Posts Tagged ‘economics’
The richest families in Florence, Italy have had it good for a while—600 years to be precise.
That’s according to a recent study by two Italian economists, Guglielmo Barone and Sauro Mocetti, who after analyzing compared Florentine taxpayers way back in 1427 to those in 2011. Comparing the family wealth to those with the same surname today, they suggest the richest families in Florence 600 years ago remain the same now.
“The top earners among the current taxpayers were found to have already been at the top of the socioeconomic ladder six centuries ago,” Barone and Mocetti note on VoxEU. The study was able to exploit a unique data set—taxpayers data in 1427 was digitized and made available online—to show long-term trends of economic mobility…
More on the research and it’s import at “The richest families in Florence in 1427 are still the richest families in Florence.” More on the underlying mechanisms of capital accumulation, the persistence of wealth and income, and their polarization here.
* widely-used aphorism, probably dating back to the Bible verse, “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath” (Matthew 13:12, King James edition); it’s use was reinvigorated by the popular 1921 song “Ain’t We Got Fun.”
As we dream the American dream, we might spare a rugged thought for Louis Dearborn L’Amour; he died on this date in 1988. While L’Amour wrote mysteries, science fiction, historical fiction, and non-fiction, he is surely best remembered as the author of westerns (or as he preferred, “frontier stories”) like Hondo and Sackett. At the time of his death he was one of the world’s most popular writers; dozens of his stories had been made into films, and 105 of his works were in print (89 novels, 14 short-story collections, and two full-length works of nonfiction); as of 2010, over 320 million copies of his work had been sold.
L’Amour was interred in the Forest Lawn Memorial Park Cemetery near Los Angeles. His grave is marked in a way that acknowledges that death was able to contain him in a way that he successfully resisted throughout his life: while his body is underground, his site is fenced in.
“Experience declares that man is the only animal which devours his own kind; for I can apply no milder term… to the general prey of the rich on the poor”*…
Something massive and important has happened in the United States over the past 50 years: Economic wealth has become increasingly concentrated among a small group of ultra-wealthy Americans.
You can read lengthy books on this subject, like economist Thomas Piketty’s recent best-seller, Capital in the Twenty-First Century (the book runs 696 pages and weighs in at 2.5 pounds). You can see references to this in the campaigns of major political candidates this cycle, who talk repeatedly about how something has gone very wrong in America.Donald Trump’s motto is to make America great again, while Bernie Sanders’s campaign has focused on reducing income inequality. And there’s a reason this message is resonating with voters:
It’s grounded in 50 years of reality…
Take the tour at “This cartoon explains how the rich got rich and the poor got poor.”
* Thomas Jefferson
As we take stock of ourselves, we might send yellowish birthday greetings to William Randolph Hearst; he was born on this date in 1863. Hearst built the nation’s largest newspaper chain, and (in competition with Joesph Pulitzer) pioneered the sensational tabloid style– crime! corruption! sex!– that we’ve come to know as “yellow journalism.” The possibly apocryphal, but indicative anecdote that became Hearst’s signature dates to the period just before the Spanish-American War: famed illustrator Frederic Remington, sent by Hearst to Cuba to cover the Cuban War of Independence, telegrammed Hearst to tell him all was quiet in Cuba. Supposedly Hearst responded, “Please remain. You furnish the pictures and I’ll furnish the war.”
Hearst parlayed his power as a publisher into a career in politics, serving two terms in Congress, then losing a series of elections (for Mayor of New York City, twice, and for Governor of New York State). An early supporter of Franklin Roosevelt, Hearst became one of his staunchest– and loudest– opponents.
Hearst’s life was the inspiration for Orson Welles’s classic film Citizen Kane.
If you want to buy soap at the Walgreens on Market Street in San Francisco, you’ll need to find a store employee to unlock the display case for you.
Fifty dollar earbuds and $100 bottles of Claritin simply sit on the shelves where customers can pick them up and go. But baby formula, shampoo, and soap are all protected by locked display cases.
It’s well known that pharmacies need to protect their stores of cold medicine, which methamphetamine cooks can use to make illicit drugs. But why soap? Is a $6 bottle of Dove body wash really worth the squeeze?…
The key to understanding the appeal of soap to thieves is realizing that they care less about an item’s price tag and more about the ease of finding a buyer. In other words, thieves want a liquid asset.
The practical economics of larceny: “Why Thieves Steal Soap.”
* Lemony Snicket (Daniel Handler),
As we call for a clerk, we might recall that it was on this date in 1977 that a notorious crime boss met his end:
Mob boss Michael “Mickey” Spillane (not to be confused with the guy who created fictional P.I. Mike Hammer) had a run of very bad luck on Friday the 13th; he was shot and killed outside his apartment in Queens, NY. Spillane, who headed the Westies gang [see here], had moved to Queens from Hell’s Kitchen out of fear for his safety. The previous year, his three top lieutenants had been taken out on orders from Genovese crime family boss Fat Tony Salerno. Salerno coveted control of construction contracts for the Jacob Javits Civic Center, which was being built in Spillane’s territory. Spillane’s killing was rumored to have been carried out by Gambino crime family associates Roy DeMeo and Danny Grillo. After Spillane’s demise, mobster Jimmy Coonan took over as head of the Westies. Coonan had previously challenged Spillane for control of the group. After he took control, Coonan formed an alliance with the Gambino family, in a deal brokered by the newly-“made” Roy DeMeo. Coincidence? Um… probably not. [source]
“In terms of organisational models and human relationship models, humankind has not evolved much over the last millennia”*…
The Office of Strategic Services (the CIA’s World War II–era precursor) created this document in 1944, for use by operatives in Europe who were trying to recruit civilians living in occupied countries to commit sabotage. The document is available in full via the CIA’s website.
The Simple Sabotage Field Manual, which contains instructions in physical as well as interpersonal disruption tactics, begins with a preface directed to OSS personnel, describing the problems and possibilities of working with “citizen-saboteurs.” Such people, living under the rule of enemy administrators in countries such as Norway or France, might already be sabotaging materials, machinery, or operations of their own initiative, but these acts “may be completely foreign to [a] habitually conservationist attitude toward materials and tools … Purposeful stupidity is contrary to human nature.” Reading instructions such as the ones in this manual might refine civilian efforts at destruction, and reassure them that they were taking risks that had rewards…
More (and a larger version of the pages above) at “The CIA’s WWII Guide to Creating Organizational Dysfunction Perfectly Describes Your Toxic Workplace.”
* Miguel Reynolds Brandao,
As we consult the chart, we might send commercial birthday greetings to Johan van der Veeken; he was born on this date in 1549. A shipowner, merchant, and banker, van der Veeken was a founding director of the VOC– Vereenigde Oost-Indische Compagnie, or the Dutch East India Company as we know it– the first multi-national corporation, and the first company to issue stock.
“Is it just a coincidence that as the portion of our income spent on food has declined, spending on health care has soared?”*…
It seems a country’s spending reflects its national stereotypes, according to household expenditure data compiled by Eurostat: Russians splash 8% of their money on booze and cigarettes—far more than most rich countries—while fun-loving Australians spend a tenth of theirs on recreation, and bookish South Koreans splurge more than most on education. Some of the differences are accounted for by economics. Richer places like America and Australia, where household expenditure is around $30,000 per person, will tend to spend a smaller share of their costs on food than Mexico and Russia, where average spending is around $6,000. And politics plays a part too. Predominantly private healthcare in America eats up over a fifth of each household’s budget, whereas the European Union, where public healthcare is common, only spends 4% on it. In Russia, government-subsidized housing and heating make living cheaper, and this means money is left over for the finer things in life.
Via The Economist‘s How Countries Spend Their Money (where oner can find a larger version of the chart above)
* “Is it just a coincidence that as the portion of our income spent on food has declined, spending on health care has soared? In 1960 Americans spent 17.5 percent of their income on food and 5.2 percent of national income on health care. Since then, those numbers have flipped: Spending on food has fallen to 9.9 percent, while spending on heath care has climbed to 16 percent [now, almost 21%] of national income. I have to think that by spending a little more on healthier food we could reduce the amount we have to spend on heath care.”
― Michael Pollan,
As we brood over our budgets, we might recall that it was on this date in 1920 that the biggest incidence of domestic terrorism in U.S. history to that date occurred: the Wall Street bombing. At noon, a horse-drawn wagon passed by lunchtime crowds on Wall Street and stopped across the street from the headquarters of the J.P. Morgan bank at 23 Wall Street, on the Financial District’s busiest corner. Inside the wagon, 100 pounds of dynamite with 500 pounds of heavy, cast-iron sash weights exploded in a timer-set detonation, sending the weights tearing through the air. 30 people were killed immediately, and another eight died later of wounds sustained in the blast. There were 143 seriously injured; the total number of injured was in the hundreds.
Though investigators and historians believe the bombing was carried out by Galleanists (an anarchist group responsible for a series of bombings the previous year), the attack– which was a part of postwar social unrest, labor struggles and anti-capitalist agitation in the U. S.– was never officially solved.
[A similarly silly-but-serious bonus: “An Interactive Guide to Ambiguous Grammar.”]
* alternately attributed to St. Augustine and to Francis Bacon
As we send birthday greetings to the father of the field of sociology and the discipline of Positivism, August Comte, we might recall that it was on this date in 1929 that bearish economist Roger Babson gave a speech in which he warned, “sooner or later, a crash is coming, and it may be terrific.” He had been delivering this message for two years, but for the first time, investors listened. The stock market took a severe dip (now known in economic history as “the Babson Break”). The next day, prices stabilized, but the equity collapse that we know as a trigger event for the Great Depression had begun.
In 1943, as American businesses tried to guess whether wartime relief from the Depression would translate into postwar prosperity, the Tension Envelope Corporation printed this chart for customers. The infographic folded into a pamphlet and could be displayed on the wall when opened. (The online archive of the Federal Reserve, FRASER, has digitized a PDF of the pamphlet, which you can view here.)
The infographic and the explanatory text below it tap data from several sources, including U.S. Treasury reports, the Department of Labor’s Bureau of Labor Statistics, the Survey of Current Business, and the Committee for Economic Development, a nonprofit founded in 1942 to help American business plan for the postwar future. Excerpted text from a Committee for Economic Development publication, “Business Planning Now for V Day,” can be found in the lower left-hand corner of the chart.
In an explanatory section on the federal debt—represented on the chart as a red line that climbs steeply upward beginning in 1941—the chart’s authors articulate a strong stance on what could be an alarming indicator: “The necessary cost of this war is not important. Victory is worth the price. Whatever the cost to the future citizens is, they will get their money’s worth in benefits derived.”…
From the redoubtable Rebecca Onion: “A Comprehensive 1943 Infographic of American Booms and Busts.”
* William Faulkner
As we reach for the Dramamine, we might recall that it was on this date in 1969 that Chemical Bank installed the first ATM in the U.S. at its branch in Rockville Centre, New York. In fact, as noted here before, the ATM was imagined (and an early version patented) in 1960 by Luther George Simjian; but a six-month trial of the stand-alone device in 1961 was a failure. A British version (developed by the banknote company Delarue and deployed by Barclays) debuted in 1967, but required the use of pre-acquired “cheques” for withdrawal. The Chemical ATM was the first of the breed that is now common: networked machines that communicate with the bank (and its account information) in real time.