 I'm going to just turn this over to our panelists, but I thought one introductory remark wouldn't be out of place. It seems to me that this panel is utterly basic to the whole project of this conference. And rather than just state it, I'll simply try to illustrate it with a story. All last year in 2016, I was reading in just about every media I read on the east coast or the west coast, and in Chicago, that the United States economy was doing really great, that we had caught up with where we were back in 2008, that it was often added as a kind of Soto Voce subtext thanks to President Obama, and the general suggestion was that people should now be happy and like everything. Then on election night, something else happened. Lots of people who evidently were not happy did not vote as people expected. And I think that was when some people in the United States woke up for the first time that they've been living in a bubble. And if one goes around Western Europe, or I dare say even in Japan, you will find in most of the developed countries, even Germany I dare say, there's a kind of bubble atmosphere at the top and in the media. And that derives from the phenomenon we're talking about, people have sort of lost track of the fact that if you like the gap between the median and the mean, or the average in that sort of normal or with medical sense has grown and grown, and that large chunks of the population are not as it were any more living in the same world. Now, lots of folks are discovering this in many ways. But the first person to sort of note it, to pull it out, and to start to build an economic theory is our first speaker, and that's Peter Timmett. Well, thank you very much for that introduction, because this was written before the election of 2016, but okay. And so I wanna start with the story, just like Tom did, just about two janitors, one who worked for Kodak in the 1980s with paid vacations, tuition support for colleges, and given a job, a tenure track job for academics, but a professional track job when she graduated in 1987. And Mr. Ramos works at Apple today, employed at Apple, not by Apple, is employed by a subcontractor, no vacations, no path to promotion. And what has happened in these 30 years is that finance has pressured companies to specialize on core activities, so that instead of hiring janitors and other workers of that sort, they have now been replaced by subcontractors, independent, they're employees of independent contractors, no equity consideration among varied workers, no benefits, no raises, no promotion. And that's just the story. Here are the facts of the decline of the middle class from over three-fifths to around two-fifths with the upper going up, that's the upward 20% that blue line going up, which will come again. And in order to understand the ramifications of this change, I've used this old model by W. Arthur Lewis of a dual economy. And so we had developing economies, often had two sectors, capitalist and subsistence farming. Transition was to go to the city, but for a higher wage, but the slums in all of the major cities show it's troublesome. Capitalists, and this is important, in the Lewis model, wanna keep farmers incomes low because that allows the capitalist to pay lower fees, lower surcharge on it to get their employees for that. So adapting Lewis to the US today gets us into what I call the finance, technology and electronics, FTE sector for that. That's the 20% with that upward line. And we'll get there. So low wage is most of the rest, the transition instead of going to the city, it's having more or less having a college education. For the FTE policy is in keeping with the Lewis model, makes policy for itself and likes to keep the low wage sector in my lexicon here down. And so on, as you can see from the slide, the wealthier, the higher income you have, the more influence you have and the more conservative that you are. So here's the data on the top 1%, which has been called the plutocrats just to give you a little more detail of that. And since a rising share as you come here gives you has to be offset by some falling share, then you can see the real wages have stalled for the time period exactly shown in the little story there. And the book goes into the fact that there's a lot of less mobility as a result of that there for it. Now racial prejudice is very important in the American story because it's being used to sell government services, to sell limited government services to keep those folks down. Blacks are only one or African Americans if you want are only about 15% of the American population. So if the low wage sector is 80%, you can see they're down about one fifth of the low wage sector. And so the onus of the race on the decision making is very important. This is a long, long American practice. The slide just has the end of this, but of course for Europeans and further it starts with slavery, with the Civil War, Jim Crow, and then these modern presidents who have encouraged this process to go again for that. The mass incarceration is very important to this story. And prison inmates started to grow in the 1970s so that now the US has 5% of the world's population and 25% of the world's prisoners. And what that means is that one in three black males goes to prison during his lifetime. It's an amazing figure. If you just think about one out of three, you know, in the relevant communities which are very heavily in the influence in the black community, everybody knows somebody in prison or is related very closely. So that this destroys black communities. Some of it is that felons are deprived all of the benefits of citizenship for there. And as I say, everybody knows somebody in jail. There's the graph there. And we seem to be a little bit tailing off at the end. So we may be approaching a new equilibrium up there where this continues out of sight and out of the mind of most people in the FTE sector indefinitely for that. The interaction interacts very much between mass, there are many interactions between the mass incarceration and education. So if a black man goes to prison, no need to educate them. What are they gonna do with it? And if boys are not educated, they go to prison. So, you know, it's a good circle. For that, it destroys the chance of the kids in school because of the overrepresentation of blacks in prisons. The children with fathers in school, fathers in school, fathers in prison have many more troubles in the early grades, which grows up to different educational things there. Now, where is the link between these things, the race and there? And you can see this. Nixon was mentioned earlier. And what this shows got enough time to read it that the Nixon's White House says we knew it couldn't make it to be illegal against the war or black, but we could associate them the opponents with blacks and heroin. Then criminalizing both heavily and disrupting those communities. We could arrest their leaders, et cetera, et cetera. Did we know we were lying about the drugs? Of course we did. So, shouldn't think that there's a separation in the race and the thing here, the political process. So, we now have dysfunctional politics in the US. The rich determine public policy. They want taxes and wages low. And the ultimate aim of some of the super rich is anarchy. Stated, it's not made up, that's their word used. Costs are born, of course, by the low wage sector. Blacks and Latinos are largely in the low wage sector. Latinos, blacks have been here for 300 years, the Latinos for 30 years, but they're falling into the same position here. And the FTE sector uses racism, fear of immigration, and misogyny to oppress the low wage sector. And what that means, having gone on since the time of Nixon, is that this has all been embedded into the institutions of the United States, the role of the government. So that we have, as you see the word, marching up the, down the slide, dual systems of government. So the dual system of justice is what I've just been talking about, mass incarceration, you can get put in jail, or you can be driven to suicide while waiting for things, just for having a rear light out if you are poor and black. Whereas if your taillight is out and you're white and stable, you pay a fine and go on. So this is the kind of dual nature of all of this. Dual systems of education, because the FTE sector has moved out, has financed their own schools, or has gone to private schools. The schools continue as they have, not perfect, but very good, and urban public education under, partially under the weight of the mass incarceration that I mentioned before, has been largely abandoned. Dual support for housing, transportation, so that we have airports, we have interstate highways, but we don't have city streets without potholes, we don't have urban transportation that is reliable, and if you read some things in the New York Times about the subways in New York, they seem to be largely into collapse. Dual treatments of debt, then since children are now expected to pay for their own education, not the typical, the historical American pattern. This is all because of the fiscal policy, which has ignored even state universities, largely privatized state universities, from lack of revenue from the statements, that the low wage workers have had mortgages in the interim, as leading up to the 2008 crisis for this, and educational debts are now second only to mortgage debts in the accumulation of things. And since I have a minute, I'll talk about a little bit, since I wrote the book, the Trump administration referred to by Tom a little before, has demonstrated exactly the force of the Lewis model here, because even though the book was finished before then, the treatment of healthcare is just exactly what the model would predict that, after all, is the function of having a model. And so they would deprive over 20 million people, the Republicans in Congress, so it wasn't the president, it was the Republican Congress, which is why I can talk about them as the FTE sector, we're happy to deprive over 20 million people of low-cost healthcare in order to eliminate the tax on high income people to finance this kind of subsidy. And so you can see this if you follow American politics right at the moment, in the rapid switch from healthcare to the massive tax cut that they wanna rush through Congress, that it has taken, took only five minutes for them to make this pivot, meaning that these 20 million people were not of any concern, what was of concern was getting the tax cut for the very rich. So in that note, I will stop. Thank you very much, Peter. Our next speaker is Marcella Corsi. Thank you, Thomas. Thanks, Cnet, hi, Nett, sorry, to have invited me here today. So if my presentation starts, exactly. So here we are. So let me just draw your attention to that lady over there on the left. That young lady with multicolored hair is called Minerva. Actually, Zetina in Greek, in the Greek tradition, is the goddess of science. And it actually represents, I think, a tank just born in Rome in my university, which I, the honor, to coordinate. And which actually aims to bring together competencies from different social sciences, not only economics, but sociology, law, and so on, in order to describe and also monitor, as I will try to show you today, the development of our society in a gender perspective. So as you can see, the title is very ambitious. I would like to introduce you to dualists in a gender perspective. And this is something that I'm actually doing or trying to do since 2013, together with some colleagues of mine, younger than me, Carlo Di Politi and Valeria Cirillo. Carlo Di Politi is here with me today. So we're talking about a crisis once again, I know. But in a different perspective. Because actually due to the crisis, the concept of social class is increasingly again the scene, but very rarely in a gender perspective. So that's our challenge here today. At the same time, together with this concept of class, of course, quite a lot of discussions have been carried out on inequality, but mostly concentrating on personal incomes. So really taking into account individual incomes, top incomes, poor people, and so on. You certainly understand what I have in mind. And of course, very often, but this is a constraint due to the data that we have to use, these analysis are carried out at household level. So what we want to do instead, actually using the classical economist theoretical approach is to study the functional income distribution. Obviously we're not the only one trying to do that. I do not pretend to be completely original in doing it. And what we do is actually talking about Europe. We try to analyze the development of household incomes through time in a gender perspective, using new silk micro data, which is, of course, the best dataset that you can use at European level. So what we mean by functional income distribution? Well, I said just before we are in Edinburgh, we have been introducing hundreds made several times, but I could, of course, speak about Ricardo and meal and so on. What they had in mind in speaking about income distribution was actually the role of each individual class in the production system. Therefore, each of the household belonging to our society does receive an income according to its role. Labor income, including wages, which is calculated in our case as the sum of the audult household members of gross employee cash or near cash income and includes, therefore, wage, but it also includes income from self-employment. Then capital income, I want to say that this is started and we start before Mr. Piketty, so it's quite important for us to stress this. Actually, capital income is mostly a financial capital because we are living in a different world, of course, compared to the classical economists, but it also includes capital in the traditional sense and the form of dividends and in the forms of profit for capital investment in unincorporated businesses. It doesn't include savings, I mean, firms saving and then state transfers, which are increasingly important in our societies, of course, especially in welfare economies like the European one or what is left of the welfare economies. And therefore, it includes quite a lot of different type of benefits that households may receive according to their situations. So, feminine children related allowances, housing allowances and so on. I'll let you read it because otherwise, time goes by very quickly, but I'm pretty sure you all have, you are familiar about these concepts. So, what shall we do with that? Well, we analyze nowadays in 2005, we're actually up to 2015 because this is the latest update of the USIC data set. We analyze 1,700 and 415 households in 31 European countries, which of course means the 28 EU countries plus three, so-called EFTA countries, Switzerland, Norway and Iceland. And we do it for the period of the crisis, 2008, 2015. I warn you that for 2015, you will see in the charts that I'm going to show you in a second, actually Germany and Switzerland are not including in the data set and that of course, makes our analysis a bit more difficult. So, let's stick to be honest up to 2014, just to be completely consistent through time. But still, we have data for 2015 and I wanted to show you by the way. So, what shall we do? We distinguish, we try to define the sex of the households. Men, female and male, what do we do? We take into account the declarations, of course, made by the head of the family and we define man-headed households, those in which a man declares to be the one earning the highest income, basically a standard male breadwinner model. But we also consider the households women-headed. So, those in which it is a woman to earn most, of course, is a minority, but it's increasing, I will show you in a second. Actually, you can see it from there, from the table that is already included in my slide. From 2008 to up to 2015, you have a decrease in the percentage of man-headed households and instead you have an increase of women-headed households. Why? Well, there is a story behind this, probably you heard it already. The crisis had actually two different stages. The first one that nowadays, especially in the feminist literature, is called an E-session. It's the first part of the crisis in which mostly men have been affected in terms of loss of employment and increase of unemployment because the crisis hit directly the manufacturing sector or any case sectors where men were mostly concentrated, which meant, of course, that with the loss of job, with the loss of income, the number, the percentage of men-headed households has decreased through time and at the same time, it has increased the number of women-headed households in two different forms, of course, households in which the man has lost the job and women have been forced to enter the labor market or otherwise, of course, situations in which the man does not or didn't work at all and it keeps not working while the women are at the breadwinner, which is, of course, not relatively minor in terms of the evidence, but still we have both, of course, and of course, then you have the single, the single people. So what happened through time, you can see, you have wages, so just one part of the labor income that I mentioned before, and capital incomes. The capital income is on the right axis, the wage income is on the left axis. You can see, actually, through time, wage income has been decreasing, both for women-headed and men-headed households, but more for men-headed households compared to women-headed households. As a matter of fact, the income gap between these two types of households has decreased, which appears for some, actually theorists or for some analysts, quite a good thing to discuss, but actually, we don't think it's a good thing to discuss because as a matter of fact, both households have become more poor. At the same time, for capital incomes, the income gap is more or less stable, so the crisis is affecting in terms of functional distribution, men-headed and women-headed in a different way. Let's make it more clear. This is the income gap between men-headed and women-headed households by source of income. You can see the labor income gap has been decreasing, as I said before. The capital income gap has more or less remained stable. What has really increased a lot is the trade transfer. State transfer income gap has been increasing for the reason that I told you before, because more and more men-headed households had to rely on state transfers because of the impact of the crisis. The first one, the E-session. Another impact might arrive quite soon or maybe it's going on right now, but we don't have the data to show you. Actually, this is a work in progress, so we will keep on doing it, at least for other five years, more or less, because actually the crisis, the new crisis, has it as the service sector, where mostly women are concentrated, the public administration, because they'll study the measures. So it's time to know what's going on, but it's too early to show you with the data. And finally, well, of course, there is quite a lot of econometrics in our analysis. In one slide more, and I will show you where you can read more about this. And of course, if you want to write us, to contact us, we will be happy to inform you about all this. But just to show you very quickly two charts, and then I stop. This is the impact of the recession taking into account changes in labor incomes and changes in capital incomes, where actually the impact of the recession is measured taking into account the cumulative GDP change between 2008 and 2014. All the dots that you see, of course, are the 31 countries. And of course, the lines just describe very quickly and very roughly the relationship between the variables that we have included in our analysis. As you can see, and as you could expect, actually a growth in the GDP actually increases the labor incomes, so there is a positive effect. But of course, which means that if there is a decrease in GDP, labor incomes decrease. But for capital incomes, the situation are different. And there is also a minor but significant difference in statistical terms between women and men. And then I mentioned just before austerity. So this is the impact of fiscal consolidation. It's measured fiscal consolidation by the the yearly change of the primary surplus per capita. So you find this variable on the vertical axis, on the y-axis, while on the right axis again you have the change in labor incomes and the change in capital incomes. What means all this? Fiscal consolidation brings in two surpluses. So of course, moving up on the left axis brings what? Brings to reduction of labor incomes. So there is a negative relationship. Austerity fails in that sense if you want of course to increase the spending power of our families. On the opposite side, well as you can see, fiscal consolidation is not so dangerous for capital incomes. And both for men and for women-headed households. Even if, once again, there is a significant difference from a statistical point of view between these two type of households and as a matter of fact that this is something that we will explore also in future works, men-headed households seem to be hit much more than women-headed households. Don't ask me why now. To know in future, in few years time. And to know more, four publications are already available and you are welcome for any comments and suggestions. Thank you. Thank you very much. And our next speaker is Guy Standing. Thank you very much. I worked for the International Labor Organization for many years and I was director of labor market research and after I left, I wanted to put to all my 30 years of work together and I decided to write a book that was called The Precariat, the new dangerous class. It was published in 2011 and on page one of that book, I said, unless the insecurities and aspirations of the emerging precariat are addressed as a matter of utmost urgency, we will see the emergence of a political monster. You will not be surprised that I've received numerous emails from across the world since last November saying, your monster has arrived. What I didn't anticipate when I published that book is that it would have a life of its own. It's been translated into 21 languages, sold thousands and thousands of copies and led to me being invited to talk about it all over the world. The one place where I've not managed to get much traction is mainstream economics faculties. But I do get a lot of requests from students of economics and have just been invited to Oxford and various other places. So I do have hope that the narrative is getting some traction among the lower-aged group of our fraternity. And now, I think the subtitle of our conference here today is actually very apt because it's uncannily close to the subtitle of a book that has been very influential in my own thinking over the years. And that is Carl Polanyi's Great Transformation. You remember the subtitle of that. My narrative is that we're in the midst of a global transformation, the painful construction of a global market system. And we cannot sensibly understand the dynamics of what we're looking at without putting it in a global context. Just feel that that is completely inappropriate. Of course, you will all know that it began in the early 1980s with the sudden triumph of the Mont Pelerin Society. When I was a student, we regarded Hayek and his bunch as a bunch of loonies on the right, but suddenly they were the orthodoxy and they took over the stables. And of course, what they pursued, as we all know, was an agenda of market liberalization, privatization, commodification of everything that could be commodified, and very significantly, for my narrative, the systematic dismantling of all institutions and mechanisms of social solidarity that stood against the market. The institutions that actually give us the protections against the worst features of market forces. And among those, of course, are the commons. The Austrian School of Economics, which was influenced by von Mises, of course, for them, the commons has no exchange value, so it has no value, it has no price, so you can privatize it and give it away. And one of the untold stories of what's been happening in the last few decades, and particularly since the austerity era began, has been the plunder of the commons. And the commons are very important for providing part of the income base for the precariat I'm about to talk about. I'll leave that aside. With the liberalization, of course, there was a concerted agenda across the world for the pursuit of labour market flexibility. That was a euphemism for making labour relations more insecure and taking away certain regulatory defences. But it's a profound mistake to think that this has been an era of labour market deregulation. Anybody who uses that term should be encouraged to take up something like sewage cleaning or gardening because they haven't been observing what has been happening. This has been a period, and I saw this in the International Labour Organization, a profound labour market deregulation with far stronger state intervention in labour markets than at any time in history. And of course, we've seen occupational licensing taking away from self-regulating guild traditions and installing state regulation. Over a thousand occupations in the United States are today subject to occupational licensing. That's called state regulation. That's much more than used to be the case, and it's contributed to the occupational segmentation and stratification along the lines I'm about to describe. The other contextual point is that we've moved out of the neoliberal era into what I've characterised as rentier capitalism. Keynes famously wrote that during the 20th century we would see the euthanasia of the rentier. But since the 1980s, the opposite has happened. Systematically with financial hegemony, the same as Polanyi would have predicted, financial hegemony led to the construction of an international architecture of institutions that have allowed rentier capitalism to flourish. The World Bank, the IMF pursued corporate property rights to extreme, but the epitome of what has happened is that whereas the World Trade Organisation was the midwife of globalisation, Waipo became the midwife of rentier capitalism. When I first went to Geneva, we regarded Waipo as a joke. We thought it was a detergent company at the other side of Geneva. Today it's the biggest bureaucracy in the UN system in Geneva, and of course it achieved its breakthrough with the passage of trips in 1995. Just to give one stylised fact, in 1995 fewer than one million patents were registered. Last year was the first year in history where more than three million patents were registered, and the globalisation of intellectual property rights is generating a vast flow of rentier income. I don't have time to go into the other aspects of rentier capitalism, but it has profoundly changed the distribution system that we're observing. Now, of course, as we all know, the functional distribution of income has become far more equal. My professor at Cambridge, one of the two, was Nicholas Kaldor. He used to be a Kaldor's law that roughly speaking, the share of national income going to capital and the share going to labour were roughly constant. It's broken down as we all know since the 1980s. The functional income distribution has become far more unequal with the growing share of capital, but within that growing share of capital, a growing share has been going to the rentiers. I don't think it makes any sense to think of a dualistic economy. What we're seeing is a fragmented economy where those who are gaining incomes from rents are doing profoundly better than those who are getting income from any other source. And that leads to the emerging class structure which I've been trying to analyse. We have a plutocracy. In Adam Smith's terms, the plutocrats are the richest men in history. And the richest man in history is Carlos Slim. In 2004, his annual income could have paid for the annual income of 140,000 Mexican workers, on average. In 2014, his annual income could have paid for over 2.4 million Mexican workers. The Rockefellers and the rest of them in the early Gilded Age can look with envy at his wealth. The plutocrats, of course, are corrupting capitalism. They're corrupting democracy. They're manipulating. We all know that story. Don't have time for that. Underneath the elite, underneath the plutocracy is an elite of servants, multimillionaires making vast incomes, mainly from rent. Below them is the old Solariat. When I was a student of labour economics at Cambridge, we were basically told that by the end of the 20th century, everybody would be part of what I'm calling the Solariat. Long-term employment security, pensions, paid holidays, paid medical leave, paid maternity leave, you name it. But that group is shrinking. That group is shrinking. Alongside it, a group of proficient freelancers making a lot of money, suffering from burnout, etc. And below them, the old Proletariat, for which the welfare state was built, habituated to full-time stable labour and all the trappings of social democracy. They are sinking into the Proletariat. And the Proletariat, I've tried to define it, tried to measure it, we still lack adequate statistics to do so, but the Proletariat can be defined in three dimensions. The first dimension is that you are seeing millions of people being habituated, told to accept a life of unstable labour. Insecure labour, that's the most obvious factor with casualisation and so on. More importantly, is they're being told and they know this from their experience that they have no occupational identity, no occupational narrative of development that they can take through life. And they have to do a lot of work for labour that doesn't get remunerated or recognised in our inadequate statistics, but they have to do it and if they don't do it, they pay a heavy price. And of course, another feature is that their level of education tends to be above the level of labour they typically have. The second dimension is that they have distinctive patterns of social income. They have to rely almost entirely on money wages. Money wages that, as we know, have been stagnating or declining in real terms in most of the economies represented here for nearly 30 years. And not only declining, but increasingly volatile and increasingly uncertain. In addition, they're losing enterprise non-wage benefits. Our income statistics don't record this sort of trend, but it's hugely important for looking at inequality. They're losing rights-based state benefits, epitomised by the 1996 Welfare Act in the United States, but echoed and mirrored everywhere else that I've observed, and they're on the edge of unsustainable debt. One mistake, one error, and I know they'll be homeless, their indebtedness will crush them. Now, the last part of the definition, in my view, is the most important of all. And that is that people in the precariat know they are systematically losing the rights of citizenship. Not just if they're migrants, but people inside their own societies. They're losing civil rights. They're losing social rights. They're losing political rights because they don't see a party or politicians representing the precariat, and they're losing economic rights because they cannot practice what they're qualified to practice. They are supplicants. They know that. They have to ask for favours. They have to ask for favours from employers, from lenders, from bureaucrats. And that is what makes people angry. The precariat is suffering from anomy because it cannot see social mobility, suffering from alienation because it cannot do what they are actually qualified to do, suffering from anxiety, chronic, and suffering from anger. And then relative deprivation is leading to politically angry reactions. And what I've tried to do and why I've predicted early last year that Trump would win and Brexit would take place is that the first part of the precariat I call the atavists. I've used that term in the books. The atavists feel they've lost what they used to have. And they are angry because they want it back. That's what the Trumps are offering. But the second group is a nostalgics. These are the migrants, the minorities, and others who feel they have a home nowhere. They don't have a present. The first group feels they've lost the past. The second group feels they don't have a present. And it's the third group in the precariat that seemed to be the ones inviting me to give talks. Those are the people who were sent to university and college and they were told if they did that they would have a future, a career. Build wonderful careers. And they come out and they don't see that future. But they're angry, time is up. And this group is looking for a politics of paradise as I described it in the books. That politics of paradise for us economists will mean nothing less than building a new income distribution system in which wages won't play such a fundamental part for many people which is something like a basic income will be fundamental to that system and which new forms of mechanisms for capturing the rents for distributing to society will develop. And maybe then we'll see the euthanasia of the rentier. Thank you very much. Thank you very much. And now our first commentary is by Shannon Monat. Hi, I think I'm just going to stay sitting since I'm just a discussant and so I'll be a little less formal. Thanks Tom and I'd like to thank INET for inviting me here and for being interested in the work I do even though I'm not an economist. I really appreciated reading these papers and viewing these presentations because there's a lot of sociology built into what was written and what was said. I saw leanings of Marx and conflict theory in here. Guy just talked about anime which of course came from Dirkheim, one of the fathers of sociology. So this has been really interesting for me. Most of my comments are going to be about the U.S. because that's the context that I'm familiar with but there is obviously a lot of overlap in things that could be applied to Europe as well. So what I'm going to do is just briefly lay out some of the themes across these papers and then provide a couple of examples from the U.S. that illustrate these themes. So one big theme of course is this idea of diverging economies, the rich versus everyone else. It's especially prominent in Peter Timmons and Gay Standing's paper. Timmons also emphasizes the disproportionate negative impact of this phenomenon on blacks in particular, especially in relationships to education and mass incarceration. Marcella Corsi lays out, of course, how dualism affects men and women differently. And so we know that race and gender are really important delineations but I would encourage us to also not lose sight of place and space issues. The dual economy has certainly had a spatially heterogeneous effect. Over the past 30 years nearly all of the gains in income have gone to the largest cities in the U.S. case, primarily due to their locations as hubs for things like finance and technology. People in small cities and metro areas in the U.S. then have seen economic prospects decline. Young people have been moving to the cities for college for several decades and they never come back. And so then what happens is that generation after generation there's a larger concentration of the least resource people left in these areas. So these selection effect issues really disproportionately impact the places that rely on single sectors for employment, for example places that are farming dependent or mining dependent. Another theme that runs through these papers is the idea of the recession and policy responses to the recession affecting poverty and inequality. Not only were the impacts of the recession and the so-called recovery spatially variant, but state and local budget cuts hurt different places in different ways because of the vulnerability and the job opportunities in those types of places. The role of government deregulation, which I guess I should be saying re-regulation, devolution, disinvestment, these are also themes throughout all of these papers. We've moved away from a core safety net system that is centralized by the federal government to one where if we can turn something into a block grant that's what we do. And what that means due to discretion is that residents of some states and localities end up in much better situations than others. Finally, these papers sometimes explicitly and also sometimes implicitly point to a lot of significant long-term implications including disparities in education, mass incarceration, health, and of course politics. So what I show here is economic distress measured at the county level by a group of economic variables. This is the percent change in economic distress from pre-recession 2000 until right now. The darkest red are places that are still doing economically worse off than they were in 2000 and the blue are places that are doing better. We can see major spatial concentrations here. Clear geographic clustering of counties where distress has declined versus where it's increased and it's increased in places that were once thriving economically. There are manufacturing hubs of the U.S. for instance. There are places that certainly experience significant recessions shock but this isn't new. These dynamics have been building over at least the last three decades and I think those themes come through really clearly in these papers. And these patterns are important because they suggest that a really large group of counties in the U.S. are doing worse now than they were a generation before. And patterns like those really set the stage for intergenerational poverty like we've been seeing in Appalachia and now maybe happening in the industrial Midwest and New England. So this shows the percentage of counties that experience an increase in economic distress between 2000 and the recession period. That's the orange bar. We see that the majority of counties across all levels of metropolitan status except for rural, remote areas. The majority experience increases in economic distress from pre to recession. And the second bar shows that the overwhelming majority of counties are still worse off on four more indicators of economic distress now than they were in 2000. As standing notes in his paper, the U.S. is now characterized by this large precariat where there's pressure to accept a life of unstable and secure labor where not only have paychecks not increased but you get less for your job. You're less likely to have health insurance, pension, sick leave. And that the precariat is losing all kinds of rights. I should point out that none of those things are new for women or for people of color. Those are things that they've been dealing with for a long time. And what's new is that all of a sudden white males are dealing with those three issues, especially white males without a college degree. So you can see that many of the places that are worse off today than they were in 2000 are located in states and enacted austerity cuts. Asterity was one of the themes through these papers. These austerity cuts have had a differential impact on people in different places. States and localities are now increasingly at a race to the bottom. How many tax incentives and subsidies can they give to big corporations to come and relocate to their town? We see it happening right now with Amazon where places are begging Amazon to come to their locality. And Amazon will get all kinds of goodies out of the deal. When Walmart starts leaving towns because the towns are going so bad, then you know there's really a problem. So there are places where Walmart can't make it and dollar stores are coming in. Dollar stores are like the new big growth machine. And what's so fascinating about that is that people in these areas are now buying the very products that led to a lot of small businesses leaving these types of areas. They're cheap, they're imported, and so it's become this cycle that reinvents itself. There are also hints about the dualism of opportunity in these papers. So of course we know that the takeoff of income inequality is one of the most important things that we've seen over the past 50 years. But what's really important about that divergence in income, that income inequality, is that the real teeth come from that it now costs more to buy things that used to be free. Not only are wages lower, but the working and middle classes are now doubly disadvantaged because it's not just that they have less money than they did before. It's that money matters now more for securing certain opportunities. Better schools, for instance, better healthcare. So people have to pay into living in areas that will get them the quality of education and health that they could have gotten 50 years ago by not having to pay so much. And that points to this commodification of everything, including, by the way, prisons. I'm going to skip this one. So the consequences. We now talk about rural areas in the U.S. much like we talked about urban inequality and urban distress in the 1980s, these structural issues that have led to declining communities, opioid and alcohol abuse, family breakdown, crime, certainly declining health. And these are all really important because they have long-term implications for the sustainability and viability of these areas. This shows drug-related mortality at the county level. Again, we see really clear spatial clustering. We see both urban and rural areas with high rates of drug abuse. And what's clear about these is that they're tightly connected. These patterns are tightly connected to economic distress, but also family distress and declines in social interaction, social cohesion. We've seen upticks in suicide among both men and women during the recession period. For men, the upticks were between 2008 and 2010. Women had a lag effect for about a year. So suicides are increasing with the recession. We talked about incarceration. The level of incarceration has increased astronomically, and part of that is a result of private prisons. Private prisons who have lobbyists and who give campaign contributions to ensure that people will continue to get locked up, more people will get locked up. And if you read that quote, the gist of it is that the Corrections Corporation of America is really happy that they've been able to fill up their prisons for economy of scale issues, and they're going to keep engaging in methods to make sure that they get to have more product in their prisons commodification of incarceration. And then of course there are the political implications. This is a map that shows Trump's overperformance, how he did relative to Mitt Romney in this election and how he did relative to Mitt Romney as a sort of baseline. And so what you see here again is clear spatial clustering across the industrial Midwest, and of course that region was the difference maker, and that region is the one that has experienced almost all of the economic decline. That's not me, but I'm happy to take Adam Smith's quote if we need to. The last point here with this graphic is just that it's not just economic distress that was related to Trump's overperformance, that it was all different levels of distress. Health distress, drug alcohol, and suicide mortality, family distress in both metro and non-metro areas at every distress indicator you could think of, Trump overperformed most at the highest quartile of that distress indicator. These things are all wrapped up together. It's not just the one thing. And on that note, I will pass it to the other discussant. Thank you very much. Thank you, Shannon. One comment which is that on the day after the election, the private prison stocks, my memory is they doubled or so in the next few days. They shot up like rockets. I mean that's an event analysis of great interest. Anyway our next commentator is Servus Storm. Okay, thank you. I'll start. I start by saying that it's difficult to comment on the three papers because I'm basically in very fundamental agreement with what has been said. So it's like it's not a critique with which I can come. I only want to sort of, what I will do is also not a very structured presentation. I don't have slides. I will just sort of throw in a number of items which I think questions or items which I think are important. First of all, I have been working on the dual economy or dualization myself. In a way, it started when I started to look into the German experience after the crisis or after the introduction of the common currency. And in a way, one of the things which came out of the sector or out of the data is basically yes, Germany is becoming a dual economy as well. It's like we have a very strong competitive high-tech core in which workers are unionized and are protected. And then we have a growing non-protected services, mostly services sector, low wage, many jobs and so on. Everybody knows the story. It's flexible work. Flexible work. I tell my students all this flexible work is a beautiful term because everybody wants to be flexible. But the question of course is always flexible for whom? I mean, who is being flexible? Well, it's like we shift the burden to one group and it's sort of a one-sided flexibility. Nobody wants to be non-flexible, but there might be something to be said for more rigidity. I'll come back to that point. The first real point I want to make is that if it is true, and I think it is true that the OECD countries, they are becoming more dual, like core and non-core, dynamic, non-dynamic, then I think this has very, very profound and as yet little understood consequences for macro-economists. In a way, I mean this maybe is overstating, but in a way it means that much of the macro-economic approaches have to be modified or if they can't be modified become meaningless. I mean, what doesn't mean when we talk about this, if the growth is actually not... There's a big difference between median and average. What doesn't mean unemployment when, again, it's sort of one-sided, the burden is shifted to... We can talk about interest, race, inflation and so on, but the point is we basically have two economies. This is something which Arthur Lewis modeled or sort of formalized. It is something which has been there for a long time. I think it's a little bit different in terms of economics and in a way I think what we are seeing is maybe slightly strange that earlier on the OSD countries were sort of the ideal or the goal to... The end goal of development would be trying to become an industrialized and also organized and coordinated and emerging back, you could say in a way to being dual with a large we call it, for developing countries we call that an informal sector. Actually, this is an informal sector. So that's the first point. This is something which macro-economists have to take up. The second point is that I think it is something which Peter Thamen mentioned this, but I want to sort of emphasize it again. It's actually also driven by technology that is if you look at manufacturing and if you look at productivity growth continuous productivity growth happening in manufacturing actually there's no employment creation. In hours of work there has been de-industrialization already for a long time. So the most dynamic sector of the economy and then on top of that we have globalization outsourcing and offshoring and so on. But the most dynamic sector in terms of productivity growth is not creating jobs to the extent needed. Now you can accommodate that as the fire sector, the finance and insurance and real estate which also for sometimes had high productivity growth but I also think that we have to agree that most of that is either rentier or rent-based or it is totally fictitious in the sense that it is a bubble and it goes. I mean there is a whole big issue here about what exactly the social efficiency of modern finance is. Anyway that is a separate issue. But it's like fintech, high-tech manufacturing in combination with finance, ICT that is the core that's the dynamic part but it's not generating jobs. So in a way the main challenge confronting governments is that the area where there is growth is not the area where there are jobs. So what do we do with the surplus population? I mean Marx called this the Reserve Army. Anyway this is a problem. What happened, I mean I'm from the Netherlands and we had a big unemployment problem in the end of the 70s and the solution was and this was very much with the support of the social democrats and that is the dimension which I want to put in into the discussion. The basic choice was let us I mean we have this problem of unemployment we want to revive growth but more importantly we want to create employment and in a way the social democrats went for an agreement in which they say we are going to introduce flexible labour markets for firms and moderate wages and we do all these things like breaking down social protection and so on because we give priority to jobs over I mean it's more important for people to have a job then to have higher pay or whatever. In that process I mean the work which has been created is low productivity jobs, it's low wage very often what the ILO would call I mean they are not using the term but it would be indecent, non-decent jobs. It's like this is the kind of work which you actually wouldn't, as a society you want it to the extent that or to the extent that that is not true, it is basically these are jobs which are very very important and I mean this is like education and it is in health and it is in many other things which are social and public services but then these jobs are basically underpaid. Yeah it's like we have very important services jobs but we basically underpaid them. Why do we underpay them? Because there is austerity, that is we can't afford to, anyway, there is this whole and then at the same time we can afford huge financial rents, huge increases in the incomes of the top 1%, that is all affordable but what is not affordable is to have sort of tax systems which generate enough revenue to create these decent societies. So this is all part of the same thing. The second point, maybe I'm sort of drifting off the point is I think that in Europe and it happened in Germany with the Hartz reforms and so on as well the social democrats which used to be the protectors of let's say the decommodification and the welfare state and so on actually the social democrats and I think in the US it would be the democrats actually bought into this narrative of well we have to accept the market, Hayekian neoliberal market economy in which there is the intermediating or mediating medium. We don't do anything, no state, no regulation, flexibility but anyway, and what we want is we want employment. Employment is the social goal and the result is huge increases in inequality, very jobs which are underpaid or which are sort of not fulfilling and I think very important also mentioned by Professor is the fact that there is a lot of insecurity even people having low-page, low-weight jobs always face this insecurity of losing it. I mean it's like you and then how to build a life on in such a situation. Now that brings me to my last point which is it has to do sort of related to this notion of social democratic parties and the Dutch social democratic party actually totally imploded in the last election, the German social democratic party didn't do too well did not do well in the German election, I think they basically lost this, they lost the plot somewhere and but my question to the panelists is two questions is what happened here and the other thing is why is the electorate, why are so many voters still voting let's say for parties which are not acting in their own either the abstain or they are not acting in their own, in their interest. Why is it that in the US case Trump, I mean seen from this side of the Atlantic it would seem strange to believe that he would do anything in to help the let's say the middle classes or the lower income classes so why do people buy into this particular narrative and support even worse I mean it's not that it was not yet there but sort of an intensified Hayekian order, I see zero seconds so I will stop here. Thank you, I think maybe anyone on the panel want to respond to anybody's comments, I mean nobody was attacked so it's not exactly like one needs to defend oneself but you might have a comment on somebody's Marcella first and then Guy. Thank you so much so yeah thanks to the discussions I mean they have introduced quite a lot of evidence and comments very useful for the future of my research let me just comment very briefly about some data shown by the I exactly you know I mentioned before the she session and the new then need or monitoring the impact of the crisis on women's headed households she has shown for the United States that most of the budget cuts were really concentrated in health sector education and so on which are of course as I mentioned before I mean sectors of the economy mostly women where mostly women are actually employed so that's what I really had in mind before in speaking about the future of the future impact of the crisis so thank you so much for showing us those figures and few other comments about flexibility it is a very tricky word of course in a gender perspective flexibility has always had a very positive meaning you know having flexible time means that women can arrange their work in such a way to be able to reconciliate their working life with their private life so family, children and so on but of course that's where the trick comes and of course the Netherlands knows what I speak about I mean low pay very high gender pay gap less and less security as we said precariat that of course is becoming not only for women of course for all the new generations but I mean women are always the main player in this sort of distress and that's why actually and now I speak about my country and I try to answer to your very important question I mean why so many women actually voting I don't want to say for Trump but certainly they voted in the past for Berlusconi or they vote nowadays for the new populist movements like the five star movements because they think that they can have a better chance with these kind of people and there is a concept that I really that really comes very often into the debate in Italy which is the concept of decency you know women look for decency which is somehow you know consider a synonymous of dignity certainly we know that is not the case but I mean they look for decency and they think that this kind of people can really give a different opportunity to themselves and don't forget that women in most countries have the majority of the voters so this is extremely important to keep in mind so for the moment yeah let me try to respond to your good comments I think what we're seeing is the beginnings of the re-embedded phase of this global transformation every single day for the last six years without exception I get emails from people around the world saying they are members of the precariat and they say the book was written for them and I was invited to speak at Occupy Movements in Ignardo various other places in 2011-2012 and I think at that stage a lot of people who were in the precariat felt they were failures they felt this sense that I've been talking about inadequacies and so on and I think what's been happening in the last few years is the first phase of a fight back if you like because more and more of that third group are now passing the mirror test they can look in the mirror in the morning and say I'm part of the precariat for millions like me I've got to do something about it I've just come from Spain speaking to the Podemos party the leadership and I think you've seen this in the Netherlands with the green left emerging which is far more precariat oriented the Corbyn leadership in this country has been far more I didn't expect this to be asked to be an economic advisor to the Labour leadership we're seeing alternative it in Denmark we're seeing Bernie Sanders in the United States all beginning to articulate a precariat thing so I'm actually beginning to feel optimistic because I think this atavistic part of the precariat has reached its peak let's be optimistic for a second it's reached its peak in size it's having terrifying effects two groups are emerging and they're beginning to re-engage in politics so I do feel that we have hope what has been terrible is how the left the old left the social democratic left including the democrat mainstream have gone for a utilitarianism which has been dualistic in its characteristics and ironically I have a long section critiquing much in my book saying that failure is on the wrong track it's going in the panopticon state direction they even use a lot of expressions that come from Jeremy Pentham's book on the panopticon and I think this is genuinely frightening if they're going to go in that direction but I think the new precariat parties and movements are not going in that direction they're looking for a revival of the enlightenment and that's going to be exciting for economists thank you one comment on all of that which is that we actually have panels we have one tomorrow morning on what were people actually thinking in some of these elections and then there is a panel on Monday about political money which if you are trying to find the roots of either Trump or the social democrats or the American democrats positions on this you are going to have to look at now I think we've got do you want any more? yeah so I was going to comment as well on this why are people voting against their interests one of the slides I had to skip just in lieu of time was a slide that showed a Brookings paper that came out just after the election talking about how Clinton won high output America and they high versus low output were really proxies for urban versus rural and of course they were basing output purely on GDP now one of the great frustrations of rural people is that they disproportionately provide things that urban people rely on for instance raw food product energy, recreation amenities retirement destinations oh and by the way how is a disproportionate percentage of prisoners and take on a disproportionate share of garbage of trash can you imagine what would happen if a big mountain of trash just piled up in the middle of Times Square in New York well that doesn't happen because it all gets shipped to my hometown in upstate New York so rural people when they see that stuff in the media about high output versus low output what that leads to is them saying that these urban elites didn't like us they think they're better than us and they dig in their heels and they double down because they have moral superior grounds at that point so that's one the other is that when we look at the difference makers for this election we lose sight of this a lot and it's frustrating because Hillary Clinton received almost 3 million more votes than Donald Trump in fact Trump underperformed Mitt Romney nationwide and he only got in 2012 and yet he won and he won because of three states Pennsylvania, Wisconsin and Michigan 77,000 votes total across those three states are the difference maker and probably why we're having this conference on this topic right now or at least a good portion of that and then you dig into those states even more and you realize it's just a handful of counties it's a handful of counties in three states that were Obama counties twice and they didn't grow and they flipped for Trump and when you look at those places the economy has really tanked social relationships and cohesion has tanked family relationships have disintegrated there are drug needles on corners so when people walk out their front door what they see is that in America that doesn't look so great and hasn't looked so great for a long time just one just one quick comment there's no reason we would have to have this conference just for Trump after all there's Le Pen, Brexit Kurtz now in Austria the Freihide party there our alternative for Deutschland and then there's yes thank you the Wilders got lots of reasons to have this conference it's not as some people seem to sometimes think when they heard about it a Made in America conference about America it's not now I think we have time for some questions probably what's sensible is to take a couple quick ones and then ask people to respond so we're looking for questions rather than speeches suppose back there the yes can you repeat when we do that we'll repeat the question okay and another question alright since we've got a bunch of people on the panel and we've got three minutes left we'll try these two questions first so who wants to go first yeah okay let me let me say it gives me a chance to advertise the new book which is that I think the new income distribution system has got to find ways of capturing the various forms of rental that have been multiplying we need to levy we need to attack intellectual property rights and things like that but I do believe that we've got to move to a basic income I've been arguing for basic income for 30 years our network has thousands and thousands of members in about 50 countries now and I think we've reached a point where we have an almost perfect storm of factors that are contributing to the legitimation of a basic income including the fact that a whole lot of Silicon Valley chief executives have been tripping over themselves to support it which is not an unmixed blessing I can tell you for those of us who've been pushing from the left for a basic income but I do think that it reflects the need to build basic security from the precariat's point of view if ever I'm giving a talk to a precariat a group they will always see the logic of having a basic income I think it's affordable I've summarized all the evidence it doesn't reduce work it improves mental health we've gone pilots now in various countries and the results have been remarkably positive as you probably know the pilots I'll stop here pilots in California, Canada Scotland is about to launch some I think that's the answer to your second question because the First Minister has put funds aside to make that possible so I think we're seeing a bigger dance in that Who else would like to comment Servus? The question about inclusive growth and competitiveness is a very important one and the Scottish Prime Minister gave a very good talk in the morning but I do think that it is sort of this is what I tried to explain in the previous panel as well that it is I mean in a way it's taken for granted the standard approach is coming from let's say the OSD and the IMF and also the European Commission is still that first we deregulate further whatever you call it re-regulate but you do it in favor of employers deregulate the make the labour cheap and reduce unit labour cost basically and then we have increased competitiveness and then we have growth and that growth will then trickle down and that is the inclusive part of it and I think that is actually not true and I personally think that the trade-off or the conflict between let's say inclusiveness or equity and efficiency that is growth that trade-off is much much less of a trade-off than what economists generally believe Marcella, you get the last word because we have 13 seconds Thank you. Not just about Mr Sturgeon and let me just say from an Italian point of view that this morning I dream for a moment to have a prime minister like her she mentioned gender equality seven times in her speech and she has a fantastic host writer she is a great person and in any case maybe both Anyway, just remember that out of this election that we just mentioned most of the most reactionary forces in Europe are actually headed by women and this is something that we should take into account Thank you very much