Distribution. Current Events Government shutdown over health care Slashing expenditures on food stamps “Among the 254 counties where food stamp.
Post on 13-Dec-2015
214 Views
Preview:
Transcript
Current EventsCurrent Events Government shutdown
over health care
Slashing expenditures on food stamps “Among the 254 counties where food stamp
recipients doubled between 2007 and 2011, Republican Mitt Romney won 213 of them in last year’s presidential election, according to U.S. Department of Agriculture data”
Government shutdown over health care
Slashing expenditures on food stamps “Among the 254 counties where food stamp
recipients doubled between 2007 and 2011, Republican Mitt Romney won 213 of them in last year’s presidential election, according to U.S. Department of Agriculture data”
Why Does Distribution Matter?Why Does Distribution Matter?
Ethical and practical question Ethical and practical question
Distribution and DemocracyDistribution and Democracy
Is our country plutocratic or democratic? Wealth, power and rent-seeking behavior "We can have a democratic society, or we
can have the concentration of great wealth in the hands of the few. We cannot have both." Supreme Court Justice Louis Brandeis
Is our country plutocratic or democratic? Wealth, power and rent-seeking behavior "We can have a democratic society, or we
can have the concentration of great wealth in the hands of the few. We cannot have both." Supreme Court Justice Louis Brandeis
The Quiet CoupThe crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
By Simon Johnson, The Atlantic
The Quiet CoupThe crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
By Simon Johnson, The Atlantic
What’s the Existing Distribution of Wealth (stock)?
What’s the Existing Distribution of Wealth (stock)?
Top 20%? Middle 20%? Bottom 20%?
Top 20%? Middle 20%? Bottom 20%?
The L-curve of Income Distribution (flow)
The L-curve of Income Distribution (flow)
http://www.youtube.com/watch?v=woIkIph5xcU
http://www.youtube.com/watch?v=woIkIph5xcU
Income Distribution and Taxation
Income Distribution and Taxation
Great compressionGreat divergence
Middle class America
Distribution by factors of production (USA)
Distribution by factors of production (USA)
Wages-70% Profit- 20% Interest- 8% Rent-2% Do natural resources contribute only 2% to
production?
Wages-70% Profit- 20% Interest- 8% Rent-2% Do natural resources contribute only 2% to
production?
Why is redistribution to be avoided? Conventional viewWhy is redistribution to be
avoided? Conventional view People are entitle to keep what they have
earned with the sweat of their brows Destroys incentives, reduces well being of
worst off NYT editorial
Higher Taxes Mean I'll Work Less
Most taxes are distorting, and lead to inefficient outcomes
People are entitle to keep what they have earned with the sweat of their brows
Destroys incentives, reduces well being of worst off NYT editorial
Higher Taxes Mean I'll Work Less
Most taxes are distorting, and lead to inefficient outcomes
Current Trends in RedistributionCurrent Trends in Redistribution
Hedge fund managers tax rates: 15% on profit share
Share of corporate profits going to finance in 1980: 5%. In 2010: 40% Only significant financial innovation: ATM
machine (Paul Volcker)
Hedge fund managers tax rates: 15% on profit share
Share of corporate profits going to finance in 1980: 5%. In 2010: 40% Only significant financial innovation: ATM
machine (Paul Volcker)
U.S. bank industry profits hit record $42.2 billion in second quarter
Finance set to surpass tech as most-profitable U.S. industry
Credit market debt,net of gov’t
Current trends in redistribution: enclosure of the commons
Current trends in redistribution: enclosure of the commons
Values produced by nature Non-renewables: minerals and energy (royalties) Renewables: Goods and Services (natural dividend, waste
absorption, etc.) Air waves, orbits etc.
Values produced by society Private property Land Knowledge and information Money and seignorage
The enclosure trend
Values produced by nature Non-renewables: minerals and energy (royalties) Renewables: Goods and Services (natural dividend, waste
absorption, etc.) Air waves, orbits etc.
Values produced by society Private property Land Knowledge and information Money and seignorage
The enclosure trend
Policies towards a sustainable, just and
efficient distribution of resources
Policies towards a sustainable, just and
efficient distribution of resources
Your viewsYour views
Should we have a guaranteed minimum income? Roosevelt’s 4 freedoms A right to health care? A right to food and shelter? A right to other basic
needs?
Should we have a guaranteed minimum income? Roosevelt’s 4 freedoms A right to health care? A right to food and shelter? A right to other basic
needs?
Your viewsYour views
Should we have more progressive income tax?
What’s the tax rate for hedge fund managers?
Should we have more progressive income tax?
What’s the tax rate for hedge fund managers?
Should we cap incomes? View of Plato and Ben and Jerry Actual status: Average CEO Economic rights
vs. political rights Social obligations
vs. individual rights
Should we cap incomes? View of Plato and Ben and Jerry Actual status: Average CEO Economic rights
vs. political rights Social obligations
vs. individual rights
Basic PrinciplesBasic Principles People keep what they produce with the sweat of their
brows Wealth created by nature and society distributed
equally Public goods replaced with public goods
Negative externalities of inequality are internalized Those who benefit most from government services pay
the most One of the most important services of government is the
protection of private property
People keep what they produce with the sweat of their brows
Wealth created by nature and society distributed equally Public goods replaced with public goods
Negative externalities of inequality are internalized Those who benefit most from government services pay
the most One of the most important services of government is the
protection of private property
Natural resources: redistributing RentNatural resources: redistributing Rent
Rent= unearned income Land- rent Non-renewables- user cost Renewables- natural dividend
Rent= unearned income Land- rent Non-renewables- user cost Renewables- natural dividend
Non-renewables: capturing rentNon-renewables: capturing rent
Ricardian rent = total revenue-total extraction cost
Scarcity rent = value arising from scarcity Investment in substitutes
Salah El Serafy, 1989, “The Proper Calculation of Income from Depletable Natural Resources”, in Environmental Accounting for Sustainable Development, edited by Yusuf J. Ahmad, Salah El Serafy, and Ernst Lutz, Washington D.C., World Bank.
Alaska permanent trust
Ricardian rent = total revenue-total extraction cost
Scarcity rent = value arising from scarcity Investment in substitutes
Salah El Serafy, 1989, “The Proper Calculation of Income from Depletable Natural Resources”, in Environmental Accounting for Sustainable Development, edited by Yusuf J. Ahmad, Salah El Serafy, and Ernst Lutz, Washington D.C., World Bank.
Alaska permanent trust
Renewable resources: ecosystem services
Renewable resources: ecosystem services
Who owns them? Pollution taxes Taxes on ecological degradation? Who should be compensated?
VCAT, Sky trust How do we compensate the future?
Who owns them? Pollution taxes Taxes on ecological degradation? Who should be compensated?
VCAT, Sky trust How do we compensate the future?
top related