Thursday, August 05, 2004

the free market

Keeping your markets unfettered by pesky social concerns is not the only way to organize an economy, writes Lawrence Mishell in the American Prospect. And, surprise surprise, it may not even be the best approach. Over the past four decades, "Major European countries [with] policies that are far different from ours: a strong social insurance system, government provision of health care, higher taxes, and far less inequality...have seen faster productivity growth -- the gain in economic efficiency -- than the United States." Meanwhile, what has happened stateside?

  • The top 1 percent of families earned 9.3 percent of all income in 1980. By 2000, this income share had increased to 19.6 percent. Correspondingly, the income share of the bottom 90 percent declined from 66 percent to 53.9 percent. There were small gains (1.9 percentage points) in the income shares of the remaining group, the 90th to 99th percentiles.
  • From 1980 to 2000, the incomes of the upper 1 percent increased 179 percent, while those of the bottom 90 percent increased by 8 percent.
  • In 1970, the ratio of top executive earnings to that of the average worker was 38.6 to 1. This ratio increased to 101.1 by 1980, to 222 by 1990, and to 1046 in 1999.
Something to think about.

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