… greed, for lack of a better word, is good. Greed is right. Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.
(Michael Douglas as Gordon Gecko in Wall Street)
Caroline Overington agrees with Gordon – sort of. She reckons greed can be good, there’s nothing particularly wrong with it and well, yes it does work. And not just for individuals – it can benefit nations too. That’s a more nuanced position than the original “Gecko thesis” but that’s to be expected. Gecko was a larger than life fictional character in a movie; Overington is a blogger and columnist at News Limited. You’d expect her opinions to be a little more worldly, a little less extreme – and she doesn’t disappoint in that regard.
Overington reckons it’s all very silly for people to get worked up about the income gap between the rich (like News Ltd opinionatrices) and the poor (like the South Pacific Islanders who would just adore looking after their children, given half the chance):
Statistics like these … get people all worked up about the gap between the rich and the poor (it’s always assumed to be a bad thing) and how it’s growing (ditto) and how the US is the worst offender.
In fact, the US isn’t in the top 30.
According to the World Development Index, published by the World Bank, countries with the biggest gaps between rich and poor are deadly places like Sierra Leone, Swaziland, Nigeria, Mozambique and Zimbabwe, where evil despots – not retired maths professors – control the bounty, and usually also the army and the police force.
I’ll bet that came as a surprise, eh? Makes you want to go off and find out more, if you can.
Well, I tried. But I couldn’t find anything to back Ms Overington’s claim at the World Bank web-site, where they have the World Development Indicators 2007 (WDI 2007) on sale in book form for $75.00, or as a CD-ROM for $275.00. Either of those would be what you’d want, if you were looking to find out what the World Bank actually did say about income gaps between rich and poor. Incidentally, the WDI 2007 was launched on April 15, so don’t feel too embarassed if you hadn’t heard of it before.
To console you all while we wait for some kind soul to rip us a copy of the CD, here’s one tidbit of information that the World Bank decided to put on the web for free (PDF file):
The responsiveness of poverty to growth depends on the distribution of income (or consumption) and how it changes. Many factors influence how the benefits of growth are shared: health, education, infrastructure, gender parity, social safety nets, rule of law, political voice and participation, and access to markets, technology, information, and credit (World Bank 2005d). In the last decade poverty reduction was not always or everywhere commensurate with income growth. In some countries and regions, inequality worsened, as poor people did not reap the fruits of economic expansion, lacking opportunities to do so.
Fifty-nine countries with comparable $1 or $2 a day poverty data measured at two points in time (with a gap of at least 10 years) over the last two decades show that growth and changes in income distribution can reinforce or offset their effects on poverty reduction (figures 1j and 1k). In 26 cases income growth was accompanied by increased inequality, and in 20 more income distribution worsened as average incomes fell.
But that’s still not the sort of league table of world inequality that I’d expected – so I’m left wondering, where the bloody hell is it? Certainly not here, but you will find some interesting maps to play with.
Update: thanks to commenter James Farrell, for providing links to three sources of information on income inequality within nations – two of them with league tables.
According to the information in the CIA’s league table, Denmark tops the CIA World Equality league, with Belgium and Sweden tying for second place. The US came 65th, behind Cameroon but ahead of Ivory Coast and Uruguay (tied for 66th). Worst performer of all was Namibia in 98th position – and well behind Lesotho in its Gini score.
Australia placed 35th in the CIA World Equality league, between Greece and Algeria and three places behind our big, troublesome neighbour to the North (Indonesia).
Update Too: according to the information in James’ second source, the Human Development Report (PDF), the world leader in equality in 2006 was Azerbaijan with Denmark narrowly pipping Japan for second place. In the HDR World Equality League, the United States shares 59th place with Turkmenistan and Ghana. Cambodia is in 58th place, Senegal 60th.
Australia placed 40th, between Spain and Algeria, but still behind Indonesia which came equal 35th with Ireland and Greece. The 2007 HDR World Equality League results will be released in November.
Top post (though there is something dodgy about that first link). Even without all the irony-and-pie-chart goodness, it would be worth reading for that word ‘opinionatrices’ alone.
so overington has reversed the marxist formula regarding the instrinsic disparity in the distribution of wealth indicating the structural contradictions of capitalism which eventually multiply and lead to a world wide communist revolution to suggest that the increase in such disparity means that the ‘economy’ (code for ‘capitalism’) is functioning perfectly. well, f’ckin derrrrr!!!!
where’s the wheat!?!
it’s a good thing some of us are bourgies that profit from the exploitative structural contradictions of capitalism.
Link fixed Ms Cat.
Hmmm.
The reason for very high Gini co-efficients in developing countries is that a small elite normally controls much of the wealth, and many people continue to live either in a subsistence or an informal economy.
A much better comparison would be between the US and other OECD countries. (Hint – the US doesn’t stack up that well).
Though why we have to take any time bothering to oppose facts to obvious crud is probably something to ponder.
The 2006 Human Development Report (p. 53) has an inequality league table.
Or you could look at the CIA World Factbook.
WIDER has data for many years on a spreadsheet you can play with.
Calculation of Gini cofficients is not very well standardise, so international comparisons using them are always reckless.
You’ll be pleased to know Caroline has left The Australian.
You’ll be displeased to know where she’ll be working next …
Thanks James. Based on the sources you’ve linked to, I’ll add an update to the post later.
So Caroline Overington thinks that all we need to do to be rich is to get a job, work hard and hope for that fat bonus. I have news for her. No-one ever really got seriously rich by working for themselves. They get seriously rich by getting other people to work for them and then paying them less than the value of the work they do. Our budding capitalist then keeps the difference. In capitalism it is known as profit, under Marxist thinking it is an appropriated surplus which is the moral equivalent of a theft. The odd retired math professor who may have cracked a billion just by their insight is trotted out to show that the old exploitative capitalist system doesn’t really work the way that critical marxist scholars might argue. The truth is that the old exploitative capitalist system is alive and well, and has probably never been healthier.
Cheers….
Because it’s appealing, plausible crud, Mark.
No clues to Overington’s next gig here, I suppose?
Couldn’t be Media Watch, I reckon – it’s a bit late in the year for them to be switching anchors.
Caroline Overington is the perfect pundit for the zeitgeist. I don’t what you are all complaining about. She has captured the new dispensation perfectly! Clever girl!
Empirically empty and theoretically blind arguments are a waste of time.
Ms Overington at least supplied some facts which suggested that varying degrees of inequality had a neutral effect on the rate of economic growth. Unfortunately for her thesis her insouciant attitude towards income inequality is inconsistent with contemporary social science.
Income inequality in the US was much lower during and after WWII which was also the period of the US’s highest rate of economic growth. Income inequality in the US has increased markedly over the past generation, due to class and race polarisation, with little postiive effect on the rate of capital accumulation or accentuation.
Wikipedia has an outstanding short summary of the research. It seems to point to a justification for a fiscally progressive but socially conservative welfare state – something that falls roughly between Gough Whitlam and John Howard. (That also, mirabile dictu, happens to be the ideological position of the present commenter.)
The question whether equality is beneficial for economic growth and progress has occupied the minds of the greatest scientific thinkers as well as policy makers. Evidence from a broad panel of recent academic studies shows the relation between income inequality and the rate of growth and investment is indeed robust however not linear.
Robert J. Barro, Harvard University found in his study Inequality and Growth in a Panel of Countries that higher inequality tends to retard growth in poor countries and encourage growth in well-developed regions.
In their study for the World Institute for Development Economics Research, Giovanni Andrea Cornia and Julius Court (2001) reach analogous conclusions. The authors therefor recommend to pursue moderation also as to the distribution of wealth and particularly to avoid the extremes.
Both very high egalitarianism and very high inequality cause slow growth. Extreme egalitarianism leads to incentive traps, free-riding, high operation costs and corruption in the redistribution system, all reducing a country’s growth potential. However also extreme inequality diminishes growth potential through the erosion of social cohesion, increasing social unrest and social conflict causing uncertainty of property rights.
Therefore public policy should target an ‘efficient inequality range’. The authors claim that such efficiency range roughly lies between the values of the Gini coefficients of 25 (the inequality value of a typical Northern European country) and 40 (that of countries such as China and the USA).
The precise shape of the inequality-growth relationship depicted in the Chart obviously varies across countries depending upon their resource endowment, history, remaining levels of absolute poverty and available stock of social programs, as well as on the distribution of physical and human capital.*
John Rawls would be well-pleased with the AUstralian version of the mini-max. Polarised SES stratification in dynastic capitalism can be best be controlled by developing the isomorphic tendencies of a socio-biological community. Shorter strocchi: dont celebrate diversity.
[STEP 1] – Let us consider the number: 10
[STEP 2] – Doubling it, we get: 20
[STEP 3] – Now adding 5 and 12 successively, we get: 25 & 37
[STEP 4] – Subtracting 3 from the above yields: 34
[STEP 5] – Dividing the above number by 2 would make: 17
[STEP 6] – Saying the magic word: Polarised SES stratification in dynastic capitalism can be best be controlled by developing the isomorphic tendencies of a socio-biological community
[STEP 7] – Subtracting 10 (which was the original number) and from the above gives: wets
The answer is always wets! You can try it yourself.
A very, funny and dry argument, Anthony
Such is the message in Gordon Ghecko’s ..’greed is good’ prescription for US capitalism (circa 1989) that I submitted it to the ABC’s famous speeches quest recently. It went nowhere but I still reckon it is a mantra for many in our time, Overington possibly included.
And to go to the other end of Gumno’s post, the World Bank seems to advance the point when its CEO soldiers on having tried to get an $80 000 p.a. pay rise for his current squeeze. Not so much as a tut-tut from the rodent even though we are represented on the governing board of 24 who are currently burning the midnight over the issue.
anthony on 2 May 2007 at 7:54 pm
steve on 2 May 2007 at 8:19 pm
I would not dignify anthony’s comment as an “argument”. More of a laboured parody. Steve has trouble with conceptual clarity. Not surprising since his cultural worldview runs on confusion.
If you dont see a connection between increased cultural diversity and increased social inequality can I suggest a visit to the reality-based community?
THe tension between diversity on the one hand and community and equity on the other is not some pet personal obsession of mine. It has been there since the Enlightenment ideological split.
Competent social theorists, both right and left, now more or less acknowledge this. NOt to mention those who still believe their own lyin’ eyes. And an increasing majority going by current politico-cultural tendencies.
It is also common knowledge amongst labour market economists, an area where you two clowns could not say boo to a goose.
I have spent time working both sides of the street in the states. You guys really need a wake up call on the relationship between cultural community and social equity.
The US polity has encouraged cultural diversity and financial proprieties in the past generation. This has caused both the Class War and Culture War to heat up. The result is a massive increase social inequality and communal segregation. Social division.
Very adverse for poorer African-AMericans, the most vulnerable members of the US citizenry.
But your average self-indulgent Wet couldnt care less. Bring on the chic ethnic cuisine, deferential ethnic nannies and cheap ethnic labour. Thats the ticket for diversity-crats looking for another racket to run and those infatuated with their image in the moral vanity mirror.
What a contemptible farce your lot have made of cultural theory and cultural policy. No wonder wanker and Wet are virtually interchangeable.
Way to go Leftist humanitarians!
Well Jack, now that I’ve had a chance to look over James Farrell’s sources. I’ve concluded that Overington’s claim on the USA’s placing in the global equality league is a factoid at best. The other facts in her piece – such as the story of James Simons – are mere trivia.
Don’t you ever get tired of Wikkying up new pieces of “superior knowledge”, every time somebody comes up with something new you don’t know? More to the point, when are you going to realise that it’s so bloody obvious what you’re doing that you just end up looking silly.
Man, I throw you guys a nice little news tip about one of your favourite targets and you don’t even bother to pursue it, beyond Gummo’s speculation (semi-accurate, as it turns out).
If you’d made a phone call or two you’d have had a mini-scoop all to yourselves, at which point you could have launched a thrilling “evil woman invades ABC!” thread. Hey, there’s still time …
I do think that sort of tip is best left to MSM bottom feeders – like gossip columnists, tabloid lynch mob ringleaders and talkback hosts.
You do know what I’m talking about here darling little timothy don’t you? Moi, you and Caroline are all well paid up members of the inner city, chardonnay sipping MSM elite. Looky here my dear, would you really like your blog proles that you so assidiously cultivate to grasp the fact they are just eyeballs that we’ll feed in any way possible to Rupert in exchange for a regular paycheck?
Do you remember the days when media meant going out and breaking stories and not waving a flaming torch to round up a mob? Well I don’t either but that’s beside the point.
But I mean really. Silly MSM pundit changes job. Since when did that become news?
Youth roundtable looks set for the chopping block
Ovington had an article the other week about being a Bob Dylan fan so as far I am concerned that is absolution for all past sins. We start with a blank slate, she and I.
The Diary in the Media section of Oz today reports she had taken a job as “an ABC radio current affairs reporter” however
Overington, rather. And “shocked.”
And “as far as” etc
Heh! Thought there had to be some explanation for the fawning tone of that Overington article. And that the bio at the end should have read:
“semi-accurate”? High praise indeed, considering the source.
Maybe she took a look at Mediawatch and realised that sometimes they go after ABC journoes too. No one’s safe from those buggers. Now back to the main game, whatever that is…
err, you have got your causality arse-up, jack. do you honestly believe, let alone have the capacity for substantiating the claim, that class and race polarisation drives income distribution in capitalist societies?
the problem with your call for reactionary capitalism economic programs and myopic conservative cultural programs is that this will only encourage and accelerate the tendency to see the relations of exploitation being expunged from the visibility of the social body of societies in question. Hence, the post-industrial transformation of most western societies and decrease in the social efficacy on the global media has produced ripe circumstances for the increased exploitation of labouring populations outside of arbitrary national boundaries. The apparent emergent class and race tension are just the resurgence of these labour relations within national boundaries due to the most recent stage of ‘workfare’ post-welfare state post-industrialisation. return of the global repressed in the mediated psyche of simple minded conservatives.
Steve
Cheers mate, really it writes itself
Jack
Another Bwahahaha I’m Jack Strocchi! Hear my … poorly argued and barely comprehensible effort shabbily held together with a few arguments from authority and finished off with a big helping of “I’m not, you are!”
What can I say, it’s a bit of a shit sandwich. It’s shit, there’s not much sandwich.
Economist
s– a Mr Bargearse: O
The US polity has encouraged cultural diversity and financial proprieties in the past generation. This has caused both the Class War and Culture War to heat up. The result is a massive increase social inequality
[link]
and communal segregation.
[link]
All a bit depressing really. C’mon do the trick again.
Better paid than she was before it would appear Ms Scavenger.
She hasn’t left.
Tim information was in error as it transpired. But spelt correctly.
Which was nice.
anthony on 3 May 2007 at 5:41 pm
You are game, I’ll give you that. But I am in no mood to give a sucker an even break. Your howlers are easy mincemeat. Don’t say you weren’t warned.
Anthony says:
Anthony thinks that puerile joke settles it. Borjas work depends on a basic economic theory: the law of supply. Increase the supply of unskilled workers and the price of such workers goes down. Illegal Mexican-American immigrants are usually unskilled, as are legal African-American residents. BOth ethnic groups inhabit similar economic niches.
Those interested in the “water runs down hill� form of economic argument can study Borjas paper at their leisure:
Borjas is not a doctrinaire economist. He points to the fact that other factors are accentuating the decline in the mass of African-American living standards.
Put differently, immigration seems to have an effect and this effect seems to be numerically important, but we would have witnessed much of the decline in black employment and the concurrent increase in black incarceration rates even if there had been no immigration in the past few decades.
Who thinks that these other, non-cultural, factors depressing the relative shares of African-Americans might be class-related? That is my working hypothesis. It is also obvious to anyone who has first-hand experience of the US or anyone with more than two synapses firing. What’s Anthony’s excuse?
Anthony says:
Another elementary blunder. If you want to determine the whether there is “polarized SES stratification” over time you should compare relative shares, not absolute levels.
African-Americans have made substantial income gains over the “desegregation generation”, roughly 1954-74. That is the grain of truth in the widely noted “Black Middle Class” phenomenon.
But the pace of these gains slowed down drastically for the “liberation generation”, roughly 1975-95. Things picked up for African-Americans a bit during Clinton’s tenure but have slumped since Bush Republicans got the whip hand.
Anthony’s quote indicating the glacial rate of progress in the growth of median black households during the last 20 years should have alerted him to this. A 20% total growth in median black household real income over this time amounts to an annualized rate of growth of black households declining share of US national wealth.
A short high-concept phrase for this is “polarization of SES stratification”. But it seems I have to spell it out for the slow learners.
Anthony says:
The news on US cultural segregation is not wholly good. The US has been informally segregating over the past generation. Thanks in part to the Cultural Left’s brilliant diversity philosophy we now have a situation in the US where ethnic groups are increasingly going their separate ways and doing their own thing.
Robert Putnama studied this phenomenon at length and concluded that:
The core message of the research was that, “in the presence of diversity, we hunker down”, he said. “We act like turtles. The effect of diversity is worse than had been imagined. And it’s not just that we don’t trust people who are not like us. In diverse communities, we don’t trust people who do look like us.”
When the data were adjusted for class, income and other factors, they showed that the more people of different races lived in the same community, the greater the loss of trust.
“They don’t trust the local mayor, they don’t trust the local paper, they don’t trust other people and they don’t trust institutions,” said Prof Putnam. “The only thing there’s more of is protest marches and TV watching.”
Some people think this kind of diversity should be celebrated. As a fan of Dr Martin Luther King I think it is kind of sad.
Anthony Says:
You are a sucker for punishment. I dont think I have the heart to mete any more of it out to such a easy target.
Some coding glitch in Jack Strocchi comment # 24 on 4 May 2007 at 9:01 pm caused the following four pars to disappear:
During that time the real US economy almost doubled in size, growing from $6.053 trillion in 1985 to $11.048 trillion in 2005. (in constant 2000 US dollars). That is an annualized growth rate of 3.05% pa.
So the rate of growth of median black household income was less than one third the rate of growth of overall median household income. One does not have to be whiz-kid at algebra to infer from this that black households relative share of US national income has declined over this period.
This is confirmed by the black households declining share of US national wealth.
I would be grateful if Webmaster could re-insert these pars in place of the mangled par, elipsed below, that appears about half-way down the previous comment:
Thanks.
Forget it Jack.
My inclination is more to start cutting you back to a first paragraph, a middleparagraph of my selection and a last paragraph. Because your tub-thumping bombast and vainglory has never been the least bit amusing.
But since I don’t have me glasses with me tonight, you’ll be spared that indignity for the moment.
Gummo Trotsky on 4 May 2007 at 11:03 pm
The missing pars contained commonly known statistics and some elementary arithmetic. Facts and logic are perhaps useful for things other than “amusing” you. Perhaps you should stick to self-parody, there’s certainly enough material there to play with.
did someone just pass wind…?
It’s not hard to pick up a few useful ideas from watching and reading the work of one of the acknowledged masters of the art Jack. Still, I live in hope that one day you’ll recognise the true nature of your genius and finally retire.
Gummo Trotsky on 5 May 2007 at 1:24 am
The link in your comment pointed to some stats I quoted on US economic growth. You apparently think that providing data is an example of my “acknowledged mastery of the art” of self-parody. Diagnostic of your inablility to discern the fine line between fact and fancy.
Gummo Trotsky says:
Be careful of what you wish for. If I retired from my day job as well I would have more time to knock your rambling diatribes, clumsy attempts at humour and amateurish social critique into a cocked hat. A cap fit for you to wear.
Jack, here’s a reminder of your first comment :
On examination – see the updates – your assertion that Overington supplied some facts proves to be false. At best she provided factoids, based on the spurious premise that comparing income inequalities between different countries is:
(A) Possible;
(B) Useful.
The rest was your usual “I’m a clever, clever cultural Dry, you’re all stoopid, stoopid cultural Wets” schtick.
As usual, you got ridiculed for it, as usual you very quickly turned peevish, and laboured long and hard to show what a quick-witted fellow you are, always with a suitably impressive array of irrelevant facts, figures and links at your Google-powered finger tips.
You got ridiculed for that too. This made you more peevish. And here you really topped yourself by miscoding your post – I have no idea what Moveable type has done to it, I’m not interested in finding out. I’m not interested, either, in fixing up your errors, when your sole purpose in commenting is to remind us proles how very, very superior you are. What, exactly, is in it for me?
Here, you made a the completely ridiculous request that your coding errors be fixed for you, a favour that has frequently been extended to you in the past, often enough it seems that you have come to expect it as something like a right. Think again sport. If you’re going to write long dilatory comments with fragile html code, write them in a text editor with html syntax recognition, get the code right, then paste them into the comments box. As far as I’m concerned you’re overdrawn at that particular favour bank.
Finally, one thing about a cocked hat is that you can take it off when you decide you don’t like the look of it. That isn’t true of a coxcomb.