Re:India has a hole where its middle class should be
by walshemj on Saturday January 13, 2018 @01:36PM
(#16140606)
What do you mean by idle investments? land is presumably rented out to farmers so its not idle
Re:India has a hole where its middle class should be
by coldtea on Saturday January 13, 2018 @03:11PM
(#16141106)
Land could be real estate, which, if not just sitting idle, it's still the epitome of rent-seeking.
Plus, land rented to farmers is productive because of the farmers, not because of the land -- and would still be a sinkhole of money from the middle class (the farmers) to the rich person doing the renting, not entering circulation like the money a farmer would make (to buy animal food, seeds, whatever, and to live their family).
Re:India has a hole where its middle class should be
by walshemj on Saturday January 13, 2018 @03:38PM
(#16141257)
You know that a large proportion of the returns from the stockmarket are made by reinvesting dividends.
"rent seeking" seems to either be used by people who don't understand how trade/investment works or want something or subsidies'
or its a dog whistle that tends to go with gold bugs, cryptocurrency fantasists and then on to much less pleasant things
The first problem is that wealth means control (e.g. from how VCs control opportunities to create businesses through their funding, to how the rich can buy politicians and laws).
So concentrated wealth = less democratic country (not in electing government, in actual control of what's to be done and opportunities).
Second problem is that concentrated wealth is not used in directly buying, so it sits out of circulation. A rich person can have 95% of its income sit in idle investments, land, etc, and still live like king with 5% of his earnings per year, while a middle class/working class person will spend most (say 70%-100%) of what they earn, thus keeping the economy going.
And when that 95% the rich keep is much much bigger than the aggregated 70% of what the majority of working people spend (e.g. because 1% of the people control 80% of the wealth), then you have a stifled economy and a dwindling middle class.
And lots of other issues, but those are quite major...