Chrystia Freeland

When capital flies, but corruption stays behind

Chrystia Freeland
Mar 28, 2013 20:12 UTC

One of the most important political and economic facts of this young century is that capital has been slipping the traces of the nation-state. Business is global; government is national. That mismatch is one of the big sources of tension in the world today: Whether it comes to taxes, bank regulation or immigration, the fact that money and politics no longer live in the same neighborhood makes consensus harder to achieve.

For Exhibit A, you could point to the flood of Russian rubles into Cypriot banks- and the dramatic consequences.

Global businesses have profited handsomely. Multinationals have legally lowered their tax bills by shifting their profits to low-tax countries: As a scandalized British public recently learned, for example, Starbucks paid 8.6 million pounds, or $13 million, in corporate taxes in Britain over the past 14 years.

For individual plutocrats, taking advantage of globalization is even easier: Move your legal residence – and your money – as the actor Gerard Depardieu or the Facebook co-founder Eduardo Saverin did.

But these lower tax bills come at a cost. As I was told by Kemal Dervis, former minister of economic affairs in Turkey and now vice president of the Brookings Institution, “Capital is seeking to avoid the burden-sharing which makes modern society possible.”

The permanent class divide

Chrystia Freeland
Mar 22, 2013 19:27 UTC

The one thing pretty much all of us agree on is the importance of equal opportunity. Opinion is divided about the significance of rising income inequality per se. Some see it as a problem in and of itself. But for others, a growing economic divide, so long as it is meritocratic, is a healthy characteristic of a growing, entrepreneurial society.

Nowadays, though, no one is in favor of a caste-based society. Income inequality is one thing, but a permanent division into the haves and have-nots is an entirely different thing – and much less acceptable.

That is why new economic research, released at a conference this week at the Brookings Institution in Washington, is so important. The comprehensive study is by five economists, including two who work at the Federal Reserve Board, Vasia Panousi and Ivan Vidangos, and one, Shanthi Ramnath, of the U.S. Treasury Department. It draws on a powerful new data set: a one-in-5,000, random and confidential sample of the population of U.S. taxpayers.

Why are people leaning on “Lean In”?

Chrystia Freeland
Mar 14, 2013 22:30 UTC

“Man is defined as a human being and woman is defined as a female. Whenever she tries to behave as a human being she is accused of trying to emulate the male.” That observation by Simone de Beauvoir helped to inspire the feminist revolution after World War Two. Two generations later, Sheryl K. Sandberg has written a book, “Lean In,” arguing that is still the case today.

Some critics have challenged Sandberg’s authority to comment on the female condition because her gilded perch as chief operating officer of Facebook makes her one of the most powerful and richest women in the world. But it is precisely that insider’s perspective – what Sandberg demurely describes as her front-row seat – that makes her “sort of feminist manifesto” so persuasive and so radical.

It is radical because Sandberg is not decrying the vile misogyny that oppresses women in some distant and impoverished land. The sexism endured by the women of, say, Afghanistan is of course incomparably more severe and more limiting than the stereotypes that trammel the graduates of Harvard Business School. But it is also much easier for the privileged Westerners – men and women alike – who inhabit Sandberg’s world to champion the cause of downtrodden females in another, poorer society. Confronting the problems in your own backyard – or indeed your own corner office – is more personally threatening.

Give the children the vote?

Chrystia Freeland
Mar 8, 2013 22:01 UTC

Here’s a novel way to address the problems caused by rising income inequality: give children the vote.

One virtue of this iconoclastic idea, recently advanced by the Canadian economist Miles Corak, is that it sidesteps the usual partisan debates. After all, the right and left have profound moral disagreements about economic inequality. But whatever your political stripe, you almost certainly believe in equality of opportunity.

Unfortunately, some of Corak’s most celebrated work has been to show that rising income inequality and declining social mobility go together. This relationship, which Alan B. Krueger, the head of President Barack Obama’s Council of Economic Advisers, has dubbed the Great Gatsby Curve, is one of the most powerful reasons to care about rising income inequality.

The political clout of the superrich

Chrystia Freeland
Mar 1, 2013 20:43 UTC

Louis D. Brandeis, the American jurist, famously warned: “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

Brandeis’s cri de coeur was inspired by an indignant observation of the shenanigans of America’s robber barons during the Gilded Age. Today, we live in a data-driven age, and some careful students of the connection between money and politics have now amassed a powerful body of evidence to support Brandeis’s moral claim. A lot of it is assembled in a report by the progressive research organization Demos, published this week.

One of the most striking findings is the extent to which economic power translates into political power.