Economics oopsie

In the declining west, large transfers of wealth towards the already rich over the last two decades

Two errors in only half a sentence.

The West is not \”declining\”. We are still enjoying that positive economic growth which the strange mixture of capitalism and free markets provide. Other places are growing faster, this is true, so that the relative position is declining: but then this is what we want anyway, isn\’t it? A reduction in global inequality?

The second error is that there have been no transfers of wealth towards the already rich. What has happened is that large parts of that economic growth have (and there are strong arguments to suggest that much of this is in fact an artefact of measurement, specifically not accounting for the different inflation rates between positional and normal goods) accrued to those already wealthy.

Wealth hasn\’t been moved or transfered, it\’s been created and distributed.

Professor Wang Xiaolu, deputy director of the China Reform Foundation, concluded that in 2008 China\’s hidden cash amounted to 10 trillion yuan, equivalent to 30% of China\’s GDP. If he is right, it means that the disposable income of China\’s consumers is some 90% higher than official estimates.

Oooh, no love, no. Cash savings are a stock, not to be confused with disposable income which is a flow.

The People\’s Republic has gone from being one of the world\’s most equal to one of the world\’s most unequal societies, with a Gini coefficient of 0.46, well above the internationally recognised warning line of 0.4.

Umm, where does this \”international warning\” come from? The UK\’s gini is over 0.5 (unadjusted for tax and benefits), that of Sweden 0.48. And really, you do seem to be getting perilously close to the line that the earlier rancid poverty but equality was better than the current leap for decent living standards unequally distributed.

Perhaps evidence that expertise in China and Chinese does not feed through into expertise about Chinese economics or the economics of China? Or, indeed, economics of any kind?

Update, link fixed as per comments

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