Advertisement

Globalization and Redistribution: Feasible Egalitarianism in a Competitive World

  • Samuel Bowles
Part of the International Economic Association Series book series (IEA)

Abstract

For well-known reasons, a reduction of impediments to international flows of goods, and factors of production — commonly termed globalization — may enhance allocative efficiency both globally and within national economies, and the associated competition among nation states may contribute to governmental accountability.1 However, globalization is also thought to raise the economic costs of programmes by the nation state to redistribute income to the poor and to provide economic security for their populations. Among the reasons is the fact that the more internationally mobile factors of production — capital and professional labour — tend to be owned by the rich, and a nation-specific tax on a mobile factor induces national output-reducing relocations of these factors. Similar reasoning demonstrates the high cost of attempting to alter the relative prices of factors of production, for example, by raising the wage relative to the return to capital through trade union bargaining. Even Pareto-improving insurance-based policies are compromised, as cross-border mobility of citizens allow the lucky to escape the tax costs of supporting the unlucky, thereby reintroducing the problem of adverse selection plaguing private insurance and which public insurance was thought to avoid.

Keywords

Wage Rate Capital Stock Real Wage Income Stream Profit Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Anand, S. and R. Kanbur (1991) ‘Public Policy and Basic Needs Provision: Intervention and Achievement in Sri Lanka’, in J. Drèze and A. Sen (eds), The Political Economy of Hunger: Vol III: Endemic Hunger (Oxford: Clarendon Press), pp. 59–92.CrossRefGoogle Scholar
  2. Ardington, E. and F. Lund (1995) ‘Pensions and Development: Social Security as Complementary to Programmes of Reconstruction and Development’, Southern Africa, vol. 12, no. 4, pp. 557–77.CrossRefGoogle Scholar
  3. Atkinson, A. (1999) ‘Equity Issues in a Globalizing World: The Experience of the OECD Countries’, IMF, mimeo.Google Scholar
  4. Banerjee, A. and M. Ghatak (1996) ‘Empowerment and Efficiency: The Economics of Tenancy Reform’, MIT, mimeo.Google Scholar
  5. Bardhan, P., S. Bowles and H. Gintis (2000) ‘Wealth Inequality, Credit Constraints, and Economic Performance’, in A. Atkinson and F. Bourguignon (eds), Handbook of Income Distribution (Dordrecht: North-Holland).Google Scholar
  6. Bashkar, V. and A. Glyn (1995), in G. Epstein and H. Gintis (eds), Macroeconomic Policy after the Conservative Era: Research on Investment Savings and Finance (Cambridge: Cambridge University Press).Google Scholar
  7. Besley, T. and R. Burgess (1998) ‘Land Reform, Poverty Reduction and Growth: Evidence From India’, The Suntory Centre, mimeo.Google Scholar
  8. Birdsall, N. and Londoño, J. (1997) ‘Asset Inequality Matters: An Assessment of the World Bank’s Approach to Poverty Reduction’, American Economic Review, vol. 87, no. 2, pp. 32–7.Google Scholar
  9. Blanchflower, D. G. and A. J. Oswald (1994) The Wage Curve (Cambridge, MA: MIT Press).Google Scholar
  10. Bowles, S. (1985) ‘The Production Process in a Competitive Economy: Walrasian, Marxian, and Neo-Hobbesian Models’, American Economic Review, vol. 76, no. 1, pp. 16–36.Google Scholar
  11. Bowles, S. (1991) ‘The Reserve Army Effect on Wages in a Labour Discipline Model: US, 1954–1987’, in T. Mizoguchi (ed.). Making Economies More Efficient and More Equitable: Factors Determining Income Distribution (Oxford: Oxford University Press), pp. 385–406.Google Scholar
  12. Bowles, S. (1992) ‘Is Income Security Possible in a Capitalist Economy? An Agency Theoretic Analysis of an Unconditional Income Grant’, European Journal of Political Economy, vol. 8, pp. 557–78.CrossRefGoogle Scholar
  13. Bowles, S. and R. Boyer (1990a) ‘A Wage-led Employment Regime: Income Distribution, Labour Discipline, and Aggregate Demand in Welfare Capitalism’, in S. Marglin and J. Schor (eds). The Golden Age of Capitalism. Reinterpreting the Postwar Experience (Oxford: Clarendon Press), pp. 187–217.Google Scholar
  14. Bowles, S. and R. Boyer (1990b) ‘Labour Market Flexibility and Decentralization as Barriers to High Employment? Notes on Employer Collusion, Centralized Wage Bargaining and Aggregate Employment’, in R. Brunetta and C. Dell’Aringa (eds). Labour Relations and Economic Performance (London: Macmillan-now Palgrave), pp. 325–52.CrossRefGoogle Scholar
  15. Bowles, S. and R. Boyer (1995) ‘Wages, Aggregate Demand and Employment in an Open Economy: A Theoretical and Empirical Investigation’, in G. E. and H. Gintis (eds), Macroeconomic Policy after the Conservative Era: Research on Investment, Savings and Finance (Cambridge: Cambridge University Press), pp. 143–71.Google Scholar
  16. Bowles, S. and H. Gintis (1999a) Recasting Egalitarianism: New Rules for Markets, States and Communities (London: Verso).Google Scholar
  17. Bowles, S. and H. Gintis (1999b) ‘Risk Aversion, Insurance, and the Efficiency Equality Tradeoff’, University of Massachusetts, mimeo.Google Scholar
  18. Bowles, S., D. M. Gordon and T. E. Weisskopf (1989) ‘Business Ascendancy and Economic Impasse’, Journal of Economic Perspectives, vol. 3, no. 1, pp. 107–34.CrossRefGoogle Scholar
  19. Catinat, M. et al. (1988) ‘Investment Behaviour in Europe: A Comparative Analysis’, Recherches Economiques de Louvain, vol. 4, no. 3, pp. 277–324.Google Scholar
  20. Clark, R. (1979) ‘Investment in the 1970s: Theory, Performance, and Prediction’, Brookings Papers on Economic Activity, vol. 1 pp. 73–113.CrossRefGoogle Scholar
  21. Engerman, S. L. and K. L. Sokoloff (1997) ‘Factor Endowments, Institutions, and Differential Paths of Growth Among New World Economies: A View from Economic Historians of the United States’, in S. Haber (ed.), How Latin America Fell Behind (Palo Alto: Stanford University Press), pp. 260–304.Google Scholar
  22. Engerman, S., K. Sokoloff and E. Mariscal (1998) ‘Schooling, Suffrage, and the Persistence of Inequality in the Americas, 1800–1945’, mimeo.Google Scholar
  23. Epstein, G. (1996) ‘International Profit Rate Equalization and Investment: An Empirical Analysis of Integration, Instability and Enforcement’, in G. Epstein and H. Gintis (eds), Macroeconomic Policy After the Conservative Era (Cambridge: Cambridge University Press), pp. 308–31.Google Scholar
  24. Feldstein, M. (1982) ‘Inflation, Tax Rules, and Investment: Some Econometric Evidence’, Econometrica, vol. 50, pp. 825–62.CrossRefGoogle Scholar
  25. Franzini, M. and L. Milone (1999) ‘I dilemmi del welfare state nell’epoca della globalizzazione’, in N. Acocella (ed.), Globalizzazione e stato sociale (Bologna: II Mulino).Google Scholar
  26. Freeman, R. and J. Medoff (1984) What Do Unions Do? (New York: Basic Books).Google Scholar
  27. Galor, O. and J. Zeira (1993) ‘Income Distribution and Macroeconomics’, Review of Economic Studies, vol. 60, no. 1, pp. 35–52.CrossRefGoogle Scholar
  28. Glyn, A., A. Hughes, A. Lipietz and A. Singh (1990) ‘The Rise and Fall of the Golden Age’, in S. M. and J. B. Schor (eds), The Golden Age of Capitalism; Reinterpreting the Postwar Experience (Oxford: Clarendon Press), pp. 39–125.Google Scholar
  29. Glyn, A. and R. Sutcliffe (1999) ‘Still Underwhelmed: Indicators of Globalization and their Misinterpretation’, Review of Radical Political Economy, vol. 31, no. 1, pp. 111–32.CrossRefGoogle Scholar
  30. Gordon, D. (1994) ‘Bosses of Different Stripes: A Cross-National Perspective on Monitoring and Supervision’, American Economic Review, vol. 84, no. 2, pp. 375–9.Google Scholar
  31. Gordon, D. (1998) ‘The Global Economy: New Edifice or Crumbling Foundations?’, New Left Review, vol. 68, pp. 24–64.Google Scholar
  32. Gordon, D., S. Bowles and T. Weisskopf (1998) ‘Power, Profits and Investment: An Institutionalist Explanation of the Stagnation of US Net Investment After the Mid-1960’s’, in S. Bowles and T. Weisskopf (eds). Economics and Social Justice: Essays on Power, Labor and Institutional Change (Cheltenham: Edward Elgar), pp. 130–5.Google Scholar
  33. Heintz, J. and S. Bowles (1997) ‘Wages and Employment in the South African Economy’, University of Massachusetts, mimeo.Google Scholar
  34. Huber, E. and J. Stephens (1998) ‘Internationalization and the Social Democratic Model’, Comparative Political Studies, vol. 31, no. 3, pp. 353–97.CrossRefGoogle Scholar
  35. Isenman, P. (1980) ‘Basic Needs: The Case of Sri Lanka’, World Development, vol. 8, no. 3, pp. 237–58.CrossRefGoogle Scholar
  36. Koechlin, T. (1992) ‘The Determinants of the Location of USA Direct Foreign Investment’, International Review of Applied Economics, vol. 6, no. 2, pp. 203–16.CrossRefGoogle Scholar
  37. Kopcke, R. (1985) ‘The Determinants of Investment Spending’, New England Economic Review, vol., pp. 19–35.Google Scholar
  38. Lim, C. (1984) Economic Structuring in Singapore (Singapore: Federal Publications).Google Scholar
  39. Maddison, A. (1982) Phases of Capitalist Development (Oxford: Oxford University Press).Google Scholar
  40. Mesà-Lago, C. (1989) ‘Costa Rica: A Latecomer Turned Boomer’, in C. Mesà-Lago (ed.). Ascent to Bankruptcy: Financing Social Security in Latin America, (Pittsburgh: University of Pittsburgh Press), pp. 0–0.Google Scholar
  41. Meyer, J. (1987) ‘Two-Moment Decision Models and Expected Utility’, American Economic Review, vol. 77, no. 3, pp. 421–30.Google Scholar
  42. Milanovic, B. (1999) ‘True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone’, Washington, DC: World Bank, mimeo.CrossRefGoogle Scholar
  43. Moene, K. O. (1998) ‘Feasibility of Social Democracy’, University of Oslo Conference on Decentralised Development, Calcutta.Google Scholar
  44. Moene, K. O. and M. Wallerstein (1993) ‘The Decline of Social Democracy’, in K. G. Persson (ed.), The Economic Development of Denmark and Norway since 1879 (Cheltenham: Edward Elgar), pp. 385–403.Google Scholar
  45. Okun, A. (1975) Equality and Efficiency: The Big Trade-Off (Washington, DC: Brookings Institution Press).Google Scholar
  46. Pagano, U. (1991) ‘Property Rights, Asset Specificity, and the Division of Labour under Alternative Capitalist Relations’, Cambridge Journal of Economics, vol. 15, no. 3, pp. 315–42.Google Scholar
  47. Przeworski, A. M. E. Alvarez, J. A. Cheibub and F. Limongi (2000) Democracy and Development (Cambridge: Cambridge University Press).CrossRefGoogle Scholar
  48. Putzel, J. (nd) ‘The Politics of Agrarian Reform in South Korea’, London School of Economics, mimeo.Google Scholar
  49. Quah, D. (1996) ‘Twin Peaks: Growth and Convergence in Models of Distribution Dynamics’, Economic Journal, vol. 106, pp. 1045–55.CrossRefGoogle Scholar
  50. Ramachandran, V. K. (1996) ‘On Kerala’s Development Achievements’, in J. Drèze and A. Sen (eds), Indian Development: Selected Regional Perspectives (Oxford: Oxford University Press), pp. 205–356.Google Scholar
  51. Rosenberg, M. (1981) ‘Social Reform in Costa Rica: Social Security and the Presidency of Rafael Angel Calderon’, Hispanic American Historical Review, vol. 61, no. 2, pp. 278–96.CrossRefGoogle Scholar
  52. Saha, A., R. C. Shumway and H. Talpaz (1994) ‘Joint Estimation of Risk Preference Structure and Technology Using Expo-Power Utility’, American Journal of Agricultural Economics, vol. 76, no. 2, pp. 173–84.CrossRefGoogle Scholar
  53. Schultz, T. P. (1998) ‘Inequality in the Distribution of Personal Income in the World: How It Is Changing and Why’, Journal of Population Economics, vol. 11, pp. 307–44.CrossRefGoogle Scholar
  54. Sengupta, S. and H. Gazdar (1996) ‘Agrarian Politics and Rural Development in West Bengal’, in J. Drèze and A. Sen (eds), Indian Development: Selected Regional Perspectives, (Oxford: Oxford University Press), pp. 129–204.Google Scholar
  55. Shapiro, C. and J. Stiglitz (1984) ‘Unemployment as a Worker Discipline Device’, American Economic Review, vol. 74, no. 3, pp. 433–44.Google Scholar
  56. Shiller, R. J. (1993) Macro Markets: Creating Institutions for Managing Society’s Largest Economic Risks (Oxford: Clarendon Press).Google Scholar
  57. Sinn, H.-W. (1990) ‘Expected Utility, mu-sigma Preferences, and Linear Distribution Classes: A Further Result’, Journal of Risk and Uncertainty, vol. 3, pp. 277–81.CrossRefGoogle Scholar
  58. Slaughter, M. (1999) ‘International Trade and Labour-Demand Elasticities’ (Dartmouth College), NBER, mimeo.Google Scholar
  59. Summers, R. and A. Heston (1984) ‘Improved International Comparisons of Real Product and its Composition, 1950–1980’, Review of Income and Wealth, vol. 30, pp. 207–71.CrossRefGoogle Scholar
  60. Taylor, A. (1999) ‘International Capital Mobility in History’, NBER, mimeo.Google Scholar
  61. Verhoogen, E. (1999) ‘Trade Pressures and Wage Convergence’, University of Massachusetts, Amherst and the Brookings Institution, mimeo.Google Scholar
  62. Yager, J. (1980) Transforming Agriculture in Taiwan: The Experience of the Joint Commission on Rural Reconstruction (Ithaca and London: Cornell University Press).Google Scholar
  63. Yang, M. (1970) Socioeconomic Results of Land Reform in Taiwan (Honolulu: East-West Center Press).Google Scholar
  64. Yashar, D. J. (1995) ‘Civil War and Social Welfare: The Origins of Costa Rica’s Competitive Party System’, in S. Mainwaring and T. Scully (eds). Building Democratic Institutions: Party Systems in Latin America (Stanford: Stanford University Press), pp. 0–0.Google Scholar
  65. Zimmerman, L.J. (1962) ‘The Distribution of World Income, 1860–1960’, in E. De Vries (ed.). Essays in Unbalanced Growth: A Century of Disparity and Convergence, (The Hague: Mouton), pp. 28–47.Google Scholar

Copyright information

© International Economic Association 2002

Authors and Affiliations

  • Samuel Bowles
    • 1
  1. 1.University of MassachusettsUSA

Personalised recommendations