[a dense loner]

I try to stay away from the politics and religion threads. I just wish to know my enemy 

[Sloper]

...
wait a minute.

i see an intellectual problem.

the article has a tricky way to make you accept that, provided that you're not sitting at home doing nothing, then you are 100% entitled to any dominant position you might have, without further distinctions about the size of your privilege.

to use a metaphor, it is more or less like saying that if you climb 9c OS, and as a consequence your shoe sponsor pays you two assistants who lick your boots your soles clean before every attempt, there is a problem only if what got you there is freaky genetics...but if you climbed 9c out of training a technique genius, then it's fine.
...

The point being, the shoe lickers are PAID.

Not forced, implying a choice (albeit constrained by circumstance).

And, fundamentally, no different from paying a Carpenter to put in your new floor, or a Glazier to replace a broken window. If there was a market for shoe lickers, shoe lickers there would be.

We can't call the uber rich Capitalists without also including the Butcher, the Baker and the Candlestick maker.

If you work, in any way, you sell your abilities to someone, for your own profit.

And there is choice.

If you were a Barrister, you could continue to sell your professional skills, or; should you be willing to accept a smaller fee, work part time in a climbing wall and have as recompense greater free time.

The point being though, is that markets aren't inert 'things' which appear out of thin air like clouds. Markets are created by needs and wants; and needs/wants aren't all innocent or harmless for third parties or non-humans - the invisible elbow of the invisible hand.
An issue with the hyper-rich is that they create their own markets like mountains create their own weather systems, and the markets the rich create can be (not are) out of kilter with what's for the common good of the rest of society. I think that's the just of the point people such as Michel Sandel 'Moral Limits of Markets' and opponents of unrestrained capitalism are making.
http://www.justiceharvard.org/about/about-what-money-cant-buy/


If there were a market for slavery, than slavery there would be...

The hyper rich create some markets, including the markets for super yachts, butlers and so on, but in reality these are prettymuch irrelevant.

If you look at many of the markets that have emerged in recent years, mobile telephone, internet thingies, payment by phone (which is transforming financial markets in Africa & etc then these have little to nothing to do with the hyper rich (or even the top 10%).

If you consider foreign holidays these were once the preserve of the rich, not any more.  Was this change (and a massive reduction in the inequality of those who could enjoy an overseas holiday) due to the super rich? No, it was a response to other factors, as was the introduciton of package tourism in the 19th C.

[andy popp]

BTW - the economist has a seemingly well-rounded blog on the "piketty made it up" accusations. My reading of that seems to be that there aren't really any problems you wouldn't find in any other vast collection of messy data, but that may be my inherent biases playing up - http://www.economist.com/blogs/freeexchange/2014/05/inequality-0

Oi ... that's not allowed. It clearly states in the UKB terms and conditions that quoting from the Economist may only be done to support free market ideological positions 

The idea that Piketty has just 'made it up' is ludicrous and betrays a complete lack of understanding of historical data.

EDIT: that came out wrong and was very much directed at the FT, not Toby.

[Oldmanmatt]

BTW - the economist has a seemingly well-rounded blog on the "piketty made it up" accusations. My reading of that seems to be that there aren't really any problems you wouldn't find in any other vast collection of messy data, but that may be my inherent biases playing up - http://www.economist.com/blogs/freeexchange/2014/05/inequality-0

Oi ... that's not allowed. It clearly states in the UKB terms and conditions that quoting from the Economist may only be done to support free market ideological positions 

The idea that Piketty has just 'made it up' is ludicrous and betrays a complete lack of understanding of historical data.

EDIT: that came out wrong and was very much directed at the FT, not Toby.

Possibly.

However he tried to find Equations to prove his hypothesis, rather than observing a mathematical correlation and proposing an Hypothesis to explain it.

And the equations are suspect.

This has the effect of undermining his argument and deflecting all interest and comment on to the minutiae; so most people will never bother reading the original.

Not the first to make that mistake and enough to keep his ideas buried for the foreseeable future.

This does not make him "wrong".

[andy popp]

That's a remarkably confident judgement on Piketty's methodology and data. I take it you've read the book?

[Oldmanmatt]

Not entirely, yet, but my judgement was on the FT article rather than him. Their focus was somewhat narrow, picking holes in the Math. As I said, this doesn't make him wrong. I've yet to be convinced, but the Math is clearly off. Perhaps something's just can't be be expressed that way. 

[Sloper]

That's a remarkably confident judgement on Piketty's methodology and data. I take it you've read the book?

I haven't read either the FT article or the book, but it has been reported (which doesn't make it true) that Pickertty has rejected the ONS data while relying on other data gathered with a similar methodology.

In many ways, access to technology, finance etc we are a more equal society now than ever before and when you have a loosening of constraints in information and finance (within a structure with a reliable & stable system founded on the rule of law) you generally have a wave of innovation and a new 'moneyed' class emerging.

[Oldmanmatt]

A quote from the Economist article illustrates my point better than I did.

"Now, the academic debate is a different thing from the judgment reached in the court of public opinion. There was an outbreak of gloating across the wires the moment the Financial Times story went live. The book has plenty of critics (many of which never spent much time wrestling with the book's arguments in the first place), and many of which reached gleefully for word that Mr Piketty's work might not be perfect. One suspects that in a public back-and-forth that has often failed to hew particularly closely to the substance of the book, this will become an excuse for many to write the book off, and for others a piece of ammo to fire at ideological opponents."

The article goes on to speculate that the "mistakes" may prove "embarrassing" to the author but not fundamentally detrimental to the Hypothesis.

So, if I could just reframe the opening line of  my last but one post to..

"However, it seems as though, he tried to..."

[Oldmanmatt]

Too late to edit. I couldn't find the ref. I'd read. Found it on another thread here though (thanks Toby).

This was the Mathematics I was referring to.

http://georgecooper.org/2014/04/29/does-pikettys-r-g-hold-in-a-low-growth-world/

The assertion that allocation of %GDP between the savers and the inheritors, in low growth environments; be split such that the Inheritors gain more than the total GDP...
Does seem suspect.

That article does open with a quote from Piketty himself, regarding the inability of mathematics to express Economic ideas, though.

[slackline]

Regardless if whether it's right or wrong it's good that Picketty has been open with his data & analysis .

[Offwidth]

I always thought political/social economics was way too hard and ran away into physics and engineering. Aside from the fiction products like Psychohistory and the Culture, I always smelt a rat in  'great thinkers' products especially when they seek to explain universal factors. Maybe this was from reading too much Orwell and Huxley.

I do believe  in a few things though. Firstly human psychology...if you have a democracy in an information world any underclass will soon get very pissed off (irrespective of any fault of their own) and extract revenge from time to time (eg crime, riots). The group just above the underclass will look down and get scared and extract their revenge (eg voting UKIP). The more power you give the rich the more it will tend to corrupt them, so society needs to have checks in place. The super rich are pulling up the drawbridge using complex financial vehicles (with global linkage),  that are too much designed to protect (especially from tax) and not enough to create wealth...I've been lucky enough to know a few very rich people and see what they do.

On the original points of gadgets and warm caves. plenty of our elderly don't have either (and both are a lot cheaper than they once were so having them isn't always so significant). Plenty of people are reliant on food banks. Plenty of people don't have access to normal finance and have to wonga their way through life. Sink schools and tuition fees are closing educational opportunities for those at the bottom faster than ever. Health gaps are starting to rise again. TTIP is right now trying to make governments liable for the costs of democratic decisions or force further dilution of trade union law (so global buisness can sue them). Something does needs to be done.

[Sloper]

Nice to see some ill judged tub thumping from the SCR rather than the lower VIth,

Let's pick apart a few of the gems, 'plenty of people don't have access to normal finance' utter bollocks the penetration rate of banking is probably now higher than it ever was before and the cost of banking; in many ways lower, one of this government's proposals was to pay benefits monthly into bank accounts to widen that access.  But yes you are correct in that access to finance is a powerful tool against poverty.

The under class don't riot as a rule because they get pissed off they riot generally when three conditions are met 1. It's a nice summers day, 2. There's a critical mass of people on the street (see in part 1) and there's a particular issue that acts a a lightning rod; from Cherry Groce to Paul Duggan, it's usually a death in custody.

3. Voting UKIP (if we can say that there's a common cause) is not about the under class; rather about an out of touch political elite who have no connection with the electorate as a whole.

Sink schools; hmm why do we have sink schools do we a. lame Thatcher, b. blame the teachers or c. blame the parents or d (and don't all go wild with excitement) d. blame society.

Education used to be a 'way out' or 'way up' but successive governments have debauched the value of a degree to the point that for many HE no longer represents a sensible investment of time and money and we need to return to a system with selective education and a smaller, much smaller HE, sector before that's going to change.

Anyways that's enough ranting, I'm off to the pub to do the crossword from the Saturday  lefty.

[Offwidth]

Except if anything I'm a social liberal not a leftie (I am only really left of the right). I've met all those groups in inner city Nottingham and elsewhere and they are very real. It worries me that we can't seem to stem the rising tide of unfairness and the waste of potential talent it involves yet the measure we do have in place are almost as expensive as ever.

Your point on finance is ridiculous, do you have any stats to back up your assertion? How do you get a bank account when your credit is shot to shit and why would people with access to standard bank loans use more exploitative payday loan organisations; and why did such organisations grow so rapidly over the last decades? Do you really think the sudden rise in food banks is really skivers seeking free handouts? Have you any contact with Nottingham schools that service St Anns, the Meadows, Bestwood etc and watch how the demand for the more expensive free schools n such areas is really about the middle classes or faith groups  escaping (at least the academies had inbuilt protections on social inclusion). I think you need to get out from your comfy middle class existence and mingle. As for a couple more of your facts: riots were just an example, that's what eg means and I understand the complexities but the rich never riot do they (at least outside small groups like the Bullingdon Club). I pretty clearly attached the UKIP point to the fearful group above the underclass (an underclass who of course don't usually vote).  I wonder if you think the worry over TTIP and the creeping negativity in society of unregulated globalisation is a guardianista scare story as well?

I was brought up in rural northants in an area where land largely owned by the (not so kind) Spencers (of lady Di fame) where tenant farm workers grafted bloody hard and lived pretty frugal lives, not so far from the subsistence hill farmers who still eak out a living to this day. I was the amongst the first kids to go to Oxbridge from my comp. As my family were not wealthy I had a grant and of course worked in the holidays and left with money in the bank. which opened up the chance of a PhD.  I always supported hard work alongside social fairness and felt the way we dealt with the less fortunate was absolutely necessary if sometimes a bit unbalanced, especially with the real growth of a dependency culture through the latter part of the last century. I think (despite my distaste for it), that the current government has chipped away sensibly at some areas just as it allowed other more important areas to slip. The chips are too small though and are often hitting 'unintended' targets unfairly (especially some of the disabled): although absolute poverty (can't afford food and heating etc)  has maybe declined a little, the gap to the wealthiest and a sense of unfairness around wealth and opportunity has increased significantly. Although people on the whole worry about this, they seem to be a bit lost in what to do about it... we seem to be increasingly atomized, and almost completely let down by the politicians, Most of the far left and right in England remain largely bonkers snake oil salesmen (maybe excepting the greens), the Labour party sold out, despite a Blair led mandate huge enough to do real good; the liberals seem intent on electoral suicide by abandoning their social liberal core voting base (for instance I still think they were right on tuition fees but are now saying - in the face of sound economic evidence that the rise from £3k to £9K almost certainly hasn't saved the government any money at all - the original pledge was unaffordable: how bloody mad is that?); the conservatives really don't seem to care, despite their rhetoric, relying on cliched targets to build unsubtle policy that increases the unfairness. The chances for someone like me today to do what I did then, simply seems much reduced and for so many reasons.

[Sloper]

There'll be an ONS report somewhere, but the number of people with bank accounts has been rising steadily alongside a reduction in the number of people paid in cash & etc the issue of bad credit rating is of course valid, but a lot of wonga etc customers have bank accounts (that's how the transfer is made) and the market for wonga is not necessarily the same as a bank loan.

A quick point; Labour were absolutely wrong to introduce tuition fees and set up the mechanism that led to the increase; remember their rhetoric; 'why should it be for the working poor to subsidise the education of the middle classes'?

The rise in food banks is the product of a number of factors; to ascribe to the view that they're the necessary consequence of 'austerity' is simply deluded, the under class were probably not too distant in number in 2003, or 1991 or 1982 than now: what differs is the provision.

Your point about the free schools etc is demonstrating that one of the causes of the inequality and poverty are failing schools, yes the 'middle classes' want better for their children and so (or at least they used to) did the working classes.

Moving away from your 4 yorkshiremen narration; the gap between asset wealth of the top 1, or 2 or even 3% is a complete irrelevance: what matters is the social mobility between the say lowest 5 to 15% and the 15-35% bracket.

Your point about dependency culture is an interesting one; if we reduce the degree to which people become dependent on the state, maybe they'll take a bit more responsibility for their own actions?

[Offwidth]

Having a bank account is very different to having a usable account. The poor have very real problems with banks at the moment and are foced to payday lender or worse stillloan sharks and there are plenty of reports to detail that..

Sink schools need real attention and that means it's these schools that should get the most cash and effort. The investment would probably pay dividends. Middle class escape may be understandable but makes the problems worse. The Freakanomics folk did some interesting  experiments in the US that showed the encouraging atmosphere surrounding kids made more difference to success than schools, so there is less to fear than the middle classes think.

Food banks was illustrating lack of equality I didn't use the 'A' word. Yet again your reading skills are lacking. I think the cause are bigger and longer term  than austerity

My childhood was pretty close to idyllic thank you very much...not 'Yorkshire' at all. I just saw poor kind people exploited plenty by rich bastewards.

At least we agree on tuition fees although I guess I'm in  minority these days thinking we need more people in Higher education to compete in nthe future as a nation (in a controlled way like in Germany rather than our freemarket model with all the institions chasingb the same market))...

[andy popp]

Too late to edit. I couldn't find the ref. I'd read. Found it on another thread here though (thanks Toby).

This was the Mathematics I was referring to.
http://georgecooper.org/2014/04/29/does-pikettys-r-g-hold-in-a-low-growth-world/

George Cooper has continued to write on this topic. For me, a lot of what he talks about here rings true. He suggests an alternative narrative for the shape of Pikkety's 300 year wealth charts based on just two disruptive events: the rise of North American agriculture in the 19th century, which decimated European farm-land values, and the rise of Asian low-cost manufacturing in the late 20th, which has massively reduced inflation and so allowed interest rates to fall almost continuously for thirty years, creating various bubbles in real asset prices.

Cooper places a vast - I would say unsupportable - burden of explanation on his two 'shocks,' the first of them especially, which is the one I read most carefully. He's playing a little loose with history here too, in my opinion, and I don't recognise his analysis in the context of Britain in the C19th, a country that after all had a bit of a part to play in the global transformations of that century.

[andy popp]

he gap between asset wealth of the top 1, or 2 or even 3% is a complete irrelevance: what matters is the social mobility between the say lowest 5 to 15% and the 15-35% bracket.

Two points. I don't believe extreme inequality at the top end is irrelevant. In The Spirit Level Wilkinson and Pickett present a very detailed case for a strong correlation between extreme inequality and a wide range of negative social consequences, even in the richest countries. You might disagree with them but their argument and evidence deserves to be be taken seriously. Secondly, and more importantly, immobility and inequality are intricately intertwined at all levels. Countries with high inequality (US, UK, for example) also tend to have very low social mobility - and vice versa for other countries. Immobility entrenches wealth concentration. Most people concerned about inequality are also deeply concerned with immobility and see improving social mobility as the most important route to sustainable reductions in inequality, more important than a redistributive programme (though that can and should have a role).

[Oldmanmatt]

he gap between asset wealth of the top 1, or 2 or even 3% is a complete irrelevance: what matters is the social mobility between the say lowest 5 to 15% and the 15-35% bracket.

Two points. I don't believe extreme inequality at the top end is irrelevant. In The Spirit Level Wilkinson and Pickett present a very detailed case for a strong correlation between extreme inequality and a wide range of negative social consequences, even in the richest countries. You might disagree with them but their argument and evidence deserves to be be taken seriously. Secondly, and more importantly, immobility and inequality are intricately intertwined at all levels. Countries with high inequality (US, UK, for example) also tend to have very low social mobility - and vice versa for other countries. Immobility entrenches wealth concentration. Most people concerned about inequality are also deeply concerned with immobility and see improving social mobility as the most important route to sustainable reductions in inequality, more important than a redistributive programme (though that can and should have a role).

But Andy, surely the inequality and social mobility status today is better than it was, say, between the wars?

Opportunity has declined from a peak in the 80's, I would have said.

 I'm reluctant to accept Piketty's assertion of the inevitability of a widening gap as a mathematical certainty.

IMO, the value of and access to, information; will be the greatest influence on future society.

And look at what is at our fingertips, when we choose to look!

Look at the debate that is happening here, on this forum. A bunch of people from a broad spectrum of society, holding a conversation, that would rarely have occurred outside of academia even a decade ago.
The ability to conduct research and cite evidence in minutes.
Everyone who has taken part, has learned something.

This is true across society. Debates may be ill or utterly mis-informed, but they rage across social media daily and shape the society we live in.

We talk here about access to education and ignore that this merely means access to information (ducks as the educators disembowel me... I get the importance of the delivery and understand the need for things to be "taught"). Perhaps traditional HE is not the right way to provide that information anymore.

I cannot see that the baubles of the mega rich represent true inequality. We talk of Wonga etc here, but the Sharks with their notebooks were always there (it was how the Krays made most of their ill-gotten empire), they merely moved online. The HP man and the Rent collector, the Slum Landlord and the Pimp; no more common today, per capita, than a hundred years ago, surely?

Things are not as good as they were ten years ago.
But they are better than they were a hundred years ago.
And people are better and more quickly informed, than they have ever been.

[andy popp]

Well, you did say a lot of it rang true so I thought I'd take it seriously. Anyway, the alternative narrative only works to falsify Piketty if its not hokum - which I believe the land value one is. There is probably much more to what he says about the period since the 1980s.

I'm not really in a position to comment on methodological issues as I haven't read Piketty yet but on this score I suspect Cooper's blog contains a fair bit of setting up and knocking down straw men.

Matt, I'm not sure what you're saying. Certainly, I haven't said society hasn't got wealthier, inequality has also fluctuated but i'm most concerned about inequality today. The Wilkinson/Pickett argument is that inequality has pernicious effects independent of how wealthy a society is. Is the mega rich don't represent inequality then I don't know what does.
 

[slackline]

And look at what is at our fingertips, when we choose to look!

Most don't choose to look though, they rely on asking questions because its quicker/easier than researching something themselves.  And even then there is the "filter bubble" issue and the fact that most people only reinforce their beliefs rather than challenge them.

[tomtom]

I think it would be interesting (and important) to consider the Geography of this - all of the ideas/comments/assumptions are based on a rather one dimensional (in space and time) model.

The Geography has a large impact on inequality in many ways. It can be as simple as the north south divide - which has grown under this present governement with their reduction of public service jobs (spread more nationally) and increase in their private sector replacements (with a greater SE bais).

In many ways the world is a smaller place - and home working, remote working, skype etc.. allows many people to work and live in different places. And - people can up sticks and move to a different part of the country and follow the jobs (on your bike etc..). But the difficulty with moving after work is that many people (rightly) do not want to leave friends/family/where they grew up/great climbing areas etc... and this has not changed much IMHO over the last 30 years...

Different places will have different levels of inequality - and I suspect mobility. If you have a town/city with few rich and many poor is it easier or harder for poor to move up to the (relative) rich? If you have a city with mega rich and mega poor is the same possible? (think Dubai)...

[andy popp]

Well, you did say a lot of it rang true so I thought I'd take it seriously.

I don't think I contradicted myself but maybe I didn't express myself very well.

Fair enough.

But, I'd be as suspicious of any explanation based on isolating out a small number of exogenous shocks as I would one based in a general theory. The 'right' exogenous shocks able to account for the very large, long-run processes Piketty's book is concerned with don't exist, in my opinion. As an historian I am always looking for complexity, multi-causality, and a dose of contingency.

[a dense loner]

Yep I've found quite a few clever people to be thick as fuck

[tomtom]

As an historian I am always looking for complexity, multi-causality, and a dose of contingency.

Generally what I look for - though probably expressed with different words (and graphs/equations)

[psychomansam]

I think it would be interesting (and important) to consider the Geography of this - all of the ideas/comments/assumptions are based on a rather one dimensional (in space and time) model.

The Geography has a large impact on inequality in many ways. It can be as simple as the north south divide - which has grown under this present governement with their reduction of public service jobs (spread more nationally) and increase in their private sector replacements (with a greater SE bais).

In many ways the world is a smaller place - and home working, remote working, skype etc.. allows many people to work and live in different places. And - people can up sticks and move to a different part of the country and follow the jobs (on your bike etc..). But the difficulty with moving after work is that many people (rightly) do not want to leave friends/family/where they grew up/great climbing areas etc... and this has not changed much IMHO over the last 30 years...

Different places will have different levels of inequality - and I suspect mobility. If you have a town/city with few rich and many poor is it easier or harder for poor to move up to the (relative) rich? If you have a city with mega rich and mega poor is the same possible? (think Dubai)...

Another reason for the North/South divide has been policies by successive neoliberal governments, starting with Thatcher, of undermining Northern industry. Recently, governments have favoured a strong pound. Which might be useful in the City, but has been awful for exports. People often claim that manufacturing exports is too expensive and unprofitable, or that we can't reign in the city because we're too dependent on it. Well worth thinking about how governments have put us in this situation. The recent response to the 'crisis' has essentially been to print money and use it to invest in infrastructure and industry banking and finance. While doing nothing to reign in high-risk 'investment' such that, last time I checked, we have more high risk investment in the City now than before the crisis.

But it's not just about a north/south divide. Much of the worst poverty is in London. Banking and finance may bring in money (especially if someone pays tax), but it provides fuck all jobs, and is extremely elitist.

Today's news: Children are fucked. Thanks coalition.