# Progressive Summary # Key Points In 2015, economics students staged a protest against the annual meeting of the American Economic Association in Boston. This was part of a global network of student dissent that involved 80 student groups in more than 30 countries. Economics is the only academic discipline that has inspired worldwide revolt amongst its own students. The ancient Greek philosopher Xenophon coined the term "economics". *Oikis* means household, and *nomis* means norms or rules. The combined term meant "household management". > Economics is the mother tongue of public policy, the language of public life and the mindset that shapes society. Both John Maynard Keynes and Friedrich Hayek, opposing economic ideologues, agreed that establishing a Nobel Prize for economists was a bad idea, as it gave them authority that was unwarranted. The world has not heeded their advice, as the language of economics has come to dominate public life. Even hospitals are referring to patients as "customers" and themselves as "service providers". ## Design to Distribute In the 1890s, Vilfredo Pareto studied income and tax records from England, Germany, Paris and Italy, and found a curious pattern. 80 percent of national income was in the hands of 20 percent of the population. This was the genesis of the famous Pareto 80-20 rule (which says that 80 percent of consequences come from 20% of causes). He concluded that this social pyramid was a fixed fact of human nature, and that attempts at redistribution were pointless. He said that the only way to help the worse off was to expand the economy. In 1955, Simon Kuznets examined data from the US, Germany and the UK, and found that in all 3 countries, inequality had been falling since the 1920s. He reasoned that inequality first had to rise before it fell. It was an inevitable stage on the path towards development. The founding theorist of development economics, W. Arthur Lewis, claimed that "development must be inegalitarian". In the 1970s, both Kuznets and Lewis won the Nobel Prize in economics, and the World Bank treated the Kuznet Curve as an economic law. It was only in the 1990s that there was sufficient data to test the curve. The result was inconclusive. There was no fixed pattern. The drop in inequality that Kuznets found was probably due to the impacts of the Great Depression and two world wars. From the 1960s to 1990 gave us the East Asian Miracle - where countries like Japan, South Korea, Indonesia and Malaysia saw rapid economic growth with falling inequality. In 2014, Thomas Piketty showed how the rate of return on capital grew faster than the economy, so that wealth became more and more concentrated in fewer hands. In 2009, epidemiologists Richard Wilkinson and Kate Pickett published a book called *The Spirit Level*, in which they wrote about the pernicious effects of inequality. More unequal countries tend to have more teenage pregnancy, mental illness, drug abuse, obesity, prisoners, school dropouts, lower life expectancy, lower status for women, and lower levels of trust. Inequality also leads to ecological degradation, because it fuels status competition and conspicuous consumption, as everyone tries to keep up with the Joneses. We can design economies that distribute and diversify wealth. # Comments Love the quote from poet Taylor Mali: "Changing your mind is the best ways of finding out whether or not you still have one." # Quotes ![[Reference Notes/Highlights/Books/Doughnut Economics]]