Ok, it's great to see issues like inherited wealth and capitalism'sPaul Krugman Discusses Piketty’s
Capital and the Rise of Inherited Wealth
on Bill Moyers - April 19, 2014
http://vimeo.com/92308666 http://rlu.ru/V59
Occupy was right: capitalism has failed the world
One of the slogans of the Occupy protests was 'capitalism isn't working'.
Now, in an epic, groundbreaking new book, French economist Thomas
Piketty explains why they're right
The Observer, Sunday 13 April 2014
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structural bias towards eventual oligarchy being aired in the
Anglo-American mainstream.
But Piketty's solution is focussed solely on higher taxes upon wealth.
Not a mention of MMT and/or setting free the People's Printing Press.
Piketty's "riches tax" threatens the Wealthy.
But MMT threatens the Bankers. And it's a systemic reform.
Is this why Piketty is the new left champion?
Maybe I'm bitchin' too much. Piketty IS exposing the
structural bias towards the 10%, the 1% and the .001%
PikettyEd Alcock / M.Y.O.PEnlarge Image
Capital Man
Thomas Piketty is economics’ biggest sensation.
He’s also the field’s fiercest critic.
By Emily Eakin - April 17, 2014
The French economist Thomas Piketty arrived in Washington, D.C., on Sunday for a week of talks at some of the nation’s leading policy-research centers but which might as well have been billed as a victory lap up the East Coast.
The English translation of Piketty’s new book, Capital in the Twenty-first Century, a formidably rigorous, 700-page history of wealth, out barely five weeks, had just made The New York Times’s best-seller list. But even before it appeared, on the strength of a handful of advance reviews and a surge of Internet buzz, Piketty’s transformation was complete: from respected researcher on income distribution to ranking heavyweight, a scholar who, armed with reams of data and charts—and, unusual for an economist, a gilded tongue—proposed to upend decades of mainstream wisdom on inequality though an unprecedented analysis of the past.
The Economist declared that Piketty’s book may "revolutionize the way people think about the economic history of the past two centuries" and started an online reading group to discuss it chapter by chapter.
The British magazine Prospect added Piketty to its annual list of the most influential world thinkers, and his book was said to be making the rounds in the office of Ed Milliband, the British Labour Party leader. Documentary filmmakers were vying for the chance to turn the book into a movie; a composer was seeking Piketty’s blessing to make it an opera.
Now the 42-year-old Frenchman had come, like a wonkish heir to de Tocqueville, to tell Americans how to salvage what he called their "egalitarian pioneer ideal" from a potentially devastating "drift toward oligarchy." His anointment was all the more remarkable in that he intended his book not just as a novel argument about inequality but as a pointed rebuke to his field—in particular its American wing.
On Monday, Piketty’s stops included the White House Council of Economic Advisers, the Government Accountability Office, and the office of the Treasury secretary, Jacob Lew, who summoned him for a private sit-down to discuss his proposal for a progressive tax on wealth.
On Tuesday, he appeared in the company of Nobelists: George Akerlof, who, introducing Piketty to a group at the International Monetary Fund, declared that he had "entered rock stardom—economist-style"; and Robert Solow, who, at the Economic Policy Institute, where a crowd of several hundred had braved a freezing downpour to hear Piketty talk, praised the originality of his argument and the "sheer collection, presentation, and analysis" of his data, predicting that "we’re going to be digesting that for a long time."
Piketty weathered the fuss with a modest smile. He wore a gray suit jacket but no tie, and with his close-cropped dark hair, clean-scrubbed round face, and unassuming demeanor, he suggested less a rock star than a particularly earnest graduate student. Speaking without notes for 45 minutes at a stretch, in rapid-fire English as engaging as his prose, he eagerly laid out his findings. "The top of the wealth distribution has been rising at 6 to 7 percent per year—three times faster than the world economy," he told the audience at the Economic Policy Institute. "Nobody knows where this will stop."
The boldness of Piketty’s thesis is belied by its apparent simplicity: Inequality is intrinsic to capitalism, and, if not forcefully combatted, is likely to increase—to levels that threaten our democracy and fail to sustain economic growth.
[] His thesis runs directly counter to mainstream economic theory, which holds that inequality should eventually decline, a process known as "convergence."
According to Piketty, whose data on income and wealth span three centuries and 20 countries, the forces of convergence (the spread of knowledge and skills, for example) are considerable, but those of divergence have typically had the upper hand.
The crux of his argument is a deceptively simple formula: r > g, where r stands for the average annual rate of return on capital (i.e. profits, dividends, interest, and rents) and g stands for the rate of economic growth. For much of modern history, he contends, the rate of return on capital has hovered between 4 and 5 percent, while the growth rate has been decisively lower, between 1 and 2 percent.
Thus he adduces capitalism’s "principal destabilizing force": Whenever r > g, "capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based."
In other words, in a slow-growing economy, accumulated wealth grows faster than income from labor. So the rich, who already hold most of the wealth, will get richer, while everyone else, who depend mostly on income from their jobs, will be lucky to keep up with inflation.
Countries in which r > g constitute much of the developed world today, including the United States, where the wealthiest 10 percent account for more than 50 percent of the national income, and which, if Piketty’s right, may fast be becoming the world’s worst offender.
Across the West, he writes, the levels of inequality "are increasing at a rate that cannot be sustained in the long run and that ought to worry even the most fervent champions of the self-regulated market."...........
FULL ARTICLE:
http://chronicle.com/article/Capital-Man/146059/
