The Future Of Capitalism - Paul Collier

Question 1

The underlying force of divergence between prosperous city and broken city:

Answer 1

1) Specialization of skills
2) Scale of economy

Cities offer excellent connectivities will encourage the clusters of specialized skill workers and create economy of scale.

Hence, to solve the inequality between cities, it would need to look into:

• taxation: tax the economic rent on land owners (who enjoy the value appreciation) and high skillet workers (who benefit from high paid city jobs)
• policy to create industry clusters: through incentivize pioneer, create business zones, universities.

Question 2

The net effect of globalization are positive, but it is not a unified phenomenon that has to be adopted wholesale or rejected in entirety.

Answer 2

1) Trade: redistribution issue within and between societies;
2) Regulation: the globalization of companies has not been matched by the globalization of regulation (eg. tax evasion)

3) Migration:
trade is driven by comparative advantage, whereas the movement of labor is driven by absolute advantage, migrants themselves are the only unambiguous beneficiaries.
“Rent of agglomeration” of metropolis transfers from citizens to immigrants when they displace nationals on high productivity jobs.

Question 3

Informed electorate is the ultimate public good.

Answer 3

民主政治的基础是选民。要使民主政治良好运作，提供受教育，能理性思维的选民就相当于是提供一种公共产品。