42
" If everyone were free to migrate from one country to another, wages in rich countries would fall and wages in poor countries would rise, and the world would be a much more equal place. Of course, opposition to lower wages in rich countries is precisely why people are not permitted to migrate at will, and it is why meals and haircuts are so cheap in poor countries. The price of land, like the price of labor, cannot be arbitraged between rich countries and poor countries. Cheap housing in India or Africa cannot be brought up to American prices by simply moving the land across the ocean. The presence of cheap land and cheap labor in poor countries explains why price levels in poor countries are so much lower than in rich countries. The market sets the exchange rate to equalize the prices of steel, gasoline, automobiles, and computers—everything that can be and is part of international trade—but the price level depends on goods and services that cannot be traded. Because those are cheaper in poor places, the poorer the country, the lower are the average prices. "
― Angus Deaton , The Great Escape: Health, Wealth, and the Origins of Inequality
44
" In the early years, top incomes were derived from capital, and the richest people were what Piketty and Saez call “coupon clippers,” who received most of their incomes from dividends and interest. The fortunes underlying these receipts were eroded over the century by increasingly progressive income and estate taxes. Those who used to live off their (or their ancestors’) fortunes have been replaced at the top by earners, people like CEOs of large firms, Wall Street bankers, and hedge fund managers, who receive their incomes as salaries, bonuses, and stock options. Entrepreneurial "
― Angus Deaton , The Great Escape: Health, Wealth, and the Origins of Inequality
47
" The part of national income that is available to families, after taxes have been paid and any transfers received, is personal disposable income, which is the second line from the top. It is a good deal smaller than GDP, but the historical picture of growth and fluctuation is very similar. Much the same is true if we look, not at what people get, but at what they spend. This is consumers’ expenditure, the third line. The difference between personal disposable income and consumers’ expenditure is the amount that people save, and the figure shows that the fraction of their income that Americans save has been falling, especially over the past thirty years. We don’t know exactly why this has happened, and there are several possible explanations: it is easier to borrow than it used to be; it is no longer as necessary as it once was to save up to make the deposit on a house, a car, or a dishwasher; Social Security has perhaps reduced the need to save for retirement; and the average American benefited from increases in the stock market and in house prices—at least until the Great Recession. "
― Angus Deaton , The Great Escape: Health, Wealth, and the Origins of Inequality