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.)