Re: Rich Getting Richer--NY Times

[dhenwood@xxxxxxxxx (Doug Henwood)]

At 10:42 PM 6/26/96, Brian Carnell wrote:

>Marxists also tend to ignore economic mobility. An unspoken assumption
>is that people who are in the poorest 20 percent remain there for
>most, if not all of their lives, while the rich remain in the economic
>stratosphere. This is not true either, as in the U.S. there is
>incredible mobility both ways (a Treasury department study found that
>about 80 percent of people who started the 1980s in the poorest 20%
>had risen to a higher income quintile by the end of the decade.
>Meanwhile about 30 percent of those who started out in the wealthiest
>20% dropped to a lower income quintile).
>
>Quite a bit better than what Marxist states achieved in the 20th
>century, wouldn't you say?

The Treasury study was a piece of political hackwork that no scholar of
income and poverty takes seriously. It did not adjust for age, nor did it
take account of people too poor to file tax returns. Serious studies of
U.S. income mobility - e.g. the NBER working paper authored by Jenny Hunt
and a collaborator whose name escapes me at the moment - have shown upward
mobility in decline and downward mobility on the rise in the U.S.

You still haven't answered my question about whether you'd rather be a
median citizen of Haiti or Cuba.

Here are some income stats that refute all your implicit claims about the
wonders of capitalist development. The first set come from Angus Maddison's
volume, published recently by the OECD. The second is based on numbers from
the European Bank for Reconstruction and Development.

Note in the first set that "Eastern Europe," which includes Russia, fell
behind Western Europe throughout the 19th century, meaning that the
underdevelopment that your ilk traces to Communism actually predates 1917.
Note too that EE did some catching up during the Communist era, and has
fallen behind rather miserably in the post-Communist era. Note finally the
dismal performance of Latin America and Africa, which you will no doubt
blame on "socialist" economic policies. The table shows rather conclusively
that bourgeois theories of convergence, which hold that over time market
incomes should converge rather than diverge, is absolute bullshit.

In the second table, savor the utter collapse of incomes in Russia in the
post-communist era. Bourgeois sources constantly blame the Bolshies for
Russia's grim statistics; the capitalist-roaders have done a far worse job
of it.

=============================================================================

REAL (PPP) GDP PER CAPITA, INDEXED TO WESTERN EURPE = 100

     western   southern  eastern    Latin
    offshoots   Europe    Europe   America     Asia     Africa    world

1820   93.3      64.3      58.1      55.4      42.6      34.8      51.2
1870  115.7      52.6      48.8      37.9      27.5      22.7      43.6
1913  141.4      47.3      42.0      40.9      20.0      15.5      43.0
1929  151.7      49.2      35.9      44.0      19.6      15.1      43.0
1950  180.7      39.5      50.8      51.0      14.2      15.5      43.7
1973  130.8      49.1      46.7      38.7      13.7      10.4      35.2
1992  119.9      47.6      26.5      30.5      18.6       7.6      31.9

"Western offshoots" is Maddison's term for the U.S., Canada, Australia, and
New Zealand. Source: Maddison.


RUSSIA, GDP,1989=100

      1989     100.0
      1990      96.0
      1991      83.5
      1992      67.7
      1993      59.5
      1994      50.6
      1995      49.1

1989-95       -50.9%

Source: EBRD, Transition Report.

=============================================================================

Doug

--

Doug Henwood
Left Business Observer
250 W 85 St
New York NY 10024-3217
USA
+1-212-874-4020 voice
+1-212-874-3137 fax
email: <dhenwood@xxxxxxxxx>
web: <http://www.panix.com/~dhenwood/LBO_home.html>




     --- from list marxism@xxxxxxxxxxxxxxxxxxxxxxxxxx ---