I congratulate our new Chinese overlords

[The Mad Monk]

...and that can only be a Good Thing. People rising out of true poverty

[pchang]

I'm really disappointed the whole coal plants and Hoover Dam comment didn't generate any responses. I thought this was a Civ site.

[The Mad Monk]

Hoover Dam is so Civ2.

[DaShi]

Rising middle class, lots of rich people.

Rising income inequality.

[pchang]

So cynical. At least one economist says that rapid growth decreases income inequality. It is when growth slows down that income inequality increases.

[AAAAAAAAH!]

Did the economist give a reason why he expects that?

[DaShi]

So cynical. At least one economist says that rapid growth decreases income inequality. It is when growth slows down that income inequality increases.

Probably only one. Check out China's.

I'm not saying that a lot of people haven't risen out of poverty during China's economic growth over the last two decades, but the wealthy have benefited far more.

[Kidlicious]

Sure, it can. They're still just making a tiny percentage of what western, Japanese, or even Korean people are making so there is a ton of upside still possible. They've only just begun to modernize the inland areas.

Thing is there are diminishing returns to everything. Yes, growth is possible. They can diversify and modernize. That's just not going to create the same rate of growth. It's the same with Japan. It's just an export economy on a larger scale.

[Dinner]

So cynical. At least one economist says that rapid growth decreases income inequality. It is when growth slows down that income inequality increases.

It seems like it would rise in both but less quickly during rapid growth as "average workers" (if such a thing exists) have more bargaining power or at least more options as there are more openings and employers are more willing to increase wages. The owner's pay check is still going up faster but since the other people's are also going up the delta might be smaller.

[pchang]

Probably only one. Check out China's.

I'm not saying that a lot of people haven't risen out of poverty during China's economic growth over the last two decades, but the wealthy have benefited far more.


[ATTACH=CONFIG]175949[/ATTACH]

Thomas Piketty is the Economist. He wrote about it in a best selling book, but it is over 600 pages long. http://www.hup.harvard.edu/catalog.p...=9780674430006

[Dinner]

I want to buy that book by that French economist... Capital in the 21st century but Amazon is on back order.

[pchang]

The basic argument is that when the return on capital is larger than the growth rate of the economy, wealth will naturally accumulate in the hands of the few (the ones with the capital). During times of rapid economic growth, the growth rate of the economy can be greater than the return on capital. When this happens, wealth inequality will decrease.

He claims that the world's rapid growth after the 2 world wars is a temporary thing and that we are returning to the normal pattern where return on capital is larger than the growth rate of the economy. He thinks the way to stop this is a progressive tax on wealth (and not income). Obviously, there are a lot of obstacles to getting something like this passed by our Government. It is also very difficult to measure wealth accurately (as opposed to income).

[AAAAAAAAH!]

The basic argument is that when the return on capital is larger than the growth rate of the economy, wealth will naturally accumulate in the hands of the few (the ones with the capital). During times of rapid economic growth, the growth rate of the economy can be greater than the return on capital. When this happens, wealth inequality will decrease.

That makes sense... if you assume 100% of the returns on capital are reinvested. And people live forever, never dying and having their assets divided up among their children and the state.

[pchang]

All you need is to spend less than the rate of return for your capital to grow forever. Also, people don't have to live forever. Only their trusts do. My family trust will outlive me by a long shot.

[MrFun]

I cannot believe that pchang and Dinner have been conversing in this thread, without spewing personal insults back and forth.