August 2019
Is The Gap Between The Rich And The Poor The Real Problem?
One of the pet topics of anti-capitalists like Bernie Sanders is the gap between rich and poor. In their opinion, this is the greatest of the problems that afflict modern society. And yet the evidence they repeatedly cite in support of their claim that the gap between society’s most and least affluent is constantly widening is questionable at best. The global anti-poverty charity Oxfam publishes an annual report that is frequently referenced in this regard, despite the fact that objective analysis has clearly demonstrated that the report’s methodology is highly questionable and does not stand up to scientific scrutiny. Nevertheless, the report is still widely cited by anti-capitalists—simply because Oxfam’s broad brushstrokes align with the socialists’ stated agenda.
Another source frequently proffered by critics of the “gap between rich and poor” is the research of left-wing French economist Thomas Piketty, who wrote the bestseller Capital in the Twenty-First Century. Piketty’s ideas have become increasingly influential in the United States, especially because two of his closest allies, the economists Emmanuel Saez and Gabriel Zucman, were instrumental in drawing up the Democratic Party’s presidential candidate Elizabeth Warren’s economic program. Unsurprisingly, Warren’s policy proposals include tax increases for the rich, founded on the premise that the gap between rich and poor is widening.
Even Piketty admits that the gap between the poor and the rich has not grown for most of the twentieth century. At the same time, he does criticize the fact that “inequalities” in terms of income and wealth widened between 1990 and 2010. In fact, this forms the core of his criticism.
Dramatic Decline In Poverty
This period, however, has seen global poverty decrease at a faster rate than at any other time in history! In the 2018 book Enlightenment Now, the Harvard University professor Steven Pinker demonstrates that over the past 200 years the rate of extreme poverty in the world has fallen from 90% to 10%. Most interestingly, almost half of this decline has been achieved in the last 35 years.
These are exactly the same years in which, according to Piketty and his socialist devotees, the gap between rich and poor grew so rapidly. In reality, these decades saw the greatest reductions in global poverty the world has ever seen. In China alone, capitalist reforms between 1981 and 2015 reduced the number of people living in extreme poverty from 878 million to less than ten million. The crucial question is: What is more important to these hundreds of millions of people—that they are no longer starving or that the wealth of multi-millionaires and billionaires may have increased to an even greater degree than their own standard of living?
Paradoxically, it is the same “progressive” politicians who otherwise always argue that the world should not be viewed from an American-centric perspective who are suddenly no longer taking a globalist standpoint on this question, but are exclusively adopting an American point of view.
A Thought Experiment
Rather than focusing on whether the gap between the rich and the poor is widening or not, it is far more important to consider the fate of the poor. This becomes clear from the following thought experiment: On a Pacific island, three rich people have fortunes of $5,000 each, while 1,000 of the island’s poorer residents only have $100 each. The combined wealth of the island’s residents is thus $115,000. Now comes the experiment part: Due to economic growth, the total wealth of the island’s residents doubles to $230,000. The wealth of the three rich people triples to $15,000 each; they now own a total of $45,000 between them. Meanwhile, the wealth of the island’s remaining 1,000 residents grows by 85% to $185 per capita. The inequality gap between the richest and the poorest residents has widened considerably.
In an alternative scenario, let’s take the total wealth of $115,000 and split it evenly between all 1,003 residents. That’s $114.66 per capita. As one of the poor with a baseline wealth of $100, which of the two societies are preferable—economic growth or equal distribution? And what would happen if, as a consequence of economic reforms aimed at creating greater equality, the island’s total wealth shrank to a paltry $80,000, or less than $79.80 per capita?
Of course, it is possible to object that the best outcome would be economic growth and a higher general standard of living in tandem with greater equality. And that’s exactly what capitalism achieved in the twentieth century, as even Piketty admits. The above thought experiment is still useful as a way of demonstrating a fundamental difference between two competing value systems. Those who prioritize the fight against inequality over raising the standard of living for the majority will make different choices from those who believe the opposite.
The Power of Capitalism
Capitalism is the root cause of a global increase in living standards on a scale unprecedented in human history before the emergence of the market economy. This has been verified by calculations from the economist J. Bradford DeLong from the University of California: It took humanity 99.4% of its 2.5-million-year history to achieve a per-capita GDP of 90 international dollars about 15,000 years ago (the international dollar is a unit of calculation based on buying-power levels in 1990). It took another 0.59% of human history to double global GDP to 180 international dollars in 1750. Between 1750 and 2000—in a period that represents less than 0.01% of the total span of human history—global per capita GDP grew 37-fold to 6,600 international dollars. To put it differently, 97% of the total wealth created throughout human history was generated within those 250 years. Global life expectancy almost tripled in the same short period of time (in 1820, it was only 26 years).
None of this happened because of a sudden increase in human intelligence or industry—it happened because the new economic system that emerged in Western countries about 200 years ago proved superior to any other before or since: capitalism. It was this system, based on private property ownership, entrepreneurship, fair pricing and competition, that made the unprecedented economic and technological advances of the past 200 years possible.
The most obvious suspicion is that socialists, who are so myopically fixated on whether the rich are getting richer and whether the gap between rich and poor is widening, are more driven by envy than by any honest sympathy for the fate of the poor. If this wasn’t the case, they would not spend all of their time complaining about inequality and would instead focus on discussing the most effective measures to combat poverty around the world.
Rainer Zitelmann I was awarded my first doctorate in history in 1986 and my second, this time in sociology, in 2016. I started my career at the Central Institute for Social Sciences Research at the Free University of Berlin and went on to become department head at one of Germany’s leading daily newspapers, Die Welt. In 2000, I founded my own company, which I established as the market leader in the field of communication consultancy for real estate companies in Germany, with a roster of clients that included Ernst & Young Real Estate, CBRE and Jamestown. I sold the company in 2016 and have focused on academic research and writing books ever since. In total, I have written and edited 22 books, the most recent of which are The Wealth Elite and The Power of Capitalism. My books on the psychology of success and wealth have been translated into a host of languages and have enjoyed notable success in China, India and South Korea. I am also a regular contributor to numerous prestigious European media outlets, including the Neue Zürcher Zeitung in Switzerland, The Daily Telegraph in the UK and the Frankfurter Allgemeine Zeitung in Germany.
By : Rainer Zitelmann
Date : August 19, 2019
Source : Forbes
https://www.forbes.com/sites/rainerzitelmann/2019/08/19/is-the-gap-between-the-rich-and-the-poor-the-real-problem/#71c97fea7c3b
Obsession with white working class fuels inequality in north, study warns
The focus on the needs of a “mystical” white working class in the aftermath of the Brexit vote has led politicians to neglect the needs of a growing ethnic minority population across the north of England, the authors of a report warned on Thursday.
Researchers behind the paper by the Runnymede Trust and the University of Leeds said that “deep racial and ethnic inequalities” were not being adequately addressed by existing plans to boost economic growth in the region, such as the “northern powerhouse”. And they argued that most discussions of the northern working class in the media and political debates since Brexit had left out minority groups who have lived in the region for decades.
“Ethnic minorities have been part of working class communities in the north since postwar migration,” said co-author Omar Khan, director of the Runnymede Trust. “They should not be forgotten or ignored in current political and media coverage of ‘working class communities’.”
Narratives focusing on a disaffected white working class in post-industrial northern towns risk treating the north as a “monolithic area”, the report argues, and also ignores areas where diversity has increased due to newly arrived European migrants and asylum seekers.
Some northern cities now have among the largest ethnic minority populations in the UK, rising by 74% in the north-east, 69% in the north-west and 68% in Yorkshire and Humber. These new migrant groups groups are all more likely to be working class than not.
The report argues that some local authorities are failing in their statutory duties under the Equality Act if they fail to address discrepancies between various ethnic groups.
This may lead to economic proposals ignoring the discrimination faced in education, the workplace and in relation to home ownership by ethnic minority groups, the authors suggest.
Dr Roxana Barbulescu, who leads the Commission on Diversity in the North project with Prof Adrian Favell at the University of Leeds, said that while racial inequalities are “a feature of modern Britain”, they run deeper in the north of England.
She added: “The north is not a monolithic area and there is remarkable variation between cities and towns.
“Future plans for regeneration of northern cities and towns have to reflect and cater to their racially diverse population.
“The government has taken a step in the right direction with the introduction of a national Racial Disparity Audit but this should be followed by investment in the areas with the highest inequalities to uphold the commitments taking place under the Equality Act and they have to be articulated within wider policy agenda such as the Industrial Strategy.”
Favell said that the northern powerhouse agenda has “very little space for ethnic or racial diversity” and “very little thinking about these places that are not cosmopolitan like Manchester or Leeds”.
He pointed out that towns that were predominantly white that had experienced a rapidly changing demographic would need a different political approach to towns with an established BAME population.
The report highlighted the increase in hate crimes, with the north of England accounting for around a third of all hate crime taking place in England and Wales. Last year, nearly 29,000 reported incidents of hate crime took place in the region, an increase of around 6,000 from 2017.
Khan said: “This briefing highlights that many towns and cities in the north of England are ethnically and racially diverse.
“The racial inequalities that BAME groups and people experience – for example in education and employment – should be tackled as part of any national or regional economic growth agendas, including those proposed by mayors.”
By : Maya Wolfe-Robinson
Date : August 15, 2019
Source : The Guardian
https://www.theguardian.com/uk-news/2019/aug/15/white-working-class-fuels-inequality-north
Why Society is Paying the Price of Inequality
Mike Brewer says it’s increasingly clear that high levels of inequality damage our health and well-being, harm social cohesion and levels of trust, and act as a brake on economic performance.
When high levels of inequality are pointed out, a common response is that the “politics of envy” are being deployed. I heard the phrase myself when I tweeted recently that the share of income going to the richest 0.01% of adults in the UK was almost at a record high, based on my new analysis of UK tax data.
After taking a few months out to write a book on what we know about economic inequalities, I was struck by the enormous amount of research showing how harmful inequality is for people. It’s increasingly clear that high levels of inequality damage our health and well-being, harm social cohesion and levels of trust, and act as a brake on economic performance. And there is increasing evidence that inequalities dramatically tilt the playing field for future generations.
HARMING OUR HEALTH
Countries with high levels of inequality are more stressed and anxious, less happy and healthy, and have lower feelings of solidarity or trust across society. The best-known research on this is by Richard Wilkinson and Kate Pickett.
Wilkinson and Pickett argue that in societies with high levels of inequality there is an ever-increasing cachet to being rich and it becomes more shameful to be poor. This heightens anxiety over social status. And money – and what one does with it – becomes ever more important to social status.
As a result, inequality worsens aspects of consumerism (“keeping up with the Joneses”), leads to feelings of entitlement for those at the top and shame for those at the bottom, and reduces social mixing, trust and social cohesion.
This may sound like a damning indictment on our 21st century culture of Instagramming our lives to death. But sociologist Thorstein Veblen observed these desires to establish superiority (among the rich) or conform (among the slightly less rich) in the 19th century United States.
ECONOMIC PERFORMANCE SUFFERS
Research also indicates that high inequality damages economic performance. It may even have caused the financial crash of 2008 and the subsequent Great Recession.
What surprised me about this recent work is that it is being led by the IMF and the World Bank. They are not exactly well-known hot-beds of radical thought, but Christine Lagarde, IMF chief until recently, said: “Reducing excessive inequality is not just morally and politically correct, but it is good economics.”
The OECD, the organisation representing the world’s wealthiest economies, adds:
"The notion that one can enjoy the benefits from one’s own efforts has always been a powerful incentive to invest in human capital, new ideas and new products, as well as to undertake risky commercial ventures. But beyond a certain point, and not least during an economic crisis, growing income inequalities can undermine the foundations of market economies."
A high level of inequality is not a natural, and certainly not a necessary, consequence of a vibrant economy. Instead, key international organisations are worried that inequality is a drag on economic growth.
OPPORTUNITY IS LIMITED
Inequality also makes it harder to achieve equality of opportunity, and it perpetuates the division between those that have and those that have not. We used to hope that if there were some in society who had a lot less than others, then maybe this would be just a short-term blip. Or that people could improve their lot with hard work and effort.
We now know that, far from living in a world where all young people have equal chance to shine, success in life is heavily influenced by where you start from. Hard data and careful research show that the more unequal society is, the harder it is to achieve equality of opportunity, and the less social mobility there will be.
In the US, so often seen as the land of opportunity, a common route to the top of the income distribution is to be born there, or to marry into it. In which country does a child from a disadvantaged family have the best change of making it to the top? It’s Sweden.
UNFAIR AND UNDEMOCRATIC
There’s a final worrying aspect about high levels of inequality, set out by economists Joseph Stiglitz and Thomas Piketty. If Western governments do not try to redistribute wealth or curb the very rich, and if money is allowed to shape political debates, then the 21st century could see the emergence of a super-wealthy elite akin to that which existed at the dawn of the 20th century. That would be profoundly undemocratic, and most definitely unfair.
Every year of high inequality is another year that strains our sense of fairness and of social justice, and another year where equality of opportunity becomes harder to achieve. It’s up to voters, politicians and other social actors to play their part in shifting the boundaries of what policy responses are politically feasible, and what levels of inequality are socially acceptable.
Written by Mike Brewer, professor of Economics and Director of the ESRC Research Centre on Micro-social Change, University of Sussex.
By : World Economic Forum
Source : Eyewitness News
https://ewn.co.za/2019/08/19/why-society-is-paying-the-price-of-inequality
Neuroscientists Suggest That Social Inequalities Can Permanently Alter Our Brains
A recently published article illustrates how the concept of neuroplasticity has been used to explain social inequalities, like poverty, by linking them to biomarkers in the brain.
Can those who are affected most by social inequality become “neurobiologically poor”? The concept of neuroplasticity has emerged over the last several decades as a popular explanation for how brains change across human lifespans. According to a journal article published recently in Science, Technology, & Human Values, it has also become common for researchers to use this idea to reframe social issues, like poverty, in neurological terms. This new paper presents a critical analysis of this trend, which is just one of the most recent attempts to reduce individuals’ social lives to a set of neurobiological traits.
As explained by the author the paper, Victoria Pitts-Taylor, Professor of Feminist, Gender, and Sexuality Studies at Wesleyan University, recent attempts by neuroscientists to develop “neural phenotypes of poverty” emerge out of “classed, gendered, and racialized inequalities that not only affect bodies in material ways but also shape scientific understandings of difference.”
She adds that it “not only establishes and reinforces norms of brain structure and function but also provides an impetus for interventions that may converge with neoliberal and carceral modes of governance.”
A neural phenotype, in this sense, can be understood as “an observable set of brain traits resulting from the interaction of an organism with its environment.” This is notably different from earlier attempts to link psychiatric diagnoses to genotypes, which are encoded through individuals’ DNA and possess no relationship to what occurs outside of their bodies.
In recent years, researchers and clinicians have promoted the concept of neuroplasticity as a potentially revolutionary, non-deterministic approach to neuroscience. As Pitts-Taylor explains, prior to the mid-twentieth century, “[p]lasticity in the mature brain was thought to be limited to ‘functional’ or synaptic plasticity in learning. In the past several decades,” however “researchers have worked to demonstrate the brain’s ‘structural’ plasticity.”
The general idea of structural neuroplasticity has obvious appeal to anyone who considers their lived-experiences to be caused by more than the sum total of their genetics and/or neural connections. And yet, some have advocated restraint in applying the concept of neuroplasticity too broadly, cautioning that many claims associated with it are overstated.
According to Pitts-Taylor, the notion of neuroplasticity can be used in different ways to draw at times contradictory conclusions about the nature of brain development. On the one hand, it offers a way to think about the “organ as constantly changing and developing, always in a state of Becoming.” On the other hand, there is a tendency for “the plastic brain [to be] understood as ‘passively’ inscribed by, and vulnerable to, experience.”
With the first of these two perspectives, the emphasis is on how the brain can be actively reconstructed from one series of experiences to another. With the second, the brain is construed as something like a blank slate that can be forever susceptible to (sometimes permanent) conditioning from environmental influences.
Pitts-Taylor’s view on neuroplasticity is that it is best understood as a useful frame for thinking about how our brains are altered unpredictably through our interactions with others across our lives. And yet, neuroplasticity has increasingly become part of risk-assessment models used to predict social threats to normal human development.
Specifically, Pitts-Taylor illustrates how the concept has been used increasingly within the “neuroscience of poverty” to promote a form of biosocial determinism. Here, “scientific assessment of risky bodies and behaviors can amount to a racialized pathologization of already marginalized populations.” As such, the author utilizes an intersectional, critical socio-material approach to thinking through the issues involved in these conversations.
This approach is intersectional because it explores how different social structures (e.g., race, gender, class) overlap at different scales of reality to produce complex, interrelated effects. It is socio-material insofar as both the physical substances of brains and the material tools used by neuroscientists are considered essential to how neuroscientific representations of human development are produced.
With this framework, Pitts-Taylor analyzes 21 studies about the “neuroscience of poverty” published between 2004 and 2017. Her article also overviews secondary literature on the topic. Specifically, the focus is on how such studies measure, classify, and propose interventions based on the neuroscience of poverty.
She summarizes these studies’ proposals according to the following three conclusions:
Brain differences can be detected between low and middle-SES populations;
SES disparity is nonuniform across regions and functions of the brain; and
Lower-SES brains are delayed, underdeveloped, or otherwise inferior.
One example of a study described by Pitts-Taylor was conducted on two sets of kindergarten students from Philadelphia—one classified as low socioeconomic status (SES) and the other as middle SES. After a series of tests were run on both groups, the authors of the study interpreted disparities in performance as being caused by irregularities in the first group’s “medial temporal/memory system” and the “prefrontal/executive system.” These areas of the brain are typically associated with memory, future planning, and self-control.
Importantly, these interpretations were made almost exclusively on the basis of cognitive tests—no brain scans were conducted for this study. Moreover, the authors describe brain systems associated with these cognitive tasks as being the only ones affected by poverty.
Pitts-Tayor describes this as being essential to their argument because:
“while the researchers identify the language and executive systems of poor children as compromised, other brain systems, such as those for spatial and visual cognition, are not. The claim that some brain areas are more affected by environmental inputs than others is a key basis for the development of a neural phenotype of poverty.”
Another study overviewed by Pitts-Taylor performed MRI scans on the brains of 1,000 young people to draw correlations between brain structure, cognitive ability, SES, and parental education. The authors of this study concluded that parental education has a determinative effect on the total brain surface, which in turn influences the cognitive ability of the participants.
Going further, other studies have drawn on this data-set to not only predict what types of brains young people living in poverty might have but assert that such neural phenotypes could persist across their lifespans. Their goal is to reveal “endophenotypic biomarkers” of poverty, allowing interventions to become more targeted. As Pitts-Taylor notes, biomarkers are supposed to be objective characteristics, while endophenotypes are “associated with genetic heritability and root causes of disease.”
According to Pitts-Taylor, however, in several of these studies, “researchers make normative judgments about the levels of neural activity in specific brain regions even when there are no differences in the performance of cognitive tasks.”
A major problem Pitts-Taylor cites regarding this literature is that current measures are often interpreted as indicators of trauma or stress that occurred at some point in the past. This is often presumed to have occurred long before the research they conducted even began.
Some studies even traced causes of current measures to conditions of poverty that parents or grandparents of the young people were exposed to. All of this despite the fact that no direct causal mechanisms were identified to account for these assumed generational links.
Another problem noted by Pitts-Taylor is that such studies often reduce most racial differences to economic disparities. In other words, they “treat race as a confounding variable that needs to be bracketed,” rather than a complex set of social phenomena essential to the subjectivities of the participants.
Pitts-Taylor proposes that an intersectional approach would be useful here because “[r]ace cannot be found in the brain, but it matters through its effects on socioeconomic mobility,” adding that “racial segregation is a key structural factor in the perpetuation of poverty.” One of the ways this perpetuation occurs, moreover, is in how participants are grouped in scientific studies, and how the results from such research are used to inform public policy.
Given how the concept of neuroplasticity has been used to make claims across such a wide variety of social contexts, the social consequences of such research extend well beyond academia. And as biotechnologies become more powerful and neural therapies more popular, thinking critically about how our brains are related to our social lives will become increasingly important.
Whether we understand our brains and cognitive capacities to be determined largely by social structures or not, it is clear that some research perspectives provide more space for human agency than others. By its nature, incarceration in America serves to reinforce behavioral norms cutting across race, gender, as well as a range of other social categories.
By exposing links between research on neuroplasticity and carceral modes of governance, authors like Pitts-Taylor illustrate how healthcare and science are already being used to define and confine individuals in previously unimaginable ways.
As she explains:
“Brain phenotypes are situated in broader contexts that shape their emergence, meaning, and impact; understanding these contexts as carceral raises questions about the social justice implications, as well as the specifically racial implications, of neuropoverty research.”
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Pitts-Taylor, V. (2019). Neurobiologically Poor? Brain Phenotypes, Inequality, and Biosocial Determinism. Science, Technology, & Human Values, 44(4), 660–685
By : Tim Beck, PhD
Date : August 15, 2019
Source : Mad in America
https://www.madinamerica.com/2019/08/neuroscientists-suggest-social-inequalities-can-permanently-alter-brains/
Locating Equality
Munich - Inequality is the leading political and economic issue of the current era, yet debates about it have long suffered from a degree of imprecision. For example, the standard measure of inequality, the Gini coefficient, reduces a country’s entire income distribution to a single number between zero and one, and is thus highly abstract. Similarly, while inequality is rising in many parts of the world, there is no simple correlation between that trend and social discontent or unrest. France is much less unequal than the United States, and yet it has similar or even greater levels of social polarization.
Today’s inequality debate effectively began in 2013 with the publication of French economist Thomas Piketty’s Capital in the Twenty-First Century, which found that the rate of return on capital tends to outpace the rate of growth, thereby causing inequality to increase over time. Specifically, appreciating real-estate values seem to be a fundamental driver of rising inequality. But here, too, one encounters a degree of imprecision. Real estate, after all, is not a homogenous good, because its value famously depends on “location, location, location.” There are elegant castles and palaces that now cost less than small apartments in major cities.
Wealth stirs the most controversy where it is most tangible, such as when physical spaces become status goods: the corner office is desirable precisely because others cannot have it. More broadly, as major cities have become magnets for a global elite, they have become increasingly unaffordable for office workers, policemen, teachers, nurses, and the like. While the latter must endure long, tiresome commutes, elites use global cities as they see fit, often hopping around from place to place. Large swaths of Paris and London are eerily shuttered at night. Manhattan now has nearly a quarter-million vacant apartments.
Whenever violence and revolution have consumed unequal societies, real estate has been a focus of discontent. In the later years of the Western Roman Empire, vast estates catered solely to an aristocratic elite. In a famous homily from this period, St. Ambrose of Milan, reflecting on the Old Testament story of Naboth’s vineyard, decries elites for making “every effort to drive the poor person out from his little plot and turn the needy out from the boundaries of his ancestral fields.”
Likewise, the French social historian Marc Ferro has demonstrated that many urban Russians were driven to the Bolsheviks in 1917 not out of ideological zeal, but because the old regime and the new constitutional parties had proved incapable of providing food and housing. Over the course of World War I, Petrograd had developed an enormous munitions industry, manned by peasant labor conscripted in the countryside and brought to the newly expanded factories. But production planners had neglected the question of where these workers would be housed, and in 1917, the worker committees (soviets) offered an answer: apartments would be confiscated from the aristocrats and bourgeoisie.
A similar pattern played out in other cities where rapid, unplanned wartime industrialization had occurred (Budapest, Munich, Turin). Today’s equivalents are the centers of the new economy, such as Silicon Valley and its high-tech imitators in Europe and Asia. These cities have produced many jobs, but they have utterly failed to accommodate the people who actually live there. As a result, even middle-class professionals are living in cars, vans, and trailers.
And this malaise is not limited to the global cities themselves. Support for Brexit in southeastern England owes something to the perception that London and its immediate surroundings have become unaffordable as a result of too much immigration, international financial activity, and tourism – in short, globalization.
Needless to say, the political response to the real-estate problem has so far been inadequate, even counterproductive. Some large European cities are introducing rent controls, despite the poor track record of such policies. When New York tried similar measures in the twentieth century, the open market dried up, and property was hoarded or traded at a premium on the black market. When the UK rolled out a fiscal subsidy for first-time homebuyers, home prices rose accordingly, offsetting any potential benefit.
Removing tax privileges – as the US did recently by imposing a $10,000 cap on the state- and local-tax deduction – is a slightly better approach. But it will not solve the fundamental problem of supply. Not surprisingly radical, even Bolshevik-style, proposals are making a reappearance. A popular initiative in Berlin, for example, would socialize the holdings of large-scale real-estate owners (those managing more than 3,000 apartments).
The obvious solution to the supply problem, of course, is to build more housing. But new construction can conflict with environmental protections and a city’s architectural heritage, and is often opposed by existing property owners, who do not want the value of their own property to fall.
Sometimes, new construction can create alternative urban magnets, such as when the Spanish city of Bilbao was transformed by the addition of a Frank Gehry-designed Guggenheim Museum. But many declining industrial cities have already tried this solution, and only a few have succeeded. Those that have failed are still run down, and now have the added burden of maintaining new arts infrastructure.
Eventually, the cities and urban areas that are driving the bulk of new wealth creation will provoke a counter-movement. If they price out or otherwise exclude those who earn less, they will have sacrificed the openness that made them attractive in the first place. So, if they want to survive and thrive in today’s egalitarian political climate, they will need to come up with bold solutions.
During a previous period of urban-based dynamism, in the early sixteenth century, rich merchant families built low-rent housing that was then allocated to the poor. One such project, the Fuggerei complex in Augsburg, Germany, still provides low-rent social housing to this day.
If enough such housing cannot be supplied, might a lottery allocation of public accommodation help to stem the encroaching homogeneity of today’s global cities? It is certainly worth a try.
Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.
By : Harold James
Date : August 5, 2019
Source : Project Syndicate
https://www.project-syndicate.org/commentary/inequality-global-city-real-estate-by-harold-james-2019-0
