Re: Growth, Interest and Wage Inequality - To the austrian economists here
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I'm not an Austrian economist, nor do I know any books where you can get quotes, but what you are saying is indeed fact, and is readily evident in our emerging economies, such as China, India, and Brasil, where rapid growth has created an ever widening wage inequality between those who are educated (either formally, or just with personal experience in management/business) and those who aren't.
But you are assuming that the inequality is due to the growth and not to the political reality of the country. In my opinion is a big stretch. There are very poor and underdeveloped countries with big inequalities.
In those cases it actually is due to growth, simply because the growth is not due to politics repressing people, but certain people really outgrowing others in a "free" market. There are kids getting education and experience, starting up businesses and starting to earn a lot of money, while their parents are still basically middle-age farmers or random stuff (leather, kitch, etc) makers. I think the only "political" effect here is the distance: the new technology and business practices these wealthy people are learning and taking advantage of were just too far and unknown to them.
Even in a US economy, though, entrepreneurs who seized on the Internet opportunities are millionaires, and compared to their income, the rest of us are dirt poor
Though the level of inequality is just not as blatantly obvious here as it is in BRIC countries.Yes, but what I am saying is that the type of growth that you are getting or the distribution of such growth is because of politics. Im saying that the inequality is not inherent to growth, but to the politics that are happening.
If you study the USA XIX century you will be surprised by how resourceful and ingenious some people without studies can be (and I have an engineering degree, so Im not saying this out of ego) if they dont have regulations on their way. The problem about regulations like licenses and controls is that it stops and discourages people with ideas but not much credibility from being able to try new things. F.e. the plane was invented by some guys in a bycicle shop, when there were re-known people trying. Studies is only a factor if you are judged by your CV, but not if you opperate in a free market.