Globalisation - Critiques (Inequality)

Question 1

how did covid change wealth inequality

Answer 1

catalyst

pace of growth in inequality increased

99% of humanity were worse off as a result

Question 2

explain how an elephant curve can describe global income distribution

Answer 2

bottom 50% capture 9% of growth of wealth

far extreme (the poorest) income dropped

20% to 70% is the hump - where most people lie. In here income doubled as there was a rise in emerging economies

The trunk of the elephant and lower part consists of the middle class of rich countries that have seen a drop in income as the amount of middle class people rises

the top 0.01% have done the best

Question 3

how was wealth distributed in the US
- pre WWII
- post WWII

Answer 3

pre WWII 45% of wealth in top 10%

post WWII, there was a growth in ‘middle class’ america, rise of labour unions gauranteed security of wages

Question 4

what does Louis Brenna (2007) believe to be the cause of the rising income inequality

Answer 4

businesses putting the value of their stock as their #1 priority, at the expense of other stakeholders

Question 5

what does Jack Welch (regarded as the Father of shareholder value) say about shareholder value in hindsight 2009

Answer 5

shareholder value should be a result not a strategy

Question 6

example of when shareholder value strategy went too far and for the worse

Answer 6

Valeant (pharmaceuticals) price hikes
2015, up to 400% increase

‘Duty to shareholders to ring in max profit’
meanwhile, CEO compensation 11milllion

They would make money by acquiring companies and laying off all the staff
did barely any R&D
settled in Canada where tax low
US does not control drug prices

now in debt and corporate rebrand