The Great Gatsby Curve

[Walterp]

F Scott Fitzgerald’s tragic hero is the idea behind ‘The Great Gatsby Curve’ - which countries give you the greater chance of an even break to make it on your own, without ‘family money’ behind you, and which makes sure that if you’re born poor you will die so?

The cult of inheritance is one of the ill effects of Thatcherism: as income inequality between UK citizens increases, inheriting the advantages of your parents both buttresses and augments the built-in disadvantages that poor kids are born with.

Social immobility, house prices, buy-to-let, student loans, (and the abuse of IHT agricultural property relief) all fit neatly into this chart, explaining why the UK is a more divided (and divisive) country than it used to be. And it’ll get worse, because it’s a compounding phenomenon down the generations.

It also explains why, until the Conservatives realise that they need to be the proponents of opportunity rather than inherited privilege, they will struggle with The Nasty Party tag.

The Great Gatsby Curve is an argument about whether our country is fair.

 

[dstudent]

F Scott Fitzgerald’s tragic hero is the idea behind ‘The Great Gatsby Curve’ - which countries give you the greater chance of an even break to make it on your own, without ‘family money’ behind you, and which makes sure that if you’re born poor you will die so?

The cult of inheritance is one of the ill effects of Thatcherism: as income inequality between UK citizens increases, inheriting the advantages of your parents both buttresses and augments the built-in disadvantages that poor kids are born with.

Social immobility, house prices, buy-to-let, student loans, (and the abuse of IHT agricultural property relief) all fit neatly into this chart, explaining why the UK is a more divided (and divisive) country than it used to be. And it’ll get worse, because it’s a compounding phenomenon down the generations.

It also explains why, until the Conservatives realise that they need to be the proponents of opportunity rather than inherited privilege, they will struggle with The Nasty Party tag.

The Great Gatsby Curve is an argument about whether our country is fair.

Am I reading this chart right? The UK is on par with Italy. Pakistan has less inequality and a higher intetgenerational mobility and earning than the UK , Italy and the USA?

 

[Muck Spreader]

Am I reading this chart right? The UK is on par with Italy. Pakistan has less inequality and a higher intetgenerational mobility and earning than the UK , Italy and the USA?

The Gini coefficient measures relative not absolute wealth.

 

[dstudent]

I m not disagreing with the basic principle of the GGC, children of well off parents have certainly more advantages and vice versa. Income inequality and wealth distribution cannot be the only indices to intergenerational mobility and increased earning though.
Hence my query about Pakistan, the GINI CM is too an arbitrary measure.
Access to education and health care, gender parity, non discriminatory practices, access to food and housing, level of corruption, these are some of the indices, on top off my head, which might influence the mobility and earning capacity between generation.
I would rather be a poor woman in England than Pakistan,

 

[Walterp]

I m not disagreing with the basic principle of the GGC, children of well off parents have certainly more advantages and vice versa. Income inequality and wealth distribution cannot be the only indices to intergenerational mobility and increased earning though.
Hence my query about Pakistan, the GINI CM is too an arbitrary measure.
Access to education and health care, gender parity, non discriminatory practices, access to food and housing, level of corruption, these are some of the indices, on top off my head, which might influence the mobility and earning capacity between generation.
I would rather be a poor woman in England than Pakistan,

The Curve incorporates the Gini coefficients in a correlation to generations, to show onward transmission.

It's the flip side of Mrs Thatcher's vision of 'wealth cascading down the generations' via inheritance, I suppose. It works, so long as you're on the inside looking out (which is where a great many TFF members find themselves, sometimes merely by dint of being born in the right bed).

It was part of a presentation to Congress in 2012 by the Council of Economic Advisers (to the President, then a Democrat) to demonstrate graphically where the USA is, in relative position to peers (no, I don't know why Pakistan is there either).

The suggestion is, I think, that neither Republican nor Democrat may reverse the process without affirmative action precisely because it has a compounding effect both socially and economically.

Banning Public Schools would be a good start...

 

[rob1]

The trouble with redistribution of wealth is that it destroys the incentive to work hard and make a better life for yourself and future family. if you view was universal we would still be living in caves waiting for someone else to do something, I agree there is too much greed and the elite are vastly over paid, now who do we class as the elite? Doctors, mp,s bankers, farmers, solicitors, teachers , tv celebs, chief execs? We have a free education system where everyone one gets the same chance, IF and its a big if, they and their parents choose to take it, peer pressure in poor areas no doubt makes it hard for kids that want to learn to be a swot,many dont want to learn and many parents dont give a toss, my OH works as a HV and while she obviously doesnt give details some of the stories about families makes you think some shouldnt be allowed to breed, now compare that to others that work hard get on, save, invest for the their and their childrens future, if you take all that away and give it to someone who wont work then whats the point?

 

[Walterp]

Wouldn't it be terrible if we lived in a liberal, social democratic, progressive taxation based country like Finland, Denmark, Sweden or Canada?

 

[Roger Perry]

I remember Gordon Geko saying that "Greed" was good..........greed made things happen.

 

[wanton dwarf]

@Walterp Where do you drag this garbage up from ?

Sweden, Norway & Denmark ?

"‘The Great Gatsby Curve’ - which countries give you the greater chance of an even break to make it on your own"

That's just a massive lie.

All those economies have VERY high social taxes which get spent on Socialist and Liberal policies ... or in other words NOTHING is done on ANYONES own.

It's all MASSIVELY state funded. Those taxes are not only spent on those with their hands out but on state indoctrination and sensorship.

Are you joined at the hip with that lunatic cult Momentum ? A closet Communist ?

The USA has always been the land of opportunity because anyone with drive can move from being an immigrant to being a senior politician or corporate demigod. Yes the useless fall by the wayside ... but that is because they are useless.

 

[wanton dwarf]

Wouldn't it be terrible if we lived in a liberal, social democratic, progressive taxation based country like Finland, Denmark, Sweden or Canada?

Having lived in Finland and met the Swedish ... yes it would.

If you advocate it then why not go live there ? Nothing stopping you.

If I remember correctly you could join the Somalian immigrants ... you only have to dodge the handgrenades every so often.

 

[Muck Spreader]

I remember Gordon Geko saying that "Greed" was good..........greed made things happen.

Greed is very good, but only for the one percent of society who it ultimately benefits.

 

[Pond digger]

Why does Thatcher get the blame for all this disquiet? She didn't invent capitalism.

 

[Walterp]

Why does Thatcher get the blame for all this disquiet? She didn't invent capitalism.

First intelligent question I've seen today (although I'm still thinking about Roger's suggestion about writing to Agco in the States).

From my point of view, I was 19 in 1979 and going up to uni when Mrs Thatcher became Prime Minister. I didn't vote Conservative, but I supported her idea that a prices and incomes policy (to control rampant and UK-specific inflation) wouldn't work in the absence of labour union co-operation.

By then the UK was already in a bit of a state due to (inter alia) the first IMF Bailout of the UK after Suez, the Stop/Go economic policies of the 1960's, irresponsible credit policies of Anthony Barber (Conservative Chancellor), and this led to the tumultuous Wilson/Heath years.

Jim Callaghan was a decent man, and obviously by far the nicer and more reasonable person, but he couldn't persuade the TUC to control militants within their ranks. This was his only weak spot, but it proved fatal: the lesson I drew from this is that greed, on the part of either labour or capital, buggers it up for the rest of us.

Mrs Thatcher's economic policies did for her, too - she was influenced by Dr Alan Walters and Milton Friedman, with what are regarded today as discredited monetary theories - and she overdid both interest rate policy (our friend the wanton dwarf consistently ignores this was a signature Thatcher policy) and supply-and-demand theorising in the NHS and the wider economy.

Whilst she didn't invent capitalism, she did invent the forced abandonment of swathes of manufacturing businesses (who couldn't afford 15% I/R) and replaced it with financial services (which could).

On the plus side, she also more or less invented the Single Market in its practical form, and characteristically strong-armed the Japanese to invest in the UK as the gateway to the EU, by giving her personal assurance that they would get EU-wide access for their goods and services. (This is why the Japanese are so pee'd-off with the UK's present Government that they took full page ads in the UK Press to complain about it).

So in some ways Mrs Thatcher did, in fact, invent the modern UK economy.

The irony is that TFF members who worship Mrs Thatcher as a strong figure (I'll bet they also inherited their farms from their parents in a surprisingly large number of cases) also despise her legacy.

 

[Pond digger]

First intelligent question I've seen today (although I'm still thinking about Roger's suggestion about writing to Agco in the States).

From my point of view, I was 19 in 1979 and going up to uni when Mrs Thatcher became Prime Minister. I didn't vote Conservative, but I supported her idea that a prices and incomes policy (to control rampant and UK-specific inflation) wouldn't work in the absence of labour union co-operation.

By then the UK was already in a bit of a state due to (inter alia) the first IMF Bailout of the UK after Suez, the Stop/Go economic policies of the 1960's, irresponsible credit policies of Anthony Barber (Conservative Chancellor), and this led to the tumultuous Wilson/Heath years.

Jim Callaghan was a decent man, and obviously by far the nicer and more reasonable person, but he couldn't persuade the TUC to control militants within their ranks. This was his only weak spot, but it proved fatal: the lesson I drew from this is that greed, on the part of either labour or capital, buggers it up for the rest of us.

Mrs Thatcher's economic policies did for her, too - she was influenced by Dr Alan Walters and Milton Friedman, with what are regarded today as discredited monetary theories - and she overdid both interest rate policy (our friend the wanton dwarf consistently ignores this was a signature Thatcher policy) and supply-and-demand theorising in the NHS and the wider economy.

Whilst she didn't invent capitalism, she did invent the forced abandonment of swathes of manufacturing businesses (who couldn't afford 15% I/R) and replaced it with financial services (which could).

On the plus side, she also more or less invented the Single Market in its practical form, and characteristically strong-armed the Japanese to invest in the UK as the gateway to the EU, by giving her personal assurance that they would get EU-wide access for their goods and services. (This is why the Japanese are so pee'd-off with the UK's present Government that they took full page ads in the UK Press to complain about it).

So in some ways Mrs Thatcher did, in fact, invent the modern UK economy.

The irony is that TFF members who worship Mrs Thatcher as a strong figure (I'll bet they also inherited their farms from their parents in a surprisingly large number of cases) also despise her legacy.

Like you, I very much regret that uk government hasn't nurtured our manufacturing industry, and Instead, put so much emphasis on services, which in itself adds to the burden on industry. I do think though, that the unions are as responsible as anyone for the demise of industry.

I don't think that any single individual can be blamed for such failings.

 

[czechmate]

Like you, I very much regret that uk government hasn't nurtured our manufacturing industry, and Instead, put so much emphasis on services, which in itself adds to the burden on industry. I do think though, that the unions are as responsible as anyone for the demise of industry.

I don't think that any single individual can be blamed for such failings.

Before blaming the unions too much, you have to consider why the unions were there in the first place

 

[wanton dwarf]

Before blaming the unions too much, you have to consider why the unions where there in the first place

Unions are there to ensure an elite get more than everyone else.

In 2008 many private sector workers lost their jobs.

Did we hear anything from the Unions ? Public sector ? Media ?

No.

All we hear now is how the public sector has had to put up with small wage rises ... self serving and amoral.

I'll give them as much interest and concern as they gave me.

 

[Muck Spreader]

Unions are there to ensure an elite get more than everyone else.

In 2008 many private sector workers lost their jobs.

Did we hear anything from the Unions ? Public sector ? Media ?

No.

All we hear now is how the public sector has had to put up with small wage rises ... self serving and amoral.

I'll give them as much interest and concern as they gave me.

Reasonable unions have a place in most organisations. They give management a single negotiating point and a body to discuss future change with. Whilst the individual employees have someone representing them and also advising them on many aspects of their lives from pensions, benefits, H&S etc.

 

[7610 super q]

The unions got us into a hole in the 70's. A hole which we will never climb out of.

 

[Old McDonald]

On the plus side, she also more or less invented the Single Market in its practical form

I would like to know how you reached that conclusion.

 

[Old McDonald]

I would like to know how you reached that conclusion.

Bump.