The maintenance of a welfare state requires the accumulation of economic resources from the taxation of wealth, income and purchase and sale of goods and services, applying the principle of redistribution through a taxation regime known as progressive.
March 8, the International Women’s Day, is perhaps a good date to have a look at income distribution and gender.
This year I am a student at the School of International and Public Affairs at Columbia University in the City of New York, one of the most respected schools in the discipline of applied economics for emerging economies and an educator of the future policy makers in the developing world.
It is often thought that radical individualism implies a negative view toward the role of the state, particularly in economic life. Radical individualists, according to this position, rely on themselves and are distrustful of the state. Consequently, they expect nothing from the state, nor are they willing to contribute to it. They are in favor of minimal taxation, minimal or no social transfers, and, even if they are not libertarian and thus definitely skeptical about any state role at all, they are at most in favor of a state as a “lighthouse keeper”. Protection of property rights, provision of a limited range of public goods (lighthouse as in the famed Adam Smith’s example), and perhaps a minimum of humanitarian assistance are enough. Austrian economists, Ludwig von Mises and later Israel Kirzner, draw a very strong parallel between radical individualism and absence of any meaningful economic role of the state. Similar was Hayek’s position, most clearly spelled out in “The road to serfdom”.
London, May 30 2007
Hello Ministre Andriamparany Benjamin Radavidson,
I currently study economic development at the London School of Economics, after having earned master degrees in financial engineering (Berkeley), financial economics (Carlos III), business administration (College des Ingenieurs) and engineering (Politecnica de Madrid). I plan to pursue my studies further in the fields of international affairs and political science.
The only thing that the Bush administrations, the Congress, economists, the public and all the media agree on is that the coming recessions has to be softened, or perhaps even altogether averted, by a huge fiscal stimulus. Now, two things are worth noticing. First, this approach is straight out of Keynes’s General Theory. It shows how much Keynesianism, against which monetarists and neo-classical fought and believed won the counter-revolution, is well and alive in policy-making circles. And for a very good reason: because it works. Second, the US is currently running a current account deficit of about 6 percent of GDP and a budget deficit of some 3 percent of GDP. Its macro accounts are clearly out of balance.
Today’s world is a world of increasing inequality, poverty and despair, a world in which the current players are incapable of coping with a reality that is too rough to admit, too uncomfortable to deal with, and too disproportionately harsh to face. Thirty plus years of development aid have proven ineffective. The major international players in the financial arena are incapable of providing solutions. The Bretton Woods era is gone, the so-called Washington Consensus is a mere reflection of what it once was, in a new world, a new reality where the Cold War and Reagonomics no longer exist, where globalization and unilateralism have gained relevance as drivers of these first years in the twenty-first century.
Branko Milanovic and Jaime Pozuelo-Monfort launch a new blog on inequality.