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I'm sure the neocons would probably write this off as India being in the early stages of of Kuznets Curve (1), but it's probably a case of what Piketty found w

I'm sure the neocons would probably write this off as India being in the early stages of of Kuznets Curve (1), but it's probably a case of what Piketty found when writing 'Capital in the Twenty-First Century'. Ie, in developed nations, the rate of return on capital greater exceeds the rate of economic growth, which creates an increasing gap between rich and poor. It's difficult to see how they will mobilise these people to become consumers, when nothing suggests a disruption of Indian wealth becoming increasingly concentrated. (1) https://en.wikipedia.org/wiki/Kuznets_curve https://en.wikipedia.org/wiki/Kuznets_curve

anovikov 9y ago
What is the problem of wealth being concentrated? Common people do not need wealth to earn money, they earn money from jobs. Gradually business will see it needs consumers to grow further and some measures will be taken to make these people more productive to be able to earn and spend, as rich don't exist in a vacuum.
- nickthemagicman 9y ago
  > Gradually business will see it needs consumers to grow further and some measures will be taken to make these people more productive to be able to earn and spend To rephrase: You're saying that the "common" people are just not working hard enough and the rich need to take measures to make them work harder so that they can be better consumers. It's the "common peoples" fault that there is no middle class because they don't work hard enough. According to you...India has a half billion lazy people.
- StephenMelon 9y ago
  Besides the scientifically proven downsides for society and general human wellbeing that inequality is known to cause, why should people’s lives be improved or not at the whim of “business” and the “non-common”, most of whom are the beneficiaries of inherited wealth or a gamed system? What gives people the right to live a parasitic, non-contributory existence at the expense of the labour of other humans? You seem to be systematising and forgetting that you are talking about billions of real lives?
  - cloverich 9y ago
    > Besides the scientifically proven downsides for society and general human wellbeing that inequality is known to cause . (Honest question) do you have some citations where this has been studied, specifically in cases where the low-end of the inequality spectrum isn't poor? (i.e., to demonstrate the inequality and not the absolute state is the culprit)
- tekmate 9y ago
  i could actually respect libertarians if you guys would stop pretending that trickle down is a thing and embraced that a society with .1% superrich, 19-20% well off experts and 80% serfs is the natural endgame of your ideology
  - jeffbax 9y ago
    Don't blame libertarianism for the state having broken the market so badly that wealth inevitably gets funneled to the few. Crony capitalism is not libertarian, rabidly competitive markets are. The natural end of that is generally going to be prosperity across the board, and hopefully a government financially solvent enough to actually pay for those in need and essential services, all of which should be lower as a result of a better market doing much of that naturally.
    - tekmate 9y ago
      libertarianism in action IS crony capitalism pretending anything else is akin to talking about how "real communism has never been tried"
    - xixixao 9y ago
      I have never seen even a simple argument for why your second paragraph should be true. On the other hand I understand the principle that money makes more money (the principle of investment and ROI), and I don't see how "competitive market" tackles this. It basically feels like the capitalism starts off from fairly-level playing field, but over time becomes more and more unstable, the gap ever-widening. We have already seen it fall (at the beginning of communist regimes), and I'm afraid we'll see it fall again. That's a pessimist view, which I hope won't turn out to be true, but I'd be interested in exploring alternatives.
      - hueving 9y ago
        In truly competitive markets it wouldn't be so easy to park money for guaranteed returns.
- coldtea 9y ago
  >What is the problem of wealth being concentrated? 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...
  - walshemj 9y ago
    What do you mean by idle investments? land is presumably rented out to farmers so its not idle
    - coldtea 9y ago
      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).
      - walshemj 9y ago
        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
baursak 9y ago
India's wealth gap is absolutely jarring. There are beautiful fenced mansions with manicured lawns and just outside the fence homeless kids setting up fires for the night.
- javiramos 9y ago
  Same in SF, you see Ferraris driving along Market St. while homeless people shoot up or defecate on the sidewalk.
  - icantdrive55 9y ago
    And the bigger problem is Americans are becoming immune to the suffering. Hell--there's a handful of you whom are rationalizing the homelessness problem right now. "If they just didn't do whatever?" We used to be appalled, but now a head could come following out of an alley, and oh well? I'm embarrassed to admit I've become hardened a bit too. My hope is we go back to being appalled,and not just at the usuall nations that we don't quite get, but ours. I don't see that happening. I just see more laws, roadblocks, and "educational will cure the problem." Many of you in tech will feel the cold reality when this party dies down, or maybe there's a sympathetic parent that will offer a basement? I hope for the latter--a lot of you come from living, responsible families. (We need to immediately build restrooms across America. F--- the Wall. We need places to chit, and wash our hands. When ever I have to go to SF, I actively think about my colon. Everyone should have the right to use a restroom.)
  - barney54 9y ago
    No, it's not close to the same. There is homelessness in SF, but the level of poverty in India is breathtaking.
    - j45 9y ago
      Places like India have a much wider spectrum of extremes between incredible poverty and incredible wealth. North America has a subset of that spectrum. If you don't believe this, I challenge you to drop yourself into 0-star in any place like India and see how it stretches you.
simula67 9y ago
"I don't know what the truth is, but let me idly speculate in favor of my political team"
- dmix 9y ago
  That's a very succinct way of putting it, thanks. Almost every economics discussion at these very high levels suffer from sweeping all-encompassing generalizations (about an entire country) that happen to fit perfectly neatly into their political worldview. Especially for India, which is notorious for having a government economic regulations that fluctuate wildly depending on what province/city you're in. Where you can drive a truck across the country and require 5 different licences/paperwork just to appease each local arrangement. Not a good country to generalize. A great overview of the complexity of the economy of India: https://www.youtube.com/watch?v=hVwIZzGHxwc https://www.youtube.com/watch?v=hVwIZzGHxwc
sfifs 9y ago
One of the big problems in Indian economic statistics is that a lot of wealth and income if the "middle class" and the rich actually doesn't show up in official statistics. Their income is in what's known as "black money". There are a lot more rich ajd middle class families in India than show up in official statistics. That's precisely why socio economic classes in India used by economists and marketers are defined by a combination of education, occupation and device ownership rather than income. Source: Am a Market researcher and analyst who segmented Indian market for a major corporate
- mikeryan 9y ago
  I’m far from expert on this but how long can India be considered a “developing” nation. It’s starting to feel like continuing to call Dropbox a “startup”
  - oblio 9y ago
    I think that at this point we classify countries as developed mostly by IHDI/HDI: (Inequality adjusted) Human Development Index. I'm from Romania, which I would classify as developing: Romanian HDI: 0.802, IHDI: 0.714. Indian HDI: 0.624, IHDI: 0.454 I think India still has a long way to go. So does China, in my opinion.
  - lozenge 9y ago
    India's GDP per capita (in US$ inflation adjusted) has quadrupled since 2000, if that isn't developing then what is? https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=log&ind_y=false&rdim=country&idim=country:IND:ISL&ifdim=country&hl=en&dl=en&ind=false&icfg https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9...
  - marcosdumay 9y ago
    It is surely a bad name, that imply that things are improving. But there is a distinguished set of countries that are not developed, and not undeveloped either.
  - barry-cotter 9y ago
chisleu 9y ago
Why should we try to change them into a consumer economy? I read the article but the problem was identified near the beginning. The top 1% of Indian adults, a rich enclave of 8m inhabitants making at least $20,000 a year...

anovikov 9y ago

What is the problem of wealth being concentrated? Common people do not need wealth to earn money, they earn money from jobs. Gradually business will see it needs consumers to grow further and some measures will be taken to make these people more productive to be able to earn and spend, as rich don't exist in a vacuum.

nickthemagicman 9y ago
> Gradually business will see it needs consumers to grow further and some measures will be taken to make these people more productive to be able to earn and spend To rephrase: You're saying that the "common" people are just not working hard enough and the rich need to take measures to make them work harder so that they can be better consumers. It's the "common peoples" fault that there is no middle class because they don't work hard enough. According to you...India has a half billion lazy people.
StephenMelon 9y ago
Besides the scientifically proven downsides for society and general human wellbeing that inequality is known to cause, why should people’s lives be improved or not at the whim of “business” and the “non-common”, most of whom are the beneficiaries of inherited wealth or a gamed system? What gives people the right to live a parasitic, non-contributory existence at the expense of the labour of other humans? You seem to be systematising and forgetting that you are talking about billions of real lives?
- cloverich 9y ago
  > Besides the scientifically proven downsides for society and general human wellbeing that inequality is known to cause . (Honest question) do you have some citations where this has been studied, specifically in cases where the low-end of the inequality spectrum isn't poor? (i.e., to demonstrate the inequality and not the absolute state is the culprit)
tekmate 9y ago
i could actually respect libertarians if you guys would stop pretending that trickle down is a thing and embraced that a society with .1% superrich, 19-20% well off experts and 80% serfs is the natural endgame of your ideology
- jeffbax 9y ago
  Don't blame libertarianism for the state having broken the market so badly that wealth inevitably gets funneled to the few. Crony capitalism is not libertarian, rabidly competitive markets are. The natural end of that is generally going to be prosperity across the board, and hopefully a government financially solvent enough to actually pay for those in need and essential services, all of which should be lower as a result of a better market doing much of that naturally.
  - tekmate 9y ago
    libertarianism in action IS crony capitalism pretending anything else is akin to talking about how "real communism has never been tried"
  - xixixao 9y ago
    I have never seen even a simple argument for why your second paragraph should be true. On the other hand I understand the principle that money makes more money (the principle of investment and ROI), and I don't see how "competitive market" tackles this. It basically feels like the capitalism starts off from fairly-level playing field, but over time becomes more and more unstable, the gap ever-widening. We have already seen it fall (at the beginning of communist regimes), and I'm afraid we'll see it fall again. That's a pessimist view, which I hope won't turn out to be true, but I'd be interested in exploring alternatives.
    - hueving 9y ago
      In truly competitive markets it wouldn't be so easy to park money for guaranteed returns.
coldtea 9y ago
>What is the problem of wealth being concentrated? 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...
- walshemj 9y ago
  What do you mean by idle investments? land is presumably rented out to farmers so its not idle
  - coldtea 9y ago
    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).
    - walshemj 9y ago
      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

baursak 9y ago

India's wealth gap is absolutely jarring. There are beautiful fenced mansions with manicured lawns and just outside the fence homeless kids setting up fires for the night.

javiramos 9y ago
Same in SF, you see Ferraris driving along Market St. while homeless people shoot up or defecate on the sidewalk.
- icantdrive55 9y ago
  And the bigger problem is Americans are becoming immune to the suffering. Hell--there's a handful of you whom are rationalizing the homelessness problem right now. "If they just didn't do whatever?" We used to be appalled, but now a head could come following out of an alley, and oh well? I'm embarrassed to admit I've become hardened a bit too. My hope is we go back to being appalled,and not just at the usuall nations that we don't quite get, but ours. I don't see that happening. I just see more laws, roadblocks, and "educational will cure the problem." Many of you in tech will feel the cold reality when this party dies down, or maybe there's a sympathetic parent that will offer a basement? I hope for the latter--a lot of you come from living, responsible families. (We need to immediately build restrooms across America. F--- the Wall. We need places to chit, and wash our hands. When ever I have to go to SF, I actively think about my colon. Everyone should have the right to use a restroom.)
- barney54 9y ago
  No, it's not close to the same. There is homelessness in SF, but the level of poverty in India is breathtaking.
  - j45 9y ago
    Places like India have a much wider spectrum of extremes between incredible poverty and incredible wealth. North America has a subset of that spectrum. If you don't believe this, I challenge you to drop yourself into 0-star in any place like India and see how it stretches you.

simula67 9y ago

"I don't know what the truth is, but let me idly speculate in favor of my political team"

dmix 9y ago
That's a very succinct way of putting it, thanks. Almost every economics discussion at these very high levels suffer from sweeping all-encompassing generalizations (about an entire country) that happen to fit perfectly neatly into their political worldview. Especially for India, which is notorious for having a government economic regulations that fluctuate wildly depending on what province/city you're in. Where you can drive a truck across the country and require 5 different licences/paperwork just to appease each local arrangement. Not a good country to generalize. A great overview of the complexity of the economy of India: https://www.youtube.com/watch?v=hVwIZzGHxwc https://www.youtube.com/watch?v=hVwIZzGHxwc

sfifs 9y ago

One of the big problems in Indian economic statistics is that a lot of wealth and income if the "middle class" and the rich actually doesn't show up in official statistics. Their income is in what's known as "black money". There are a lot more rich ajd middle class families in India than show up in official statistics. That's precisely why socio economic classes in India used by economists and marketers are defined by a combination of education, occupation and device ownership rather than income. Source: Am a Market researcher and analyst who segmented Indian market for a major corporate

mikeryan 9y ago
I’m far from expert on this but how long can India be considered a “developing” nation. It’s starting to feel like continuing to call Dropbox a “startup”
- oblio 9y ago
  I think that at this point we classify countries as developed mostly by IHDI/HDI: (Inequality adjusted) Human Development Index. I'm from Romania, which I would classify as developing: Romanian HDI: 0.802, IHDI: 0.714. Indian HDI: 0.624, IHDI: 0.454 I think India still has a long way to go. So does China, in my opinion.
- lozenge 9y ago
  India's GDP per capita (in US$ inflation adjusted) has quadrupled since 2000, if that isn't developing then what is? https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=log&ind_y=false&rdim=country&idim=country:IND:ISL&ifdim=country&hl=en&dl=en&ind=false&icfg https://www.google.co.uk/publicdata/explore?ds=d5bncppjof8f9...
- marcosdumay 9y ago
  It is surely a bad name, that imply that things are improving. But there is a distinguished set of countries that are not developed, and not undeveloped either.
- barry-cotter 9y ago

chisleu 9y ago

Why should we try to change them into a consumer economy? I read the article but the problem was identified near the beginning. The top 1% of Indian adults, a rich enclave of 8m inhabitants making at least $20,000 a year...