Politics and Economics or Political Economy?

How, precisely, does one conceptualize the operation of a system as complex as the United States? Or, more specifically, is the US best conceptualized as Luhmann suggests -- that is as a set of largely distinct systems (social, political, economic, legal, etc.) which each operate with all of the others as part of their environment -- or as Marx suggests -- that is as an integrated political economic system?

The fascinating figure below shows that for the past 60 years there has been a very strong link between the extent of income inequality (as the difference between the rich and the poor increases, so does the gini coefficient) and the extent of political polarization within the US House of Representatives.

Obviously, no single piece of evidence can unequivocally answer such a broad question. But, the figure below certainly suggests a very tight coupling between the Gini index (economy) and polarization within the House (politics); a scenario more straightforwardly consistent with Marx than with Luhmann

Those interested in the details of the research that produced the above graph will want to check out Polarized America.

US Income Inequality: Real, Perceived, Desired

Michael Norton and Dan Ariely, by producing the graph below, have provided an interesting addition to the growing discussion of income inequality in the US.

The two columns on the left come from representative national samples of the American public.

The one on the far left shows the wealth distribution their respondents said would be ideal. In other words, in an idealized version of America, the public thought that the wealthiest 20% of the population (the purple bar) should control about 32% of the total wealth, the second and third quintiles (the blue and green bars) should control slightly more than than their proportionate 'share' (about 22% for each), while the poorest 40% of the population (the yellow and red bars) should control substantially less of the total wealth. In short, the American public embraces the concept of inequality of wealth, but not extreme wealth inequality.

The middle column captures American perceptions of how wealth is currently distributed. Clearly, Americans perceive the country as being more unequal than their 'ideal' distribution. They perceive the wealthiest 20% as having substantially more than ideal, the second 20% as having close to their ideal share and the bottom 60% having substantially less than ideal.

The column on the right shows the actual distribution of wealth in the United States, which is substantially more unequal than the perception. In sum, "respondents to his surveys universally think that wealth is more evenly distributed in the United States than it actually is—and what’s more, respondents say they would prefer for the wealth to be still more evenly spread around."

For more:  What We Know About Wealth

Crisis Migration: City to Country? Country to City?

Helena Smith of the Guardian UK is reporting that, following the collapse of the Greece economy, young people in Greece have started a mass exodus from the cities to the countryside, where they are taking over abandoned farms.

11.22am: Moving to the Greek countryside from the city, though (see last post) is no picnic.

Photograph: Cathal Mcnaughton/Reuters

This picture shows 56-year-old farmer George Andrianakis, and goat, at his farm in the village of Stafania in the Peloponesse area of Greece. As he told Reuters, profits at the farm (which includes orange and olive trees, sheep and goats) are down by over 50% this year while costs are almost 30% higher.

11.11am: News in from Athens, where our correspondent Helena Smithsays newspapers and television channels this morning all reporting that young Greeks hit hard by the financial crisis are fleeing from the cities to the countryside.

Some commentators are describing it as a mass exodus. Helena writes:

It's official: Greece is undergoing a mass internal migration as a result of the economic crisis that has engulfed the nation since December 2009.

After years of being spurned for the bright lights of big cities, rural areas are making a comeback as unprecedented numbers of unemployed young Greeks move en masse to the countryside encouraged by government stipends to cultivate tracts of land that have been left untended for years. A survey conducted at the behest of the Agricultural Development Ministry by the polling firm Kapa Research found that more than 1.5 million Greeks were considering relocating to rural areas with one in five already having made the move. Around 75 % were under the age of 44 – the group worst hit by joblessness in a nation where more are now out of work than employed.

A €60bn state-funded program offering plots of land at cheap rates to would-be farmers had been snapped up, said the agriculture minister Costas Skandalides, announcing the findings. The survey showed that the vast majority were willing to earn less for a better quality of life. "More than one million Greeks, most with university and even post graduate degrees, are rejecting prototypes to go back to their roots convinced that it will lead to a better quality of life even if there are less trappings," he averred. "We are witnessing a profound shift in Greek society and lifestyles the extent to which we have yet to grasp."

In the northern Greek city of Thessaloniki, more than 4,000 trained agronomists have rushed to sign up to an initiate that has seen the town's main university rent out plots of land for cultivation at affordable prices. "I will go and grow rice and cotton," Alexandra Terzidou, one of the graduates, told Skai news. "It's a great opportunity."

Prior to the research academics had poured over anecdotal evidence of the migration but had been unable to pin point just how big it was.

Another story in the NY Times (Jan. 9 2012) confirms this trend in Greece.

The Greek case seems to set up the supposition that "in the face of economic and political collapse, people will migrate from the city to the countryside to farm."

Yet we are also seeing a mass migration from the countryside to the city, right here in New Brunswick, and all over the United States. Data from the 2010 US census shows that growth in urban centres has exceeded growth in the suburbs for the first time in 20 years:

WASHINGTON — Stung by high gasoline costs, outlying suburbs that sprouted in the heady 2000s are now seeing their growth fizzle to historic lows, halting American city dwellers’ decades-long exodus to sprawling homes in distant towns.

New census estimates as of July 2011 highlight a shift in population trends following an extended housing bust and renewed spike in oil prices. Two years after the recession technically ended, and despite faint signs of a rebound, Americans again are shunning moves at record levels and staying put in big cities.

That is posing longer-term consequences for residential “exurbs” on the edge of metropolitan areas.

Construction of gleaming new schools and mega-malls built in anticipation of a continued population boom is cutting back. Spacious McMansions offering the promise of homeownership to middle-class families sit abandoned or half-built. Once an escape from urban problems, suburban regions hit by foreclosures are posting bigger jumps in poverty than cities.

The result: The annual rate of growth in American cities and surrounding urban areas has now surpassed that of exurbs for the first time in at least 20 years, spanning the modern era of sprawling suburban development.

Read more: http://www.nydailynews.com/news/national/census-shows-u-s-cities-booming-suburbs-wilting-article-1.1056505#ixzz1rZUkArFp

So this begs the question: under the pressure of economic decline, job loss and rising fuel prices, which way will people tend to migrate? from cities to the countryside to grow food? or from the suburbs to the cities to find jobs? The answers are obviously complex and it will very much depend on local conditions.

The case of Greece seems to indicate that catastrophic economic collapse might see people migrating to the countryside in order to grow food. This does not mean that they will be successful at procuring even a subsistence living, as farm production is as much affected by the price of oil, and general market conditions, as the urban job sector.

The case of the US cities (and New Brunswick) seems to indicate that in the case moderate to severe economic stress, high oil prices, higher property taxes, and the loss of jobs and services in suburban areas, people will tend to migrate to the cities to reduce expenses and find jobs.

It should be noted that both trends are affected by local and federal government policies that change taxation and economic sector subsidies, creating incentives for people to move in one direction or the other.

One thing is for certain: under severe economic stress, high food and fuel prices, job loss and climate change, people are going to move.