Many individuals helped construct neoclassical economics, often with financial support from the robber barons and their successors. I will focus on two: in the United States, John Bates Clark (1847-1938), and in Europe, Vilfredo Pareto (1848 to 1923).
In Thomas Piketty’s doomsday model, slowing of growth in the twenty-first century will cause an inexorable increase in inequality. Piketty is not the first to propose a grand model of inequality and growth. To get some perspective on his model, let’s see what the “classical” economists had to say (Part I), and how the “neoclassical” economists responded (Part II).
Deep in the heart of Texas, still another billionaire is scheming to make public education a rewarding business investment opportunity.
In urban hotspots like New York, the slender luxury towers of the global super rich are assaulting the sky. Inequality is literally blocking out the sun.
In his surprise best-seller, Thomas Piketty warns that growing wealth inequality will have a corrosive impact on our democratic institutions.
Pundits and political scientists are always searching for that simple theory that’ll explain just what makes our politics tick. Where should they be looking? How about in the eyes of a billionaire at tax time?
If you give a dollar to a middle class family, that family will spend that dollar in the local economy and spur growth.
The California Constitution says the water belongs to the people. Yet the state gives water almost free to agriculture–resulting in enormous waste and dire “shortages” during droughts. If the state were to charge for water, that would end the water crisis–and solve California’s fiscal crisis too.
Back when I studied economics, we “proved” in class that a minimum wage causes unemployment. But that proof depends on assuming a perfectly competitive market. Big low-wage employers like Wal-Mart have substantial market power; they can deliberately under-staff operations to force down wages. In that case, a minimum wage increase can actually create jobs–if it can be enforced.
The new Congressional Budget Office report projects that the Affordable Care Act will lead to a decline in full-time equivalent workers of 2.5 million. This is people voluntarily deciding to work less–like mothers with small children, or workers in poor health or close to retirement. That should mean higher wages for the remaining workers.