Re: Growth, Interest and Wage Inequality - To the austrian economists here
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.
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.
From what I've been reading regarding recent explosive growth in BRIC, Brasil is an example of what you're saying, where the high inequality is mainly due to high regulation, with lower income people just not having the connections, resources, or will to deal with the bureaucracy to move up. China, despite being communist, seems to have a cultural reason, where people are just used to doing what they have been doing (like farming), so they are left behind while others keep going up. And Russia is just pretty much corruption-based... And sure, there are people who are ingenious, and they'll end up wealthy, but not everyone will move up the wealth ladder with them. That's kind of the point.
As for the last sentence, even free market entrepreneur types prefer to partner up with people who have the paperwork to prove that they know what the heck they are talking about. Brilliant inventor types do happen, but they're very rare, and once they do invent, they usually look for people with good VCs to implement their ideas
