Browsing articles in "Articles"
Jun 4, 2014
boyce
Comments Off on Inequality versus democracy

Inequality versus democracy

Quiz for the day: Who said this?

The 85 richest people in the world, who could fit into a single London double-decker, control as much wealth as the poorest half of the global population– that is 3.5 billion people….

A greater concentration of wealth could—if unchecked—even undermine the principles of meritocracy and democracy. It could undermine the principle of equal rights proclaimed in the 1948 Universal Declaration of Human Rights.

Pope Francis recently put this in stark terms when he called increasing inequality “the root of social evil”.

And this:

Some of the greatest problems, still outstanding today, lay with the so-called too-big-to-fail firms. In the decade prior to the crisis, the balance sheets of the world’s largest banks increased by two to four-fold. With rising size came rising risk—in the form of lower capital, less stable funding, greater complexity, and more trading.

This kind of capitalism was more extractive than inclusive. The size and complexity of the megabanks meant that, in some ways, they could hold policymakers to ransom. The implicit subsidy they derived from being too-big-too-fail came from their ability to borrow more cheaply than smaller banks—magnifying risk and undercutting competition.

Answer: IMF Managing Director Christine Lagarde, in a speech to a conference on “inclusive capitalism” on May 27. See the transcript of her speech here. For more on changing spirits of the times, see here.

May 29, 2014
boyce
Comments Off on Who rigs the “gig” economy?

Who rigs the “gig” economy?

Do freelance gigs liberate workers? Lynn Parramore interviews Econ4’s Gerald Friedman:

By removing any social protection, the gig economy returns us to the most oppressive type of cut-throat and hierarchical capitalism, a social order where the power to hire and fire has been restored to employers, giving them once again unfettered control over the workplace.

Read more here.

May 9, 2014
boyce
Comments Off on Maximum wage legislation

Maximum wage legislation

In testimony before the Rhode Island state legislature, Econ4’s Doug Smith lays out the rationale for capping the maximum annual compensation a firm pays its CEO – based on what it pays its lowest-paid workers:

This dangerous rise in top-to-bottom pay ratios fuels a cancerous spread of business strategies obsessed with cost reductions and short-term financial performance. The result: outsourcing, offshoring, tax avoidance, downsizing, and the substitution of good-paying permanent jobs with temporary, precarious employment.

Read more here and here.

Read his New York Times op-ed piece on maximum wages for government officials and top-paid government contractors here.

May 6, 2014
boyce
Comments Off on Students call for pluralism in economics education

Students call for pluralism in economics education

There is growing demand from students around the world for profound changes in how economics is being taught:

We, 42 associations of economics students from 19 different countries, believe it is time to reconsider the way economics is taught. We are dissatisfied with the dramatic narrowing of the curriculum that has taken place over the last couple of decades. This lack of intellectual diversity does not only restrain education and research. It limits our ability to contend with the multidimensional challenges of the 21st century – from financial stability, to food security and climate change. The real world should be brought back into the classroom, as well as debate and a pluralism of theories and methods. This will help renew the discipline and ultimately create a space in which solutions to society’s problems can be generated.

Read more here.

And The Guardian‘s coverage here.

Apr 24, 2014
boyce
Comments Off on Post-crash economics

Post-crash economics

Students at Manchester University lay out the case for changes in economics education:

In short, we argue for pluralism of perspectives and the inclusion of ethics, history and politics. We advocate an approach that begins with economic phenomena and then gives students a toolkit to evaluate how well different perspectives can explain it. The discipline should be conceptualised as an ecosystem, as the importance of diversity and the cross-fertilisation of paradigms are key to success.

Read more here.

For some background on this initiative, see here.

Apr 12, 2014
boyce
Comments Off on You know it’s getting bad when …

You know it’s getting bad when …

… inequality makes the IMF sing a new tune:

[T]he newfound attention to income inequality isn’t just another facet of a more liberal, Keynesian economic worldview. The fund’s economists have been producing research that suggests that inequality could make the world economy less stable.

Read more here.

Apr 1, 2014
boyce
Comments Off on Who needs a boss?

Who needs a boss?

From a Times report on the rise of worker-owned cooperatives:

If you happen to be looking for your morning coffee near Golden Gate Park and the bright red storefront of the Arizmendi Bakery attracts your attention, congratulations. You have found what the readers of The San Francisco Bay Guardian, a local alt-weekly, deem the city’s best bakery. But it has another, less obvious, distinction. Of the $3.50 you hand over for a latte (plus $2.75 for the signature sourdough croissant), not one penny ends up in the hands of a faraway investor. Nothing goes to anyone who might be tempted to sell out to a larger bakery chain or shutter the business if its quarterly sales lag.

Instead, your money will go more or less directly to its 20-odd bakers, who each make $24 an hour — more than double the national median wage for bakers. On top of that, they get health insurance, paid vacation and a share of the profits. “It’s not luxury, but I can sort of afford living in San Francisco,” says Edhi Rotandi, a baker at Arizmendi. He works four days a week and spends the other days with his 2-year-old son.

Read more here.

Mar 29, 2014
boyce
Comments Off on Right on the money: concentrated wealth versus democracy

Right on the money: concentrated wealth versus democracy

Quiz for today: who said this?

The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power.

Answer: Teddy Roosevelt in a 1910 speech in Osawatomie, Kansas. Paul Krugman quotes Roosevelt to make the case that taxing the rich to safeguard democracy is as American as apple pie. Krugman also quotes Irving Fisher’s 1919 presidential address to the American Economics Association, warning of the dangers of “an undemocratic concentration of wealth.”

“How,” Krugman asks,” did such views not only get pushed out of the mainstream, but come to be considered illegitimate?”

Good question. Krugman’s conclusion is right on the money:

[T]he demonization of anyone who talks about the dangers of concentrated wealth is based on a misreading of both the past and the present. Such talk isn’t un-American; it’s very much in the American tradition.

Read his column here.

Mar 21, 2014
econ4org
Comments Off on Rent in a warming world

Rent in a warming world

Econ4’s James Boyce explains what rent’s got to do with climate change:

Read his piece here.

Mar 21, 2014
boyce
Comments Off on Energy efficiency takes off

Energy efficiency takes off

Some good news from the energy efficiency frontlines:

[I]nvestment in energy efficiency is large and growing: $300 billion in 2011 by companies and governments in 11 countries. That is the same as total investment in electricity generation from oil, gas and coal, though less than investment in renewable electricity plus renewable-energy subsidies. But it saves more in emissions of carbon dioxide than all the spending on renewables, and pays for itself.

Read more here.