Beyond Labels

A 360° Discussion of Foreign, National and Local Policy Issues

Some alternative theories on inequality

From SlateStarCodex, among other random things, this week: (Links to the original articles within the quoted text)

For the past four decades or so, rich-country inequality has been increasing as labor gradually takes less and less of the pie; most people have blamed this on political or structural factors and expected it to get worse. A London economics professor suggests that it’s actually two demographic factors – the baby boom and the rise of China – creating lots and lots of new workers and driving the price of labor down. He predicts that from now on, as baby boomers retire and China shrinks, the trend will reverse and inequality will start decreasing back toward 1970s levels. Alternate still-pretty-good possibility: Africa booms as the new cheap labor source.

On the other hand, here are some people saying that 100% of the decline in labor’s share of income is due to intellectual property products.


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