Groundbreaking Work in the Field of Economics (That We’d Basically Already Figured Out)

Another addition , this time on the part of the OECD, to the growing body of economics literature on income and wealth inequality here attempts to highlight a causal relationship between inequality and a reduction in economic growth, particularly in long-term economic growth potential. For those readers not particularly interested in reading a 65-page economics paper, here is the key point the paper makes:

Drawing on harmonised data covering the OECD countries over the past 30 years, the econometric analysis suggests that income inequality has a negative and statistically significant impact on subsequent growth. In particular, what matters most is the gap between low income households and the rest of the population…It follows that policies to reduce income inequalities should not only be pursued to improve social outcomes but also to sustain long-term growth

None of this is surprising to me, nor, I should expect, would it be surprising to many of my readers. In fact, I believe I have made a similar point in prior posts, albeit not backed up with any sort of data whatsoever. Simply because it is intuitive and sensible, however, does not make it trivial. The impact of inequality on growth is a question that has been plaguing economics for years, and the relative paucity of income inequality research (relative to other questions in economics) has prevented a decent answer to this question from emerging. Given the recent trend toward empiricism in economics, this paper (and, indeed, others like it) could prove to be definitive, not only in allow economics to take a stand on the issue of income inequality, but to pay the necessary attention to it in the first place.

Of more practical relevance to the general public, however, is that findings such as these could help create an ideological alliance of convenience. Economists pride themselves on their non-partisanship (a suspect claim), but it is difficult to argue non-partisanship in a field that has effectively ignored questions of income distribution, despite being by far the most equipped to tackle these questions. You can hardly blame them- one could argue that it is not strictly possible to be non-partisan at all, as people are all subject to prior beliefs regarding fairness, justice and morality.

Ideology (or, at least, the Western conception of ideology) has tended to pit growth vs equality, long before any relationship between the two was clarified or even studied. The study above may indeed be a first step to breaking that false dichotomy. We will never turn socialists into growth hawks or capitalists into bleeding hearts, but we may approach a grudging consensus in which we all accept that economies require some base level of equality in order to grow. Holders of capital are also often holders of power, and holders of capital tend to put stock in what the economic consensus has to say. As such, it is crucial to expand and strengthen this consensus so that we may have a shot at reversing (or at least reducing) the trend in which Western economies have headed.


The Protest

Every subway station, from my local one in Queens, through Union Square, to Brooklyn Bridge, where the protest was located, seemed to have cops posted in it, randomly searching bags. I’d never seen that before, and it certainly didn’t help the fact that I was already slightly on edge about attending a protest. After all, who knows how cops deal with protesters these days? After all, they’re all too ready to choke innocent people to death. I doubt the police would have much sympathy for a majority-minority crowd of citizens gathered for the sole purpose of venting their police-related anger.

I rarely head down to that part of lower Manhattan, and, leaving the subway, I was ready to ask someone for directions on how to get to Foley Square. No need. The sheer volume of police cars (armored and otherwise), vans and multiple police helicopters led me directly to the site of the protest. By the time the protest began, at least couple thousand people (by my estimate) had shown up- from grotty college students to the well-dressed and suit-clad, from bearded and tattooed hipsters to teamsters, and members of seemingly every racial and ethnic group under the sun. There was barely any breathing room in the “free-speech zone” to which we were initially confined, and the two hundred or so cops (again, my estimate) did not seem amenable to us taking up any more space than what we were allotted.

A middle-aged woman held up a photo up a bloody-faced teenager. She told me the story of how the police had brutally beaten her son. His crime? Technically, standing around. “A lot of people don’t believe them when I tell them,” she sighed with clear exasperation. “I wouldn’t put it past them.” I replied. She stared at me for a second. “You know, when we used to say ‘anything’s possible,’ it used to mean ‘you can do anything.’ Now it means ‘they can do anything.'”

At the center of the protest, a protest security team answered questions, distributed slips of paper with numbers for legal aid, unloaded bottles of water, and generally acted in as civil and caring a manner as a celebration of human anger would allow. Within minutes, the protest started up. The crowd was large enough that it had effectively formed neighborhoods- the two bullhorns the security team had brought with them were not enough for the whole crowd to hear, and several pockets of the crowd were eager to begin their chants. Astoundingly, after only about 10 minutes, a series of mic checks had united the crowd. The parents of RaMarley Graham spoke- the human microphone transmitted their stories to the very edges of the crowd. Addressing the crowd consistently as ‘beautiful people,’ the main organizer started a litany of chants and re-purposed Civil Rights-era songs that darted through the crowd with near-total unity of purpose.

Apart from protesters and police, the next biggest group represented at the protest were journalists and reporters- whether tied to formal news organization or freelancing. I sincerely doubt any one of them could have seen the love, solidarity, harmony, unity of purpose, organization and genuine care this amazing group of people was showing and not be deeply touched. For several years, I had become disillusioned, assuming that hashtags, general apathy, and cynicism was bringing a slow death to genuine activism. What I saw yesterday began to change my mind. For the first time in years, I saw the power of mutual solidarity, of rage tempered by civility and of spontaneous human organization. It’s a pity that it takes police brutality and institutionalized racism to bring out the heroic capacity of human beings. But it was the realization that a commitment to humanity and progress still exists that allowed me to sleep easy last night.