Re: The economy - a new era?

[Julio Huato <juliohuato@xxxxxxxxxxx>]

> Michael Perelman wrote:
>
> > That was the big fight during the New Deal.  One wing of the Democratic
> > Party called for trust busting; the other, for organizing the potential of
> > larger economic formations.
> >
> > Both sides have anti-progressive consequences.
>
> Of course they do, without "progressive" intervention. But which
> environment is more target-rich for progressive intervention? I'm guessing
> the more concentrated.
>
> Doug

Can you guys elaborate on this?

Why would concentration be more propitious for progressive politics?

What's in my mind is the idea floated in the growth literature in the last
10 years that initial inequality sabotages subsequent growth.  (See, for
example, Person and Tabelini, Dani Rodrik, Will Easterly, etc.  There's a
brief survey of the material by Francisco Ferreira, World Bank at
www.worldbank.org/poverty/inequal/econ/ferreira.pdf.)

I know there's no necessary link between industrial concentration and
inequality, but -- at least in the development literature -- economies
(e.g., Southeast Asia versus, say, Latin America) with relatively less
industrial concentration have lower Ginis and are more robust in dealing
with external shocks.  I'd argue that progressive politics has been much
more effective in Southeast Asia, where millions of people have lifted
themselves out of poverty in the last 20 years.  I was just reading this
morning a posting by Henry Liu in the Post-Keynesian list on China's
re-distributive rural subsidies.

Maybe I'm naive, but just as progressive politics doesn't necessarily
require deficit financing (it may, because politics is decisive, but it
doesn't appear to me as a technical necessity in spite of what
Post-Keynesians argue), I'd think that the only acceptable basis for
concentration is technical (e.g., natural monopoly), and such technical
basis is continuously shifted by technological change.  (Again, this could
also be overruled by political necessity.)  No?

Julio

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