This is an intriguing little video summarizing the hypothesis of a new study by Vamsi Vakulabharanam. It looks at the puzzle of why China and India are exceptions to the Kuznets curve, that economic development at first increases income inequality but then starts to produce less disparity. But that did not occur in India and China. Vakulabharanam argues that the difference lies in changes in institutional arrangements, and the inflection point was roughly 1980.
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We’re building a stable of economists? Well I’ll be goddamned.
What’s that big Keynesian stud Paul Krugman up to these days?
Hey Give this dude a Henry Ford Professer Emeritus position studying “cross-sectional social income stratification growth boundary equilibrium optimisation policy development theory”. Whoa! It sounds profound when you put it like that.
Some find the Lord in data and some find the Lord in faces on the street. And some in both. It’s not that hard, if you look. and you can always work the math.
Good Luck Mr. Vakulabharanam!
“cross-sectional social income stratification growth boundary equilibrium optimisation policy development theory”.EPIC!!!Mr.Crazy man,thou art awesomeness personified.
If only the economists had your common sense…
I’m only surprised Indians didn’t actually invent capitalism. Maybe their affinity comes from all those years under the boots of the Brits? And their final revenge? To invade America – the failing second generation empire of the Royals – and ride that mother down beneath the waves of history.
As if any of this would have occurred without the west deliberately outsourcing jobs to the east.
Brilliant! Brilliant! Brilliant! I will be contacting this guy to donate some of my hard earned cash. We need more people like him.
Listening to this a second time they sound as if they are equating “regimes of capitalism” with sovereign governance. I wonder how many people confuse capitalism with a form of governance instead of understanding it as equitable rules for commerce and trade – which is all it is. Governance is what controls and guides capitalism. Only when governance fails, as it has in the United States, and a country ceases to live by both law and policy, does capitalism get a chance to turn definitions on their head like these two are doing. These two are among a wider association of academics who are pushing capitalism as a form of governance with flexible varieties of ” accumulation strategies” ranging from attacking workers to appropriating distribution networks to rampant speculation and financialization. Does our Constitution even mention Capitalism?
Blame it on a half century or more of democracy = capitalism = prosperity that has been the baseline propaganda ever since the cold war started.
No, our Constitution does not mention capitalism, nor does the Bible.
We the Capitalists, in order to form a more perfect wealth transfer mechanism…
«I wonder how many people confuse capitalism with a form of governance»
I guess people who understand what the term means? “Capitalism” is the political system in which dominant political power is held by the owners of capital. Just like feudalism is the one where the titulars of feudal obligations hold dominant power, and so on.
A lot of people confuse capitalism with markets (you can have markets without having dominant political power to owners of capital) or with the industrial system (capitalists can exist without an industrial system), or with democracy or whatever.
«equitable rules for commerce and trade – which is all it is»
That is called “a well regulated economy”, which is not a political system. And under capitalism «equitable rules for commerce and trade» cannot happen because the rules are designed to the benefit of owners of capital.
The USA and other first-world economies are not capitalists, because the owners of capital, which means mostly the state and female pensioners, do not have dominant political power; as J. K. Galbraith showed, in the past several decades it is the holders of executive office in large corporations who have dominant political power.
In J. K. Galbraith’s time it was executives in manufacturing large corporations, today it is in large financial ones.
All this inequality is due to something called the Kuznets curve and something about institutional arrangements?
Didn’t leave me with much.
Instead, listen/watch this video from Vamsi, where he explains capitalism’s inherent instability.
http://www.youtube.com/watch?v=HQ0t6-kYeKo
Those economists sure love their unnumbered graphs…
Waaaaaayy too academic. Neither guy seems to picture that real people are involved; it’s all math.
Hmmm, I guess I’m too dumb to see the intricate, complex subtleties at work here, but somehow it just seems common sense that a capitalist “regime” that stresses private profit uber alles would tend to increase inequality over a “regime” that stresses distribution of profits … The mechanisms inherent in the 2 regimes can do little else but produce those results, n’est pas? i guess that is why I am not an economist –
Do we really need to fund more studies to “prove” that?
Some people seem to think that in a system where it takes money to make money it’s shocking to suggest that the rich will get richer while everyone else treads water.
WORD! MOST ain’t even treading water!
An interesting anecdote from when he joined Unilever and was told by their VP of Human Resources that their greatest success was breaking the backbone of the unions.
The late 19th century founders of the firm must be spinning in their graves. William Lever was famously concerned for the wellbeing of the workforce and founded the model village of Port Sunlight for his workers. He saw it as an exercise in indirect profit sharing.
How different from today’s rabid capitalism!
YES. This is what he means when he is talking about “regimes of capitalism”. The old ones (regimes AND people) have all died off now. All those memories of hard lessons learned and memories of the success of the post-great depression welfare state all gone away… only to be relearned again. This is Minksy on other levels, not just debt…
Yes.
It looks like INET is doing its best to save *Capitalism*, destroyed from Chicago to Mobile. Maybe we’ll live to see if they’re fighting a *Lost Cause* or not.
On the other hand, one might imagine a phoenix rising from ashes: more difficult, revolutionary. Some speakers are still deferent. Is this part of a necessary strategy, or does it connote a failure of nerve? As always, academics are a timid folk.
“Half measures avail us nothing.”
BILL BLACK/YVES SMITH 2012: JUSTICE NOW OR NEVER
I would say rather, “Vote for Justice now, before its shoved up your arsehole”
Most of the comments really say more about the ignorance and character of the people commenting rather than anything of note.
I welcome your opinion, even as it was tossed off so nonchalantly and without a shred of justification. My question is: why did you bother even making it, as it definitely said “nothing of note,” and equally spoke volumes about your character and ignorance as well?
I would say that about YOUR comments E-CON, fer sher. But what are you doing here? Why dont you go scatter your pearls ofd wisdom out somewhere everyone agrees with you, and or behind a a paywall? Just cant stay away when theres an opportunity to pose and/or bloviate for free can you?
Econ; I’d add that the first is at a high level and the second at a low level….
Raawwwthur
The root cause is of course not in a matter of technical arrangements like “institutional arrangements” – its about raw power. The ones with power make “institutional arrangements” that suits them and the people with power is not a bit interested in income equality, rather the opposite.
When people in common get power they can make “institutional arrangements” so they get more income equality.
You know, you know. You know?