October 21, 2007
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Richer and Poorer
The "New World Order" seems to have an economic component.
The world's median standard of living seems to be tending more toward equality between the wealthy and the poor countries while at the same time there seems to be a movement toward greater separation between the very rich and the working classes within these countries; that is "richer rich" and "more and poorer poor".
What's your opinion of these trends?That's one of the Socrates_Cafe topics this time.
The problem, if there is one, seems to be one of world and national politics. Presumably if the "playing field" was level, labor costs should even out and the main variables would be things like transportation and natural resource availability.
Classic Marxian economics used to insist that labor was the major component of manufacturing and economics and that politics mostly existed to exploit labor. Later economists have amply demonstrated how over-simplistic this analysis was.
(See W.W. Rostow's The Stages of Economic Growth, a Non-Communist Manifesto for a good clear and short exposition of later thinking.)
The economic world has been moving rapidly toward unlimited free trade but international politics have lagged far behind and there is little the world economic community can do to keep undemocratic countries from exploiting their work force and pursuing dangerous and polluting industrial techniques - as a matter of fact the competition of world trade encourages them toward these practices.
Even in democratic countries, those with strong capitalistic and individual values have trouble regulating their industries.
Those same values seem to encourage the entrepreneurial class to strive for as much individual wealth as possible and to use that wealth to influence politicians toward their goals.
Here in the U.S. the political climate has, for some years, encouraged the growth and collection of individual wealth among the top one percent of the population, while discouraging union membership and distracting the voting public with non-economic controversies. As a result the present gap between the wealth of the top one percent and that of the bottom fifty percent of the working population is the greatest it has been since the 1920's. Partly this is due to the free trade agreements which allow the entrepreneurs to lower their labor costs by "out-sourcing" to countries with lower living standards and wage levels of workers.
Effective world labor, pollution, and resource depletion standards would go a long way toward ending this disparity but Nationalism and basic cultural beliefs make world-wide agreement almost impossible.
Comments (6)
You're linked.
I wish I could debate this with you but Economics is a field I know nothing about.
Have you read Greenspan's new book?
Economics is not the problem here. My brief essay simply tried to state a condition which many non-economists worry about.
The problem is world (and national) politics and human attitudes - which seem to be changing.
Do you think the present trend away from the "middle class" is a natural one? Do the rich deserve to get richer and the poor to get relatively poorer, after all those rich persons proved their worth by rising to the top, as the poor proved their worth by sinking.
I suppose the situation with the battle between the middle, upper, and lower classes are a natural one, one that is present in all societies.
I think that today especially in the states that the middle class is large, and fairly powerful.
The problem, if there is one, seems to be that there is a growing disparity between the income and wealth of the upper 5% of the population and the income and wealth of the lower 50%. The rich really are getting richer and the middle class hasn't kept up - is in fact falling behind. A spectacular example is the present housing crisis- as many as two million homes may be foreclosed because the owners cannot keep up with their inflation-adjusted mortgage payments - their income has actually dropped, certainly not kept up with inflation. If you don't think there isn't inflation - you apparently haven't filled your car's gas tank or paid for heating oil lately.
But maybe there really isn't any problem - that we are just undergoing a "correction" of a situation brought about by the New Deal and World War II that left the average American with unrealistic expectations. What do you think?
Sorry I really don't know. I have never been very good at discussing thing s I don't have a lot of knowledge about i.e. economics and the influence they have on society.