Economic Inequality Statistics

My research on economic inequality consistently turns up three key points:

  1. since the 80’s, there has been an ever-widening gap in incomes and capital ownership between the rich and poor,
  2. the gap has been growing at an accelerating rate, especially since the year 2000, and
  3. this phenomenon is worldwide.

So what?

As I’ve mentioned before, many U.S. economists and policy-makers greet those findings either with indifference or as a clarion call to defend endangered capitalism, while their international counterparts find them alarming. We’re talking about them here because it turns out that economic inequality has a lot to do with happiness and meaning at work. (Stay with me — we’ll get there, we’re just taking the scenic route.)

We all know that it’s easy to mold statistics to fit opinions — here’s a neurologist’s take on Why People Can’t Agree on Basic Facts. Any stats we look at here will have been pre-sorted, pre-analyzed, and pre-interpreted. My goal today is to provide a sampling of statistics from a variety of global sources — starting with a quote about how the new global super-rich are a bunch of economic data curve busters, which makes finding honest data even harder.

plutocrats“The skew toward the very top is so pronounced that you can’t understand overall economic growth figures without taking it into account. As in a school whose improved test scores are due largely to the stellar performance of a few students, the surging fortunes at the very top can mask stagnation lower down the income distribution.

“Consider America’s economic recovery in 2009-2010. Overall incomes in that period grew by 2.3 percent — tepid growth, to be sure, but a lot stronger than you might have guessed from the general gloom of the period. Look more closely at the data, though… and it turns out that average Americans were right to doubt the economic comeback. That’s because for 99 percent of Americans, incomes increased by 0.2 percent. Meanwhile, the incomes of the top I percent jumped by 11.6 percent.”

Plutocrats:  The Rise of the New Global Super Rich and the Fall of Everyone Else (2012), by Canadian journalist and politician Chrystia Freeland.

kwak“Across the developed world, vast fortunes are again ascendant. In the United States, the top 1 percent take home a larger share of total income than at any time except the late 1920’s. The total wealth of the world’s billionaires has quadrupled in the past two decades (even when the definition of “billionaire” is adjusted for inflation).

“In the 1950’s, a typical CEO of a large company took home as much money as twenty average employees; today he makes as much as two hundred workers.”

Economism (2017), by UConn law professor James Kwak.

the wealth of humans“In 2014, the inflation-adjusted income of the typical American household was just 7 per cent higher than it was in 1979. By contrast, the income of a household in the 95th percentile of the income distribution grew 45 per cent over that period.”

The Wealth of Humans:  Work, Power, and Status in the Twenty-First Century (2016), by Ryan Avent,  a thoroughly Anglicized American who works as a senior editor and economic columnist for The Economist.

the fourth industrial“[C]ompare Detroit in 1990… with Silicon Valley in 2014. In 1990, the three biggest companies in Detroit had a combined market capitalization of $36 billion, revenues of $250 billion, and 1.2 million employees. In 2014, the three biggest companies in Silicon Valley had a considerably higher market capitalization ($1.09 trillion), generated roughly the same revenues ($247 billion), but with about 10 times fewer employees (137,000).”

The Fourth Industrial Revolution (2016), by German engineer and economist Klaus Schwab, Founder and Chairman of the World Economic Forum.

Prior to the 2017 World Economic Forum annual meeting of world leaders, U.K.-based Oxfam International issued a report that offers a fascinating slant on Schwab’s comments. According to the report:

“Eight men now control as much wealth as the world’s poorest 3.6 billion people… The men — Bill Gates, Warren Buffett, Carlos Slim, Jeff Bezos, Mark Zuckerberg, Amancio Ortega, Larry Ellison and Michael Bloomberg — are collectively worth $426 billion.”

As reported by CNN.

“By contrast, half the planet’s population, some 3.6 billion people, have a combined wealth of $409 billion.”

As reported by The Mirror Online (the U.K.’s “intelligent tabloid”).

Not only are the Elite Eight collectively worth more than the lower half of the world’s entire population, each individual member of the group is worth more than the combined market capitalization of Detroit’s three largest companies 27 years ago. The Mirror also noted this about the study:

“The report found that between 1988 and 2011 the incomes of the poorest 10% increased by just $65, while the incomes of the richest 1% grew by $11,800 – 182 times as much.”

A couple years ago, Credit Suisse’s Global Wealth Report 2015 reported that half of the world’s assets were controlled by the top 1% of the global population, while the lower half owned less than 1%.

There’s plenty more where all of that came from. In fact, there’s such an abundance of global data and opinion on the topic that, if nothing else, it’s probably safe to conclude that economic inequality either really is a problem or, even if it’s not, a whole lot of people around the world sure seem to think it is.

We’ll continue our economic inquiries next time.

The Future of Law (16):  The New Law Masters

 [I wrote last week about open source law. Check out this article on that topic from The Lawyerist  that was posted the same day. Yes, the future of law is already here.]

I Googled “definition of expert” and got this: “a person who has a comprehensive and authoritative knowledge of or skill in a particular area.”

  •  We will still see legal experts in the future, but not as we currently know them.

As we saw earlier in this series, the legal experts of the future will be systems thinkers who can fashion comprehensive, multidisciplinary, mass-appeal, consumer-oriented IT products with legal solutions embedded within them. And, as we saw last time, Law by Algorithm will increasingly provide the “think like a lawyer” artificial intelligence needed to create those products.

On the other hand, in his book Tomorrow’s Lawyers, law futurist Richard Susskind anticipates the ongoing need for lawyers (using human brains, not artificial intelligence) who can fashion legal solutions beyond the “think like a lawyer” work product.

  • Those lawyers will emerge as a new class of legal masters.

Consider this quote from Ken Coleman. host of The Ken Coleman Show and author of One Question, in which Coleman captures the essence of the commoditization we’ve been talking about.

“Society seems to favor mass production from its citizens. We dress alike, behave similarly, and speak with a common vernacular. Thanks to the gifts of the digital age, anyone today can become an ‘expert.’”

In this blog interview with author Daniel Pink — bestselling author of Drive and A Whole New Mind — Coleman and Pink agree that what’s really needed is not expertise but mastery, and share some thoughts about how you get it. Further, check out this blog post on that topic from The Lean Thinker, which ends this way:

“Put another way, the ‘expert’ knows. The ‘master’ knows that there is much to learn.”

Here are this week’s predictions about the new law masters:

  • The legal masters of the future will be valued not as repositories of knowledge, but for their inquiring minds, and especially for the ability to ask important, relevant questions whose answers aren’t already embedded in commoditized legal products.
  • The new legal masters’ key proficiency will lie not in knowing the law (the job of experts), but in knowing how to develop it.
  • The new legal masters will shape the law using innovative new methods not currently part of the law landscape. (What these might be is anybody’s guess.)
  • And the law itself will reward them for this expertise, by continuing to provide plenty of gray areas and unanswered questions, commoditization notwithstanding.

In his book The End of Lawyers?, Richard Susskind notes that disruptive innovation is disruptive to lawyers, not clients. This comment suggests another role for the new legal masters:

  • They will profoundly and skillfully shape the assimilation of disruptive innovation into the law and law practice.
  • For example, they will have the sage ability to understand and guide the law and law practice when the law goes multimedia, as it inevitably will (another topic Richard Susskind takes up in The End of Lawyers?).

As for the latter, just try to imagine what the law will be like when it is detached from its Gutenberg printing press moorings in language and logic.

I can’t either.

Which is precisely why we’ll need the new legal masters to help us out.

The Future of Law (15): Law By Algorithm

Google customizes the news you see. Amazon suggests if you like this, you might like that. Your cellphone carrier, bank, and pretty much everybody else you deal with on a regular basis gives you the option to customize your own account page.

  • The new commoditized/democratized purveyors of legal products will also give this option to consumers. The days of “mylaw.com” are upon us.

Welcome to law by algorithm:  artificial Intelligence at work, serving up the customized law you need personally and for your work and business. And you don’t have to go looking for it — it will come to you automatically, based on your preference settings and past choices.

  • Law by algorithm will enable consumers to self-diagnose legal issues and access legal “remedies” for what ails them.
  • We’ll also see online diagnostic networks geared for legal professionals only — similar to those that already exist for physicians.

Think WebMD. And yes, we will see WebJD — someone is already working on it. Also check out A2J Author, sponsored by the Center for Access to Justice & Technology, a project of the Chicago-Kent School of Law. The Center’s purpose is “to make justice more accessible to the public by promoting the use of the Internet in the teaching, practice, and public access to the law.” And for a thoughtful introduction to online legal diagnosis, see this blog post by Stephanie Kimbro, MA, JD, a Fellow at Stanford Law School Center on the Legal Profession and Co-Director of the Center for Law Practice Technology. The post was written four years ago — an eternity in the tech world — but it’s still worth a read.

  • Law by algorithm will take us all the way to its extreme expression: to open source law.

For an introduction to this topic, see this Forbes review of open source as applied to the law. It was written in 2008 — again, ancient techno history. Seven years later, open source law is no longer mere speculation; we are already living in the Outer Limits (remember that show?) of this future legal reality.

We aren’t talking here about the law concerning open source software (like this and this). We’re talking about open source practice applied to the law itself. In his book The End of Lawyers, Richard Susskind describes open source law as sustained, online, mass collaboration re: the application and creation of the law, where content is user-generated, derived from public sources such as judicial and regulatory filings. Open source users engage with this data, extracting, analyzing, applying, and creating the law they need.

Thus open source law takes the creation of the law out of the exclusive hands of lawyers and the legal system as we have known it, and instead puts it into the hands of end-users, using artificial intelligence algorithms that incorporate the best of “thinking like a lawyer.” (Without, we might add, the risk that the lawyer doing the thinking might be suffering from stress-related cognitive impairment.)

Which takes us back to the topic we looked at last time:  the place of human legal experts in the future of law. We’ll look at that topic again next time, with a new twist.

[A few posts back, I noted legal futurist Richard Susskind’s opinion that commoditization would improve access to legal advice in the future, in what he termed the “latent legal market.” Would that include clients of moderate means? I think so. As an example, consider this resource I became aware of last week re: creating a virtual office to serve this market — yet another example of how technology is creating the new world of law.]

The Future of Law (Part Nine): Hacking the Law

Hackers used to be known by the color of their hats:  black, white, and gray. There were good guys, bad guys, and in-between guys. Nowadays, hacking is the new caché in the self-improvement culture. Self-hacking is the ultimate DIY — it’s how you step up, take responsibility, get it done.

Remember DU Law professor Debra Austin from the Killing Them Softly series? Here’s her advice re: neural self-hacking for stressed-out lawyers. Or check out this video on neural self hacking, Google style.  And how about this conference in London last summer on The Future of Self-Hacking that asked:

“What are the best methods for “hacking” improvements on ourselves? What do recent insights from science and technology have to say about self-development? What methods are likely to become more widespread in the not-too-distant future?”

At that conference, an all-star group of presenters talked about:

  • Smart methods to improve our consciousness, memory, and creativity
  • Meditation as self-engineering
  • Diet, drugs, and supplements – impacts on fitness and performance
  • Actions based on self-measurement (QS: quantified self)
  • Best insights into goal-setting, affirmations, etc
  • Risks and opportunities in the frontier lands of DIY brain-hacking and mind-hacking.

Hacking may be enjoying a surprising new respectability in its social status, but not all quarters of the hacking culture are so benign. Hacking still has an edge where the radicals hang out, playing a sort of X Games version of the democratization of knowledge. That’s where you find WikiLeaks, open source social entrepreneurship, corporate open source and its anti-intellectual property orientation, and the rest of the voices denouncing the keeping of ANY kinds of secrets or protecting proprietary interests in them.

  • In the realm of law, these radical players will increasingly bypass conventional modes of entry into the legal profession and law practice, and will offer their own alternative solutions to perceived injustice and inequities.
  • These radical players are already changing the law, hacker-style.
  • And they will continue to do so.

Consider, for example, the swift race towards justice we see daily in online news, as surveillance footage and ubiquitous smart-phone videos capture people in the act. Or consider the kind of visceral responses we make to images captured on police body cameras. As lawyers debate about them, these technologies are already changing evidentiary standards and criminal investigative methods. It’s not hard to imagine other applications — if you need to prime the pump, Google “whistle-blowing as cultural ethos” and check out what comes up.

Hacker law is the law of outcry and outrage, fueled by an insistent impatience that flies in the face of the law’s historical emphasis on rational, language-based deliberation. Are those who practice it vigilantes? Anarchists? Underground heroes? Tomorrow’s Gandhis and MLKs? It depends on where your sympathies lie, but like it or not, the hacker ethos has invaded the law. And, as is true of all the trends we’re looking at in this series, we’ve only seen the start of it.