Distribution Of Income Quotes

Despite a voluminous and often fervent literature on "income distribution," the cold fact is that most income is not distributed: It is earned.

I think it's terrible the way people don't share things in this country. I think it's a heartless government that will let one baby be born owning a big piece of the country, the way I was born, and let another baby be born without owning anything. The least a government could do, it seems to me, is to divide things up fairly among the babies.

In no country does the average income give the right picture of how people live but in a country with higher inequality it is likely to be particularly misleading. Given that the US has by far the most unequal distribution of income among the rich countries, we can safely guess that the US per capita income overstates the actual living standards of more of its citizens than in other countries....The much higher crime rate than in Europe or Japan -- in per capita terms, the US has eight times more people in prison than Europe and twelve times more than Japan -- shows that there is a far bigger underclass in the US.

Thirty-nine percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and 73 percent will spend a year in the top 20 percent.

Income from labor [in the United States] is about as unequally distributed as has ever been observed anywhere.

It’s not growth itself that matters – what matters is how income is distributed, and the extent to which it is invested in public services. And past a certain point, more GDP isn’t necessary for improving human welfare at all.

To the Congress: Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people. The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power. The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing. This concentration is seriously impairing the economic effectiveness of private enterprise as a way of providing employment for labor and capital and as a way of assuring a more equitable distribution of income and earnings among the people of the nation as a whole.

The crash did not cause the Depression: that was part of a far broader malaise. What it did was expose the weaknesses that underpinned the confidence and optimism of the 1920s - poor distribution of income, a weak banking structure and insufficient regulations, the economy's dependence on new consumer goods, the over-extension of industry and the Government's blind belief that promoting business interests would make America uniformly prosperous.

It is not the role of government or any central planner to formulate the final distributions of wealth and income.

If there is any law governing the distribution of income between classes, it still remains to be discovered.

Societies with unequal income distribution tend to be less happy. There are a number of reasons for this. Inequality creates a sense of unfairness; it erodes social trust, cohesion and solidarity. It’s also linked to poorer health, higher levels of crime and less social mobility. People who live in unequal societies tend to be more frustrated, anxious, insecure and discontent with their lives. They have higher rates of depression and addiction.

Keynes declared capitalism the best system ever devised to achieve a civilized economic society. But he recognized in it two major faults—“its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.

It had been well known for twenty years that the distribution of large and small earthquakes followed a particular mathematical pattern, precisely the same scaling pattern that seemed to govern the distribution of personal incomes in a free-market economy.

While the distribution of wealth and income need not be equal, it must be to everyone’s advantage, and at the same time, positions of authority and offices of command must be accessible to all.

Material progress does not merely fail to relieve poverty, it actually produces it. This association of progress with poverty is the great enigma of our times. It is the riddle that the sphinx of fate puts to our civilization. And which NOT to answer is to be destroyed.

What do we mean by poverty? Not what Dickens or Blake or Mayhew meant. Today no one seriously expects to go hungry in England or to live without running water or medical care or even TV. Poverty has been redefined in industrial countries, so that anyone at the lower end of the income distribution is poor ex officio, as it were-poor by virtue of having less than the rich. And of course by this logic, the only way of eliminating poverty is by an egalitarian redistribution of wealth-even if the society as a whole were to become poorer as a result.

In a truly civilized society there wouldn't be any billionaire, nor will there be any homeless, for all the revenue generated through taxing the rich would be distributed among the people through welfare initiatives.

Because the true root cause of hunger is inequality, any method of boosting food production that deepens inequality will fail to reduce hunger. Conversely, only technologies that have positive effects on the distribution of wealth, income, and assets, that are pro-poor, can truly reduce hunger.

All told, over the period 1932-1980, nearly half a century, the top federal income tax rate in the United States averaged 81 percent.

The distribution of capital ownership (and of income from capital) is always more concentrated than the distribution of income from labor.

Wealth is not distributed by society: it is produced and traded by the people who create it. To distribute it, society would first have to seize it from the people who created it. This

Subprime mortgage lending was still a trivial fraction of the U.S. credit markets—a few tens of billions in loans each year—but its existence made sense, even to Steve Eisman. “I thought it was partly a response to growing income inequality,” he said. “The distribution of income in this country was skewed and becoming more skewed, and the result was that you have more subprime customers.

The alienation, the downright visceral frustration, of the new American ideologues, the bone in their craw, is the unacknowledged fact that America has never been an especially capitalist country. The postal system, the land grant provision for public education, the national park system, the Homestead Act, the graduated income tax, the Social Security system, the G.I. Bill -- all of these were and are massive distributions or redistributions of wealth meant to benefit the population at large.

For thousands of years, civilization did not lend itself to peaceful equalization. Across a wide range of societies and different levels of development, stability favored economic inequality. This was as true of Pharaonic Egypt as it was of Victorian England, as true of the Roman Empire as of the United States. Violent shocks were of paramount importance in disrupting the established order, in compressing the distribution of income and wealth, in narrowing the gap between rich and poor. Throughout recorded history, the most powerful leveling invariably resulted from the most powerful shocks. Four different kinds of violent ruptures have flattened inequality: mass mobilization warfare, transformative revolution, state failure, and lethal pandemics. I call these the Four Horsemen of Leveling. Just like their biblical counterparts, they went forth to “take peace from the earth” and “kill with sword, and with hunger, and with death, and with the beasts of the earth.” Sometimes acting individually and sometimes in concert with one another, they produced outcomes that to contemporaries often seemed nothing short of apocalyptic. Hundreds of millions perished in their wake. And by the time the dust had settled, the gap between the haves and the have-nots had shrunk, sometimes dramatically.

If central banks can convince people that inflation will move higher, people will begin spending more money today (why wait to buy something if prices are heading up?), and the added demand will actually move prices higher. Still others see inequality and wage stagnation as key drivers of slow growth and de minimis pressure on wages and prices. Some say wage growth and a more equitable distribution of income would help bolster demand among lower- and middle-income households, thereby helping to create some inflationary pressure.

The distribution of wealth and income is primarily the role and responsibility and freedom of individual people and businesses through their voluntary economic interaction with other people and businesses. And their voluntary exchange of economic value through products, services, and ideas. In this way, social mobility is maximized and a fluid class structure allows for both upward and downward economic movements; this is social justice.

Johnson lowered poverty rates in the black community, yes, but not by supporting black-owned businesses or addressing racist hiring practices and the racial income gap. Instead, he passed a series of bills that essentially distributed checks to struggling black families, thereby giving them the fish instead of showing them how to fish on their own.

As it is not a settled question, you must clear your mind of the fancy with which we all begin as children, that the institutions under which we live, including our legal ways of distributing income and allowing people to own things, are natural, like the weather. They are not. Because they exist everywhere in our little world, we take it for granted that they have always existed and must always exist, and that they are self-acting. That is a dangerous mistake. They are in fact transient makeshifts; and many of them would not be obeyed, even by well-meaning people, if there were not a policeman within call and a prison within reach. They are being changed continually by Parliament, because we are never satisfied with them.... At the elections some candidates get votes by promising to make new laws or to get rid of old ones, and others by promising to keep things just as they are. This is impossible. Things will not stay as they are. Changes that nobody ever believed possible take place in a few generations. Children nowadays think that spending nine years in school, oldage and widows’ pensions, votes for women, and short-skirted ladies in Parliament or pleading in barristers’ wigs in the courts are part of the order of Nature, and always were and ever shall be; but their great-grandmothers would have set down anyone who told them that such things were coming as mad, and anyone who wanted them to come as wicked.

The Gini Coefficient quantifies how large a percentage of the total income of a society must be redistributed in order to achieve a perfectly equal distribution of wealth.

It is politically easier to rev up GDP and hope some of it trickles down to the poor than it is to distribute existing income more fairly.

Chief among these headwinds is the rise of inequality that since 1970 has steadily directed an ever larger share of the fruits of the American growth machine to the top of the income distribution.

As part of the process of heroification, textbook authors treat America itself as a hero, indeed as the hero of their books, so they remove its warts. Even to report the facts of income and wealth distribution might seem critical of America the hero, for it is difficult to come up with a theory of social justice that can explain why 1 percent of the population controls almost 40 percent of the wealth.

At the nation’s top 130 colleges and universities, only 9 percent of first-year students are from the bottom half of the nation’s household income distribution, while 91 percent are from families in the top half of the income range.

In countries where income from labor is most equally distributed, such as the Scandinavian countries between 1970 and 1990, the top 10 percent of earners receive about 20 percent of total wages and the bottom 50 percent about 35 percent.

Consider this thought experiment: if Portugal has higher levels of human welfare than the United States with $38,000 less GDP per capita, then we can conclude that $38,000 of America’s per capita income is effectively ‘wasted’. That adds up to $13 trillion per year for the US economy as a whole. That’s $13 trillion worth of extraction and production and consumption each year, and $13 trillion worth of ecological pressure, that adds nothing, in and of itself, to the fundamentals of human welfare. It is damage without gain. This means that the US economy could in theory be scaled down by a staggering 65% from its present size while at the same time improving the lives of ordinary Americans, if income was distributed more fairly and invested in public goods.

For a fair proportion of Americans in the bottom 50 percent of the income distribution, these inequalities are of secondary importance for the very simple reason that they were born in a less wealthy country and see themselves as being on an upward trajectory.

The new element in part III is the headwinds—inequality, education, demography, and debt repayment—that are buffeting the U.S. economy and pushing down the growth rate of the real disposable income of the bottom 99 percent of the income distribution to little above zero.

Contemporary discussion of inequality in America often conflates two related but distinct issues: • Equality of income and wealth. The distribution of income and wealth among adults in today’s America—framed by the Occupy movement as the 1 percent versus the 99 percent—has generated much partisan debate during the past several years. Historically, however, most Americans have not been greatly worried about that sort of inequality: we tend not to begrudge others their success or care how high the socioeconomic ladder is, assuming that everyone has an equal chance to climb it, given equal merit and energy. • Equality of opportunity and social mobility. The prospects for the next generation—that is, whether young people from different backgrounds are, in fact, getting onto the ladder at about the same place and, given equal merit and energy, are equally likely to scale it—pose an altogether more momentous problem in our national culture. Beginning with the “all men are created equal” premise of our national independence, Americans of all parties have historically been very concerned about this issue.

In our day, this global offensive plays a well-defines role. Its aim is to justify te very unequal income distribution between countries and social elates, to convince the poor that poverty is the result of the children they don't avoid having, and to dam the rebellious advance of the masses.

And in the most inegalitarian countries, such as the United States in the early 2010s (where, as will emerge later, income from labor is about as unequally distributed as has ever been observed anywhere), the top decile gets 35 percent of the total, whereas the bottom half gets only 25 percent.

(a) Recent U.S. income growth primarily occurs at the top 1 percent of the income distribution. (b) As a result there is growing inequality. (c) And those at the bottom and in the middle are actually worse-off today than they were at the beginning of the century. (d) Inequalities in wealth are even greater than inequalities in income. (e) Inequalities are apparent not just in income but in a variety of other variables that reflect standards of living, such as insecurity and health. (f) Life is particularly harsh at the bottom—and the recession made it much worse. (g) There has been a hollowing out of the middle class. (h) There is little income mobility—the notion of America as a land of opportunity is a myth. (i) And America has more inequality than any other advanced industrialized country, it does less to correct these inequities, and inequality is growing more than in many other countries.

The equality Liberalism creates is equality before the Law; it has never sought any other. From the liberal point of view, therefore, criticism which condemns this equality as inadequate — maintaining that true equality is full equality of income through equal distribution of commodities — is unjustified.

The evidence suggests that a rate on the order of 80 percent on incomes over $500,000 or $1 million a year not only would not reduce the growth of the US economy but would in fact distribute the fruits of growth more widely while imposing reasonable limits on economically useless (or even harmful) behavior.

As the Edsalls explain, “the pitting of whites and blacks at the low end of the income distribution against each other intensified the view among many whites that the condition of life for the disadvantaged—particularly for disadvantaged blacks—is the responsibility of those afflicted, and not the responsibility of the larger society.

Norton and his colleagues would call the psychology behind DiAngelo’s mother’s warnings “last place aversion.” In a hierarchical system like the American economy, people often show more concern about their relative position in the hierarchy than their absolute status. Norton and his colleagues used games where they gave participants the option to give money to either people who had more money than they had, or those who had less. In general, people gave money to those who had less—except for people who were in the second-to-last place in the money distribution to begin with. These players more often gave their money to the people above them in the distribution so that they wouldn’t fall into last place themselves. The study authors also looked at real-world behaviors and found that lower-income people are less supportive of redistributive policies that would help them than logic would suggest. Even though raising the minimum wage is overwhelmingly popular, people who make a dollar above the current minimum “and thus those most likely to ‘drop’ into last place” alongside the workers at the bottom expressed less support. “Last-place aversion suggests that low-income individuals might oppose redistribution because they fear it might differentially help a last-place group to whom they can currently feel superior,” the study authors wrote.

You hear it in every political speech, “vote for me, we’ll get the dream back.” They all reiterate it in similar words—you even hear it from people who are destroying the dream, whether they know it or not. But the “dream” has to be sustained, otherwise how are you going to get people in the richest, most powerful country in world history, with extraordinary advantages, to face the reality that they see around them? Inequality is really unprecedented. If you look at total inequality today, it’s like the worst periods of American history. But if you refine it more closely, the inequality comes from the extreme wealth in a tiny sector of the population, a fraction of 1 percent. There were periods like the Gilded Age in the 1890s and the Roaring Twenties and so on, when a situation developed rather similar to this, but the current period is extreme. Because if you look at the wealth distribution, the inequality mostly comes from super-wealth—literally, the top one-tenth of a percent are just super-wealthy. This is the result of over thirty years of a shift in social and economic policy. If you check you find that over the course of these years the government policy has been modified completely against the will of the population to provide enormous benefits to the very rich. And for most of the population, the majority, real incomes have almost stagnated for over thirty years. The middle class in that sense, that unique American sense, is under severe attack. A significant part of the American Dream is class mobility: You’re born poor, you work hard, you get rich. The idea that it is possible for everyone to get a decent job, buy a home, get a car, have their children go to school . . . It’s all collapsed.

Upper-middle income and high-income nations – countries over the threshold of $10,000 per capita – could in theory deliver flourishing lives for all, achieving real progress in human development, without needing any additional growth in order to do so. We know exactly what works: reduce inequality, invest in universal public goods, and distribute income and opportunity more fairly.

To be sure, it would be a mistake to underestimate the importance of the intuitive knowledge that everyone acquires about contemporary wealth and income levels, even in the absence of any theoretical framework or statistical analysis. Film and literature, nineteenth-century novels especially, are full of detailed information about the relative wealth and living standards of different social groups, and especially about the deep structure of inequality, the way it is justified, and its impact on individual lives. Indeed, the novels of Jane Austen and Honoré de Balzac paint striking portraits of the distribution of wealth in Britain and France between 1790 and 1830. Both novelists were intimately acquainted with the hierarchy of wealth in their respective societies.

According to our estimates, the optimal top tax rate in the developed countries is probably above 80 percent.50 Do not be misled by the apparent precision of this estimate: no mathematical formula or econometric estimate can tell us exactly what tax rate ought to be applied to what level of income. Only collective deliberation and democratic experimentation can do that. What is certain, however, is that our estimates pertain to extremely high levels of income, those observed in the top 1 percent or 0.5 percent of the income hierarchy. The evidence suggests that a rate on the order of 80 percent on incomes over $500,000 or $1 million a year not only would not reduce the growth of the US economy but would in fact distribute the fruits of growth more widely while imposing reasonable limits on economically useless (or even harmful) behavior.

there is no income tax, there are still all sorts of statistics concerning whatever tax basis exists at a given point in time (for example, the distribution of the number of doors and windows by département in nineteenth-century France, which is not without interest), but these data tell us nothing about incomes. What is more, before the requirement to declare one’s income to the tax authorities was enacted in law, people were often unaware

Today’s computer technology exists in some measure because millions of middle-class taxpayers supported federal funding for basic research in the decades following World War II. We can be reasonably certain that those taxpayers offered their support in the expectation that the fruits of that research would create a more prosperous future for their children and grandchildren. Yet, the trends we looked at in the last chapter suggest we are headed toward a very different outcome. BEYOND THE BASIC MORAL QUESTION of whether a tiny elite should be able to, in effect, capture ownership of society’s accumulated technological capital, there are also practical issues regarding the overall health of an economy in which income inequality becomes too extreme. Continued progress depends on a vibrant market for future innovations—and that, in turn, requires a reasonable distribution of purchasing power.

In a paper analyzing the data, Chetty and his coauthors noted two important factors that explained the uneven geographic distribution of opportunity: the prevalence of single parents and income segregation. Growing up around a lot of single moms and dads and living in a place where most of your neighbors are poor really narrows the realm of possibilities. It means that unless you have a Mamaw and Papaw to make sure you stay the course, you might never make it out.

A long decade ago economic growth was the reigning fashion of political economy. It was simultaneously the hottest subject of economic theory and research, a slogan eagerly claimed by politicians of all stripes, and a serious objective of the policies of governments. The climate of opinion has changed dramatically. Disillusioned critics indict both economic science and economic policy for blind obeisance to aggregate material "progress," and for neglect of its costly side effects. Growth, it is charged, distorts national priorities, worsens the distribution of income, and irreparably damages the environment. Paul Erlich speaks for a multitude when he says, "We must acquire a life style which has as its goal maximum freedom and happiness for the individual, not a maximum Gross National Product." [in Nordhaus, William D. and James Tobin., "Is growth obsolete?" Economic Research: Retrospect and Prospect Vol 5: Economic Growth. Nber, 1972. 1-80]

A just society is one that allows all of its members access to the widest possible range of fundamental goods. Fundamental goods include education, health, the right to vote, and more generally to participate as fully as possible in the various forms of social, cultural, economic, civic, and political life. A just society organizes socioeconomic relations, property rights, and the distribution of income and wealth in such a way as to allow its least advantaged members to enjoy the highest possible life conditions. A just society in no way requires absolute uniformity or equality. To the extent that income and wealth inequalities are the result of different aspirations and distinct life choices or permit improvement of the standard of living and expansion of the opportunities available to the disadvantaged, they may be considered just. But this must be demonstrated, not assumed, and this argument cannot be invoked to justify any degree of inequality whatsoever, as it too often is.

Rawls argues that distributive justice is not about rewarding virtue or moral desert. Instead, it’s about meeting the legitimate expectations that arise once the rules of the game are in place. Once the principles of justice set the terms of social cooperation, people are entitled to the benefits they earn under the rules. But if the tax system requires them to hand over some portion of their income to help the disadvantaged , they can’t complain that this deprives them of something they morally deserve.

Here’s the bottom line: The most recent data compiling spending on social insurance, means-tested programs, tax benefits, and financial aid for higher education show that the average household in the bottom 20 percent of the income distribution receives roughly $25,733 in government benefits a year, while the average household in the top 20 percent receives about $35,363.[36] Every year, the richest American families receive almost 40 percent more in government subsidies than the poorest American families.

Beyond the obvious demands - an end to sexual violence, an end to the wage gap - feminism must be class-conscious, and aware of the limiting culture of the gender binary. It needs to recognise that disabled people aren't inherently defective, but rather that non-disabled people have failed at creating a physical world that serves all. Feminism must demand affordable, decent, secure housing, and a universal basic income. It should demand pay for full-time mothers and free childcare for working mothers. It should recognise that we live in a world in which women are constantly harangued into being lusted after, but punishes sex workers for using that situation to make a living. Feminism needs to thoroughly recognise that sexuality is fluid, and we need to dream of a world where people are not violently policed for transgressing rigid gender roles. Feminism needs to demand a world in which racist history is acknowledged and accounted for, in which reparations are distributed, in which race is completely deconstructed.

Yet, we must remember that even White privilege is not distributed evenly among Whites. Many White people never get a piece of the pie. This fact, sadly, instead of making them unite with other marginalized and oppressed American employees, it makes them unload their rage and disappointment on the already suffering low-income, refugee, or poor ethnicities, accusing them of ‘stealing our jobs’, or ‘destroying our country and values’. In doing so, they miss the chance of working together with a significant number of allies for real change. Furthermore, they vote for and side with their oppressors thinking that voting for racist and supremacist candidates will change this ugly reality. What they fail to realize is that politics is literally a nasty business that is fed by the masses’ hatred and, once in power, that business never thrives by changing the way the business is done. If all these supposed problems are solved, where will future politicians get their fodder to feed hatred to masses who will bring them to power?

In order to properly convey the considerable influence that Kuznets’s theory enjoyed in the 1980s and 1990s and to a certain extent still enjoys today, it is important to emphasize that it was the first theory of this sort to rely on a formidable statistical apparatus. It was not until the middle of the twentieth century, in fact, that the first historical series of income distribution statistics became available with the publication in 1953 of Kuznets’s monumental Shares of Upper Income Groups in Income and Savings.

the welfare states of western Europe were not politically divisive. They were socially re-distributive in general intent (some more than others) but not at all revolutionary—they did not ‘soak the rich’. On the contrary: although the greatest immediate advantage was felt by the poor, the real long-term beneficiaries were the professional and commercial middle class. In many cases they had not previously been eligible for work-related health, unemployment or retirement benefits and had been obliged, before the war, to purchase such services and benefits from the private sector. Now they had full access to them, either free or at low cost. Taken with the state provision of free or subsidized secondary and higher education for their children, this left the salaried professional and white-collar classes with both a better quality of life and more disposable income. Far from dividing the social classes against each other, the European welfare state bound them closer together than ever before, with a common interest in its preservation and defense.

The suspicion that something is structurally wrong with the vision of homo faber is common to a growing minority in capitalist, communist, and "underdeveloped" countries alike. This suspicion is the shared characteristic of a new elite. To it belong people of all classes, incomes, faiths, and civilizations. They have become wary of the myths of the majority: of scientific utopias, of ideological diabolism, and of the expectation of the distribution of goods and services with some degree of equality. They share with the majority the awareness that most new policies adopted by broad consensus consistently lead to results which are glaringly opposed to their stated aims. Yet whereas the Promethean majority of would-be spacemen still evades the structural issue, the emergent minority is critical of the scientific deus ex machina, the ideological panacea, and the hunt for devils and witches. This minority begins to formulate its suspicion that our constant deceptions tie us to contemporary institutions as the chains bound Prometheus to his rock. Hopeful trust and classical irony must conspire to expose the Promethean fallacy.

Economists who have studied financialization have found a strong correlation between the growth of the financial sector and inequality as well as the decline in labor’s share of national income.55 Since the financial sector is, in effect, imposing a kind of tax on the rest of the economy and then reallocating the proceeds to the top of the income distribution, it’s reasonable to conclude that it has played a role in a number of the trends we’ve looked at. Still, it seems hard to make a strong case for financialization as the primary cause of, say, polarization and the elimination of routine jobs.

Inequalities at the bottom of the US wage distribution have closely followed the evolution of thee minimum wage: the gap between the bottom 10 percent of the wage distribution and the overall average wage widened significantly in the 1980s, then narrowed in the 1990s, and finally increased again in the 2000s. Nevertheless, inequalities at the top of the distribution - for example, the share of total wages going to the top 10 percent -- increased steadily throughout this period. Clearly, the minimum wage has an impact at the bottom of the distribution but much less influence at the top, where other forces are at work.

Feminism must demand affordable, decent, secure housing, and a universal basic income. It should demand pay for full-time mothers and free childcare for working mothers. It should recognise that we live in a world in which women are constantly harangued into being lusted after, but punishes sex workers for using that situation to make a living. Feminism needs to thoroughly recognise that sexuality is fluid, and we need to dream of a world where people are not violently policed for transgressing rigid gender roles. Feminism needs to demand a world in which racist history is acknowledged and accounted for, in which reparations are distributed, in which race is completely deconstructed.

Our plan? We put into practice that noble historical precept: From each according to his ability, to each according to his need. Everybody in the factory, from charwomen to president, received the same salary—the barest minimum necessary. Twice a year, we all gathered in a mass meeting, where every person presented his claim for what he believed to be his needs. We voted on every claim, and the will of the majority established every person’s need and every person’s ability. The income of the factory was distributed accordingly. Rewards were based on need, and the penalties on ability. Those whose needs were voted to be the greatest, received the most. Those who had not produced as much as the vote said they could, were fined and had to pay the fines by working overtime without pay. That was our plan. It was based on the principle of selflessness. It required men to be motivated, not by personal gain, but by love for their brothers.” Dagny heard a cold, implacable voice saying somewhere within her: Remember it—remember it well—it is not often that one can see pure evil—look at it—remember—and some day you’ll find the words to name its essence. . . . She heard it through the screaming of other voices that cried in helpless violence: It’s nothing—I’ve heard it before—I’m hearing it everywhere—it’s nothing but the same old tripe—why can’t I stand it?—I can’t stand it—I can’t stand it! “What’s

To sum up, the truth of post-1945 globalization is almost the polar opposite of the official history. During the period of controlled globalization underpinned by nationalistic policies between the 1950s and the 1970s, the world economy, expecially in the developing world, was growing faster, was more stable and had more equitable income distribution than in the past two and a half decades of rapid and uncontrolled neo-liberal globalization. Nevertheless, this period is protrayed in the official history as a one of unmitigated disaster of nationalistic policies, especially in developing countries. This distortion of the historical record is peddled in order to mask the failure of neo-liberal policies.

The distribution of wealth is one of today’s most widely discussed and controversial issues. But what do we really know about its evolution over the long term? Do the dynamics of private capital accumulation inevitably lead to the concentration of wealth in ever fewer hands, as Karl Marx believed in the nineteenth century? Or do the balancing forces of growth, competition, and technological progress lead in later stages of development to reduced inequality and greater harmony among the classes, as Simon Kuznets thought in the twentieth century? What do we really know about how wealth and income have evolved since the eighteenth century, and what lessons can we derive from that knowledge for the century now under way?

In countries where income from labor is most equally distributed, such as the Scandinavian countries between 1970 and 1990, the top 10 percent of earners receive about 20 percent of total wages and the bottom 50 percent about 35 percent. In countries where wage inequality is average, including most European countries (such as France and Germany) today, the first group claims 25–30 percent of total wages, and the second around 30 percent. And in the most inegalitarian countries, such as the United States in the early 2010s (where, as will emerge later, income from labor is about as unequally distributed as has ever been observed anywhere), the top decile gets 35 percent of the total, whereas the bottom half gets only 25 percent.

Income is not distributed. It is directly earned in accordance with its value to others and in the light of competition from other available sources of the same services. To advocate a policy of income “redistribution” is to advocate not merely a change in statistical outcomes but a more profound change in the whole process by which people receive pay. The word “redistribution” is very deceptive insofar as it implies that we simply have distribution A today and should change to distribution B in the future. We are talking about collectivizing and politicizing the economic level of each individual. Such a massive institutional change should stand or fall on its own merits, not be quietly drifted into by soothing words or an innocuous prefix like “re-”.

Page 548: We can imagine no recommendation for using the government to manipulate fertility that does not have dangers. But this highlights the problem: The United States already has policies that inadvertently social-engineer who has babies, and it is encouraging the wrong women. If the United States did as much to encourage high-IQ women to have babies as it now does to encourage low-IQ women, it would rightly be described as engaging in aggressive manipulation of fertility. The technically precise description of America's fertility policy is that it subsidizes births among poor women, who are also disproportionately at the low end of the intelligence distribution. We urge generally that these policies, represented by the extensive network of cash and services for low-income women who have babies, be ended.

On August 16, 2012, the South African police intervened in a labor conflict between workers at the Marikana platinum mine near Johannesburg and the mine’s owners: the stockholders of Lonmin, Inc., based in London. Police fired on the strikers with live ammunition. Thirty-four miners were killed.1 As often in such strikes, the conflict primarily concerned wages: the miners had asked for a doubling of their wage from 500 to 1,000 euros a month. After the tragic loss of life, the company finally proposed a monthly raise of 75 euros.2 This episode reminds us, if we needed reminding, that the question of what share of output should go to wages and what share to profits—in other words, how should the income from production be divided between labor and capital?—has always been at the heart of distributional conflict. In traditional societies, the basis of social inequality and most common cause of rebellion was the conflict of interest between landlord and peasant, between those who owned land and those who cultivated it with their labor, those who received land rents and those who paid them. The Industrial Revolution exacerbated the conflict between capital and labor, perhaps because production became more capital intensive than in the past (making use of machinery and exploiting natural resources more than ever before) and perhaps, too, because hopes for a more equitable distribution of income and a more democratic social order were dashed. I will come back to this point. The Marikana tragedy calls to mind earlier instances of violence. At Haymarket Square in Chicago on May 1, 1886, and then at Fourmies, in northern France, on May 1, 1891, police fired on workers striking for higher wages. Does this kind of violent clash between labor and capital belong to the past, or will it be an integral part of twenty-first-century history?

The current crisis has led to renewed discussions about a universal basic income, whereby all citizens receive an equal regular payment from the government, regardless of whether they work. The idea behind this policy is a good one, but the narrative would be problematic. Since a universal basic income is seen as a handout, it perpetuates the false notion that the private sector is the sole creator, not a co-creator, of wealth in the economy and that the public sector is merely a toll collector, siphoning off profits and distributing them as charity. A better alternative is a citizen’s dividend. Under this policy, the government takes a percentage of the wealth created with government investments, puts that money in a fund, and then shares the proceeds with the people. The idea is to directly reward citizens with a share of the wealth they have created. Alaska, for example, has distributed oil revenues to residents through an annual dividend from its Permanent Fund since 1982.

Much of the so-called environmental movement today has transmuted into an aggressively nefarious and primitive faction. In the last fifteen years, many of the tenets of utopian statism have coalesced around something called the “degrowth” movement. Originating in Europe but now taking a firm hold in the United States, the “degrowthers,” as I shall characterize them, include in their ranks none other than President Barack Obama. On January 17, 2008, Obama made clear his hostility toward, of all things, electricity generated from coal and coal-powered plants. He told the San Francisco Chronicle, “You know, when I was asked earlier about the issue of coal . . . under my plan of a cap and trade system, electricity rates would necessarily skyrocket. . . .”3 Obama added, “. . . So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all the greenhouse gas that’s being emitted.”4 Degrowthers define their agenda as follows: “Sustainable degrowth is a downscaling of production and consumption that increases human well-being and enhances ecological conditions and equity on the planet. It calls for a future where societies live within their ecological means, with open localized economies and resources more equally distributed through new forms of democratic institutions.”5 It “is an essential economic strategy to pursue in overdeveloped countries like the United States—for the well-being of the planet, of underdeveloped populations, and yes, even of the sick, stressed, and overweight ‘consumer’ populations of overdeveloped countries.”6 For its proponents and adherents, degrowth has quickly developed into a pseudo-religion and public-policy obsession. In fact, the degrowthers insist their ideology reaches far beyond the environment or even its odium for capitalism and is an all-encompassing lifestyle and governing philosophy. Some of its leading advocates argue that “Degrowth is not just an economic concept. We shall show that it is a frame constituted by a large array of concerns, goals, strategies and actions. As a result, degrowth has now become a confluence point where streams of critical ideas and political action converge.”7 Degrowth is “an interpretative frame for a social movement, understood as the mechanism through which actors engage in a collective action.”8 The degrowthers seek to eliminate carbon sources of energy and redistribute wealth according to terms they consider equitable. They reject the traditional economic reality that acknowledges growth as improving living conditions generally but especially for the impoverished. They embrace the notions of “less competition, large scale redistribution, sharing and reduction of excessive incomes and wealth.”9 Degrowthers want to engage in polices that will set “a maximum income, or maximum wealth, to weaken envy as a motor of consumerism, and opening borders (“no-border”) to reduce means to keep inequality between rich and poor countries.”10 And they demand reparations by supporting a “concept of ecological debt, or the demand that the Global North pays for past and present colonial exploitation in the Global South.”11

It is evident that wealth is even more unevenly distributed than income and that the gap is widening. Since 1976, wealth has increased by 63 percent for the wealthiest 1 percent of the population and by 71 percent for the top 20 percent. Wealth has decreased by 43 percent for the bottom 40 percent of the U.S. population (Economic Policy Institute 2011). The widening gap has multiple causes. First, shifts in the U.S. tax code have lowered the top tax rate from 91 percent in the years from 1950 to 1963, to 35 percent from 2003 to 2012, allowing the wealthy to retain far more of their income (Tax Policy Center 2012). Second, wages for most U.S. families have stagnated since the early 1970s. Moreover, credit card, education, and mortgage debt have skyrocketed. Finally, the collapse of the housing market beginning in 2007 dramatically affected many middleclass families who held a significant portion of their wealth in the value of their home. By 2012, fully 31 percent of all homeowners owed more on their mortgages than their homes were worth (Zillow 2012).

Gossip is perhaps the most familiar and elementary form of disguised popular aggression. Though its use is hardly confined to attacks by subordinates on their superiors, it represents a relatively safe social sanction. Gossip, almost by definition has no identifiable author, but scores of eager retailers who can claim they are just passing on the news. Should the gossip—and here I have in mind malicious gossip—be challenged, everyone can disavow responsibility for having originated it. The Malay term for gossip and rumor, khabar angin (news on the wind), captures the diffuse quality of responsibility that makes such aggression possible. The character of gossip that distinguishes it from rumor is that gossip consists typically of stories that are designated to ruin the reputation of some identifiable person or persons. If the perpetrators remain anonymous, the victim is clearly specified. There is, arguably, something of a disguised democratic voice about gossip in the sense that it is propagated only to the extent that others find it in their interest to retell the story.13 If they don’t, it disappears. Above all, most gossip is a discourse about social rules that have been violated. A person’s reputation can be damaged by stories about his tightfistedness, his insulting words, his cheating, or his clothing only if the public among whom such tales circulate have shared standards of generosity, polite speech, honesty, and appropriate dress. Without an accepted normative standard from which degrees of deviation may be estimated, the notion of gossip would make no sense whatever. Gossip, in turn, reinforces these normative standards by invoking them and by teaching anyone who gossips precisely what kinds of conduct are likely to be mocked or despised. 13. The power to gossip is more democratically distributed than power, property, and income, and, certainly, than the freedom to speak openly. I do not mean to imply that gossip cannot and is not used by superiors to control subordinates, only that resources on this particular field of struggle are relatively more favorable to subordinates. Some people’s gossip is weightier than that of others, and, providing we do not confuse status with mere public deference, one would expect that those with high personal status would be the most effective gossipers.

Data sliced sufficiently finely begin once again to tell stories. The top 1 percent of the income distribution—representing household incomes in excess of roughly $475,000—comprises only about 1.5 million households. If one adds up the numbers of vice presidents or above at S&P 1500 companies (perhaps 250,000), professionals in the finance sector, including in hedge funds, venture capital, private equity, investment banking, and mutual funds (perhaps 250,000), professionals working at the top five management consultancies (roughly 60,000), partners at law firms whose profits per partner exceed $400,000 (roughly 25,000), and specialist doctors (roughly 500,000), this yields perhaps 1 million people. These are surely not all one-percenters, but they are all plausibly parts of the top 1 percent, and this group might comprise half—a sizable share—of 1 percent households overall. At the very least, the people in these known and named jobs constitute a material, rather than just marginal or eccentric, part of the top 1 percent of the income distribution. They are also, of course, the people depicted in journalistic accounts of extreme jobs—the people who regularly cancel vacation plans, spend most of their time on the road, live in unfurnished luxury apartments, and generally subsume themselves in work, encountering their personal lives only occasionally, and as strangers.

In their famous Critique of the Gotha Programme Marx and Engels speak about two phases of communism, the lower and the higher. In the lower one there still prevails the "narrow horizon of bourgeois rights" with its inequality and its wide differentials in individual incomes. Obviously, if in socialism society, according to Marx, still needs to secure the full development of its productive forces until a real economy of wealth and abundance is created, then it has to reward skill and offer incentives. The bureaucrat is in a sense the skilled worker, and there is no doubt that he will place himself on the privileged side of the scale... In practice it proved impossible to establish and maintain the principle proclaimed by the Commune of Paris which served Marx as the guarantee against the rise of bureaucracy, the principle extolled again by Lenin on the eve of October, according to which the functionary should not earn more than the ordinary worker's wage. This principle implied a truly egalitarian society -- and here is part of an important contradiction in the thought of Marx and his disciples. Evidently the argument that no civil servant, no matter how high his function, must earn more than an ordinary worker cannot be reconciled with the other argument that in the lower phase of socialism, which still bears the stamp of "bourgeois rights," it would be utopian to expect "equality of distribution.

In exchange for some wide-ranging modifications demanded by the socialist government to the church’s 1929 concordat, Italy agreed to underwrite the remainder of the $406 million settlement.53 The changes to the concordat would have once been unthinkable. The church dropped its insistence that Roman Catholicism be the state religion. Moving forward, the state had to confirm church-annulled marriages. Parents were given the right to opt their children out of formerly mandatory religious education classes. And Rome was no longer considered a “sacred city,” a classification that had allowed the Vatican to keep out strip clubs and the porn industry. Italy even managed to get the church to relinquish control of the Jewish catacombs. “The new concordat is another example of the diminishing hold of the Roman Catholic church in civil life in Italy,” noted The New York Times.54 In return, Italy instituted an“eight-per-thousand” tax, in which 0.8 percent of the income tax paid by ordinary Italians was distributed to one of twelve religious organizations recognized by the state. During its early years, nearly 90 percent of the tax went to the Catholic Church (by 2010, the church received less than 50 percent as the tax was more equitably distributed). Not only did the tax relieve Italy of its responsibility for the $135 million annual subsidy it paid for the country’s 35,000 priests, it meant the church had a steady and reliable source of much needed income.55

The importance of ethical governance, exemplified by the Norwegian Pension Fund, is highlighted by a deplorable UK government proposal in 2016 to set up a Shale Wealth Fund.38 The fund would receive up to 10 per cent of the revenue generated by fracking (hydraulic fracturing) for shale gas, which could amount to as much as £1 billion over twenty-five years. This would be paid out to communities hosting fracking sites, which could decide to use the money for local projects or distribute it to households in cash. It is hard to avoid the conclusion that this is a bribe to secure local approval of environmentally threatening fracking operations, to which there has been considerable public opposition. Beyond that, there are many equity questions. Why should only people who happen to live in areas with shale gas be beneficiaries? How would the recipient community be defined? Would the payments go only to those living in the designated community at the time the fracking started? Would they be paid as lump sums or on a regular basis, and how long would they last? What about future generations? Can cash payments compensate for the risk of harm to the air, water, landscape and livelihoods? All these questions cast doubt on the equity and ethics of any selective scheme. They underline the need for the principles of wealth funds and dividends from them to be established before they are implemented, and for a governance structure that is independent from government and business. But

Ultimately, the World Top Incomes Database (WTID), which is based on the joint work of some thirty researchers around the world, is the largest historical database available concerning the evolution of income inequality; it is the primary source of data for this book.24 The book’s second most important source of data, on which I will actually draw first, concerns wealth, including both the distribution of wealth and its relation to income. Wealth also generates income and is therefore important on the income study side of things as well. Indeed, income consists of two components: income from labor (wages, salaries, bonuses, earnings from nonwage labor, and other remuneration statutorily classified as labor related) and income from capital (rent, dividends, interest, profits, capital gains, royalties, and other income derived from the mere fact of owning capital in the form of land, real estate, financial instruments, industrial equipment, etc., again regardless of its precise legal classification). The WTID contains a great deal of information about the evolution of income from capital over the course of the twentieth century. It is nevertheless essential to complete this information by looking at sources directly concerned with wealth. Here I rely on three distinct types of historical data and methodology, each of which is complementary to the others.25 In the first place, just as income tax returns allow us to study changes in income inequality, estate tax returns enable us to study changes in the inequality of wealth.26 This

The 12 Principles of Permaculture Investing are: 1. Accumulate & Compound Capital: Consistently save and invest to grow your capital base over time, leveraging the power of compound interest. 2. Utilize Capital: Actively deploy your capital into productive investments that generate returns, rather than letting it sit idle. 3. Retain Maximum & Gradiented Liquidity: Maintain a balance between liquid assets (easily accessible cash) and less liquid investments, ensuring you can meet immediate needs while still investing for the long term. 4. Actively Manage Passive: While focusing on passive income sources, actively monitor and adjust your investments to optimize returns and mitigate risks. 5. Prioritize Long-Term Growth: Focus on investments that offer potential for significant growth over the long term, even if they don't provide immediate high yields. 6. Prioritize Consistent Yields: Balance your portfolio with investments that provide reliable, consistent income to support your financial needs. 7. Add Net Value to all Stakeholders: Invest in ways that benefit not only yourself but also the broader community, environment, and all parties involved. 8. Provide Authentic Data: Be transparent and honest in your financial reporting, providing accurate information to all stakeholders. 9. Collect & Utilize Authentic Data: Base your investment decisions on reliable, verified data rather than speculation or rumors. 10. Diversify Holistically: Diversify your investments across different asset classes, industries, and geographical regions to reduce risk and maximize potential returns. 11. Harvest Yields Equitably: Distribute profits fairly among all stakeholders, ensuring everyone benefits from the investment's success. 12. Reinvest Yields in Most Profitable Assets: Continuously evaluate your portfolio and reinvest profits into the most promising opportunities to further compound your growth.

Found a startup society. This is simply an online community with aspirations of something greater. Anyone can found one, just like anyone can found a company or cryptocurrency.2 And the founder’s legitimacy comes from whether people opt to follow them. Organize it into a group capable of collective action. Given a sufficiently dedicated online community, the next step is to organize it into a network union. Unlike a social network, a network union has a purpose: it coordinates its members for their mutual benefit. And unlike a traditional union, a network union is not set up solely in opposition to a particular corporation, so it can take a variety of different collective actions.3 Unionization is a key step because it turns an otherwise ineffective online community into a group of people working together for a common cause. Build trust offline and a cryptoeconomy online. Begin holding in-person meetups in the physical world, of increasing scale and duration, while simultaneously building an internal economy using cryptocurrency. Crowdfund physical nodes. Once sufficient trust has been built and funds have been accumulated, start crowdfunding apartments, houses, and even towns to bring digital citizens into the physical world within real co-living communities. Digitally connect physical communities. Link these physical nodes together into a network archipelago, a set of digitally connected physical territories distributed around the world. Nodes of the network archipelago range from one-person apartments to in-person communities of arbitrary size. Physical access is granted by holding a web3 cryptopassport, and mixed reality is used to seamlessly link the online and offline worlds. Conduct an on-chain census. As the society scales, run a cryptographically auditable census to demonstrate the growing size of your population, income, and real-estate footprint. This is how a startup society proves traction in the face of skepticism. Gain diplomatic recognition. A startup society with sufficient scale should eventually be able to negotiate for diplomatic recognition from at least one pre-existing government, and from there gradually increased sovereignty, slowly becoming a true network state.

It is very important to note, however, that the only segment of the population from whom changing our social and economic conditions in the ways that prevent violence would exact a higher cost would be the extremely wealthy upper, or ruling, class — the wealthiest one per cent of the population (which in the United States today controls some 39 per cent of the total wealth of the nation, and 48 per cent of the financial wealth, as shown by Wolff in Top Heavy (1996). The other 99 per cent of the population — namely, the middle class and the lower class — would benefit, not only form decreased rates of violence (which primarily victimize the very poor), but also from a more equitable distribution of the collective wealth and income of our unprecedentedly wealthy societies. Even on a worldwide scale, it would require a remarkably small sacrifice from the wealthiest individuals and nations to raise everyone on earth, including the populations of the poorest nations, above the subsistence level, as the United Nations Human Development Report 1998, has shown. I emphasize the wealthiest individuals as well as nations because, as the U.N. report documents, a tiny number of the wealthiest individuals actually possess wealth on a scale that is larger than the annual income of most of the nations of the earth. For example, the three richest individuals on earth have assets that exceed the combined Gross Domestic Product of the fortyeight poorest countries! The assets of the 84 richest individuals exceed the Gross Domestic Product of the most populous nation on earth, China, with 1.2 billion inhabitants. The 225 richest individuals have a combined wealth of over $1 trillion, which is equal to the annual income of the poorest 47 per cent of the world's population, or 2.5 billion people. By comparison, it is estimated that the additional cost of achieving and maintaining universal access to basic education for all, basic health care for all, reproductive health care for all women, adequate food for all and safe water and sanitation for all is roughly $40 billion a year. This is less than 4 per cent of the combined wealth of the 225 richest people in the world. It has been shown throughout the world, both internationally and intranationally, that reducing economic inequities not only improves physical health and reduces the rate of death from natural causes far more effectively than doctors, medicines, and hospitals; it also decreases the rate of death from both criminal and political violence far more effectively than any system of police forces, prisons, or military interventions ever invented.

As nervous systems developed, they acquired an elaborate network of peripheral probes—the peripheral nerves that are distributed to every parcel of the body’s interior and to its entire surface, as well as to specialized sensory devices that enable seeing, hearing, touching, smelling, and tasting. Nervous systems also acquired an elaborate collection of aggregated central processors in the central nervous system, conventionally called the brain.10 The latter includes (1) the spinal cord; (2) the brain stem and the closely related hypothalamus; (3) the cerebellum; (4) a number of large nuclei located above brain-stem level—in the thalamus, basal ganglia, and basal forebrain; and (5) the cerebral cortex, the most modern and sophisticated component of the system. These central processors manage learning and memory storage of signals of every possible sort and also manage the integration of these signals; they coordinate the execution of complex responses to inner states and incoming stimuli—a critical operation that includes drives, motivations, and emotions proper; and they manage the process of image manipulation that we otherwise know as thinking, imagining, reasoning, and decision making. Last, they manage the conversion of images and of their sequences into symbols and eventually into languages—coded sounds and gestures whose combinations can signify any object, quality, or action, and whose linkage is governed by a set of rules called grammar. Equipped with language, organisms can generate continuous translations of nonverbal to verbal items and build dual-track narratives of such items.

Ricardo was drawn to economics by reading Smith’s The Wealth of Nations, but was concerned with something that he felt was glaringly absent from Smith’s theory of value: how that value was distributed throughout society–or what we would today call income distribution. It need hardly be said that, in today’s world of growing inequality of income and wealth, this question remains profoundly relevant.

The dividend received is exempt from income tax in India provided the Dividend Distribution Tax (DDT) has been paid by the company distributing dividend. If the DDT has not been paid, the dividend income would be taxable.

And after generations of redistributive progressive income and inheritance taxes, the economic elite was losing its lead. Income in America during the mid-1970s was as equally distributed as at any time in the country’s history.

The separation of mind and body that informs medical practice is also the dominant ideology in our culture. We do not often think of socio-economic structures and practices as determinants of illness or well-being. They are not usually “part of the equation.” Yet the scientific data is beyond dispute: socio-economic relationships have a profound influence on health. For example, although the media and the medical profession — inspired by pharmaceutical research — tirelessly promote the idea that next to hypertension and smoking, high cholesterol poses the greatest risk for heart disease, the evidence is that job strain is more important than all the other risk factors combined. Further, stress in general and job strain in particular are significant contributors both to high blood pressure and to elevated cholesterol levels. Economic relationships influence health because, most obviously, people with higher incomes are better able to afford healthier diets, living and working conditions and stress-reducing pursuits. Dennis Raphael, associate professor at the School of Health Policy and Management at York University in Toronto has recently published a study of the societal influences on heart disease in Canada and elsewhere. His conclusion: “One of the most important life conditions that determine whether individuals stay healthy or become ill is their income. In addition, the overall health of North American society may be more determined by the distribution of income among its members rather than the overall wealth of the society…. Many studies find that socioeconomic circumstances, rather than medical and lifestyle risk factors, are the main causes of cardiovascular disease, and that conditions during early life are especially important.” The element of control is the less obvious but equally important aspect of social and job status as a health factor. Since stress escalates as the sense of control diminishes, people who exercise greater control over their work and lives enjoy better health. This principle was demonstrated in the British Whitehall study showing that second-tier civil servants were at greater risk for heart disease than their superiors, despite nearly comparable incomes. Recognizing the multigenerational template for behaviour and for illness, and recognizing, too, the social influences that shape families and human lives, we dispense with the unhelpful and unscientific attitude of blame. Discarding blame leaves us free to move toward the necessary adoption of responsibility, a matter to be taken up when we come in the final chapters to consider healing.

Once you realize that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are—a simple upward redistribution of income, rather than a way to make all of us richer, as we were told.

What words openly declare can be tested against empirical evidence, but what words insinuate can bypass that safeguard. Even an innocent-sounding phrase like “income distribution,” endlessly repeated, can suggest a process in which income exists somehow and is then distributed, as one might distribute food at a dinner table or gifts at Christmas.

Seeking to unite a divided India, Nehru articulated an ideology that rested on four main pillars. First, there was democracy, the freedom to choose one’s friends and speak one’s mind (and in the language of one’s choice) – above all, the freedom to choose one’s leaders through regular elections based on universal adult franchise. Second, there was secularism, the neutrality of the state in matters of religion and its commitment to maintaining social peace. Third, there was socialism, the attempt to augment productivity while ensuring a more egalitarian distribution of income (and of social opportunity). Fourth, there was non-alignment, the placement of India beyond and above the rivalries of the Great Powers. Among the less compelling, but not necessarily less significant, elements of this worldview were the conscious cultivation of a multiparty system (notably through debate in Parliament), and a respect for the autonomy of the judiciary and the executive.

Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn’t a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint.

Stalin formulated the economic aims of socialism as: “The securing of the maximum satisfaction of the constantly rising material and cultural requirements of the whole society.” [Economic Problems of Socialism in U.S.S.R., English edition, p. 45.] Taken positively, this has no more content than any metaphysical slogan; like the slogan “All men are equal,” it expresses its point of view through negations. “Constantly rising” requirements means that there is no foreseeable limit to the possible rise in productivity (for, of course, it is not so much the needs as the means to satisfy them that will continually increase). “Cultural” requirements means that growing wealth is not to be confined to physical goods (though these alone enter into the Marxist definition of output). “The whole society” implies a condemnation of the arbitrary distribution of wealth. There is nothing in this that the orthodox economists can object to. Indeed, it takes the very words out of their mouth. But they were wont to excuse the inequality generated by private property in the means of production because it was necessary to make total income greater. If income grows faster without it, they are in an awkward situation. Perhaps this is why they have crept off to hide in thickets of algebra and left the torch of ideology to be carried by the political argument that capitalist institutions are the bulwark of liberty. [pp. 109-110]

Not only is the system distorted by its bias towards investing in what happens to be profitable, but even within that sphere there is no reason to expect the profit motive to lead to a well-balanced pattern of investment. This has always been a weak point in the neo-classical system. The doctrine that, under conditions of free competition, given resources are used to yield maximum satisfaction, applies essentially to an equilibrium position. It can be demonstrated only by assuming that an equilibrium exists and showing that a /departure /from it would be harmful (it also has to assume, of course, that the distribution of income is somehow what it ought to be). Walras had the ingenious idea of making the inhabitants of his market “shout” their offers until the equilibrium has been found, and then start actual trading at the equilibrium prices. It is pure effrontery to extend this kind of equilibrium conception to investment; an equilibrium pattern of investment worked out on this system is possible only in a fully planned economy (if there). [p. 125]

The /utility /economists, according to Wicksell, were committed to a “thoroughly revolutionary programme” precisely on this question of distribution of income.^9 Marshall, and to some extent Pigou, got out of the fix that their theory had landed them in by emphasizing the danger to total physical national income that would be associated with an attempt to increase its /utility /by making its distribution more equal. This argument has been spoiled by the Keynesian revolution. If, as Keynes expected, saving is more than sufficient for a satisfactory rate of private investment, to use it for social purpose is not only harmless but actually beneficial to National Income, while if more total saving is needed than would be forthcoming under /laisser faire /it can easily be supplemented by budget surpluses. Edgworth, as we saw above,^10 and many after him, took refuge in the argument that we do not really know that greater equality would promote greater happiness, because individuals differ in their capacity for happiness, so that, until we have a thoroughly scientific hedonimeter, “the principle ‘every man, and every woman, to count for one,’ should be very cautiously applied.”^11 Many years ago, this point of view was expressed by Professor Harberler: “How do I know that it hurts you more to have your leg cut off than it hurts me to be pricked by a pin?” It seemed at the time that it would have been more telling if he had put it the other way round. Such arguments are getting rather dangerous nowadays, for though we shall presumably never have a hedonimeter whose findings would be unambiguous, the scientific measurement of pain is fairly well developed, and it would be very surprising if a national survey of the distribution of susceptibility to pain turned out to have just the same skew as the distribution of income. If the question is once put: Would a greater contribution to human welfare be made by an investment in capacity to produce knick-knacks that have to be advertised in order to be sold or an investment in improving the health service, it seems to me that the answer would be only too obvious; the best reply that /laisser-faire /ideology can offer is not to ask the question. [pp. 127-8]

The better way to look at the distributional effect of monetary policy is to compare changes in the income flowing from capital investments with the income from labor.

families with incomes in the top 20 percent of the distribution dedicate twice as much of their budget to alcohol as families with incomes in the bottom 20 percent. It’s been this way for generations.

All this would indicate, not technical insufficiency, but rather the fatal absence of a just system of distribution: a conclusion that is re-enforced by Benjamin Franklin's estimate, well before megatechnics had taken hold, that if work and reward and consumption standards were more evenly distributed, a five hour day would suffice to supply all human needs. If, on the other hand, the machine economy has now transcended these limitations, how is it that in the United States more than a quarter of the population lacks an income sufficient to provide a minimums standard of living?

The test statistics of a t-test can be positive or negative, although this depends merely on which group has the larger mean; the sign of the test statistic has no substantive interpretation. Critical values (see Chapter 10) of the t-test are shown in Appendix C as (Student’s) t-distribution.4 For this test, the degrees of freedom are defined as n – 1, where n is the total number of observations for both groups. The table is easy to use. As mentioned below, most tests are two-tailed tests, and analysts find critical values in the columns for the .05 (5 percent) and .01 (1 percent) levels of significance. For example, the critical value at the 1 percent level of significance for a test based on 25 observations (df = 25 – 1 = 24) is 2.797 (and 1.11 at the 5 percent level of significance). Though the table also shows critical values at other levels of significance, these are seldom if ever used. The table shows that the critical value decreases as the number of observations increases, making it easier to reject the null hypothesis. The t-distribution shows one- and two-tailed tests. Two-tailed t-tests should be used when analysts do not have prior knowledge about which group has a larger mean; one-tailed t-tests are used when analysts do have such prior knowledge. This choice is dictated by the research situation, not by any statistical criterion. In practice, two-tailed tests are used most often, unless compelling a priori knowledge exists or it is known that one group cannot have a larger mean than the other. Two-tailed testing is more conservative than one-tailed testing because the critical values of two-tailed tests are larger, thus requiring larger t-test test statistics in order to reject the null hypothesis.5 Many statistical software packages provide only two-tailed testing. The above null hypothesis (men and women do not have different mean incomes in the population) requires a two-tailed test because we do not know, a priori, which gender has the larger income.6 Finally, note that the t-test distribution approximates the normal distribution for large samples: the critical values of 1.96 (5 percent significance) and 2.58 (1 percent significance), for large degrees of freedom (∞), are identical to those of the normal distribution. Getting Started Find examples of t-tests in the research literature. T-Test Assumptions Like other tests, the t-test has test assumptions that must be met to ensure test validity. Statistical testing always begins by determining whether test assumptions are met before examining the main research hypotheses. Although t-test assumptions are a bit involved, the popularity of the t-test rests partly on the robustness of t-test conclusions in the face of modest violations. This section provides an in-depth treatment of t-test assumptions, methods for testing the assumptions, and ways to address assumption violations. Of course, t-test statistics are calculated by the computer; thus, we focus on interpreting concepts (rather than their calculation). Key Point The t-test is fairly robust against assumption violations. Four t-test test assumptions must be met to ensure test validity: One variable is continuous, and the other variable is dichotomous. The two distributions have equal variances. The observations are independent. The two distributions are normally distributed. The first assumption, that one variable is continuous and the other dichotomous,

Ironically, some of the same critics who said we were hurting savers also said that our policies were making rich people richer. (Since rich people save more than everyone else, apparently we were both hurting and helping these folks.) The critics based their argument on the fact that lower interest rates tend to raise prices for assets such as stocks and houses. Wealthy people own more stocks and real estate than the nonwealthy. However, this argument misses the fact that lower interest rates also reduce the returns that the wealthy earn on their assets. The better way to look at the distributional effect of monetary policy is to compare changes in the income flowing from capital investments with the income from labor. As it turns out, easier monetary policy tends to affect capital and labor incomes fairly similarly. Most importantly in a weak economy, it promotes job creation, which especially helps the middle class.