Posted on 11/30/2006 8:54:28 AM PST by libertarianPA
LONDON (Reuters) - Huge gifts to charity from U.S. billionaire Warren Buffett and others have won widespread praise, but some say the same economic process that helped earn those fortunes is leaving billions more in dire poverty.
Buffett pledged to give away a mammoth $37 billion of his fortune -- more than most African countries' GDP estimates for this year -- the bulk of which will go to the Bill and Melinda Gates Foundation.
But the size of the gift also highlights growing inequality in the distribution of wealth, even as world economic output doubled in the last 10 years.
"The way we have proceeded with globalization has exacerbated the inequalities because it has been very asymmetric," said Joseph Stiglitz, a Nobel prize-winning economist and professor at Columbia University in New York. "Capital moves more freely than labor and that means that the bargaining position of workers is disadvantaged relative to capital."
Analysts say the huge numbers of workers coming into the market through globalization in China and India have driven down wages in rich countries by making their workforce compete with much cheaper labor elsewhere.
At the same time, the upside for wages in poor countries is capped by an infinite pool of labor to choose from.
This helps explain the numbers in the 2005 U.N. Human Development Report, which show the richest 50 individuals in the world have a combined income greater than that of the poorest 416 million and that the unequal distribution of income worsened within many countries in the last 20 years.
CULPRITS
To be sure, unfettered economic growth is not solely to blame for growing inequality.
Corrupt national governments help to keep nearly half of Africa's people below the poverty line and inequality rampant in Latin America despite two decades of economic reforms.
Yet even emerging economic powerhouses such as India and China -- whose impressive growth rates have helped lift thousands out of poverty -- are still haunted by widening wealth gaps.
While China's economy expanded nearly 10 percent a year from 2001 to 2003, the average income for the poorest 10 percent of the country's households fell 2.5 percent, according to an analysis by the World Bank.
Meanwhile, the Gini index, a measure of wealth inequality, was 63 in rural India and 66 in urban India in 2002. The closer the index is to 100, the greater is the inequality. The corresponding figures for China were 39 and 47 respectively.
Behind this trend, a push toward smaller government has left officials without the means to care for society's most vulnerable, according to some critics.
"I think the primary responsibility for ensuring that growth benefits the poor is national government, but they have been very poorly advised over the last 25 years by the World Bank and the IMF and other institutions," said Duncan Green, head of research at charity Oxfam.
"For example, advice to open up their markets to trade and investment when all the successful economies like Korea and Taiwan have actually been very cautious about liberalizing and have done it quite slowly."
(NOT SO) ADVANCED ECONOMIES
Advanced economies too are plagued by inequalities which make parts of their population vulnerable to external shocks and natural disasters, as shown by the aftermath of Hurricane Katrina in the United States.
Although a 2005 European Union report concluded Europe was pretty equitable, it said earnings inequalities had increased in the 1990s in countries like Britain, Poland and Denmark. Even in socially-conscious Germany, the gap between rich and poor has grown since 1998, according to a 2005 government report.
But the gaps are especially wide in the world's largest economy and biggest champion of the free market.
The average U.S. chief executive earned 821 times as much as a minimum wage worker, the highest gap ever, according to a study published by the Economic Policy Institute think tank in June.
Analysts have also said an overriding concern with raw economic growth measures, at the heart of widely accepted business-friendly economic policies, risked widening wealth gaps.
"Our political system and the very conservative ideology that says somehow the way to boost the economy is by reducing the taxes for the very wealthy, that system has increased enormously the inequalities in our society," said Pablo Eisenberg, senior fellow at Georgetown University's Public Policy Institute.
So what? What's the point? What does she want to do about it? More socialism? Give me a case in which that has worked and produced booming economies!
Libs just don't seem to realize that if everyone in the world were to suddenly achieve the lifestyle the average American enjoys, the world's resources would quickly evaporate and there would be choking pollution.
But that doesn't matter. There are poor people in the world. As a lib non-economically educated journalist, I have to sound the siren.
And people scream about Fox News' bias.
"highlights growing inequality in the distribution of wealth"
Maybe the poor countries should make products or perform services that other people want and sell them.
Just an idea.
Stupid communists.
You could take all the monet from the rich and give it to the poor. In less that 10 years the rich would have it back.
Good point. There's a fundamental principle libs just don't seem to get:
The rich get richer because they continue to do what made them rich... ditto the poor.
I thought this was extremely basic economics: The pie doesn't get cut in more ways -- the pie grows. Buffet helps make the pie bigger. Those poor people in Bangladesh who are using Grameen Bank's microcredit to escape from poverty are making the pie bigger.
Capitalists always want the pie to grow, the increasing slice size going to those who made it grow. Socialists want to keep the pie the same size and cut all sizes equally.
"The rich get richer because they continue to do what made them rich... ditto the poor."
Nutshell.
Okay, so a wealthy man such as Warren Buffett is not to be commended for his generous gifts, because the fact that he had such wealth highlights gaps between rich and poor?
Should we all just become communists then? Not sure where they are coming from here, or what exactly the complaint is.
Estate tax protection. Buffett is such an advocate of massive estate taxes so why doesn't he just allow the government to confiscate 55% of his wealth when he kicks the bucket?
Yeah, that's for sure. Katrina was particularly hard on welfare moochers and stupid people who did not listen to orders to evacuate New Orleans, for example. They were just like people who stand on the train tracks and ignore the oncoming train because they're waiting for somebody to send a limo for them.
I think of it as social Darwinism in action. Nature can be very harsh with stupid, useless career social dependants with no sense of responsibility for their own self-preservation. That's how God culls the herd.
I believe that land reform in Mexico (1970?) ended in a similar way. The original owners of the land ended up owning much of the land that the receivers sold back to them after failing to farm it productively.
Same old communist claptrap. If the commies want to make a positive contribution to mankind, they should render themselves into biodiesel for the rest of us!
This is a "zero sum" argument and is as extinct as the dodo.
In America, the rich get richer and the poor get richer too.
Today's poor in America live as well or better than the middle class did during the '50's when I was growing up. That's why half the world is trying to crash our borders.
No flat screen TV, only one car per family, no health club membership, got to shop at Walmart not Prada . . . Oh, the humanity!
"Labor" is not a lumpen, indistinguishable mass negotiating with an equally indivisible "capital." Individuals workers bargain with individual employers, unless aided by collective-bargaining laws, which artificially forces together their otherwise dissimilar interests. The variation within "labor" is much greater than the differences between Mr. Stiglitz's imaginary categories of "labor" and "capital," which is Marx's language.
Joseph Stiglitz, one of whose most popular books is called Whither Socialism?, is a very smart man in the ways of academic economists, but a socialist through and through.
Wealth isn't "distributed" it's earned. those who have more don't get it because of some cosmic roulette wheel , they get it by earning it. Those who have less get less because they either don't work as hard or don't do things as valuable.
Buffett can do whatever he wants with his money. You are assuming it will be of more help to people than I am.
Anything he wants with his money except buy legislation to take money from me against my will. All this "raising awareness" crap is code for lobbying to get laws passed and government programs kicked off. Everybody knows some people are poor. At least Buiffett is willing to come off his own money, unlike most.
A conservative should know there are very few problems remedied by throwing money at them. Poverty is one of them.
"Wealth isn't "distributed" it's earned."
According to the left, all wealth is earned collectively by our society as a whole, at least that is how they view it. It is of course totally wrong.
The left is really writing a lot of columns about leftist class warfare ("the rich are getting richer", "there is a widening gap between the rich and the poor", "the economy is not fair", etc.). It seems to be gaining some traction with the ignorant.
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