Government and Taxes: Inequality 19: Notes and Quotes on Globalization and Inequality

Friday, July 18, 2014

Inequality 19: Notes and Quotes on Globalization and Inequality

Reposting here some notes and quotes on the subject which I posted in the facebook group, Government and Taxes, Liberty and Responsibility last month.

A good chart from Cato last May 3, 2014. Globalization eradicates poverty, posted by Daniel Castro.

Actually, the term "globalization eradicates poverty" may be wrong. Poverty may never be eradicated as there are many factors that contribute to it, including personal irresponsibility and laziness. A better term would be "globalization reduces poverty" and inequality among countries. Free trade can lead to factor price equalization (FPE) and commodity price equalization (CPE) across countries over the long term.

Many activists complaining of "widening inequality" will not be happy with this data from The Economist daily chart -- the number of "extremely poor" in developing countries is declining while the number of "developing middle class" and "developed middle class" is rising.

In a paper last May 8, 2014, Where is the Inequality Problem?, Harvard University economist Kenneth Rogoff wrote,

Reading Thomas Piketty’s influential new book Capital in the Twenty-First Century, one might conclude that the world has not been this unequal since the days of robber barons and kings. That is odd, because one might conclude from reading another excellent new book, Angus Deaton’s The Great Escape (which I recently reviewed), that the world is more equal than ever.

... over the last few decades, several billion people in the developing world, particularly in Asia, have escaped truly desperate levels of poverty. The same machine that has increased inequality in rich countries has leveled the playing field globally for billions.... when it comes to reducing global inequality, the capitalist system has had an impressive three decades.

From Freedom Barometer June 12, 2014, written by Dr. Sethaput Narueput.

One can even argue that globalization has reduced inequality. Most discussions of inequality focus on national inequality, which has increased. But global inequality, which looks at differences in income across people regardless of what country they are in, has dropped because many more Chinese and Indians now have higher incomes, in significant part due to globalization and freer markets.

From EFN Asia, Globalization and Inequality: EFN Asia’s session in Jeju Forum for Peace and Prosperity 2014

... globalization is an inevitable phenomenon and a good one. It is the one that has helped mitigate the income inequality situation. Income inequality actually comes from not enough globalization and protectionism and monopoly. Thomas Piketty’s idea on global tax of wealth is plainly wrong.

From BBC, The next billionaires in numbers June 13, 2014,

The extremely wealthy are growing in numbers and entire industries are being created to cater to their desires but where are the individuals who are amassing vast fortunes based and what do we know about them?

Multi-billionaire Edward Zhu, who moved to China from the United States two decades ago, says talented people should start from nothing and that is what he wants for his children.

Meanwhile, here are some photos during my talk on "Globalization, Mobility and Inequality" at La Salle Green Hills (LSGH) 4th year high school/graduating students, Honors Class, last February 17, 2014.