Prime Minister Justin Trudeau speaks at the UN headquarters on April 22, 2016. (Photo: Sean Kilpatrick/CP)He's making that speech in a year where popular resentment has led to Britain leaving the European Union; Donald Trump contending for the U.S. presidency; and once-fringe nationalist parties increasingly competitive in different European elections. A common theme for these movements is blaming foreign forces for the struggles of domestic workers — while Trump talks about U.S. steel, coal and cars, France's Marine Le Pen emphasizes farming and agriculture. The prime minister intends to argue that governments can apply some preventive medicine for that frustration in the form of policies aimed at the working class. A spokesman cited as examples his government's deficit-financed infrastructure spending and its parental benefit of up to $6,400 per child.
Peace through prosperity
IMF chief wants Canada policies to go viral
IMF director Christine Lagarde takes part in a news conference with Prime Minister Justin Trudeau on Parliament Hill on Sept. 13, 2016. (Photo: Adrian Wyld/CP)—Some deregulation. She said barriers to entry in protected industries needed to come down. Lagarde warned against monopolies and market concentration, and urged policies that promote competition. —Creating consumer demand. As examples, Lagarde saluted Canada's infrastructure spending and its new child benefit geared toward working class parents. "I hope (Canada's plan) can actually go viral," Lagarde said. A new book by the former chief research economist at the World Bank casts the global challenge in darker terms.
Shift from manufacturing to servicesBranko Milanovic writes in, "Global Inequality," that globalized trade has been good for the vast majority of humans and led to greater equality between societies. However, he describes increased inequality within societies as a dangerous force. He identifies one group as the biggest loser of globalization: the lower-middle-class of right countries. He writes that it's happening for a variety of reasons — trade, new technology, and sociological factors like people increasingly intermarrying within their own economic class. And he draws from economic history to argue that these are perilous times. Milanovic says we're living through what he calls the Second Kuznets curve — named after the American economist Simon Kuznets. The first was the turn of the 20th century, as labour shifted from farming to manufacturing. Now it's a shift from manufacturing to services.
'Rising inequality' spurs strifeHe warns of a historical cycle: growing inequality, political instability — then war, followed by greater equality. He points to the growth of far-right parties in Greece, Finland and France as an alarming signal. "Rising inequality indeed sets in motion forces, often of a destructive nature, that ultimately lead to its decrease but in the process destroy much else, including millions of human lives," says Milanovic, who is referenced on the first page of the book by Canada's Trade Minister Chrystia Freeland on inequality, "Plutocrats." "Very high inequality eventually becomes unsustainable, but it does not go down by itself; rather, it generates processes, like wars, social strife, and revolutions, that lower it.... (Let's) hope that humanity, facing a very similar situation today as one hundred years ago, will not allow the cataclysm of a world war to be the remedy for the ills of inequality."
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