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The elephant chart makes the winners and losers in income inequality quite clear
Winners are the very rich(the trunk of the elephant) and the middle class in emerging economies(the back of the elephant) losers are the middle class in developed nations like us and europe Possible investments consumer companies in emerging asia but not in usa and europe
It takes an active imagination to see the correlation between this chart data shape and an elephant. The chart title was most likely selected to attract attention. The data itself has meaning for dedicated economists, but are of doubtful value to the average person.
I seriously doubt if that average person ever ranks his income against someone from China. I doubt if that same average guy even ranks his income against some neighbor. We recognize and accept the major differing factors that cause a disparate income scale. A free economy promotes that disparity. Those who are in the top .quarter of earners see those above them as successful folks and seek to improve their current status.
As noted in the article itself, the curve is misleading in that those populating any percentage in one timeframe are not the same folks in another timeframe. There is a constant population migration upward.
Note that the curve is positive everywhere; the world's income is advancing for everyone. The capitalistic economy works it's magic. Good for all of us.
For me, the Elephant curve doesn't inform as much as it misguides. Interpretations of that data are almost endless. It gives economists work. I suppose some economists might even find it useful work. I do not.
@MJG If you find a free economy, let me know. I'd like to visit one someday. In the meantime I'm busy staring at operating systems owned by three oligarchs--Microsoft, Apple and Google. My airport only has three airlines and any medicines I might need have patents on them that last 17 years and Congress is well-oiled by pharmaceutical lobbyists so that I can't purchase any pills for the actual 2 cents each it costs to manufacture them in Canada, Mexico or India.
Like you, I worked out Anna's comment was a reference .I googled it and one high ranking post was http://wavefunction.fieldofscience.com/2015/02/derek-lowe-to-world-beware-of-von.html but that post was criticising over fitting curves. I am more sympathetic to MJG's comments but don't think the warning about Von Neumann's elephants is valid to the graph I provided..I could be convinced but not yet.
Forget it. I was just fooling with MJG. That's why I made no links to the origin of the comment. I figured he would understand and chuckle. As far as the vague tie-in goes. I was picking up on MJG's point about the timeframe and analogizing to (let's say) that fifth parameter wiggle.
@MJG If you find a free economy, let me know. I'd like to visit one someday. In the meantime I'm busy staring at operating systems owned by three oligarchs--Microsoft, Apple and Google. My airport only has three airlines and any medicines I might need have patents on them that last 17 years and Congress is well-oiled by pharmaceutical lobbyists so that I can't purchase any pills for the actual 2 cents each it costs to manufacture them in Canada, Mexico or India.
Good point at the end, there. But all of what you say is true, besides. I have medical coverage via my wife through her job. Two more years until Medicare. The cost of premiums every month take HALF of her pay. Recently, she came back from Asia on vacation with the girls. She brought me a month's supply of (diabetes) Metformin. Cost was the equivalent of $5.00. ..... That same prescription costs me $5.00 PLUS the health-plan premiums taken from her paycheck. It is an obscenity.
You're right that not our economy, nor anyone else's, is really free. More properly, I should have said "capitalistic economy". That more accurately summarizes what I really wanted to say. Sorry about my imprecise writing.
I don't worry much over large American enterprises. In our capitalistic economy there have always been winners and losers. That's the nature of the beast. But the story is never fixed in time. Here is a Link to a comparison between present and 1955 successful outfits:
Our economy is of a dynamic character. Things changed then and will continue to change. The current winners earned their high positions by providing goods and services that we needed or wanted. Whatever the reason, we volunteered to pay the going rates. Good for them and good for us.
I would be a billionaire if I had predicted the success of Apple, etc, 4 decades ago. That task is easier said then done. Like Peter Drucker said: "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Not an easy assignment, and dangerous too.
Thank all of you for your comments that energized this discussion.
The current winners earned their high positions by providing goods and services that we needed or wanted. Whatever the reason, we volunteered to pay the going rates. Good for them and good for us.
Your quote suggests that all goods are discretionary when many are not. No one "volunteers" to buy a life saving drug. They either pay whatever price the drug maker is demanding or die. This leads to the friction one sees over price gouging by companies like Mylan over drugs like Epipen. Capitalism can function well for discretionary items but can malfunction terribly for consumer staples for which there is no adequate substitute. And even when there is choice, the limited amount--operating systems, airlines, etc.--can lead to bad service, safety issues and price gouging. Again, no one volunteers to take a specific airline that dominates an individual route for an essential trip. This is why government regulation of certain industries and breaking up of monopolies is essential for there to be anything resembling a "free market" that truly benefits the end consumer. The natural tendency of markets is monopolistic control as dominant players tend to push out or gobble up the others--not always to the end benefit of society at large--and that was actually something Adam Smith himself recognized as a danger to unregulated markets. He even believed in government measures to reduce income inequality: nytimes.com/2001/08/16/business/economic-scene-the-many-faces-of-adam-smith-rediscovering-the-wealth-of-nations.html?sec=&spon=&pagewanted=print
Thank you for your reasonable and well reasoned reply to my post.
In balance, we are not that far apart on this subject. I suspect my use of the word "volunteer" was inappropriate and triggered your reply. Perhaps the word "choice" might have been better, but I suspect that you still might object. Please understand that for some critical issues, the available choices might all be negative. But even among these poor choices options are available.
I prefer that the individual make the final decision, not the government in almost all instances. In the military, decision options are significantly attenuated or simply don't exist. Special circumstances must be excluded from broad generalities.
That's not to say that government rules and regulations are not needed. Of course, they are! A totally free market is an unrealistic dream. Criminal minds and unsavory folks exist among the population and will work to control interactions to their advantage.
We need government to protect us from these misguided characters. But I want as little of that government intervention as possible. Suzy Kassem wrote that “Profit should never come at the cost of human blood. Any government that places profit before people is pure evil.”
The trick is to identify that limiting government involvement. I'm not smart enough to specify that critical limit. It changes over time and is situational dependent. It is likely that each of us have different thresholds for many of these special circumstances. No easy answers here.
Comments
It takes an active imagination to see the correlation between this chart data shape and an elephant. The chart title was most likely selected to attract attention. The data itself has meaning for dedicated economists, but are of doubtful value to the average person.
I seriously doubt if that average person ever ranks his income against someone from China. I doubt if that same average guy even ranks his income against some neighbor. We recognize and accept the major differing factors that cause a disparate income scale. A free economy promotes that disparity. Those who are in the top .quarter of earners see those above them as successful folks and seek to improve their current status.
As noted in the article itself, the curve is misleading in that those populating any percentage in one timeframe are not the same folks in another timeframe. There is a constant population migration upward.
Note that the curve is positive everywhere; the world's income is advancing for everyone. The capitalistic economy works it's magic. Good for all of us.
For me, the Elephant curve doesn't inform as much as it misguides. Interpretations of that data are almost endless. It gives economists work. I suppose some economists might even find it useful work. I do not.
Best Wishes
You are right. It doesn't wiggle right.
On second thought just forget it entirely.
You're right that not our economy, nor anyone else's, is really free. More properly, I should have said "capitalistic economy". That more accurately summarizes what I really wanted to say. Sorry about my imprecise writing.
I don't worry much over large American enterprises. In our capitalistic economy there have always been winners and losers. That's the nature of the beast. But the story is never fixed in time. Here is a Link to a comparison between present and 1955 successful outfits:
http://247wallst.com/investing/2010/09/21/americas-biggest-companies-then-and-now-1955-to-2010/
Our economy is of a dynamic character. Things changed then and will continue to change. The current winners earned their high positions by providing goods and services that we needed or wanted. Whatever the reason, we volunteered to pay the going rates. Good for them and good for us.
I would be a billionaire if I had predicted the success of Apple, etc, 4 decades ago. That task is easier said then done. Like Peter Drucker said: "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Not an easy assignment, and dangerous too.
Thank all of you for your comments that energized this discussion.
Best Wishes
nytimes.com/2001/08/16/business/economic-scene-the-many-faces-of-adam-smith-rediscovering-the-wealth-of-nations.html?sec=&spon=&pagewanted=print
Thank you for your reasonable and well reasoned reply to my post.
In balance, we are not that far apart on this subject. I suspect my use of the word "volunteer" was inappropriate and triggered your reply. Perhaps the word "choice" might have been better, but I suspect that you still might object. Please understand that for some critical issues, the available choices might all be negative. But even among these poor choices options are available.
I prefer that the individual make the final decision, not the government in almost all instances. In the military, decision options are significantly attenuated or simply don't exist. Special circumstances must be excluded from broad generalities.
That's not to say that government rules and regulations are not needed. Of course, they are! A totally free market is an unrealistic dream. Criminal minds and unsavory folks exist among the population and will work to control interactions to their advantage.
We need government to protect us from these misguided characters. But I want as little of that government intervention as possible. Suzy Kassem wrote that “Profit should never come at the cost of human blood. Any government that places profit before people is pure evil.”
The trick is to identify that limiting government involvement. I'm not smart enough to specify that critical limit. It changes over time and is situational dependent. It is likely that each of us have different thresholds for many of these special circumstances. No easy answers here.
Best Wishes