It’s time to move beyond growth for growth’s sake

Martin Kirk writes: Economic growth sits at the root of all plans to tackle poverty. The two concepts – growth and poverty reduction – are treated as practically interchangeable. Nowhere is this more apparent than in the new UN Sustainable Development Goals (SDGs), which promise to eradicate poverty ‘in all its forms everywhere’ by 2030. The entire formula for success rests on economic growth; at least 7 per cent per annum in the least developed countries, and higher levels of economic productivity across the board. Goal 8 is entirely dedicated to this objective.

This feels intuitive and logical. If economic growth equals more money, and poverty equals a lack of money, then economic growth equals less poverty. And this is, of course, the prevailing logic for all human development. The idea that if you’re not growing you must be dying is writ large. Every country, every company, every individual must grow their material wealth over time; both the whole and every one of its parts must be on a constant growth curve. Taken together, we might see this as a form of totalitarianism – the totalitarian imperative of growth.

There are two problems with economic growth as a measure of wellbeing. First, the correlation between economic growth and poverty reduction is weak. It’s a reminder that intuition and ‘common sense’ do not always correspond to evidence. Globally, the trends are clear. Since 1990, global gross domestic product (GDP) has increased 271 per cent, and yet both the number of people living on less than $5 a day, and the number of people going hungry (using the Food and Agriculture Organization of the UN’s definition of available calories for the mid‑point between normal and intense activity levels) have also increased, by 10 per cent and 9 per cent respectively. Add to that the wage stagnation across the developed world, and increasing inequality both within and between countries pretty much everywhere, and the shakiness of this basic logic becomes evident. Aggregate economic growth does not translate into less poverty, which is the stated objective of the SDGs.

This is not to suggest that a larger economic pie doesn’t benefit many people; it does. But that is simply not the same as saying that it reduces poverty. We live in a world where 95 per cent of all income from growth goes to the richest 40 per cent, and the concept of trickle-down neoliberal economics has been shown, in the words of Alex Andreou in The Guardian last year, to be ‘the greatest broken promise of our lifetimes’. [Continue reading…]


Belgium is a failed state

Tim King (editor of European Voice for The Economist) writes: [Molenbeek] is one of the most densely populated parts of Brussels, but its population is only 95,000. And it is not that the entire borough is a no-go zone. The lawlessness problems are concentrated in much smaller areas.

All of which raises the question of why Molenbeek’s problems have been allowed to persist for so long. This is not a task on the same scale as reviving the South Bronx or redressing the industrial blight of Glasgow. The nearest parallel I can think of is Brixton, a London suburb, three miles south of Westminster. Blighted by wartime bomb damage, then home to large contingents of West Indian immigrants in the 1950s and 1960s, it suffered race riots in the 1980s. But much of Brixton has been turned round, so why not Molenbeek?

The answers are an indictment of the Belgian political establishment and of successive reforms over the past 40 years.

Those failures are perhaps one part politics and government; one part police and justice; one part fiscal and economic. In combination they created the vacuum that is being exploited by jihadi terrorists.

Belgium has the trappings of western political structures, but in practice those structures are flawed and have long been so. The academics Kris Deschouwer and Lieven De Winter gave a succinct, authoritative account of the development of political corruption and clientelism in an essay published back in 1998 as part of the piquantly titled book “Où va la Belgique?” (Whither Belgium?)

Almost from the beginning, they explain, the state suffered problems of political legitimacy. [Continue reading…]


In a society where everyone is ready to defend the common good, corruption doesn’t pay

Suzanne Sadedin writes: By making a few alterations to the composition of the justice system, corrupt societies could be made to transition to a state called ‘righteousness’. In righteous societies, police were not a separate, elite order. They were everybody. When virtually all of society stood ready to defend the common good, corruption didn’t pay.

Among honeybees and several ant species, this seems to be the status quo: all the workers police one another, making corruption an unappealing choice. In fact, the study showed that even if power inequalities later re-appeared, corruption would not return. The righteous community was extraordinarily stable.

Not all societies could make the transition. But those that did would reap the benefits of true, lasting harmony. An early tribe that made the transition to righteousness might out-compete more corrupt rivals, allowing righteousness to spread throughout the species. Such tribal selection is uncommon among animals other than eusocial insects, but many researchers think it could have played a role in human evolution. Hunter-gatherer societies commonly tend toward egalitarianism, with social norms enforced by the whole group rather than any specially empowered individuals. [Continue reading…]


Climate change is a reverse Robin Hood: stealing from the poor countries and giving to the rich ones

Quartz reports: Just when you thought the news about climate change couldn’t get any worse, consider this.

Not only will global warming put a massive dent in the world’s GDP over the coming decades, but it “is essentially a massive transfer of value from the hot parts of the world to the cooler parts of the world,” according to a new study in Nature. “This is like taking from the poor and giving to the rich.”

Researchers Stanford University analyzed 166 countries over a 50-year period (from 1960 to 2010) and compared economic output when country’s experienced normal temperature to abnormally cold or warm temperatures. Controlling for factors such as geography, economic changes, and global trade shifts, they found the optimum temperature where humans are good at producing stuff: 55ºF (13ºC).

Applying this finding to climate change forecasts, they found that 77% of countries will experience a decline in per capita incomes by 2099, with the average person’s income shrinking by 23%. Unusually high temperatures will hurt agriculture, economic production, and overall health, researchers say. [Continue reading…]


The world has 21 million slaves – and millions of them live in the West

Wagner Moura writes: As a child growing up in one of Brazil’s poorest regions, I was used to seeing well-off families take in girls from poorer ones to come live in their homes and be brought up as one of their own. This was seen as an act of kindness. It was only much later that I came to see it for what it really was: these young girls, who would do all the domestic chores all day long in return only for food and a roof over their heads, were in fact modern slaves.

There are 21 million modern slaves in the world today, most of them women and girls hiding in plain sight in poor and rich countries alike – 7% of today’s slaves live in North America or the European Union. From trafficking and sexual exploitation to work in private homes, agriculture, fishing, construction and manufacturing, modern slavery is not only a crime, it is big business. It generates some $150bn in illegal profits every year, according to an estimate by the International Labour Organization (ILO).

Poverty is at the root of it, as is lack of awareness by both victims and the general public. Forced labor affects the most vulnerable and least protected people, perpetuating a vicious cycle of poverty and dependency. Women, low-skilled migrant workers, children, indigenous peoples and other groups suffering discrimination on different grounds are disproportionately affected. And many victims don’t even consider themselves to be slaves – working to pay off a debt passed down through generations, or being a servant in a private home from dusk to dawn is the only life some have ever known. At the same time, you may be eating food picked by modern slaves, or wearing clothes made with slave labor without realizing it. [Continue reading…]


Inside Britain’s secretive Bullingdon Club

Der Spiegel reports: The Bullingdon and other dinner clubs are seeds of power in the United Kingdom, and not just because membership provides influence. Members also gain access to a group of like-minded individuals who will later assume leading roles — allies for life, just as it has always been.

If there is a stable core of British society that has remained unchanged for centuries, it is the upper class. Unlike the elites on the European continent, the leadership clique in Britain was largely spared from revolutions and uprisings. For generations, the children of the country’s powerful families have attended boarding schools like Eton, Winchester and Harrow, followed by the Universities of Oxford and Cambridge. It is a form of patronage that Britons simply refer to as tradition.

Not everyone has fond memories of those colorful student days. David Cameron was not only a member of the Bullingdon Club, but also of the Piers Gaveston Society, a club for younger students well known for its excesses. If a new biography about the premier is to be believed, Cameron, during one Gaveston party, placed his private parts into the mouth of a dead pig as part of an initiation ritual. The affair was lampooned in the press as “Pig-gate,” and had the entire country laughing at the prime minister. Cameron initially kept mum about the incident before explicitly denying it and his spokeswoman refuses to dignify the book with an official statement.

The most amazing part of the story isn’t the story as such, but the fact that most in Britain think it could be true. Few in the UK are surprised anymore by the excesses and affairs of the powerful at Westminster, a place that has long been viewed as sleazy and tainted. In the summer, to name just one recent example, the Sun published photos of Baron Sewel, a member of the House of Lords, who was photographed, half-naked, snorting cocaine with prostitutes.

There is a direct relationship between the excesses of these men and their lives as university students. One of the traditions at the Bullingdon Club was to invite prostitutes to a group breakfast. Excesses are part of the careers of these men rather than exceptions; they are part of the British elite’s DNA. [Continue reading…]


Pope Francis’s reception in the U.S. from the left and the right

Gerard O’Connell writes: Pope Francis comes to embrace all the people of the United States and is likely to encourage them to renew their devotion to family life and their understanding of the demands of solidarity as well as the responsible use of their global power.

As we have read in his programmatic document, “The Joy of the Gospel,” and as he spelled out clearly in the encyclical “Laudato Si’, on Care for Our Common Home,” this Jesuit pope from Argentina is calling Christians to a new simplicity of life and a depth of spirit that replaces materialism, hyper-individualism and the pursuit of constant pleasure with an integrity that knows what it is to sacrifice, to live in compassion and solidarity, to work for the common good, to care for creation, to show mercy and to attempt to pattern our lives after Jesus himself. His radical message is clear, simple and firmly rooted in the Gospels, which he never tires of encouraging people to read. [Continue reading…]

Jesus said to Rush Limbaugh, “Go and sell your possessions and give to the poor, and you will have treasure in heaven; and come, follow Me.” But when Rush heard this statement, he went away grieving; for he was one who owned much property. (Matthew 19)

Jesus wouldn’t have been welcome on Fox News. Indeed, as an undocumented Palestinian, he wouldn’t have even made it through U.S. Immigration.


Guns, germs, and steal

We have all been raised to believe that civilization is, in large part, sustained by law and order. Without complex social institutions and some form of governance, we would be at the mercy of the law of the jungle — so the argument goes.

But there is a basic flaw in this Hobbesian view of a collective human need to tame the savagery in our nature.

For human beings to be vulnerable to the selfish drives of those around them, they generally need to possess things that are worth stealing. For things to be worth stealing, they must have durable value. People who own nothing, have little need to worry about thieves.

While Jared Diamond has argued that civilization arose in regions where agrarian societies could accumulate food surpluses, new research suggests that the value of cereal crops did not derive simply from the fact that the could be stored, but rather from the fact that having been stored they could subsequently be stolen or confiscated.

Joram Mayshar, Omer Moav, Zvika Neeman, and Luigi Pascali write: In a recent paper (Mayshar et al. 2015), we contend that fiscal capacity and viable state institutions are conditioned to a major extent by geography. Thus, like Diamond, we argue that geography matters a great deal. But in contrast to Diamond, and against conventional opinion, we contend that it is not high farming productivity and the availability of food surplus that accounts for the economic success of Eurasia.

  • We propose an alternative mechanism by which environmental factors imply the appropriability of crops and thereby the emergence of complex social institutions.

To understand why surplus is neither necessary nor sufficient for the emergence of hierarchy, consider a hypothetical community of farmers who cultivate cassava (a major source of calories in sub-Saharan Africa, and the main crop cultivated in Nigeria), and assume that the annual output is well above subsistence. Cassava is a perennial root that is highly perishable upon harvest. Since this crop rots shortly after harvest, it isn’t stored and it is thus difficult to steal or confiscate. As a result, the assumed available surplus would not facilitate the emergence of a non-food producing elite, and may be expected to lead to a population increase.

Consider now another hypothetical farming community that grows a cereal grain – such as wheat, rice or maize – yet with an annual produce that just meets each family’s subsistence needs, without any surplus. Since the grain has to be harvested within a short period and then stored until the next harvest, a visiting robber or tax collector could readily confiscate part of the stored produce. Such ongoing confiscation may be expected to lead to a downward adjustment in population density, but it will nevertheless facilitate the emergence of non-producing elite, even though there was no surplus.

This simple scenario shows that surplus isn’t a precondition for taxation. It also illustrates our alternative theory that the transition to agriculture enabled hierarchy to emerge only where the cultivated crops were vulnerable to appropriation.

  • In particular, we contend that the Neolithic emergence of fiscal capacity and hierarchy was conditioned on the cultivation of appropriable cereals as the staple crops, in contrast to less appropriable staples such as roots and tubers.

According to this theory, complex hierarchy did not emerge among hunter-gatherers because hunter-gatherers essentially live from hand-to-mouth, with little that can be expropriated from them to feed a would-be elite. [Continue reading…]


How the super-rich threaten American democracy

Markus Feldenkirchen writes: The two candidates currently attracting the most attention in the American presidential primaries seem to be polar opposites. First, there’s self-declared socialist Bernie Sanders, who can pack entire arenas with as many as 20,000 supporters. And then there’s a man who claims to possess $10 billion, Donald Trump, who is leading in the broad field of Republicans. The two do, however, have one thing in common: They reject the US campaign finance system. One out of conviction; the other because he has the resources to finance his own campaign.

One, Bernie Sanders, takes pride in stating that he doesn’t want rich people’s money. Some 400,000 largely middle class Americans have contributed to his campaign so far, donating $31.20 on average. The other, Donald Trump, proudly announced recently that he had rejected a $5 million donation from a hedge fund manager. And that he is prepared to pump $1 billion of his own wealth into the campaign. One of Trump’s most popular arguments so far is that his rival Jeb Bush has managed to raise over $150 million. “Jeb Bush is a puppet to his donors,” Trump says disparagingly. Sooner or later, he argues, they will call in their favors. “I don’t owe anyone any favors.” It’s a message that is proving popular with potential voters. But is it really any more democratic that a billionaire can buy his own election instead of allowing himself to be bought by others?

Two fatal developments are converging during this election in the United States. The decoupling of the super-rich from the rest of society is an accelerating trend in recent years. And also the consequences of a series of rulings by the Supreme Court in 2010 that enable politicians and support groups to accept unlimited donations. This confluence of events is undermining the development of the world’s proudest democracy. [Continue reading…]


The other immigrants: How the super-rich skirt quotas and closed borders

By John Rennie Short, University of Maryland, Baltimore County

The mass media are filled with images of desperate refugees struggling to escape civil unrest. But it is not only the poor and the displaced who are on the move. The rich, especially from countries such as Russia and China, are also leaving their home countries, but they are not faced with fences and rejection but welcomes and encouragement.

A review of these policies highlights the dramatic differences between rich and poor when it comes to immigration. It also reveals the dubious economic benefits of catering to the super-rich.

[Read more…]


Why liberals separate race from class

Touré F. Reed writes: After shutting down a Bernie Sanders speech at a Seattle rally for Social Security, Medicare, and Medicaid, Black Lives Matter activist Marissa Johnson declared to MSNBC’s Tamron Hall that she was motivated by a desire to hold liberal candidates accountable.

This is more than understandable. Despite boosting progressives’ expectations, President Obama has continued to prosecute a shadowy global “war on terror,” undermined public education by promoting charter schools, and reneged on promises to organized labor for the Employee Free Choice Act (EFCA) and to the American public for a truly universal health care system.

All this has certainly made clear the importance of holding putative liberals to their rhetoric, even for someone as young as Johnson, whose progressive political awakening only dates back to Trayvon Martin’s murder in 2012 at the hands of sociopathic vigilante George Zimmerman.

On some level, then, Johnson’s circumspection about Sanders and Gov. Martin O’Malley (no word on Clinton) could be considered encouraging, even if her decision to hijack the Sanders rally falls somewhere between arrogant (she represents no constituency to speak of) and politically misguided — many black lives, including both of my grandmothers’, have benefited greatly from Social Security, Medicare, and Medicaid for decades.

If we could chalk up Johnson’s actions in Seattle to youthful hubris, this incident could be easily dismissed. However, as the interview on MSNBC continued, Johnson laid out a problematic perspective that has spread through the universe of activists, political operatives, and pundits plugged into Black Lives Matter. [Continue reading…]


What is wrong with the West’s economies?

Edmund S. Phelps writes: What is wrong with the economies of the West — and with economics? It depends on whether we are talking about the good or the just.

Many of us in Western Europe and America feel that our economies are far from just, though our views on justice differ somewhat. One band of economists, led for decades by the British economist Anthony Atkinson, sees the West as being in another Gilded Age of inequality in income and wealth. Adopting Jeremy Bentham’s utilitarian view, they would redistribute income from those in high brackets to those farther down—until we reach the highest “sum of utilities.” It is a question, though, whether this doctrine captures intuitive views of what is just.

Philosophers over these same decades have been more interested in the work by the American philosopher John Rawls. His book A Theory of Justice argues for a fundamental shift away from Bentham: economic justice is about the distribution of “utilities,” for him a word usually denoting the satisfactions of consumption and leisure, not the sum of those utilities. It is about the terms on which each participant contributes to the fruit of the society’s economy. For Rawls, justice requires the state to use taxes and subsidies to pull up people with the lowest wages to the highest level possible. That way, the least advantaged get the largest possible portion of the gain from people’s cooperation in the economy.

A struggle persists between these views. The Benthamite view has morphed into the corporatist idea that a nation’s government ought to provide benefits, whether in the form of money or tax advantages, or free services, to interest groups — whether corporations, or unions, or consumers — that voice a need until more benefits would be deemed to cost too much. Meeting these claims of many different interests has left little in the public purse for low-wage workers.

The Rawlsian view has found little support among legislators, it is true. In the US, the Earned Income Tax Credit was passed in 1975. But it mainly supplements the income of low-wage mothers of young children. It does nothing for low-end workers as a whole and, to some extent, it actually reduces paychecks for low-paid work of childless women and single men. In Europe, a few countries spend much more than the US on job subsidies but statistical analyses have not found large effects on wages or unemployment.

With little or no effective policy initiative giving a lift to the less advantaged, the jarring market forces of the past four decades — mainly the slowdowns in productivity that have spread over the West and, of course, globalization, which has moved much low-wage manufacturing to Asia — have proceeded, unopposed, to drag down both employment and wage rates at the low end. The setback has cost the less advantaged not only a loss of income but also a loss of what economists call inclusion — access to jobs offering work and pay that provide self-respect. And inclusion was already lacking to begin with. In America, black urban teenagers have long been lacking in inclusion. In France there is a comparable lack of inclusion among North Africans. In much of Europe there has been little attempt to include the Roma.

This failing in the West’s economies is also a failing of economics. The classical idea of political economy has been to let wage rates sink to whatever level the market takes them, and then provide everyone with the “safety net” of a “negative income tax,” unemployment insurance, and free food, shelter, clothing, and medical care. This policy, even when humanely carried out, and it often is not, misses the point that, even if we confine our attention to the West since the Renaissance, many people have long felt the desire to do something with their lives besides consuming goods and having leisure. They desire to participate in a community in which they can interact and develop. [Continue reading…]


In Saudi Arabia, social media is helping reveal the harassment of women

Huffington Post reports: In recent years, an increasing number of women in Saudi Arabia have used social media as a resource to document and confront the ongoing problem of harassment. As Noura bint Afeich wrote in Al-Monitor last year, “Posting photos and videos documenting certain events has shed light on sensitive topics that the kingdom wishes to avoid dealing with.”

Women are harassed at workplaces, in malls and on city streets. Yet in Saudi Arabia’s conservative society, instances of physical harassment are rarely reported to authorities, for fear it will bring shame or embarrassment. In a national survey conducted in 2014 by the Riyadh-based King Abdulaziz Center for National Dialogue, 80 percent of participants attributed sexual harassment in Saudi Arabia to women’s “deliberate flirtatious behavior.”

Amid this climate of shame and underreporting, the data reveal a pressing problem. Six sexual harassment cases are reported every day, as statistics published by the country’s Ministry of Justice have shown. In 2013 and 2014, a total of 3,982 harassment cases made it to Saudi courts, with the largest share of offenses taking place in the Saudi capital of Riyadh.

But the growing outrage throughout the country — prompted in large part by social media — has had an effect, leading the very conservative kingdom to consider legal measures to combat the problem. [Continue reading…]


In defense of equality

In a review of Our Declaration: A Reading of the Declaration of Independence in Defense of Equality, by Danielle Allen, Gordon S. Wood writes: This is a strange and remarkable book. There must be dozens of books on the Declaration of Independence written from every conceivable point of view — historical, political, theoretical, philosophical, and textual — but no one has ever written a book on the Declaration quite like this one. If we read the Declaration of Independence slowly and carefully, Danielle Allen believes, then the document can become a basic primer for our democracy. It can be something that all of us — not just scholars and educated elites but common ordinary people — can participate in, and should participate in if we want to be good democratic citizens.

Allen, who is a professor of social science at the Institute for Advanced Study in Princeton, came to this extraordinary conclusion when she was teaching for a decade at the University of Chicago. But it was not the young bright-eyed undergraduates whom she taught by day who inspired her. Instead, it was the much older, life-tested adults whom she taught by night who created “the single most transformative experience” of her teaching career.

As she slowly worked her way through the 1,337 words of the Declaration of Independence with her night students, many of whom had no job or were working two jobs or were stuck in dead-end part-time jobs, Allen discovered that the document had meaning for them and that it was accessible to any reader or hearer of its words. By teaching the document to these adult students in the way that she did, she experienced “a personal metamorphosis.” For the first time in her life she came to realize that the Declaration makes a coherent philosophical argument about equality, an argument that could be made comprehensible to ordinary people who had no special training.

By reading and analyzing the words of the Declaration deliberately and with care, her night students

found themselves suddenly as political beings, with a consciousness that had previously eluded them. They built a foundation from which to assess the state of their political world. They gained a vocabulary and rhetorical techniques for arguing about it.

The entire experience with her students “re-gifted to me a text that should have been mine all along. They gave me again the Declaration’s ideals — equality and freedom — and the power of its language.”

Allen is most interested in the idea of equality, and rightly so. Equality has always been the most radical and potent idea in American history. [Continue reading…]


Rainbow White House

Quartz: The White House was quick to celebrate today’s historic decision by the US Supreme Court that legalized gay marriage in all 50 states of the nation.

Soon after the Supreme Court announced its decision, the White House Facebook page changed its profile photo to a picture of the iconic building’s walls in the colors of the rainbow, the universal symbol of the gay rights movement.

At 11am, the President addressed a crowd in the Rose Garden behind the White House—whose walls, alas, remain white despite the Facebook change—heralding the Supreme Court’s decision as “justice that arrives like a thunderbolt.”

“This ruling is a victory for America,” Obama said. “This decision affirms what millions of Americans already believe in their hearts: When all Americans are treated as equal, we are all more free.”