Would the Western World have been better off without Raeganomics?

Solidaire

Ad Honorem
Aug 2009
5,596
Athens, Greece
Woah. Ignore? I'm asking questions. You are "guessing." You know what's worse than ignoring? Claiming there are issues without a hint of solutions. And then leaving it to "specialists" is even worse. I don't prefer to abdicate my civic responsibilities to the "specialists." Unchecked bureaucracy leads to all kind of abuse. Call me skeptical. I've heard this song and dance before and seen attempts to 'correct' throughout history. See Venezuela.
What are you talking about? You are skeptical about what? That we have extreme inequality, or that it is harmful to the economy? You want me to measure inequality, or to tell you my personal opinion? I've showed you two organisations that are on the liberal side of economics, too liberal as a matter of fact. And they both agree that both issues are a yes, we do have extreme inequality, and it is harmful to the economy. What else do you need to be convinced?
 

Rodger

Ad Honorem
Jun 2014
6,171
US
What are you talking about? You are skeptical about what? That we have extreme inequality, or that it is harmful to the economy? You want me to measure inequality, or to tell you my personal opinion? I've showed you two organisations that are on the liberal side of economics, too liberal as a matter of fact. And they both agree that both issues are a yes, we do have extreme inequality, and it is harmful to the economy. What else do you need to be convinced?
I am skeptical that it can be properly corrected.
 
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GogLais

Ad Honorem
Sep 2013
5,461
Wirral
No one denies the economy was much better in the '80s than in the '70s. The question is, how much credit does Reagan deserve? How much did Reagan do himself and how much would have happened without him? The economy goes in cycles. It never stays bad for long. After 10 years or so of high inflation and unemployment, it was pretty much guaranteed to get better in the '80s regardless of who was president. No doubt Reagan helped a little, but I think he gets more credit than he deserves.
One can’t compare the two decades without taking the huge hike in oil prices in the 70s into account.
 

notgivenaway

Ad Honorem
Jun 2015
5,743
UK
Economics is as much trial and error as it is firm practice. It's not something like chemistry that can be conduct in controlled experiments, or psychology via interviews or case studies.

The liberal economics of the 1980s and onwards was in part a response to the recession of the 1970s. And the old Keynesian ways before then had become stuck.

So did we need it? Who knows? it was more about how the problems of the 1970s could be tackled.
 
Aug 2014
296
New York, USA
This is a history forum, so lets look at it from a historical perspective.

Liberal economics in the short amount of time of the last 20-30 years is responsible for lifting more people out of poverty than at any point in recorded history of the world.

For people yapping about inequality. I rather live in an extremely unequal country where I make $100k a year with the richest person having $1 trillion, than be a part of a tribe in Papua where everyone is equally living on effectively $1 a day and have no wealth but the stuff they carry around, or some kind of socialist "from each according to his ability, to each according to his needs" utopia where the wealth gets redistributed equally and everyone is dead broke. I frankly do not care how much money Bezos or Bill Gates have. I do not count other people's money. All I care about is how much I & my family have and my own welfare and the welfare of my loved ones.

My man from Greece. With all due respect, but maybe you should try fixing your own country than caring about "poor" people in the US. Where I live we have the worst income inequality in the country, the minimum wage is $32,000 per year, it is very easy to get a job since everyone is hiring, and on top of that you pretty much pay no income taxes on that, since you are considered dead broke making minimum wage, AND you qualify for all kinds of government benefits. Poverty is relative. If you do not own at least 2 cars and do not walk around in $300 sneakers, and you live in an apartment instead of a house or a condo, you are considered poor.
Heck, we even have affordable government-subsidized housing programs for households making "only" $138,000 per year. Here is one of those random fliers:
https://a806-housingconnect.nyc.gov/nyclottery/AdvertisementPdf/692.pdf
 
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Apr 2018
979
Upland, Sweden
There is this Stanford based ancient historian (specialist in numismatics) called Walter Scheidel who released a book two years ago essentially arguing that inequality seems to be constantly rising throughout history, and only decreases as a result of severe system shocks (warfare, revolution or the threat thereof, the plague).

"The Great Leveller - Inequality from the Stone Age until the 21st Century" . Has anyone read it? Is the guy convincing? I have free market reflexes, and haven't read it yet (see a line of causality there if you choose to).
---

Anyway, one aspect I think deserves some mention is this: economic inequality =/= corruption. In more regulated economies there tends to be less change in who sits at the top than in more liberal economies. What this could mean for example is that while wealth inequality is much higher in the US than in most of Western Europe I am not sure crony capitalism & "the state and the capital sitting in the same boat" (to quote a Swedish band from the 70s) is necessarily a bigger thing in the US than it is here...
 
Jan 2017
783
UK
There is this Stanford based ancient historian (specialist in numismatics) called Walter Scheidel who released a book two years ago essentially arguing that inequality seems to be constantly rising throughout history, and only decreases as a result of severe system shocks (warfare, revolution or the threat thereof, the plague).

"The Great Leveller - Inequality from the Stone Age until the 21st Century" . Has anyone read it? Is the guy convincing? I have free market reflexes, and haven't read it yet (see a line of causality there if you choose to).
---

Anyway, one aspect I think deserves some mention is this: economic inequality =/= corruption. In more regulated economies there tends to be less change in who sits at the top than in more liberal economies. What this could mean for example is that while wealth inequality is much higher in the US than in most of Western Europe I am not sure crony capitalism & "the state and the capital sitting in the same boat" (to quote a Swedish band from the 70s) is necessarily a bigger thing in the US than it is here...
Defining inequality isn't always easy for earlier times since documentation is sparse compared to the 20th century. Diseases and wars probably had a big effect on lowering inequality, though I found this graph in Branko Milanovic's book "Global Inequality" using land rent/wage ratio as a measure for inequality in Spain from 1326-1842. There's probably other factors coming into play relating to demographics, how the economy operates, new laws e.t.c. which might account for some of these smaller fluctuations, but I know sweet f.a. about Spanish history, and economics in general.



This website charts income inequality for 25 countries starting from 1900, here's Sweden:

Sweden – The Chartbook of Economic Inequality
 
Apr 2018
979
Upland, Sweden
Defining inequality isn't always easy for earlier times since documentation is sparse compared to the 20th century. Diseases and wars probably had a big effect on lowering inequality, though I found this graph in Branko Milanovic's book "Global Inequality" using land rent/wage ratio as a measure for inequality in Spain from 1326-1842. There's probably other factors coming into play relating to demographics, how the economy operates, new laws e.t.c. which might account for some of these smaller fluctuations, but I know sweet f.a. about Spanish history, and economics in general.



This website charts income inequality for 25 countries starting from 1900, here's Sweden:

Sweden – The Chartbook of Economic Inequality
Interesting graph (and graphs relating to Sweden). It seems to imply that rising inequality and wealth are correlated, which would some make sense. Maybe it would also be interesting to compare this with how much silver Spain sold around the world (that is really what my own knowledge of Spanish economic history comes down to).

I think I know a little bit about Economics but I probably know a lot less than I think I know.

And yeah - defining inequality before the modern era seems very difficult to do with precision. Maybe one thing you could do before the preindustrial era is look at the percentage of people who owned some land or form of property as an approximate, besides what Milanovic is doing here. While in almost all of Europe that was always the minority of the population, just how small that minority was seems to have been quite varied. In Sweden in the 1300s around half the population owned their own land, for example.

I'll add him to my list of people I should read!
 

macon

Ad Honorem
Aug 2015
4,074
Slovenia, EU
Would the world have been better off without the Reaganomics of the 80s, even at the cost of higher inflation? It seems that Reaganomics traded one problem, high single digit nflation and higher unemployment, for another problem of increasing inequality, would a lower level of income inequality due to Reagan free market economics have been a good tradeoff for chronic 10 percent inflation and 6 to 10ish percent unemployment?
As I understand it Reaganomics enabled a digital revolution with lowering of corporate taxes. Computers were on a same level for nearly 20 years but in eighties there was an explosion of technological development. And computers finished off the Eastern block.