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[...] Share buybacks used to be less than 5 per cent of US corporate profits for decades until the early 1980s, but have kept rising since then and reached an epic proportion of 90 per cent in 2007 and an absurd 280 per cent in 2008. [...]
mostly likely explanation: corporations are taking on debt in order to do share buybacks
The wage gaps between rich and poor countries exist not mainly because of differences in individual productivity but mainly because of immigration control. If there were free migration, most workers in rich countries could be, and would be, replaced by workers from poor countries. In other words, wages are largely politically determined. The other side of the coin is that poor countries are poor not because of their poor people, many of whom can out-compete their counterparts in rich countries, but because of their rich people, most of whom cannot do the same. This does not, however, mean that the rich in the rich countries can pat their own backs for their individual brilliance. Their high productivities are possible only because of the historically inherited collective institutions on which they stand. We should reject the myth that we all get paid according to our individual worth, if we are to build a truly just society.
it's true, but he could go deeper into what it means for some countries to be rich or poor if it has nothing to do with individual productivity
While they complain about minimum wage legislation, regulations on working hours, and various 'artificial' entry barriers into the labour market imposed by trade unions, few economists even mention immigration control as one of those nasty regulations hampering the workings of the free labour market. [...]
[...] I am not arguing that immigration control should be abolished [...]
Countries have the right to decide how many immigrants they accept and in which parts of the labour market. All societies have limited capabilities to absorb immigrants [...] Too rapid an inflow of immigrants will not only lead to a sudden increase in competition for jobs but also stretch the physical and social infrastructures, such as housing and healthcare, and create tensions with the resident population. As important, if not as easily quantifiable, is the issue of national identity. It is a myth--a necessary myth, but a myth nonetheless--that nations have immutable national identities that cannot be, and should not be, changed. However, if there are too many immigrants coming in at the same time, the receiving society will have problems creating a new national identity, without which it may find it difficult to maintain social cohesion. This means that the speed and the scale of immigration need to be controlled.
other points: investor visas that contribute to capital drain from poor countries; highly skilled people from poorer countries getting visas more easily which results in brain drain & prevents them from contributing more to their own country
[...] the washing machine and other household appliances, which, by vastly reducing the amount of work needed for household chores, allowed women to enter the labour market and virtually abolished professons with domestic service [...]
i don't necessarily agree with the comparison (I think it's dumb to compare something like the Internet with household appliances--they're just different in nature) but it's a good point about the scale of demographic change in the labour market afforded by allowing women to enter the workforce
Even more worryingly, the fascination with the internet by people in rich countries has moved the international community to worry about the 'digital divide' between the rich countries and the poor countries. This has led companies, charitable foundations and individuals to donate money to developing countries to buy computer equipment and internet facilities. The question, however, is whether this is what the developing countries need the most. Perhaps giving money for those less fashionable things such as digging wells, extending electricity grids and making more affordable washing machines would have improved people's lives more than giving every child a laptop computer or setting up internet centres in rural villages. [...]
The free-market policy package, often known as the neo-liberal policy package, emphasizes lower inflation, greater capital mobility and greater job insecurity (euphemistically called greater labour market flexibility), essentially because it is mainly geared towards the interests of the holders of financial assets. Inflation control is emphasized because many financial assets have nominally fixed rates of return, so inflation reduces their real returns. Greater capital mobility is promoted because the main souce of the ability for the holders of financial assets to reap higher returns than the holders of other (physical and human) assets is their ability to move around their assets more quickly (see Thing 22). Greater labour market flexibility is demanded because, from the point of view of financial investors, making hiring and firing of workers easier allows companies to be restructured more quickly, which means that they can be sold and bought more readily with better short-term balance sheets, bringing higher financial returns (see Thing 2).
[...] Britain adopted free trade only in the 1860s, when its industrial dominance was absolute. In the same way in which the US was the most protectionist country in the world during most of its phase of ascendancy (from the 1830s to the 1940s), Britain was one of the world's most protectionist countries during much of its own economic rise (from the 1720s to the 1850s).
Virtually all of today's rich countries used protectionism and subsidies to promote their infant industries. [...]
[...]
[...] For the same reason why we send our children to school rather than making them compete with adults in the labour market, deveoping countries need to protect and nurture their producers before they acquire the capabilities to compete in the world market unassisted. [...]
Then why are the relative prices of manufactured goods falling? It is because manufacturing industries tend to have faster productivity growth than services. As the output of the manufcaturing sector increases faster than the output of the service sector, the prices of the manufactured goods relative to those of services fall. In manufacturing, where mechanization and the use of chemical processes are much easier, it is easier to raise productivity than in services. In contrast, by their very nature, many service activities are inherently impervious to productivity increase without diluting the quality of the product.
the reason we think we're in a post-industrial society
I think this is also related to the Baumol effect?
[...] We don't see any Swiss manufactured products around because the country is small (around 7 million people), which makes the total amount of Swiss manufactured goods rather small, and because its producers specialize in producer goods, such as machinery and industrial chemicals, rather than consumer goods that are more visible. But in per capita terms, Switzerland has the highest industrial output in the world (it could come second after Japan, depending on the year and the data you look at). [...]
about how Switzerland is actually one of the most industrialized economies in the world
Since the late 1970s (starting with Senegal in 1979), Sub-Saharan African countries were forced to adopt free-market, free-trade policies through the conditions imposed by the so-called Structural Adjustment (SAPs) of the World Bank and the IMF (and the rich countries that ultimate control them). [...] By suddenly exposing immature producers to international competition, these policies led to the collapse of what little industrial sectors these countries had managed to build up during the 1960s and 1970s. Thus, having been forced back into relying on exports of primary commodities, such as cocoa, coffee and copper, African countries have continued to suffer from the wild price fluctuations and stagnant production technologies that characterize most such commodities. The result was often a collapse of prices in those commodities due to a large increase in their supplies, which sometimes meant that these countries were exporting more in quantity but earning less in revenue. The pressure on governments to balance their budgets led to cuts in expenditures whose impacts are slow to show, such as infrastructure. Over time, however, the deteriorating quality of infrastructure disadvantaged African producers even more, making their 'geographical disadvantages' loom even larger.
as a result of these policies: stagnation (of course)
today's equivalent of SAPs are "Poverty Reduction Strategy Papers"