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Neoliberalism is making the world much more equal

Summary:
It's puzzling to me that so many progressives view the term 'neoliberalism' with disdain. A new article by Cardiff Garcia shows that the world is becoming much more equal. And that trend is being spurred by less between country inequality---within country inequality has actually risen slightly: It seems likely that much of the reduction in between country inequality is caused by market reforms in places like China, India, and the ASEAN group. Neoliberalism might just be the best thing that ever happened. PS. Commenter PaulS raised an interesting point after my previous post: And yet I think the [free market] approach would fail in the USA. A privatized NYC subway would act like the cable

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It's puzzling to me that so many progressives view the term 'neoliberalism' with disdain. A new article by Cardiff Garcia shows that the world is becoming much more equal. And that trend is being spurred by less between country inequality---within country inequality has actually risen slightly:

Neoliberalism is making the world much more equal
It seems likely that much of the reduction in between country inequality is caused by market reforms in places like China, India, and the ASEAN group.

Neoliberalism might just be the best thing that ever happened.

PS. Commenter PaulS raised an interesting point after my previous post:

And yet I think the [free market] approach would fail in the USA. A privatized NYC subway would act like the cable companies, which are monopolies and awful. US airlines are semi-competitive and manage to be awful too.

I think there is a tendency for people to look at an actual market outcome in the US and assume the results reflect market forces. Airlines are not a free market, indeed the US government bans foreign airlines from serving America routes, even though they often provide much better service. When US car companies started facing serious competition from foreign automakers, they dramatically improved the quality of US cars. Privatizing airports, air traffic control and airport security would also improve the flying experience.

I would add that my cable TV company in Boston (which faced competition from other cable companies), provided about 10 times better service than the NYC subway.



Scott Sumner

Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better “induce the correct level of business investment”. In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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