Huge Worldwide Poverty Reductions

 

The huge increase in the world population NOT living in poverty (the Green above) began after mid 1970s. A big chunk of it from China expanding market forces. Aka Capitalism. 

Everywhere in the world that things go better, where the poor get richer, where the rich also get richer, in every single case it’s down to capitalism. , 

“But isn’t China socialist?”. “Didn’t China have huge growth since 1980?”. Yes to both. But but…. The growth wasn’t down to socialism. It was and is, very simply, because the Communist Party allowed the market to expand. It was market expansion, aka capitalism, that grew the growth.

China has been economically successful to the exact extent that it has allowed market forces to operate. 

I saw that with my own eyes on the ground in China, from the 1970s to now. 

Whenever China shifts back to more Party control, growth stops or slows. We’ve seen it. I’ve seen it, lived it, experienced it. 

That’s the reality of the world in the last century. Capitalism works.. Socialism doesn’t.

It’s Capitalism all the time, all the way.

It's not rich vs poor, it's makers vs takers | David Friedberg

David Friedberg: It's not rich vs poor, it's makers vs takers.

@friedberg:

The great lie is that there are two sides to society, that is the rich and the poor.

And the great truth is that there are two sides that are the makers and the takers.

The lie is that the rich are unfairly rich and the poor are unfairly poor, and therefore, the poor must take from the rich.

But the truth is that it's the takers that tell you that lie, that the real truth is that artists, plumbers, electricians, woodworkers, computer scientists, people that build, people that make from all walks of life, all income levels, all wealth brackets, are the makers.

And the takers are what Sacks calls this intelligentsia, the analysts, the espousers, the armchair mechanics, the critics, the commentators, the politicians. They are the takers.

They are the people that watch the rest of society make stuff, build stuff, specifically doing things that create value for other people in society. That's what a maker is.

Who allocates capital better? Makers or Takers? Success-motivated individuals or power-obsessed governments? Case in point:

A socialist may object: “private companies also fail”. Indeed they do. And when they do, they forfeit their money. Theirs and their backers’ money. When governments fail, they waste your money. Our money. 

The reason for increasing homelessness is ideology | Michael Shellenberger

	Michael Shellenberger ⁦‪@shellenberger‬⁩ Poverty is the underlying cause of homelessness, say the mainstream media. But it's not. Poverty has declined steadily for decades as homelessness got worse. And people priced out of their housing for reasons unrelated to addiction or untreated mental illness find another place… pic.twitter.com/b7twRc0SvO   30/4/2024, 3:22 AM

Dodwell on inequality | BRICS and mortality

David Dodwell has a growing fascination with the collection of kleptocracies, theocracies and autocracies known as the BRICS.  

Somehow, because democracy is not perfect, the BRICS, this ragtag of scoundrels, are better.
Me (and also Churchill): "Democratic capitalism is the worst system … apart from all the others."

Opinion | Political silence on inequality is strangling prosperity and democracy scmp.com

ADDED: Dodwell blames the west for failing to provide Covid vaccines to “the world’s poor”, aka Africa. But Africa had better Covid mortality outcomes than all of the west (28 times fewer deaths). Without the vaccines. No one talks about that. 

“A need for modesty” | David Dodwell

“Ages of inequality” (highlighted above) could also be rather more accurately framed as: “ages of massive, unprecedented increases in human wealth, health and happiness due to the global spread of the Industrial Revolution and the use of fossil fuels to drive it”. 

Ok, not as catchy, I get it. But not said above is: if you increase wealth, and some that increase happens faster for some (countries or people) than for others, that inevitably means increased inequality. But still it’s everyone that’s better off. Rising wealth almost always means rising inequality. The difference between socialism and capitalism is that socialism tries to reduce inequality by squashing down the top; while capitalism tries to reduce inequality by lifting up the bottom. I’ve seen the horrors of the former (China 1976) and the wonders of the latter (China 1980-2012).

That said, a modicum of modesty from the US would be nice. As David Dodwell pleads above. But don’t hold your breath. Americans are brought up with American exceptionalism— “the greatest country in the world” — imbibed with their mothers’ milk. 

And, a bit of tu quoque, what about China? How’s it doing on the modesty front in the South China Sea?

In praise of billionaires

Depressing, to me, that nearly 40k people had Liked this
by the time I had saw it today. Reich’s is a false narrative

That’s a tweet from Robert Reich. First up I thought it was parody. But no, it’s just Intelligent Idiocy. 

There’s no doubt professor Reich is intelligent. Wouldn’t be a professor if not, right? And he did do some good things, when he was Labor Secretary under Bill Clinton. Things like job training schemes. 

But he’s also an idiot. [ADDED: I wrote this before I found out Musk called Reich the same]. Provably so. He pushed the NAFTA accords. At the time he said the labour unions were “absolutely wrong”, to fear massive job losses in the car industry. Turns out he was the one “absolutely wrong” -- NAFTA led to 50% job losses, loss of well-paying jobs in middle America. 

50% job losses after Reich’s NAFTA deal
US Bureau of Labor Statistics figures

So while this Washington gnome destroyed tens of thousands of well-paying American jobs, he now berates people who create jobs. For without Musk, no Tesla. Without Elon, no SpaceX. Without Bezos, no Amazon. Without Jobs, no Apple. Without Buffet, no Berkshire. And without them all million fewer jobs. 

As for “inherited wealth”, those he mentions in his odious little hit job of a video, had none. Musk certainly not, as shown here. [LATER: Reich says Musk “came from a wealthy family that owned an emerald mine in Apartheid South Africa”, a story that is completely false; Reich either couldn’t be bothered finding out, or knew it and lied knowingly. Either way, that’s shocking. Full background here]

Bezos was born to impoverished teenagers. Much later his wider family scraped together some starting capital for his new business idea (Let’s sell books online!). But that is what everyone, everywhere, every time, does to get started. It’s what we did with the business we started here in HK. You borrow money from family and friends. To class that as a version of “inherited wealth” is ludicrous. 

As is classifying Gates’ mother giving him an intro to IBM as some kind of privilege. It’s always what you do with the chances that counts. What you do with that fortuitous introduction. 

Same with Warren Buffett, who grew up with entrepreneurialism in his blood. Not wealth, just a burning desire to make money -- delivering papers as a youngster and selling used golf balls. Which he parlayed into a gargantuan empire. Not just for himself but for millions of workers and shareholders in his company. 

Buffett classed his business as “Asset Allocation” and that’s what he did -- allocate capital, in ways so productive it energised thousands of companies, shareholders and employees around the world. I’ve seen the Asset Allocation capacities of Red Raw Socialism in China in the seventies. It’s horrible and wasteful and inefficient and demoralising. China's “State-Owned Enterprises” behemoths of blah.

I’m no mind reader and I don’t want to try to read Robert Reich’s thoughts. From his presentation in the video, one gets the impression -- at least I do -- that he’s jealous of the billionaires. And so he plays out his jealousy by demonising them as a group, those whose money is a measure of their success, not of their wickedness. Those without whom the world would be a worse place. Whereas, without Reich pushing NAFTA in 1995 the US would also have been a better place. At least for the workers that Reich pretends to care about. 

PS: Larry Summers, the Democrat and ex Treasurer of the United States, agrees with me!

ADDED: Amazon Anecdotes: Last year I tried to buy some ecologically sound goodies as Xmas presents and found some on a British website. Got all the way to the check out, all the way to the very end, putting in the credit card details, only to be told, at the very very end, that they don’t ship outside the UK. Sigh. Back to Amazon. 

Another time a friend who’d just published a book asked if I could buy it via the publishers, not Amazon, as she made clear she though it a horrid capitalist company. So, again, I hie me to the publisher’s website, only to be told they don’t ship outside Australia. In both cases I ended up back on Amazon. And thinking: the only reason those companies don’t ship internationally is laziness. Or short-sightedness. Or both. In any case, not doing what Amazon has done for years, which is, go the extra mile. People love to hate on Amazon. But ask them if they’d rather not have Amazon? 

An Amazon trope is that it underpays its staff. It does not. Its least paid workers get a little over $US20/hour. The US minimum wage is $7.25. Amazon is paying its least paid 2.75 times the minimum wage. Hardly enough to support a family for sure. But consider: unless you have zero drive in your life (something which all billionaires have in abundance) you’re not there to stay at minimum wage. That’s just entry level. It’s clear from the Amazon employee structure that there’s plenty of opportunities to move up the ranks, right up into the senior management ranks, if you’re good enough and -- again -- if you’re driven. Drive is the key, despite Reich pooh-poohing it. 

ADDED (2): I haven’t touched on other bits of “Reich’s recap”, like the “government subsidies”. In the Tesla case, it was a government loan (not a subsidy) and Reich fails to mention: Ford and GM both got more than Tesla and Tesla has repaid it in full (the others have not). On “Tax loopholes”, I won’t go there, save to say they are also known as “tax planning”. And if you don’t plan your tax, you’re a fool. If you’re a public company, if you don’t tax plan, you’re failing in your fiduciary duty and shareholders will come after you. Simply saying “tax loopholes” is smearing these companies, to no end, save to get foolish folks to Like.

ADDED (3): Reich is talking about America. If we look at the billionaires in Hong Kong, they virtually all arrived here as penniless refugees. That’s the case of our richest man, Li Ka-shing, who famously left school at 15 to start selling plastic flowers. Which he parlayed into a global empire, employing tens of thousands. It’s true that his wealth and that of fellow tycoons is now being passed on to younger generations so they there’s that inherited wealth angle; as they say “we ought have a discussion around that”.  Similarly the inequality of wealth issue. Reich raises a large straw man here, for I don’t know anyone claiming that it’s due to the “choices of everyday Americans”. At least not as the only reason. If you look it up, you find quickly that it’s multi-factorial. “Choices of everyday Americans” is part of it; must be. And part of it must be the negative effect of Americans of Color, everywhere everyday being told that there’s systemic racism in the country, that it’s irredeemable and that therefore they can never succeed. That surely is counterproductive and horrid message to give out to a huge section of America. How can that be a good thing? And how can that provide the grit needed to succeed, to work to be a billionaire? 

"Liberal hypocrisy fuels inequality” -- The New York Times

 

Oh look a unicorn! 

New York Times criticising it’s own liberal readership. Now that’s a unicorn! 

Damning evidence of how NIMBYism flourishes. Makes inequality worse. Worse in Blue states than Red. Worse where the government is progressive than where it’s conservative.

Collecting reactions of Red States bussing illegal immigrants to Blue States

Martha’s Vineyard over 24 hours. Exactly

“It’s wrong, it’s unAmerican, it’s reckless... playing politics with human beings”.  Joe Biden

"It’s  really just disrespectful to humanity, it doesn’t afford them any dignity. It’s cruel and shameful". Karine Jean-Pierre, WH Press Secretary 

"Republican governors slammed for migrant stunt". Bloomberg in SCMP.

It’s like internment:

It’s the same as slavery: Reverse Freedom Ride (on Takei’s twitter)

"It’s like the holocaust.” John Bernin on CNN. (The holocaust?? Really??!)

"DeSantis is a ‘bonehead’. These are actual real people you’re playing with here”. Whoopi Goldberg. 

“Actual people”, yes indeed they are. Which is why we want to stop them being trafficked at the border, by cartels, then trucked around the country in the mid of night by Biden buses. And forgotten. -- or left to die in locked containers. Until a “bonehead” like DeSantis decides to make progressives face the reality of their very own policies, and flies a few to the most luxurious holiday resort in America. To make a point. Via a stunt. Or, else, it's exactly like the holocaust. 

Illegal immigrants interviewed during this brouhaha say they are happy with their treatment. They’ve been treated better in the US than anywhere along their path to the US. They had a choice to go to Martha’s Vineyard or other sanctuary cities. They found the trip good and are happy with where they needed up. It’s “nice”. They make clear they came because they believed the borders were “Open”:

“We were told the border was open. It is open. And yes, we have entered illegally; still, the border is open”. 

-- Illegal immigrant speaking outside the DC home of VP Harris who had said on that very day that “the border is secure”. 

To see more of the outrage on the Left about the DeStantis “stunt", there's the MSM like CNN, NBC, ABC, PBS. 

To see the take on it that is more “reality based" you’d need to hold your nose (if you’re on the Left) and go to the takes of Carlson and Shapiro. I’ve got my leanings, so I think they’re good takes. Do have a look, even you’re progressive Left.

Then I stumbled on another vid I’d seen last year, which is so relevant to today. The New York Times, no less, discussing the issue of NIMBYism in progressive circles. Those who say “I care for these people, but please, not here”. This is such a good vid and 14 minutes well spent: "Liberal Hypocrisy is Fueling American Inequality"

Meantime, a reminder of what this is all about: a tenfold increase in illegal immigration since Biden, which is impacting poor border state communities. And is ignored or denied until there’s a “stunt” like DeSantis’. Note the low illegals number under Barack Obama. He was all for secure borders, as I’ve noted before. Now he’s silent, which is his own hypocrisy. I think. Or has he really changed his mind? Oh, also forgot to mention: Joe Biden is quoted saying “Illegal immigrants are a gift”. Hmmm... this famous resident of Martha’s Vineyard not so sure about that gift now. 

US Border Patrol Stats, which I have updated with the 
latest, the red bar on the right. The jump under Biden is huge and shocking
Note that under Obama numbers continued the decline. As did Trump

From tuition ban to Evergrande collapse, is China tripping over its chase for ‘common prosperity’? | SCMP

Article by Donald Low. Interesting two reasons:

1. It's in the South China Morning Post, Asia's prestige English language paper on China issues, Hong Kong-based — where we are assured by foreign media that free speech is dead, post Beijing's National Security Law — and yet it is criticising a key policy goal of Xi Jinping, to reach "common prosperity". The SCMP is thus far navigating those treacherous post-NSL shoals rather well.

Sure there's been arrests and closures: I keep hoping the other shoe doesn't drop and am heartened whenever I see robust articles like these in our local media.

2. Donald Low’s analysis may well be right. When you try to reduce inequality by giving a greater role to state enterprises, you end up "levelling down" (as Socialism does) rather than "levelling up" (as Capitalism does — or at at least tries to).

Click above photo to go to the article.

"Zero-Covid goal not worth damage to children's learning” | Collin Levy, SCMP

Man, oh man. It’s what I’ve said in this blog for over a year now. That school closures are a bad idea, and that both “the science” and experience prove it. 

Collin Levy quotes some truly startling studies — from the World Bank, UNESCO and UNICEF no less —  that school closures will cost $US 17 TRILLION in lifetime earnings. Poorer countries like Bangladesh, Philippines and Panama are going to suffer worse and fall even further behind. Lockdowns are exacerbating inequality. (ADDED: School closures a disaster)

Hong Kong should not be closing schools again. We only are because we are slaves to Beijing’s draconian Zero-Covid strategy.

The Covid-19 story of the year is playing out in Hong Kong, and children again have a starring role. On Tuesday, Chief Executive Carrie Lam Cheng Yuet-ngor announced that all kindergartens and primary schools will be closed for on-campus learning until after the Lunar New Year. With experience as a guide, it will be much longer than that. 

The decision was made in pursuit of the city’s goal of zero-Covid, in an effort to please Beijing, where the party leadership is using any means necessary to keep coronavirus cases low in the run-up to the Olympics and the 20th National Congress later this year. 

But while China’s approach was wise before vaccines were available to save the lives of the vulnerable and elderly, that is no longer the case. The Omicron variant that’s spreading rapidly around the world appears to be less severe than previous variants, particularly for those who have taken an effective vaccine. [More…]

Document 9 vs the Enlightenment

/Snip: 

China may not have been at the G7 summit in person, but it was very much there in spirit. We will look back at this long weekend in Cornwall, England as the moment when there was more than just a tacit recognition that China has become our era’s agenda-setting country.

In the eyes of many Western policymakers, China was supposed to become more like the West. The United States was to carry on ruling the waves, while simultaneously crafting the international rules. Yet, in many cases it is now China making the waves – if not the rules – with its ideas and others reacting to them.

Someone called Mark Logan, who seems to fancy himself on China, makes the argument that China is setting the world agenda. Though where the "still" in "... still setting the agenda" comes from is not clear.

Two items are offered: (1) that the west's push to set up an infrastructure fund for poorer countries emulates China's Belt and Road (BAR) initiative. And (2) promoting the virtues of western values is a reaction to China's Document 9. 

I wrote about D9 in 2013, then not again till yesterday. And here it is again, twice in two days! Spoiler alert: Document 9 is a repulsive document, written by hardline communist functionaries, for their boss Xi Jinping early in his presidency. He's using it as his authoritarian guidebook.

It may be that some or all these moves by the west, as represented by the G7, are indeed a reaction to what China's been doing. Then again the west made it WW2 when they reacted to what the new Reich had done. And all that came out of the war -- United Nations, WTO, Marshall Plan, etc.... all were reactions. 

For poorer nations it must be better to have more avenues to infrastructure development, whether or not in reaction to China being irrelevant.

As for western values vs Document 9: check it out and see which you'd rather was running your life, your country. What's set out in Document 9 has no allure for me. Long live Western Values!

PS: just thinking what's going on this week: the G7 meeting in Cornwall. Biden meets Putin in Geneva. NATO has a summit meeting and targets China as its main challenge. France reopens after Covid, while Boris bottles it again. Busy week.

ADDED: But what will Joe (or the west) do if Russia or China test their mettle? Nothing much say Shapiro in “Old Joe Meets the Bond Villain”. Shapiro is crazy in some stuff and plain wrong on other stuff, but I think this reading of the Biden-Putin summit is pretty much spot on. The battle of the autocracies vs the democracies goes in too at personal level, by people voting which their feet. One doesn’t see many clambering to enter Russia or China. 

Bret Weinstein talks to Tristan Harris: all about Social Media and unintended consequences

 

Click on screenshot for vid. Settle in: nearly two hours

Tristan Harris was in "The Social Dilemma". Which is all about what they call here the "Cultural Derangement Syndrome". Aka "Fracturing Reality". This is serious stuff and dangerous to our existence. So they say. That Facebook and Twitter, in particular, have led to erosion of our shared realitiy.

This is most surely worth a listen and ponder. What to do about it? Their suggestions about Global Solutions is going to cause angst amongst many. But clearly something needs be done about the unintended consequences of the growth of social media. 

Listen on....

The Two Chinas

Gansu goats

I realise that my post on Chinese people being happy, is biased. Because I was only thinking of people in the cities. Things are not nearly so bright in the country. I did say so in a post a while back -- stories that paint a picture of class divide in China -- and also in a video I posted that I can’t find for the moment, which look at the terrible state of many in the countryside. 

It’s a picture you can see if you leave the superhighway, the brand new freeway, and go down any dirt track to any village. You’ll encounter a scene of poverty, of decrepitude and decay. People are leaving the country for the city, for obvious reasons (something happening throughout the world and really obvious in places like Russia and Japan). Even if they have problems getting permissions (the hukou) for living in the city, people are desperate to leave. 

I’m correcting that bias now, by reposting the above link to my earlier story and by linking to “The Two Chinas”.

Corbyn to ban wealth

Britain's GINI index is falling = getting more equal

Jeremy Corbyn says the the UK should have no billionaires. Dig a bit and it gets more alarming. Corbyn finds any wealth distasteful (his acolytes gush: “he rides a bike and has an allotment!"), and in power he and his self-described Marxist Chancellor John McDonnell will do their best to wipe out any wealth. For the sake of the poor, of course. Not at all for envy. And with “wealth” defined by them.

John Mc Donnell: “I’ll be straight with you -- I’m a Marxist" (June 2013), as clipped by Andrew Neil and the BBC:

[PS: here’s a compilation of John McDonnell -- shadow Chancellor! -- saying repeatedly how he would like to punch, slap or jail people who don’t think precisely the way he does, and supporting violence and insurrection of all stripes]

Beware. The UK is headed for penury if Corbyn, McDonnell and the rest of their gang get into power. I saw it in the UK back in the seventies when I was there -- it led to the Three-Day Week -- and in China in 1976, when I lived as a student, and had ration tickets for food and clothing.  That’s what socialism does to you, never mind Marxism...

Income inequality according to the Labour party has become a “crisis".  But look at the chart above. The Gini index, a widely accepted measure of inequality, has gone down. Down = “good". That is inequality has declined, not become worse. (The above is for income, but wealth follows the same trend). Britain ranks in the 20% “best” countries in the world according to the index.
And yet the Labour party, that is to say, the Left, is stoking resentment and hatred for “worsening income and wealth inequality”.  Of course we know why they are doing this.  They want to gain electorally. But it remains the fact that in so doing they are stoking the increased division and bitterness in society.

In America the same is happening among the Democrat presidential candidates. All decry inequality.  But they don’t take account of income transfers. Transfers TO the poor in the form of various subsidies and direct hand-outs, and Transfers FROM the richest, in the form of taxes.
This is shown in the chart below, by economists Phil Gramm and John Early.
The candidates only talk big income differences (60 to 1) without including transfers and call that a “moral crisis”. But the difference between the poorest and the richest is 3.8 times after transfers, not 60 times.
Moreover, if more money is transferred to the middle quintiles (ie, the middle classes), then they would find it no longer worthwhile to work, as they already are only just above the net income of the poorest as it is, after accounting for transfers

Gramm and Early note in conclusion:

Any debate about further redistribution of income needs to be tethered to these facts. America already redistributes enough income to compress the income difference between the top and bottom quintiles from 60 to 1 in earned income down to 3.8 to 1 in income received. If 3.8 to 1 is too large an income differential, those who favor more redistribution need to explain to the bottom 60% of income-earning households why they should keep working when they could get almost as much from riding in the wagon as they get now from pulling it.  

WSJ link ($). My iCloud link

EARLIER: 
“Some inequality needed” | The Age, Jan 2018
When inequality is better than equality, Nov 2017

The Goalkeepers: tracking the world’s progress

Just one of the great graphics in the report

Bill and Melinda Gates and their Foundation are doing such wonderful work around the world.

This is their latest report on how the world is doing in reaching the United Nations’ millennium goals for 2030. Though there’s work to do (there alway is...), what jumps out is the huge progress that’s been made in the entire world in recent decades. Things are really a lot better than the view that “it’s all going to hell in a hand basket”, that we’re inclined to think if we just look at the news...  For a summary of just how, have a look at the sections at the end of the report.

This report is made for online viewing on a desktop.  It’s terrific: striking, clear, on point.  Just what you’d expect from the Gates’.

On yer Mel, On yer Bill!

LATER: I’ve been watching Netflix’s “Inside Bill’s Brain: Decoding Bill Gates”. It’s done with Gates’ cooperation but is not hagiography. (Though Variety thinks it is).  I’m enjoying it. A criticism: I would really have liked more in what it was they were coding, he and Paul Allen, in the early days. I’d have liked a bit of detail in the MS-DOS software they did for IBM and made them rich. I remember MS-DOS! Groundbreaking then, but how far we’ve come.
Maybe more of Bill describing what it’s like to code (I always wondered). Anyway, still a good show, three parts.

“Some inequality needed” | The Age

LETTER TO THE AGE PUBLISHED TODAY (26th Jan 2018) AS BELOW:

Your readers, and indeed leader writers, seem uniformly to believe: income inequality, bad; income equality, good. Allow me to dissent. China of the 1970s cured me of this absolutist view. When I first went to live there (1975), it was a very equal economy. From top leaders to factory workers, all earned pretty much the same – about $50 per month. This gave it a low (that is, "good") Gini index of 0.24.

Since then, China has opened up its economy and boomed. According to the World Bank, more than 500 million people were lifted out of extreme poverty as its poverty rate fell from 88 per cent in 1981 to 6.5per cent in 2012. But as this happened, inequality increased to give China a higher (that is, a "bad") Gini index of 0.46.

Someone has noted that inequality in an economy is much like water for plants. Water is needed, but too much and the plant drowns. And so for our economy. Unless we want the stultification of communism, some inequality is needed. Just not too much. Therein is the rub. But what seems certain is that it is not an absolute all or nothing.

Peter Forsythe, (former general manager for Austrade East Asia), Hong Kong

Inequality, like water for a plant

LETTER TO THE AGE, MELBOURNE

Your readers - and indeed your leader writers - seem uniformly to believe income inequality, bad; income equality, good.
Allow me to dissent.
China of the seventies cured me of this absolutist view.
When I first went to live there (1975) it was a very equal economy. From top leaders to factory workers all earned pretty much the same - about $50 per month. This gave it a low (ie "good") Gini index 0.24.
Since then it has opened up its economy and boomed.
According to the World Bank, more than 500 million people were lifted out of extreme poverty as China's poverty rate fell from 88 percent in 1981 to 6.5 percent in 2012.
But as this happened inequality increased to give China a higher (ie "bad") Gini index of 0.46.
Someone has noted that inequality in an economy is much like water for plants. Water is needed, but too much and the plant drowns.
And so for our economy. Unless we want the stultification of communism, some inequality is needed. Just not too much. Therein is the rub. But what seems certain is that it's not an absolute all or nothing.
P F etc...

LATER: This was run the on the 26th January in The Age

When inequality is better than equality

My notional chart: not real figures; illustrative only
(but roughly correct!)

Lest people think from my previous post that I'm anti-equality or that I'm pro-inequality, let me state: of course I'm pro-equality.  Who is not?
The problem is that darned thing: actual experience.
Which tells me: there are times and situations in which inequality is better than equality.
China, in the chart above, is an example.

NOTE: this chart is created by me on Excel using purely notional figures.  I haven't gone off to Google to find that actual info, partly because I'm too lazy and partly because I know the basic story.

I lived it. 

I arrived in China in 1976, towards the end of those "years of equality" (in chart above), observed and reported on China and its economy (for the Australian government, then for business clients) for decades, and still do so, from time to time, from my eyrie here in Hong Kong, now an inaliable part of our dear mother country, China.

So that's why there's no label on the Y-axis. I wouldn't want anyone to think that it's based on actual figures or indices.  It's not. It just illustrates a principle. It just tells a story.

And here's the quick story:
Mao and his communists took control of China on 1st October 1949.
After a short quiet period, Mao began movements to instill communism, that is the equal treatment of all, in fact the punishment of rich people and anti-revolutionaries: The Anti-Rightist Movement, The Great Leap Forward, The Great Proletarian Cultural Revolution.
That's all summarised on the left-hand side of the chart above.

• The rich and many just well-off became poorer.
• The poor also became poorer.

In short:

Everyone got poorer.  Until equality was achieved. Hurrah!

That was the time I arrived in China as a student of the Chinese language.  (This period became known as "the final years of the Cultural Revolution").
When I arrived in China, a factory worker earned 100 yuan a month.  A teacher 105 yuan a month. A Minister of State 110 yuan a month. (all worth, on average, about $US10 a month).
Pretty equal, right?
But you couldn't buy consumer goods, and everyday stuff like rice, cotton, meat and even bicycles were all rationed.  I still have my ration book from my time as a student there.
Then came the resurgence of Deng Xiaoping, the Four Modernisations (started in 1979), and the rest is history. Have a walk down any Chinese street and ponder: this is what capitalism, the free market, has done (known in China, for political reasons, as "Socialism with Chinese characteristics").
Capitalism delivered what Socialism promised.
In short:

Everyone got wealthier. But inequality resulted.  Booh!

Inequality "resulted" not "was achieved" because it's not the aim of capitalism to create inequality.  But it does seem to be a result, rather all too often.
Still: according to the  World Bank, 500 Million Chinese were lifted out of poverty, in the period from 1980 to 2010.
So: which would you prefer?

• Equality, but with poverty?    Or...
• Wealth, but with inequality?

Of course, we want both: wealth and equality. But if it's a choice? Would you rather be on the left-hand side of the chart above, or on the right-hand side? I can say this: that pretty much all Chinese want to be on the right side of the chart.
Also, it strikes me that understanding this might lead to different questions about how to tackle inequality.
The standard answer from the Left is to squeeze the rich. "Redistribution".  Like the Institute of Policy Studies, in my previous post.
Another answer would come from asking: how can we make the poor richer? How did the rich become rich and how can the poor learn from that?

****************

[NOTE: Here I'm looking at income.  The earlier post on a report from the Institute of Policy Studies was based on wealth.  Yes, I'm clear on the difference, but would make the point that one is a proxy for the other.  In China, for example, as incomes have increased, so has wealth.  This morning's BBC reported that China now has 95,000 millionaires (wealth) a result of the increase in the gap in incomes]

In defence of billionaires

LATER: Ben Shapiro also hates The Guardian article: above.

LETTER TO SOUTH CHINA MORNING POST:

The three richest people in the US — Bill Gates, Jeff Bezos, and Warren Buffett — own as much wealth as the bottom half of the US population or 160 million people. 

That's the eye-popping opening of The Guardian article reprinted in your paper today ("Top three in US own more than bottom half", 10 November). 

One's first reaction is likely: "my goodness that's a moral crisis!"

Indeed, those are the very words of the report's author, the progressive Institute for Policy Studies. The growing wealth gap, it asserts, is "not just bad economics, it's a moral crisis."

But is it? 

These three billionaires have committed to use for charity or to donate fully 99% of their wealth before they die (that’s a quarter of a Trillion dollars). 

Both Gates and Buffett have started that process. Think Gates' anti-malaria campaigns in Africa and Buffet's massive donations to the Gates Foundation (the largest ever). They are donating immense wealth and expertise to the poorest people in the world, not just to those in the bottom half of America, the world's richest country. 

Can we really assume that a government, any government, would make better use of the money than these three wealth-creating, wealth-distributing geniuses?  

The opposite is likely the case. 

Or imagine instead that they gave away all their money to these 160 million Americans. Do we really think $1,550 per person would alleviate poverty? 

The opposite is likely the case.
Organisations such as the Institute for Policy Studies seem to assume that billionaires' wealth is simply lying around, idle. But it is used to the immediate benefit of millions of employees and billions of the world's poorest. 

What would the IPS have us do with the money if it were not under the control of these storied philanthropists?  

The IPS doesn't say. But we can infer its intentions from its past support of communist governments. It would no doubt welcome "radical redistribution".  That is, radical appropriation, aka communism. 

We have seen where that can lead: think Mao's China or today's Venezuela and North Korea. 

It is such countries that are "bad economics"; it is such countries that create a "moral crisis". Not the careful stewardship and charitable spending by billionaires for the benefit of humankind. 

Pf, etc

Wealth inequality in the US

From here.
The question is: what to do about it?  For freedom and equality are mutually incompatible...