Road to Wealth: What It's Like To Sell On Amazon

TIME

Mannes on the Street: How to Make a Million

TIME

 

More educated but how much richer?

The Economist

Kevin O'Leary addresses income equality flap

The Great Escape: Health, Wealth, and the Origins of Inequality

catoinstitutevideo

Cuba, de la sacarocracia a la chulocracia

Ruinas del ingenio "La Caridad de Tartabul", Cienfuegos/ Panoramio - Photo by ceosgol

Noticiero Digital

Antonio Sánchez García 

Los datos aportados por el gran historiador cubano Manuel Moreno Fraginals en su breve y enjundiosa historia de Cuba que redactara en La Florida absolutamente de memoria, ya en el exilio y sin un solo documento o bibliografía a la mano una vez caído en desgracia ante el régimen castrista a pesar de su declarado guevarismo, bajo el título de Cuba-España/España-Cuba, son sencillamente abrumadores. Se reducen a una asombrosa constatación: tan rica y tan poderosa fue la burguesía cubana, enriquecida como ninguna otra de las Américas gracias a la explotación industrial y moderna del azúcar, primer producto de exportación de los siglos XVIII y XIX y por ello la industria más exitosa y productiva de ninguna otra bajo el imperio de la corona española, que resulta inadecuado calificar a Cuba de colonia.

Esa burguesía, bautizada por Moreno Fraginals de sacarocracia, era tanto o más poderosa y rica que la aristocracia española, poseía las mayores influencias políticas y sociales sobre la corona y se pavoneaba no sólo de su asombrosa riqueza sino de la cantidad de títulos nobiliarios con los que se había hecho a punta de dinero: “En La Habana, en 1790, existían 23 títulos nobiliarios y 17 en tramitación, todos ellos criollos. (Manuel Moreno Fraginals, El País, 26 de julio de 1985). De allí el hecho excepcional que tuviera gran repercusión en el comportamiento de Cuba y su alineamiento puro y duro junto a las autoridades hispanas frente al proceso independentista vivido por el continente bajo el sacrificio y la entrega de cientos de miles de vidas venezolanas: “Era una oligarquía enriquecida, de primer orden, con mucha fuerza político-social, y suponía un eje estructural dentro del antiguo régimen, lo que es un caso excepcional en América Latina”.(Ibídem).

En otras palabras: la burguesía cubana pertenecía propiamente a la clase dirigente peninsular y tenía tanto interés en la preservación de la dominación colonial de España, como España misma. La sacarocracia ejerció, como grupo de presión, una influencia directa sobre las autoridades metropolitanas. En 1804 las estadísticas manejadas por Moreno Fraginals indican que el 51,3% de las plantaciones de caña de azúcar estaban en manos de los cubanos.

Las 30 primeras en volumen de producción también eran suyas. Se calcula que en esta época había unos 80 cafetales, ninguno español. Sus dueños no constituían “una oligarquía plantadora absentista que explotara las plantaciones desde la metrópoli, sino que estaba en el mismo lugar de la plantación, donde recibía los beneficios y, obviamente, buscaba un sistema político afín a sus intereses”. Esa sistema político no fue ni podía ser el republicano perseguido a sangre y fuego por Bolívar, Sucre, San Martín u O’Higgins. Razón que llevó a la clase dirigente cubana a jugar todas sus bazas contra el esfuerzo liberador de tierra firme. El independentismo cubano fue marginal, de poca monta y sin ningún efecto político militar. La ruptura del cordón umbilical de la sacarocracia con la corona fue producto del inmenso poder obtenido por los Estados Unidos y la acción de sus cañoneras. Lo demás es epopeya marxista.

En el convulso período pre y post independentista, abierto definitivamente el 19 de abril de 1810 en Caracas, según escribiese Moreno Fraginals en sus obras fundamentales – El Ingenio y Cuba España/España-Cuba -, aquella oligarquía hizo gobierno, arrancando a la metrópoli todas las leyes y reglamentos que necesitaba para estructurar su propio sistema de plantación y de explotación económica, política y social.

¿Qué interés podría haber tenido en separarse de España, si de la corona obtenía cuanto necesitaba para la preservación de su riqueza y su Poder político y social? “Por ejemplo, puede decirse que a partir de 1792, y con motivo del punto fundamental que perseguían para el desarrollo del sistema de plantación -el libre comercio de esclavos-, la oligarquía obtuvo el libre comercio para todo. El libre comercio en la isla de Cuba es un hecho real, factual, independiente de la legislación, desde 1792″ . Aquella gente obtuvo además leyes complementarias sobre la propiedad de la tierra y, hecho curioso, liquidó la producción tabacalera para impedir toda competencia. “En la década última del siglo XVIII los cubanos tuvieron que importar tabaco del norte para poder fumar”. El caso insólito de la ruina tabacalera fue una acción consciente contra el sistema de factoría y contra “el único cultivo fundamental que estaba en manos de los españoles”. De allí que los logros alcanzados por la sacarocracia de libertad absoluta de la trata de esclavos, libre comercio, liquidación de la factoría tabacalera y nuevas leyes sobre la tierra, definen, según Moreno, las coordenadas de un poder efectivo en Cuba.

Las consecuencias fueron definitorias: mientras todas las colonias hispanoamericanas estaban sujetas al férreo yugo colonial, Cuba estuvo liberada de todo lazo colonialista, en el sentido clásico del término; fue una excepción. “Cuba no era una colonia en el sentido exacto de la palabra”. No respondía al modelo inglés.

En Cuba eran los naturales de la isla los que imponían el sistema de plantación. Asimismo, la producción no se enviaba a la metrópoli para ser reprocesada y vendida, y España, siendo poseedora de la que iba a ser primera productora mundial de azúcar (de 1829 a 1950), no disponía siquiera de refinería azucarera. Cuba, como colonia, “no tenía un mercado en su metrópoli y menos aun un mercado preferencial”. Y, finalmente, no se daba otra característica colonial: “La metrópoli impone generalmente a la colonia su sistema monetario, y España en el siglo pasado tenía el más atrasado y degradado sistema monetario de Europa. En Cuba lo normal era la circulación del dólar norteamericano, el peso mexicano y los llamados pesos colombianos”. La interconexión con la economía norteamericana durante la segunda mitad del siglo XIX llegó al extremo de plantearse la venta pura y simple de la isla a una sociedad mercantil norteamericana.

Cuba, “primera productora mundial de azúcar desde 1829 a 1950”, lo que le permitió ser una de las sociedades más prósperas de la región, reafirmó su naturaleza idiosincrática una década después, cuando al fragor del castrismo se convertiría en la primera y única sociedad socialista del hemisferio. Con una consecuencia inevitable, propia de regímenes comunistas: de la mayor prosperidad pasó a la mayor miseria y de la mayor independencia a la mayor dependencia económica: de ser dominada por su sacarocracia en connivencia con España o los Estados Unidos, pasó a serlo por el gobierno soviético, que se convirtió en su sostén material. Hasta la caída del Muro de Berlín y la desaparición de la Unión Soviética. Luego de lo cual, y tras una travesía por el océano de la más espantosa ruindad y miseria vino a aferrarse al gobierno del teniente coronel Hugo Chávez y a mamar y sobrevivir de su última teta: el petróleo venezolano. Para reafirmar así el paso de la sacarocracia que la llevara a las alturas del Poder y la riqueza a la espantosa miseria de la chulocracia castrista.

Como hubiera dicho Chivo Negro: así son las cosas.

Poll: More Than Two Thirds of Voters Say 'Drill Here, Drill Now'

breitbart

By AWR Hawkins 

A Harris Interactive poll conducted for the American Petroleum Institute shows that 67 percent of registered voters support more offshore drilling for oil and 77 percent support more domestic production, period. 

Moreover, out of 1,002 respondents, 89 percent said that expanded on and offshore oil and gas natural gas production "could help strengthen America's energy security" while 87 percent believe increased production "could lower energy costs for consumers."

For these reasons, nearly 90 percent of Americans said more oil and natural gas production would help our economy. And 84 percent said more oil production production could "benefit federal and state budgets" through "lease payments" and "royalty fees." 

But while the American people support expanded oil and natural gas production by such large majorities, President Obama maintains a posture opposed to it. According to the American Thinker, by May 2013 production on federal lands had declined 40 percent under Obama.

Moreover, the Canadian Free Press (CFP) says Obama's production-crushing policies in the Gulf of Mexico, following the 2010 BP oil spill, so hindered oil and gas exploration that 2010 levels of production will not be seen again until "at least" the end of 2014.

All the while 92 percent of voters believe increased oil and natural gas production could do one thing Americans have not seen Obama do--create more jobs in the U.S.

What are the political effects of increasing inequality?

marginalrevolution >> 

By Tyler Cowen on November 23

Kevin Lewis reports some new research to us: 

Economic Inequality and Democratic Support 

Jonathan Krieckhaus et al. Journal of Politics, forthcoming

Abstract: Does economic inequality influence citizens’ support for democracy? Political economy theory suggests that in a country with high inequality, the majority of the population will support democracy as a potential mechanism for redistribution. Much of the survey and area-studies literature, by contrast, suggests that inequality generates political disillusion and regime dissatisfaction. To clarify this disagreement, we distinguish between prospective versus retrospective evaluations as well as between egocentric versus sociotropic evaluations. We test the resulting hypotheses in a multilevel analysis conducted in 40 democracies. We find that citizens are retrospective and sociotropic, meaning that higher levels of economic inequality reduce support for democracy amongst all social classes. We also find a small prospective egocentric effect, in that the reduction in democratic support in highly unequal countries is slightly less severe amongst the poor, suggesting they believe that democracy might increase future redistribution.

I do not see an ungated copy, but the data for the paper are available here >>

- See more at: http://marginalrevolution.com/marginalrevolution/2013/11/what-are-the-political-effects-of-increasing-inequality.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+marginalrevolution%2Ffeed+%28Marginal+Revolution%29#sthash.4mOpEQzQ.dpuf

Economic Growth Is the Best Way to Help the Poor, not Redistribution in Pursuit of Coerced Income Equality

International Liberty

By Dan Mitchell

Switzerland’s left-wing party has instigated a referendum for November 24 that asks voters to limit pay ranges so that a company wouldn’t be able to pay top employees more than 12 times what they’re paying their lowest-level employees.

I talked with Neil Cavuto about this proposal and made several (hopefully) cogent points.

Since Swiss voters already have demonstrated considerable wisdom (rejecting a class-warfare tax proposal in 2010 and imposing a cap on government spending in 2001), I predicted they will reject the plan. And I pointed out that Switzerland’s comparatively successful system is a result of not letting government have too much power over the economy.

But I don’t want to focus today on the Swiss referendum. Instead, I want to expand on my final point, which deals with the misguided belief by some on the left that the economy is a fixed pie and that you have to penalize the rich in order to help the poor.

I’ve covered this issue before, and I even tried to educate a PBS audience that economic growth is key.

But maybe this chart is the most persuasive bit of evidence. It shows per-capita GDP in France and Hong Kong over the past 50 or so years. France is a nation that prides itself of redistribution to “help” the poor while Hong Kong is famous for having the most economic freedom of any jurisdiction.

Now look at this data and ask yourself whether you’d rather be a poor person in France or Hong Kong?

Since Hong Kong is richer and is growing faster, the obvious answer is that poor people in France almost surely face a bleaker outlook.

In other words, the welfare state can give you the basic necessities and allow you to survive (at least until the house of cards collapses), but it comes at a very high cost of lower growth and diminished opportunity.

The moral of the story is that prosperity is best achieved by a policy of free markets and small government.

P.S. If you want more evidence on the superiority of markets over statism, check out the comparison of South Korea and North Korea and the difference between Chile, Argentina, and Venezuela. Heck, even the data comparing America and Europe show similar results.

P.P.S. As you might expect, Margaret Thatcher addressed this issue in a brilliant fashion.

P.P.P.S. There’s a lot to like about Sweden, but click here if you want to see an impossibly absurd example from that nation of the equality-über-alles mentality.

P.P.P.P.S. There is some very interesting academic research that suggests humans are hard-wired by evolution to be statists. Let’s hope that’s not true.

Nobel Laureate Edmund Phelps: Two Kinds of Prosperity

Carnegie Council for Ethics in International Affairs

Beyond El Dorado: Power and gold in ancient Colombia

The Economist

The Beholden State: Reclaiming California's Lost Promise

ManhattanInst

The Economic Nature of the Resource Curse: Evidence

Why Nations Fail

www.energy-daily.com

By Daron Acemoglu and James Robinson

So oil has been a curse for Cameroon.

Is it true more generally that natural resource wealth, or perhaps more specifically oil wealth, has a negative effect on economic growth? If it does, via what mechanisms?

Before we start thinking about mechanisms let’s focus on the cross-national evidence. In fact, the more careful evidence does not suggest that there is such an unconditional effect.

Early work by Jeffrey Sachs and his collaborators suggested that this was the case. And it is true that the discovery and exploitation of oil in the Cameroon coincided with a massive economic decline and deterioration in human development.

But as we discuss in Chapter 14 of Why Nations Fail, this was not the case in Botswana where the diamond wealth has been a key part of the economic and human development success of the country. Other obvious examples of resource wealth helping economic development include Australia, Chile, Norway and the United States.

So the claim that the average effect of natural resource wealth on economic growth is negative must either be wrong or uninteresting – meaning that the heterogeneous effect of resource wealth in different contexts are what is really interesting to study. What context? As we point out in Why Nations Fail, Botswana’s distinctive characteristic was its institutional development prior to the discovery of diamonds.

It is also obvious that while Cameroon had poor institutions in 1977, Australia, Chile, Norway and the US all had relatively good institutions when they benefitted from resource discoveries.

The idea that the economic impact of natural resources is conditional on the quality of institutions was brought home vividly in a paper by Karl Moene, Halvor Mehlum and Ragnar Torvik, “Institutions and the Resource Curse,”. (See also this related paper). The three Norwegians showed that there is only a “conditional resource curse” in the sense that there is a negative correlation between resource abundance (as measured by the ratio of primary exports to GDP in 1970) and economic growth for countries with low institutional quality. But the same correlation is positive for countries, such as Norway, with stronger institutions (or what we would call “inclusive institutions”).

There are of course many ways to measure institutional quality, and several of these measures are correlated. The three Norwegians created an institutional quality index as an un-weighted average of five indexes based on data from Political Risk Services: a rule of law index, a bureaucratic quality index, a corruption in government index, a risk of expropriation index, and a government repudiation of contracts index. Since many of the measures of institutions used in this literature are the outcomes of political processes, they are also closely related to policy outcomes. Thus this conditional resource curse bundles quite a large number of factors into what conditions the impact of resources which stretch all the way to fundamental aspects of the political institutions of a country (such as the nature of the constitution) to basic economic institutions (security of property rights), the nature of the state (bureaucratic quality) all the way to government policy (repudiation of contracts).

All the same, the paper produces a very important bottom line: to the extent that Cameroon did experience a resource curse after 1977 this was because some key facets of its institutions were initially poor.

What about the mechanisms? We will turn to this in our next post.

Michael Tanner: "We’ve made poverty too ’comfortable"

www.nationalaffairs.com

inplainsight

What if, instead of operating a variety of anti-poverty programs, the government simply mailed every poor person in America a check big enough to lift them out of poverty? That, says the Cato Institute’s Michael Tanner, would make more sense than what we do now – and, he says, we’d still have money left over.

Michael Tanner, CATO
 Institute senior fellow.

Here’s Tanner’s math: By his count, the federal government spends more than $668 billion a year on a total of 126 anti-poverty programs, including those that address housing, hunger, health care, and cash assistance. They range from TANF (Temporary Assistance to Needy Families), which most people associate with traditional welfare, to much smaller programs for Indian tribes, at-risk youth, and others. If you divide Tanner’s total by the roughly 46 million people with incomes below the poverty line, you get nearly $15,000 for every poor man, woman, and child in the U.S.

Tanner acknowledges that poor individuals don’t receive that much money, and that’s his point: government spending isn’t laser-targeted to those most in need. In fact, he says, “throwing money at the problem has neither reduced poverty nor made the poor self-sufficient. It is time to re-evaluate our approach to fighting poverty.”

You’ve taken a fair amount of heat for saying that America should “focus less on making poverty more comfortable.” What do you mean by that? Is poverty ever comfortable?

Poverty is never a good thing. But most of the programs we have to combat poverty are based on taking people who are in poverty and giving them a little more income so their poverty doesn’t feel quite as bad. Instead, we should be focused on how to we get more people out of poverty.

What do you think we are doing wrong?

The problem is that our welfare programs aren’t targeted at the right things: education, pregnancy prevention, and job creation. They’re targeted at giving people who are poor the resources to live in poverty.

We know that if you drop out of high school you’re likely to be poor. If you graduate from college, your chances of escaping poverty are much greater.  

We know that if you’re a woman, don’t get pregnant if you’re not married. That’s not a moral judgment, it’s an economic one. It’s simply more difficult to raise a child if you have one income rather than two.

And get a job, any job, even a low-wage job, and stick with it. Even a low-paying job is better than no job at all. People are more likely to move out of poverty if they have a low-paying job than if they are on welfare.

And we need to create more jobs. The fact is, we still have an anti-job atmosphere. Too many taxes, too many regulations. We don’t do a very good job of creating an environment that’s going to create more jobs.

What do we do about the millions of people who are in poverty right now? They are poor, they don’t have skills, they don’t have a good education, they don’t have or can’t get a job. Do we pull the safety net out from under them?

We should target our aid to those people who need the help the most. We have created a situation in which there are a certain number of people who are not going to be able to become an economically viable family unit anytime soon, and we probably have to support them in the short term. In the long term, however, we want to give people in the future more of an opportunity to avoid poverty and to get out of poverty.

It’s unfair to compare my approach to utopia. Let’s compare it to the real world and in the real world, the approach I’m talking about would mean fewer poor people than there are today. Would there be zero? No. I don’t know if a society in the history of the world has ever had zero. Poverty in many ways is the natural condition of man. Throughout most of mankind’s history, most people were poor. The question is, how do you create more prosperity?

People on my side of this have often appeared to be hard-hearted, by arguing on a dollars-and-cents basis. But you shouldn’t measure compassion by inputs. You measure by outcomes. And by that measure, we’re failing. And the burden is on the poor, who are the ones suffering in poverty.

So you think it would be more compassionate to blow up and restructure the system?

It’s not fun to live in poverty. Poor people don’t want to be poor. Most poor people would like to work. Most poor people would like to be non-poor. But we’re not giving them that opportunity. The goal should be that each person gets to achieve their full potential. Most people trapped in the welfare system are (NOT?) getting to do that.

It was Ronald Reagan who said, we fought a war on poverty and poverty won. Do you agree with that?

Let’s put it this way: We are certainly not beating poverty. We may have had a draw but that’s not where we want to be.

US-Mexico: A reversal of fortune

MercatusCenter

Wealth Inequality in America..you must see this!

seeker401

Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

Artificial Inteligent Could Make a Healthier, Wealthier World

ForaTv

What Really Happened During the Neolithic Revolution?

Daron Acemoglu and James Robinson

In our last blog post, we examined the explanatory power of Jared Diamond’s book Guns, Germs and Steel. A viable position is that while the argument in his book cannot explain modern inequality amongst nations, it can explain where the Neolithic Revolution took place and thus, at least in part, account for inter-continental inequality before 1500.

But we also saw that the distribution of domesticable plants and animals doesn’t show a distinct pattern singling out southeastern Turkey and the banks of River Jordan as the places where the Neolithic Revolution should have taken place.

This should not be surprising. Economic success is all about innovation and technology. But technology itself depends on institutions — and on institutional innovations.

The Neolithic Revolution was not only a set of technological innovations associated with farming and herding. It was also an institutional revolution — people became sedentary and social and political life changed.

Diamond’s argument, which has essentially become the conventional wisdom on this topic, is that the the introduction of farming was a direct result of the greater benefits from farming in terms of greater domesticable crop and animal species, and this major technological change then caused institutional change.

Though popular, this argument is at odds with the archaeological evidence, which instead shows extensive social and institutional change prior to the transition to farming in the Middle East.

Consider the hill of Göbekli Tepe in southeastern Turkey. Soon after 9600BCE people came and carved massive T-shaped pillars out of limestone, an example of which is shown in the next picture.

Many pillars were 8 feet high and weighed 7 tons and had been brought from as far as 100 meters away. They were sunk into circular structures cut into the hill, and many of the pillars were carved with wild animals, snakes, wild cattle, gazelles, wild boars. More >>

Middle-class areas shrink as America divides into 'two-tiered society' of rich and poor

msnbc.com

The portion of American families living in middle-income neighborhoods has declined significantly since 1970, according to a new study, as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent.

The study, conducted by Stanford University and scheduled for release on Wednesday by the Russell Sage Foundation and Brown University, uses census data to examine family income at the neighborhood level in the country’s 117 biggest metropolitan areas.

The findings show a changed map of prosperity in the United States over the past four decades, with larger patches of affluence and poverty and a shrinking middle.

In 2007, the last year captured by the data, 44 percent of families lived in neighborhoods the study defined as middle-income, down from 65 percent of families in 1970. At the same time, a third of American families lived in areas of either affluence or poverty, up from just 15 percent of families in 1970.

More >

The world's richest town celebrated its 50th birthday by buying a solid gold bull