the upside down world of neo-liberal economics:
Neo-liberalism assumes that wo/men are hardwired to follow self-interests and that our self-interests are ultimately collectively positive. One can't help thinking what a different vision neoliberal economics would've mapped out for us with its forbidding formulae and graphical illustrations had it begun from the assumption that wo/men are hardwired to cooperate and share. Unfortunately, it follows the same path as many of the early Enlightenment figures with its rather negative view of human nature and optimistic view of the competitive consequences of this negative human nature. Neo-liberalism pre-empts Gordon Gecko—greed is good. When all the wo/men in the market place are greedy together, a spontaneous and ideal order emerges. In this sense, all market places are the same. Pigs, bombs and currency are interchangeable. This private language of measurable movable quantities views the economy as a set of scales that tend in the natural order of things towards balance. As much greed as is possible is satisfied within the constraint of scarce resources. This (with a straight face) is called optimum social welfare. In the competitive nature of the marketplace one wo/man may triumph and accumulate far in excess of the others on the basis of his superior characteristics of greed. This (still with a straight face) is also called optimum social welfare. Everybody had a chance to participate and it is the total satisfaction of greed not the distribution that counts. Competitive greed is the given. Since it is innate it exists in all times and places. As a result, neoliberal economics marginalizes history, geography and institutional rules or rather turns the world of history, geography and institutions upside down.
(...) Neo-liberal individualism means we are free to be different so long as we all behave the same
Tuesday, July 15, 2008
Tuesday, July 8, 2008
the concentration of wealth in the world:
According to the study, for the world as a whole the share of the top 10 per cent was 85 per cent in the year 2000 and the Gini coefficient (a measure of inequality between 0 and 1) equalled 0.892 at official exchange rates. This is an extraordinarily high value of the Gini coefficient and indicates extremely high concentration of wealth. For comparison, it can be noted that a recent study by Branko Milanovic found the Gini coefficient of world income to be 0.795 in 1998.
(...) As expected, the US is found to be the richest country even in personal wealth terms. The average wealth per person in the US is estimated to have been $144,000 in 2000. This compares with around $6,500 per person (in purchasing power parity or PPP terms) in India, which is at the bottom of the list of countries with wealth data. However, this does not mean that this is actually the lowest per capita wealth of all countries. The data used in the study are not comprehensive, and so a number of poor countries have been excluded for want of adequate data. So the actual wealth inequality across countries is likely to be even higher.
(...) The study also finds that the concentration of wealth within countries is high. Typical Gini coefficients for wealth distribution within countries lie in the range of about 0.65 - 0.75, and there are several above 0.8. In contrast, the mid-range for the Gini coefficients for income distribution is from about 0.35 – 0.45. So the concentration of wealth has become more acute than the concentration of income.
(...) In 2000, the richest 1 per cent of adults alone owned 40 per cent of global assets, and the richest 10 per cent of adults accounted for 85 per cent of total world assets. In contrast, the bottom half of the world adult population owned barely 1 per cent of global wealth.
According to the study, for the world as a whole the share of the top 10 per cent was 85 per cent in the year 2000 and the Gini coefficient (a measure of inequality between 0 and 1) equalled 0.892 at official exchange rates. This is an extraordinarily high value of the Gini coefficient and indicates extremely high concentration of wealth. For comparison, it can be noted that a recent study by Branko Milanovic found the Gini coefficient of world income to be 0.795 in 1998.
(...) As expected, the US is found to be the richest country even in personal wealth terms. The average wealth per person in the US is estimated to have been $144,000 in 2000. This compares with around $6,500 per person (in purchasing power parity or PPP terms) in India, which is at the bottom of the list of countries with wealth data. However, this does not mean that this is actually the lowest per capita wealth of all countries. The data used in the study are not comprehensive, and so a number of poor countries have been excluded for want of adequate data. So the actual wealth inequality across countries is likely to be even higher.
(...) The study also finds that the concentration of wealth within countries is high. Typical Gini coefficients for wealth distribution within countries lie in the range of about 0.65 - 0.75, and there are several above 0.8. In contrast, the mid-range for the Gini coefficients for income distribution is from about 0.35 – 0.45. So the concentration of wealth has become more acute than the concentration of income.
(...) In 2000, the richest 1 per cent of adults alone owned 40 per cent of global assets, and the richest 10 per cent of adults accounted for 85 per cent of total world assets. In contrast, the bottom half of the world adult population owned barely 1 per cent of global wealth.
are we heading for global stagflation?:
That is because inflation in modern economies is essentially about two forces: the fight over distributive shares in national income by different groups, and the role of expectations about inflation. Thus, if there is a rise in commodity prices (that would increase the relative income share of commodity producers) then this will only lead to a rise in the general price level if capitalists insist on maintaining their margins over costs at the same level. If they are unable to do so for any reason, then the rise in commodity prices need not translate into a generalised inflation. Similarly, if the initial rise in prices pushes down real wages and workers are not in a position to demand increases in nominal wages that would maintain their real wages, then the inflation is controlled. Tight monetary policies are usually a way of enforcing this by allowing greater unemployment, so they work indirectly rather than directly to control inflation. So inflation reflects a wider fight over income distribution.
(...) Therefore, whether or not there will be stagflation depends ultimately on international political economy and the relative strength of different groups in the world economy. It may be argued that working classes and peasants have been so weakened by the onslaught of neoliberal policies of the past two decades that they are in no position to fight to maintain even their already significantly diminished shares of income. If this is true, then the likelihood for the immediate future is an economic recession with worsened conditions of living and higher unemployment across the world, albeit with lower rates of aggregate inflation.
That is because inflation in modern economies is essentially about two forces: the fight over distributive shares in national income by different groups, and the role of expectations about inflation. Thus, if there is a rise in commodity prices (that would increase the relative income share of commodity producers) then this will only lead to a rise in the general price level if capitalists insist on maintaining their margins over costs at the same level. If they are unable to do so for any reason, then the rise in commodity prices need not translate into a generalised inflation. Similarly, if the initial rise in prices pushes down real wages and workers are not in a position to demand increases in nominal wages that would maintain their real wages, then the inflation is controlled. Tight monetary policies are usually a way of enforcing this by allowing greater unemployment, so they work indirectly rather than directly to control inflation. So inflation reflects a wider fight over income distribution.
(...) Therefore, whether or not there will be stagflation depends ultimately on international political economy and the relative strength of different groups in the world economy. It may be argued that working classes and peasants have been so weakened by the onslaught of neoliberal policies of the past two decades that they are in no position to fight to maintain even their already significantly diminished shares of income. If this is true, then the likelihood for the immediate future is an economic recession with worsened conditions of living and higher unemployment across the world, albeit with lower rates of aggregate inflation.
manufacturing a food crisis:
Once regarded as relics of the pre-industrial era, peasants are now leading the opposition to a capitalist industrial agriculture that would consign them to the dustbin of history. They have become what Karl Marx described as a politically conscious "class for itself," contradicting his predictions about their demise. With the global food crisis, they are moving to center stage--and they have allies and supporters. For as peasants refuse to go gently into that good night and fight de-peasantization, developments in the twenty-first century are revealing the panacea of globalized capitalist industrial agriculture to be a nightmare. With environmental crises multiplying, the social dysfunctions of urban-industrial life piling up and industrialized agriculture creating greater food insecurity, the farmers' movement increasingly has relevance not only to peasants but to everyone threatened by the catastrophic consequences of global capital's vision for organizing production, community and life itself.
Once regarded as relics of the pre-industrial era, peasants are now leading the opposition to a capitalist industrial agriculture that would consign them to the dustbin of history. They have become what Karl Marx described as a politically conscious "class for itself," contradicting his predictions about their demise. With the global food crisis, they are moving to center stage--and they have allies and supporters. For as peasants refuse to go gently into that good night and fight de-peasantization, developments in the twenty-first century are revealing the panacea of globalized capitalist industrial agriculture to be a nightmare. With environmental crises multiplying, the social dysfunctions of urban-industrial life piling up and industrialized agriculture creating greater food insecurity, the farmers' movement increasingly has relevance not only to peasants but to everyone threatened by the catastrophic consequences of global capital's vision for organizing production, community and life itself.
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