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.
Well, considering that the 'rich' he stole from were economic parasites themselves, I'd call it a wash.
By the way, if such a person does not have time to gain the new skills (which I doubt), then my answer is that the person made some very bad decisions earlier in life in choosing the low paying job/lifestyle. Choices in life do have consequences and the government should not punish people who made good decisions and earn more money by taking the money away from them with taxes and giving to the people who made bad decisions.
"Again, if this is the case, then you are working in the wrong job. Go gain the skills to get a job that the market will pay more for and you will earn more and have extra money to invest."
Again, you miss my point. There are many areas in the world where your "solution" does not apply.
Correct, and the governments of those countries that do not have a free market capitalist system are the blame for it. The only fix is to get on the right system. There is no other way. Got it?
"deMonet, deMonet"
Garde la Foi, mes amis! Nous nous sommes les sauveurs de la République! Maintenant et Toujours!
(Keep the Faith, my friends! We are the saviors of the Republic! Now and Forever!)
LonePalm, le Républicain du verre cassé (The Broken Glass Republican)
LOL!!!!
Oh, pi$$-boy!
I think you misunderstood me. I said if a peasant lives in the US, then the fault does in fact lie with the peasant because that person lives in a mobile, free market society and can choose almost any job he or she wants.
If a person lives in some country that does not have the mobility that we have, then the fault lies with the government that does not have a free market system. The peasant is not at fault in that case.
Yes, I did misunderstand you, I'm sorry.
No problem. I am probably not very clear when I write sometimes.
Buffet isn't stupid enough to think the government will spend the money wisely. Maybe he likes estate taxes because it makes the ultra-rich want to give away their money near the end of their lives like he's doing.
Not true, but it has to be thrown in a wise way that never occurred to government. Check out Grameen Bank's microcredit loans, as they have pulled a lot of enterprising people out of poverty. However, those loans are about enabling people to help themselves (basically, using capitalism as the vehicle), not just throwing money at them indiscriminately as government normally does (using socialism).
I believe the rich he stole from were those in the government who obtained their riches through excessive taxation and land control. The poor were those impoverished by the actions of their government.
"I believe the rich he stole from were those in the government who obtained their riches through excessive taxation and land control. The poor were those impoverished by the actions of their government."
LOL! Yeah, that's the standard answer I get when I ask a kid about Robin Hood. /s
I had a naive friend who was writing an economics paper for college, and he was doing it on third-world sweatshops, full of damning pictures and "they earn $6 a day" junk based on what his professor had been spewing.
I took his $6 a day, ran it against the average wage earned in that country, and it turned out to be a far above average wage. He was impressed, but he wouldn't change his paper because he knew his teacher was expecting a capitalism-bashing paper, and my friend needed the good grade.
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