Posts Tagged ‘Thomas PIety’

The Good vs. The Bad Anthropocene

August 20, 2018

This post is taken from “Origin Story: A Big History of Everything” by David Christian. The “good” here is from a human perspective. The increase in energy and wealth has, for the first time in human history, resulted in consumption levels rising for a growing middle class of billions of people, far more people than the entire population of the world at the end of the agrarian era. Thomas Piety estimates that in modern European countries, 40% of the population control between 45% and 25% of the national wealth. The appearance of a middle class of this size was a new phenomenon in human history. More and more people are joining the new middle class as the numbers living in extreme poverty fall. Unfortunately and paradoxically, increasing wealth also meant increasing inequality, and even as the numbers living above subsistence are rising, the numbers living in extreme poverty remain higher than ever before in human history. Thomas Piety estimates that in most modern countries, the wealthiest 10% of the population controls between 25% and 60% of national wealth, while the bottom 50% controls no more than 15% to 30%. The huge number of people living in extreme poverty today are than there were in the past. In 2005, more than three billion people (more people that the total population of the world in 1900) lived on less than $2.50 a day. Most people in this group have seen few benefits from the fossil-fuels revolution and suffer from the unhealthy, unsanitary, and precarious living conditions of the early industrial revolution that were described by Dickens and Engels.

Still a growing proportion of the human population has benefited from increasing energy and wealth flows and is living well above subsistence. These flows have raised consumption levels and also levels of nutrition and health for billions of people. These changes are reflected in changes in life expectancy. For most of human history, life expectancies at birth were less than thirty years. This was because so many children died young and so many adults died of traumas and infections that would not have killed them today. Life expectancies barely changed for one hundred thousand years. Then in the past one hundred years, average life spans have almost doubled throughout the world because humans have acquired the information and resources needed to care for the young and old much better, to feed more people, and to improve the treatment and care of the sick and injured.

The energy bonanza from fossil fuels was so vast that, in addition to expenditures on reproduction, elite wealth, waste, and the infrastructure for complexity, there was enough left over to raise the consumption levels and living standards of an increasing proportion of humanity. This revolution transformation occurred mostly in just the past 100 years and primarily during the Great Acceleration of the second half of the 20th century.

Now let us consider the Bad Anthropocene. Christian notes that the Bad Anthropocene consist of the many changes that threaten the achievements of the Good Anthropocene. The Bad Anthropocene has generated huge inequalities. In spite of colossal increases in wealth, millions continue to live in dire poverty. And the modern world has not abolished slavery. The 2016 Global Slavery Index estimated that more than 45 million humans today are living as slaves. Christian writes, “The Bad Anthropocene is not just morally unacceptable. It is also dangerous because it guarantees conflict, and in a world with nuclear weapons, any major conflict could prove catastrophic for most of humanity.”

The Bad Anthropocene also undermines the stable climate system of the past ten thousand years and reduces biodiversity. The flows of energy and resources supporting increasing human consumption are now so large that they are impoverishing other species and endangering the ecological foundations on which modern society was built. Rising carbon dioxide levels, declining biodiversity, and melting glaciers are telling us something dangerous is happening, and we should take notice.

Christian concludes, “The challenge we face as a species is pretty clear. Can we preserve the best of the Good Anthropocene and avoid the dangers of the Bad Anthropocene? Can we distribute the Anthropocene bonanza of energy and resources more equitably to avoid catastrophic conflicts? And can we, like the first living organisms, learn how to use gentler and smaller flows of resources to do so? Can we find global equivalents of the delicate proton pumps used to power all living cells today? Or will we keep depending on flow of energy and resources so huge that they will eventually shake apart the fantastically complex societies we have built in the past two hundred years?”

How Rising Inequality Hurts Everyone, Even the Rich

February 15, 2018

The title of this post is identical to the title of an article by Christopher Ingraham in the Business Section of the 11 February 2017 issue of the Washington Post. The article begins, “Over the past 40 or so years, the American economy has been funneling wealth and income, reverse Robin Hood style, from the pockets of the bottom 99% to the coffers of the top 1%. The total transfer, to the richest from everyone else, amounts to 10% of the national income and 15% of the national wealth.

It’s part of a massive concentration of wealth and income among the rich that has put the United States at levels of inequality not seen in this country since before World War II. It’s a trend that economists such as Thomas Piety believe will continue unchecked in the coming decades with the top 1% of American capturing a quarter or more of the national income by 2030.”

Research suggests that the inequality depresses economic growth, leaving less for society to divvy up—regardless of how its members decide to do so. Research has also discovered that inequality, particularly the light level seem today in the United States, promotes criminal behavior. Regardless of whether you’re in the bottom 99% or the top 1% these effects can take a chunk of your paycheck. The article notes “Leading economists and economic organizations are coming around to the idea that to maximize income and wealth for everyone—including those at the top—there have to be meaningful checks on income and wealth inequality.

The following is in bold in the article, “Inequality hurts economic growth especially high inequality (like ours) in rich nations (like ours). The Organization for Economic Co-operation and Development a collective of the world’s 35 wealthiest nations including the United States found that rising inequality in the United States from 1990 to 2010 knocked about 5% points off cumulative GDP per capita over that period. Similar effects were seen in other rich countries.

The OECD found, “The main mechanism through which inequality affects growth is by undermining education opportunities for children from poor socioeconomic backgrounds lowering social mobility and hampering skills development. Children from the bottom 40% of households are missing out on pricey education opportunities. That makes them less productive employees, which means lower wages, which means lower overall participation in the economy.”

What might be surprising is that while this is obviously bad news for poor families, it also hurts those at the top. For if you’re a billionaire owner of a retail or manufacturing company, you want people to be able to afford the stuff you’re selling. It is not because of any altruistic impulses that Henry Ford offered his workers high wages, but because he wanted them to buy his cars.

Inequality is not necessarily bad. A 2015 World Bank paper that a certain amount of inequality boosts per capita GDP in developing economies by allowing wealth entrepreneurs to invest more. This effects is reversed in advance economies like our own, because of the detrimental effects on education attainment mentioned above.

Even in advanced countries, not all inequality is harmful. A report by the International Monetary Fund found the inequality could be beneficial to growth at low to moderate levels. Using the Gini coefficient, where 0 means that everyone has the same income and 100 means just one individual has it all, inequality spurred growth in the counties with index values below 27. Too bad for the US where our current Gini index is somewhere around 41, which is well beyond the threshold where inequality because harmful.

To quickly summarize inequality harms overall growth by decreasing per capita income, damaging health and well-being, decreasing disposable income, or enticing middle-class individuals to incur debts they can’t pay.

Of course, this is of no interest to the Trump administration. They are not interested in research studies and instead are relying on Trump’s gut feeling. Moreover, Trump’s tax cut exacerbated the problem of wealth discrepancy and increased the size of the national debt.

© Douglas Griffith and healthymemory.wordpress.com, 2018. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Douglas Griffith and healthymemory.wordpress.com with appropriate and specific direction to the original content.