Re: Wade vs Wolf
> > I don't think S. Korea, Taiwan, or Japan made it as far as they did > > based on > > import substitution, which at least in Latin America meant a > > nation-centric > > effort at development. It's more accurate to say that they used > > protection > > in order to build up the basis for fighting and (at least temporarily) > > > > winning the battle of exporting. (Nation-centric development involves, > > for > > example, high domestic wages to provide a home market. This is much > > less > > important to the East Asian "model.") When I first got to Japan in 1989 I wanted to see just how protectionist and closed the markets actually were. The thing that struck me the most wasn't protection or closed markets, but, rather, the extreme competition. At the time Japan still had 12 automobile manufacturers. I think one reason why US companies couldn't find the key to 'crack' the Japanese market was they just found it too expensive to wade in and figure out how to compete. Some did, though: Proctor & Gamble (do Americans buy Kao or Lion detergent?), Coca-Cola (does Suntory market softdrinks in the US?), Warner-Lambert, Lever, etc. For all the complaints that Kodak made about Fuji, if you have ever been to Japan you can see that their number one competitor is Konica and German film marketed generically, while Kodak has been a marketing joke. I could go on and on. I think most Americans never knew just how competitive and difficult it was to sell something in Japan. Japanese, exporters that they are, were well aware however just how difficult it was to get shelf space in US stores. Coca Cola became successful by building up its own distribution network,and they are as much responsible for the pervasive use of vending machines. The damned things are everywhere! As is the litter of cans and pet bottles carelessly tossed. However, in terms of products, Coca Cola is usually not the innovator. For example, UCC marketed canned coffee back in the 60s and it became a hit. Japanese drink far more of it than they do cola. However, Coca Cola now dominates sales of canned coffee. Japan, by the way, is a poster child of the WB development model circa 1950-1970. Charles Jannuzi
Wade vs Wolf
G'day Jim, > I don't think S. Korea, Taiwan, or Japan made it as far as they did > based on > import substitution, which at least in Latin America meant a > nation-centric > effort at development. It's more accurate to say that they used > protection > in order to build up the basis for fighting and (at least temporarily) > > winning the battle of exporting. (Nation-centric development involves, > for > example, high domestic wages to provide a home market. This is much > less > important to the East Asian "model.") As I understand it, this matches the quasi-Stiglitzian Wolfensonian World Bank view, no? They're not sure there's anything necessarily wrongwith a nation-building / sunrise sector public support / intervention model - but they still encourage a globalising stance. So it'd be export-producing enterprises you'd be looking at nurturing, rather than indulging in across-the-board import-substitution. That's a big recant on the part of the WB, but still poses the common problem of people sweating over, and often using up arable land on, stuff that's not for their consumption, even though they're desperately short of the stuff they could be manufacturing or growing with all that labour, capital and land. The long-term gain is (a) only theoretically there [they're often stuck in the role of pricetaker rather than maker, for a start] and (b) very long-term indeed to someone who's malnourished or sans roof/clothing/medecine. Some of them are dead well before the long run ... > but for better or for worse the genie is out of the bottle and it's > hard to reverse the neoliberal move away from import substitution. Yeah, but one senses, too, that the WB retreat into mixed paradigms and confessions that the empirical hasn't too convincingly validated the theoretical - well, that indicates the backlash genie might be out of its bottle, too. Doncha reckon? Cheers, Rob.
X beats Y, was Re: Wade vs Wolf]
Doug wrote: >It's awful, but I guess it beats slavery or feudalism. But it's also >a deeply contradictory system, producing wealth and possibility >alongside poverty and oppression. This is silly. (And of course the most vicious slavery was capitalist slavery.) Misery is individual, and a well-treated slave in (say) ancient syra, was better off than a new york citizen being raped with a toilet plunger. Or as Sissy Jupe said, I can't tell, unless I know who's got the money. There is simply no way (unless there exists a god who can see the fall of a sparrow) to say that "social system A" was better or worse than Social System B, and it's rather weird to try to quantify personal misery. And to say in the abstract that Capitalism is better than Feudalism is _not_ marxist. All Marx said was that capitalism _made socialism possible_, and I'm sure the slaves on a southern rice plantation would have been delighted to know that just possibly their deaths were creating unalienated life in the 25th century. Carrol
Re: RE: Re: Wade vs Wolf
No, high wages came about as industries absorbed labor. So labor repression worked initially but it didn't later. If my memory serves me right Korean wages were growing at very high rates throughout the 70s and 80s. Further, Jim is right that it wasn't classic Lat Am style ISI, but Korea did have ISI, witness the Heavy Industry and Chemicals Industrialization beginning in 1973, though their steel industry was initiated in 1968. Park Chung Hee, the military man, believed in classic heavy industry for national development. The difference was Korea did not, in fact encouraged, shut out exports. Cheers, Anthony Anthony P. D'Costa Associate Professor Ph: (253) 692-4462 Comparative International Development Fax: (253) 692-5718 University of WashingtonBox Number: 358436 1900 Commerce Street Tacoma, WA 98402, USA xxx On Tue, 5 Mar 2002, Devine, James wrote: > you write: > > ...Isn´t "infant-industry promotion, buttressed by trade restrictions" the > only way any country has ever industrialised ,including all of Southeast > Asia and India, or am I way off here?< > > I don't think S. Korea, Taiwan, or Japan made it as far as they did based on > import substitution, which at least in Latin America meant a nation-centric > effort at development. It's more accurate to say that they used protection > in order to build up the basis for fighting and (at least temporarily) > winning the battle of exporting. (Nation-centric development involves, for > example, high domestic wages to provide a home market. This is much less > important to the East Asian "model.") > > > Also it seems to me that in many ways the import substitution regime in > Latin America, however flawed, seemed to progress at a faster pace than the > current neoliberal model.< > > maybe, but for better or for worse the genie is out of the bottle and it's > hard to reverse the neoliberal move away from import substitution. > > Jim Devine > >
Re: Re: Re: Re: Wade vs Wolf
I'd said: >It's awful, but I guess it beats slavery or feudalism. But it's also >a deeply contradictory system, producing wealth and possibility >alongside poverty and oppression. Doug Yes, you had but I still think you sometimes appear as appreciating the booms. Well, at least, this is my perception. On another note, Carl Remick says: "Location, sure, and let's not forget class!" And I said: I guess there is some kind of "struggle" going on here but I forgot what that "struggle" was. What do you think this was about? Sabri
Re: Re: Re: Re: Re: Wade vs Wolf
Sabri Oncu wrote: >Don't forget that this is not just a temporal/historical but also >a spatial/geographical system. Even at times of capitalist booms, >although the boom lifts some boats in certain locations, other >boats sink in certain other locations. I would say whether you >appreciate or hate the fact that capitalism often produces >"greats booms" depends on your location. And it should have been >clear by now that I hate these booms whereas you sometimes appear >as appreciating them. I'd said: >It's awful, but I guess it beats slavery or feudalism. But it's also >a deeply contradictory system, producing wealth and possibility >alongside poverty and oppression. Doug
Re: Re: Re: Re: Re: Wade vs Wolf
>From: Sabri Oncu <[EMAIL PROTECTED]> > >Don't forget that this is not just a temporal/historical but also >a spatial/geographical system. Even at times of capitalist booms, >although the boom lifts some boats in certain locations, other >boats sink in certain other locations. I would say whether you >appreciate or hate the fact that capitalism often produces >"greats booms" depends on your location. [Location, sure, and let's not forget class! From today's NY Times:] For Executives, Nest Egg Is Wrapped in a Security Blanket By DAVID LEONHARDT General Electric allows its top executives to contribute money to a retirement fund on which the company recently guaranteed an annual return of at least 10 percent, far better than a typical G.E. worker saving money in the company's 401(k) plan can expect. Tenneco Automotive, which makes shock absorbers, permits its executives to receive a full pension at age 55, seven years before the company's other employees can. When Louis V. Gerstner retired as I.B.M.'s chief executive last week, he became eligible for an annual pension of at least $1.1 million, precisely what the company promised in his contract when he joined eight years ago. As part of a 1999 cost-cutting program, however, many I.B.M. employees are set to receive smaller pensions and retirement health insurance benefits than they were promised when they were hired. Such contrasts have become the norm over the last two decades, as the United States has increasingly developed a two-tier pension system. Companies seeking to increase profits have cut retirement benefits, leaving many members of the baby boom generation unprepared for life after age 65 despite the long bull market, economists say. [http://www.nytimes.com/2002/03/05/business/05PENS.html] Carl _ MSN Photos is the easiest way to share and print your photos: http://photos.msn.com/support/worldwide.aspx
Re: Re: Re: Re: Wade vs Wolf
Doug, I don't think anyone here would argue that when faced with a choice between less misery and more misery, people would chose less misery. By the way, I am using the word misery in its daily form without any theoretical connotation and mention this so that I don't find myself in a long debate on what misery means. My only reminder to you is this: Don't forget that this is not just a temporal/historical but also a spatial/geographical system. Even at times of capitalist booms, although the boom lifts some boats in certain locations, other boats sink in certain other locations. I would say whether you appreciate or hate the fact that capitalism often produces "greats booms" depends on your location. And it should have been clear by now that I hate these booms whereas you sometimes appear as appreciating them. I guess there is some kind of "struggle" going on here but I forgot what that "struggle" was. Sabri + Sabri Oncu wrote: >Let me ask you a direct question: Is it your point that >capitalism is not as bad a system as some of us here think it is? It's awful, but I guess it beats slavery or feudalism. But it's also a deeply contradictory system, producing wealth and possibility alongside poverty and oppression. A friend of mine who spent a few years as a reporter in Vietnam interviewed Nike workers who told her that they prefer their sweatshop jobs to what they would have been doing otherwise - things like chasing rats in rice paddies (not much fun to be a woman on the farm). Anticapitalists - and I'm one - often overlook that sort of thing. And capitalism often produces great booms, though PEN-Lers seem to prefer talking about busts. Which kind of begs the question of just how capitalist China is, and what lessons it might hold for other poor countries. Doug
Wade vs Wolf
Wade vs Wolf by Doug Henwood 05 March 2002 13:53 UTC Sabri Oncu wrote: >Let me ask you a direct question: Is it your point that >capitalism is not as bad a system as some of us here think it is? It's awful, but I guess it beats slavery or feudalism. But it's also a deeply contradictory system, producing wealth and possibility alongside poverty and oppression. A friend of mine who spent a few years as a reporter in Vietnam interviewed Nike workers who told her that they prefer their sweatshop jobs to what they would have been doing otherwise - things like chasing rats in rice paddies (not much fun to be a woman on the farm). Anticapitalists - and I'm one - often overlook that sort of thing. And capitalism often produces great booms, though PEN-Lers seem to prefer talking about busts. Which kind of begs the question of just how capitalist China is, and what lessons it might hold for other poor countries. Doug CB: One big problem is that capitalism, since the beginning and continually ever since, doesn't seem to be able to produce great booms, without producing great "booms" , as in kapploooweee !! Viet Nam is an extraordinarily tragic example of the destructive scale of a capitalist "boom" as in Klloooww !!! One obvious lesson that U.S. leftists don't seem to like to talk about with respect to China and that might hold for other poor countries might be have a Communist Party and Marxist economists as the political economic leadership of your country.
Re: Re: Re: Re: Re: Wade vs Wolf
- Original Message - From: "Doug Henwood" <[EMAIL PROTECTED]> >A friend of mine who spent a few > years as a reporter in Vietnam interviewed Nike workers who told her > that they prefer their sweatshop jobs to what they would have been > doing otherwise - things like chasing rats in rice paddies (not much > fun to be a woman on the farm). == This of course raises, again, the issue of Marx' vs. Roemer's views on exploitation. Ian
RE: Re: Wade vs Wolf
you write: > ...Isn´t "infant-industry promotion, buttressed by trade restrictions" the only way any country has ever industrialised ,including all of Southeast Asia and India, or am I way off here?< I don't think S. Korea, Taiwan, or Japan made it as far as they did based on import substitution, which at least in Latin America meant a nation-centric effort at development. It's more accurate to say that they used protection in order to build up the basis for fighting and (at least temporarily) winning the battle of exporting. (Nation-centric development involves, for example, high domestic wages to provide a home market. This is much less important to the East Asian "model.") > Also it seems to me that in many ways the import substitution regime in Latin America, however flawed, seemed to progress at a faster pace than the current neoliberal model.< maybe, but for better or for worse the genie is out of the bottle and it's hard to reverse the neoliberal move away from import substitution. Jim Devine
Re: Wade vs Wolf
>From: "Ian Murray" <[EMAIL PROTECTED]> >Reply-To: [EMAIL PROTECTED] >To: <[EMAIL PROTECTED]> >Subject: [PEN-L:23494] Wade vs Wolf >Date: Mon, 4 Mar 2002 15:21:17 -0800 > >< http://www.prospect-magazine.co.uk > >Are global poverty and inequality getting worse? [snip] > > > > >You are convinced that the World Bank has cooked the data on >poverty and inequality. You need to produce chapter and verse to >substantiate such a serious charge, but have failed to do so. >That is not good enough. All you assert is that we do not know >what has happened to poverty and inequality, not that they have >become worse. I note also that you have not taken up my offer to >explain how we are to reduce absolute gaps in living standards >in the near future. We should remember that it´s crucial to take into account _how good progress has been_ (rates of poverty reduction) rather than absolute poverty reduction only. All of these data ignore other data that is virtually unmeasurable, such as how happy people feel in general, how secure, at peace, crime rates and individual atomisation, etc.. >I accept that infant-industry promotion, buttressed by trade >restrictions, may occasionally accelerate economic growth. >However, the record on the use of such policies in developing >countries is, with few exceptions, dreadful. This seems flat-out wrong to me. Isn´t "infant-industry promotion, buttressed by trade restrictions" the only way any country has ever industrialised ,including all of Southeast Asia and India, or am I way off here? Also it seems to me that in many ways the import substitution regime in Latin America, however flawed, seemed to progress at a faster pace than the current neoliberal model. Yet even though >liberalisation of protectionist trade policy regimes is good for >developing countries, I don't claim it is a panacea. > >I also fail to see why WTO constraints on policy discretion >should be good for rich countries, as we know they are, but not >for poor ones. Governments of developing countries are, if >anything, more vulnerable to capture by protectionist lobbies >than those of advanced countries. > >I do accept, however, that developing countries have sometimes >been forced to accept inappropriate policies: the trade-related >intellectual property agreement is an example. I also agree that >the north should liberalise in favour of the south and that more >aid, targeted on countries with governments that know how to use >it, is a moral and practical necessity. > [snip] > >Yours Martin > > > _ Send and receive Hotmail on your mobile device: http://mobile.msn.com
Re: Re: Re: Re: Wade vs Wolf
Sabri Oncu wrote: >Let me ask you a direct question: Is it your point that >capitalism is not as bad a system as some of us here think it is? It's awful, but I guess it beats slavery or feudalism. But it's also a deeply contradictory system, producing wealth and possibility alongside poverty and oppression. A friend of mine who spent a few years as a reporter in Vietnam interviewed Nike workers who told her that they prefer their sweatshop jobs to what they would have been doing otherwise - things like chasing rats in rice paddies (not much fun to be a woman on the farm). Anticapitalists - and I'm one - often overlook that sort of thing. And capitalism often produces great booms, though PEN-Lers seem to prefer talking about busts. Which kind of begs the question of just how capitalist China is, and what lessons it might hold for other poor countries. Doug
RE: Re: Wade vs Wolf
Charles J. writes: > the US cheap dollar/strong yen policy has pushed China into the fore as huge exporter to both the US and Japan< huh? the US$ has been soaring since the mid-1990s. How could it be "cheap"? Are you saying that the Yen is even stronger? JDevine
Re: Wade vs Wolf
Doug Henwood put us onto the questionable nature of World Bank statistics in Indonesia. Doug has also strongly criticized some of David Dollar's work, if I recall correctly. I cannot believe that poverty is decreasing in China. I realize that some have risen, but many more have fallen. Bill Lear mentioned Sen, who has emphasized that the data can be misleading -- that in places like Kerala quality of life can exceed what might be inferred from poverty data. Anthony earlier enriched our understanding of this subject. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Re: Wade vs Wolf
On Monday, March 4, 2002 at 18:56:42 (-0500) Doug Henwood writes: >Michael Perelman wrote: > >>Wasn't Wade's point that much of the increase in inequality was within >>countries rather than between them? > >Well yeah, but there's a tendency in left discourse to bracket out >China, except to talk about sweatshops and political repression. The >U.S. recession has gotten far more PEN-L traffic than growth in >China, which has grown almost 10% a year over the last two decades. >How'd it happen? What'd it mean? What's happened to incomes across >the spectrum? Even if ineq increased, are the poor better off than >they were 10 or 20 years ago? India shows growth rates of almost 6% - >the same questions apply. I know growth is so much less fun than >crisis, but maybe a few words... I think Sen points out that though China has grown, mortality rates have gone up markedly since market reforms were instituted (in late '70s?). So average income goes up, while length of average life goes down. Bill
Re: Re: Wade vs Wolf
On Monday, March 4, 2002 at 18:57:45 (-0500) Doug Henwood writes: >Devine, James wrote: > >>In all of these income numbers, are non-market sources of subsistence >>measured? Is it possible that measured and reported gains in market income >>are cancelled out if one subtracts the effects of the abolition of the >>availability of non-capitalist means of subsistence (the end of the iron >>rice bowl policy in China, the end of non-commodity-producing traditional >>ways of life, etc.)? > >More excellent questions. Is anyone studying this now? Has Sen? Bill
Re: Re: Re: Wade vs Wolf
> the same questions apply. I know growth is > so much less fun than crisis, but maybe a few words... > > Doug Hi Doug, Let me ask you a direct question: Is it your point that capitalism is not as bad a system as some of us here think it is? Sabri
Re: Wade vs Wolf
Henwood: > Well yeah, but there's a tendency in left discourse to bracket out > China, except to talk about sweatshops and political repression. The > U.S. recession has gotten far more PEN-L traffic than growth in > China, which has grown almost 10% a year over the last two decades. Well, for a start , a lot of those figures are about as accurate as, say, unemployment figures from the US. Second, a lot of that growth has been 'robbing peter to pay paul' so to speak. As the east coast has boomed and pumped up the statistics, the interior has waned. You might say there just isn't enough of an accurate historical database about the Chinese economy to say much of anything except to say over the past 20 years it has changed a lot and it has grown some. Since 9-11 happened hardly anyone noticed China's acceptance into the WTO--at least all those globally minded Americans hardly noticed. > How'd it happen? What'd it mean? What's happened to incomes across > the spectrum? Even if ineq increased, are the poor better off than > they were 10 or 20 years ago? The China model is, I know it sounds trite, unique. It combines the US penchant for pumping money into research, development and the economy via the military and space/missile/aerospace programs while it also follows a somewhat Japanese model for development, at least on the east coast. In that sense, the gov't plans how to make capital for development and building readily available. I'm not sure China will be as successful at taking full development into the hinterland the way Japan did (the side of Japan most Americans know nothing about but which figures heavily in Japan politics and in its economy). One thing that has really helped China is the investment into China from the US, Japan and Korea (a lot of it profitable but probably non-productive cronyism if you look at the Bush family portfolio). It's been Japan with S. Korean chaebol as well that have been largely responsible for the building of modern factories able to churn out custom-fitted but factory-made suits, computers, DVD players, and white goods. Also, the US cheap dollar/strong yen policy has pushed China into the fore as huge exporter to both the US and Japan (Japan has a very large account deficit with China). This is why the Chinese are now upset by any depreciation of the yen, even if it is short-term (as are a lot of currency speculators whose constant source of money was always betting against that depreciation). The Chinese I meet and get to know in Japan still act like they come from a secretive and repressive society. For example, one might have a girlfriend from China but he doesn't want the other Chinese to know they are together or that she is even here in Japan. And these people are in Japan because they have connections to the CP, otherwise they wouldn't be permitted to leave China. If you get them actually talking about China as they know it, they talk of uneven development (city vs. countryside, east coast vs. the interior, SE vs. most of the rest of the country), loss of farmland and ecological destruction, enormous pollution and waste problems, and social disruptions (everyone trying to move to the east coast, people leaving farming to try for work in the cities, even if it means camping out under a bridge). Most Chinese I know here are economic and political immigrants in true senses of those words; they would prefer to stay in Japan than go back after they've lived a while here. One of my best friends, who is from China, says he doesn't want to go back because he loves the social freedom of Japan and hates the prevalent crime in the Chinese provinces (he doesn't come from an east coast city, but rather the deep interior). When we were taking a summer hike in the peaceful Japanese countryside I asked him what his part of China was like. He said, lots of countryside but you wouldn't walk through it like this because of bandits. He's also increasingly uncomfortable with being identified as 'Chinese' in Japan because recent Chinese immigrants are associated with crime waves in the Kanto. His hope for a future job is connected with helping (I won't name the company but it's a famous brand), an electronics company with several factories here in Fukui, to set up production somewhere in 'green field' China. His father has lived in Japan and worked for them, as does his older brother. If China can resolve its Taiwan issue peacefully (though the Koreas could be equally cataclysmic for China) and meet its fast-growing energy needs (a bif IF), it's set to surpass Japan in GNP in a decade and the US in two. But that's also because of its enormous population. I almost think the elite in Japan would be happy to see the US concentrate its often aggressive and manipulative foreign and trade policies toward China while Japan slips into some sort of 'Italy' or 'Sweden' status. Hard to do, though, if you have no EU to tie yourself to. Charles Jannuzi Fukui, Japan
Re: Re: RE: Wade vs Wolf
- Original Message - From: "Doug Henwood" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Monday, March 04, 2002 3:57 PM Subject: [PEN-L:23500] Re: RE: Wade vs Wolf > Devine, James wrote: > > >In all of these income numbers, are non-market sources of subsistence > >measured? Is it possible that measured and reported gains in market income > >are cancelled out if one subtracts the effects of the abolition of the > >availability of non-capitalist means of subsistence (the end of the iron > >rice bowl policy in China, the end of non-commodity-producing traditional > >ways of life, etc.)? > > More excellent questions. Is anyone studying this now? > > Doug Has digging potential http://www.chinaonline.com http://www.chinaonline.com/features/chinaonline2/research.htm Ian
Re: Re: Wade vs Wolf
See UNU/WIDER paper by Cornia and Court (2001) "Inequality, Growth and Poverty in the Era of Liberalization and Globalization) on these issues. Cheers, Anthony Anthony P. D'Costa Associate Professor Ph: (253) 692-4462 Comparative International Development Fax: (253) 692-5718 University of WashingtonBox Number: 358436 1900 Commerce Street Tacoma, WA 98402, USA xxx On Mon, 4 Mar 2002, Doug Henwood wrote: > Ian Murray wrote: > > >However, this result comes from fast growth > >in China and India. If they are excluded this measure of > >inequality shows no obvious trend since 1980. > > Well yeah, but China and India together account for 44% of the > "developing" world's population. I can see the point of excluding > them, but still, they're not exactly footnotes to the real story. > > Doug > >
RE: Wade vs Wolf
Martin [Wolf?] writes: >Economic growth is, almost inevitably, uneven. Some countries, regions and people do better than others. The result is growing inequality. To regret that is to regret the growth itself. < according to Kuznets, after awhile growth is supposed to help _fight_ inequality (as trickle-down finally kicks in). Is Martin denying this? This denial sure does fit the story of the US since 1980 or so, where we Amurricans have seen "the far side of the Kuznets curve" (to paraphrase Doug Henwood) with increasing inequality despite sustained GDP growth. I guess Wolf's message is that he really doesn't care about inequality. Is it possible that growth, properly defined as something distinct from an increase in market-oriented measures such as GDP, might occur without increasing inequality, but that marketization is almost always associated with increasing inequality? Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
Re: RE: Wade vs Wolf
Devine, James wrote: >In all of these income numbers, are non-market sources of subsistence >measured? Is it possible that measured and reported gains in market income >are cancelled out if one subtracts the effects of the abolition of the >availability of non-capitalist means of subsistence (the end of the iron >rice bowl policy in China, the end of non-commodity-producing traditional >ways of life, etc.)? More excellent questions. Is anyone studying this now? Doug
Re: Re: Re: Wade vs Wolf
Michael Perelman wrote: >Wasn't Wade's point that much of the increase in inequality was within >countries rather than between them? Well yeah, but there's a tendency in left discourse to bracket out China, except to talk about sweatshops and political repression. The U.S. recession has gotten far more PEN-L traffic than growth in China, which has grown almost 10% a year over the last two decades. How'd it happen? What'd it mean? What's happened to incomes across the spectrum? Even if ineq increased, are the poor better off than they were 10 or 20 years ago? India shows growth rates of almost 6% - the same questions apply. I know growth is so much less fun than crisis, but maybe a few words... Doug
RE: Wade vs Wolf
In all of these income numbers, are non-market sources of subsistence measured? Is it possible that measured and reported gains in market income are cancelled out if one subtracts the effects of the abolition of the availability of non-capitalist means of subsistence (the end of the iron rice bowl policy in China, the end of non-commodity-producing traditional ways of life, etc.)? JD
Re: Re: Wade vs Wolf
Wasn't Wade's point that much of the increase in inequality was within countries rather than between them? On Mon, Mar 04, 2002 at 06:28:13PM -0500, Doug Henwood wrote: > Ian Murray wrote: > > >However, this result comes from fast growth > >in China and India. If they are excluded this measure of > >inequality shows no obvious trend since 1980. > > Well yeah, but China and India together account for 44% of the > "developing" world's population. I can see the point of excluding > them, but still, they're not exactly footnotes to the real story. > > Doug > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: Wade vs Wolf
Ian Murray wrote: >However, this result comes from fast growth >in China and India. If they are excluded this measure of >inequality shows no obvious trend since 1980. Well yeah, but China and India together account for 44% of the "developing" world's population. I can see the point of excluding them, but still, they're not exactly footnotes to the real story. Doug
Wade vs Wolf
< http://www.prospect-magazine.co.uk > Are global poverty and inequality getting worse? Dear Martin 22nd January 2002 You have written eloquently in the Financial Times about globalisation. You make three main points. (1) Poverty and inequality on a world scale have both fallen over the past two decades for the first time in more than 150 years. (2) These falls are due to greater global economic integration. (3) The anti-globalisation movement encourages countries to adopt policies that will in fact only intensify their poverty and inequality. Let us take the first point about trends in poverty and inequality. If you are wrong here, the rest of your argument begins to wobble and, in fact, there are reasons to doubt what you say. On poverty, the World Bank is the main source of numbers. Bank researchers have found that the number of people in absolute poverty (with incomes less than about $1 per day) was roughly constant in 1987 and 1998, at around 1.2 billion. Since world population increased, the proportion of the world's population in absolute poverty fell sharply from around 28 per cent to 24 per cent in only 11 years. This is good news. But recent research on where the Bank got the 1.2 billion suggests that the method for calculating the numbers is questionable. The effect is probably to understate the true numbers in poverty. How much higher than 1.2 billion we do not yet know. So what is happening to global inequality? It is widening rapidly, if we compare the average incomes for each country and treat each one as a unit (China = Uganda). Yet income inequality among countries has become more equal, since around 1980, if we compare the average incomes for each country and weight each one by its population. However, this result comes from fast growth in China and India. If they are excluded this measure of inequality shows no obvious trend since 1980. In any case, this measure-using the average income of each country weighted by population-is interesting only as an approximation to what we are really interested in, which is the income distribution among all the world's people or households, regardless of where they live. The problem is that we do not have good data for the incomes of all the world's people. You say that global inequality amongst households has probably fallen. But the most comprehensive data on world incomes, based on household income and expenditure surveys, find a sharp increase in inequality over as short a time as 1988 to 1993. Some of this may be statistical error; but the results do mean that the balance of probability falls in the direction of increasing global inequality among households. This conclusion is strengthened by the trends in industrial pay inequality within countries. Pay inequality within countries was stable or declining from the early 1960s to 1982, then sharply increased from 1982 to the present. The year 1982 was a dramatic turning point towards greater inequality within the world's countries. Doesn't the fast growth of populous China and India create a presumption that world income distribution is becoming more equal? No. At low levels of income, growth has to be fast for a long time before the absolute gap with slow-growing, high income countries begins to fall. The absolute income gap between a developing country with an average income of $1,000 a year, growing at 6 per cent, and a developed country with average income of $30,000, growing at 1 per cent, continues to widen until after the 40th year. China and India are not reducing the gap between their average incomes and the averages of the countries of western Europe, North America and Japan. They are, though, closing the gap with the faltering, middle-income states like Mexico, Brazil, Russia and Argentina, which is why average inequality among countries has become more equal since around 1980. But this reduction in the gap between China and India and the middle-income states is probably offset by widening income inequality within the two giants. Perhaps all the thunder and lightning about the trends diverts attention from the main issue: the sheer magnitude of poverty and inequality on a world scale. The magnitude is unacceptable, regardless of the trend, and the world development agenda should make inequality reduction (not only poverty reduction) a high priority. Roughly 85 per cent of world income goes to 20 per cent of the world's population and 6 per cent to 60 per cent of the world's population. Can this meet any plausible test of legitimacy? It is difficult to see how it could meet the Rawlsian principle that a given degree of inequality is acceptable if it is necessary for the worst off to become better off. Integration/globalisation is nothing like the engine of development you say it is. The engine is the advance of technology and the diffusion of technical capacities of people, firms and governments. Some forms of integration may help this, others may hinder it, depending partly o
