27 May 2014

The rich is not good for GDP.

I am following this interesting phenomenon in economics for some time and one question that started growing is:
Why should a middle class sacrifice everything and systematically get less capable to educate and afford material goods and invest, if the rich keep their wealth out of GDP growth?
This is a Western issue, highlighted by Piketty's study.  But I hope this throws light on another side of the economics question.  This is because, in South Africa, the middle class also have to contend with an Ineptocracy that direct attention away from the rich's "poor" contribution to GDP growth.

My current analysis leaves me convinced that the rich is the covert custodian and protector of most Ineptocrasies in the world.  It keeps them from sharing accountability for GDP growth.  You can ask, how much does investment and philanthropic gestures by the rich improve GDP and prevents the existence of an Ineptocracy?

(For those who have no clear context of who the rich are. As a rule of thumb I consider the 10% richest individuals and the entities that contains their wealth.)


Michael said...

Om so 'n bietjie verdere konteks te gee aan hierdie probleem... In hierdie artikel word aanbeveel dat die Amerikaanse mense moet begin spaar om die komende krisis van die opkomende Sjinese middelklas, se impak op die VSA teen te werk. My vraag bly steeds, waar is die investering wat van die rykes in die wêreld moet kom? Hoe gebeur dit dat die VSA nie deur hulle eie industrie vergoed word nie? Uit die Wiki-opsomming van Piketty se werk: " The central thesis is that wealth will concentrate if the rate of return on capital is greater than the rate of economic growth. Over the long term, Piketty argues, this will lead to the concentration of wealth and economic instability."

Lees gerus hierdie oor VSA en Sjina... http://www.cbc.ca/m/news/#!/content/1.2654710

Michael said...