Headline, February 28 2019/ '' ' INEQUALITY THE INFIRMARY ' '' : GLOBE



THE INEQUALITY OF NATIONS : And would The World Students Society mind considering,  ''Rent-A-State''.

But before you all consider that let Nobel Laureat Professor Joseph Stiglitz explains why wealth creation is just so different from wealth extraction and why inequality is at the root of what ails the US economy or maybe the entire world, at large.

IT has been a tumultuous month at the World Bank. The bank's armies of analysts and economists routinely produce research on topics ranging from best practices to a variety of development issues to how to promote gender in emerging economies.

Indeed the vast majority of research it produces apply to certain niches of analysis, they are launched and read without much ado, let alone controversy.

This was not the case with a recent working paper : Entitled Elite Capture of Foreign Aid : Evidence from Offshore Bank Accounts, it was authored by economists Jorgen Joel Andersen, Niels Johannesen and Bob Rijkers, with the support of World Bank's own economists, including its [now former] chief economist Penny Goldberg.

According to reports, the paper had also gone through numerous reviews that helped improve and organize its findings.

The findings were damning. Using data from offshore banks in places like Switzerland, Luxembourg, the Caymen Islands, Hong Kong and Singapore, the researchers traced what happened when aid disbursements were made to some of the world most aid-dependent countries.

Around the same time the money was released, the researchers noted, there was an increase in the number of deposits in those offshore accounts. The same correlation was found over almost a decade of economic data, by tracking aid disbursement from more than 20 countries. [The World Students Society thanks Professor Rafia Zakaria].

Professor Stiglitz, however, goes many steps further and posits that curtailing market power is not just is not just about economics. ''One cannot have a true democracy with the kinds of large concentrations of market power and wealth that marks the US today.

The imbalance in market power gets translated into imbalance in political power.

WITH ADVANCEMENT IN SCIENCE AND TECHNOLOGY, we are fast moving towards  knowledge economies. This phenomenon is driven by sustained process of research and development in all fields of knowledge.

Innovations are patented to benefit that research the researchers and the organisations that employ them. However, there is a time limit for these patents, after which they become common property of all mankind because that helps in boosting further innovations.

The debate around Intellectual Property Rights is also being tipped in favor of big corporations since they do not want to part with their monopolistic power even over very old inventions. Stiglitz stresses the need to reevaluate the trade-off between privatising and providing public access to the patents. 

Stiglitz has also critiqued the role of the financial sector in exacerbating the economic woes of society. Banks - that are supposed to intermediate between those who have savings and those who want fund for investments - have increasingly engaged in highly speculative lending practices, completely ignoring financial prudence.

The behaviour led to the financial crisis of 2007. However, the ''government provided massive largesse to the banks and the bankers - without any sense of accountability for the crisis they had created, and with miserly help for for the workers and homeowners.

And what little oversight was established by the government over the banking sector in 2010 - to avoid any future financial meltdown - has been rolled back in 20018, underling the kind of power the financial sector wields in Washington.

Stilgitz further argues that new technologies such as artificial intelligence, big data and  gene sequencing, need to be closely monitored so that they cannot be used against the common good.

We have already seen how companies such as Cambridge Analytica used digital data to undermine the democratic process.

Finally, all the economic analyses of Stiglitz are concluded in minimising the influence of wealth in American politics to ensure that government policies are directed towards public welfare instead of benefiting the elite class.

Although this book like Stilgitz's previous works, has been well received by a great number of experts and general populace at large, some critques from the proponent neoliberal policies have been presented.

Having found it difficult to undermine the basic premises Stiglitz, most of these critiques are focused on some minute detail of his prescriptions for the ailing politico-economic system that desperately needs to be reformed.

Some of these critiques accuse Stiglitz of spreading pessimism and paint him as some kind of doomsday prophet, but Stiglitz is not a doomsday prophet.

This is evident from his concluding remark that ''it is still not too late to save capitalism from itself.''

With respectful dedication to the Leaders, Economists, Students, Professors and Teachers of the world. See Ya all prepare and register for Great Global Elections on The World Students Society- for every subject in the world : wssciw.blogspot.com and Twitter- !E-WOW!  -The Ecosystem 2011:

''' Money & Mouths '''

Good Night and God Bless

SAM Daily Times - the Voice of the Voiceless


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