When the wealthy allocate their resources in ways that benefit the less well-off, the wealthy experience significant gains in well-being. Where these well-being gains exceed those they would experience by using their resources to amass more wealth, the logical (and selfish!) choice for the wealthy is to reallocate their own wealth towards the poor. This revolutionary idea is the point of this episode.
Upon reviewing this episode (and especially in light of the later episode in which we talk to Professor Steve Radelet), I realized that I overdid it- again (see my mea culpa in the Episode 1 Supplemental Content): in my zeal to not get labeled a Bolshevik, I again gave capitalism more credit than it probably deserves for the recent global surge in indicators of general human well-being. Although there does seem to be a connection between the emergence of democracy and the flourishing of market economies- and although the benefits that flow from this convergence are undeniable- I probably lavished my praise too much on the market economy and not enough on the democratic institutions that make a market economy viable. Capitalism is still a damn powerful machine, though- one that we’d be foolish to forsake.
Also, another mea culpa: I said that eminent French economist Thomas Piketty won the Nobel prize in economics. While the ideas I refer to have been very influential in many circles in recent years, he did not win the Nobel Prize. Sorry about that, too.