Keith,

What a great juxtaposition!

Couple of points arising out of them.

Without doubt the US has the most homicides - but even there, they are mostly committed by blacks against blacks. I think it's 51% of the homicides are committed by the black 13% of the population. Instead of not talking about such things, we should perhaps spend more time on the black people who suffer the extreme violence of the few.

My figures are old, but in terms of general violence, again some 80% is committed by blacks on blacks. This is inferred from the figure for victims of violence 80% of whom are black.

Even so, in a release of violence statistics a month or two ago, England was number two in the international listing of acts of violence - or, I assume crimes of violence. I believe the US was 12th. Number one was Australia.

Most of our crimes and many of our incarcerated are drug related. If we could decriminalize drugs, our prisons would empty and violence would decrease. But, no politician dare be "soft on drugs".

Anyway, make of it what you will.

Harry
---------------------------------------------------------------------------------------

Keith wrote:

Two of the most brilliant economic journalists who write regularly for the
FT are Michael Prowse and Amity Shlaes (both around 40 years-of-age I would
judge from their photos). Michael Prowse used to write from America until a
year or so ago but is now based here; Amity Shlaes is American (I think).
Michael Prowse used to be right-wing but is now a leftie; Amity Shlaes
might have been a leftie when younger for all I know, but is certainly a
rightie now. This is by way of saying that their views are totally opposite
from each other's! I've been busy for the last few days and have only just
got round to reading a feature in the week-end issue, "Is inequality is
good for you?", in which they both put forward their own answer to the
question.

<<<<
Is inequality is good for you? -- No

Michael Prowse

We have grown accustomed to the health warnings issued by surgeon generals.
"Smoking causes lung cancer" is no longer a controversial proposition. But
recent epidemiological researhc suggests that finance ministers, too, may
some day be required to issue health wranings. There are good reasons to
believe that policies that promote great economic inequality -- such as
budgets that slash top tax rates -- cause higher rates of sickness and
mortality.

The adverse physiological consequences of absolute poverty have long been
understood. We know poor nutrition, damp housing, lack of heating,
excessive working hours and pollution cause a higher incidence of many
diseases and chronic disorders. Policymakers understand the argument for
trying to eliminate these gross forms of material deprivation, even when
they lack the will or capacity to enact the necessary legislation.

By contrast, the argument that economic inequality in itself causes
sickness and premature death remainas controversial. But the case is
persuasive enough to deserve a wider public hearing. It implies that
governments need to rethink their policy objectives: to worry less about
the sum total of material output and more about the way that income and
wealth are distributed.

It implies that if greater efforts are not made to counter growing
inequality, the incidence of cancer, heart disease and other chronic
disorders will remain needlessly high, regardless of the lebvel of gross
domestic product.

In Britain these arguments are most closely associated with Richard
Wilkinson, a professor at Nottingham University's medical school. Wilkinson
has spent much of the last two decades painstakingly assembling the
evidence for a link between inequality and sickness. But researchers
elsewhere, such as Ichiro Kawachi and Bruce Kennedy of the School of public
health at Harvard University, have independently confirmed many of his claims.

Those who would deny a link between health and inequality must first
grapple with the following paradox. There is a strong relationship between
health and incomes within countries. Within any nation you will find that
people on high incomes live longer and have fewer chronic illnesses than
people on low incomes.

Yet, if you look for differences between countries, the relationship
between income and health largely disintegrates. Rich Americans, for
instance, are healthier on average than poor Americans, as measured by life
expectancy. But, although the US is a much richer country than, say,
Greece, Americans on average have a lower life expectancy than Greeks. More
income.it seems, gives you a health advantage with respect to your fellow
citizens, but not with respect to people living in other countries.

We lack data on the the relative health of the richest tiers in different
countries, but it would not be surprising if even the wealthiest Americans
paid a personal price for their nation's inequality.

The solution to the paradox, argues Wilkinson, cannot be found in
difference in factors such as quality of healthcare, because this has only
a moderate impact on health outcomes in advanced nations. It lies rather in
recognising that our income relative to others is more significiant for our
health than our absolute standard of living. Relative income matters
because health is importantly influenced by "psychosocial" as well as
material factors.

Once a floor standard of living is attained, people tend to be healthier
when three conditions hold: they are valued and respected by others' they
feel "in control" in their work and home lives; and they enjoy a dense
network of social contacts. Economically unequal societies tend to do
poorly in all three repsects: they tend to be characterised by big status
difference, by big differences in people's sense of control and by low
levels of civic participation.

In market societies, the wealthy regard themselves as "winners" in life's
race. They enjoy high social status and considerable autonomy, both in the
workplace and in their domestic lives. By contrast, people on low or
loderate incomes are made to feel like "losers". They have no symbols of
affluence to flaunt, they occupy subordinate positions in thenworkplace and
face a great deal of unc ertainty and insecurity. The way this humiliating
lack of status and control weakens their health is by putting them under
much higher levels of stress than the better-off.

One of the signs that people are under intense stress is the prevalence of
behavioural pathologies such as obesity, alcoholism and drug addiction.
Sweet and fatty foods may well serve as natural anti-depressants. That
millions of prescriptions for Prozac and other mood-altering drugs ar also
sold just confirm that unequal, competitive societies generate high levels
of anxiety.

A steep social health gradient is statistically visible even among the
relatively privileged. In a study of british civil servants (where rank is
precisely defined by a grading system), researchers found that junior
support staff were four times as likely to die of heart disease as the most
senior administrators. EWven allowing for all the usual risk factors such
as smoking, alcohol consumption, high blood pressure and cholesterol, some
60% of the difference in death rates were unexplained.

The sheer number of different illnesses in which health inequalities are
rcorded is another reason for believing that psychosocial effects are real.
Some 65 of the 78 most common cause of death in men are more common in
manual than in non-manual workers. A factor that adversely affects all
manual workers -- such as lack of social status and autonomy -- seems more
likely to explain their greater vulnerability to so many different
illnesses than any physical cause.

Experiments with other primates also appear to support Wilkinson's
arguments. For instance, researchers have manipulated the social status of
macaque monkeys, while golding diet and other factors constant. They have
put high-status monkeys from different troupes together so that some would
have to decline in status. The stressed-out socially-downgraded monekys got
ill and and died prematurely in just the same way as socially marginalised
humans.

A quirky item of medical history -- uncovered by Robert Sapolsky, the
biologist  -- is also suggestive. In the century to 1930, corpses dissected
in Lodnon medical schools were nearly always those of paupers. On the basis
of these dissections, anatomists estimated the size of the human adrenal
gland. When they occasionally saw the adrenal glads of the better-off, they
found that they were often oddly small, and they invented a new disease --
"idiopathic adrenal atrophy" -- to explain the discrepancy. It was, of
course, the adrenal glands of the paupers that were artificially enlarged:
a result of lives lived under unremitting stress.

Inequality is associated with higher mortality in another strriking way:
through its impact on hiomicide rates. Internation studies have confirmed
what the casual tourist has always know: uneual societies tend to be
violent. Thuis Sweden and Japan have among the most egalitarian income
distributions of developed countries, and they have correspondingly low
homiide rates. The US is one of the most unequal and also the most violent.

Kennedy and Kawachi, of Harvard University, found the same close
correlation between violence and inequality among the 50 US states. The
greater the disparity in hosehold incomes, the higher the state homicide
rate. Significantly, the relationship between property crime (such as
burglary) and inequality is much weaker than the relationship between
violent crime and ineuality.

Why is this? The answer, according to Wilkinson and his US collaborators,
is that violence is a social crime in a way that others are not. It
reflects not a desire for personal gain but a perverse expression of the
universal human desire for respect. They quote American prison
psychiatrist, James Gilligan, who wrote in a book on violence: "I have yet
to see a serious act of violence that was not provoked by th experience of
feeling shamed and humiliated, disprespected and ridiculed." Violence is
thus frequently an attempt to assert status on the part of those who feel
they have no non-violent ways of commanding the respect of others, often
because they are unskilled and illiterate and so incapable of advancing
economically and socially.

Covernsely, greater income equality is linked, internationally and within
the 50 US states, with increased levels of social trust. In his influential
research on civic participation, Robert Puttnam, the US sociologist,
uncovered a strong correlation between equality and "social capital" (his
composite measure of the degree to which people bond together socially).
The link makes sense. If people think of themselves as the equals of
others, they are surely more likely to be public-spirited and to
participate in civil and political projects. Participation matters because
research indicates that people's vulnerability to illness increases with
social isolation.

There is one piece of the puzzle still missing: how and why does socially
induced stress ansd anxiety cause higher rates of cancer, hear tdisease and
other degenerative disorders? The answer comes in two parts.

Our pre-human ancestors evolved methods for coping with sudden physical
threats -- the so-called "fight or flight" response. This mobilises energyu
for muscular exertion by diverting resources from biological
"house-keeping" functions -- tissue maintenance and repair, immunity,
growth, digestiona dn reproduction -- inessential for a rapid response to
danger. When the threats are short-lived, theis liversion of physiological
effort does lasting harm. But with the chronic stress caused by feeling of
social and economic inferiority, the body is put onto a war footing for
months or years. The health cost of neglecting the house-keeping functions
escalate rapidly. In effect, stressed-out social inferiors epxerience
faster ageing than their more fortunate rivals.

But why didn't our ancestors evolve ways of coping with socially induced
stress? A possible answer is that stark differences in wealth and status
are relatively recent. They probably date from only the beginnings of
agriculture. Today's highly-competitive world reflects something that has
emerged, metaphotically speaking, only tin the last few minutes of humand
history: capitalism.

For the great majority of human pre-history we were bunters and gatherers,
and we lived in small egalitarian groups. We shared food and we reached
decisions in a consensual manner. No wonder, then, that capitalism makes
people feel so ill.

The significance of these ideas shouldn't be underestimated. They reveal
the true poverty of the "don't mind the gap" argument that now finds favour
even with centre-left political parties such as New Labour: the argument
that inequality as such does not matter so long as we do something for the
poorest.

Economic inequality is correlated with status differentials, with declining
civic participation, and with lack of control for those at the bottom of
hierarchies. Such adverse social environments create high levels of stress,
anxiety and insecurity as well as feelings of shame and inferiority. And
these, in turn, cause higher rates of serious illness and death, including
death as a result of violent crime.

Unequal societies, in other words, will remain unhealthy societies -- and
also unhappy societies -- no matter how wealthy they become. Their
advocates -- those who see no reason whatever to curb ever-widening income
differentials -- have a lot of explaining to do.
>>>>

<<<<
INEQUALITY IS GOOD FOR YOU

By Amity Shlaes

"More even distribution of wealth is key to growth," read the headline from
this autumn's Latin American business summit in Brazil. The speaker whose
words it described was Felipe González of Spain. The former prime minister
went on to say that this was not a moral issue but a practical one. The
developing world needed to become more "equal" like the developed one.

But the idea that growth is necessarily associated with economic equity is
a fallacy. And, despite the picture González sought to project, all is not
entirely equal within each developed nation.

Indeed, the most developed of all developed nations, that growth
powerhouse, the US, is actually a veritable model of social and economic
inequity.

The ineuity starts with the most obvious of measures, income: in New York
city today, there are people who cannot afford $1.50 for a subway ride and
people who can order up a trip to the Turks and Caicos on the old
Gulfstream with their mobile.

Then there are disparities in healthcare: the nprosperous cancer sufferer
may survey the rooftops of the city from his blanketed deathbed on Memorial
Sloan-Kettering's marbled upper floors, whereas the poor cancer sufferer
may have trouble getting his foot in the door and on to the grimy floor of
a Brooklyn emergency room.

Still, such evidence, so often rehearsed by America's critics, begs and
important question: Is this inequality actually bad?

No, one can argue. In fact, US inequality has been good. That is to say
that inequality has benefited all of US society, first the fat cats and
then, eventually, the poorer members. One can even argue that American
inequality has benefited the rest of the world, including many of America's
habitual critics.

The line of reasoning here is a straightforward one. The US has been, and
remains, a society that is based upon the very Jeffersonian notion of
equality of opportunity. The US is also genuinely committed to the
possibility of social mobility.

This, however, does not mean the country usually endorses or works to
generate equality of result, especially not for individuals. And the very
same features that make individual Americans' results so disturbingly
unequal are the ones that promote growth, which is the best social welfare
programme of all.

Inequality, for starters, means that somebody is on top. And the
opportunity for somebody to be on top, especially in a big way, especially
in the richest country in the world, is a powerful draw. Any talent that
has the poor luck not to be born in the US therefore considers, at least at
one or the other point in his life, the possibility of immigration to the
States.

These talents are not always the sweetest and calmest of people. One of the
mottos of Andy Grove, the Hungarian-born immigrant who built Intel, is
"Only the Paranoid Survive". This is not the motto of an egalitarian.

In addition to this draw, the raw meat of the opportunity to compete, we
can count a number of other opportunities that attract the sharks of
innovation to the US. None of these advantages is linked, in the
international brain, with the idea of economic equity throughout life.
Rather the reverse.

The first is the US tax regime. America's tax regime is seriously
progressive. The top 5% of earners pay more than 50% of all the income
taxes in the States. The bottom 50% of the earners pay only 4% of such
taxes. Still, what matters here is relative position.

Overall, when you count every sort of tax, the US regime is simply less
confiscatory than that of Europe or neighbouring Canada. This has the
(highly unfair) consequences of allowing people who are rich to keep more
of their money. But it also makes teh States an investor's destination. And
this ensures that growth tends to happen more in the US than elsewhere.

The notion of relative tax competitiveness is not merely blithe Reaganite
theory. Indeed, the US in recent decades saw a rather dramatic dmonstration
of the role tax rates play in growth. In the late 1980s, US tax rates were
high. Capital gains were taxed at an effective rate of 49%. Venture capital
was dead in the water. And the economic forecasters so uniformly predicted
Japan's future technology dominance that the Japanese national image of a
rising sun was a cliché of the business press.

But then the US cut tax rates -- both the crucial capital gains tax, and
individual rates as well. The capital gains rate cut was followed by an
explosion of venture capital in high-tech Silicon Valley. The individual
rate cuts helped US business across the land. The technology revolution
occurred in the States and not in Japan.

The there are America's regulatory and legal regimes, again not necessarily
the fairest in the world, at least of you use the word "fair" in the
Continental sense. US patent and trademark law to protect private property
pretty rigorously. This has had the "unfair" consequence of making many
products expensive to poorer citizens.

The most famous of such products are the costly components of the Aids
cocktail. Still, America's opportunity for profit afforded by patents is
why the great share of Aids drugs were first invented and marketed in the
USD and not elsewhere.

Next comes the ineffable matter of culture. In Europe and Japan both, the
schools are openly and officially elitist: track systems ensure that the
best talents are concentrated together from an early age. In the US, by
contrast, the system for pre-university education is nominally egalitarian.
Tracking exists, but American schools are still more like UK comprehensive
schools than like a German gymnasium.

Still, US schools fo have one highly inegalitarian feature that promotes
innovation. It is, oddly enough, neglect. Specifically, neglect that
permits play.

When, as in Europe or Japan, you have a rigorous elementary school system
with a "rap on the knuckles" approach towards mistakes, you end up
producing mor or less one kind of student: the cautious but uninspired
thinker.  Everyone is soemwhat well-trained -- perhaps not as well-trained
as in the past, regretfully.  But nonetheless.generally meeting a basic
cultural standard.

But what about when you have a system like America's, wildly uneven and
often outright neglectful?  Then, you generate, as America does, many
painfully uninformed idiots who cannot run a cash register. But you also
generate a few creative geniuses. That's because intelligent American
teenagers do not have to spend their teen years bent over books preparing
for a uniform national exam as they would in Europe, the UK or Japan.
Instead they find their way by themselves, playing Ninetendo games,
building fighter robots and generally getting up to mischief wile their
inefficient schools and indifferent parents are not looking. This, as it
turns out, is the ideal preparation for software writing and other growth
fields. How very profitable for the economy, and how very unequal.

The growth that America's innovation-friendly environment generates
benefits innovators in the first order. But there are only so many TiVos
and Vail homes that a rich fellow in a rich economy can accumulate. He
therefore uses the rest of his money to create jobs. The net effect
ebenefits all players in America's famously variegated society. In other
words, as hackneyed as it may sound, the old saying is true: in American
waters, a rising tide does lift all boats.

The lifting has been especially visible in the area of health. In 1968, the
average life expectancy for the 65-year-old American was 15 more years: he
would reach the age of 80. By 1970, that had risen to the age of 81, and by
1966 our old man could expect to live to 83. At the other end, US infant
mortality rates in 1970 hung at around 20 per 1,000 live births. Thirty
years later, that figure was closer to 10 per 1,000.

US teen drinking rates were as high as 50% back in 1979; in 1997, they are
21%. One in three US teens smoked 30 years ago; in 1997 something like 20%
did. America's poor have a terrible problem, but it is not -- except in
some tragic pockets -- having too little to eat. It is obesity. As last
month's lawsuit against McDonald's reflects, the majority of poor Americans
are too fat.

Great gains in personal wealth have accompanied these health gains. In
1947, the year wealthy America was putting together the Marshall Plan for
an impoverished Europe, the median US household income was $20,107. (These
figures are adjusted for inflation.) In 1972, the median income for the
family was closing in on $40,000. By 1997, it was $44,568. America, in
other words, is not a petrified society, where income striations are set
for eternity. Mr or MsEveryday has, quite simply, done better.

US minorities, to be sure, are not as wealthy as white. Again, we may ask:
does this really matter? The answer is "Yes" but not nearly so much as
another, more important question: How are minorities doing relative to how
they have done before.

And here the data are more than encouraging. Black home ownership rose to
47% of households in 2000, up from 42% in 1990. Today, half of black cancer
patients survive five years or longer, compared with only one third of
blacks in the early 1960s. Black infant mortality rates are now around 20
per 1,000 live births, or half the 40 per 1,000 of the 60s.

There has also been astounding progress for black peope in the area of
education. While in the 1840s blacks had on average about half of the
number of school years behind them as whites, today the median number of
school years completed for 25 year olds of the two ethnicities is, at 13,
identical.

For women there is a similar story of narrowing gaps.

The domestic benefits of US inequality are, of course, not the only
benefits. The innovations that the US generated are valuable to the rest of
the globe. We see a particularly spectacular demonstration of this in the
current battles over Aids drugs. At issue is whether the unfair old US will
release the patents of these drugs so that poorer nations may have access
to them to slow the wild spread of the disease. But it is important to
remember that the world would probably not have Aids drugs at all if US
health care did not have a large private health sector compoentn and ifthe
US did not have secure patent and property rights. These drugs were mostly
not developed in Europe, the land of rpice controls and regulation; and
they were certainly not developed in India, where patent rights are so
weak. When it comes to drugs, the rest of the world is a free rider
beneficiary of America's notoriously unfair, selfish pharmaceutical industry.

But that, in a way, is merely the micro argument. The macro argument is one
that has only become indisputably clear since the mid-1980s, with the
recognition that the Soviet Union was growing anywhere near as fast asd the
official data suggested.  What became clear in that period, and afterwards,
is that free markets are the only path to growth. A country may strike
compromises along the way, as the nations of Europe have done. But this
also means recognising that growth has been sacrificed in that compromise.

What this means is that America's inegalitarian system of free markets has
been its greatest export. And that very inequality that leaders such as Mr
González complains of is due not to insufficient redistribution of extant
wealth, but to insufficient penetration of free market systems in the
developing world. Or, as the Danish author, Johan Norberg, put it recently:
"The uneven distribution of wealth in this world is above all due to uneven
distribution of capitalism."

In other words, Europeans and Japanese who desire to perpetuate their own
egalitarian cultures may also want to do what they can to support America's
very different one. And, from time to time, raise a glass to the States --
that land that is so arrogant, so rich, and so gloriously unequal.
>>>>

******************************
Harry Pollard
Henry George School of LA
Box 655
Tujunga  CA  91042
[EMAIL PROTECTED]
Tel: (818) 352-4141
Fax: (818) 353-2242
*******************************


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