According to the World Bank and numerous other analysts, wealth in developing countries is today largely locked up among the elite....
Of potentially considerable concern in the bank’s projections is where this new wealth will end up being concentrated.
“It’s one thing for the pie to be increasing, but how equitably is it being distributed?” Kar asks.
“Equity is a huge problem, as the rich seem to be getting richer and the poor getting poorer. Further, it seems the nouveau riche in the developing countries are a bit more callous than the established rich in developed countries.”Inter Press Service
Developing World to Dominate Global Investment by 2030
Carey L. Biron
Neoliberalism at work.
4 comments:
It should be no surprise that rich people are rich.
The natural flow of funds is towards the top mathematically so it follows that the only possible mechanism for maintaining a proportional wealth distribution is progressive taxation.
It's a simple IF-THEN proposition.
IF the natural flow of funds is to the top…
THEN…how can we account for it?
I would love to see some arguments in opposition.
“Equity is a huge problem, as the rich seem to be getting richer and the poor getting poorer.
Which is why the use of equity as a private money form should be encouraged. Common stock is an ideal, democratic form of endogenous money that requires neither usury, PMs, or a central bank which "shares" wealth and power automatically even as it consolidates it for economies of scale.
It should be no surprise that rich people are rich.
This is the essence of capitalism. The advance of capitalism over previous systems is that enterprise is (supposedly) the door to the top tier rather than force.
Marx as sociologist saw this a necessary step to global capital formation through investment, at which point capitalism would no longer be necessary and would be replaced by a superior economic paradigm.
What we are seeing now is the developed world running mostly on consumption, since investment has produced the requisite capital base, which then just needs to be repaired and upgraded with innovations. But investment is no longer primary economically.So labor share needs to increase over profit share.
In the developing world, the need is for capital formation so the priority is investment over consumption. This will remain true until a sufficient capital base is created and then a "rebalancing" will occur with the role of consumption increasing.
As the world approaches relative equality wrt capital structure, then a new paradigm will emerge.
This can happen in a coordinated way or not. So far it's sort of middling. While the warts stand out there is a lot of progress taking place simultaneously.
Most of the warts and wounds are due to ignorance and self-interest, and are therefore unnecessary. However, with the system design we have, they are built in, since this is pretty much endemic in modern capitalism.
An important point…capitalism only works if a there is a significant amount of public investment.
Private investment alone can't drive an inclusive economy because flows are parasitic on the system itself.
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