Water boils at 100°C; that’s certain. But there’s little point expecting the behaviour of societies to conform to the laws of physics. That 1% of people command the majority of the world’s wealth does not mean that the 99% are a cohesive social group, still less a political force at boiling point.The 2011 Occupy Wall Street movement was built around an idea and a slogan: ‘We are the 99% that will no longer tolerate the greed and corruption of the 1%.’ Studies just before it happened showed that almost all of the gains from an economic upturn had gone to the US’s wealthiest 1%. This wasn’t a historical aberration or a national exception. Almost everywhere a similar outcome has consistently been encouraged by government policy. In France, the tax plans of President Macron will largely benefit ‘the richest 280,000 households … whose assets are mainly in the form of financial investments and business shares’ (1).
Tag Archives: Economy
Although America’s right-wing plutocrats may disagree about how to rank the country’s major problems – for example, inequality, slow growth, low productivity, opioid addiction, poor schools, and deteriorating infrastructure – the solution is always the same: lower taxes and deregulation, to “incentivize” investors and “free up” the economy. President Donald Trump is counting on this package to make America great again.
It won’t, because it never has. When President Ronald Reagan tried it in the 1980s, he claimed that tax revenues would rise. Instead, growth slowed, tax revenues fell, and workers suffered. The big winners in relative terms were corporations and the rich, who benefited from dramatically reduced tax rates.
China’s cardinal foreign policy imperative is to refrain from interfering abroad while advancing the proverbial good relations with key political actors – even when they may be at each other’s throats.Still, it’s nothing but gut-wrenching for Beijing to watch the current, unpredictable, Saudi-Qatari standoff. There’s no endgame in sight, as plausible scenarios include even regime change and a seismic geopolitical shift in Southwest Asia – what a Western-centric view calls the Middle East.And blood on the tracks in Southwest Asia cannot but translate into major trouble ahead for the New Silk Roads, now rebranded Belt and Road Initiative (BRI).
In just 10 years, the world’s five largest companies by market capitalization have all changed, save for one: Microsoft. Exxon Mobil, General Electric, Citigroup and Shell Oil are out and Apple, Alphabet (the parent company of Google), Amazon and Facebook have taken their place.They’re all tech companies, and each dominates its corner of the industry: Google has an 88 percent market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77 percent of mobile social traffic and Amazon has a 74 percent share in the e-book market. In classic economic terms, all three are monopolies.
There is immense concern about economic inequality, both among the scholarly community and in the general public, and many insist that equality is an important social goal. However, when people are asked about the ideal distribution of wealth in their country, they actually prefer unequal societies. We suggest that these two phenomena can be reconciled by noticing that, despite appearances to the contrary, there is no evidence that people are bothered by economic inequality itself. Rather, they are bothered by something that is often confounded with inequality: economic unfairness. Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality. Both psychological research and decisions by policymakers would benefit from more clearly distinguishing inequality from unfairness.
Propaganda works by sanctifying a single value, such as faith, or patriotism. Anyone who questions it puts themselves outside the circle of respectable opinion. The sacred value is used to obscure the intentions of those who champion it. Today, the value is freedom. Freedom is a word that powerful people use to shut down thought.When thinktanks and the billionaire press call for freedom, they are careful not to specify whose freedoms they mean. Freedom for some, they suggest, means freedom for all. In certain cases, this is true. You can exercise freedom of thought, for instance, without harming others. In other cases, one person’s freedom is another’s captivity.
IT WAS as though the world had a new appetite. A Kentucky Fried Chicken (KFC) outlet opened near Tiananmen Square in 1987. In 1990 a McDonald’s sprang up in Pushkin Square, flipping burgers for 30,000 Muscovites on its first day. Later that year Ronald McDonald rolled into Shenzhen, China, too. Between 1990 and 2005 the two companies’ combined foreign sales soared by 400%.McDonald’s and KFC embodied an idea that would become incredibly powerful: global firms, run by global managers and owned by global shareholders, should sell global products to global customers. For a long time their planet-straddling model was as hot, crisp and moreish as their fries. Today both companies have gone soggy. Their shares have lagged behind America’s stockmarket over the past half-decade. Yum, which owns KFC, saw its foreign profits peak in 2012; they have fallen by 20% since. Those of McDonald’s are down by 29% since 2013 (see article). Last year Yum threw in the towel in China and spun off its business there. On January 8th McDonald’s sold a majority stake in its Chinese operation to a state-owned firm. There are specific reasons for some of this; but there is also a broader trend. The world is losing its taste for global businesses.
There are very few things that $5bn can’t buy, but one of them is manners. This week video emerged of Travis Kalanick, the CEO and founder of ride-share app Uber, patronising and swearing at one of his own drivers, who complained that harsh company policies had forced him into bankruptcy. “Some people don’t like to take responsibility for their own shit,” sneered Kalanick. Truer words were never spoken by a tycoon: for Uber, along with many other aggressive corporations, not taking responsibility for your own shit isn’t just a philosophy, it’s a business model.Uber has barely been out of the news this year, with a succession of scandals cementing the company’s reputation as a byword for cod-libertarian douchebaggery. Accusations of strike-breaking during protests against Donald Trump’s “Muslim ban” sparked a viral campaign to get customers to delete the app. A week later, a former employee went public with accusations of sexual harassment and institutional misogyny. Kalanick, who was pressured to withdraw from a position as a business adviser to Trump, is now facing legal suits across the world from drivers who insist that they would be better able to “take responsibility” for their lives if they could earn a living wage.
The global race to tame and civilise digital capitalism is on. In France, the “right to disconnect” – requiring companies of a certain size to negotiate how their employees handle out-of-hours work and availability – came into force on 1 January. In 2016 a similar bill was submitted to the South Korean parliament. Earlier this month a congressman in the Philippines introduced another such measure, receiving the support of an influential local trade union. Many companies – from Volkswagen to Daimler – have already made similar concessions, even in the absence of national legislation.
In barely a month, US President Donald Trump has managed to spread chaos and uncertainty – and a degree of fear that would make any terrorist proud – at a dizzying pace. Not surprisingly, citizens and leaders in business, civil society, and government are struggling to respond appropriately and effectively.Any view regarding the way forward is necessarily provisional, as Trump has not yet proposed detailed legislation, and Congress and the courts have not fully responded to his barrage of executive orders. But recognition of uncertainty is not a justification for denial.