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.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
Let's play "liberal hypotheticals" with this wild pronouncement.
Our society recognizes both intelligence and "emotional" intelligence, right? What would happen to the calculations of wealth if we figure "emotional" wealth in the equation?
Liberal minds want to know in order to be proud of their own emotional generosity.
The Mexican land reforms began shortly after Diaz retired at the beginning of the 20th century, and have continued ever since. There was a big outbreak of land reform under Cardenas in the '30s, as well. They take it away from productive landowners and turn it over to marginally productive campesinos. The campesinos eventually sell it back to the productive landowners, the campesinos complain about the patron, and the whole thing starts again. They have been doing this for 100 years and it hasn't worked yet. Only in areas where they have managed to institute guaranteed property rights is agriculture in Mexico a paying proposition.
...and did so precisely because there was the incentive of profit.
This viewpoint made Cuba the economic powerhouse it is today and was the reason the the Russians were able to outproduce the US thus ending the cold war in favor of communism and why communism is the ... Oh wait, Cuba is an economic shambles and Russia didn't outproduce the USA and still communism is touted by retards like the one who wrote this article. Go figure.
Better there should be huge concentrations of wealth in the hands of individuals than in the hands of government, and the latter is the only alternative.
Then only the high-ranking party officials will be rich. Fidel Castro is one of the richest men in the world.
Socialism is not the answer, though.
And don't bring God into this, especially as culling some herd.
Two points ..
They don't want everyone to achieve the average American lifestyle. They want the average American lifestyle to disappear.
If all the wealth was magically divided equally across the globe ... in a generation the "gross inequalities" would be right back in place.
"The poor you will always have with you" .. Jesus
No, it's the advanced economy which enables parts of their population to be vulnerable to external shocks and natural disasters - and survive!
Old maps of New Orleans showed nobody living in the flood zone - precisely because it would flood and destroy homes (surely found out the hard way). It was the advanced economy which built levees between the river/ocean and the flood zone, allowing the disadvantaged access to cheap, previously-unused, and wealth-enabling land. It was the advanced economy which was able to evacuate most of the city in time, and provided food & shelter to those who would/could not care for themselves. It is also the advanced economy (gov't flood insurance) which, upon devestating failure of those levees and destruction of homes in that flood zone, will rebuild those homes at little/no cost to owners & occupants.
The bottom "inequals" of an advanced economy are, on the whole, better off than the bottom "equals" of a less-advanced economy.
BTW: It was also an advanced economy which sent a floating city to Indonesia to help the less-advanced economy deal with the pervasive devestation of a huge tsunami.
Would the author prefer a less-advanced economy? The bottom is fixed; the top is boundless. Lowering the top does not raise the bottom.
I find it extremely interesting that Reuters has an economics reporter in London, supposedly writing "objective" news stories, who is an avowed Marxist.
He ought to ask some farmers in India or Indonesia if they'd rather continue in grinding rural poverty or make twice the wage in a Nike "sweatshop." Nike wins every time.
Seems the "corrupt governments" thing that shows up in all of these stories makes the socialist wealth stealing outcries a bit foolish, don't it?
Now ask those same factory workers if they would prefer the current system or one where they can organize for greater benefits and standards of living.
If it was good enough for us, after all, it is good enough for them.
It's okay. With the 'Rats in charge, we'll all be equally poor!
Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful. Never grateful.
You must have watched the Barney Frank and Bill O debate last night too.
Bill was stuck on 'income' redistribution and didn't get Franks "wealth" redistribution.
I agree with everyone's assessment about the 'rich' knowing how to acquire wealth and know what to do with it when they have it. Those that don't will ALWAYS be poor.
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