The haves and the have-nots

Score: 4/5

This is a great book that educated me about some facts around inequality, either interpersonal, or among nations. It does not give a solution of course for inequality, but it gives me the facts and the theories. For example:

  • A utilitarian measure of inequality may be difficult because not everyone has the same level of utility (e.g. they just prefer to eat better than others).
  • The “shape” of the inequality within a society differs in preindustrial societies and the modern ones. Namely – there is a lack of middle class. Or the middle class is not that different from the bottom in pre-industrial societies.
  • You would expect the middle-voter, the voter whose decision will sway the ballot and the election, will gain from the vote. But it has not been the case. It was the poorest who benefited the most from voting to redistribute the wealth. The middle class were even worse off compared to if income had not been redistributed.
  • “The single most serious threat to Chinese unity is increasing inequality”
  • The gap between the richest and the poorest nation widened in post-industrial times. So the author claims that Mao was right about the third-world countries being the new proletariat.
  • If the U.S. GDP per capita grows by 1 percent, India’s will need to grow by 17 percent, an almost impossible rate, and China’s by 8.6 percent, just to keep absolute income differences from rising.
  • The real median wage in the United States has been stagnant for twenty-five years, despite an almost doubling of GDP per capita.
  • So, in order to make the voters happy over the 25 years, instead of raising income which is hard, politicians made credit more widely available, so you think you have more money to spend.

Whether you agree with the claims or not, if you are interested in the topic, I would definitely recommend this book.