Lunchtime Must-Read: Ryan Avent: Forget the 1%. It's the Top 0.01% Who Are Really Getting Ahead in America
Afternoon Must-Read: Nicholas Bagley: The Supreme Court Will Hear King. That’s Bad News for the ACA

Afternoon Must-Read: Ricardo Hausmann: The Economics of Inclusion

Ricardo Hausmann: The Economics of Inclusion: "I believe that both inequality and slow growth...

...often result from a particular form of exclusion....Thanks to more than two centuries of sustained growth, average per capita income in the OECD countries is just under $40,000--3.3, 11.3, and 17.7 times more than in Latin America, South Asia, and Sub-Saharan Africa, respectively. Sustained growth has obviously not included the majority of humanity.... GDP per worker in... Nuevo León in Mexico is eight times that of Guerrero.... Why would capitalists extract so little value from workers if they could get so much more out of them?...To form part of the modern economy, firms and households need access to networks.... But connecting to these networks involves fixed costs....It is the fixed costs that limit the diffusion of the networks. So, a strategy for inclusive growth has to focus on ways of either lowering or paying for the fixed costs that connect people to networks. Technology can help.... But in other areas, the issue involves public policy.... A strategy for inclusive growth must empower people by including them in the networks that make them productive. Inclusiveness should not be seen as a restriction on growth to make it morally palatable. Viewed properly, inclusiveness is actually a strategy that enhances growth.