Inequality and how to fix it

[Note: This item comes from friend David Rosenthal. DLH]

From: “David S. H. Rosenthal” <dshr@abitare.org>
Subject: Inequality and how to fix it
Date: January 26, 2017 at 9:34:44 AM EST
To: dewayne@warpspeed.com

Problem:

Upward mobility declines sharply as the rich make off with the growth
By Bill Mitchell
Jan 26 2017
http://bilbo.economicoutlook.net/blog/?p=35255

Late last year (December 2016), an interesting academic research paper was released by the National Bureau of Economic Research – The Fading American Dream: Trends in Absolute Income Mobility Since 1940 – which provides stark evidence of the way in which this neo-liberal era is panning out and suppressing the opportunities for the least advantaged. One of the constantly repeating claims made by conservatives is that if governments run deficits they are really undermining the future for their children and their children. The claim is that while the current generation is living it up (deficits are tantamount in this narrative to living a profligate existence), the next generations will have to pay for it via higher taxes and reduced services.It is a bizarre argument given that each generation chooses its own tax burden and we cannot transfer real resources through time. There is truth in the argument that if the current generation imposes terminal damage to our natural environment then we are diminishing the prospects for the future. But that is not the point that the neo-liberals make. Indeed, there is a strong positive relationship between conservative views of fiscal policy (deficits) and the propensity to engage in climate change denial. Recently released research is now showing that around 50 per cent of American children born in 1980 have incomes higher than their parents compared to 90 per cent born in 1940. The so-called ‘American Dream’ is looking like a nightmare. Other research has shown that the bottom 50 per cent of the US income distribution have not enjoyed any of the growth since 1980 and that the top-end-of-town has increased its share of income from 12 per cent in 1980s to 20 per cent in 2014. These shifts are the result of deliberate policy changes and inaction by governments, increasingly co-opted by the rich to serve their interests at the expense of the broader societal well-being. Revolutions have occurred for less.

It was considered the norm of human progress that each generation would leave the next generation better off. As parents we would ensure our children were (collectively) better off.

[snip]

Fix:

Stanford historian uncovers a grim correlation between violence and inequality over the millennia
Professor Walter Scheidel examines the history of peace and economic inequality over the past 10,000 years.
By ELENA DANCU
Jan 24 2017
http://news.stanford.edu/2017/01/24/stanford-historian-uncovers-grim-correlation-violence-inequality-millennia/

What price do we pay for civilization? For Walter Scheidel, a professor of history and classics at Stanford, civilization has come at the cost of glaring economic inequality since the Stone Age. The sole exception, in his account, is widespread violence – wars, pandemics, civil unrest; only violent shocks like these have substantially reduced inequality over the millennia.

“It is almost universally true that violence has been necessary to ensure the redistribution of wealth at any point in time,” said Scheidel, summarizing the thesis of The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, his newly published book.

Surveying long stretches of human history, Scheidel said that “the big equalizing moments in history may not have always had the same cause, but they shared one common root: massive and violent disruptions of the established order.”

This idea is connected to Thomas Piketty’s Capital in the Twenty-First Century(2013), a New York Times bestseller Scheidel admires. Piketty found that “inequality does not go down by itself because we have economic development,” Scheidel said. “His book covers only 200 years and argues that only violent intervention can make that happen.”

[snip]

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