Catastrophes are reliable levelers of inequality; inequality creates catastrophes

Stanford history and classics professor Walter Scheidel writes in the Atlantic that the only reliable ways for unequal societies to become more equal is to suffer catastrophes that upend the order of things; Scheidel concludes that our modern, unequal state may not be able to avail itself of a convenient catastrophe for this purpose because "Technology has made mass warfare obsolete; violent, redistributive revolution has lost its appeal; most states are more resilient than they used to be; and advances in genetics will help humanity ward off novel germs." Read the rest

Bank fraud and Dieselgate: how do we design regulations that are harder to cheat?

Tim Harford points out that Dieselgate -- when VW designed cars that tried to guess when they were undergoing emissions test and dial back their pollution -- wasn't the first time an industry designed its products to cheat when regulators were looking; the big banks did the same thing to beat the "stress tests" that finance regulators used to check whether they would collapse during economic downturns (the banks "made very specific, narrow bets designed to pay off gloriously in specific stress-test scenarios" so that they looked like they'd do better than they actually would). Read the rest

In China's once poverty-stricken villages, former peasants manufacture a single product for one retailer

Alibaba subsidiary Taobao has given rise to "Taobao Villages" -- 18 villages that were once among China's poorest places, where former peasant farmers have attained prosperity by working in factories that produce a single class of goods (for example, Daiji township, a remote town in Shandong where most working age people have moved away, is now a high-speed-fiber linked booming factory town dedicated to "acting and dance costumes"). Read the rest

Piketty: the poorest half of Americans saw a "total collapse" in their share of the country's wealth

In a new analysis of the World Income Database published by the National Bureau of Economic Research, Thomas Piketty and colleagues from the Paris School of Economics and UC Berkeley, describe a "collapse" of the share of US national wealth claimed by the bottom 50% of the country -- down to 12% from 20% in 1978 -- along with an (unsurprising) drop in income for the poorest half of America. Read the rest

A succinct, simple, excellent description of the problems of neoliberalism and their solution

Ha-Joon Chang, an author and reader in Political Economy of Development at the University of Cambridge, opens his interview about the problems of neoliberalism with Truth-Out by quoting Gore Vidal: Neoliberalism is "free enterprise for the poor and socialism for the rich," where "the rich have been increasingly protected from the market forces, while the poor have been more and more exposed to them." Read the rest

Multigenerational wealth makes white Americans richer than black Americans

Black American wage disparity can be offset by education; but even though black American families -- one parent, two parent, educated, uneducated, employed, unemployed -- save more and spend less than their white counterparts, white families have substantially more wealth than black families -- college-educated white adults have 7.2 times the wealth of their black counterparts. Read the rest

Brexit, Chicken and Ulysses Pacts: the negotiating theory behind the UK-EU stalemate

Ever since Thomas Schelling -- an advisor on Dr Strangelove! -- published his work on negotiating theory and nuclear deterrence, we've developed a rich vocabulary for describing negotiating tactics and their underlying theories. Read the rest

The secret to success in local politics: steal from the people, but not too much

In a new paper in Progress, Oxford economist Vuk Vukovic argues that the key to re-election in local politics is to be just corrupt enough: giving lucrative contracts and other benefits to special interests who'll fund your next campaign, but not so much that the people refuse to vote for you. Read the rest

The World Wealth and Income Database: data and visualizations from 110 researchers in 70 countries

Thomas "Capital in the 21st Century" Piketty endorses the World Wealth and Income Database, where you will find "open and convenient access to the most extensive available database on the historical evolution of the global distribution of income and wealth, both within countries and between countries" in English, with upcoming translations in Chinese, Spanish, Arabic and French. Read the rest

A handful of essential ideas from economics

Inspired by this year's Edge question ("What scientific term or concept ought to be more widely known?"), Bloomberg columnist Noah Smith enumerates five economic concepts that we would be well-served to familiarize ourselves with: "Endogeneity" (when you don't know whether something is a cause or effect); "Marginal versus average" (something can be good on average, but so bad at the margins that it's a net negative); "Present value and discounting" (how much would you sacrifice today for the promise of something great tomorrow?); "Conditional versus unconditional" (you can hedge a prediction by adding a condition: "Assuming Donald Trump loses the election, the biggest crisis we'll face is a continued transfer of wealth from the poor to the rich"); "Aggregate" (differentiating global effects from local ones: borrowing money reduces your personal net worth, but increases some one else's, so you're getting poorer, they're getting richer and in the aggregate, it's a wash -- governments need to think in aggregate, voters need to think in particular). Read the rest

Four Futures: using science fiction to challenge late stage capitalism and Thatcher's "no alternative"

Margaret Thatcher's 1979 declaration that "there is no alternative" to neoliberal capitalism is more than a rallying cry: it's a straitjacket on our imaginations, constraining our ability to imagine what kinds of other worlds we might live in. But in science fiction, alternatives to market economies abound (and a surprising number of them are awarded prestigious awards by the Libertarian Futurist Society!), and it is through these tales that sociologist Peter Frase asks us to think through four different ways things could go, in a slim, sprightly book called Four Futures -- a book that assures us that there is no more business as usual, and an alternative must be found.

When robots take routine middle-class jobs, those workers drop out of the workforce

In Disappearing Routine Jobs: Who, How, and Why? economists from USC, UBC and Manchester University document how the automation of "routine" jobs (welders, bank tellers, etc) that pay middle class wages has pushed those workers out of the job market entirely, or pushed them into low-paying, insecure employment. Read the rest

Chinese social media went a-flutter at this photo of an apparent App Store clickfarmer

This year-old photo of a woman seated at a wall of Iphones went viral on Chinese social media, where it was identified as a clickfarmer whose job is to repeatedly install apps on multiple phones in order to inflate their App Store ranks. Read the rest

The Triumph of the 1%

Colin Gordon at Dissent summarizes new national income statistics for America's wealthiest, something that seems likely to worsen under Trump. Since Reagan, the US has been been edging toward income share levels not seen since before World War II. Read the rest

Folding Beijing: the 2016 Hugo-winning novelette about the obsolescence of labor and the preservation of privilege

Belatedly, I've finally read Hao Jingfang's novelette "Folding Beijing," which won the Hugo Award last summer in Kansas City: it's a story about a future in which the great cities continue to be engines of economic power, but where automation eventually makes most of the people in the cities obsolete -- a problem solved by dividing the city's day and geography up by strata, using marvellous origami buildings that appear and disappear, and suspended animation technologies that whisk away great portions of the city's unneeded proletariat for most of the day. Read the rest

How Lloyds of London solved the precarious market for kidnapping ransoms

Kidnapping ransom markets are really tough: it's hard to convey the demand, hard to arrange the payoff, hard to get the kidnapping victim back in one piece -- but Lloyds of London has largely solved this problem by monopolizing the market for kidnapping insurance, then setting standards for the amounts of ransom to be paid and the conditions for payment. Kidnappers know that if they kill their prey, Lloyds will never pay them again. Read the rest

Robots vs the middle class: everyone's endangered, white people less so

On Common Dreams, Paul Buchheit rounds up a ton of scholarly/economic papers on the ways that automation is coming to employment niches occupied by well-educated middle-class professionals, who face the same dilemma their "low-skilled" industrial colleagues have been living through for three decades and counting. Read the rest

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