So, what is it that brings the people out onto the streets in France? Other than the lack of a decent war to surrender in that is? The gilets jaunes are providing a backdrop for all to project their prejudices onto. Hey, why not, everyone likes pontificating.
It’s just that we do generally prefer there to be some supporting evidence behind such assertions. Something that Michael Spence doesn’t quite manage here:
How Inequality Undermines Economic Performance
Hmm, OK. Be interesting to see the argument.
Perhaps the most important lesson was that growth patterns that lack inclusiveness and fuel inequality generally fail. The reason for this failure is not strictly economic. Those who are adversely affected by the means of development, together with those who lack sufficient opportunities to reap its benefits, become increasingly frustrated. This fuels social polarization, which can lead to political instability, gridlock, or short-sighted decision-making, with serious long-term consequences for economic performance. There is no reason to believe that inclusiveness affects the sustainability of growth patterns only in developing countries, though the specific dynamics depend on a number of factors. For example, rising inequality is less likely to be politically and socially disruptive in a high-growth environment (think a 5-7% annual rate) than in a low- or no-growth environment, where the incomes and opportunities of a subset of the population are either stagnant or declining. The latter dynamic is now playing out in France, with the “Yellow Vest” protests of the last month.
The way to read this is that I, Michael Spence, think inequality a very bad thing therefore here’s some proof that inequality is a very bad thing.
Well, OK. Except, except. The gilets jaunes can only be powered by their indignation against rising inequality if inequality is actually rising. And France actually has, by international standards, a really pretty low level of income inequality. More, it’s not been rising particularly:
An absence of rising inequality does rather tell us that rising inequality isn’t the cause of the gilets jaunes, doesn’t it. And don’t you just hate it when one pesky fact brings an interesting theory tumbling down?