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Life is unfair.docx

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Political Science

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 inAsia had been labelled crony capitalism • Russia/ east Europe’s end of communism= income gaps • LatinAmerica- 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 behind • 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: -history matters -Slave labour -Wealth in natural resources • Poor’s 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 • Bad economic policy: -Policies that hamper economic growth are the most devastating outcome of all for the poor - When financed by unsustainable economic largesse, they bring the inflation or high interest rates that worsen inequality - Regulatory privileges, trade protection, and special access to cheap credit and foreign exchange- all bad economic policies-will inevitably increase the profits of a wealthy minority • Protectionism -Developing countries that have been open to trade have the most growth and reduces global inequality -international trade and open markets are less of a problem than technology that fa
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