"The US is more unequal & unfair for its citizens than Europe": Nobel Economist

owedtojoy

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Much has been made about the growth of inequality in the US, with some anti-immigration activists blaming it solely on cheap imported labour, even though both productivity and population have grown significantly. The inequity in distribution of incomes is plain to see:



Yet, this is far higher in the US than in Europe, even though Europe has had an unparalleled influx of refugees and immigrants in the past few years.



The underlying causes are complex (and, yes, cheaper labour may be a contributor, but only a minor one). Nobel -Prize winner Angus Deaton is recognised as an expert on Inequality. Recently he wrote an article that said:

" ... inequality is not the same thing as unfairness; and, to my mind, it is the latter that has incited so much political turmoil in the rich world today. Some of the processes that generate inequality are widely seen as fair. But others are deeply and obviously unfair, and have become a legitimate source of anger and disaffection."

Unfortunately, this article is pay-walled, but in an interview with the online magazine Pro-Market, Deaton outlines its main points.

Basically, he points to a growth in oligarchic and plutocrat power that has happened in America, but not in Europe to the same extent, mainly thanks to US elections laws which make money a key determinant of elections. Deaton calls this "Monopoly, or monopsomy [a market situation in which there is only one buyer], or rent-seeking".

“Monopoly, I think, is a big part of the story. Both monopoly and monopsony contribute to lower real wages (including higher prices, fewer jobs, and slower productivity growth)—just a textbook case!”

Question: Would you describe rent-seeking as the main problem facing the American economy today?

I’d say the main problem is that the living standards of the working class are not rising anymore. That’s linked to the “deaths of despair” aspect, the work Anne Case and I have been doing on people dying in middle age, which we have tied to a very long-term wage stagnation that’s been going on for over half a century and destroyed working class life in America. [See www.politics.ie/forum/us-politics/261890-gran-torino-problem-decay-us-white-communities.html]

I think the deep question here is: Does American capitalism, or liberal democracy as it is today, continue to work for ordinary people?


Deaton believes that Europe does not have this problem to the same extent:

“I think it’s easier for rent-seekers to affect policy here than in much of Europe. You cannot run for Congress unless you have a deep-pocketed backer, and that’s not true in Europe. It’s also very difficult to be a member of Congress if your views are not pro-corporate, whereas in Europe it’s much harder for corporations to affect policy—it would take much longer and you have to be much more subtle about it.”

One of his recipes is that libertarian and liberalism unite against rent-seekers:

"You’ve got libertarians on one hand and left-wingers on the other hand that would agree that rent-seeking is a really bad thing. They may not agree that free market capitalism is a good thing, but they can agree on disliking rent-seeking. Maybe there’s something of a consensus to be built there."

Deaton crystallises what has been fairly obvious for some time: Processes like the Citizens United Supreme Count decision that decided that electoral contributions were a form of free speech have poisoned American democracy, and it is no longer an entirely free country. It is also clear that simplistic solutions offered to blue-collar voters are just a cheap con to entrench inequality even more.

It also suggests what is behind "illiberal" states like Poland and Hungary, and ultimately what is behind the Brexit push: a attempt by plutocrat rent-seekers to create an economy devoid of any workers' rights or citizens' rights, or any barrier like environmental regulations that might hinder the accumulation of wealth by a narrow class of people.

https://www.project-syndicate.org/onpoint/anatomy-of-inequality-2017-by-angus-deaton-2017-12?barrier=accesspaylog

https://promarket.org/angus-deaton-discussed-driver-inequality-america-easier-rent-seekers-affect-policy-much-europe/

Wage Stagnation in Nine Charts | Economic Policy Institute
 
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owedtojoy

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I am surprised this thread turned out to be so non-contentious.

The US is one of the world’s wealthiest countries, yet 40 million of its inhabitants live in poverty, its infant mortality rates are the highest among developed nations, and Americans lead “shorter and sicker lives, compared to people living in any other rich democracy.” The US also has the lowest rate of social mobility of any rich country, rapidly turning the American Dream—its national ethos—to “an American illusion.”

Americans have always prided itself on its social mobility, and indeed would have boasted to have the most socially mobile population in the world as a meritocracy of talents. Is that now in Europe?
 

Jack Walsh

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I am surprised this thread turned out to be so non-contentious.

The US is one of the world’s wealthiest countries, yet 40 million of its inhabitants live in poverty, its infant mortality rates are the highest among developed nations, and Americans lead “shorter and sicker lives, compared to people living in any other rich democracy.” The US also has the lowest rate of social mobility of any rich country, rapidly turning the American Dream—its national ethos—to “an American illusion.”

Americans have always prided itself on its social mobility, and indeed would have boasted to have the most socially mobile population in the world as a meritocracy of talents. Is that now in Europe?
America, best exemplified by its President is all front and much of its success is now illusory.

Western Europe is better educated, more stable, safer and healthier than the USA and probably most important of all, a far more equitable and tolerant society structure.
Seriously, who in blazes would live in gun crazed intolerant and angry Red State kips over pretty much any major West European city?

So prob no surprise you didn't get much kick back

Although' I'd have been short odds the usual crew would have been on with their anti EU lies "Muzzie hellhole ghettos, rape gangs..."
 
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Betson

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Western Europe is better educated, more stable, safer and healthier than the USA and probably most important of all, a far more equitable and tolerant society structure.
That is basically the platform that Trump ran on , while the Democrats tried to pass the US off as some Utopia during the campaign.

You are on the wrong side , you should join the movement to make America great again.
 

silverharp

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America, best exemplified by its President is all front and much of its success is now illusory.

Western Europe is better educated, more stable, safer and healthier than the USA and probably most important of all, a far more equitable and tolerant society structure.
Seriously, who in blazes would live in gun crazed intolerant and angry Red State kips over pretty much any major West European city?

So prob no surprise you didn't get much kick back

Although' I'd have bee short odds the usual crew would have been on with their anti EU lies "Muzzie hellhole ghettos, rape gangs..."
are you calling for an ethno state there pal, fascist!
 

gleeful

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I am surprised this thread turned out to be so non-contentious.

The US is one of the world’s wealthiest countries, yet 40 million of its inhabitants live in poverty, its infant mortality rates are the highest among developed nations, and Americans lead “shorter and sicker lives, compared to people living in any other rich democracy.” The US also has the lowest rate of social mobility of any rich country, rapidly turning the American Dream—its national ethos—to “an American illusion.”

Americans have always prided itself on its social mobility, and indeed would have boasted to have the most socially mobile population in the world as a meritocracy of talents. Is that now in Europe?
Europe's model is to provide a safety net, mobility is secondary. Essentially, you are protected against falling.

The US used to offer the opposite. No limit on how far you can fall, and no limit on rising either. During the last few decades, each of the routes to success were removed. All thats left to motivate work is the bottomless abyss to which you can fall. America is all stick and no carrot.
 

toughbutfair

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I am surprised this thread turned out to be so non-contentious.

The US is one of the world’s wealthiest countries, yet 40 million of its inhabitants live in poverty, its infant mortality rates are the highest among developed nations, and Americans lead “shorter and sicker lives, compared to people living in any other rich democracy.” The US also has the lowest rate of social mobility of any rich country, rapidly turning the American Dream—its national ethos—to “an American illusion.”

Americans have always prided itself on its social mobility, and indeed would have boasted to have the most socially mobile population in the world as a meritocracy of talents. Is that now in Europe?
40 million live in poverty ? I would guess that they are better off than most Africans, Indians, Chinese etc
 

toughbutfair

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America, best exemplified by its President is all front and much of its success is now illusory.

Western Europe is better educated, more stable, safer and healthier than the USA and probably most important of all, a far more equitable and tolerant society structure.
Seriously, who in blazes would live in gun crazed intolerant and angry Red State kips over pretty much any major West European city?

So prob no surprise you didn't get much kick back

Although' I'd have been short odds the usual crew would have been on with their anti EU lies "Muzzie hellhole ghettos, rape gangs..."
Europeans are better educated? How come nearly all the new inventions , especially in tech , come from the USA ?
 

Jack Walsh

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40 million live in poverty ? I would guess that they are better off than most Africans, Indians, Chinese etc
Europe, it's Europe, what part of the OP "The US is more unequal & unfair for its citizens than Europe" confused you?
Africa and India and China aren't in Europe
OK?
 

toughbutfair

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Europe, it's Europe, what part of the OP "The US is more unequal & unfair for its citizens than Europe" confused you?
Africa and India and China aren't in Europe
OK?
True, just pointing out that they aren’t in poverty. They are not worse off than Greeks, Portuguese, southern Italy, southern Spain
 

devoutcapitalist

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Social mobility is far higher amongst Asian-Americans when compared to blacks and Latinos. Why is that?

1) More likely to believe in traditional values like marriage.
2) Far more likely to value education.
 

silverharp

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Social mobility is far higher amongst Asian-Americans when compared to blacks and Latinos. Why is that?

1) More likely to believe in traditional values like marriage.
2) Far more likely to value education.
75% of African Americans are born to unmarried mothers and mostly single mothers, you cant raise kids well like that .
 

Lord Deputy

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African Americans may be disadvantaged, but they’re not going hungry as they do in some parts of Africa. They’re still well of by comparison.

[video=youtube;64yAzs5ywlc]https://www.youtube.com/watch?v=64yAzs5ywlc[/video]
 

gleeful

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Europeans are better educated? How come nearly all the new inventions , especially in tech , come from the USA ?
Theres a lot of profitable innovation in the US. Its driven by immigrants (many from the EU) and pension fund investment (some of it from the EU).
 


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