Three interesting articles have appeared this week comparing the Indian and Chinese governments responses to inequality and economic growth:
- Give us growth and we’ll handle the inequality by Manas Chakravarty
ADB acknowledges that rapid growth in Asia has lifted millions out of poverty
- Chinese lessons for India by Niranjan Rajadhyaksha
The data shows that the difference between growth rates in the two countries converge towards the end of every decade, but then something happens that allows China to accelerate relative to India all over again
- Why India will beat China by Swaminathan S. Anklesaria Aiyar
Extractive political institutions (autocracy and empire) lead to extractive economies benefiting elites, and cannot create general prosperity save for limited periods.
Given these three articles, do you think democratic regimes tend to allow more creative destruction than autocratic ones?
Aiyar argues that “creative destruction, which is essential for sustained prosperity but threatens extractive regimes” and therefore the extractive parties (for him autocrats) won’t allow it in the long-run. But what if politics in a democracy is not based on a desire for individual and economic liberty but for the greatest numbers to extract from minorities, or for some tribes to extract from others, or at the very least on a conservative fear of change?What do you think is more important in creating long-term freedom and prosperity: economic freedom or voting rights and a free press?