A bit of data from the UK that supports Piketty's position over that of the FT:
The richest 20% of the population in Britain will have, on average, the spare sum of £18,680 to put into their savings this year, while the poorest 20% will spend £1,910 more than they earn, latest figures suggest. In research published this Thursday, the Post Office
said saving was still being driven by the wealthiest people while lower
earners were suffering a debt crisis. According to the Centre for
Economics and Business Research, which undertook the analysis, this
trend has been happening for the past 12 years.The poorest 40% of
the population have spent more than they have earned over this period,
in contrast to the top 40% of earners who had money to save every year.
UK's richest can save £18,680 a year as poorest 40% spend more than they earn | Money | The Guardian
Piketty also issued a 10 page response to the FT questions about his data. The tone is academic. I think it shows the difference between academic inquiry and journalistic inquiry. You can read it on his website or also at Huffington Post here. Note that he didn't post his response at the Huffington Post site...they copied it from his website.
I find it interesting that the author did not expand on why he thought that the situation in the UK was unequal among the rich and the poor.
ReplyDeleteThis reminds me a lot of what Stiglitz suggested in his book about being quick to point out inequality without any facts to support reasoning. I wonder how the rich are becoming richer while the poor are becoming poorer.
This makes me think about what the key factors in economic mobility are. If wealth accumulation only seems to perpetuate and we do not want to go to a physical war or a global tax war, there must be something else I feel... Furthermore, inequality and abject poverty may not always go together. When income inequality is high, such as in the case of Singapore, this country has rarely experienced uprisings or protests. The crime rate is also very low in Singapore. High inequality tends to couple with social unrest but it may not necessarily be the case when we weigh in other factors.
ReplyDeletei really like the points you make, ly, but i want to challenge the idea of inequality and and abject poverty not being in the same vein. inequality is an innate feature of capitalist economies and it reaches its pinnacle when there is a gaping divide between the rich and the poor which stems from concentration of wealth and poverty, respectively. i hope that makes sense.
ReplyDeleteI agree with you Sameen. To expand on your point, I think that, at least historically speaking inequality has been associated with abject poverty. To address Ly's point, it is true that Singapore has high inequality, but maybe little abject poverty. However, we also have to consider the structure of global economies today. Many countries get rich across the board at the expense of outsourcing their worst inequality elsewhere.
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