economic inequality

"Why Nations Fail" : An antipoverty polemic for people who believe in change

Why Nations Fail asks, "Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?" Image: <a href="http://www.flickr.com/photos/26107309@N05/2550699761/">Crystal Davis</a> World Resources Inst. (Flickr
Why Nations Fail asks, "Why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine?" Image: Crystal Davis World Resources Inst. (Flickr

Poverty isn’t random or predetermined—it’s man-made.

That’s Daron Acemoglu and James Robinson’s answer to a simple, ancient question: why are some countries rich while others are poor? Why do some people live in poverty while others prosper?

In their new polemic, Why Nations Fail, Acemoglu and Robinson explore the growing gap between rich and poor countries and what the root causes of poverty mean for aid efforts. It’s not culture, weather, geography, or ignorance, they say: poverty is created by man-made economic and political institutions.

Why Nations Fail is the newest book to tackle the question of global inequality—after Sachs’ the End of Poverty, Easterly’s the White Man’s Burden, and Banerjee and Duflo’s Poor Economics.

In a review of the book, Paul Collier for the Guardian praises its accessibility: "not just readable but engrossing.” Adam Davidson for the New York Times says Acemoglu “is about as hot as economists get.”

While you ponder whether to go for the deep dive and read the book, check out what these intellectual heavyweights have to say on the issue of inequality through the following interviews and articles:

In the Huffington Post, Acemoglu and Robinson speak to the problem of inequality in the U.S.:

Economic inequality will lead to greater political inequality, and those who are further empowered politically will use this to gain a greater economic advantage by stacking the cards in their favor and increasing economic inequality yet further -- a quintessential vicious circle. And we may be in the midst of it...Whatever we may think of the views, rhetoric, and tactics of OWS [Occupy Wall Street], not only does it deserve our respect for putting the question of inequality on the agenda, but also for actually standing up for political equality.

Acemoglu talks about what growing inequality means for society in an interview with book review site Browser. According to Acemoglu, prosperity rests on political foundations—not on culture, weather or geography, as some scholars argue:

We are conditioned to think of factors such as culture and geography as so determining because we see them as immutable. They’re there and therefore they must be important. How could it not be important that Mexico City is so much warmer than New York? How could it not be important that some people are Muslim and others are Christian? But actually none of it is really as obvious as it appears.

And he talks about how inequality affects economic markets:

I do believe in markets. I passionately believe in the importance of property rights and private property. I think they are absolute sine qua nons for prosperity. But I also believe that these things are very political and the politics shouldn’t be one-sided.

Can middle-class Americans really speak for "the other 99 percent"? Demonstrators say so

In Portland's Waterfront Park, Steve Wessing sold Occupation-themed buttons to demonstrators for $1 each. Photos: Michael Andersen for MercyCorps.
In Portland's Waterfront Park, Steve Wessing sold Occupation-themed buttons to demonstrators for $1 each. Photos: Michael Andersen for MercyCorps.

Sometimes, people who claim to speak for "the other 99 percent" aren't actually among them.

As the leaderless, left-leaning "Occupy" movement gathered this week for demonstrations across the United States, claiming inspiration from and solidarity with the Arab Spring, some self-described "99-percenters" faced a hard truth: They were, in fact, among the richest 1 percent of humans.

In 2003, the World Bank estimated that anyone who earned at least $47,500 annually was in the world's richest percentile. According to 2004 Census figures, that was a bit higher than the median income for an American over 25 with earnings and a bachelor's degree.

In other words: on a global scale, much of the American middle class are 1-percenters.

As about 5,000 demonstrators, as estimated by the Portland Mercury, gathered Thursday just down the block from Global Envision's headquarters, we headed into the crowds to ask a few participants whether the world's richest can safely speak for its poorest.

The answer we heard: Why not?

Lauren Ho, center beneath banner.
Lauren Ho, center beneath banner.

"The 1 percent still exists," said Steve Wessing, 50, an unemployed music professional selling souvenir buttons to demonstrators for $1 apiece. "I can't identify with the 1 percent while the 99 percent are still suffering."

Both Wessig and Lauren Ho, a naturopathic medical student holding a sign that read "People Before Profit," hesitated to identify with this year's successful demonstrations in Cairo's Tahrir Square.

"I don't feel educated enough," said Ho, 27. But Ho said she had come to support "a right to health care, housing" and an end to the destruction of the environment. "You have to start somewhere to make a change," she said.

Heather Perry, 30, attended with her boyfriend and their respective children. She said Thursday's rally was the "coming together" of communes predicted by Karl Marx in the 19th century.

 Heather Parry, center left facing camera.
Heather Parry, center left facing camera.

Neither Perry, Ho or Wessig seemed to question that globalization has driven huge increases in wealth around the world, even as it may have eroded the American middle class. Perry, in fact, said this might be for the best.

"If people have money, that should be redistributed to people that don't," she said.

To Charles Newlin, a semi-retired landscaper from Corvallis, Ore., protesting inequality within the United States made perfect sense.

Charles Newlin, right.
Charles Newlin, right.

"Our income disparity is third-world," said Newlin, 66, who showed up in a Pacific Green Party T-shirt that matched his 18-year-old grandson's. "It's larger than a lot of third-world countries'."

As a result, even prosperous American cities are suffering, he said.

"The paint is peeling off the overpasses on I-5," Newlin said. "It's starting to look like Mexico."

As the crowd began to chant, Newlin said he was excited to see so many Americans taking action for greater equality. The key, he said, was widespread underemployment among young people.

"I think they've made a tremendous mistake," Newlin said, referring to the richest 1 percent. "They gave young people skin in the game."

Demonstrators at Occupy Portland, Oct. 6, 2011.
Demonstrators at Occupy Portland, Oct. 6, 2011.

Brazil's Lesson for China: Do Not Ignore Inequality

Topics: Economic Development
Countries: China, Brazil

Even as the global market looks increasingly unsteady, China's economy continues to boom. It has already become apparent that this rapid growth is contributing to increasing income inequality.

The Financial Times argues that China should learn from Brazil by combatting economic inequality with more social spending on things like health care and education.


Stories We're Watching

Jobs for Billionaires - By Joshua E. Keating

Foreign Policy - Thu, 05/24/2012 - 07:25
A few problems back here on Earth in need of some serious capital.

Panda glasses are Toms shoes for your face

Washington Post - Innovations - Thu, 05/24/2012 - 02:30
Growing up in a Chinese home, Vincent Ko saw the many uses of bamboo — in the kitchen utensils, decorations and even furniture. Years later, as a recent Georgetown University graduate, Ko began to wonder if the trendy Asian grass had a place in fashion — in sunglasses, to be exact.

Old Ways Disappearing In The New Mongolia

NPR - Thu, 05/24/2012 - 00:17
With desertification, drought and a booming mining industry, Mongolians are leaving the traditional life of herding. Herdsman Bat-Erdene Badam says he will be the last in his family to tend livestock. His children are trading in their nomadic lives for more stable, often urban jobs.

Two Worlds, One Climate - By Peter Passell

Foreign Policy - Wed, 05/23/2012 - 14:35
Forget Kyoto. There’s a much better way to persuade the developing world to fight climate change.

Brazil and China, Oiling the Wheels of Business

Inter Press Service - development - Mon, 05/28/2012 - 06:21
China's voracious demand for energy has prompted it to embrace Brazil as a major oil partner, fuelling the dramatic expansion of Chinese companies in this South American country. But while some see this as a boost to the Brazilian economy, others fear that it poses a risk to this country's future self-sufficiency.

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