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"Too much wealth inequality hurts growth" - that's just an assertion. China, for instance, would appear to defy this rule.


How so? China is still, to a great extent, a command economy. The usual rules don't apply. The Chinese government can create all the artificial growth it wants and is not directly answerable to the public.

One could point to basically every country in Africa and many in Latin America and Asia for support of the assertion. One counter-example (not that I agree China is even a counter-example in this case) doesn't disprove the theory in social science. There are always weird exceptions.


Well, the original statement was that inequality hurts growth. It said nothing regarding command economies or otherwise.


Anyone who thinks China's growth is real needs to watch this:

http://www.youtube.com/watch?v=rPILhiTJv7E


There are a million other confounding variables, but you can also track a reasonably strong correlation to income inequality and growth rates in the US over the past several decades.




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