My Social Bookmarking Soulmate!

I found who I believe to be my “social bookmarking soulmate” while browsing del.icio.us. Interestingly enough, the person that I found was the former president of del.icio.us when they were sold to Yahoo. I found him by looking up wealth distribution, and he was one of the top commenters on an article I found to be interesting.

            When I first went to his profile, I knew I was encountering a social bookmarking pro. With almost 3,000 public links and 58 followers, this guy had to be a big deal within the social bookmarking sphere. He has over 1,000 tags, but they are each fairly unique and relatively well-organized. You can tell that he must use the filter function well so that he doesn't have to organize perfectly. Some of the tags that confirmed to me that I had stumbled upon a match were “subjective well being”, “income”, “revolution”, “capitalism”, and “morality”. Not to mention that fact that he is a tech/math nerd like me. Sprinkled among his posts on economics are links to sites detailing the Fourier Transformation and String Theory. Academically grounded and socially driven.

            Following the link in his description brought me to his blog, Continuations.com. While there I gathered a couple more pieces of information about who this person was. His name is Albert Wenger and he is a partner at a venture capital firm which has companies like Twitter, Etsy, Tumblr, and Kickstarter in its portfolio. He has a Ph.D. in Information Technology from MIT and is fully engaged in Web 2.0. He has multiple posts each week on his blog, and the posts generate comments and fruitful discussion.

            By looking through his tags on del.icio.us I was able to find a number of good blogs on income inequality. One was on basic income guarantee, laying out what type of political action will be necessary for basic income to be introduced. I will have to reference it when I post later about basic income guarantee. Another intriguing blog I found from looking through Albert’s tags Lane Kenworthy’s “Consider the Evidence.” He has a very intellectually driven blog that dives deeply into the issue of wealth distribution and the pathway to potential solutions in the US. On the blogging end, I might say that Lane is my blogger soulmate. I find myself learning and wishing I spent more time on my own blog after reading his thorough and well-linked posts.        I am hoping to learn from these advanced web users so that I can keep myself at the forefront of content and dissemination of content on the web. To me, the sustained engagement with the web that I see in professional adults reminds that communicating and sharing content over the web is not a pastime of teenagers, but an incredibly valuable tool. Connecting with like-minded and driven individuals can help to promote ideas and growth. I am looking forward to improving the quality of my own blog by serving as a conduit to even more advanced content on the web.

            So why don’t my readers just climb the ladder and take me out as a middle man?  My particular contribution will hopefully be to contribute a naïve but interested opinion that others who are new to the topic can empathize with. I am looking forward to strengthening the network of information presented on this blog so those who wish to dive deeper are in a position to do so. 

Is Welfare Fair?

For today's post on welfare, I want to give a brief history of welfare states, look at some places where it seems to be working today, and highlight some of the inherent drawbacks to the system.

Welfare is the redistribution of wealth through contribution into a pool of money which is provisioned to provide basic levels of well being to everyone in a community. This can take the form of government programs, charities, or religious endeavors. The history of such programs is quite rich, dating back as far as the Roman Empire! Upon realization that their empire had grown too large for local crops to feed the populace, they developed a program called annona which consisted of large collections of crops in storehouses, sold to the poor at a very cheap rate during times of scarcity. The emperors would collect this tax from landowners within the empire. Historians have found that the great Roman Coliseum was used as a form of public welfare, and nearby people could collect their food. 

                               

                                      

These Roman coins called tesserae were the Roman equivalent to food stamps

This quote from Henry Joseph Haskell's 1939 book "New Deal in Rome" portents an ominous future for countries following a trend similar to ancient Rome:

The failure of the Roman system to furnish decent minimum standards of living for the mass of the people was a fundamental cause of instability, both political and economic. The decay of character that attended the sudden rush of great wealth undermined the Republic even before it was submerged by civil wars. Later, in a society unstable through social bitterness, extravagant public spending proved fatal. A British commentator, Professor F. E. Adcock of Cambridge University, remarks on the price the world finally had to pay for ” the gilding of the Golden Age of the Antonines.” The spending for non-productive public works, for the bureaucracy, and for the army, led to excessive taxation, inflation, and the ruin of the essential middle class and its leaders. It destroyed the men whom Leon Homo, French historian, calls, in a brilliant phrase, “the general staff of civilization.” These facts have implications that may be pertinent today

In modern day, Otto von Bismarck of Germany ushered in our current notion of the welfare state. He established pensions, medical care, and accident insurance through the strong ties with the business sector. In America, the Great Depression motivated a reevaluation of the role of government in maintaining the well-being of its citizens. Franklin D. Roosevelt's New Deal created many of the social programs we still support to this day. Overtime, these systems of welfare have become more and more holistic, with some European countries offer nearly holistic social safety nets.

One of the main sources of conflict over the welfare state is the requirement for people to pay into a system regardless of whether or not they think the system is effective. Not paying taxes is punishable by law, yet many feel as if they would rather choose how they would like to spend their money, rather than have that decision made for them by the government. There are strong arguments to be made on both sides of the debate. Often times the scale of operations in a welfare state produce incredible bureaucracy and stagnation. Programs are slow to adjust to demand, and even smallest of decisions are hard to make with so many affected parties. Additionally, the distance of the welfare system from the refinement mechanisms of the free market contribute exacerbate the inefficiencies of government social programs even further. On the other hand, social safety nets really are a public good, and those who at highest risk for needing support are rarely in a position where they can find help in times of need. A country without a welfare system would rely on the privileged to be charitable towards the lesser privileged. While this is most definitely possible, and many wealthy people are incredibly charitable global citizens, there is no guarantee that the level charitable people will match the great demand for support.

I believe that the values of a particular society dictate the importance of a welfare program and the scale to which it should be provisioned. For example, in countries where family and community are of greater importance, there is an inherent system of welfare which would make large government programs less efficient than the direct support of family and friends. Alternatively, in a country like the US which is very individualistic, it may be more important to include welfare as a major component of taxation because people are less compelled to help out their neighbor.

Although the Romans happened upon an important social innovation in the form of welfare, there is still a great deal of refinement necessary to address the root motivations for welfares existence. Opinions on welfare nearly divide the US in half, demonstrating the incredibly divisive nature of the subject. We may to reconsider our preconceptions about welfare in order to find a more suitable compromise. I am excited to talk about these divisions, and possible ways to re-envision welfare in future posts.

Post #4

Finding the Human in the Digital Humanities

Gini Coefficient

Part of assessing the effects of inequality is understanding the different ways in which inequality is measured. I am going to give a brief introduction to the Gini coefficient, a commonly used metric for the amount of inequality in a particular population. I will then show a brief example of how the Gini coefficient can be used to put economic development in perspective in a way that facilitates better policy making.

            The Gini coefficient was first used by Italian statistician Corrado Gini in 1912. It is probably best understood by looking at the graph from which the measure comes from. In the above graph you can see the x-axis holds the cumulative share of people in the population from lowest to highest incomes. That means that 25% represents the poorest quarter of the population. The y-axis displays the cumulative share of total income earned a particular percentage of the population receives. The point (25%, 15%) represents the fact the poorest quarter of the population accounts for 15% of total income earned. In a society where wealth is perfectly equally distributed, the graph would be a 45 degree straight line where everyone earned the same amount of income. This is represented by the “Line of Equality” in the above image.

            

             In reality, income earned varies among the population, creating a curved line. The Gini coefficient is equal to the area between the line of equality and the curve that represents income distribution for a particular population, divided by the total area underneath the line of equality. In our picture this is represented by A divided by A + B. This number is really only useful when put into relative terms. Below are the values of the Gini coefficient for a number of countries to provide some intuition for what normal values are. Remember, the higher the number, the more inequality in that country.

South Africa: 63.1

Costa Rica: 50.7

China: 47.0

United States: 45.0

Qatar: 41.1

Japan: 38.1

United Kingdom: 34.0

Afghanistan: 27.8

Denmark: 24.0

           

            As we can see, the numbers vary quite a bit, and the Gini coefficient isn’t necessarily a good indicator of economic prosperity within a country. But it can be very useful for a number of practical purposes like looking into the role inequality plays when conducting policy planning for development.

            This graph pulled from Martin Ravallion’s 2005 paper Inequality is Bad for the Poor shows how reduction of poverty associated with changing mean incomes has a positive relationship with the amount of inequality in a country. Effectively, the less inequality in a region, the more poverty reduction occurs from raising the mean income. This finding is crucial for policy makers who are looking at the most important factors to address when aiming to reduce poverty in a country.

            

        I plan to bring the Gini coefficient back up throughout my blog so that readers can have a numerical grounding when reading about levels of inequality. Although it is a very simple measure and leaves room for more investigation, its simplicity allows for easy comparison and basic quantification of income distribution. Maybe by looking at how different levels of inequality affect prosperity and happiness in different countries we will be able to get a better understanding for whether or not inequality really is so bad.