Growing Up Wealthy Makes Leaders More Narcissistic

How does income inequality — currently at historically high levels — affect the types of leaders we get in the workplace? As a first step toward exploring that question, we carried out a study exploring how parental income while people are growing up relates to their leadership behaviors as adults. We found that parental income is significantly related to adult levels of narcissism, a trait characterized by grandiose self-views, impulsive tendencies, and low empathy. We also found that those levels of narcissism were associated with people’s engagement (or lack thereof) in important leadership behaviors and various measures of effectiveness.

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Posted in Leadership, Wealth | Tagged ,

Financial networks and stress testing

Network models, stress testing methods, and early warning systems are attracting growing interest both among scholars and practitioners. In this short paper, we illustrate some of the insights they have to offer both in terms of new fundamental scientific understanding of the emergence systemic risk and in terms of concrete applications to the policy areas of financial stability and macro-prudential policy. Finally, we discuss new research pathways to address the challenging questions still open, including multiplex networks, big financial data, and climate finance.

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Poor and powerless – economic and political inequality

The relationship between economic and political inequality has long concerned social scientists, but research remains limited in scope. Most studies focus on isolated cases, highly restricted subsamples, or subunits within countries. Using data for up to 136 countries between 1981 and 2011, this study analyzes whether and how income inequality affects the distribution of political power for, and respect for the civil liberties of, a society’s rich and poor people. When income inequality is high, do rich people command greater political power and enjoy stronger civil liberties than poor people do? To answer these questions, the study uses both pooled regression analyses and two-stage models with instrumental variables to identify causal effects. The results are decisive: income inequality is inimical to both political and civil equality. These findings hold for developed as well as developing countries and for democratic as well as nondemocratic countries.

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Posted in income inequality, political equality | Tagged ,

Studies point to physical pain as an outcome of economic insecurity

A series of studies have found a connection between economic insecurity and physical pain. Lead research Eileen Chou and colleagues were interested in how factors such as employment status, economic security, and perceived control lead to physical pain among people who experience economic insecurity.

In the first study, a sample of 33,720 households were accessed through Nielsen’s consumer panel data set, with data related to household purchases of over the counter (OTC) painkillers and employment status tracked. Results indicated that household unemployment level predicted the use of OTC painkillers.

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Reconsidering Value and Labour in the Digital Age

How do labour and value-production change in the age of Facebook, YouTube and Twitter?

This volume explores current interventions into the digital labour theory of value, proposing theoretical and empirical work that contributes to our understanding of Marx’s labour theory of value, proposes how labour and value are transformed under conditions of digital and social media, and employ the theory in order to shed light on specific practices.

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Creating an innovation culture

Even as opportunities grow to exchange ideas and cross-fertilize innovative impulses across organizational boundaries, we’re also seeing a renaissance of something decidedly traditional: the corporate R&D department. Concentrations of scientific talent at institutions such as Bell Labs and PARC (a Xerox company) once ruled the innovation roost, but many company R&D units lost their luster as cost pressures made them less tenable and the digital revolution enabled smaller organizations to make outsized innovation contributions. Recently, though, a new generation of corporate R&D powerhouses has been emerging at technology leaders such as Amazon, Google, and Microsoft. The advance of artificial intelligence, for example, is creating a new set of innovation opportunities for these leaders.

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Where is technology taking the economy?

We are creating an intelligence that is external to humans and housed in the virtual economy. This is bringing us into a new economic era—a distributive one—where different rules apply.

That shift, of course, has been going on for a long time. It’s been driven by a succession of technologies—the Internet, the cloud, big data, robotics, machine learning, and now artificial intelligence—together powerful enough that economists agree we are in the midst of a digital economic revolution. But there is less agreement on how exactly the new technologies are changing the economy and whether the changes are deep. Robert Gordon of Northwestern University tells us the computer revolution “reached its climax in the dot-com era of the 1990s.” Future progress in technology, he says, will be slower.

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Posted in Economy, Technology | Tagged ,

What Can We Learn From The Nordic Model?

The neoliberal creed is that the welfare state, with its high progressive taxes and strong public sector, is uncompetitive. State intervention hampers growth and innovation and results in stagnation.

Now we know better. The facts speak for themselves. No matter what criteria we apply, the Nordic model is invariably at the top of the league. This applies no less to economic performance than other criteria: Economic growth, research and development, technological innovation, productivity per hour of work, job creation, participation in the labour market, (especially women), equality of the sexes, level of education, social mobility, absence of poverty, health and longevity, quality of infrastructure, access to unspoilt nature, the overall quality of life. Less inequality than in most places. And a vibrant democracy. What more do you want?

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Textbook for a complex world

Inequality, climate change, financial crises: New economics textbook puts complex concerns at its CORE.

Most introductory courses in economics do not equip students with the tools they need to explore complex issues such as financial instability, climate change, and growing inequality.

That’s all changing with the publication this month of The Economy, a new textbook published by Oxford University Press as well as a free online interactive text created by the Curriculum Open-access Resources for Economics (CORE) project. The book aims to address the gap between complex, real-world economic problems and the topics traditionally taught in first-year courses by introducing students to recent advances in the economics of information and strategic interactions.

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Posted in Course, Inequality, Textbook | Tagged , ,

The Science of Flow Says Extreme Inequality Causes Economic Collapse

Circulation represents the lifeblood of all flow-systems, be they economies, ecosystems, or living organisms.

According to a recent study by Oxfam International, in 2010 the top 388 richest people owned as much wealth as the poorest half of the world’s population– a whopping 3.6 billion people. By 2014, this number was down to 85 people. Oxfam claims that, if this trend continues, by the end of 2016 the top 1% will own more wealth than everyone else in the world combined. At the same time, according to Oxfam, the extremely wealthy are also extremely efficient in dodging taxes, now hiding an estimated $7.6 trillion in offshore tax-havens.

Why should we care about such gross economic inequality? After all, isn’t it natural? The science of flow says: yes, some degree of inequality is natural, but extreme inequality violates two core principles of systemic health: circulation and balance.

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