Harvard University

Eric Maskin, Professor of Economics, Harvard University; Nobel Prize Winner in Economics



“Why has Globalization Increased Inequality in Developing Economies?”

A Lecture by Eric Maskin, Professor of Economics, Harvard University; Nobel Prize Winner in Economics

Berlin International Economic Congress 2012
(Berlin, March 7th-10th, 2012)

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30 Comments

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  • Prof. Maskin dismisses the notion that workers would invest in their own education. (Too expensive he thinks).

    He may be wrong. This is the weakest part of the argument.

  • Bad talk. This guy need work on his presentation skills. Get to the point. He takes FOREVER to say almost nothing. But that's style – let me address content:

    1) Moral argument – he confuses the concepts of equal treatment with equal outcome. Equal outcome would require unequal treatment to achieve – therefore income equality is immoral, by this "professors" own lame argument.

    2) For his second point, he immediately refutes his initial assumption – that everyone's average income is higher,..

  • 3) Countries that have higher income inequalities have less political stability – no evidence whatsoever of a causal or even a pos. correlated relationship. I could give contrary examples, but that wouldn't prove anything and that's my point. This whole line of argument is a non-sequitur.

    Then he cites China, says more unrest due to more inequality. What?
    Chinese peasants were much poorer 50 years ago, rich middle class is becoming restless for political change.

    This guy is an idiot.

    

  • This guy, I don't think, has read Wealth of Nations. I have. He get's the theory of comparative advantage totally wrong. It says each person in the exchange will benefit, so there is a net gain. It doesn't prescribe anything about the magnitude of difference in their resultant gain from trade. One may benefit slightly, while the other benefits enormously – but they both benefit and that's what drives free trade.

    This guy's such a retard.

  • Next point. This guy has never raised corn. In the US, it is a very high skilled task. It yields much more productivity/hr in large part because we have the capital (thanks to high wealth inequality), in the form of a $250k tractor, to support that worker and his high wage. Raising corn in the US is every bit as complex as software programming. I've worked a farm and written in BASIC, C++, java, and read Wealth of Nation + Human Action, etc.

    Wanker above has done none.

  • Next point. We're doing a thought experiment, OK, now he's Einstein…

    Nope, he's no Einstein. His argument doesn't make sense at all. Here's a counter example; The US makes wooden widgets of it's own wood. Bam, no tarifs. Now it buys wood for a $1/widget from Mexico. The price of wood doubles and so does the salary of the mexican sawyer, who makes $10,000/yr. The widget maker in the US sells widgets for $10/widget to the Dutch. His income increases from $50,000/year to $150,000/year. 

  • The mexican went from 5k to 10k/year and the american went from 50k to 150k… so both are better off and the income inequality has increased as well.

    That's a good thing.

  • False dichotomy – it's not two classes, have and have-nots. It's have very little, have a bit more, have even more….

    Country is not largely rich because it has more skilled labor, it's rich because it has a lot of productively employed capital… this man isn't too sharp. He sounds like a high school student to me.
    

  • How did I know all this misguided BS would lead, ultimately, to some hair-brained utopian scheme?

    Maybe it was the Harvard + Nobel combo. What a laughing stock.

    His solution is to misdirect capital from high yield investment to low yield investment and the definite result will be a lower total productivity and therefore an absolute aggregate drop in GDP.

    Bullshit is debunked that easily by truth.

    Eric just made a laughing stock of himself. What an embarrassment.

    I'd pull that clip…

  • Gee whiz, Derek Smith assures us that Eric Maskin is an idiot and a retard. That's a hoot! And, remember, Derek has read the Wealth of Nations! So we can all rest assured that his insights are astute.                                 

  • Nice talk. Many thanks.

    Speaking of education, I would like see introduced other undergraduate degrees, such as a Bachelor of Plumbing, a Bachelor of Electricity, or a Bachelor of Boilermaking, and many other trades type courses that are currently excluded from universities. With these additional degrees, perhaps done as majors, students could graduate with a very useful life skill as well as what they might learn conceptually, both in the liberal arts and the empirical sciences. Further, if they chose to study only the core curriculum, they could graduate with say an associate degree. 

  • Why don't these endowments of rich schools share their cash with the poor colleges of the USA.  Is in not obscene Harvard has a massive endowment of rich preppy brat students yet pays no taxes on it?

  • The actual cause of inequality is easy to understand. We have always been a society dominated by landed interests, individuals and entities that extract rent from those who produce goods or provide real services without providing anything in exchange. The universal low effective rate of taxation on rents provides to holders of land and land-like assets (e.g., the broadcast spectrum and take-off and landing slots at airports) an actual or an imputed unearned rental income stream. This income is capitalized by market forces into a price for such assets. The market and price for such assets is driven up by hoarding and land speculation. And, of course, the extent to which speculation drives up prices is directly influenced by the extent to which speculation occurs using credit rather than one's own financial reserves.

    Even in the United States a very large portion of the population is landless. One-third of all households live in apartments owned by someone else. The "landlords" generally enjoy the advantage of insufficient supply and are able to increase apartment rental charges as land prices in their market are increasing. Even among the 65 percent of households that own at least on residential property, the aggregate ownership of land value is relatively low for the bottom half. A small percentage of those in the top half of landowning households own second residential properties, and a small percentage still own income-producing properties.

    There are no publicly-available statistics on the concentration of ownership of landed assets. Moreover, the manner by which "rent" is calculated and included in the National Income Accounts is so flawed as to be useless. Joseph Stiglitz has estimated that rents comprise roughly one-third of GDP. Peter Barnes some years ago estimated that of privately held land in the U.S. (roughly half of the land area and far higher as a percent of total land value), 95% of total value was held by no more than 3-5 percent of the population, including ownership of shares of stock in companies that own land outright or hold licenses to land-like assets (the licenses having a huge resale value).

    Globalization has exacerbated this situation, as foreign nationals with surplus dollars derived from sale of goods in the United States have acquired land and land-like assets.

    This is the fundamental source of the problem of income and wealth inequality.

    Edward J. Dodson, Director
    School of Cooperative Individualism
    http://www.cooperative-individualism.org

  • simplified economic by mathematics crysis global earth is just need : how earth is circle ..we do it circle of box..maybe the answer:4/~=balance..circle have ~ ..box only 4 sudut(bhs Indonesian)..circle have unlimits sudut(sudut take terhingga)…sorry iam just followed quote of myself teachers..Albert einsteins..4/~=5…~ for number unlimits…4/~{+1/~)=so result is 5/1..

  • Creativity is key. Corporations sit on earnings. If they knew what people would & could buy, they'd invest in it. They don't know, because people's needs becoming more complex. Silly marketing subdivides products into tiny categories, which isn't creative solution, just rule-based. Look at IT. Web bubble, app bubble, tech bubble, useless biz's that claim creative breakthrough. Not. Instead a few big tech companies now monopolize basic services. Standardized education dulls minds.

  • His argument regarding inequality is flawed. The culture among each ethnicity is the reason why specific genres earn less than others. At least in regards to the United States.

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