Tuesday, January 29, 2008

Democracy Interlude

by Ken Houghton

Chris Dillow notes that the alleged feedback loop between "capitalism" and "democracy" is dependent on a very loose definition of the former—and possibly the latter as well:
Brad Setser estimates that a $50 rise in the oil price, if sustained for a year, gives $250bn to just four or five families. They get this not on account of their ownership of capital, but because of their inherited land. That's feudal.

It is left as an exercise to reader to realize why "inherited land" is not necessarily a form of capital.

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