The Global Upward Trend in the Profit Share is the name of a working paper from the Bank of International Settlements (BIS). The BIS describes itself as "an international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks." It also serves as a research center for policy and publishes its findings on its website. Among those we find this slightly awkward title pointing to the increase of the share profit in GDP. I do not know enough to analyse the fact itself, or its relevance to current problems and the Anglo Disease. But I trust the ET stat squad will know what to do.

A few observations to get started though.

[1] The data shows that the trend started in the mid/late 70's. This reminds me of the period were US wages started to stagnate: surely the two aren't unrelated.

[2] There doesn't seem to be an obvious difference between the Anglo-Saxon and European economies in this respect. This data can almost certainly be linked to a number of issues currently being debated in 'continental' Europe. The current hype on 'pouvoir d'achat' in France (purchasing power) could be seen as an understatement for the loss in revenue described here. In France income share went down 9.3% since 1960.

[3] For the welfare state, income matters because it is where most money is punctured to support social policies (retirement benefits, universal healthcare). As the share of income goes down, a number a policies which were previously affordable now seem to be remnants of a socialist world. One common critic of the welfare state is that it is inherently bankrupt: it would be interesting to see how much of the current  'social deficits' we run could be paid had the income share remained constant.

[4] On the same note the UK is the country whose income share has not significantly increased in the past 30 years. It's also the only country who created so many public sector jobs...

Here is  the conclusion of the article, so that you can get the gist of it.

In this paper, we have presented both graphical and econometric evidence of one particular stylised fact describing factor income shares in industrialised countries - an upward trend in the profit share that started in the mid-1980s, or equivalently a downward trend in the wage share. This trend is clearly apparent even after controlling for a number of factors that might previously have been thought to have been its cause, including the business cycle, labour market deregulation, and the entry of China and other emerging market economies into the global trading system.

The combination of this trend's timing and its cross-country pattern is consistent with a technological cause: faster innovation increasing the rate of obsolescence in capital goods and the ex ante rate of churn in the labour market. This greater churn strengthens firms' bargaining positions and allows them to capture a larger share of factor income. The increase is therefore in essence a reallocation of economic rents - a new equilibrium, but not necessarily an optimum. It could easily be above or below that necessary to offset the faster rate of economic depreciation, while maintaining a constant level of the effective capital- labour ratio.

Ideally, we would want to show that this trend can be explained by some measure of the use of faster-depreciating technologies in capital goods, or the depreciation rates themselves. Unfortunately all the standard measures in this field, such as those from the OECD, relate to information technology and communications goods specifically. Thus they do not adequately capture the fact that IT components are increasingly being embedded in a broader class of
capital goods that would not be thought of as IT products, and thereby increasing their rate of obsolescence as well. Nonetheless, the common timing of the trend, its cross-country pattern, and its correlation with other stylised facts about the labour market are all consistent with the Hornstein et al model - particularly as it relates to product market regulation - being the most likely explanation of the trend, out of all the possibilities considered here. The cross-country pattern in the magnitudes of these trends has not been well explained in the
literature before.

This technological explanation implies that the recent upswing is not part of a cycle. It is not inherently likely to reverse, nor was itself the necessary reversal of an earlier - perhaps unsustainable - shift up in the labour share brought about by a change in workers' bargaining power. Indeed, if our preferred explanation is correct, then the observed shifts in factor shares were simply a redistribution of existing economic rents, which could continue for some time before stabilising, only reversing if the underlying drivers do.

You will find graphs (which I can't add for some reason) of individual countries profit share increases  since 1960 on page 2, and a general trend graph on page 3. Here is the whole thing.

... MacOs X

That's it. I erased MacOs X. I erased my operating system.

Then, you ask, how am I writing this diary? Well. Until two days ago I didn't know it was possible. But it is: My computer is running a portable version of Ubuntu.

Ubuntu. Yes. To tell you the truth, I have no idea what it really is, but here is what I think. I think that's how they call a bunch of software put together to make an operating system based on linux. Unbuntu, of course, isn't the only "bunch". It loads pretty quickly. It runs perfectly so far, and pages load well. Flash isn't installed by default, so I can't see no advertising. Ok, this last one isn't really new. I had disabled flash in Camino... well, anyway.

Why?

Because a couple of days ago, Itunes asked me, rather nicely, whether I wished to download and install the last update, 7.0.4 or something. I said no a couple of time, as I had other stuff to do with my bandwidth... but then I succumbed to the Siren's call. After all, maybe the update was about loading libraries faster? making the software faster?

So off I download. And I listen to music after that. Well, before, I had to accept a new license agreement, which makes me loose a LOT of time.

Ok, the 'accept' button is just a click away, so it's not really a lot of time, you think. Well, see, I used my computer as an alarm clock, setting it to boot at 9 (i'm a student hehe) and to automatically launch a couple of mp3's in iTunes. So this time, it does launch the mp3s, but iTunes freezes on the license screen... So i missed class.

The following day, for some reason, at some point I am done listening to music. So, naturally I quit iTunes. Oh, but wait, it won't quite just like that. Hum, I frown at this unusual popup. 'iTunes is downloading album artwork. Are you sure you wish to interupt?"

What?

Did I read this correctly? Is iTunes sending content of my music library to an unknown third party with the vile and pernicious intention of polluting my hard drive with useless jpgs... so I can browse my library like on the ads? Is this a joke?

And now, I can't find the option to disable this downloading.

And so that's it. Then I saw the video of the Kid being tazed for being a little deranged. And I decided I should regain some control over what I have around me. The things I use daily, that live their own lives, like iTunes. I decided to regain control over my computer, what it does. It's my belief that we're all, collectively, going to spend more and more time using software and electronic devices in general, and that therefore knowing how to retain some, just a bit of control over what goes on behind you TFT screen, is important, politically sound and responsible.
I can't bear the thought of my computer sending a partial list of my HD's content to a company I don't know. I can't stop thinking that I need a proxy, so that advertising companies can't know from where i'm loading webpages. And it goes on.

So, right now, Ubuntu is being installed on my computer. MacOSX is no more. And it's for the better.

Sure, it's going to crash a bunch of times. Yes, I'm going to spend hours learning basic programming, so I can configure my computer a little bit, use Fluxbox which looks maaaaaad cool... It's going to take time and energy, patience too. But in the end, I will have eradicated proprietary software from my computer.

Oh, Ubuntu too does unexpected popup, like itunes. But check this one:

Installation is complete. You need to restart the computer in order to use the new installation.

Buttons: Continue using the live CD -- Restart Now

My first diary will be 'hit and run'. Not what I expected, but I am completely taken aback by the latest Ifop poll.... results there:

Ifop Intention de Vote (PDF)

Age	Royal			Sarkozy
18-24	53	53	47.5	47	47	52.5
25-34	54			46
35-49	56	45		44	55
50-64	51			49
65+	25			75

From the diaries ~ whataboutbob