Search the archive.

Central to the idea of the American Dream lies an assumption that we all have an equal opportunity to generate the kind of wealth that brings meaning to the words “life, liberty and the pursuit of happiness,” boldly penned in the Declaration of Independence. The American Dream portends that with hard work, a person can own a home, start a business, and grow a nest egg for generations to draw upon. This belief, however, has been defied repeatedly by the United States government’s own decrees that denied wealth-building opportunities to Black Americans.

Today, the average white family has roughly  the amount of wealth as the average Black family. White college graduates have over  more wealth than Black college graduates. Making the American Dream an equitable reality demands the same U.S. government that denied wealth to Blacks restore that deferred wealth through reparations to their descendants in the form of individual cash payments in the amount that will close the Black-white racial wealth divide. Additionally, reparations should come in the form of wealth-building opportunities that address racial disparities in education, housing, and business ownership.

For decades, the rich and powerful have taken advantage of the United States economic system, yielding extreme concentration of wealth at the very top and producing off-kilter, dysfunctional economic outcomes. Since the 1970s, the top 0.1 percent of US households have dramatically increased their wealth share from 7 to 20 percent, while the bottom 90 percent have seen their wealth share  to 25 percent.

One of the most effective ways to rectify these economic distortions and inject fairness into the US tax code: a wealth tax.

Though most people naturally dislike inequality, it’s often argued that raising taxes on the rich will do more harm than good by damaging incentives and investment, thereby slowing economic growth and ultimately hurting us all. “Given five fat sheep and ninety-five thin, how [to] induce the ninety-five to resign to the five the richest pasture and shadiest corners?” the famous British philosopher R.H. Tawney once asked. He continued: “By convincing them, obviously, that, if they do not, they will die of rot, be eaten by wolves, and be deprived in the meantime of such pasture as they have. Nor, indeed, hitherto has it been difficult to convince them, for there is nothing which frightens thin sheep like the fear of being thinner.” But is it really true that high taxes — even very high ones — are detrimental to societal well-being? The last few years have witnessed an explosion of new evidence from economists, sociologists, political scientists and ecologists that suggests they’re not. Exaggerated concerns It’s accurate that high taxes on the wealthy bring real risks. But in general, the downsides are highly overblown. For instance, a common worry is that rich people will respond to high taxes by working less. But there’s essentially zero empirical support for this claim. In fact, there is now close to consensus among researchers that while the rich do frequently try to avoid taxes, they don’t do so by working less. The most serious potential cost of high taxes is the reduction of private investment. This is definitely possible. But the key point to keep in mind is that such a reduction is only half the picture. It’s wrong to think of taxes as simply reducing investment, because states do not simply collect taxes — they also spend them. Therefore it’s more accurate to regard taxes not as reducing investment but as rearranging it — from the private sector to the public. Whether this is a good or bad thing depends entirely on the details. In many cases, levying high taxes on the rich will mean money is no longer invested in foreign stock markets or spent on unproductive things like private jets and multiple mansions, but is rather spent on productivity-enhancing entities like schools, hospitals, roads, public research grants and so on. Indeed, critical research shows that, all things considered, high inequality actually tends to reduce an economy’s overall growth rate. The most sensible and cautious conclusion is that high taxes — very high taxes, in particular — could somewhat reduce economic growth, but these costs are likely to be only mild or moderate. What about the other side of the ledger? What are the social and economic benefits from high taxes and reduced inequality? In my book Against Inequality: The Practical and Ethical Case for Abolishing the Superrich, I note that five stand out: 1. The environment It’s well-known that the rich emit far more carbon than the rest of us. The wealthiest 20 people in the world emit 8,000 times more carbon than the poorest billion people on Earth combined. So imposing high taxes on the rich would be doubly effective from an environmental perspective. It would directly reduce the copious emissions of the rich. And it would provide the necessary resources to build the new low-carbon infrastructure — including public transit, green energy grids, etc. — that we desperately need. That would indirectly help the rest of us reduce our emissions too. 2. Our democracy The evidence is overwhelming that inequality erodes democracy. For instance, American scholars Martin Gilens and Benjamin Page examined 1,779 public policy debates between 1981 and 2002 to see whose voices actually mattered in deciding important issues. They found that: “The majority does not rule — at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites or with organized interests, they generally lose.” Such evidence demonstrates that significant inequality can actually break a democracy, transforming it into oligarchy, as has arguably already transpired in the United States. 3. Opportunity for all Inequality makes a mockery of the cherished aspiration of equal opportunity. To take one particularly egregious example, the poorest residents of Chicago today face a life expectancy 30 years shorter than their richer neighbours down the street. High redistributive taxes could reverse this most brutal of disparities. We also know that countries with more equality tend to have greater social mobility too. Richard Wilkinson, the famous British epidemiologist and inequalities scholar, likes to quip that if Americans want to live the American dream and not just dream it, they should move to high-tax Denmark. 4. Reduced xenophobia and racism Though right-wing populism has many complex causes, research clearly demonstrates that one of its main drivers is economic insecurity. That’s likely because insecurity increases fear that one’s already precarious position will be worsened by competition from “immigrants” and “others.” The evidence shows that right-wing populism can be effectively reduced by enhancing economic security — for instance by taxing the rich to fund free public services — a stronger safety net and perhaps even a guaranteed basic income. As neo-Nazis once again march in the streets, hate crimes rise, far-right political parties receive more public support than any time since the 1930s, the benefits of reducing such terrifying threats are hard to overstate. 5. Reduced social friction Reducing inequality also builds community health and cohesion. It encourages greater levels of agreeableness and tolerance, better mental health and reduces crime. All in all, the costs of high taxes and low inequality are likely to be only moderate. But the benefits are truly enormous — a different order of magnitude entirely.

The term "Green New Deal" was first used by Pulitzer Prize-winner Thomas Friedman in January 2007. At that point, America experienced its hottest year on record (although there have been five hotter since). Friedman recognized the easy solution to climate change politicians hoped for wasn't possible. It was going to take money, effort, and upsetting an industry that is always generous with campaign contributions.

Transitioning away from fossil fuels, he argued in a New York Times column, would require the government to raise prices on them, introduce higher energy standards, and undertake a massive industrial project to scale up green technology.

A wealth tax on the fortunes of the world’s richest people would raise trillions of dollars that could be spent on helping poorer countries shift their economies to a low-carbon footing, and on “loss and damage”, the rescue and rehabilitation of countries stricken by climate disaster. A 2% tax on extreme wealth would yield about $2.5tn a year, by recent estimates. The economists, including the prominent degrowth advocate Jason Hickel, have written a letter to world leaders before a global summit on finance this week. They are calling for a tax of 1.5% for 1.5C to help ensure the world limits global temperature rises to 1.5C above pre-industrial levels. The world’s wealthiest people are responsible for an outsize proportion of global greenhouse gas emissions, with the richest 1% responsible for double the carbon emissions of the world’s poorest half, according to Oxfam, but there are few constraints on them. Recent research suggests if the combined emissions of wealthy countries was counted against the destruction that the climate crisis is wreaking in poorer countries, the rich would owe the poor $6tn a year in “reparations” for the damage caused. Mark Paul, of Rutgers University, and a signatory of the letter, which was spearheaded by the campaigning group Oil Change International, said rich countries were not facing up to their responsibilities. “Global north leaders saying they can’t afford to address global crises is the oldest excuse in the book, and simply put, a lie. What’s truly unaffordable is the status quo. The truth is there is no shortage of public money that can be dedicated to the cause, only a lack of political will – but that must change.” In the letter, the economists also call for an end to harmful subsidies of fossil fuels, and the forgiveness of debts for some of the poorest countries. Alex Lenferna, of Nelson Mandela University and the Climate Justice Coalition, one of the signatories of the letter, said: “Countries in the global south are drowning in debt, which is driving austerity and undermining our ability to respond to the climate crisis. “We need much more public money to drive a truly just transition. The global north must pay their climate debt, and not use climate finance as a wolf in sheep’s clothing that advances their interests.” Richard Heede, of the Climate Accountability Institute, said fossil fuel companies must pay for the damage they have caused. “The wealthy fossil fuel companies that have acted in concert to delay action and perpetuate the carbon economy should also contribute substantially to an atmospheric trust to aid the nations and peoples who have contributed little to the climate emergency.” About

While there has been much research on the effect of valuable natural resource extraction on a state’s domestic development (e.g., the “resource curse”), Wilson Center Fellow Jeff Colgan focuses on how natural resource extraction affects foreign policy. In 'Petro-Aggression: When Oil Causes War,' Colgan finds that “petrostates” – countries where revenue from oil exports exceeds 10 percent of GDP – are twice as likely to engage in inter-state conflict than non-petrostates.

“America has the unfortunate habit of getting into war with oil-exporting states,” said Colgan. Understanding the dynamics of petrostates’ aggressive behavior is therefore a vital security interest.

There’s a direct relationship between fossil fuels and the Russian war machine. Rosneft, one of Russia’s main petroleum companies, is reported to be one of the main suppliers of fuel to the Russian army. Rosneft also supplies petroleum to companies like BP. So every time Russian oil or gas are bought it’s not just contributing funds to the war chest, it may be keeping military machinery running. Rosneft and subsidiary company Rosneft-Aero and Transneft reportedly delivered fuel to the Russian Army before and during the invasion. [1] 

To stop this war we need a global divestment from, and an embargo on, Russian fossil fuels as soon as possible, as well as urgent delivery of humanitarian aid to those in need.

While energy is essential to modern society, most primary sources are unsustainable. The current fuel mix is associated with a multitude of environmental impacts, including global climate change, acid rain, freshwater consumption, hazardous air pollution, and radioactive waste. Renewable energy has the potential to meet demand with a much smaller environmental footprint and can help to alleviate other pressing problems, such as energy security, by contributing to a distributed and diversified energy infrastructure. About 79% of the nation’s energy comes from fossil fuels, 8.4% from nuclear, and 12.5% from renewable sources. In 2019, renewables surpassed coal in the amount of energy provided to the U.S. and continued this trend in 2021. Wind and solar are the fastest growing renewable sources, but contribute just 5% of total energy used in the U.S.

Paul 22, Abela,. [Writer and systems thinker | Place a lens on the social, economic and political causes of the climate crisis ] "Replacing Income Tax With a Pollution Tax Can Trigger Social Transformation." Medium, 14 July 2022, . //PA

Earning income is good for you as it gives you money in your pocket, it’s good for society (because the job or work you do must be of social value), and it’s good for the economy, as that money in your pocket can be spent on goods and services. But before you earn a salary, the government takes a large wedge of it in income tax. Income tax punishes a social good. Meanwhile, the impacts of fossil fuels (for example), which release greenhouse gas emissions that cause the climate crisis, go unpunished. To make matters worse, governments subsidise the fossil fuel industry (a staggering $5.9 trillion in 2020) partly through the taxes collected from your income. So, not only do we tax a social good, we then use the proceeds to support an industry that is destroying the climate. The current state of affairs makes no sense, but income tax goes unquestioned because it works just fine for the wealthy, who manipulate the rules of the game to make sure they pay less tax. For decades, the social benefits of trickle-down economics have been lionised by right-wing governments. The idea is that taxing the rich less is good for society because they then invest in businesses and the economy, which helps stimulate economic growth. The benefits of more economic growth trickle through society, helping to increase incomes as it does. The reality is that trickle-down economics has the exact opposite effect. Funnily enough, if you tax the rich less, they get richer. It’s no coincidence that since this argument was made (in the early 1980s), inequality has increased in Europe and the US. That the tax burden revolves around income is also great for the fossil fuel industry and many others with destructive environmental impacts. They like it just how it is, with taxes being used to support them in keeping prices low. Tax havens exacerbate inequalities further by allowing corporations and the elite to syphon money into hidden accounts so that they pay no tax at all. The Pandora papers were the biggest ever leak exposing the financial secrets of the rich and famous. From politicians to royal families to celebrities, the richest take advantage of this secret financial underworld to hoard money offshore to avoid paying taxes. A recent IMF report on the financial consequences of tax havens estimates up to $36 trillion is held offshore by individuals. That’s 7% of all human wealth. Tax losses from global individual income are estimated at around $200 billion a year. Corporations are also in on the act. American Fortune 500 companies held an estimated $2.6 trillion offshore in 2017. Collectively, tax havens cost governments between $500 billion and $600 billion a year in lost corporate tax revenue. That colossal sum which gathers dust in secretive accounts could finance education programmes, social welfare, health care, or the countless other ways governments support a functioning society and help distribute wealth to those who need it most. What’s clear is that the current tax system is flawed on a number of levels, radical reform of the tax system could trigger profound changes. Let’s imagine we stopped taxing income for low and medium earners. Instead, we embedded the environmental impacts of products and services as a tax within prices. Let’s call it a ‘pollution’ tax. The amount of tax paid to purchase or product or service correlates to its environmental impacts. The greater the impact, the higher percentage of tax paid, the lower the impact the lower the tax paid. This type of tax system would punish people for purchasing products with high impacts. Some people will be willing to pay a premium for products with higher prices; eating meat is a prime example. But, it will create a disincentive for people to buy products and services with high environmental impacts, which is precisely what’s needed to reduce pressure on the environment..

The United States' annual per capita beef consumption climbed by 18%, from 50 pounds in 2014 to 59 in 2022. In the last ten years, Americans have eaten more meat than ever. According to JerkyBrands.com research, this includes processed meats like beef jerky and other snack meats. From about $3.5 billion in 2019 to an estimated $4.9 billion in 2022, meat snack sales have increased by a remarkable 40% over the past four years. Beef also accounted for around 53.5% of the sales in the fresh meat department, with Americans spending over $11 on beef each time they go grocery shopping. In addition, the average annual expenditure on meat products in the United States is $9.97. RELATED NEWS: - Ambitious, balanced and green: EU and New Zealand sign free trade agreement RELATED NEWS: - Ambitious, balanced and green: EU and New Zealand sign free trade agreement close volume_off volume_up Next Stay Auto (225p) 225p 360p Subtitles Off RELATED NEWS: - Ambitious, balanced and green: EU and New Zealand sign free trade agreement The EU is New Zealand's third-largest trading partner, exporting wine, fruit and meat to Europe. Ambitious, balanced and green: EU and New Zealand sign free trade agreement General news. The United States is not only a major market for meat but also a major producer. The same study revealed that the leading producers of beef and veal are the United States and Brazil, with the United States expected to produce around 12.1 million metric tons in 2023.

This paper introduces a special feature on biodiversity conservation and poverty traps. We define and explain the core concepts and then identify four distinct classes of mechanisms that define important interlinkages between biodiversity and poverty. The multiplicity of candidate mechanisms underscores a major challenge in designing policy appropriate across settings. This framework is then used to introduce the ensuing set of papers, which empirically explore these various mechanisms linking poverty traps and biodiversity conservation.

Stemming biodiversity loss and reducing poverty are global challenges of the first order, enshrined in both the Convention on Biological Diversity and the Millennium Development Goals, agreed by virtually all countries over the past decade. The world is nonetheless struggling to meet the ambitions expressed in those global accords. The World Wide Fund for Nature International finds that the earth’s wildlife populations have declined by a third over the past 35 years alone but by even more, 60%, in poorer tropical regions (). The rate and magnitude of these losses will define the earth’s sixth mass extinction period unless we quickly reverse this decline (). Meanwhile, leaving aside the remarkable case of China, the number of people living in extreme poverty increased by more than 30% from 1981 to 2004 and now surpasses 1 billion ().

Infrastructure is the basic equipment and structures such as roads and bridges that are needed for a country, region, or organization to function properly. Infrastructure contributes to economic development by increasing productivity and providing services, which enhance the quality of life. The services generated as a result of an adequate infrastructure base will translate to an increase in aggregate output such as increased agriculture output of farmers through improved roads, creation of a sea ports, Rail links., Electrical generation, transmission and distribution, Water and irrigation projects,- Increase quality of life and Urbanization of different areas (Akinyosoye, 2010) Majority of poor people in the world live in rural areas where the level of public infrastructure especially roads seems low. The inadequate roads and poor road access put high cost of transportation; reduce ability to use access high quality inputs; limit the uses of local markets to the sales of their products, the purchase of consumer goods and opportunities for off-farm employment. Poor road access has put nevertheless constraints for rural poor people in terms of access to other social infrastructure such as education and health facilities. Therefore, improvement of rural road seems to be a clear means by which large numbers of people might acquire the opportunity to participate in the market economy and thereby raise themselves out of poverty (Oraboune, 2008) Infrastructure is a key element of poverty alleviation. It often acts as a catalyst to development and enhances the impact of interventions to improve the poor’s access to other assets, e.g., human, social, financial, and natural assets. Its impact is felt both on the economic and social sectors. Without roads, the poor are not able to sell their output on the market. In India, it has been shown that roads alone account for seven percent of the growth in aggregate output of the rural areas. Without electricity, the industrialization process, which provides the poor an important source of employment, is unlikely to take off. In Costa Rica, a retrospective review of the rural electrification experience through electrification cooperatives indicates that for one of these cooperatives the number of major businesses jumped from 15 to 86 after electrification .Without potable water and sanitation health is at risk. The social and economic impact often go hand in hand (Pouliquen, 2000) Many of the world’s poor people live in rural areas isolated by distance, terrain and poverty from employment and economic opportunities, markets, healthcare and education. Lack of basic infrastructure such paths, trails, bridges and roads and access to transport services makes it difficult for poor people to access markets and services. There is clear evidence that rural isolation is associated with low agricultural productivity linked to poor market access and low use of fertilizers and modern agricultural technologies. It is also linked with poor health and low school enrolment. Rural isolation can imprison the elderly and people with disabilities. Good Developing Country Studies www.iiste.org ISSN 2224-607X (Paper) ISSN 2225-0565 (Online) Vol.7, No.1, 2017 50 transport infrastructure is a necessary condition for economic growth and poverty alleviation, but transport investments alone cannot address the problems of the poorest households (Starkey & Hine, 2014) The adequate supply of infrastructure services has long been viewed as essential for economic development and poverty reduction, both in the policy and academic realms. More recently, increasing attention has also been shifting to the impact of infrastructure on poverty and inequality (Ariyo and Jerome, 2004; Calderon, 2008; Estache and Wodon, 2010; Ogun, 2010). Over the last two decades, considerable efforts have been devoted to theoretical and empirical evaluation of the contribution of infrastructure to growth and economic development (Programme, 2011) Poverty reduction requires economic growth which, when accompanied by sound macroeconomic management and good governance, results in sustainable and socially inclusive development (ADB 1999). Greater access of the poor to education and health services, water and sanitation, employment, credit, and markets for produce is needed. Moreover, the vulnerability of the poor to economic shocks and natural disasters must be reduced to enhance their well-being and encourage investment in human capital and in higher-risk and higher-return activities. Public policy reforms and investment in physical infrastructure will significantly contribute to the pursuit of socially inclusive development (Ali & Pernia, 2003). Roads, railroads, ports, lighthouses, fairways, inland waterways and airports with navigation systems for flight traffic make up the transport infrastructure system. Transport infrastructure systems are often seen as one of the core areas of any government’s activities. Over time and in most countries governments have been involved in the introduction of, the construction and maintenance of infrastructure systems. This involvement has led governments to take on a large number of roles in the transport infrastructure sector such as; regulator, financer, owner with responsibility for construction and maintenance and also in many cases with heavy involvement in the organizations carrying out transport services (Hasselgren, 2012). Sub-Sahara Africa vestiges the poorest region of the World despite the recent noticeable increase in per capital income growth rates of many countries in the region. Thanks to decades of economic stagnation, poor standard of living, ethnic cleansing and tribal wars, political instability and environmental disasters which had left infrastructure development uncared for. Infrastructure are public goods and services that goes into the production process as Complementary inputs for traditional factors of production such as capital, labour and Entrepreneur. They help to increase returns on investment by reducing production cost and improving transition efficiency (BELLO & OSINUBI, n.d) The availability of infrastructure facilities and services as well as the efficiency of such services to a large extent determine the success or otherwise of all other production endeavourers. Investments in infrastructures such as energy, water, transportation and communication technologies promote economic growth and help to alleviate poverty and improve living conditions in developing countries (OECD, 2006) Somalia is a country situated in the Horn of Africa. It is bordered by Ethiopia to the west, Djibouti to the northwest, the Gulf of Aden to the north, the Indian Ocean to the east, and Kenya to the southwest. Somalia has the longest coastline on Africa's mainland and its terrain consists mainly of plateaus, plains and highlands. The destruction of the country engulfed not only the bridges that link the regions together in economic wise, but devastated roads, water, transportation, education, communication, electricity, hospitals and all that may contribute the development of social infrastructure as well, thus, lack of infrastructure makes the economic development retarded, therefore, to the researchers’ best knowledge; there is no proof in the literature with respect to studies that examine the relationship between lack of infrastructure and economic development, however, this current study explores the impact of lack infrastructure on economic development. Developing Country Studies www.iiste.org ISSN 2224-607X (Paper) ISSN 2225-0565 (Online) Vol.7, No.1, 2017 51 CONCEPTUAL FRAMEWORK As the conceptual frame work postulates, lack of social infrastructure promotes, poor standard living, economic deficit, productivity decline, and free trade barriers that have negative impact on economic development.

In a concerted effort with seven other states, Assemblymember Alex Lee (D-San José) has reintroduced the tax on extreme wealth in California as AB 259 and an accompanying proposed constitutional amendment, ACA 3. This tax would apply to households with net worths of more than $50 million, or the top 0.1% of Californians, and would generate an estimated $21.6 billion annually — roughly the same amount as the projected budget shortfall from the Governor’s proposed budget this year.

The  released in 2021 revealed that the richest 25 Americans pay just a tiny fraction of their wealth in taxes, and some are able to pay little to nothing in income tax, with effective tax rates lower than the average American. By increasing their fortunes in assets such as stocks and property and then borrowing off those assets, they are able to avoid selling the assets and paying capital gains taxes.

In 1980, when Ronald Reagan ran for president, he called government “the problem” and not the solution to any problem he could think of. He probably wasn’t referring to the government that paves the roads, picks up the garbage, or provides your home with drinking water. That government provided essential services we all rely on. Its absence would certainly be a problem. But Reagan’s anti-government and anti-tax mantra remains with us and has had the impact of defunding many of the basic services that government provides.

The biggest impact of an undertaxed America has not been the failure to fund the daily costs of government service, although that has happened, it has been the failure to invest in physical infrastructure and the long-term capital projects that cost billions of dollars and enable transportation, water, waste, and sewage systems to operate. These projects are not completed in a single election cycle and require political courage to advocate. As we well know, political courage and foresight are in short supply these days. We are seeing the impact of this disinvestment in real time in Jackson, Mississippi, where the public water system has collapsed. Jackson is where selfish, self-centered anti-tax ideology combines with Republican racism to deny a city of 180,000 mostly African-American citizens a system of public water.

He’s obviously right; the move towards increasing global trade has created wealth, especially in China, and we should be glad that it has raised millions of people out of poverty. However, he doesn’t acknowledge the problem of distributing the wealth thus created. The world is awash with money but it has been very unequally distributed. Possession of so much money by people and institutions who can’t possibly use it has created serious instability. We need to reform institutions in ways that prevent the unhealthy accumulation of wealth by minorities. Otherwise, we will see more catastrophes such as 2008 as the rich cast around for risky ways to use their wealth and more and more Brexit and Trump votes as resentful populations seek to find somebody to blame for their diminished share of prosperity. Thomas Piketty proposed one simple remedy; the Robin Hood tax is another, as is international co-operation against tax havens and tax avoidance. So far, the political will to do any of these things is not strong and our government is sturdily in the anti-reform corner. Jeremy Cushing Exeter While I would not argue with Will Hutton’s assertion that trade is the lifeblood of humanity, or that automation and robotisation will not be prevented by protectionism, he fails to present a rational alternative. Put simply, where are the jobs coming from to pay the living expenses of that section of the population that depends on employment? The misconception made by the proponents of globalisation has been that the discarded can be disregarded. Taking away a man’s job, before you take away his vote, is every bit as dangerous as taking away both at the same time. Trade agreements might well have benefited many, but the notion that more trade agreements will somehow benefit those already marginalised by previous agreements, is a horse without a jockey. It is the failure of neoliberalism, and of the financialisation of global trade that funded trade imbalances, which caused austerity. Remember, the Smoot-Hawley tariffs might have been enacted in America, but the consequences hit the fan in Germany. Today, Trump is a willing harbinger of coming conflicts. Martin London Henllan Denbighshire Few rational people would disagree with Will Hutton’s assertion that “exchange between countries brings prosperity and progress”. There is, however, a huge difference between unfettered free trade and fair trade. It would be wrong for Britain or the US to impose blanket trade tariffs that inhibit innovation in other countries or for us to protect our industries from competition with more efficient foreign producers. However, Hutton cannot be allowed to get away with suggesting globalisation has created “prosperity and progress” for all. In most cases, so-called free trade has simply involved a race to the bottom in pay rates across the world. That may be free trade, but it certainly isn’t fair trade. A tiny proportion of the world’s population have got ludicrously rich, while former manufacturing communities have declined into despair. We have sacrificed manufacturing jobs for cheap jeans and washing machines, made by people (often children) earning pittances with which we cannot fairly compete

Bastiat argued that free trade between countries could reduce international conflict because trade forges connections between nations and gives each country an incentive to avoid war with its trading partners. If every nation were an economic island, the lack of positive interaction created by trade could leave more room for conflict. Two hundred years after Bastiat, libertarians take this idea as gospel. Unfortunately, not everyone does. But as recent research shows, the historical evidence confirms Bastiat’s famous claim.

In “Peace through Trade or Free Trade?” professor Patrick J. McDonald, from the University of Texas at Austin, empirically tested whether greater levels of protectionism in a country (tariffs, quotas, etc.) would increase the probability of international conflict in that nation. He used a tool called dyads to analyze every country’s international relations from 1960 until 2000. A dyad is the interaction between one country and another country: German and French relations would be one dyad, German and Russian relations would be a second, French and Australian relations would be a third. He further broke this down into dyad-years; the relations between Germany and France in 1965 would be one dyad-year, the relations between France and Australia in 1973 would be a second, and so on.

Why is trade with some countries more popular than with others? Linking the literature on regime type and trade cooperation with the literature on trade attitudes, the authors argue that the domestic political institutions and cooperative reputations of foreign states condition the willingness of the public and policy elites to deepen trade cooperation. Using survey experiments fielded on the American public and a unique sample of US foreign economic policymakers, the authors show that respondents prefer trade with democracies over trade with nondemocracies by large margins. Further, they find that this democratic advantage stems from a strong expectation that democracies will be more reliable and consistent cooperation partners. This study provides one of the first direct and causally identified tests of the mechanisms underlying theories of the political economy of regime type and international cooperation. Although the article focuses on the case of trade attitudes, the argument is general, suggesting that support for cooperation in other issue areas is conditional on similar factors.

From 1930 to 1980 the top marginal income tax rate in the United States averaged 78 percent; it exceeded 90 percent from 1951 to 1963. These quasi-confiscatory top rates championed by Franklin Delano Roosevelt and his successors in office were meant to reduce the income of the superrich: not simply to achieve tax justice, but to compress the income distribution. These tax rates applied to extraordinarily high incomes only, the equivalent of more than several million dollars today; only the ultrarich were subjected to them. In 1960, for example, the top marginal tax rate of 91 percent started kicked in at an income threshold that was nearly 100 times the average national income per adult, the equivalent of $6.7 million in income today. The merely rich—high-earning professionals, medium-size company executives, people with incomes in the hundreds of thousands in today’s dollars—were taxed at marginal rates in a range of 25 percent to 50 percent, in line with what is typical nowadays (for instance, in states such as California and New York, when you count state income taxes).According to the evidence, the policy of quasi-confiscatory tax rates for sky-high incomes achieved its objective. From the late 1930s to the early 1970s, income inequality fell. The share of pre-tax national income earned by the top 1 percent was reduced by a factor of two, from close to 20 percent on the eve of World War II to barely more than 10 percent in the early 1970s. In 1960, for example, only 306 families earned more than $6.7 million in taxable income a year (the threshold above which income was imposed at 91 percent). This tax policy reflected the view that extreme inequality hurts the community; that the economy works better when rent extraction is discouraged (indeed, the economy grew strongly in the mid twentieth century); and that unfettered markets lead to a concentration of wealth that threatens our democratic and meritocratic ideals. Extreme wealth concentration, like carbon emissions, imposes a negative externality on the rest of us. The point of taxing carbon is not to raise revenue but to reduce carbon emissions. And the point of high tax rates on the very highest incomes is not fundamentally to fund government programs. They are aimed at reducing the income of the ultra-wealthy. The reason for reducing those incomes is not, as critics sometimes say, to give vent to envy. It is to disrupt privilege, impede rent extraction, and protect democracy. When 90 cents out of any extra dollar earner will go to the IRS, we will disincentivize negotiating a $20 million salary, earning millions by creating a zero-sum financial product, and spiking the price of patented drugs. Quasi-confiscatory tax rates equalize the distribution of pre-tax income, make the market place more competitive, and limit the concentrations of economic power that pave the way for undemocratic concentrations of political power. To see how wealth taxation might work to reduce such concentrations of wealth and power, let’s contrast a moderate with a radical wealth tax. A moderate wealth tax, say with marginal tax rates of 2 percent above $50 million and 3 percent above $1 billion, would generate a lot of revenue—about 1 percent of GDP each year, according to our estimates. Consider now a more radical wealth tax with a marginal tax rate of 10 percent above $1 billion. A person with $1 billion in wealth would pay the same $19 million as under a moderate wealth tax. A radical wealth tax would not make it harder to become a billionaire; it would make it harder to remain a multi-billionaire. A person with $2 billion would pay almost 5 percent a year, a decabillionaire such as David Geffen 9 percent, and a centibillionaire such as Bezos 10 percent (instead of 3 percent with a moderate wealth tax). Just as Roosevelt’s 90 percent top marginal income tax sharply reduced the number of families earning more than $10 million of today’s dollars, a radical wealth tax would eventually lead to a reduction in the number of multi-billionaires. More than collecting revenue, it would de-concentrate wealth. There would still be multibillionaires, no doubt. If a wealth tax of this higher sort had been in place over the last decades, Zuckerberg would still be worth $21 billion in 2018—instead of the $61 billion recorded by Forbes. Why? Because Zuckerberg’s wealth has grown at a rate of 40 percent a year since 2008 when he first became a billionaire. A 10 percent annual wealth tax would not have stopped his stratospheric ascent. But a more mature billionaire such as Bill Gates would be worth “only” $4 billion—instead of $97 billion in 2018—because he has been a billionaire for over three decades now, giving the radical tax more time to reduce his wealth. If a radical wealth tax had been in place since 1982, most of the 400 richest Americans would still be billionaires in 2018, but they would be only one third as wealthy as they currently are (see graph 1). Their share of U.S. wealth would be similar to what it was back in 1982, before the wealth inequality took off. A radical wealth tax would have raised $250 billion in revenue from the 400 richest Americans alone in 2018. That is more than 1 percent of GDP. But if such a tax had been in place since 1982, it would have only raised $66 billion from the 400 wealthiest families in 2018, while a moderate wealth tax, despite its much lower rate, would have yielded almost as much—about $50 billion. In the long run, a radical wealth tax erodes top fortunes so much that it reduces the taxes paid by the ultrarich. Is a radical wealth tax worth it, then? Would society benefit from curbing huge fortunes, even if it means lower tax collection at the top end? Over the years, our own thinking about this question has evolved as the stagnation of working-class income, the boom in extreme wealth, and the threats to democracy became clearer. Perhaps yours will too.

However, reducing the United States’ emphasis on a values-driven foreign policy is wrong, and contrary to the strategic interests of the United States. Democracy promotion in particular serves a key role in safeguarding U.S. interests and promoting global, long-term growth in ways fundamentally compatible with U.S. strategic interests. After all, democracies protect private property in important ways, invest in public goods, are more politically stable, make for more dependable allies, and empirically do not go to war with one another. Ultimately, a world full of democratic governments is safer, more prosperous, and more stable — all states of being that the United States has an interest in promoting. Democracy guarantees that the public has a stake in its own institutions and government, which leads to investor confidence and growth. Since elected politicians are accountable to property owners and are held in check by an independent judiciary, democracies tend to have better mechanisms for protecting private property than their autocratic counterparts. This makes democracies a particularly attractive type of country for investors — both public and private — because checks and balances make it difficult for the state to nationalize industries. Further, private property rights protected by the legal system encourage entrepreneurship and small business development, both of which are key to a growing and modernizing economy. As a result, democracies tend to be wealthier and more economically stable than their autocratic counterparts. This is fundamentally in the interest of the United States in that both private and public investors have an interest in seeing returns on their investments, thereby potentially making countries less willing to go to war if that would require severing economic ties. Democratic institutions ensure that citizens with both economic and political power are heard. Democracies also invest in public goods at much higher rates than autocratic governments. Because politicians must cater to the median voter, they approve policies that invest in public education and healthcare, both of which promote long-term growth and development. Public education invests in a country’s human capital, setting the stage for long-term innovation, adaptability, and advancement. Public healthcare, meanwhile, has been shown to increase overall societal productivity and well-being as people take fewer sick days, citizens are able to afford their healthcare without going bankrupt, and ultimately, the overall costs of healthcare are driven down as citizens become healthier. Productive, innovative societies are also better for the United States — innovation around the world improves global quality of life, results in more educational and vocational opportunities for Americans (both because other universities and jobs become more attractive to Americans who want to go abroad and because potential immigrants are more likely to want to stay in their own country, opening up opportunities for U.S. citizens at home), and may reduce friction between countries over resources and labor. Democracies are also generally more politically stable because regular election cycles ensure an established process for the habitual and peaceful removal of leaders from power. Elections ensure the non-violent transition of power and reduce the need for mass protest, rioting, and revolution — which makes countries more politically stable. Further, when citizens are granted rights and protections from government abuse, enforced by an independent judiciary, they have fewer grievances against the government and are thus less able to mobilize large numbers of people to violently overthrow the regime. Revolution, while not always violent, often leads to political instability, challenges to growth, increased incentives for diversionary war and conflict, and oftentimes civil war. The externalities of civil war and international conflict then put pressure on the United States to intervene, protect human rights, and otherwise expend resources on other countries’ issues. Further, civil wars are highly destructive to institutions, human capital, and resources, and can have significant security spillover effects, increasing global risk of political instability and violent extremism. This political stability, in addition to institutional checks and balances, makes democracies better international partners and allies in the long-term. Treaties ratified by multiple branches of government are more durable than executive agreements signed by a single leader who may be replaced within a short period of time. While democracies may be more reluctant to commit to alliances and formal security pacts, once a party to them, they are more dependable than other states with concentrated power at the executive level. These kind of durable commitments are of interest to the United States as it seeks to preserve the liberal world order; it is far more effective to ally with partners whose institutions make withdrawal from the alliance costly. Finally, it has been empirically observed that democracies do not go to war with one another. While there is a robust debate around the exact nature of the so-called “democratic peace,” it appears that there are qualities particular to democracies that make war between them particularly unlikely: a dovish public constrains leaders’ ability to wage war, competitive elections and a free press make it easier to credibly communicate resolve to potential adversaries, consolidated democracies tend to be more wealthy and economically interdependent, like-minded people are more hesitant to wage war against one another, and so on. Regardless of the precise mechanisms, however, a world of democracies is inherently safer, more prosperous, and less likely to initiate a war against the United States — a key factor in protecting American security and interests.

Sen. Elizabeth Warren (D-Mass.) has jolted the body politic with a bold proposal to tax the concentrated wealth of the richest 75,000 households in the United States. It’s about time someone took up this mantle.

Warren’s proposal would levy an annual 2 percent tax on wealth over $50 million, with the rate rising to 3 percent on wealth over $1 billion. Jeff Bezos, the wealthiest man in the country, would pay $4.1 billion under the new tax.