Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Inequality’

The new political divide, and a plan to close it

Posted by hkarner - 26. März 2017

Date: 23-03-2017
Source: The Economist

David Goodhart, a “post-liberal”, seeks to accommodate the decent elements of identity-based populism

The Road to Somewhere: The Populist Revolt and the Future of Politics. By David Goodhart. Hurst; 278 pages; $24.95 and £20.

WHY did Britain vote to leave the European Union? Why did America elect Donald Trump? Why are populists on the rise all over Europe? David Goodhart, founding editor of Prospect magazine and now a proud “post-liberal”, has found a culprit. Populism, he argues in his new book, is an understandable reaction to liberal overreach.

Focusing on Britain, he identifies a new divide in Western societies, pitting a dominant minority of people from “anywhere” against a majority from “somewhere”. The first group, says Mr Goodhart, holds “achieved” identities based on educational and professional success. Anywheres value social and geographical mobility. The second group is characterised by identities rooted in a place, and its members value family, authority and nationality.

Whereas Anywheres, whose portable identities are well-suited to the global economy, have largely benefited from cultural and economic openness in the West, he argues, the Somewheres have been left behind—economically, but mainly in terms of respect for the things they hold dear. The Anywheres look down on them, provoking a backlash. Den Rest des Beitrags lesen »

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Robotization Without Taxation?

Posted by hkarner - 23. März 2017

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With the World’s Most Billionaires, China Has Its Own Populism Problem

Posted by hkarner - 22. März 2017

Date: 21-03-2017
Source: The Wall Street Journal

After several years of decline, China’s economic inequality is rising again. That could spell trouble for Western firms and for relations with the U.S. and Donald Trump

Modern China is the greatest “get rich” story of the past generation—maybe ever. But after a decade of growth lifting all boats, official data contain a dispiriting revelation: Income inequality is again on the rise.

A little-noticed government press release citing the backslide comes as the just-released Hurun Global Rich List shows China with the most billionaires for the second year in a row, edging out the U.S.

Slower broad-based income growth—and increasing numbers of isolated, angry Chinese men in the countryside—is problematic. And as in the U.S., income disparity boosts the chances of political upheaval somewhere down the line. These topics are well known in Beijing, where the Communist Party leadership prizes social stability and fair distribution of wealth as linchpins of its hold on power.

The government’s official inequality measure is the Gini coefficient, a zero-to-one measure of population income dispersion used by the World Bank and others. After declining by an average of over 0.4 percentage point a year from 2009 to 2015, official figures showed China’s Gini coefficient rising by 0.3 percentage point last year.

Other independent measures of inequality have also rebounded. Regional disparities began widening in 2015, in part due to slowing growth in poor northern and western industrial provinces, according to a recent paper from Andrew Batson, China research director at Gavekal Dragonomics. China’s statistics bureau cited slowing income growth for some rural agricultural workers as one reason for the uptick. So-called bare branches, low-income rural men with poor professional and marital prospects, have become a persistent topic of conversation in Chinese society.

While the shift is nascent, there are reasons to think it might continue. The massive transfer of wealth triggered by the privatization of the housing stock in the late 1990s was a huge boon to poor inland provinces, but it has now largely run its course.

China’s official inequality measure rose last year. Here, a farmer works in east China’s Shandong province.

And despite large helpings of rhetoric on reform from top leadership, there is little indication that the market power of big state firms in sectors such as telecommunications will be curtailed to make room for more efficient, job-creating privately run firms.

For firms eyeing China, the implications are profound: Slower broad-based income growth could weaken sales prospects for basic consumer goods. Companies such as Yum China or Coca-Cola, already under pressure from regulatory scrutiny and local competition, could see a slower lift from core consumers.

More rich people in China might seem to present an opportunity, particularly in luxury goods and travel, real estate, and financial services. Firms such as Apple may be less tempted to pursue a pricing strategy based on volume, rather than luxury prestige.

Yet the past few years under President Xi Jinping have showed an inclination to punish conspicuous consumption. Rising inequality data may in fact embolden Beijing to keep up the pressure. Politically, corruption crackdowns to save face with the populace may become more frequent and severe. And nationalism, the old fallback of politicians bereft of other solutions to help disaffected citizens, will become more strident and potent.

That latter could make for choppy waters in the years to come, on both sides of the Pacific—and in the shipping lanes in between.

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The great Chinese inequality turnaround

Posted by hkarner - 18. März 2017

Ravi Kanbur, Yue Wang, Xiaobo Zhang

T. H. Lee Professor of World Affairs, International Professor of Applied Economics and Management, Professor of Economics at Cornell University and CEPR Research Fellow

PhD student in Economics, Cornell University

Distinguished Chair Professor of Economics, National School of Development, Peking University; Senior Research Fellow, International Food Policy Research Institute

15 March 2017, voxeu

Alongside the spectacular growth and extraordinary reductions in poverty – perhaps the most dramatic in human history – the evolution of Chinese income inequality since the start of the reform process in 1978 has been a focus of interest among analysts and policymakers. Sharply increasing inequality became an integral part of the narrative on Chinese development, with some commentators arguing that this was the inevitable price to be paid for the high rates of growth, while others warned of the social consequences of these growing gaps. Den Rest des Beitrags lesen »

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Chart of the Week: Growth and Inequality

Posted by hkarner - 15. Februar 2017

Posted on by iMFdirect

By iMFdirect

In the past two decades, low-income economies have seen a rise in growth, with fewer living in poverty. Yet inequality in many countries has remained virtually unchanged.

A recent IMF paper explains how the design of policies can matter to spread the economic benefits of growth more broadly.

Over the long haul, reforms can indeed yield bridges, banks, firms and fields of grain. But these take time, and the poorest cannot always wait for the transformation without additional help. Hence, in the short run, governments need to complement reform policies with redistribution. For example, they can use targeted cash transfers to farmers who suddenly lose a grain subsidy, a more progressive tax system to distribute burdens more fairly, or more accessible banking services. Den Rest des Beitrags lesen »

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Four Certainties About Populist Economics

Posted by hkarner - 26. Januar 2017

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Inclusive Growth and the IMF

Posted by hkarner - 25. Januar 2017

Posted on by iMFdirect

prakash-loungani-128x112-72By Prakash Loungani

Four years ago, at the World Economic Forum in Davos, IMF Managing Director Christine Lagarde warned of the dangers of rising inequality, a topic that has now risen to the very top of the global policy agenda.

While the IMF’s work on inequality has attracted the most attention, it is one of several new areas into which the institution has branched out in recent years. A unifying framework for all this work can be summarized in two words: Inclusive growth

We want growth, but we also want to make sure:

  • that people have jobs—this is the basis for people to feel included in society and to have a sense of dignity;
  • that women and men have equal opportunities to participate in the economy—hence our focus on gender;
  • that the poor and the middle class share in the prosperity of a country—hence the work on inequality and shared prosperity;
  • that, as happens, for instance when countries discover natural resources, wealth is not captured by a few—this is why we worry about corruption and governance;
  • that there is financial inclusion—which makes a difference in investment, food security and health outcomes; and
  • that growth is shared just not among this generation but with future generations—hence our work on building resilience to climate change and natural disasters.

In short, a common thread through all our initiatives is that they seek to promote inclusion—an opportunity for everyone to make a better life for themselves. Den Rest des Beitrags lesen »

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From Economic Analysis to Inclusive Growth

Posted by hkarner - 22. Januar 2017

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Davos Elite Fret About Inequality Over Vintage Wine and Canapés

Posted by hkarner - 20. Januar 2017

It is amazing to see the NYT take such a (correct) stance! (hfk)

Date: 19-01-2017
Source: The New York Times By PETER S. GOODMAN

DavosWhat It Is Like to Be in Davos

For most of the year, Davos is a resort town high in the Swiss Alps. But for two weeks each January, the global elite descend on the town in what could be described as the world’s most expensive networking event.

DAVOS, Switzerland — You have perhaps noticed that in many countries, history-altering numbers of people have grown enraged at the economic elite and their tendency to hog the spoils of globalization. This wave of anger has delivered Donald J. Trump to the White House, sent Britain toward the exit of the European Union, and threatened the future of global trade.

The people gathered here this week in the Swiss Alps for the annual World Economic Forum have noticed this, too. They are the elite — heads of state, billionaire hedge fund managers, technology executives.

They are eager to talk about how to set things right, soothing the populist fury by making globalization a more lucrative proposition for the masses. Myriad panel discussions are focused on finding the best way to “reform capitalism,” make globalization work and revive the middle class. Den Rest des Beitrags lesen »

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Neue Töne in Davos: Lösungen für Krise der Mittelschicht suchen

Posted by hkarner - 18. Januar 2017

Alexandra Föderl-Schmid aus Davos, 18. Jänner 2017, 18:40 derstandard.at

Beim Weltwirtschaftsforum wird verstärkt über die Schattenseiten der Globalisierung diskutiert und darüber, was gegen Ungleichheit getan werden kann

Ein bisher kaum benutzter Begriff ist heuer in Davos plötzlich in aller Munde: die Mittelklasse. Auch US-Vizepräsident Joe Biden nahm in seiner Abschiedsrede darauf Bezug und rief dazu auf, dass man etwas tun müsse: Immer mehr Reichtum konzentriere sich auf immer weniger oben und immer mehr Menschen müssten kämpfen, um überhaupt im Mittelstand zu bleiben.

„Ausgepresst und zornig: Wie kann man die Mittelklassenkrise lösen“, lautete der Titel einer Podiumsdiskussion am Mittwoch, bei der rasch Einigkeit darüber herrscht, dass es diese Krise gebe. Die Chefin des Internationalen Währungsfonds, Christine Lagarde, machte die Politik dafür verantwortlich: „Die Menschen trauen der Regierung nicht mehr, haben keine Hoffnung und sind desillusioniert.“ Den Rest des Beitrags lesen »

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