Friday, July 04, 2014

Future of Capitalism?

In a May 22 article Mark Varga wrote "Everything points to the fact that Ukraine is the only country in the region where the oligarchs have thrived, playing political leaders off against each other and skewing the political system to their favor. Were Poroshenko to win the elections, we would see the birth of the first truly oligarchical society in Europe."

Earlier in the article "Seen in political terms, the corollary to Piketty’s economics translates thusly: Wealth attracts more wealth, which subsequently leads to a concentration of power. The problem of income distribution therefore makes its way to the political system and the overall system of governance, as the economic elite seeks to protect its concentration of power, leaving elected rulers powerless to stop this self-sustaining process. In the long run, widening economic inequality would impact the political class, depriving it of the power to act as the rich get more powerful and more united while the poor lose the capacity to impact the polity. The end state of this slow, incremental process spells the end of the democratic process. A once-liberal society would therefore be transformed into an oligarchical society.
One of the few countries in the developed world that can effectively test Piketty’s hypothesis is Ukraine, with its highly influential class of businessmen-cum-power brokers."
The article ends "Piketty, start writing the sequel!"

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