The Importance of a Good Analogy

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In America, there's an extraordinary piece of equipment, this garbage truck. In poor countries it might be a cart pulled by an animal even with a bunch of labor. The capital labor ratio is the capital is very low and the labor is very high. There's no incentive for an American company to help the poor companies get more efficient in their operations.

Economist and author Branko Milanovic of the Graduate Center, CUNY, talks about his book, Capitalism, Alone, with EconTalk host Russ Roberts. They discuss inequality, the challenge of corruption in the Chinese system, and Milanovic's claim that in American capitalism, the texture of daily life is increasingly affected by the sharing economy and other opportunities.