With the election looming and most people looking for better times, it is instructive to consider what prevents greater prosperity. Comparing different countries, what stands out strongly is that the greater the level of corruption the lower the prosperity, however you define it. That corruption is the enemy of prosperity is hardly a surprise, just ask: in Europe which countries are in financial difficulties? and which have significantly higher levels of corruption?
We can easily see the mechanism by which corruption reduces prosperity, corrupt practices simply siphon off money from enterprise. But legal practices can do the same. For example, ticket touts are not illegal but are entirely detrimental to the prosperity of individuals wanting the tickets. Is there really any difference in financial effect between an executive in any business paying themselves an excessive salary and embezzling the same excess?
In common language these are the people we define as “fat-cats”. The effect of a single fat-cat, like the effect of a single corrupt individual, may not be significant, but the widespread existence and tolerance of both fat-cattery and corruption drains away prosperity.
What is the evidence? It seems very likely that the cumulative effect of many fat-cats will tend to increase inequality. Again, comparing different countries, greater levels of inequality correlate with lower prosperity. The degree of correlation is not as strong as with corruption but it is there. We can say that fat-cat induced inequality probably reduces overall prosperity but certainly does not increase it, While it may increase the prosperity of the fat-cats themselves, the prosperity of the majority, the 99%, is significantly reduced.
Corruption and fat-cats are the enemies of prosperity.