Trickle down development is so 20th century
My first reaction to the headline of this story, "Growth Has Been Good for Decades. So Why Hasn't Poverty Declined," in yesterday's New York Times was "trickle down doesn't work anymore."
Capital in the 21st Century, (which I haven't yet read). One of the better summaries comes from this NYT Magazine article, "Inequality Has Been Going On Forever ... but That Doesn't Mean It's Inevitable," which emphasizes Piketty's point that the rate of return on capital is always greater than the rate of return from economic growth.
r > g
is the equation in the article. That leads to Piketty's recommendation of more taxation of wealth to ensure greater equality.
In "the old days," capital(ists) weren't focused on capturing every element of the return, so that some of the return was shared with labor, and some of the return was captured by taxation, and those monies would be invested in educational, economic, transportation, and other infrastructure that would benefit.
Now, capital is focused on keeping as much of the return as possible.
So there aren't monies to share with labor and the focus is on reducing the cost of labor by having fewer workers, and therefore fewer people to benefit even indirectly from increasing returns to capital investment.
And companies continue to devise ever more creative financial engineering strategies focused on reducing taxes, shaping the political process in ways that favor capital when it comes to taxation (e.g., the special tax treatment for "carried interest,) or moving to those jurisdictions where corporate taxes are lower)--although most of these acts by multinational corporations are similar in spirit to strategies that have been employed for decades.
2. I have been thinking of this issue quite a bit as it relates to urban planning, having been exposed to planning in Hamburg, Vienna, and Helsinki as part of the Europe in Baltimore writing project I have been doing.
There, and in Europe more generally, which has a different tradition concerning social and public goods, social and civic infrastructure and what we might call indirect equity planning is built into projects at the outset, especially as it relates to the provision of what they call "social housing."
People who are poorer need social and civic infrastructure the most, because the wealthy can just buy what they want and need.
Reductions in investment in social and civic infrastructure are another element in the increase in inequality.