Year | U.S. Population | % working on farms |
---|---|---|
1790 | 4,000,000 | 90% |
1900 | 76,000,000 | 40% |
2015 | 326,000,000 | <1% |
Source: U.S. Department of Agriculture Economic Research Service
Joseph Schumpeter
1883-1950
"Industrial mutation--if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in" (p.83).
Schumpeter, Joseph A, (1947), Capitalism, Socialism, and Democracy
59 years of progress
Markets serve consumers (consumer sovereignty), not workers or producers!
Successful market economies produce wealth and destroy jobs
Economic growth ≡ more output with fewer inputs!
A political problem: how do producers permit the destructive side of creative destruction?
Source: Feenstra & Taylor (2017)
Source: Feenstra & Taylor (2017)
Source: Feenstra & Taylor (2017)
Again, changes in trade fall mainly upon the fixed/specific factors of production
Mobile factors face ambiguous change
Policy implication: if governments wish to protect domestic groups from adverse trade shocks, increase mobility and non-specific skills/uses
We’ve really focused on the world of “neoliberalism”, the system of international trade institutions and underlying philosophy
Rightly or wrongly, people associate “neoliberalism” with:
Very few people have ever called themselves “neoliberals”
Though some have recently tried to “take it back” 👉
Very few people have ever called themselves “neoliberals”
Though some have recently tried to “take it back” 👉
“Globalism”: urban, cosmopolitan, citizen of the world, tolerant of other cultures/religions/minorities, often elite professional
Populism/Nationalism: rural, parochial, attached to local/national culture and identity, anxiety over economic obsolescence, anxiety over cultural/social change
A lot of straw man arguments
This conversation will not be easy, but is one our nation must have
Decades ago, many internal divisions within both the Republicans and Democratic parties on issues
Today, issues have clear Democrat-side vs. Republican-side
Politics becomes more ideological, meaning less compromise or deal-making
Results: less governing gets done, more gridlock
Brady, William J, Julian A Wills, et al., 2017, "Emotion Shapes the Diffusion of Moralized Content in Social Networks" PNAS 114(28): 7313--7318
Brady, William J, Julian A Wills, et al., 2017, "Emotion Shapes the Diffusion of Moralized Content in Social Networks" PNAS 114(28): 7313--7318
Brady, William J, Julian A Wills, et al., 2017, "Emotion Shapes the Diffusion of Moralized Content in Social Networks" PNAS 114(28): 7313--7318
Opposition to the global, neoliberal system has historically been a position on the extreme political left
Now it is also a position of the extreme political right
Greater economic instability of globalization
Rapid social and demographic change
Social, political, and economic inequality (often within wealthy countries)
Moody’s Credit Ratings: January 2014
Boris Johnson
“The more the EU does, the less room there is for national decision-making. Sometimes these EU rules sound simply ludicrous, like the rule that you can’t recycle a teabag, or that children under eight cannot blow up balloons, or the limits on the power of vacuum cleaners. Sometimes they can be truly infuriating – like the time I discovered, in 2013, that there was nothing we could do to bring in better-designed cab windows for trucks, to stop cyclists being crushed. It had to be done at a European level, and the French were opposed.”
BBC Op-Ed by Boris Johnson, 15 March 2016
With economic growth, everyone's income is rising, people tolerate inequalities more: a positive sum game
With stagnation, people view the economy and politics as a zero-sum game
“Any nation, even one with incomes as high as America's, will find the basic character of its society at risk if it allows its citizens' living standards to stagnate.”
Ian Bremmer
“Many Americans were desperate not for “change,” as the word appears on professionally produced campaign posters. Real change. Actual change...You don’t have to defend Donald Trump to defend those who chose him...Trump is the purest distillation of a “protest vote” that either of the two major American political parties has ever produced...”
Bremmer, Ian, 2017, “In Defense of the Trump Voter”
Ian Bremmer
“All of which have undermined trust among a large swathe of the American population. These failures have been compounded over years, while Congress and the White House have been controlled by both Democrats and Republicans; these failures belong to the American political establishment, not one party or the other. People in this country feel at best ignored, at worst actively lied to, by politicians, by the mainstream media, by corporate executives, by bankers, by public intellectuals. For many, a vote for Trump was a clear message that business as usual would not be tolerated.”
Bremmer, Ian, 2017, “In Defense of the Trump Voter”
1) In the last 20 years, the proportion of people living in extreme poverty has:
a) Almost doubled
b) Remained more or less the same
c) Almost halved
2) How many of the world’s 1-year-old children today have been vaccinated against some disease?
a) 80%
b) 50%
c) 20%
3) How did the number of deaths per year from natural disasters change over the last hundred years?
a) More than doubled
b) Remained more or less the same
c) Decreased to less than half
4) Where does the majority of the world population live?
a) Low income countries
b) Middle income countries
c) High income countries
5) Worldwide, 30 year old men have spent 10 years in school, on average. How many years have women of the same age spent in school?
a) 9 years
b) 6 years
c) 3 years
6) There are roughly seven billion people in the world today. Which map shows where people live? (Each figure represents 1 billion people.)
7) In low income countries across the world, how many girls finish primary school?
a) 20%
b) 40%
c) 60%
8) How many people in the world have some access to electricity?
a) 20%
b) 50%
c) 80%
9) What is the life expectancy of the world population?
a) 50 years
b) 60 years
c) 70 years
10) What does the global income distribution look like?
Source: Our World in Data: Income Inequality
Dierdre N. McCloskey
1942-
Two centuries ago the world’s economy stood at the present level of Chad or Bangladesh. In those good old days of 1800...the average human consumed in modern-day prices...roughly $3 a day, give or take a dollar or two...The only people much better off than the $3 average were lords or bishops or some few of the merchants. It had been this way for all of history, and for that matter all of pre-history. With her $3, the typical denizen of the earth could eat a few pounds of potatoes, a little milk, very occasionally a scrap of meat. A wool shawl. A year or two of elementary education, if exceptionally lucky. At birth she had a 50-50 chance of dying before she was 30 years old. Perhaps she was a cheerful sort, and was "happy" with illiteracy, disease, superstition, periodic starvation, and lack of prospects. After all, she had her family and faith and community, which interfered with every choice she made. But anyway she was desperately poor, and narrowly limited in human scope. (pp. 11-12)
McCloskey, Diedre N, 2010, The Bourgeois Dignity: Why Economics Can't Explain the Modern World
Dierdre N. McCloskey
1942-
[Today] the world supports more than six-and-a-half times more people...the average person today earns and consumes almost ten times more goods and services than in 1800. Real income per person in the world has recently been doubling every generation, and is accelerating. Starvation worldwide therefore is at an all-time low, and falling. Literacy and life expectancy are at all-time highs, and rising. Liberty is spreading. Slavery is retreating, as is a patriarchy enslaving of women. In the richer countries, such as Norway, the average person earns fully 45 times more than in 1800, a startling $137 a day. The environment - a concern of a well-to-do bourgeoisie - is in such rich places improving. (pp. 11-12)
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