At a conference I attended, Ann Pettifor argued that the world was undergoing a crisis of under consumption. It makes sense, so I had a look at what she says/said. Here some noted and links …

I started by reading Hyperglobalisation, Big Government & Three Systemic Challenges by Ann Pettifor on her substack. She sub-titles it, “Trump’s chaotic plans to build a new world order”

My hyper summary, … “It’s exports – and income inequality!”.

My annotations,

  • That obsession with exports and the simultaneous neglect of living standards in the domestic economy is most conspicuous in China and Germany.
  • In economies like those of China and Europe surpluses have built up- but also deficits in ‘consuming’ economies like the US and Britain.
  • But here’s the thing: the affluent don’t spend all they earn. There are limits to the number of properties, fashion items, yachts and foreign holidays they can buy.
  • As earned incomes have fallen as a share of economies worldwide, the majority lack the purchasing power to buy all that is produced by the export-oriented economy. The consequence is over-production and under-consumption, the latter defined by economists as ‘weak demand’

I also picked this quote, which comes immediately after her comments on deficit economies.

So I had a look for some statistics to back this up and came across,

  1. https://tradingeconomics.com/world/trade-percent-of-gdp-wb-data.html
  2. Trends in Income Inequality and its Impact on Economic Growth by the OECD
  3. https://tradingeconomics.com/euro-area/inequality-of-income-distribution-eurostat-data.html
  4. letmegooglethat q=trading+economics+world+income+equality

Is the world getting relatively poorer? For the last query, I was looking for declining Gini in G7, but I might need to build one myself from some of the sources discovered by this query.

Govt policy, preferring exports to domestic consumption, distort the economy and divert income to the rich whom as we can see, do not spend it. QE also directed wealth to the rich.


The featured image is one of mine, I was looking for pictures of Super Yachts, and couldn’t find anything I wanted to use. CC 2024 Dave Levy BY

Dave Uncategorized

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