LATEST NEWS FROM PARTNER CAP X
3 February 2017
Workers are losing out as monopolies corner the market - Somaliland is a lesson in how to build a nation without aid - Economic illiteracy is helping the bad guys win
One of the most important phenomena in economics - which helps explain the Trump surge and much else - is that workers are getting a smaller and smaller share of the pie. Two new papers put the blame on the way in which markets are increasingly dominated by a few giant firms, which have greater leverage over consumers and their own staff. For competition to work properly, the game needs more than just a few players.
Somaliland is a desperately poor place - partly because it is not even recognised as a state. Yet compared to its neighbours in the Horn of Africa, it is a beacon of political stability. Denied the Western aid doled out to other poor countries, its people have had to fall back on their own resources. In doing so, they have helped Somaliland avoid the dependency trap into which so many others have fallen.
Many explanations have been advanced for the surging popularity of populism, but one contributory factor has gone largely ignored - the fact that voters are by and large economically illiterate. That makes them easy prey for snake-oil salesmen promising policies that benefit the few but harm the many, or deliver short-term boom and long-term bust. So why not try teaching people the real facts of economic life?
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