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Walmart avoids $1 billion a year in taxes through federal loopholes. The losers are the working-class consumers who think they’re getting a good deal by elbowing through the mob surrounding the Xbox floor display. An even more convenient source of “savings” for Walmart operates on the retail level, through the pockets of consumers and workers who rely on taxpayer-funded federal welfare programs.
When people think of the world’s “population problem,” they often focus on rapid demographic growth in parts of the developing world. But, globally, the population-growth rate is actually falling, and population is expected to plateau later this century. Though we cannot afford to ignore the fact that, according to United Nations estimates, there will be 2.4 billion more mouths to feed worldwide by mid-century, another population problem also merits serious attention: large pockets of demographic decline.
Six years after the Lehman disaster, the industrialized world is suffering from Japan Syndrome. Growth is minimal, another crash may be brewing and the gulf between rich and poor continues to widen. Can the global economy reinvent itself?
In August 2007, then–presidential candidate Barack Obama vowed that, if elected, he would “immediately” amend NAFTA. Six years later, with NAFTA still untouched, Obama faced the decision to appoint the chief U.S. negotiators for the two largest trade agreements in history. And he picked Wall Street bankers for the job. While labor organizations worry about losing leverage, the financial industry seems poised to entrench its influence.
The United States passed a major milestone last month, having now regained all 8.7 million of the jobs lost during the Great Recession. But many American families, businesses, and communities are still living with the legacy of the most severe contraction in decades. Wages have stagnated, poverty has increased, social mobility has decreased, and too much human potential is being left untapped.
Noncompete clauses are now appearing in far-ranging fields beyond the worlds of technology, sales and corporations with tightly held secrets. From event planners to chefs to investment fund managers to yoga instructors, employees are increasingly required to sign agreements that prohibit them from working for a company’s rivals.
Four major tech companies including Apple and Google have agreed to pay a total of $324 million to settle a lawsuit accusing them of conspiring to hold down salaries in Silicon Valley. The case was based largely on emails in which Silicon Valley rivals hatched plans to avoid poaching each other’s prized engineers.
When researchers at the McKinsey Global Institute recently dug into the details of Mexico’s lagging economic performance, they made a remarkable discovery: an unexpectedly large gap in productivity growth between large and small firms. In view of the huge gulf separating the “two Mexicos” it is no wonder that the economy performed so poorly overall. This is in fact an increasingly common occurrence around the developing world, a bewildering fissure is opening up between economies’ leading and lagging sectors.
Slavery, in its various forms of physical and mental torment, has been a part of U.S. history from the beginnings of our country to the present day. There are numerous modern-day corporations who profited immensely from slave labor. The 13th Amendment bans slavery “except as punishment for crime.” The 14th Amendment bans debt servitude. But each inmate in a modern-day private prison, according to Chris Hedges, “can generate corporate revenues of $30,000 to $40,000 a year.”
In the golden, post-war years of Western economic growth, the comfortable living standard of the working class and the economy’s overall stability made the best case for the value of capitalism and the fraudulence of Marx’s critical view of it. But in more recent years many of the forces that Marx said would lead to capitalism’s demise have become real, and troubling, once again.
U.S. manufacturing—and the jobs that go with it—have been steadily increasing since 2010. Whether the resurgence of U.S. manufacturing jobs continues depends on a range of factors—including environmental initiatives. While the future of U.S. manufacturing jobs is uncertain, energy-efficiency and clean-energy investment can help ensure that this sector continues to thrive.
Americans will look back and marvel at what became of our old welfare state–that tangle of inequity and dysfunction once known as federal entitlements. Why did the public tolerate a system that wound up distributing most of its benefits to the well-off? And how did the economy survive its costs? With the vaunted post-Cold War Peace dividend evaporating, the United States found itself unable to invest adequately in either its infrastructure or its children. Eventually people began to talk of another Great Depression, before the coming of the next New Deal. This Atlantic magazine article from 1992 almost could have been written today.
The Obama Administration fought to keep the Haitian minimum wage to 31 cents an hour. Haiti passed a law in 2012 raising its minimum wage to 61 cents an hour. America corporations like Hanes and Levi Strauss vociferously objected, claiming such an increase would irreparably harm their business and profitability.
In recent decades, American workers have suffered one body blow after another: the decline in manufacturing, foreign competition, outsourcing, the Great Recession and smart machines that replace people everywhere you look. Amazon and Google are in a horse race to see how many humans they can put out of work with self-guided delivery drones and driverless cars. What can workers do to mitigate their plight? One useful step would be to lobby to eliminate the corporate income tax.
US President Barack Obama recently declared that growing income inequality and the inequality of opportunity that it creates are the defining challenges now facing America. These problems have risen to the top of the political agenda in the United States, but they are not uniquely American problems.
The primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.
The greatest danger is one that will not be faced for decades but that is lurking out there. If we move to a system where half of the country is either stagnant or losing ground while the other half is surging, the social fabric of the United States is at risk, and with it the massive global power the United States has accumulated.
Today’s techniques of finance are designed to make the rich richer. None are designed to make the poor richer. That’s why the poor are poor. The reason they are poor is because they do not have viable capital ownership. Thus, we need to focus on revising today’s techniques of finance to broaden capital ownership.
There is a never-ending supply of business gurus telling us how we can, and must, do more. Yet the biggest problem in the business world is not too little but altogether too much busy-ness. All this “leaning in” is producing an epidemic of overwork, and has been producing negative returns for some time now. It is time to try the far more radical strategy of leaning back.
Jessica is a social entrepreneur focused on empowering others through entrepreneurship and access to capital. She currently serves as a Venture Partner with the Collaborative Fund, focused on investing in creative entrepreneurs who want to change the world through emerging technologies.
Nobel Peace Prize winner Muhammad Yunus’s vision is the total eradication of poverty from the world. This work is a fundamental rethink on the economic relationship between the rich and the poor, their rights and their obligations. Credit is the last hope left to those faced with absolute poverty. That is why Muhammad Yunus believes that the right to credit should be recognized as a fundamental human right.
Capitalism rests on a foundation of myths. First, capitalism somehow “invented” entrepreneurship; second, capitalism provides the only “market” economy; third, only capitalism is compatible with “self-reliance” and individual responsibility; fourth, capitalism is the model of “efficiency,” when in truth it generates enormous waste of all kinds; finally, there Is No Alternative. All of this is nonsense. The economy of the Emilia Romagna region of Italy and its largest city, Bologna, is living proof.
How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970-2010 national balance sheets recently compiled in the top eight developed economies. For the U.S., U.K., Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise of wealth-income ratios in recent decades, from about 200-300% in 1970 to 400-600% in 2010. In effect, today’s ratios appear to be returning to the high values observed in Europe in the eighteenth and
nineteenth centuries (600-700%). This can be explained by a long run asset price recovery (itself driven by changes in capital policies since the world wars) and by the slowdown of productivity and population growth. Our results have important implications for capital taxation and regulation and shed new light on the changing nature of wealth, the shape of the production function, and the rise of capital shares.
CEOs are legendary for defending their tax paying records, and eager to imply that government is responsible for any of their tax delinquencies. For example, just 32 companies avoided enough in 2012 taxes to pay the entire 2013 federal education budget. Changing the tax rules is a specialty of big business, but so is flouting the tax rules.
Britain’s top dozen ‘payday’ lenders – some charging interest rates of more than 4,000% – made almost £1bn in the last 12 months. The figure is more than four times greater than the turnover of the entire industry assessed just three years ago. Half of the biggest high-risk loan companies in the Bureau’s research also posted profit margins of more than 30%.
Like industries that preceded it, Silicon Valley is not a philosophy, a revolution, or a cause. If this new generation of smart, wealthy, successful tech leaders want to make a difference in terms of policy, it’s the right idea to leave their cool headquarters and gorgeous campuses and actually engage.
Smart machines are evolving at breakneck speed and have reached a new social frontier. There are concerns that modern technologies will widen inequality, increase social exclusion and provoke a backlash. Policymakers need to think as hard about managing the current wave of disruptive innovation as technologists are thinking about turbocharging it.
The opponents of immigration reform have many small complaints, but they really have one core concern. It’s about control. America doesn’t control its borders. But the opponents rarely say what exactly it is they are trying to control. They talk about border security and various mechanisms to achieve that, but they rarely go into detail about what we should be so vigilant about restricting.
The $85 billion in federal budget cuts known as sequestration are beginning to be felt far from the nation’s capital, some programs are coping, some are struggling and others appear to be out of luck. While not everyone is feeling the pain, the good-news stories are eclipsed by the bad. At issue for many programs is politics — specifically the politics of President Obama’s health care law.
Cheap shale gas is translating into cheap electricity. Economists at Citigroup and UBS predict that the shale gale will lift America’s GDP growth by half a percentage point a year for the next few years. Indeed, cheap energy is cited as one factor by those who predict a manufacturing renaissance in America.
Thatcher was a breaker of consensus, not a builder of it. And she did not care about everybody. She seemed not to care about the poor and the near-poor, whose misfortunes she tended to regard as failures of character. The moral high point of her tenure was a passionate speech on global warming, delivered at the United Nations in 1989.
Despite bipartisan consensus in favor of retaining foreign students studying at U.S. universities to make America economically competitive, Congress continues to disagree over the details. Very soon, the American public will see some version of these proposals in a much-anticipated comprehensive immigration reform bill.
Silicon Valley is obsessed with serendipity. Armed with social network maps, managers can spot isolated teams and structural holes, tweaking the organizational structure in real time. Rather than wait for their employees to cross paths, they could simply make the necessary introductions.
Patagonia wants to be in business for a good long time, and a healthy planet is necessary for a healthy business. We want to leave behind not only a habitable planet, but an Earth whose beauty and biodiversity is protected for those who come after us. We think that business can inspire solutions to the environmental crisis.
Thomas Picketty, Professor of Economics, specializes in economic inequality with his works covering both theoretical and normative issues. His scholarship includes work on long-term economic inequality, the evolution of inequalities in France, and comparative studies of different developed systems.
The massive global movements of capital, products, and talent in the modern economy have fundamentally changed the nature of business in the 21st century. The Chicago Booth Initiative on Global Markets supports original research on international business, financial markets and public policies.
The Political Economy Research Institute promotes human and ecological well-being by translating research into workable policy proposals capable of improving life on our planet today, and in the future. PERI strives to make a workable science out of morality.
The Economic Policy Institute (EPI) Regulatory Policy Research program debunks claims that regulations impede job creation and addresses attempts to roll back laws that protect the environment and guarantee worker protections.