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Yesterday I posted Alvin Toffler’s 25 core assumption underpinning his landmark “PowerShift – Knowledge, Wealth and Violence at the Edge of the 21st Century“.
Several of the latter assumptions point out maldistribution and inequality (of power and by extension wealth, as it is one of the primary sources of power). Specifically, points 19 and 20.
On the heels of that post, here’s an interesting article by Branko Milanovic on Helen Cobban’s “Just World News” blog / site.
Addendum: I remember saying to someone about 5 years ago that I though in the larger scene of things rising income inequality globally was probably more of a ‘security’ threat to more people than was terrorism. I think both are threats, up to you to decide which you think is more menacing in the grand scheme of things.
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The crisis of maldistribution
By Branko Milanovic,
Carnegie Endowment for International Peace
The current financial crisis is generally blamed on feckless bankers, financial deregulation, crony capitalism, and the like. While all of these elements may be true, this purely financial explanation of the crisis overlooks its fundamental reasons. They lie in the real sector, and more exactly in the distribution of income across individuals and social classes. Deregulation, by helping irresponsible behavior, just exacerbated the crisis; it did not create it.
To go to the origins of the crisis, one needs to go to rising income inequality within practically all countries in the world over the last 25 years. In the United States, the top 1% of the population doubled its share in national income from around 8 percent in the mid-1970s to almost 16 percent in the early 2000s. (Piketty and Saez, 2006). That replicated the situation that existed just prior to the crash of 1929, when the top 1% share reached its previous high watermark In the UK, the top 1% receives 10% of total income, a share greater than at any point since World War II (Atkinson, 2003, Figure 3).
In China, inequality, measured by the Gini coefficient (the most common measure of inequality), almost doubled between 1980 and 2005. The top 1% of the population is estimated to garner around 9% of national income.
Even more egregious were developments in Russia, where the combined total wealth of thirty-three Russian billionaires listed on the Forbes list in 2006 was $180 billion as against total country’s GDP of about $1,000 billion that same year (Guriev and Rachinsky, 2008).
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Read the rest here …
I think it goes back a lot further than 25 years. The maldistribution of purchasing power is an inevitable result of the kinds of privilege built into even so-called “laissez-faire” capitalism, as Thomas Hodgskin pointed out 180 years ago. And chronic overinvestment and underconsumption are endemic to Sloanist mass production: extremely expensive, product-specific machinery means you’ve got to run at full capacity 24/7 to keep the unit costs down, which means the corporation has to exercise control over society at large to guarantee the output will be absorbed and not create a glut of inventory. So you get push distribution, planned obsolescence, consumer debt, and all the rest of it. And meanwhile, the investment capital seeking a profitable outlet continues to pile up, when existing plant and equipment can barely dispose of its output. The whole thing would probably have gone belly-up in the Depression, if the great powers hadn’t pushed the “reset” button by blowing up most of the capital equipment in the world outside the U.S.
Hi, Kevin. Honoured that you stopped by. Yes, I am sure you are correct. I think it’s clear that we operate now (and for quite a while) under a fundamentally flawed mental model or set of assumptions … if you can call it that (mental model, that is). I am not knowing enough to articulate how much of it is (the continuous and seemingly ineluctable) push for growth is bound up in a toxic mix of myth, religion, biological imperative and mental models. Of course, it could be simpler in that the mix of knowledge, wealth and violence was sussed out a long time ago by ‘rulers’ who have understood how to impose and sustain sets of conditions that enure to their benefit, and that much political. military and capital effort has been turned, for a long time now, towards keeping the chattering masses firmly in control regardless of the cost to the greater population of the planet. Today it seems clear that the powers that be know, nore or less, how to keep their hands firmly on the tiller and it’s full speed ahead, damn the consequences. It also seems clear to me that it doesn’t have to be this way, at all.
You’d know much more about than than me.
Have you ever read Ronald Wright’s “A Short History of Progress” ? An useful (and well written) book, I think.
Talent, Work, and Justice…
I think any argument that can be made against oversize CEO salaries can also be made against [celebrity salaries](http://www.rollingstone.com/nationalaffairs/index.php/2009/04/05/the-compensation-kings/) in sports or entertainment.
…Overwhelmed with…