A free download e-book based on the best selling Sprit Level is now available on the My Fair London web site. It's been produced in association with CLASS - the Centre for Labour and Social Studies. Get it free, here.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
This book is a good analysis of the unequal state that we have reached, and some of the causes and effects of this which make it well worth reading.
I only have one criticism of it. There is one statement that banks only “shuffle money around.”
The book should be edited here to state that banks create the money supply, and so the poor and middle classes cannot help but get into debt if they want a home or an education. The same criticism goes for Krugmans’ blind spot on debt – that it is caused by “keeping up with the Joneses.” I think not. With out debt, many would not have any where to live. The brighter ones would not go to University. Even if you are in the black, it is because your employer is in debt to pay you.
Steve Keen and Michael Hudson have criticised this, as Paul Krugman has stated that borrowers are impatient, and lenders are patient, and states that banks do not create money.
Krugman states “that isn’t right in any model I understand”. See link below.
Michael Hudson includes both his own and Steve Keens criticism here-
http://michael-hudson.com/2012/05/paul-krugmans-economic-blinders/
I do like this book, but if it wants to be totally correct, it needs to show that millions of unfortunate people are suffering inequality not just because of falling wages, but because they suffer debt peonage to banks who inflated house prices because the banks have the privilege to create money in a deregulated environment. Even if they rent, this will be inflated because the landlord has an inflated mortgage.
Council housing, rent caps, loan regulation and state created money would do more to relieve poverty than a pay increase. Although the latter is important too.
The information from the IMF in the book should be criticised, it states “The International Monetary Fund has published evidence that inequality led to the huge debts behind the 2008 bank crisis.” I would say that it was huge debts that led to inequality, due to banks inflating house prices, and getting students into debt instead of paying their taxes to pay for the education of the young.
Agreed
Good point