; as unique human trait 4 Ashur, Assyria 165 Asimov, Isaac 354 Asoka the Great 172–3 aspirin 258 asset price inflation 24, 30 Assyrian empire 161, 165–6, 167 asteroid impacts, risk of 280, 333 astronomy 221, 270, 357 Athabasca tar sands, Canada 238 Athens 115, 170, 171 Atlantic Monthly 293 Atlantic Ocean 125, 170 Attica 171 Augustus, Roman emperor 174 Augustus the Strong, Elector of Saxony 184–5 Australia: climate 127, 241, 300, 334; prehistoric 66, 67, 69–70, 127; trade 187; see also aborigines (Australian); Tasmania Austria 132 Ausubel, Jesse 239, 346, 409 automobiles see cars axes: copper 123, 131, 132, 136, 271; stone 2, 5, 48–9, 50, 51, 71, 81, 90–91, 92, 118–19, 271 Babylon 21, 161, 166, 240, 254, 289 Bacon, Francis 255 bacteria: cross fertilisation 271; and pest control 151; resistance to antibiotics 6, 258, 271, 307; symbiosis 75 Baghdad 115, 177, 178, 357 Baines, Edward 227 Baird, John Logie 38 baking 124, 130 ‘balance of nature’, belief in 250–51 Balazs, Etienne 183 bald eagles 17, 299 Bali 66 Baltic Sea 71, 128–9, 180, 185 Bamako 326 bananas 92, 126, 149, 154, 392 Bangladesh 204, 210, 426 Banks, Sir Joseph 221 Barigaza (Bharuch) 174 barley 32, 124, 151 barrels 176 bartering vii, 56–60, 65, 84, 91–2, 163, 356 Basalla, George 272 Basra 177 battery farming 104, 145–6 BBC 295 beads 53, 70, 71, 73, 81, 93, 162 beef 186, 224, 308; see also cattle bees, killer 280 Beijing 17 Beinhocker, Eric 112 Bell, Alexander Graham 38 Bengal famine (1943) 141 benzene 257 Berlin 299 Berlin, Sir Isaiah 288 Bernard of Clairvaux, St 358 Berners-Lee, Sir Tim 38, 273 Berra, Yogi 354 Besant, Annie 208 Bhutan 25–6 Bible 138, 168, 396 bicycles 248–9, 263, 269–70 bin Laden, Osama 110 biofuels 149, 236, 238, 239, 240–43, 246, 300, 339, 343, 344, 346, 393 Bird, Isabella 197–8 birds: effects of pollution on 17, 299; killed by wind turbines 239, 409; nests 51; sexual differences 64; songbirds 55; see also individual species bireme galleys 167 Birmingham 223 birth control see contraception birth rates: declining 204–212; and food supply 192, 208–9; and industrialisation 202; measurement of 205, 403; population control policies 202–4, 208; pre-industrial societies 135, 137; and television 234; and wealth 200–201, 204, 205–6, 209, 211, 212; see also population growth Black Death 181, 195–6, 197, 380 Black Sea 71, 128, 129, 170, 176, 180 blogging 257 Blombos Cave, South Africa 53, 83 blood circulation, discovery of 258 Blunt, John 29 boat-building 167, 168, 177; see also canoes; ship-building Boers 321, 322 Bohemia 222 Bolivia 315, 324 Bolsheviks 324 Borlaug, Norman 142–3, 146 Borneo 339 Bosch, Carl 140, 412 Botswana 15, 316, 320–22, 326 Bottger, Johann Friedrich 184–5 Boudreaux, Don 21, 214 Boulton, Matthew 221, 256, 413–14 bows and arrows 43, 62, 70, 82, 137, 251, 274 Boxgrove hominids 48, 50 Boyer, Stanley 222, 405 Boyle, Robert 256 Bradlaugh, Charles 208 brain size 3–4, 48–9, 51, 55 Bramah, Joseph 221 Branc, Slovakia 136 Brand, Stewart 154, 189, 205 Brando, Marlon 110 brass 223 Brazil 38, 87, 123, 190, 240, 242, 315, 358 bread 38, 124, 140, 158, 224, 286, 392 bridges, suspension 283 Brin, Sergey 221, 405 Britain: affluence 12, 16, 224–5, 236, 296–7; birth rates 195, 200–201, 206, 208, 227; British exceptionalism 200–202, 221–2; climate change policy 330–31; consumer prices 24, 224–5, 227, 228; copyright system 267; enclosure acts 226, 323, 406; energy use 22, 231–2, 232–3, 342–3, 368, 430; ‘glorious revolution’ (1688) 223; income equality 18–19, 218; industrial revolution 201–2, 216–17, 220–32, 255–6, 258–9; life expectancy 15, 17–18; National Food Service 268; National Health Service 111, 261; parliamentary reform 107; per capita income 16, 218, 227, 285, 404–5; productivity 112; property rights 223, 226, 323–4; state benefits 16; tariffs 185–6, 186–7, 223; see also England; Scotland; Wales British Empire 161, 322 bronze 164, 168, 177 Brosnan, Sarah 59 Brown, Lester 147–8, 281–2, 300–301 Brown, Louise 306 Bruges 179 Brunel, Sir Marc 221 Buddhism 2, 172, 357 Buddle, John 412 Buffett, Warren 106, 268 Bulgaria 320 Burkina Faso 154 Burma 66, 67, 209, 335 Bush, George W. 161 Butler, Eamonn 105, 249 Byblos 167 Byzantium 176, 177, 179 cabbages 298 ‘Caesarism’ 289 Cairo 323 Calcutta 190, 315 Calico Act (1722) 226 Califano, Joseph 202–3 California: agriculture 150; Chumash people 62, 92–3; development of credit card 251, 254; Mojave Desert 69; Silicon Valley 221–2, 224, 257, 258, 259, 268 Cambodia 14, 315 camels 135, 176–7 camera pills 270–71 Cameroon 57 Campania 174, 175 Canaanites 166, 396 Canada 141, 169, 202, 238, 304, 305 Canal du Midi 251 cancer 14, 18, 293, 297–9, 302, 308, 329 Cannae, battle of 170 canning 186, 258 canoes 66, 67, 79, 82 capitalism 23–4, 101–4, 110, 115, 133, 214, 258–62, 291–2, 311; see also corporations; markets ‘Captain Swing’ 283 capuchin monkeys 96–7, 375 Caral, Peru 162–3 carbon dioxide emissions 340–47; absorption of 217; and agriculture 130, 337–8; and biofuels 242; costs of 331; and economic growth 315, 332; and fossil fuels 237, 315; and local sourcing of goods 41–2; taxes 346, 356 Cardwell’s Law 411 Caribbean see West Indies Carnegie, Andrew 23 Carney, Thomas 173 carnivorism 51, 60, 62, 68–9, 147, 156, 241, 376 carrots 153, 156 cars: biofuel for 240, 241; costs of 24, 252; efficiency of 252; future production 282, 355; hybrid 245; invention of 189, 270, 271; pollution from 17, 242; sport-utility vehicles 45 The Rational Optimist 424 Carson, Rachel 152, 297–8 Carter, Jimmy 238 Carthage 169, 170, 173 Cartwright, Edmund 221, 263 Castro, Fidel 187 Catalhoyuk 127 catallaxy 56, 355–9 Catholicism 105, 208, 306 cattle 122, 132, 145, 147, 148, 150, 197, 321, 336; see also beef Caucasus 237 cave paintings 2, 68, 73, 76–7 Cavendish, Henry 221 cement 283 central heating 16, 37 cereals 124–5, 125–6, 130–31, 143–4, 146–7, 158, 163; global harvests 121 Champlain, Samuel 138–9 charcoal 131, 216, 229, 230, 346 charitable giving 92, 105, 106, 295, 318–19, 356 Charles V: king of Spain 30–31; Holy Roman Emperor 184 Charles, Prince of Wales 291, 332 Chauvet Cave, France 2, 68, 73, 76–7 Chernobyl 283, 308, 345, 421 Chicago World Fair (1893) 346 chickens 122–3, 145–6, 147, 148, 408 chickpeas 125 Childe, Gordon 162 children: child labour 104, 188, 218, 220, 292; child molestation 104; childcare 2, 62–3; childhood diseases 310; mortality rates 14, 15, 16, 208–9, 284 Chile 187 chimpanzees 2, 3, 4, 6, 29, 59–60, 87, 88, 97 China: agriculture 123, 126, 148, 152, 220; birth rate 15, 200–201; coal supplies 229–30; Cultural Revolution 14, 201; diet 241; economic growth and industrialisation 17, 109, 180–81, 187, 201, 219, 220, 281–2, 300, 322, 324–5, 328, 358; economic and technological regression 180, 181–2, 193, 229–30, 255, 321, 357–8; energy use 245; income equality 19; innovations 181, 251; life expectancy 15; Longshan culture 397; Maoism 16, 187, 296, 311; Ming empire 117, 181–4, 260, 311; per capita income 15, 180; prehistoric 68, 123, 126; serfdom 181–2; Shang dynasty 166; Song dynasty 180–81; trade 172, 174–5, 177, 179, 183–4, 187, 225, 228 chlorine 296 cholera 40, 310 Chomsky, Noam 291 Christianity 172, 357, 358, 396; see also Catholicism; Church of England; monasteries Christmas 134 Chumash people 62, 92–3 Church of England 194 Churchill, Sir Winston 288 Cicero 173 Cilicia 173 Cisco Systems (corporation) 268 Cistercians 215 civil rights movement 108, 109 Clairvaux Abbey 215 Clark, Colin 146, 227 Clark, Gregory 193, 201, 401, 404 Clarke, Arthur C. 354 climate change 328–47, 426–30; costs of mitigation measures 330–32, 333, 338, 342–4; death rates associated with 335–7; and ecological dynamism 250, 329–30, 335, 339; and economic growth 315, 331–3, 341–3, 347; effects on ecosystems 338–41; and food supply 337–8; and fossil fuels 243, 314, 342, 346, 426; historic 194, 195, 329, 334, 426–7; pessimism about 280, 281, 314–15, 328–9; prehistoric 54, 65, 125, 127, 130, 160, 329, 334, 339, 340, 352; scepticism about 111, 329–30, 426; solutions to 8, 315, 345–7 Clinton, Bill 341 Clippinger, John 99 cloth trade 75, 159, 160, 165, 172, 177, 180, 194, 196, 225, 225–9, 232 clothes: Britain 224, 225, 227; early homo sapiens 71, 73; Inuits 64; metal age 122; Tasmanian natives 78 clothing prices 20, 34, 37, 40, 227, 228 ‘Club of Rome’ 302–3 coal: and economic take-off 201, 202, 213, 214, 216–17; and generation of electricity 233, 237, 239, 240, 304, 344; and industrialisation 229–33, 236, 407; prices 230, 232, 237; supplies 302–3 coal mining 132, 230–31, 237, 239, 257, 343 Coalbrookdale 407 Cobb, Kelly 35 Coca-Cola (corporation) 111, 263 coffee 298–9, 392 Cohen, Mark 135 Cold War 299 collective intelligence 5, 38–9, 46, 56, 83, 350–52, 355–6 Collier, Paul 315, 316–17 colonialism 160, 161, 187, 321–2; see also imperialism Colorado 324 Columbus, Christopher 91, 184 combine harvesters 158, 392 combined-cycle turbines 244, 410 commerce see trade Commoner, Barry 402 communism 106, 336 Compaq (corporation) 259 computer games 273, 292 computers 2, 3, 5, 211, 252, 260, 261, 263–4, 268, 282; computing power costs 24; information storage capacities 276; silicon chips 245, 263, 267–8; software 99, 257, 272–3, 304, 356; Y2K bug 280, 290, 341; see also internet Confucius 2, 181 Congo 14–15, 28, 307, 316 Congreve, Sir William 221 Connelly, Matthew 204 conservation, nature 324, 339; see also wilderness land, expansion of conservatism 109 Constantinople 175, 177 consumer spending, average 39–40 containerisation 113, 253, 386 continental drift 274 contraception 208, 210; coerced 203–4 Cook, Captain James 91 cooking 4, 29, 38, 50, 51, 52, 55, 60–61, 64, 163, 337 copper 122, 123, 131–2, 160, 162, 164, 165, 168, 213, 223, 302, 303 copyright 264, 266–7, 326 coral reefs 250, 339–40, 429–30 Cordoba 177 corn laws 185–6 Cornwall 132 corporations 110–116, 355; research and development budgets 260, 262, 269 Cosmides, Leda 57 Costa Rica 338 cotton 37, 108, 149, 151–2, 162, 163, 171, 172, 202, 225–9, 230, 407; calico 225–6, 232; spinning and weaving 184, 214, 217, 219–20, 227–8, 232, 256, 258, 263, 283 Coughlin, Father Charles 109 Craigslist (website) 273, 356 Crapper, Thomas 38 Crathis river 171 creationists 358 creative destruction 114, 356 credit cards 251, 254 credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411 Cree Indians 62 Crete 167, 169 Crichton, Michael 254 Crick, Francis 412 crime: cyber-crime 99–100, 357; falling rates 106, 201; false convictions 19–20; homicide 14, 20, 85, 88, 106, 118, 201; illegal drugs 106, 186; pessimism about 288, 293 Crimea 171 crocodiles, deaths by 40 Crompton, Samuel 227 Crookes, Sir William 140, 141 cruelty 104, 106, 138–9, 146 crusades 358 Cuba 187, 299 ‘curse of resources’ 31, 320 cyber-crime 99–100, 357 Cyprus 132, 148, 167, 168 Cyrus the Great 169 Dalkon Shield (contraceptive device) 203 Dalton, John 221 Damascus 127 Damerham, Wiltshire 194 Danube, River 128, 132 Darby, Abraham 407 Darfur 302, 353 Dark Ages 164, 175–6, 215 Darwin, Charles 77, 81, 91–2, 105, 116, 350, 415 Darwin, Erasmus 256 Darwinism 5 Davy, Sir Humphry 221, 412 Dawkins, Richard 5, 51 DDT (pesticide) 297–8, 299 de Geer, Louis 184 de Soto, Hernando 323, 324, 325 de Waal, Frans 88 Dean, James 110 decimal system 173, 178 deer 32–3, 122 deflation 24 Defoe, Daniel 224 deforestation, predictions of 304–5, 339 Delhi 189 Dell (corporation) 268 Dell, Michael 264 demographic transition 206–212, 316, 328, 402 Denmark 200, 344, 366; National Academy of Sciences 280 Dennett, Dan 350 dentistry 45 depression (psychological) 8, 156 depressions (economic) 3, 31, 32, 186–7, 192, 289; see also economic crashes deserts, expanding 28, 280 Detroit 315, 355 Dhaka 189 diabetes 156, 274, 306 Diamond, Jared 293–4, 380 diamonds 320, 322 Dickens, Charles 220 Diesel, Rudolf 146 Digital Equipment Corporation 260, 282 digital photography 114, 386 Dimawe, battle of (1852) 321 Diocletian, Roman emperor 175, 184 Diodorus 169 diprotodons 69 discount merchandising 112–14 division of labour: Adam Smith on vii, 80; and catallaxy 56; and fragmented government 172; in insects 75–6, 87–8; and population growth 211; by sex 61–5, 136, 376; and specialisation 7, 33, 38, 46, 61, 76–7, 175; among strangers and enemies 87–9; and trust 100; and urbanisation 164 DNA: forensic use 20; gene transfer 153 dogs 43, 56, 61, 84, 125 Doll, Richard 298 Dolphin, HMS 169 dolphins 3, 87 Domesday Book 215 Doriot, Georges 261 ‘dot-communism’ 356 Dover Castle 197 droughts: modern 241, 300, 334; prehistoric 54, 65, 334 drug crime 106, 186 DuPont (corporation) 31 dyes 167, 225, 257, 263 dynamos 217, 233–4, 271–2, 289 dysentery 157, 353 eagles 17, 239, 299, 409 East India Company 225, 226 Easter Island 380 Easterbrook, Greg 294, 300, 370 Easterlin, Richard 26 Easterly, William 318, 411 eBay (corporation) 21, 99, 100, 114, 115 Ebla, Syria 164 Ebola virus 307 economic booms 9, 29, 216 economic crashes 7–8, 9, 193; credit crunch (2008) 8–10, 28–9, 31, 100, 102, 316, 355, 399, 411; see also depressions (economic) ecosystems, dynamism of 250–51, 303, 410 Ecuador 87 Edinburgh Review 285 Edison, Thomas 234, 246, 272, 412 education: Africa 320; Japan 16; measuring value of 117; and population control 209, 210; universal access 106, 235; women and 209, 210 Edwards, Robert 306 Eemian interglacial period 52–3 Egypt: ancient 161, 166, 167, 170, 171, 192, 193, 197, 270, 334; Mamluk 182; modern 142, 154, 192, 301, 323; prehistoric 44, 45, 125, 126; Roman 174, 175, 178 Ehrenreich, Barbara 291 Ehrlich, Anne 203, 301–2 Ehrlich, Paul 143, 190, 203, 207, 301–2, 303 electric motors 271–2, 283 electricity 233–5, 236, 237, 245–6, 337, 343–4; costs 23; dynamos 217, 233–4, 271–2, 289 elephants 51, 54, 69, 303, 321 Eliot, T.S. 289 email 292 emigration 199–200, 202; see also migrations empathy 94–8 empires, trading 160–61; see also imperialism enclosure acts 226, 323, 406 endocrine disruptors 293 Engels, Friedrich 107–8, 136 England: agriculture 194–6, 215; infant mortality 284; law 118; life expectancy 13, 284; medieval population 194–7; per capita income 196; scientific revolution 255–7; trade 75, 89, 104, 106, 118, 169, 194; see also Britain Enron (corporation) 29, 111, 385 Erie, Lake 17 Erie Canal 139, 283 ethanol 240–42, 300 Ethiopia 14, 316, 319; prehistoric 52, 53, 129 eugenics 288, 329 Euphrates river 127, 158, 161, 167, 177 evolution, biological 5, 6, 7, 49–50, 55–6, 75, 271, 350 Ewald, Paul 309 exchange: etiquette and ritual of 133–4; and innovation 71–2, 76, 119, 167–8, 251, 269–74; and pre-industrial economies 133–4; and property rights 324–5; and rule of law 116, 117–18; and sexual division of labour 65; and specialisation 7, 10, 33, 35, 37–8, 46, 56, 58, 75, 90, 132–3, 350–52, 355, 358–9; and trust 98–100, 103, 104; as unique human trait 56–60; and virtue 100–104; see also bartering; markets; trade executions 104 extinctions 17, 43, 64, 68, 69–70, 243, 293, 302, 338–9 Exxon (corporation) 111, 115 eye colour 129 Ezekiel 167, 168 Facebook (website) 262, 268, 356 factories 160, 214, 218, 219–20, 221, 223, 256, 258–9, 284–5 falcons 299 family formation 195, 209–210, 211, 227 famines: modern 141, 143, 154, 199, 203, 302; pessimism about 280, 281, 284, 290, 300–302, 314; pre-industrial 45, 139, 195, 197 Faraday, Michael 271–2 Fargione, Joseph 242 farming: battery 104, 145–6; free-range 146, 308; intensive 143–9; organic 147, 149–52, 393; slash-and-burn 87, 129, 130; subsidies 188, 328; subsistence 87, 138, 175–6, 189, 192, 199–200; see also agriculture; food supply fascism 289 Fauchart, Emmanuelle 264 fax machines 252 Feering, Essex 195 Fehr, Ernst 94–6 female emancipation 107, 108–9, 209 feminism 109 Ferguson, Adam 1 Ferguson, Niall 85 Fermat’s Last Theorem 275 fermenting 130, 241 Ferranti, Sebastian de 234 Fertile Crescent 126, 251 fertilisation, in-vitro 306 fertilisers 32, 129, 135, 139–41, 142, 143, 145, 146, 147, 148, 149–50, 152, 155, 200, 337 Fibonacci 178 figs 125, 129 filariasis 310 Finland 15, 35, 261 fire, invention of 4, 50, 51, 52, 60, 274 First World War 289, 309 fish, sex-change 280, 293 fish farming 148, 155 fishing 62, 63–4, 71, 78–9, 81–2, 125, 127, 129, 136, 159, 162, 163, 327 Fishman, Charles 113 Flanders 179, 181, 194 flight, powered 257, 261, 264, 266 Flinders Island 81, 84 floods 128, 250, 329, 331, 334, 335, 426 Florence 89, 103, 115, 178 flowers, cut 42, 327, 328 flu, pandemic 28, 145–6, 308–310 Flynn, James 19 Fontaine, Hippolyte 233–4 food aid 28, 141, 154, 203 food miles 41–2, 353, 392; see also local sourcing food preservation 139, 145, 258 food prices 20, 22, 23, 34, 39, 40, 42, 240, 241, 300 food processing 29–30, 60–61, 145; see also baking; cooking food retailing 36, 112, 148, 268; see also supermarkets food sharing 56, 59–60, 64 food supply: and biofuels 240–41, 243, 300; and climate change 337–8; and industrialisation 139, 201–2; pessimism about 280, 281, 284, 290, 300–302; and population growth 139, 141, 143–4, 146–7, 192, 206, 208–9, 300–302 Ford, Ford Maddox 188 Ford, Henry 24, 114, 189, 271 Forester, Jay 303 forests, fears of depletion 304–5, 339 fossil fuels: and ecology 237, 240, 304, 315, 342–3, 345–6; fertilisers 143, 150, 155, 237; and industrialisation 214, 216–17, 229–33, 352; and labour saving 236–7; and productivity 244–5; supplies 216–17, 229–30, 237–8, 245, 302–3; see also charcoal; coal; gas, natural; oil; peat Fourier analysis 283 FOXP2 (gene) 55, 375 fragmentation, political 170–73, 180–81, 184, 185 France: capital markets 259; famine 197; infant mortality 16; population growth 206, 208; revolution 324; trade 184, 186, 222 Franco, Francisco 186 Frank, Robert 95–6 Franken, Al 291 Franklin, Benjamin 107, 256 Franks 176 Fray Bentos 186 free choice 27–8, 107–110, 291–2 free-range farming 146, 308 French Revolution 324 Friedel, Robert 224 Friedman, Milton 111 Friend, Sir Richard 257 Friends of the Earth 154, 155 Fry, Art 261 Fuji (corporation) 114, 386 Fujian, China 89, 183 fur trade 169, 180 futurology 354–5 Gadir (Cadiz) 168–9, 170 Gaelic language 129 Galbraith, J.K. 16 Galdikas, Birute 60 Galilee, Sea of 124 Galileo 115 Gandhi, Indira 203, 204 Gandhi, Sanjay 203–4 Ganges, River 147, 172 gas, natural 235, 236, 237, 240, 302, 303, 337 Gates, Bill 106, 264, 268 GDP per capita (world), increases in 11, 349 Genentech (corporation) 259, 405 General Electric Company 261, 264 General Motors (corporation) 115 generosity 86–7, 94–5 genetic research 54, 151, 265, 306–7, 310, 356, 358 genetically modified (GM) crops 28, 32, 148, 151–6, 283, 358 Genghis Khan 182 Genoa 89, 169, 178, 180 genome sequencing 265 geothermal power 246, 344 Germany: Great Depression (1930s) 31; industrialisation 202; infant mortality 16; Nazism 109, 289; population growth 202; predicted deforestation 304, 305; prehistoric 70, 138; trade 179–80, 187; see also West Germany Ghana 187, 189, 316, 326 Gibraltar, Strait of 180 gift giving 87, 92, 133, 134 Gilbert, Daniel 4 Gilgamesh, King 159 Ginsberg, Allen 110 Gintis, Herb 86 Gladstone, William 237 Glaeser, Edward 190 Glasgow 315 glass 166, 174–5, 177, 259 glass fibre 303 Global Humanitarian Forum 337 global warming see climate change globalisation 290, 358 ‘glorious revolution’ (1688) 223 GM (genetically modified) crops 28, 148, 151–6, 283, 358 goats 122, 126, 144, 145, 197, 320 Goethe, Johann von 104 Goklany, Indur 143–4, 341, 426 gold 165, 177, 303 golden eagles 239, 409 golden toads 338 Goldsmith, Edward 291 Google (corporation) 21, 100, 114, 259, 260, 268, 355 Gore, Al 233, 291 Goths 175 Gott, Richard 294 Gramme, Zénobe Théophile 233–4 Grantham, George 401 gravity, discovery of 258 Gray, John 285, 291 Great Barrier Reef 250 Greece: ancient 115, 128, 161, 170–71, 173–4; modern 186 greenhouse gases 152, 155, 242, 329; see also carbon dioxide emissions Greenland: ice cap 125, 130, 313, 334, 339, 426; Inuits 61; Norse 380 Greenpeace 154, 155, 281, 385 Grottes des Pigeons, Morocco 53 Groves, Leslie 412 Growth is Good for the Poor (World Bank study) 317 guano 139–40, 302 Guatemala 209 Gujarat 162, 174 Gujaratis 89 Gustavus Adolphus, King of Sweden 184 Gutenberg, Johann 184, 253 Guth, Werner 86 habeas corpus 358 Haber, Fritz 140, 412 Hadza people 61, 63, 87 Haiti 14, 301, 315 Halaf people 130 Hall, Charles Martin 24 Halley, Edmond 256 HANPP (human appropriation of net primary productivity) number 144–5 Hanseatic merchants 89, 179–80, 196 Hansen, James 426 hanta virus 307 happiness 25–8, 191 Harappa, Indus valley 161–2 Hardin, Garrett 203 harems 136 Hargreaves, James 227, 256 Harlem, Holland 215–16 Harper’s Weekly 23 Harvey, William 256 hay 214–15, 216, 239, 408–9 Hayek, Friedrich 5, 19, 38, 56, 250, 280, 355 heart disease 18, 156, 295 ‘hedonic treadmill’ 27 height, average human 16, 18 Heller, Michael 265–6 Hellespont 128, 170 Henrich, Joe 77, 377 Henry II, King of England 118 Henry, Joseph 271, 272 Henry, William 221 Heraclitus 251 herbicides 145, 152, 153–4 herding 130–31 Hero of Alexandria 270 Herschel, Sir William 221 Hesiod 292 Hippel, Eric von 273 hippies 26, 110, 175 Hiroshima 283 Hitler, Adolf 16, 184, 296 Hittites 166, 167 HIV/AIDS 8, 14, 307–8, 310, 316, 319, 320, 322, 331, 353 Hiwi people 61 Hobbes, Thomas 96 Hock, Dee 254 Hohle Fels, Germany 70 Holdren, John 203, 207, 311 Holland: agriculture 153; golden age 185, 201, 215–16, 223; horticulture 42; industrialisation 215–16, 226; innovations 264; trade 31, 89, 104, 106, 185, 223, 328 Holy Roman Empire 178, 265–6 Homer 2, 102, 168 Homestead Act (1862) 323 homicide 14, 20, 85, 88, 106, 118, 201 Homo erectus 49, 68, 71, 373 Homo heidelbergensis 49, 50–52, 373 Homo sapiens, emergence of 52–3 Hong Kong 31, 83, 158, 169, 187, 219, 328 Hongwu, Chinese emperor 183 Hood, Leroy 222, 405 Hooke, Robert 256 horses 48, 68, 69, 129, 140, 197, 215, 282, 408–9; shoes and harnesses 176, 215 housing costs 20, 25, 34, 39–40, 234, 368 Hoxha, Enver 187 Hrdy, Sarah 88 Huber, Peter 244, 344 Hueper, Wilhelm 297 Huguenots 184 Huia (birds) 64 human sacrifice 104 Hume, David 96, 103, 104, 170 humour 2 Hunan 177 Hungary 222 Huns 175 hunter-gatherers: consumption and production patterns 29–30, 123; division of labour 61–5, 76, 136; famines 45, 139; limitations of band size 77; modern societies 66–7, 76, 77–8, 80, 87, 135–6, 136–7; nomadism 130; nostalgia for life of 43–5, 135, 137; permanent settlements 128; processing of food 29, 38, 61; technological regress 78–84; trade 72, 77–8, 81, 92–3, 123, 136–7; violence and warfare 27, 44–5, 136, 137 hunting 61–4, 68–70, 125–6, 130, 339 Huron Indians 138–9 hurricanes 329, 335, 337 Hurst, Blake 152 Hutterites 211 Huxley, Aldous 289, 354 hydroelectric power 236, 239, 343, 344, 409 hyenas 43, 50, 54 IBM (corporation) 260, 261, 282 Ibn Khaldun 182 ice ages 52, 127, 329, 335, 340, 388 ice caps 125, 130, 313, 314, 334, 338–9, 426 Iceland 324 Ichaboe island 140 ‘idea-agora’ 262 imitation 4, 5, 6, 50, 77, 80 imperialism 104, 162, 164, 166, 172, 182, 319–20, 357; see also colonialism in-vitro fertilisation 306 income, per capita: and economic freedom 117; equality 18–19, 218–19; increases in 14, 15, 16–17, 218–19, 285, 331–2 India: agriculture 126, 129, 141, 142–3, 147, 151–2, 156, 301; British rule 160; caste system 173; economic growth 187, 358; energy use 245; income equality 19; infant mortality 16; innovations 172–3, 251; Mauryan empire 172–3, 201, 357; mobile phone use 327; population growth 202, 203–4; prehistoric 66, 126, 129; trade 174–5, 175, 179, 186–7, 225, 228, 232; urbanisation 189 Indian Ocean 174, 175 Indonesia 66, 87, 89, 177 Indus river 167 Indus valley civilisation 161–2, 164 industrialisation: and capital investment 258–9; and end of slavery 197, 214; and food production 139, 201–2; and fossil fuels 214, 216–17, 229–33, 352; and innovation 38, 220–24, 227–8; and living standards 217–20, 226–7, 258; pessimistic views of 42, 102–3, 217–18, 284–5; and productivity 227–8, 230–31, 232, 235–6, 244–5; and science 255–8; and trade 224–6; and urbanisation 188, 226–7 infant mortality 14, 15, 16, 208–9, 284 inflation 24, 30, 169, 289 influenza see flu, pandemic Ingleheart, Ronald 27 innovation: and capital investment 258–62, 269; and exchange 71–2, 76, 119, 167–8, 251, 269–74; and government spending programmes 267–9; increasing returns of 248–55, 274–7, 346, 354, 358–9; and industrialisation 38, 220–24, 227–8; and intellectual property 262–7, 269; limitlessness 374–7; and population growth 252; and productivity 227–8; and science 255–8, 412; and specialisation 56, 71–2, 73–4, 76–7, 119, 251; and trade 168, 171 insect-resistant crops 154–5 insecticides 151–2 insects 75–6, 87–8 insulin 156, 274 Intel (corporation) 263, 268 intellectual property 262–7; see also copyright; patents intensive farming 143–9 Intergovernmental Panel on Climate Change (IPCC) 330, 331, 332, 333–4, 338, 342, 347, 425, 426, 427, 428 internal combustion engine 140, 146, 244 International Planned Parenthood Foundation 203 internet: access to 253, 268; blogging 257; and charitable giving 318–19, 356; cyber-crime 99–100, 357; development of 263, 268, 270, 356; email 292; free exchange 105, 272–3, 356; packet switching 263; problem-solving applications 261–2; search engines 245, 256, 267; shopping 37, 99, 107, 261; social networking websites 262, 268, 356; speed of 252, 253; trust among users 99–100, 356; World Wide Web 273, 356 Inuits 44, 61, 64, 126 IPCC (Intergovernmental Panel on Climate Change) 330, 331, 332, 333–4, 338, 342, 347, 349, 425, 426, 427, 428 IQ levels 19 Iran 162 Iraq 31, 158, 161 Ireland 24, 129, 199, 227 iron 166, 167, 169, 181, 184, 223, 229, 230, 302, 407 irradiated food 150–51 irrigation 136, 147–8, 159, 161, 163, 198, 242, 281 Isaac, Glyn 64 Isaiah 102, 168 Islam 176, 357, 358 Israel 53, 69, 124, 148 Israelites 168 Italy: birth rate 208; city states 178–9, 181, 196; fascism 289; Greek settlements 170–71, 173–4; infant mortality 15; innovations 196, 251; mercantilism 89, 103, 178–9, 180, 196; prehistoric 69 ivory 70, 71, 73, 167 Jacob, François 7 Jacobs, Jane 128 Jamaica 149 James II, King 223 Japan: agriculture 197–8; birth rates 212; dictatorship 109; economic development 103, 322, 332; economic and technological regression 193, 197–9, 202; education 16; happiness 27; industrialisation 219; life expectancy 17, 31; trade 31, 183, 184, 187, 197 Jarawa tribe 67 Java 187 jealousy 2, 351 Jebel Sahaba cemeteries, Egypt 44, 45 Jefferson, Thomas 247, 249, 269 Jenner, Edward 221 Jensen, Robert 327 Jericho 127, 138 Jevons, Stanley 213, 237, 245 Jews 89, 108, 177–8, 184 Jigme Singye Wangchuck, King of Bhutan 25–6 Jobs, Steve 221, 264, 405 John, King of England 118 Johnson, Lyndon 202–3 Jones, Rhys 79 Jordan 148, 167 Jordan river 127 Joyce, James 289 justice 19–20, 116, 320, 358 Kalahari desert 44, 61, 76 Kalkadoon aborigines 91 Kanesh, Anatolia 165 Kangaroo Island 81 kangaroos 62, 63, 69–70, 84, 127 Kant, Immanuel 96 Kaplan, Robert 293 Kay, John 184, 227 Kazakhstan 206 Kealey, Terence 172, 255, 411 Kelly, Kevin 356 Kelvin, William Thomson, 1st Baron 412 Kenya 42, 87, 155, 209, 316, 326, 336, 353 Kerala 327 Kerouac, Jack 110 Khoisan people 54, 61, 62, 67, 116, 321 Kim Il Sung 187 King, Gregory 218 Kingdon, Jonathan 67 Kinneret, Lake 124 Klasies River 83 Klein, Naomi 291 Kleiner Perkins Caufield & Byers (venture capitalists) 259 knowledge, increasing returns of 248–50, 274–7 Kodak (corporation) 114, 386 Kohler, Hans-Peter 212 Korea 184, 197, 300; see also North Korea; South Korea Kuhn, Steven 64, 69 kula (exchange system) 134 !


pages: 868 words: 147,152

How Asia Works by Joe Studwell

affirmative action, anti-communist, Asian financial crisis, bank run, banking crisis, barriers to entry, borderless world, Bretton Woods, British Empire, call centre, capital controls, central bank independence, collective bargaining, crony capitalism, cross-subsidies, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, failed state, financial deregulation, financial repression, Gini coefficient, glass ceiling, income inequality, income per capita, industrial robot, Joseph Schumpeter, Kenneth Arrow, land reform, land tenure, large denomination, liberal capitalism, market fragmentation, non-tariff barriers, offshore financial centre, oil shock, open economy, passive investing, purchasing power parity, rent control, rent-seeking, Right to Buy, Ronald Coase, South China Sea, The Wealth of Nations by Adam Smith, urban sprawl, Washington Consensus, working-age population

When the regional recession struck in the early 1980s, the Philippine economy collapsed under the weight of unserviceable debt and shrank an astonishing 20 per cent. It only really stabilised in the mid 1990s, and there has been no sustained period of growth since. The Philippines has no indigenous, value-added manufacturing capacity. At the end of the Second World War only Japan and Malaysia had higher incomes per capita in Asia. Then Korea and Taiwan overtook the Philippines in the 1950s. The country slid down past Thailand in the 1980s, and Indonesia more recently. From having been in a position near the top of the Asian pile, the Philippines today is an authentic, technology-less Third World state with poverty rates to match.231 What was not important North-east and south-east Asia provide small variations around clear themes.

It is only a combination of the two that can take the country to the front rank of nations and allow Chinese people to be genuinely proud of where they come from. Thus far, institutional deficiency has not been a significant drag on China’s economic growth. But it will catch up with it eventually. The Chinese government already spends more money trying to micro-manage people’s lives through its domestic security apparatus than it does on defence.69 On its present trajectory, China is set to be a middle-income per capita, but profoundly institutionally retarded state. At an economic level, this gives leading nations nothing to fear. At a political level the outlook is more tricky. We must hope that the fact that China is more cosmopolitan, and its military more subject to civilian control, than nineteenth-century Germany or inter-war Japan makes it a less threatening rising power. In the coming years, the world’s developed nations will need to remain engaged with a more assertive China, and to press their political and humanitarian principles.


pages: 524 words: 155,947

More: The 10,000-Year Rise of the World Economy by Philip Coggan

"Robert Solow", accounting loophole / creative accounting, Ada Lovelace, agricultural Revolution, Airbnb, airline deregulation, Andrei Shleifer, anti-communist, assortative mating, autonomous vehicles, bank run, banking crisis, banks create money, basic income, Berlin Wall, Bob Noyce, Branko Milanovic, Bretton Woods, British Empire, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, Celtic Tiger, central bank independence, Charles Lindbergh, clean water, collective bargaining, Columbian Exchange, Columbine, Corn Laws, credit crunch, Credit Default Swap, crony capitalism, currency peg, debt deflation, Deng Xiaoping, discovery of the americas, Donald Trump, Erik Brynjolfsson, European colonialism, eurozone crisis, falling living standards, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, Frederick Winslow Taylor, full employment, germ theory of disease, German hyperinflation, gig economy, Gini coefficient, global supply chain, global value chain, Gordon Gekko, greed is good, Haber-Bosch Process, Hans Rosling, Hernando de Soto, hydraulic fracturing, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, industrial robot, inflation targeting, Isaac Newton, James Watt: steam engine, job automation, John Snow's cholera map, joint-stock company, joint-stock limited liability company, Kenneth Arrow, Kula ring, labour market flexibility, land reform, land tenure, Lao Tzu, large denomination, liquidity trap, Long Term Capital Management, Louis Blériot, low cost airline, low skilled workers, lump of labour, M-Pesa, Malcom McLean invented shipping containers, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, McJob, means of production, Mikhail Gorbachev, mittelstand, moral hazard, Murano, Venice glass, Myron Scholes, Nelson Mandela, Network effects, Northern Rock, oil shale / tar sands, oil shock, Paul Samuelson, popular capitalism, popular electronics, price stability, principal–agent problem, profit maximization, purchasing power parity, quantitative easing, railway mania, Ralph Nader, regulatory arbitrage, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, Scramble for Africa, Second Machine Age, secular stagnation, Silicon Valley, Simon Kuznets, South China Sea, South Sea Bubble, special drawing rights, spice trade, spinning jenny, Steven Pinker, TaskRabbit, Thales and the olive presses, Thales of Miletus, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, transatlantic slave trade, transcontinental railway, Triangle Shirtwaist Factory, universal basic income, Unsafe at Any Speed, Upton Sinclair, V2 rocket, Veblen good, War on Poverty, Washington Consensus, Watson beat the top human players on Jeopardy!, women in the workforce, Yom Kippur War, zero-sum game

These countries started to seize foreign-owned assets; and in 1938, Mexico nationalised American and British oil companies. Even India, still subject to British rule, was making 70% of its own steel in 1938, up from 14% in 1919.64 This process would continue, with a vengeance, after the Second World War. Latin American countries were badly hit by the Depression. Ten countries in the region suffered an export drop of more than half. Chile’s exports fell by 83% and its income per capita dropped by a third.65 The crisis accelerated over the course of 1930, when industrial production fell 20% in Britain, 25% in Germany and 30% in America.66 Banks started to fold, with 600 US institutions failing in the last two months of 1930. The most serious demise was that of the Bank of the United States in New York’s Bronx district. The collapse was partly due to a seeming reluctance to bail out the bank’s 400,000, mainly Jewish, depositors.

In 1870, 25% of American children died before their fifth birthday; now that number is down to 1%. The proportion of people living past their 65th birthday has risen from 34% to 77%.8 Globally, there has been just as dramatic a change. Life expectancy in 1820 was 36 in the developed world and 24 elsewhere; by 2000, the respective figures were 79 and 64. Over that same period, global population rose sixfold and income per capita ninefold (see chart).9 Occasionally, there are terrible famines, as in Ethiopia in the 1980s or in Yemen at the time of writing. But they are much rarer and more isolated than they used to be. Malthus has been conquered. A stronger economy supports a bigger population World population, bn Source: Our World In Data The most exciting news of the last 30 years has been that the developing world has been catching up.


pages: 851 words: 247,711

The Atlantic and Its Enemies: A History of the Cold War by Norman Stone

affirmative action, Ayatollah Khomeini, bank run, banking crisis, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bonfire of the Vanities, Bretton Woods, British Empire, business cycle, central bank independence, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, European colonialism, facts on the ground, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, Gunnar Myrdal, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, illegal immigration, income per capita, interchangeable parts, Jane Jacobs, Joseph Schumpeter, labour mobility, land reform, long peace, mass immigration, means of production, Mikhail Gorbachev, Mitch Kapor, new economy, Norman Mailer, North Sea oil, oil shock, Paul Samuelson, Ponzi scheme, popular capitalism, price mechanism, price stability, RAND corporation, rent-seeking, Ronald Reagan, Silicon Valley, special drawing rights, Steve Jobs, strikebreaker, The Death and Life of Great American Cities, trade liberalization, trickle-down economics, V2 rocket, War on Poverty, Washington Consensus, Yom Kippur War, éminence grise

Bohley, Bärbel Böhm, Karl Bokassa, Jean-Bédel Bolivia Bologna Bolsheviks: and bureaucracy and China Civil War Congress of the Peoples of the East (1920) lies of Revolution and science Bond, James (fictional character) Bonn Borinage Borland Software Corporation Borodin, Mikhail Boston Bourgès-Maunoury, Maurice BP (British Petroleum) Bradlee, Ben Braestrup, Peter Brandt, Willy: background and character elected Chancellor foreign minister mayor of West Berlin memoirs Nobel Peace Prize Ostpolitik resignation Braşov Bratislava author’s imprisonment in Braudel, Fernand Braun, Otto Brazil Breakfast at Tiffany’s (film) Brecht, Bertolt Brentano, Lujo Brescia Brest-Litovsk Bretherton, Russell Bretton Woods conference (1944) Bretton Woods system end of Triffin Dilemma Brezhnev, Leonid: and Afghanistan and arms limitiation talks background and character and de Gaulle death and East Germany and Helsinki conference (1975) and Johnson and Middle East nationalities policy and Orthodox Church ‘our common European home’ and Poland political reforms and ‘Prague Spring’ and Soviet satellite states and Stalin succeeds Khrushchev and Vietnam Brioni island Britain: agriculture atomic bombs automobile industry balance of payments banking system and Chinesewar civil service class system coal industry Communist Party council housing crime cultural institutions currency controls and Cyprus defence expenditure Department of Trade and Industry Depression (1930s) devaluation of sterling divorce rates economic and political decline education system (see also universities) and EEC/EU and Egypt emigration and establishment of NATO and European Exchange Rate Mechanism (ERM) Falklands War (1982) family breakdown film industry financial deregulation fishing industry general elections: (1945); (1950); (1951); (1959); (1970); (1974); (1979); (1983) gold reserves and GreekWar IMF bail-out (1976) import surcharges income per capita Industrial Revolution industrial wastelands inflation intelligentsia and Iran Lend-Lease aid and Malaya and Marshall Plan middle classes miners’ strike (1984-5) monarchy National Health Service nationalization of industry navy North Sea oil nuclear weapons oil imports Poll Tax post-war debt post-war shortages and rationing privatizations productivity levels property prices public transport race riots scientific and technological developments Second World War shipbuilding steel industry strikes Suez crisis taxation television textile industry trade unions underclass unemployment universities Welfare State Westland affair (‘Westgate’; 1986) winter weather of 1946-7 withdrawal of forces from Gulf (1971) zone of occupation in Germany British Airways British Commonwealth British Empire: American antipathy towards decline of decolonization revitalization attempts trade British Leyland (automobile manufacturer) British Petroleum (BP) British Steel British Telecom Brittan, Sir Samuel Bronfman, Edgar Brown, Andrew Brucan, Silviu Bruce, David Bruges Brussels Brussels Exhibition (1958) Brussels Pact (1948) Bryan, William Jennings Brzezinski, Zbigniew Bucak, Mehmet Celal Bucharest Buck, Pearl S.

Turin University Turing, Alan Türkeş, Alparslan Turkey: Alevi population ANAP (‘Motherland’ Party) banking system Christian minorities coal industry consumer goods production corruption and Cyprus Democratic Party education system (see also universities) and EEC/EU elections: (1950); (1974); (1977); (1983); (1986); (1989); (1991) emigration establishment and success of Atatürk’s republic GAP project Greek population ‘guest workers’ in Germany and human rights hydro-electricity inflation infrastructure Inönü’s government intelligentsia Islam Jews in Justice Party and Korean War Kurdish population language and Marshall Plan Marxism military coup (1960) military coup (1971) military coup (‘generals’ coup’; 1980) Nationalist Party NATO membership Özal’s economic reforms Özal’s premiership and presidency peasantry political instability of multi-party period population growth refugees in relations with USSR Republican Party Second World War secularism Soviet territorial claims steel industry taxation trade unions universities US aid US bases war with Greece (1919-22) Turner Broadcasting Tutzing U2 spy planes UB (Polish secret police) Uganda Uglich Ukraine: birth rate Communist takeover demolition of churches Khrushchev as Party head nationalism Russian population transfer of Crimea to Uniates Ukrainians: in Poland in Soviet Politburo Ulbricht, Walter unemployment: Britain Chile ‘downsizing’ France Nazi Germany Phillips Curve reunified Germany USA Uniates (Orthodox Church) ‘Uniscan’ (proposed European free-trade area) Unitarians United Nations: and Afghanistan and Chilean coup (1973) and Cuban crisis of 1962 and Cyprus development of bureaucracy establishment of as forum for ‘world opinion’ investigation of German reunification and Korean War ‘non-aligned’ states and Palestine ‘peacekeeping’ role Security Council and Suez crisis and Yom Kippur War United Nations Economic Council for Latin America United Nations Human Rights Commission United Nations Relief and Rehabilitation Administration (UNRRA) United Workers’ Party (Hungarian) universities: Belgium Britain Chile France Germany Italy Poland Romania student demonstrations student exchanges student loans Turkey USA USSR UNRRA (United Nations Relief and Rehabilitation Administration) Untergang, Der (Downfall; film) uranium Uriage, administrators’ school Urrutia, Manuel USA: and Afghanistan ‘Alliance for Progress’ (plan for Latin America) armaments industry atomic bombs automobile industry balance of payments banking system Bay of Pigs invasion (1961) business management methods and Chile and Chinesewar Civil Rights Act (1964) coal production coin-clipping Communists conservatism Constitution consumer goods production crime Cuban crisis of 1962 and Cyprus Declaration of Independence defence expenditure Democratic Party Depression (1930s) and division of Germany education system (see also universities) and Egypt and establishment of NATO and European Defence Community European resistance to cultural domination and Falklands War (1982) family breakdown farm subsidies fast food Federal Reserve feminism film industry financial deregulation and German economic miracle gold reserves grain exports to USSR Great Society and Greekwar and Haiti health care ICBMs (intercontinental ballistic missiles) immigration income per capita inflation intelligentsia interest rates and Iran Iran-Contra affair and Israel Jews in Korean War Lend-Lease aid to Britain McCarthyism mass culture missionaries in China motorways National Security Council (NSC) New Deal New Frontier nuclear weapons development oil industry and Pakistan personal debt and Poland post-war occupation of Japan poverty Presidential elections: (1952); (1960); (1964); (1968); (1972); (1976); (1980); (1984); (1988) productivity public transport ‘pursuit of happiness’ racial problem refugee groups Republican Party ‘rust belt’ SALT (Strategic Arms Limitation Talks) and Saudi Arabia Savings and Loans crisis Second World War space programme steel production Strategic Defense Initiative (‘Star Wars’) strikes ‘supplyside’ economics Supreme Court taxation technological developments trade unions and Turkey underclass unemployment universities urban development and decay visa system Watergate scandal welfare system westward migration see also CIA; Marshall Plan; Vietnam War USSR: Afghanistan war (1979-89) Agitation and Propaganda department alcoholism American grain imports and Angola anti-alcohol campaign atomic bombs and Austria Berlin blockade (1948-9) birth rate border conflicts with China business management methods censorship and Chile and Chinesewar collapse of communism collectivization policy commissariat for culture coup of August 1991 Cuban crisis of 1962 cultural institutions deportations disintegration dissidents ‘Doctors’ plot’ (1952) and East Germany economic stagnation and Egypt and Ethiopia Five Year Plans friendship treaty with China (1950) German invasion (1941) glasnost and human rights and Hungarian uprising of 1956 ICBMs (intercontinental ballistic missiles) inflation information technology institutchiki intelligentsia internment camps invasion of Czechoslovakia and Iran Jews in and Korean War life expectancy rates and Marshall Plan Molotov Plan nationalism navy New Economic Policy non-Russian populations nuclear power nuclear weapons development oil and gas production ‘Optimal Functioning’ planning system ‘our common European home’ ‘peaceful coexistence’ doctrine peasantry perestroyka and Poland power struggle following Stalin’s death and ‘Prague Spring’ refugees in Turkey relations with West Germany religious persecution reparations demands and Romania SALT (Strategic Arms Limitation Talks) scientific and technological developments Second World War shortages and starvation Siberian gas pipeline Sino-Soviet split slave labour space programme Spetsnaz (‘special forces’ troops) stage managment of revolutions of 1989 Stalin’s purges steel industry strikes television and Turkey underground theatre universities and Vietnam Western studies of Soviet economy winter war with Finland (1939-40) see also Communist Party of Soviet Union; KGB; Red Army; RussianWar; Russian Revolution Ussuri river Ustinov, Dmitry Uzbekistan Uzbeks Uzunada island Vaizey, John, Baron Valparaíso Van, Turkey Vance, Cyrus Vandenberg Resolution (1948) Vann, John Vatican Papal Guard Vatican(ecumenical council) Venezuela, oil production Venice Venice conference (1956) venture capital Verheugen, Günter Verlaine, Paul Vernadsky, George Vernadsky, Vladimir Vial (Chilean conglomerate) Vichy France Vienna: airport bombing (1985) Atomic Energy Commission author’s studies in espionage in Karl-Marx Hof bombardment (1934) Kraus on OPEC headquarters post-war rebuilding State Opera Taylor on Vienna conference (1961) Vienna OPEC conference (1973) Vienna school of economics Vietnam: agricultual collectivization ‘boat people’ Buddhists Catholics Chinese minority population Communist Party famine French rule France-Indochina war independence movement industrialization invasion of Cambodia (1978) Japanese invasion (1941) partition peasantry war with China see also North Vietnam; South Vietnam Vietnam War (1959-75): American conscription American public opposition Ap Bac, battle of (1963) bombing campaigns ceasefire CIA involvement civilian casualty totals corruption European response to fall of Saigon (1975) guerrilla warfare Gulf of Tonkin incident (1964) Ho Chi Minh Trail Khe Sanh, battle of (1968) Lam Son operation (1971) media coverage military casualty totals My Lai massacre (1968) numbers of American troops deployed origins of Paris peace talks ‘peace initiatives’ Phoenix ‘pacification’ programme Tet offensive (1968) use of Agent Orange use of helicopters ‘Vietnamization’ Vilna Vinde, Pierre Vladikavkaz Volcker, Paul Volga Famine (1921-2) Volga river Volhynia Volkswagen (automobile manufacturer) Volobuyev, P.

Werfel, Franz Werfel, Roman Werner, Pierre West Berlin: access agreements with East birth rate Brandt as mayor isolation of student population subsidies symbolism of war damage Weizsäcker as mayor see also Berlin Wall West Germany (Federal Republic of Germany): agriculture automobile industry balance of payments birth rates Bundesbank (Federal Bank) Catholic Church Christian Democrats (CDU) coal production Communist Party conservatism constitution contraceptivedevelopment cultural institutions economic miracle education system (see also universities) elections: (1965); (1969); (1972) establishment of West German state and European Atomic Community and European Economic Community exports fiftieth anniversary floating of currency Franco-German reconciliation Free Democrats (FDP) Grand Coalition (SPD-CDU) Green Party ‘guest workers’ and Helsinki conference (1975) immigration from East Germany income per capita inflation intelligentsia introduction of Deutsche Mark and Kurdish nationalism ‘Little’ coalition (SPD-FDP) missile bases NATO membership neo-Nazism and nuclear weapons Ostpolitik peasantry political institutions privatizations productivity levels protectionism rearmament Red Army Faction refugee leagues regional policy relations with Poland relations with USSR reunification shipbuilding Social Democrats (SPD) Soviet gas supplies Sozialmarktwirtschaft steel production taxation television terrorism trade unions traffic policy treaties with East Germany (1971-2) Turkish immigrants universities welfare system Western European Union Westland affair (‘Westgate’; 1986) Westmoreland, William Weyand, Frederick.


pages: 251 words: 63,630

The End of Cheap China: Economic and Cultural Trends That Will Disrupt the World by Shaun Rein

business climate, credit crunch, Deng Xiaoping, Donald Trump, facts on the ground, glass ceiling, high net worth, illegal immigration, income per capita, indoor plumbing, job-hopping, Maui Hawaii, price stability, quantitative easing, Silicon Valley, Skype, South China Sea, Steve Jobs, thinkpad, trade route, trickle-down economics, upwardly mobile, urban planning, women in the workforce, young professional, zero-sum game

Chinese consumers are well aware of what products you are selling in other markets, because of information flow via the Internet and tourism, and they don’t want to wait months or years to buy the newest products. They have no compunctions about going through illegal channels if it means faster gratification. Key Action Item Your former factory workers now might be your target market. With rising incomes, per capita GDP has tripled in the last decade from $1,000 to $3,000 per year. Revamp your China-based factories to sell within China rather than just for export. Release in China before Other Markets Many companies make the mistake of taking too long to introduce the season’s newest products into China. Until Apple moved up its scheduled release dates for China, their official sales stumbled because consumers were not willing to wait a month before getting access to their devices.


pages: 217 words: 61,407

Twilight of Abundance: Why the 21st Century Will Be Nasty, Brutish, and Short by David Archibald

Bakken shale, Climategate, Climatic Research Unit, deindustrialization, energy security, failed state, Francis Fukuyama: the end of history, income per capita, Intergovernmental Panel on Climate Change (IPCC), means of production, mutually assured destruction, oil shale / tar sands, oil shock, out of africa, peak oil, price discovery process, rising living standards, sceptred isle, South China Sea, University of East Anglia, uranium enrichment, Yom Kippur War

But industry and consumers need a steady source of electricity. A storage system for intermittent wind power to be stored so it can be drawn on when required at least doubles the cost of wind power, even before taking into account the conversion losses, which would be at least 40 percent of generated power. Relying on wind would take the percentage of U.S. GDP outlaid on energy from the current 9 percent to at least 29 percent, slashing disposable income per capita. According to figures released by the wind power industry, individual wind turbines have a high energy return on investment—that is, twenty times. As part of an integrated power supply system with energy storage and backup power generation, however, energy return on investment falls to less than five times, even going by industry figures. And those figures may be overly generous. A recent UK study by the Renewable Energy Foundation, The Performance of Wind Farms in the United Kingdom and Denmark, shows that the economic life of onshore wind turbines is in reality between ten and fifteen years, not the twenty to twenty-five years projected by the wind industry itself and used for government projections.


pages: 242 words: 68,019

Why Information Grows: The Evolution of Order, From Atoms to Economies by Cesar Hidalgo

"Robert Solow", Ada Lovelace, Albert Einstein, Arthur Eddington, assortative mating, business cycle, Claude Shannon: information theory, David Ricardo: comparative advantage, Douglas Hofstadter, Everything should be made as simple as possible, frictionless, frictionless market, George Akerlof, Gödel, Escher, Bach, income inequality, income per capita, industrial cluster, information asymmetry, invention of the telegraph, invisible hand, Isaac Newton, James Watt: steam engine, Jane Jacobs, job satisfaction, John von Neumann, Joi Ito, New Economic Geography, Norbert Wiener, p-value, Paul Samuelson, phenotype, price mechanism, Richard Florida, Ronald Coase, Rubik’s Cube, Silicon Valley, Simon Kuznets, Skype, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, working-age population

I am quite familiar with the general exploitation narrative, having spent the first twenty-four years of my life in the long strip of coast and mountains known as Chile. Chile has a long mining tradition or as I like to say, Chile is heavily involved in “atomic ranching.” But this was not always the case. During the nineteenth century Chile’s wealth came mostly from the export of saltpeter, a mineral used as a fertilizer and as an ingredient in gunpowder. Saltpeter made the Chilean economy boom. At the turn of the twentieth century Chile had an income per capita that was larger than that of Spain, Sweden, or Finland.6 Things were good, but the pendulum was about to swing the other way. Figure 3. Products that Brazil exported to China in 2012. Total exports USD 41.3B (Source: atlas.media.mit.edu) Figure 4. Products that China exported to Brazil in 2012. Total exports USD 33.4B (Source: atlas.media.mit.edu) In 1909 the German chemists Fritz Haber and Carl Bosch discovered an inexpensive way of synthesizing saltpeter on an industrial scale.


pages: 251 words: 69,245

The Haves and the Have-Nots: A Brief and Idiosyncratic History of Global Inequality by Branko Milanovic

Berlin Wall, Branko Milanovic, colonial rule, crony capitalism, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, endogenous growth, Fall of the Berlin Wall, financial deregulation, full employment, Gini coefficient, high net worth, illegal immigration, income inequality, income per capita, Joseph Schumpeter, means of production, open borders, Pareto efficiency, plutocrats, Plutocrats, purchasing power parity, Simon Kuznets, very high income, Vilfredo Pareto, Washington Consensus, zero-sum game

4 The total number of people included in 2005 surveys is just under 6 billion. About 5 percent of people in the world, living in the poorest and most conflict-ridden countries such as Sudan, Afghanistan, North Korea, Somalia, and Iraq, are not included since their countries do not conduct national household surveys. Thus, all inequality results shown here are (slight) underestimates compared to “real” values. 5 It takes $90,000 of net income per capita to be in the top 1 percent of U.S. income distribution. 6 We know that 60/(2.06)α has to yield 6. Hence, α = 3.2. Vignette 3.2 1 One example is Thomas Friedman, The World Is Flat (New York: Farrar, Straus, and Giroux, 2005). 2 Pioneered by Lester Thurow, “A Surge in Inequality,” Scientific American 256 (1987), it was used recently in Carol Graham, Nancy Birdsall, and Stefano Pettinato, Stuck in the Tunnel: Is Globalization Muddling the Middle?


pages: 262 words: 66,800

Progress: Ten Reasons to Look Forward to the Future by Johan Norberg

agricultural Revolution, anti-communist, availability heuristic, Bartolomé de las Casas, Berlin Wall, British Empire, business climate, clean water, continuation of politics by other means, Daniel Kahneman / Amos Tversky, demographic transition, desegregation, Donald Trump, Flynn Effect, germ theory of disease, Gini coefficient, Gunnar Myrdal, Haber-Bosch Process, Hans Island, Hans Rosling, Ignaz Semmelweis: hand washing, income inequality, income per capita, indoor plumbing, Isaac Newton, Jane Jacobs, John Snow's cholera map, Kibera, Louis Pasteur, Mahatma Gandhi, meta analysis, meta-analysis, Mikhail Gorbachev, more computing power than Apollo, moveable type in China, Naomi Klein, Nelson Mandela, open economy, place-making, Rosa Parks, sexual politics, special economic zone, Steven Pinker, telerobotics, The Wealth of Nations by Adam Smith, transatlantic slave trade, very high income, working poor, Xiaogang Anhui farmers, zero-sum game

In Asia, some attribute this fertility decline to brutal policies like China’s one-child policy, but fertility fell much further among the Chinese in Taiwan and by exactly the same rate in Thailand. Women don’t suffer through as many pregnancies, and parents are spared the agony of having to see their children dying. The wealthier a country is, the healthier it is. Variation in income can explain over seventy per cent of the variation in infant and child mortality. No country with an income per capita above $10,000 has an infant mortality rate above two per cent. Richer people can invest more in sanitation and water facilities, and can afford food and medicine. But it is not just that humanity is getting richer, so it can afford a better standard of living. That is not even the major cause. Even more important is that a decent standard of living is getting much cheaper. Health indicators for a given income level are improving all the time.


Economic Origins of Dictatorship and Democracy by Daron Acemoğlu, James A. Robinson

Andrei Shleifer, British Empire, business cycle, colonial rule, conceptual framework, constrained optimization, Corn Laws, declining real wages, Edward Glaeser, European colonialism, Gunnar Myrdal, income inequality, income per capita, invisible hand, Jean Tirole, John Markoff, Kenneth Rogoff, land reform, minimum wage unemployment, Nash equilibrium, Nelson Mandela, oil shock, open economy, Pareto efficiency, rent-seeking, strikebreaker, total factor productivity, transaction costs, Washington Consensus, William of Occam, women in the workforce

Evolution of Democracy 1960–1995. Figure 3.4. Evolution of Democracy 1840–2000. Patterns of Democracy Figure 3.5. Democracy and Income 1990s. Figure 3.6. Democracy and Income 1990s. 53 54 What Do We Know about Democracy? Figure 3.7. Democracy and Education 1990s. Figure 3.5 shows this by plotting the average Freedom House index during the 1990s versus the average log gross domestic product (GDP) (income) per capita during the 1990s (in purchasing-power party terms, calculated from the latest version of the Summers–Heston data set; Heston, Summers, and Atten 2002). Figure 3.6 does the same using the average Polity score during the 1990s. Both figures show a strong positive relationship between income and democracy. The richer countries, such as the United States, Canada, Australia, New Zealand, and those in the European Union, are all democratic, whereas the poor countries in sub-Saharan Africa, South Asia, and Central America are less democratic.

the democracy score between the same dates (for the Freedom House and Polity indexes, respectively). This way of looking at the data is useful because it differences out potentially fixed characteristics that are simultaneously affecting income and democracy (thus bringing us closer to the causal relationship between income and democracy). Both figures show a clear pattern: there is no relationship between changes in income per capita and changes in democracy. In other words, although richer countries are more democratic, there is no evidence that countries that grow faster than others tend to become more democratic, at least over this period. A natural interpretation of the patterns shown in Figures 3.5 and 3.6 in light of these results is that they are largely driven by some fixed country characteristics. Consequently, conditional on these characteristics, countries that have grown faster during the past twenty-five to thirty years have not become more democratic.


The Handbook of Personal Wealth Management by Reuvid, Jonathan.

asset allocation, banking crisis, BRICs, business cycle, buy and hold, collapse of Lehman Brothers, correlation coefficient, credit crunch, cross-subsidies, diversification, diversified portfolio, estate planning, financial deregulation, fixed income, high net worth, income per capita, index fund, interest rate swap, laissez-faire capitalism, land tenure, market bubble, merger arbitrage, negative equity, new economy, Northern Rock, pattern recognition, Ponzi scheme, prediction markets, Right to Buy, risk tolerance, risk-adjusted returns, risk/return, short selling, side project, sovereign wealth fund, statistical arbitrage, systematic trading, transaction costs, yield curve

For this reason, buying art associated with future economic development and a strong national culture while understanding the fashions of the past ឣ 162 PLEASURABLE INVESTMENT ______________________________________________ may reap the best rewards; the logic being that as the wealthy proportion of a population reaches a certain income level they tend to buy their own art before exploring art from other countries. Looking beyond the BRIC countries of Brazil, Russia, China, and India, Goldman Sachs recommends the ‘Next 11’ as general investment opportunities; in order of projected income per capita in 2025, these are South Korea, Mexico, Turkey, Iran, Vietnam, Egypt, Indonesia, Philippines, Pakistan, Nigeria and Bangladesh. The major art auction houses are represented in five of these countries. Nevertheless, the best advice as always is to buy something you like and hope your enthusiasm is shared with buyers of the future. Figure 4.3.3, taken from www.artprice.com 2008 illustrates developed and emerging market post-war and contemporary art trends. 1,400 1,200 1,000 800 600 Chinese contemporary art 400 Indian contemporary art American pop art 200 Young British artists 01 /0 1 01 /20 /0 03 5/ 01 20 /0 03 9 01 /20 /0 03 1/ 01 20 /0 04 5 01 /20 /0 04 9 01 /20 /0 04 1/ 01 20 /0 05 5 01 /20 /0 05 9 01 /20 /0 05 1/ 01 20 /0 06 5 01 /20 /0 06 9 01 /20 /0 06 1/ 01 20 /0 07 5 01 /20 /0 07 9 01 /20 /0 07 1/ 01 20 /0 08 5 01 /20 /0 08 9/ 20 08 0 Source: artprice.com, 2008 Figure 4.3.3 Developed and emerging markets, post-war and contemporary art 163 4.4 4.4 Mission possible Stefan Velvick, Charities Aid Foundation Background These are tough times for charities.


pages: 381 words: 78,467

100 Plus: How the Coming Age of Longevity Will Change Everything, From Careers and Relationships to Family And by Sonia Arrison

23andMe, 8-hour work day, Albert Einstein, Anne Wojcicki, artificial general intelligence, attribution theory, Bill Joy: nanobots, bioinformatics, Clayton Christensen, dark matter, disruptive innovation, East Village, en.wikipedia.org, epigenetics, Frank Gehry, Googley, income per capita, indoor plumbing, Jeff Bezos, Johann Wolfgang von Goethe, Kickstarter, Law of Accelerating Returns, life extension, personalized medicine, Peter Thiel, placebo effect, post scarcity, Ray Kurzweil, rolodex, Silicon Valley, Simon Kuznets, Singularitarianism, smart grid, speech recognition, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Levy, Thomas Malthus, upwardly mobile, World Values Survey, X Prize

Put another way, poor health causes a decline in productivity for the simple reason that it’s very difficult to work effectively when you’re in ill health, thereby increasing your chances of falling into poverty. In their paper titled “The Health and Wealth of Nations,” Harvard economist David Bloom and Queen’s University economist David Canning explain that, based on the available research, if there are “two countries that are identical in all respects, except that one has a 5 year advantage in life expectancy,” then the “real income per capita in the healthier country will grow 0.3–0.5% per year faster than in its less healthy counterpart.”9 Although these percentages might look small, they are actually quite significant, especially when we consider that between 1965 and 1990 countries experienced an average per capita income growth of 2 percent per year. When countries only have an average growth of that amount, an advantage of 0.5 percent is quite the boost.


pages: 241 words: 75,516

The Paradox of Choice: Why More Is Less by Barry Schwartz

accounting loophole / creative accounting, attribution theory, Atul Gawande, availability heuristic, Cass Sunstein, Daniel Kahneman / Amos Tversky, endowment effect, framing effect, hedonic treadmill, income per capita, job satisfaction, loss aversion, medical residency, mental accounting, Own Your Own Home, Pareto efficiency, positional goods, price anchoring, psychological pricing, RAND corporation, Richard Thaler, science of happiness, The Wealth of Nations by Adam Smith

., of 2000, 26 electricity service electronic gadgets employment at home mobility in wardrobe and endowment effect Epstein, Benita error, susceptibility to evolution existential choice exit Exit, Voice, and Loyalty (Hirschman) expectations: control of high raised rising see also prospect theory expected utility experience, diversity of experienced utility expressive value, of choice F family “fear of falling,” feelings, memories and predictions of framing comparison and definition of prospect theory and psychological accounting and reference prices and risk assessment and France Frank, Robert freedom “freedom from” and “freedom to,” self-respect and, see also autonomy friendship G gains, see risk, risk assessment Gallup polls Gawande, Atul Gawande, Hunter Germany goal-setting God, belief in “good enough,” see satisficers Gore, Al gratitude Great Britain grocery shopping gross domestic product guarantees, money-back H habits happiness autonomy and choice and decline in maximizing as obstacle to measurements and surveys of social comparison and social relations and status and wealth and see also satisfaction Harris, Lou Harvard University health care health insurance heart disease hedonic adaptation hedonic lag helplessness, learned heuristic, definition of high expectations, curse of Hirsch, Fred Hirschman, Albert HMOs human progress Hungary hypertension I Iceland identity, choice of illness immune system inaction inertia income per capita individualism infants “infomercial,” information: evaluations of filtered by consciousness gathering of quality and quantity of information costs instrumental value, of choice Internet medical misinformation on interviews, effect of J jams, of choice Japan jeans, selection of job mobility Johnson, Paul Joyless Economy, The (Scitovsky) justification, of choices K Kahneman, Daniel Kaiser Permanente Kaminer, Wendy Katz, Jay L Landman, Janet Lane, Robert learned helplessness liberty, negative vs. positive liking, wanting and loss aversion Loss of Happiness in Market Democracies, The (Lane) losses.


pages: 267 words: 78,857

Discardia: More Life, Less Stuff by Dinah Sanders

A. Roger Ekirch, Atul Gawande, big-box store, Boris Johnson, carbon footprint, clean water, clockwatching, cognitive bias, collaborative consumption, credit crunch, endowment effect, Firefox, game design, Inbox Zero, income per capita, index card, indoor plumbing, Internet Archive, Kevin Kelly, late fees, Marshall McLuhan, McMansion, Merlin Mann, post-work, side project, Silicon Valley, Stewart Brand

Symptom #19: Clutter Everywhere Solution #19: You Need What You Need, but You Don’t Need Much More Than You Need How terrible would it be if you needed a glass jar and didn’t have one? —Gretchen Rubin, author So much stuff If you combine mass production and rising standards of living over the past century, pretty much anyone outside the Third World can have more belongings than they’ll ever need—and more than their homes can accommodate. This reality reached a fever pitch after the 1960s as real disposable personal income per capita in the United States grew and spending increased while prices for most goods dropped dramatically. By the 1990s, heftily squatting on the scales opposite voluntary simplicity and similar movements, the average American family had twice as many possessions as their counterpart 25 years prior, according to a September 2009 article by Jon Mooallem in The New York Times, “The Self-Storage Self - Storing All the Stuff We Accumulate.”


pages: 309 words: 78,361

Plenitude: The New Economics of True Wealth by Juliet B. Schor

Asian financial crisis, big-box store, business climate, business cycle, carbon footprint, cleantech, Community Supported Agriculture, creative destruction, credit crunch, Daniel Kahneman / Amos Tversky, decarbonisation, dematerialisation, demographic transition, deskilling, Edward Glaeser, en.wikipedia.org, Gini coefficient, global village, IKEA effect, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Joseph Schumpeter, Kenneth Arrow, knowledge economy, life extension, McMansion, new economy, peak oil, pink-collar, post-industrial society, prediction markets, purchasing power parity, ride hailing / ride sharing, Robert Shiller, Robert Shiller, sharing economy, Simon Kuznets, single-payer health, smart grid, The Chicago School, Thomas L Friedman, Thomas Malthus, too big to fail, transaction costs, Zipcar

The Path to Sustainability: Population, Affluence, and Technology Ecological economists often organize their thinking with an accounting framework developed by two scientists: Paul Ehrlich of Stanford and Harvard’s John Holdren, currently President Obama’s chief scientific adviser. It says that environmental impact is a product of three things: population, affluence, and technology. Affluence is income per capita, and includes not just what individuals earn, but the entire production of a society. Population measures the number of people consuming that level of income. Technology stands for an operator that translates total production into all of its ecological effects. Strictly speaking, this “technology” concept covers more than the word does in its common usage, because it also incorporates the mix of different products and activities.


pages: 277 words: 79,360

The Happiness Curve: Why Life Gets Better After 50 by Jonathan Rauch

endowment effect, experimental subject, Google bus, happiness index / gross national happiness, hedonic treadmill, income per capita, job satisfaction, longitudinal study, loss aversion, Richard Thaler, science of happiness, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, upwardly mobile, World Values Survey, zero-sum game

When Helliwell and other researchers crunch the data, they find that six factors account for three-fourths of reported wellbeing: • social support: having someone to count on in times of trouble • generosity: people are happier when they do generous things and live among generous people • trust: corruption and dishonesty are bad for life satisfaction • freedom: feeling that you have sufficient freedom to make important life decisions • income per capita • healthy life expectancy If you look at that list, you will notice, again, that of the six factors, four have to do with social interaction. Of the bunch, social support is the most important, and together the social four—“relational goods,” as the term of art would have it—comprise the bulk of what makes us happy. As the 2015 World Happiness Report notes, the strong link between life satisfaction and being connected to others “appears in almost all empirical analyses of life satisfaction data irrespective of geographical and time differences.”


Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics by Francis Fukuyama

Asian financial crisis, banking crisis, Berlin Wall, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, cognitive bias, cuban missile crisis, energy security, flex fuel, global pandemic, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John von Neumann, mass immigration, Menlo Park, Mikhail Gorbachev, moral hazard, Norbert Wiener, oil rush, oil shale / tar sands, oil shock, packet switching, RAND corporation, Ray Kurzweil, reserve currency, Ronald Reagan, The Wisdom of Crowds, trade route, Vannevar Bush, Vernor Vinge, Yom Kippur War

See International Health Regulations Imagination: believability and, 93–94, 98; of low-probability events, 3, 8–9, 98; as psychological barrier, 8–9; of strategic surprises, 93–94, 97–99 IMF. See International Monetary Fund Immigration, 148, 149, 156, 161–62 Incentives: for good vs. bad predictions, 2, 171; against infectious disease preparedness, 87, 88, 89; political, 4, 171 Income gap, 137, 149 Income per capita: increases in, 137; and value of life, 11, 15 Incubation period, of SARS, 87 India: energy dependence of, 76; poverty rates in, 164; predictions of famine in, 135–36 Indian Ocean tsunami (2004), political barriers to preparing for, 10–11 Individualism, expressive, 133 Indonesia: breakup of, as future surprise, 106, 144; conditions before economic crisis in, 44, 46; effects of economic crisis in, 42, 47, 49 Inequality, income, 137, 149 Infectious disease, emerging, 82–90; drug resistance in, 84, 85; funding for response to, 89–90; gaps in preparation for, 83; global approach to, 83, 89–90; international regulations on, 88–89, 90; optimism vs. pessimism about prospect of, 129–30, 136; preparedness for, 85–86, 171; prevention of, 83–85; reporting on, 87, 88; response to, 87, 89–90; sources of, 82, 83; surveillance of, 86–87, 88; transmission of, 82–83, 85; treatment of, 84; vs. wellestablished disease, 84–85 Influenza pandemic: bird flu and, 82, 83, 84, 85, 86; funding for response to, 89–90; optimism vs. pessimism about prospect of, 129–30, 136; 2990-7 ch17 index 7/23/07 12:33 PM Page 190 190 1918–19 outbreak of, 83, 130, 136; preparedness for, 85; prevention of, 84, 85; response to, 87, 89–90; sources of future, 82; surveillance of, 86 Information collection, filters for, and strategic surprises, 99–100 Information processing, and strategic surprises, 100–01 Information technology innovation, 120–25; convergence of ideas in, 123–25; at DARPA, 63–65; individuals driving, 120–23; in scenario thinking, 110, 117–19; trends in, 120; U.S. leadership in, 58 Innovation organization, 59–70; DARPA model of, 63–67; definition of, 59; and energy dependence, 59–60, 67–70; fragmentation of, 62–63; at institutional level, 59, 63–67; at personal level, 59, 63–65; precursors to DARPA model of, 60–63; in World War II, 60–61 Inside-out perspective, 101–03 Institute of Medicine, 89 Institutional barriers: to energy innovation agency, 68–69; to preparedness, 2–5, 171 Institutional organization, of DARPA, 59, 63–67 Intel, 122–23 Intelligence, U.S.: examples of failures in, 41.


pages: 233 words: 75,712

In Defense of Global Capitalism by Johan Norberg

anti-globalists, Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, Gini coefficient, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, income per capita, informal economy, Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, prediction markets, profit motive, race to the bottom, rising living standards, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, union organizing, zero-sum game

This is a hypothesis, not an ironclad guarantee, but it conveys something of the explosive potential inherent in free commercial exchange.10 But it has its basis in the real world. During the last decades 24 developing countries with a combined population of more than 3 billion people have integrated into the global economy through increased trade flows and by reducing their tariffs more than three times more than the others. Those globalized developing countries saw growth in incomes per capita increase step by step from 1 percent annually in the 1960s to 5 percent in the 1990s. According to those trends, the average person in those countries will see her income doubled every 15 years.11 A clear connection exists between greater free trade and growth on the one hand and poverty reduction on the other. We can see the differences between similarly situated countries that have introduced, or refrained from introducing, liberalization measures and open markets.


pages: 246 words: 76,561

Radical Cities: Across Latin America in Search of a New Architecture by Justin McGuirk

A Pattern Language, agricultural Revolution, dark matter, Donald Trump, Enrique Peñalosa, extreme commuting, facts on the ground, Guggenheim Bilbao, Hernando de Soto, housing crisis, illegal immigration, income per capita, informal economy, Jane Jacobs, Kickstarter, lateral thinking, mass immigration, microcredit, Milgram experiment, neoliberal agenda, New Urbanism, place-making, Silicon Valley, starchitect, technoutopianism, unorthodox policies, urban decay, urban planning, urban renewal, urban sprawl, Washington Consensus

Indeed, before the terrible earthquake of February 2010, the government had hoped to reduce the number of squatter families to zero in time for the bicentennial celebrations in September of that year. The current housing deficit stands at about 100,000, which is nothing by Latin American standards. So the focus ought now to shift to the quality of life enjoyed by people in government housing. The fact is that Chile no longer needs a housing solution as drastic as the one Aravena pioneered in Iquique. Thanks to its copper, the country has grown rich. It has the highest income per capita in Latin America, and no public debt. Within five years of Quinta Monroy being built the national housing budget has doubled – twice. The evidence of that is written all over Aravena’s subsequent housing projects. He parks his VW Beetle outside a row of houses in Lo Espejo. They look similar to the ones in Iquique, but they are different. That’s partly because the structures are made of brick rather than concrete, but mainly because the ‘voids’ have been filled in a consistent style.


pages: 269 words: 77,876

Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit From Global Chaos by Sarah Lacy

Asian financial crisis, barriers to entry, BRICs, clean water, cleantech, cloud computing, Deng Xiaoping, Donald Trump, Elon Musk, fear of failure, Firefox, income per capita, intangible asset, Jeff Bezos, knowledge economy, knowledge worker, M-Pesa, Mahatma Gandhi, Marc Andreessen, Mark Zuckerberg, McMansion, megacity, Network effects, paypal mafia, QWERTY keyboard, risk tolerance, Skype, social web, Steve Jobs, Tony Hsieh, urban planning, web application, women in the workforce, working-age population, zero-sum game

That’s more than double what it was in 1998, but stil tiny. Sixteen years ago, Rwanda was written off as a place that would forever be mired in chaos and ethnic fighting. Today, by many accounts it’s the cleanest, safest, and least corrupt African nation, but Rwanda is stil incredibly poor—so poor that going jogging is considered a luxury in parts of the country because you are purposely expending calories just to stay thin. The gross national income per capita is less than half the rest of sub-Saharan Africa. If Rwanda can be considered an African startup, President Kagame—the general of the army that defeated the genocidaires and took back over the country when the rest of the world did nothing—is the entrepreneur crafting it. Let’s be clear: Kagame is a dictator, but most people I spoke with in Rwanda felt he was an overwhelmingly benevolent one.


pages: 829 words: 186,976

The Signal and the Noise: Why So Many Predictions Fail-But Some Don't by Nate Silver

"Robert Solow", airport security, availability heuristic, Bayesian statistics, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, big-box store, Black Swan, Broken windows theory, business cycle, buy and hold, Carmen Reinhart, Claude Shannon: information theory, Climategate, Climatic Research Unit, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, computer age, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, cuban missile crisis, Daniel Kahneman / Amos Tversky, diversification, Donald Trump, Edmond Halley, Edward Lorenz: Chaos theory, en.wikipedia.org, equity premium, Eugene Fama: efficient market hypothesis, everywhere but in the productivity statistics, fear of failure, Fellow of the Royal Society, Freestyle chess, fudge factor, George Akerlof, global pandemic, haute cuisine, Henri Poincaré, high batting average, housing crisis, income per capita, index fund, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, invention of the printing press, invisible hand, Isaac Newton, James Watt: steam engine, John Nash: game theory, John von Neumann, Kenneth Rogoff, knowledge economy, Laplace demon, locking in a profit, Loma Prieta earthquake, market bubble, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, Monroe Doctrine, mortgage debt, Nate Silver, negative equity, new economy, Norbert Wiener, PageRank, pattern recognition, pets.com, Pierre-Simon Laplace, prediction markets, Productivity paradox, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, Saturday Night Live, savings glut, security theater, short selling, Skype, statistical model, Steven Pinker, The Great Moderation, The Market for Lemons, the scientific method, The Signal and the Noise by Nate Silver, The Wisdom of Crowds, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, transfer pricing, University of East Anglia, Watson beat the top human players on Jeopardy!, wikimedia commons

He said accounting for a president’s approval rating (historically a very reliable indicator of his likelihood to be reelected) would not improve his forecasts at all. Nor did the inflation rate or the unemployment rate matter. And the identity of the candidates made no difference: a party may as well nominate a highly ideological senator like George McGovern as a centrist and war hero like Dwight D. Eisenhower. The key instead, Hibbs asserted, was a relatively obscure economic variable called real disposable income per capita. So how did the model do? It forecasted a landslide victory for Al Gore, predicting him to win the election by 9 percentage points. But George W. Bush won instead after the recount in Florida. Gore did win the nationwide popular vote, but the model had implied that the election would be nowhere near close, attributing only about a 1 in 80 chance to such a tight finish.32 There were several other models that took a similar approach, claiming they had boiled down something as complex as a presidential election to a two-variable formula.

., 428 Rasskin-Gutman, Diego, 269 ratings agencies, 463 CDOs misrated by, 20–21, 21, 22, 26–30, 36, 42, 43, 45 housing bubble missed by, 22–23, 24, 25–26, 28–29, 42, 45, 327 models of, 13, 22, 26, 27, 29, 42, 45, 68 profits of, 24–25 see also specific agencies rationality, 183–84 biases as, 197–99, 200 of markets, 356–57 as probabilistic, 242 Reagan, Ronald, 50, 68, 160, 433, 466 RealClimate.org, 390, 409 real disposable income per capita, 67 recessions, 42 double dip, 196 failed predictions of, 177, 187, 194 in Great Moderation, 190 inflation-driven, 191 of 1990, 187, 191 since World War II, 185 of 2000-1, 187, 191 of 2007-9, see Great Recession rec.sport.baseball, 78 Red Cross, 158 Red River of the North, 177–79 regression analysis, 100, 401, 402, 498, 508 regulation, 13, 369 Reinhart, Carmen, 39–40, 43 religion, 13 Industrial Revolution and, 6 religious extremism, 428 religious wars of sixteenth and seventeenth centuries, 2, 6 Remote Sensing Systems, 394 Reno, Nev., 156–57, 157, 477 reserve clause, 471 resolution, as measure of forecasts, 474 results-oriented thinking, 326–28 revising predictions, see Bayesian reasoning Ricciardi, J.


pages: 279 words: 87,910

How Much Is Enough?: Money and the Good Life by Robert Skidelsky, Edward Skidelsky

"Robert Solow", banking crisis, basic income, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, call centre, creative destruction, David Ricardo: comparative advantage, death of newspapers, financial innovation, Francis Fukuyama: the end of history, full employment, happiness index / gross national happiness, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, market clearing, market fundamentalism, Paul Samuelson, profit motive, purchasing power parity, Ralph Waldo Emerson, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tobin tax, union organizing, University of East Anglia, Veblen good, wage slave, wealth creators, World Values Survey, zero-sum game

At the point of “Bliss,” in 2030, growth of income would stop (because everyone would have enough) and necessary work would fall towards zero (because almost everything people needed would be produced by machines). Now let us compare the two predictions with actual outcomes. What has happened to growth in the rich countries plotted against Keynes’s prediction is shown in Chart 2, while what has happened to hours of work in rich countries, plotted against Keynes’s prediction, shown in Chart 3. Growth of real income per capita has been much as Keynes expected. The coincidence is in fact a bit of a fluke. Keynes assumed no major wars and no population growth in the countries covered. In fact there was another world war, and population has grown by about one-third. But he underestimated productivity growth. The two mistakes cancelled each other out, with the result that per capita incomes indeed rose fourfold in the seventy years from 1930, up to Keynes’s lower bound.


Crisis and Dollarization in Ecuador: Stability, Growth, and Social Equity by Paul Ely Beckerman, Andrés Solimano

banking crisis, banks create money, barriers to entry, business cycle, capital controls, Carmen Reinhart, carried interest, central bank independence, centre right, clean water, currency peg, declining real wages, disintermediation, financial intermediation, fixed income, floating exchange rates, Gini coefficient, income inequality, income per capita, labor-force participation, land reform, London Interbank Offered Rate, Mexican peso crisis / tequila crisis, microcredit, money: store of value / unit of account / medium of exchange, offshore financial centre, old-boy network, open economy, pension reform, price stability, rent-seeking, school vouchers, seigniorage, trade liberalization, women in the workforce

In addition, as the economic crisis came with instability, continuous currency depreciation, and high and volatile inflation, there was a reduction in real wages, affecting workers and their families as well as other low-income groups and classes whose incomes grow (if at all) at a slower pace than the exchange rate and average prices. In the case of Ecuador, as documented in chapter 4, unemployment, poverty, and inequality all worsened in this period. From a longer-term perspective, the low (and volatile) rate of GDP growth of the 1980s and 1990s implied almost stagnant income per capita for a long period, with minimal poverty reduction, persistent inequality, and social marginalization of minorities. This social situation worsened further because of the economic crisis of the late 1990s. The social impact of dollarization has to be evaluated against this background. Gender biases, in turn, seem to make crises affect women more adversely (see chapter 5). Dollarization, as we document in this book, has not been costless in Ecuador.


pages: 288 words: 85,073

Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think by Hans Rosling, Ola Rosling, Anna Rosling Rönnlund

animal electricity, clean water, colonial rule, en.wikipedia.org, energy transition, first square of the chessboard, first square of the chessboard / second half of the chessboard, global pandemic, Hans Rosling, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), jimmy wales, linked data, lone genius, microcredit, purchasing power parity, Stanford marshmallow experiment, Steven Pinker, Thomas L Friedman, Walter Mischel

Fact Question 1: Correct answer is C. Sixty percent of the girls in low-income countries finish primary school. According to World Bank[3], the number is 63.2 percent, but we rounded it to 60 percent to avoid overstating progress. See gapm.io/q1. Fact Question 2: Correct answer is B. The majority of people live in middle-income countries. The World Bank[2] divides countries into income groups based on gross national income per capita in current US $. According to the World Bank[4], the low-income countries represent 9 percent of the world population, the middle-income countries, 76 percent of the world population, and the high-income countries, 16 percent of the world population. See gapm.io/q2. Fact Question 3: Correct answer is C. The share of people living on less than $1.9/day fell from 34 percent in 1993 to 10.7 percent in 2013, according to World Bank[5].


The Ages of Globalization by Jeffrey D. Sachs

Admiral Zheng, British Empire, Cape to Cairo, colonial rule, Columbian Exchange, Commentariolus, coronavirus, COVID-19, Covid-19, cuban missile crisis, decarbonisation, demographic transition, Deng Xiaoping, domestication of the camel, Donald Trump, en.wikipedia.org, endogenous growth, European colonialism, global supply chain, greed is good, income per capita, invention of agriculture, invention of gunpowder, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John von Neumann, joint-stock company, Louis Pasteur, low skilled workers, mass immigration, Nikolai Kondratiev, out of africa, packet switching, Pax Mongolica, precision agriculture, profit maximization, profit motive, purchasing power parity, South China Sea, spinning jenny, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, Turing machine, Turing test, urban planning, Watson beat the top human players on Jeopardy!, wikimedia commons

Since 1500, Western Europe had made important advances on many fronts, including military power, global conquests, scale of industry, and multinational production and trade in many sectors, including cotton, sugar, tobacco, and others. By 1820, according to Maddison’s estimates, a significant gap in production per person had already opened between Western Europe and Asia. China, India, and Japan each had incomes per capita of around $600 (in 1990 international dollars) compared with Western Europe’s average of around $1,200 and Britain’s global lead at around $1,700. With the industrialization that followed, that gap widened dramatically in the nineteenth century. Figure 7.3 summarizes the dramatic story by comparing the two most dynamic industrializing nations—the United Kingdom and the United States—with several other world regions.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

"Robert Solow", 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, British Empire, business cycle, business intelligence, business process, call centre, Charles Lindbergh, Chuck Templeton: OpenTable:, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, digital map, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, G4S, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, payday loans, post-work, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

In contrast, as discussed in chapter 7, productivity grew at an average of 1.56 percent per year during this period, accelerating a bit to 1.88 percent per year from 2000 to 2011. Most of the growth in productivity directly translated into comparable growth in average income. The reason why median income growth was so much lower was primarily because of increases in inequality.14 FIGURE 9.1 Real GDP vs. Median Income per Capita The Three Pairs of Winners and Losers In the past couple of decades, we’ve seen changes in tax policy, greater overseas competition, ongoing government waste, and Wall Street shenanigans. But when we look at the data and research, we conclude that none of these are the primary driver of growing inequality. Instead, the main driver is exponential, digital, and combinatorial change in the technology that undergirds our economic system.


pages: 310 words: 91,151

Leaving Microsoft to Change the World: An Entrepreneur's Odyssey to Educate the World's Children by John Wood

airport security, British Empire, call centre, clean water, corporate social responsibility, Deng Xiaoping, Donald Trump, fear of failure, glass ceiling, high net worth, income per capita, Jeff Bezos, Johann Wolfgang von Goethe, Marc Andreessen, microcredit, Own Your Own Home, random walk, rolodex, shareholder value, Silicon Valley, Skype, Steve Ballmer

Dean Chan introduced himself succinctly and got straight to the point. He was a fellow Kellogg graduate who had read an article in our alumni magazine about Room to Read’s progress. He saw serious fund-raising potential in Great Britain and was ready and willing to set up Room to Read as a public charity. Dean laid out the business case. The country had over 60 million people and one of the strongest economies and incomes per capita in the world. The average citizen was well aware of the global condition, partly as a result of the glory days of the British Empire. There was a strong history of citizens donating to causes beyond the borders. I agreed that the British market was tempting, but asked whether it wouldn’t be logistically and bureaucratically complex to set up a charitable entity. Dean replied that he had already contacted the charity commission, studied the application process, and believed it was possible to get set up in less than two months.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Miners in Brazil, Russia, South Africa, Australia, and Canada benefited from higher prices and volumes. Chinese savings and foreign exchange reserves financed developed countries, especially their governments. China exported savings of around US$400 billion each year, helping reduce interest rates in the US by as much as 1 percent per annum. Its role as an exporter of capital was surprising because China was much poorer than the countries it financed. Its average income per capita was well below that of the US and Europe, and the latter possessed around five times more fixed capital, along with greater human capital and intellectual property wealth. The strategy of attracting foreign investment with cheap labor benefited from competition between the emerging nations. Rising costs in Japan, South Korea, Taiwan, Hong Kong, and Singapore led to businesses shifting to China.


pages: 354 words: 92,470

Grave New World: The End of Globalization, the Return of History by Stephen D. King

9 dash line, Admiral Zheng, air freight, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, joint-stock company, Kickstarter, Long Term Capital Management, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, plutocrats, Plutocrats, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, The Rise and Fall of American Growth, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

Behind the Iron Curtain, nations struggled to make any significant economic progress. Czechoslovaks, who had enjoyed considerable economic success in the interwar period, saw their average living standards fall from 37 per cent of those in the US in 1950 to 33 per cent in 1980. Poles, Hungarians and Soviet citizens made modest gains, but in relative terms were left for dust by the more dynamic Western European nations: their incomes per capita were still only between 30 and 35 per cent of those in the US in 1980. Over the same period, the incomes of the eight largest economies in Latin America rose only modestly compared with those in the US: on average up from 28 per cent to a still paltry 32 per cent. Chinese and Indian citizens were impoverished throughout, their average living standards stranded at only around 5 per cent of those in the US.


pages: 351 words: 93,982

Leading From the Emerging Future: From Ego-System to Eco-System Economies by Otto Scharmer, Katrin Kaufer

Affordable Care Act / Obamacare, agricultural Revolution, Albert Einstein, Asian financial crisis, Basel III, Berlin Wall, Branko Milanovic, cloud computing, collaborative consumption, collapse of Lehman Brothers, colonial rule, Community Supported Agriculture, creative destruction, crowdsourcing, dematerialisation, Deng Xiaoping, en.wikipedia.org, European colonialism, Fractional reserve banking, global supply chain, happiness index / gross national happiness, high net worth, housing crisis, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Johann Wolfgang von Goethe, Joseph Schumpeter, Kickstarter, market bubble, mass immigration, Mikhail Gorbachev, Mohammed Bouazizi, mutually assured destruction, Naomi Klein, new economy, offshore financial centre, peak oil, ride hailing / ride sharing, Ronald Reagan, Silicon Valley, smart grid, Steve Jobs, technology bubble, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Washington Consensus, working poor, Zipcar

Before we continue with our journey below the tip of the iceberg, let’s take a moment to look at three interesting data points that tell us something about the current health of our society. The Economic Condition of Society Today Let us first consider the link between GDP and health or well-being. The relationship between GDP and average life expectancy is often used as an indicator of the quality of health in a country. There is in fact a close link between GDP and health up to a level of US$5,000 to US$8,000 annual income per capita (see figure 6). This link weakens significantly as GDP rises above that level. In other words, an increase in material output as measured by GDP in developed countries does not translate into better health or increased life expectancy. If a GDP increase in developed countries does little to increase the well-being of its citizens, what does improve their welfare? Surprisingly, the leverage to increase well-being seems to be connected to reducing the size of one of the above-mentioned issue bubbles: inequality.3 Figure 7 shows that health and social problems are more common in countries with wider income inequalities, such as the United States.


pages: 324 words: 93,606

No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy by Linsey McGoey

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, agricultural Revolution, American Legislative Exchange Council, bitcoin, Bob Geldof, cashless society, clean water, cognitive dissonance, collapse of Lehman Brothers, colonial rule, corporate governance, corporate social responsibility, crony capitalism, effective altruism, Etonian, financial innovation, Food sovereignty, Ford paid five dollars a day, germ theory of disease, hiring and firing, Howard Zinn, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, liquidationism / Banker’s doctrine / the Treasury view, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Mitch Kapor, Mont Pelerin Society, Naomi Klein, obamacare, Peter Singer: altruism, Peter Thiel, plutocrats, Plutocrats, price mechanism, profit motive, Ralph Waldo Emerson, rent-seeking, road to serfdom, Ronald Reagan, school choice, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Slavoj Žižek, Steve Jobs, strikebreaker, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, urban planning, wealth creators

., riding in cramped Tro-Tros – rusted mini-vans that form a makeshift transport system, their insides stripped clean and crammed with benches holding eighteen to twenty passengers at a time. Locals blame the vibrant aid industry for driving up rental costs. Seen for years as one of Sub-Saharan Africa’s golden economic performers, Ghana earned middle-income status in 2011. The World Bank determines a country’s ranking according to a decades-old (many say outdated) classificatory scheme based on gross national income per capita. Boosted by a commodities boom in gold, diamonds, and recently discovered oil deposits, many Ghanaians have grown wealthier in recent years. Inequality has widened dramatically.1 While richer Ghanaians ready themselves for watching the football match, staff from the Ghana Health Service battle a recent outbreak of cholera in the capital. Eighteen people have died in Accra during the first days of April.


pages: 879 words: 233,093

The Empathic Civilization: The Race to Global Consciousness in a World in Crisis by Jeremy Rifkin

agricultural Revolution, Albert Einstein, animal electricity, back-to-the-land, British Empire, carbon footprint, collaborative economy, death of newspapers, delayed gratification, distributed generation, en.wikipedia.org, energy security, feminist movement, global village, hedonic treadmill, hydrogen economy, illegal immigration, income inequality, income per capita, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, Johann Wolfgang von Goethe, Mahatma Gandhi, Marshall McLuhan, means of production, megacity, meta analysis, meta-analysis, Milgram experiment, Nelson Mandela, new economy, New Urbanism, Norbert Wiener, off grid, out of africa, Peace of Westphalia, peak oil, peer-to-peer, planetary scale, scientific worldview, Simon Kuznets, Skype, smart grid, smart meter, social intelligence, supply-chain management, surplus humans, the medium is the message, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, transaction costs, upwardly mobile, uranium enrichment, working poor, World Values Survey

The important point, which the Europeans seem to recognize in their emphasis on the quality of life of the community, is what Layard and other scholars have found in their own studies. Layard writes:From this psychological reality it follows that if money is transferred from a richer person to a poorer person, the poor person gains more happiness than the rich person loses. So average happiness increases. Thus a country will have a higher level of average happiness the more equally its income is distributed—all else being equal.69 The income per capita for Europeans is, on average, 29.3 percent lower than American income, and Europeans have smaller houses, cars, and wardrobes and fewer electronic conveniences.70 Moreover, a greater percentage of their income goes to taxes to pay for an array of “public” services, designed to improve the quality of life of the entire community. Their greater emphasis on the social model, as opposed to the American emphasis on the market model, narrows the gap in wealth.

Huizinga, Johan human behavior human collaboration human consciousness in children six levels of human journey bodily experience and reality bridging the is/ought gap communications and energy and faith versus reason feelings/emotions in history mortality new biosphere phase in truth, freedom, and equality human migration human nature altruism versus self-interest attachment theorists on changing views on embodied approach to Freud on object relations theorists on Romantics on Human Origins (MacCurdy) human race bipedalism of common language of complex system of cosmopolitanization of Human Resource Development Quarterly human resources management humanism Humanist Age humanist psychology Hume, David hurricane intensity hydraulic societies Chinese control of nature in Egyptian entropic decline of Indian Jewish parenting in rise of theology in Sumerian See also Roman Empire hydrogen hydrogen-powered fuel-cell vehicles hydrologic cycle Iacoboni, Marco, Dr. IBM ideal self identity crisis ideological consciousness imagination imaginative identification immortality imprinting income, per capita Index of Economic Well-Being (IEWB) Index of Sustainable Economic Welfare (ISEW) India individuality in late Middle Ages induction scripts Indus Valley Industrial Revolution industrial societies infant Ainsworth on altruism in Bowlby on consciousness in empathic distress in Fairbairn on Freud on IQ development in isolation effects on Klein on Kohut on Levy on mimicry in nature versus nurture and orphans Suttie on Winnicott on Information and Communications Technology (ICT) revolution Information Technology (IT) Inglehart, Ronald InnoCentive Inquiry into the Nature and Causes of the Wealth of Nations (Smith) insula intentionality, sense of interior furniture intermarriage internal combustion engine international law Internet interracial dating/marriage intimacy introspection invulnerability Iowa Child Research Welfare Station Iran Iraq is/ought gap Islamic Society of North America isolated system isolation Italian Renaissance Italy Jacobsen, Thorkild Jains James, William Japanese culture Jefferson, Thomas Jerusalem Jesus Gnostic view of story of Jews Johns Hopkins University Johnson, David W.


pages: 334 words: 98,950

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang

affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

Mohamed Suharto came to power in a military coup in 1966 and ruled until 1998. He is estimated to have stolen at least $15 billion during his 32-year rule. Some suggest the figure may even have been as high as $35 billion.His children became some of the country’s richest business people. If we take the mid-point of these two estimates ($25 billion), Suharto has stolen the equivalent of 5.2 times his country’s national income in 1961 ($4.8 billion). Zaire’s income per capita in purchasing power terms in 1997, when Mobutu was deposed, was one third of its level in 1965, when he came to power. In 1997, the country stood 141st among the 174 countries for which the UN calculated a ‘human development index’ (HDI). The HDI takes into account not only income but also ‘quality of life’ measured by life expectancy and literacy. Considering the corruption statistics, Indonesia should have performed even worse than Zaire.


pages: 471 words: 97,152

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof, Robert J. Shiller

"Robert Solow", affirmative action, Andrei Shleifer, asset-backed security, bank run, banking crisis, business cycle, buy and hold, collateralized debt obligation, conceptual framework, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, experimental subject, financial innovation, full employment, George Akerlof, George Santayana, housing crisis, Hyman Minsky, income per capita, inflation targeting, invisible hand, Isaac Newton, Jane Jacobs, Jean Tirole, job satisfaction, Joseph Schumpeter, Long Term Capital Management, loss aversion, market bubble, market clearing, mental accounting, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, Myron Scholes, new economy, New Urbanism, Paul Samuelson, plutocrats, Plutocrats, price stability, profit maximization, purchasing power parity, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, South Sea Bubble, The Chicago School, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, working-age population, Y2K, Yom Kippur War

While we believe these models to be often useful, they most certainly neglect some important structure that involves psychological variables that we cannot quantify. 27. http://research.stlouisfed.org/fred2/series/OILPRICE. 28. Akerlof’s personal knowledge from working at the Council of Economic Advisers in 1973. 29. Meadows et al. (1972, p. 125). 30. De Long and Summers (1992), in a comparison of countries around the world, showed that those with higher levels of investment, particularly high equipment investment, have higher growth of income per capita. Hsieh and Klenow (2003, p. 1) additionally conclude that “one of the strongest relationships established in the empirical growth literature is the positive correlation between the rate of investment in physical capital and the level of output per worker.” 31. Welch and Byrne (2001, pp. 93, 94, 107, and 171). 32. Truman Bewley (2002), relying on experiments by Daniel Ellsberg showing that people have uncertainty aversion, describes people’s reaction to uncertainty as inertial, that is, they tend to stay with the status quo.


The New Harvest: Agricultural Innovation in Africa by Calestous Juma

agricultural Revolution, Albert Einstein, barriers to entry, bioinformatics, business climate, carbon footprint, clean water, colonial rule, conceptual framework, creative destruction, double helix, energy security, energy transition, global value chain, income per capita, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, knowledge economy, land tenure, M-Pesa, microcredit, mobile money, non-tariff barriers, off grid, out of africa, precision agriculture, Second Machine Age, self-driving car, Silicon Valley, sovereign wealth fund, structural adjustment programs, supply-chain management, total factor productivity, undersea cable

Climate Change, Agriculture, and Economy As Africa prepares to address its agricultural challenges, it is now confronted with new threats arising from climate change. Agricultural innovation will now have to be done in the context of a more uncertain world in which activities such as plant and animal breeding will need to be anticipatory.1 According to the World Bank, warming “of 2°C could result in a 4 to 5% permanent reduction in annual income per capita in Africa and South Asia, as opposed to minimal losses in high-income countries and a global average GDP loss of about 1%. These 254 THE NEW HARVEST losses would be driven by impacts in agriculture, a sector important to the economies of both Africa and South Asia.”2 SubSaharan Africa is dominated by fragile ecosystems. Nearly 75% of its surface area is dry land or desert. This makes the continent highly vulnerable to droughts and floods.


pages: 363 words: 98,024

Keeping at It: The Quest for Sound Money and Good Government by Paul Volcker, Christine Harper

anti-communist, Ayatollah Khomeini, banking crisis, Bretton Woods, business cycle, central bank independence, corporate governance, Credit Default Swap, Donald Trump, fiat currency, financial innovation, fixed income, floating exchange rates, forensic accounting, full employment, global reserve currency, income per capita, inflation targeting, liquidationism / Banker’s doctrine / the Treasury view, margin call, money market fund, Nixon shock, Paul Samuelson, price stability, quantitative easing, reserve currency, Right to Buy, risk-adjusted returns, Ronald Reagan, Rosa Parks, secular stagnation, Sharpe ratio, Silicon Valley, special drawing rights, too big to fail, traveling salesman, urban planning

Not a financial center like New York or a technology hub like Silicon Valley, Washington money is directed toward shaping public policy and laws to benefit specific interests. And it shows in the escalating demand for office space, luxury hotels, high-priced apartments and restaurants to serve a multiplying force of lawyers and lobbyists. Washington’s surrounding counties reportedly are now at the top in their residents’ average income per capita. I don’t know how many senators and congressmen are counted among those residents these days, or what their incomes may be. I do know they spend inordinate amounts of time “dialing for dollars” to finance costly campaigns and less time in Washington socializing with colleagues, seeking areas for compromise and consensus. We face a huge challenge in this country to restore a sense of public purpose and of trust in government.


pages: 359 words: 97,415

Vanishing Frontiers: The Forces Driving Mexico and the United States Together by Andrew Selee

Berlin Wall, call centre, Capital in the Twenty-First Century by Thomas Piketty, Donald Trump, energy security, Gini coefficient, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, informal economy, job automation, low skilled workers, manufacturing employment, oil shale / tar sands, open economy, payday loans, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Silicon Valley startup, Steve Wozniak, Y Combinator

In a country where average wages are a quarter of those in the United States, it actually costs around five times more to register a small business. As a result, most small businesses simply stay under the radar, avoiding taxes and labor laws but also unable to apply for loans or government contracts that would allow them to expand. Despite these limitations, overall Mexicans are more prosperous today than at any time in the country’s history. On average gross national income per capita—people’s average share of the country’s wealth—grew around a third in real terms over twenty years and is closer today to that of Russia, Romania, and Bulgaria than to other developing countries. And today average educational attainment is around nine years, up from an average of six years only two decades ago, and almost three times as many students attend college. Over the same period life expectancy has also risen from seventy-three to seventy-seven, only two years less than in the United States, as health care has improved.


pages: 347 words: 99,317

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity by Ha-Joon Chang

affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, business cycle, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, Nelson Mandela, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

Mohamed Suharto came to power in a military coup in 1966 and ruled until 1998. He is estimated to have stolen at least $15 billion during his 32-year rule. Some suggest the figure may even have been as high as $35 billion. His children became some of the country’s richest business people. If we take the mid-point of these two estimates ($25 billion), Suharto has stolen the equivalent of 5.2 times his country’s national income in 1961 ($4.8 billion). Zaire’s income per capita in purchasing power terms in 1997, when Mobutu was deposed, was one third of its level in 1965, when he came to power. In 1997, the country stood 141st among the 174 countries for which the UN calculated a ‘human development index’ (HDI). The HDI takes into account not only income but also ‘quality of life’ measured by life expectancy and literacy. Considering the corruption statistics, Indonesia should have performed even worse than Zaire.


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

"Robert Solow", accounting loophole / creative accounting, Albert Einstein, Alvin Roth, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, corporate raider, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, information asymmetry, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, Kenneth Arrow, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, ought to be enough for anybody, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

Since the full range of market-supporting institutions were in place at the outset, most prices were free, and most of the economy was privately owned, New Zealand provides a favorable test case for shock therapy. The impetus for reform was chronically low growth together with unsustainable budgetary imbalances. From 1950 to 1980, New Zealand slipped from having the world’s third-highest income per capita to twenty-second. The reforms were needed, therefore, and most observers agree that moving rapidly was justified in the circumstances. But the reforms were slow to show a return, and they brought severe social costs. In the 1960s and 1970s, the government’s knee-jerk response to any external shock was to impose controls on imports, prices, wages, profits, and interest rates. Restraints on markets abounded.


pages: 463 words: 105,197

Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Eric Posner, E. Weyl

3D printing, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, anti-communist, augmented reality, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, business process, buy and hold, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collective bargaining, commoditize, Corn Laws, corporate governance, crowdsourcing, cryptocurrency, Donald Trump, Elon Musk, endowment effect, Erik Brynjolfsson, Ethereum, feminist movement, financial deregulation, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, guest worker program, hydraulic fracturing, Hyperloop, illegal immigration, immigration reform, income inequality, income per capita, index fund, informal economy, information asymmetry, invisible hand, Jane Jacobs, Jaron Lanier, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, labor-force participation, laissez-faire capitalism, Landlord’s Game, liberal capitalism, low skilled workers, Lyft, market bubble, market design, market friction, market fundamentalism, mass immigration, negative equity, Network effects, obamacare, offshore financial centre, open borders, Pareto efficiency, passive investing, patent troll, Paul Samuelson, performance metric, plutocrats, Plutocrats, pre–internet, random walk, randomized controlled trial, Ray Kurzweil, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Rory Sutherland, Second Machine Age, second-price auction, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, special economic zone, spectrum auction, speech recognition, statistical model, stem cell, telepresence, Thales and the olive presses, Thales of Miletus, The Death and Life of Great American Cities, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, urban planning, Vanguard fund, women in the workforce, Zipcar

To take an extreme but illuminating example, imagine that the countries of the Organisation for Economic Co-operation and Development (OECD), the club of wealthy countries, were to accept enough migrants to double their population, presently at 1.3 billion. This would move roughly 20% of the global population to the OECD. Suppose too that each migrant on average created income gains of $11,000. This would constitute an increase on average of roughly $2,200 for every person on the planet. Given that global income per capita is approximately $11,000, this is roughly a 20% increase in global income. If historical experience is any guide, gains to those who stay in poor countries would be equally dramatic, as most migrants remit a large fraction of their income to the countries they came from.18 In sharp contrast to trade, these gains have transformative potential for global well-being, if they can be harnessed and shared.19 Why Not Just Expand Existing Migration?


The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities by Mancur Olson

"Robert Solow", barriers to entry, British Empire, business cycle, California gold rush, collective bargaining, correlation coefficient, David Ricardo: comparative advantage, full employment, income per capita, Kenneth Arrow, market clearing, Norman Macrae, Pareto efficiency, price discrimination, profit maximization, rent-seeking, Sam Peltzman, selection bias, Simon Kuznets, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, urban decay, working poor

These controls are frequently used to keep out practitioners from other states. The nations of Western Europe also vary greatly in the proportion of migrants and guest workers they have admitted. Many other factors are involved, but the initial impression is that countries with weaker labor unions have accepted relatively larger inflows of labor. The law of diminishing returns suggests that the growth of income per capita or per worker would be reduced when an already densely populated country imports more labor. However, as Charles Kindleberger has argued," the developed industrial economies in which per capita income has grown most rapidly are often those which have absorbed the most new labor. Kindleberger explains this in terms of Arthur Lewis's famous model of growth with "unlimited supplies of labor," and this hypothesis deserves careful study.


pages: 319 words: 106,772

Irrational Exuberance: With a New Preface by the Author by Robert J. Shiller

Andrei Shleifer, asset allocation, banking crisis, Benoit Mandelbrot, business cycle, buy and hold, computer age, correlation does not imply causation, Daniel Kahneman / Amos Tversky, demographic transition, diversification, diversified portfolio, equity premium, Everybody Ought to Be Rich, experimental subject, hindsight bias, income per capita, index fund, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, Long Term Capital Management, loss aversion, mandelbrot fractal, market bubble, market design, market fundamentalism, Mexican peso crisis / tequila crisis, Milgram experiment, money market fund, moral hazard, new economy, open economy, pattern recognition, Ponzi scheme, price anchoring, random walk, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Small Order Execution System, spice trade, statistical model, stocks for the long run, survivorship bias, the market place, Tobin tax, transaction costs, tulip mania, urban decay, Y2K

., 224 Movies, 104 Mutation rate, 160 Mutual funds, 19, 43, 54, 240n27, 263n14; growth of, 35–36; learning about, 197–200 NAIC (National Association of Investors Corporation), 58 Narrative-based thinking. See Stories NASDAQ, 19, 39 National Association of Investors Corporation (NAIC), 58 National Broadcasting Company, 104 National crises, 76–77 National Gambling Impact Study Commission, 41 National income, per capita, 219, 222 National Network of Grantmakers, 216 Nazism, 116, 149 Negative bubbles, 62, 244n21; crash of 1929 and, 88; crash of 1987 and, 90–91; media and, 88, 90; in Philippines, 124 Nelson, William, 238n9 Netter, Jeffrey M., 248n21 New era economic thinking, xvi, 14, 96–117, 118, 209, 224, 248–50n1–38; bull market of 1920s and, 103–7; bull market of 1950s/1960s and, 107–11; bull market of 1990s and, 111–14; ends of, 114–17, 128–30; financial crises and, 128–30; in 291 France, 128; peak of 1901 and, 99– 103; in Peru, 126; in Philippines, 123; stock market creation of, 99; in Taiwan, 124 New Levels in the Stock Market (Dice), 105–6 Newsweek, 108, 109, 111 New York Daily Tribune, 101 New York Herald Tribune, 193 New York Stock Exchange, 22, 33, 35, 39, 40, 59, 225, 226, 266n21 New York Times, 75–76, 83, 84, 85, 86, 87, 107 Niederhoffer, Victor, 75–76, 78 Nifty Fifty, 177, 178, 258n7 Nikkei index, 3, 48, 80–81, 228, 265n17 9 Steps to Financial Freedom, The (Orman), 51 Nisbett, Robert, 257n19 No Fear of the Next Crash (Niquet), 51 Noguchi, Yukio, 265n17 Nominal interest rates, 37 Nonconsequentialist reasoning, 146 No-Ponzi condition, 245n30 Nordhaus, William, 264n5 North American Free Trade Agreement, 129 Northern Securities Company, 102 Obstfeld, Maurice, 182 Odean, Terrance, 59 Oil prices, 125–26 Okun, Arthur, 116 Online trading, 39–40, 59, 206 Only Yesterday (Allen), 47, 103 Optimism: of analysts’ forecasts, 30–32, 239n18, 241n40; bull market of 1920s and, 103–7; bull market of 1990s and, 113; peak of 1901 and, 99–103; turn-of-century, 9, 99–101, 205–6 Organization for Economic Cooperation and Development, 129 292 Organized crime, 42 Orman, Suze, 51 Overconfidence, 142–46, 151, 242n3, 255n19.


pages: 430 words: 109,064

13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson, James Kwak

American ideology, Andrei Shleifer, Asian financial crisis, asset-backed security, bank run, banking crisis, Bernie Madoff, Bonfire of the Vanities, bonus culture, break the buck, business cycle, buy and hold, capital controls, Carmen Reinhart, central bank independence, Charles Lindbergh, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, Edward Glaeser, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, financial intermediation, financial repression, fixed income, George Akerlof, Gordon Gekko, greed is good, Home mortgage interest deduction, Hyman Minsky, income per capita, information asymmetry, interest rate derivative, interest rate swap, Kenneth Rogoff, laissez-faire capitalism, late fees, light touch regulation, Long Term Capital Management, market bubble, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage tax deduction, Myron Scholes, Paul Samuelson, Ponzi scheme, price stability, profit maximization, race to the bottom, regulatory arbitrage, rent-seeking, Robert Bork, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, Satyajit Das, sovereign wealth fund, The Myth of the Rational Market, too big to fail, transaction costs, value at risk, yield curve

As in many other low-income countries in the past half-century, economic development was dominated by a small economic elite defined by their personal ties to the ruling family, which traded favors for both political support and cold, hard cash—a pattern known as “crony capitalism.”26 For example, Indofood became one of the largest conglomerates in the country, largely because of a longtime personal friendship between its founder, Liem Sioe Liong, and Suharto.27 Suharto’s wife, Siti Hartinah Suharto, known as Madame Tien, was involved in so many business deals that she was referred to by critics as “Madame Tien Percent” for her alleged fees.28 Suharto’s children also cut themselves into many major deals; his daughter was involved in the largest taxi company, one son tried to build cars, and another son was a financial entrepreneur.29 For a long time, the system worked reasonably well. Annual income per capita grew from $1,235 in 1970, just after Suharto came to power, to just over $4,545 by 1997.30 Indonesia was still a poor country with pervasive poverty, but thirty years of economic growth had created higher standards of living for millions of people. The country was regarded as a development success story by the World Bank and by foreign investors, who supplied much of the capital needed to build factories, roads, and apartment buildings.


pages: 274 words: 93,758

Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof, Robert J. Shiller, Stanley B Resor Professor Of Economics Robert J Shiller

"Robert Solow", Andrei Shleifer, asset-backed security, Bernie Madoff, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collapse of Lehman Brothers, corporate raider, Credit Default Swap, Daniel Kahneman / Amos Tversky, dark matter, David Brooks, desegregation, en.wikipedia.org, endowment effect, equity premium, financial intermediation, financial thriller, fixed income, full employment, George Akerlof, greed is good, income per capita, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, late fees, loss aversion, market bubble, Menlo Park, mental accounting, Milgram experiment, money market fund, moral hazard, new economy, Pareto efficiency, Paul Samuelson, payday loans, Ponzi scheme, profit motive, publication bias, Ralph Nader, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, short selling, Silicon Valley, the new new thing, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, too big to fail, transaction costs, Unsafe at Any Speed, Upton Sinclair, Vanguard fund, Vilfredo Pareto, wage slave

Indeed, that is exactly what John Maynard Keynes, one of the most astute economists of all time, thought would be the case when he looked forward from 1930. In an essay, which was little noticed when published, Keynes projected what life would be like “for our grandchildren,” in 2030: one hundred years thence.12 In one respect he almost hit a bull’s-eye. He “supposed” that the standard of living would be eight times higher. For the United States, as of 2010, real income per capita was 5.6 times higher.13 With another twenty years to go on Keynes’s stopwatch, and with annual growth in per capita income at its historic average between 1.5 percent and 2 percent, his supposition will be remarkably close to target. But in another respect, Keynes was totally off the mark. As you might expect, Keynes did not say that the grandchildren would be going to bed worried about their next pound or their next shilling.


Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

"Robert Solow", affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, high net worth, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, Plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Silicon Valley, single-payer health, special economic zone, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

Such a war, if it did not lead to the extinction of humankind, would not negate all of the technological advancements that have been made during the past several hundred years. The reason is that globalization has spread the knowledge of technology far and wide. Even if North America, Europe, and Russia were more or less obliterated and made uninhabitable (with resulting drastic decreases in income per capita and probably massive emigration of the surviving population to Latin America, Africa, and Asia), technological knowledge—from the production of cars and computers to genetically modified food—would not be lost. The relative powers of different states would be fundamentally altered (as after the two world wars of the twentieth century), but, although technological progress would suffer a huge setback, it would not be halted.


pages: 419 words: 109,241

A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, blue-collar work, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, financial innovation, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Khan Academy, Kickstarter, low skilled workers, lump of labour, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Network effects, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

In Europe, for example, a survey found “both rising support for redistribution for ‘natives’ and sharp opposition to migration and automatic access to benefits for new arrivals.”45 In the Age of Labor, there has been a persuasive economic response to this instinct to exclude others: through their work, immigrants make the country’s economic pie bigger. As a result, letting in more people does not necessarily leave existing citizens with a smaller slice; on the contrary, there is often more income per capita to share out. But in a world with less work, that response will be far less compelling. There will be fewer opportunities for newcomers to contribute through their jobs, and a greater chance that they will depend on the efforts of others for their income. In that world, it is more likely that adding new members to a community will in fact lead to existing members having smaller slices of the pie.


pages: 374 words: 111,284

The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"Robert Solow", 3D printing, agricultural Revolution, AI winter, Albert Einstein, anti-work, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, computer age, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deindustrialization, deskilling, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, financial intermediation, full employment, future of work, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Paul Samuelson, Peter Thiel, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, Y2K, Yogi Berra

Investment in these things has become more rewarding and, if the enthusiasts are right, will become still more rewarding. (Economists will refer to this as an increase in the marginal efficiency of capital.) Once you look at things in this way, traditional economic analysis can be brought to bear. There are several clear implications. The increase in the return on capital should lead to: • An increase in investment.4 • Upward pressure on real interest rates. • An increase in real output and income per capita. • A possible increase in average real wages. This last result is possible because, since more capital has been added, the amount of capital per worker will have risen. Yet whether this leads to an increase in average real wages will depend, just as with any other capital investment, on the extent to which, at the macro level, the new capital substitutes for labor as opposed to complementing it.


pages: 474 words: 120,801

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be by Moises Naim

additive manufacturing, barriers to entry, Berlin Wall, bilateral investment treaty, business cycle, business process, business process outsourcing, call centre, citizen journalism, Clayton Christensen, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, conceptual framework, corporate governance, creative destruction, crony capitalism, deskilling, disintermediation, disruptive innovation, don't be evil, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, illegal immigration, immigration reform, income inequality, income per capita, intangible asset, intermodal, invisible hand, job-hopping, Joseph Schumpeter, Julian Assange, Kickstarter, liberation theology, Martin Wolf, mega-rich, megacity, Naomi Klein, Nate Silver, new economy, Northern Rock, Occupy movement, open borders, open economy, Peace of Westphalia, plutocrats, Plutocrats, price mechanism, price stability, private military company, profit maximization, Ronald Coase, Ronald Reagan, Silicon Valley, Skype, Steve Jobs, The Nature of the Firm, Thomas Malthus, too big to fail, trade route, transaction costs, Washington Consensus, WikiLeaks, World Values Survey, zero-sum game

THE MORE REVOLUTION: OVERWHELMING THE MEANS OF CONTROL Ours is an age of profusion. There is simply more of everything now. There are more people, countries, cities, political parties, armies; more goods and services, and more companies selling them; more weapons and more medicines; more students and more computers; more preachers and more criminals. The world’s economic output has increased fivefold since 1950. Income per capita is three and a half times greater than it was then. Most importantly, there are more people—2 billion more than there were just two decades ago. By 2050, the world’s population will be four times larger than it was in 1950. Comprehending the size of this population as well as its age structure, geographical distribution, longevity, health, and aspirations is critical for understanding what has happened to power.


pages: 395 words: 116,675

The Evolution of Everything: How New Ideas Emerge by Matt Ridley

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, Albert Einstein, Alfred Russel Wallace, AltaVista, altcoin, anthropic principle, anti-communist, bank run, banking crisis, barriers to entry, bitcoin, blockchain, Boris Johnson, British Empire, Broken windows theory, Columbian Exchange, computer age, Corn Laws, cosmological constant, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, cryptocurrency, David Ricardo: comparative advantage, demographic transition, Deng Xiaoping, discovery of DNA, Donald Davies, double helix, Downton Abbey, Edward Glaeser, Edward Lorenz: Chaos theory, Edward Snowden, endogenous growth, epigenetics, Ethereum, ethereum blockchain, facts on the ground, falling living standards, Ferguson, Missouri, financial deregulation, financial innovation, Frederick Winslow Taylor, Geoffrey West, Santa Fe Institute, George Gilder, George Santayana, Gunnar Myrdal, Henri Poincaré, hydraulic fracturing, imperial preference, income per capita, indoor plumbing, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, Khan Academy, knowledge economy, land reform, Lao Tzu, long peace, Lyft, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, meta analysis, meta-analysis, mobile money, money: store of value / unit of account / medium of exchange, Mont Pelerin Society, moral hazard, Necker cube, obamacare, out of africa, packet switching, peer-to-peer, phenotype, Pierre-Simon Laplace, price mechanism, profit motive, RAND corporation, random walk, Ray Kurzweil, rent-seeking, reserve currency, Richard Feynman, rising living standards, road to serfdom, Ronald Coase, Ronald Reagan, Satoshi Nakamoto, Second Machine Age, sharing economy, smart contracts, South Sea Bubble, Steve Jobs, Steven Pinker, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, twin studies, uber lyft, women in the workforce

A series of papers by the Princeton economist Dani Rodrik and his colleagues tried to shed light on the impact of policy decisions on economic growth, but found that ‘most instances of economic reform do not produce growth accelerations’, and ‘most growth accelerations are not preceded or accompanied by major changes in economic policies, institutional arrangements, political circumstances, or external conditions’. The economist William Easterly points out that the evidence for a change of leadership being the cause of a growth miracle anywhere in the developing world is wholly lacking: the timing simply does not match. The effect of leaders on growth rates, he says, is close to zero, a conclusion that is ‘almost too shocking to be believed’. South Korea and Ghana had the same income per capita in the 1950s. One received far more aid, advice and political intervention than the other. It is now by far the poorer of the two. In general, Asian economies grew their way out of poverty in the late twentieth century, while African economies failed to be aided out of poverty. Trade, not aid, proved the best way to achieve an increase in prosperity. And just when experts were beginning to despair of Africa ever achieving economic development, and sometimes even to reach for racial or institutional explanations of why this should be, Africa suddenly began to experience its own development miracle, which continues to this day: the GDP of many African countries has doubled in a decade.


Poisoned Wells: The Dirty Politics of African Oil by Nicholas Shaxson

Asian financial crisis, Berlin Wall, blood diamonds, business climate, clean water, colonial rule, energy security, Exxon Valdez, failed state, Fall of the Berlin Wall, Hernando de Soto, income per capita, inflation targeting, Kickstarter, Martin Wolf, mobile money, Nelson Mandela, offshore financial centre, old-boy network, Ronald Reagan, Scramble for Africa, Yom Kippur War, zero-sum game

In the countryside, away from foreign eyes, Plácido reckons things are as bad as ever. As Equatorial Guinea’s per capita income rose from $368 per capita in 1990 to over $2,000 in 2000, the country slipped ten places down the United Nations’ Human Development ranking. It now has the dubious distinction of being the country with the greatest negative difference—93 places—between its ranking in terms of human welfare and its income per capita. Agriculture and manufacturing have fallen to less than two percent of GDP between them, while oil claims 93 percent.85 The share of health and education spending has shrunk. 142 Obiang Nguema Obiang said in 2003 that there is no poverty, only “shortages.”86 Yet the IMF in 2005 was gloomier. “Unfortunately,” it said, “the country’s oil and gas wealth has not yet let to a measurable improvement in living conditions for the majority.”87 Now, despite all the scandals, powerful Americans line up to praise Obiang.


pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

accounting loophole / creative accounting, Ada Lovelace, Airbnb, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, Ben Bernanke: helicopter money, bitcoin, blockchain, Bretton Woods, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, David Graeber, deskilling, Diane Coyle, discrete time, disruptive innovation, distributed ledger, diversification, double entry bookkeeping, Ethereum, ethereum blockchain, fiat currency, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, large denomination, liquidity trap, London Whale, low skilled workers, M-Pesa, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, Satoshi Nakamoto, Satyajit Das, savings glut, seigniorage, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Von Neumann architecture, Washington Consensus

Owing to this mechanism, change in a certain variable can result in either the augmentation (positive feedback) or a reduction (negative feedback) of that change. When this change repeats itself, a loop is said to emerge. A feedback loop means that the loop’s behaviour is self-reinforcing: it will run on and on until something intervenes. An example of a positive feedback loop could be between income and consumption. The bigger the income per capita in an economy, the more people consume. This will produce a further increase in their per capita income, and so on. On the other hand, inequality also happens to be a kind of feedback loop found in self-organizing systems (DiMaggio and Cohen, 2003). The interaction between the two feedbacks is an example of a self-perpetuating process seen in complex systems. A feedback loop is also the reason behind selforganisation.


pages: 504 words: 126,835

The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

In the United States alone, annual subsidies to firms amount to more than $70 billion.10 And taxpayer handouts are not the most profitable privilege or rent that a firm can get from the political system. That prize goes to regulation, leading to a far greater redistribution of money between firms, and from consumers to firms. Brussels and Washington DC, the two lobbying capitals of the West, have in recent years seen the fastest growth in income per capita in their respective countries and regions. This is not surprising. If regulation has become ever more important for business activity, lobbyists will be greatly rewarded for their work. Regulation and political romanticism Uber’s experience tells us a lot about regulation and innovation, and how political perceptions of innovation have lost touch with the reality. “Is Uber a threat to democracy?”


pages: 432 words: 124,635

Happy City: Transforming Our Lives Through Urban Design by Charles Montgomery

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, American Society of Civil Engineers: Report Card, Bernie Madoff, British Empire, Buckminster Fuller, car-free, carbon footprint, centre right, City Beautiful movement, clean water, congestion charging, correlation does not imply causation, East Village, edge city, energy security, Enrique Peñalosa, experimental subject, Frank Gehry, Google Earth, happiness index / gross national happiness, hedonic treadmill, Home mortgage interest deduction, housing crisis, income inequality, income per capita, Induced demand, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, license plate recognition, McMansion, means of production, megacity, Menlo Park, meta analysis, meta-analysis, mortgage tax deduction, New Urbanism, Panopticon Jeremy Bentham, peak oil, Ponzi scheme, rent control, ride hailing / ride sharing, risk tolerance, science of happiness, Seaside, Florida, Silicon Valley, starchitect, the built environment, The Death and Life of Great American Cities, the High Line, The Spirit Level, The Wealth of Nations by Adam Smith, trade route, transit-oriented development, upwardly mobile, urban planning, urban sprawl, wage slave, white flight, World Values Survey, zero-sum game, Zipcar

When Peñalosa ran for the mayor’s seat back in 1997, he refused to make the promises doled out by so many politicians. He was not going to make everyone richer. Forget the dream of becoming as wealthy as Americans: it would take generations to catch up to the gringos, even if the urban economy caught fire and burned blue for a century. The dream of riches, Peñalosa complained, served only to make Bogotans feel bad. “If we defined our success just in terms of income per capita, we would have to accept ourselves as second- or third-rate societies—as a bunch of losers,” he said. No, the city needed a new goal. Peñalosa promised neither a car in every garage nor a socialist revolution. His promise was simple. He was going to make Bogotans happier. “And what are our needs for happiness?” he asked. “We need to walk, just as birds need to fly. We need to be around other people.


pages: 413 words: 128,093

On the Grand Trunk Road: A Journey Into South Asia by Steve Coll

affirmative action, airport security, anti-communist, Ayatollah Khomeini, back-to-the-land, Berlin Wall, British Empire, colonial rule, Fall of the Berlin Wall, full employment, global village, income inequality, income per capita, Indoor air pollution, Khyber Pass, land reform, Mahatma Gandhi, market bubble, mass immigration, Mikhail Gorbachev, New Urbanism, Ponzi scheme, Ronald Reagan, upwardly mobile, urban sprawl, yellow journalism

Gul, Hamid Gunaratna, Rohan Gupta, Shekhar Gurfali, India Gurkhaland Gyanwapi (‘Well of Knowledge’) Mosque (Varanasi) Hapur, India Haq, Abdul Hassan, Mashoud Hassan, Mubashir Hathnuada, Randu Haveláclav health care Hekmatyar, Gulbuddin Heston, Alan Hinduism; caste system ; in Nepal; temples, Muslim destruction of Hindu Kush mountains Hindu-Muslim conflict; Ayodhya mosque destruction ; economic causes of ; in England; Gyanwapi Mosque dispute; in Kashmir; kidnappings ; religious riots Hindu revivalists; destruction of Muslim mosques ; and modem technology; nationalism ; and Nehruvian state; political parties Hindus: converts to Islam; political control in India ; violence against Sikhs Hizbollah (Party of God) Hizbul Mujaheddin Hong Kong hospitals human rights Hussain, Abida Hussein, Saddam Hyderabad, India Ignatius, David Imam, Imran imperialism income, per capita (South Asia) India; affirmative action programs ; capitalism in ; caste system in ; cold war and ; conspiracy theories in; corruption in government ; death squads ; democracy in. ; economic growth; and economic reform ; economy ; education in; elections ; employment in ; foreign debt; Hindu political control in; hostility to Pakistan; independence; Kashmir counterinsurgency campaign ; Kashmir rebellion against ; middle class in ; nationalism ; Nehruvian state in ; political violence in ; poverty in; public-sector employment ; public-sector enterprises; India (cont.)


pages: 497 words: 143,175

Pivotal Decade: How the United States Traded Factories for Finance in the Seventies by Judith Stein

"Robert Solow", 1960s counterculture, activist lawyer, affirmative action, airline deregulation, anti-communist, Ayatollah Khomeini, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business cycle, capital controls, centre right, collective bargaining, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, desegregation, energy security, Fall of the Berlin Wall, falling living standards, feminist movement, financial deregulation, floating exchange rates, full employment, Gunnar Myrdal, income inequality, income per capita, intermodal, invisible hand, knowledge worker, laissez-faire capitalism, liberal capitalism, Long Term Capital Management, manufacturing employment, market bubble, Martin Wolf, new economy, oil shale / tar sands, oil shock, open economy, Paul Samuelson, payday loans, post-industrial society, post-oil, price mechanism, price stability, Ralph Nader, RAND corporation, reserve currency, Robert Gordon, Ronald Reagan, Simon Kuznets, strikebreaker, trade liberalization, union organizing, urban planning, urban renewal, War on Poverty, Washington Consensus, working poor, Yom Kippur War

The problem was that feed prices continued to rise, but processors, wholesalers, and retailers had to keep their prices down. With echoes from the 1930s, processors drowned baby chicks and farmers slaughtered calves—drastic measures that processors claimed were less expensive than raising the animals to sell at low prices.21 By August even Nixon had enough and unfroze prices, producing another price explosion. Farmers made out very well. In 1973, for the first time since such statistics were recorded, on-farm income per capita in the United States was higher than off-farm income.22 But food inflation was the inevitable result. High food prices were important in their own right, but they heated up distributional struggles between business and labor because food is an important component of working class spending. Union negotiators attempted to meet the higher food costs with higher wages for their members. This effort was one of the reasons why 1973 yielded the highest strike level since 1959.23 Mounting food prices returned the consumer to the forefront of American politics in 1973, and the government acted.


pages: 422 words: 131,666

Life Inc.: How the World Became a Corporation and How to Take It Back by Douglas Rushkoff

addicted to oil, affirmative action, Amazon Mechanical Turk, anti-globalists, banks create money, big-box store, Bretton Woods, car-free, Charles Lindbergh, colonial exploitation, Community Supported Agriculture, complexity theory, computer age, corporate governance, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, death of newspapers, don't be evil, Donald Trump, double entry bookkeeping, easy for humans, difficult for computers, financial innovation, Firefox, full employment, global village, Google Earth, greed is good, Howard Rheingold, income per capita, invention of the printing press, invisible hand, Jane Jacobs, John Nash: game theory, joint-stock company, Kevin Kelly, Kickstarter, laissez-faire capitalism, loss aversion, market bubble, market design, Marshall McLuhan, Milgram experiment, moral hazard, mutually assured destruction, Naomi Klein, negative equity, new economy, New Urbanism, Norbert Wiener, peak oil, peer-to-peer, place-making, placebo effect, Ponzi scheme, price mechanism, price stability, principal–agent problem, private military company, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, RFID, road to serfdom, Ronald Reagan, short selling, Silicon Valley, Simon Kuznets, social software, Steve Jobs, Telecommunications Act of 1996, telemarketer, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, trade route, trickle-down economics, union organizing, urban decay, urban planning, urban renewal, Vannevar Bush, Victor Gruen, white flight, working poor, Works Progress Administration, Y2K, young professional, zero-sum game

Or perhaps the wealthy obsess over what they hope is an entirely dog-eat-dog reality because their participation in the culture of money hasn’t ended up making them any happier. According to a study conducted at the height of the market, 23 percent of brokers and traders at the seven largest firms on Wall Street suffered from depression—more than three times the national average. Scientists and United Nations sociologists alike have concluded that affluence produces rapidly diminishing returns on happiness. After achieving an income per capita of about $15,000, any increase in wealth makes little difference to a nation’s total happiness metrics. Among the six articles I found from Forbes in 2006 fiercely criticizing this “swath of studies” as well as the whole notion of “happiness research,” none mentioned any of them specifically, or their findings. The libertarian think tank the Cato Institute similarly criticized these studies along with any attempt to measure subjective well-being—but concluded that even if they were true and money didn’t make people happier, this would only support the libertarian position that wealth redistribution by government was unnecessary.


pages: 469 words: 146,487

Empire: How Britain Made the Modern World by Niall Ferguson

British Empire, Cape to Cairo, colonial rule, Corn Laws, European colonialism, imperial preference, income per capita, John Harrison: Longitude, joint-stock company, Khartoum Gordon, Khyber Pass, land reform, land tenure, liberal capitalism, Livingstone, I presume, Mahatma Gandhi, mass immigration, night-watchman state, Panopticon Jeremy Bentham, profit motive, Scramble for Africa, spice trade, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the new new thing, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transatlantic slave trade, undersea cable, union organizing, zero-sum game

Ernest grew tanned and broad-shouldered working the prairie soil; shaved off his moustache; became handsome where once he had been hangdog. The chicken shack was supplanted by a clapboard farmhouse. Gradually, their sense of isolation diminished as more Scots settled in the area. It was reassuring to be able to celebrate Hogmanay with fellow countrymen so far from home, since ‘they don’t hold New Year out here very much just the Scotch folk’. Today their ten grandchildren live all over Canada, a country whose annual income per capita is not merely 10 per cent higher than Britain’s but second only to that of the United States. All thanks to the British Empire. So to say that I grew up in the Empire’s shadow would be to conjure up too tenebrous an image. To the Scots, the Empire stood for bright sunlight. Little may have been left of it on the map by the 1970s, but my family was so completely imbued with the imperial ethos that its importance went unquestioned.


pages: 447 words: 141,811

Sapiens: A Brief History of Humankind by Yuval Noah Harari

Admiral Zheng, agricultural Revolution, Albert Einstein, Alfred Russel Wallace, Atahualpa, British Empire, cognitive dissonance, correlation does not imply causation, credit crunch, David Graeber, Edmond Halley, European colonialism, Francisco Pizarro, glass ceiling, global village, greed is good, income per capita, invention of gunpowder, Isaac Newton, joint-stock company, joint-stock limited liability company, Kickstarter, liberal capitalism, life extension, Mahatma Gandhi, megacity, Mikhail Gorbachev, out of africa, personalized medicine, Ponzi scheme, Silicon Valley, South China Sea, stem cell, Steven Pinker, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, urban planning, zero-sum game

Spiers, The Army and Society: 1819–1914 (London: Longman, 1980), 121; Robin Moore, ‘Imperial India, 1858–1914’, in The Oxford History of the British Empire: The Nineteenth Century, vol. 3, ed. Andrew Porter (New York: Oxford University Press, 1999), 442. 10 Vinita Damodaran, ‘Famine in Bengal: A Comparison of the 1770 Famine in Bengal and the 1897 Famine in Chotanagpur’, The Medieval History Journal 10:1–2 (2007), 151. 16 The Capitalist Creed 1 Maddison, World Economy, vol. 1, 261, 264; ‘Gross National Income Per Capita 2009, Atlas Method and PPP’, the World Bank, accessed 10 December 2010, http://siteresources.worldbank.org/DATASTATISTICS/Resources/GNIPC.pdf. 2 The mathematics of my bakery example are not as accurate as they could be. Since banks are allowed to loan $10 for every dollar they keep in their possession, of every million dollars deposited in the bank, the bank can loan out to entrepreneurs only about $909,000 while keeping $91,000 in its vaults.


pages: 545 words: 137,789