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POL101Y1 Chapter Notes -Crony Capitalism, International Inequality, Protectionism

Political Science
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Life is unfair- Birdsall FEB 24 READING*
Income of poor families in U.S declining
Income of rich people in U.S increasing
Crony capitalism: economy in which success in business depends on close relationships between
business people and government officials- high concentration of wealth in Asia had been labelled
crony capitalism
Russia/ east Europe’s end of communism= income gaps
Latin America- wealth and income gaps are the largest
Rich get richer, poor get poorer
Despite the increase of democracy and free markets, inequality is increasing
Spread of democracy has led to more visible income gaps
Technology plays large role in income gaps- makes situation worse
High education= economic success
-puts the poor at a disadvantage
Forces of change like capitalism or global integration increase inequality
In China, agriculture and other markets spur growth but large amounts of the population is left
It’s not likely that the poor will catch up with the rich
Inequality is nobody’s fault – can’t be fixed in this life ?
-history matters
-Slave labour
-Wealth in natural resources
Poors rational decisions:
-Predicable human behavior
-Rich and educated marry each other-same with poor and uneducated
-Rational differences=income inequality
-Poor have more children-need more help
Prosperity produces inequality
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