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Thread: Thomas Piketty

  1. #16
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    Apparently Piketty's main thing is inequality increases when return on capital far exceeds growth: r > g.

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    It is the economics book that took the world by storm. Capital in the Twenty-First Century, written by the French economist Thomas Piketty, was published in French in 2013 and in English in March 2014. The English version quickly became an unlikely bestseller, and it prompted a broad and energetic debate on the book’s subject: the outlook for global inequality. Some reckon it heralds or may itself cause a pronounced shift in the focus of economic policy, toward distributional questions. The Economist hailed Professor Piketty as "the modern Marx" (Karl, that is). But what is his book all about?

    Capital draws on more than a decade of research by Piketty and a handful of other economists, detailing historical changes in the concentration of income and wealth. This pile of data allows Piketty to sketch out the evolution of inequality since the beginning of the industrial revolution. In the 18th and 19th centuries western European society was highly unequal. Private wealth dwarfed national income and was concentrated in the hands of the rich families who sat atop a relatively rigid class structure. This system persisted even as industrialisation slowly contributed to rising wages for workers. Only the chaos of the first and second world wars and the Depression disrupted this pattern. High taxes, inflation, bankruptcies and the growth of sprawling welfare states caused wealth to shrink dramatically, and ushered in a period in which both income and wealth were distributed in relatively egalitarian fashion. But the shocks of the early 20th century have faded and wealth is now reasserting itself. On many measures, Piketty reckons, the importance of wealth in modern economies is approaching levels last seen before the first world war.

    From this history, Piketty derives a grand theory of capital and inequality. As a general rule wealth grows faster than economic output, he explains, a concept he captures in the expression r > g (where r is the rate of return to wealth and g is the economic growth rate). Other things being equal, faster economic growth will diminish the importance of wealth in a society, whereas slower growth will increase it (and demographic change that slows global growth will make capital more dominant). But there are no natural forces pushing against the steady concentration of wealth. Only a burst of rapid growth (from technological progress or rising population) or government intervention can be counted on to keep economies from returning to the “patrimonial capitalism” that worried Karl Marx. Piketty closes the book by recommending that governments step in now, by adopting a global tax on wealth, to prevent soaring inequality contributing to economic or political instability down the road.

    The book has unsurprisingly attracted plenty of criticism. Some wonder whether Piketty is right to think that the future will look like the past. Theory argues that it should become ever harder to earn a good return on wealth the more there is of it. And today’s super-rich (think of Bill Gates, or Mark Zuckerberg) mostly come by their wealth through work, rather than via inheritance. Others argue that Piketty’s policy recommendations are more ideologically than economically driven and could do more harm than good. But many of the sceptics nonetheless have kind words for the book’s contributions, in terms of data and analysis. Whether or not Professor Piketty succeeds in changing policy, he will have influenced the way thousands of readers and plenty of economists think about these issues.

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    Quote Originally Posted by john eden View Post
    Reviewing Marx seems as pointless as reviewing Miles Davis in 2020.

    Both have helped me see the world in new ways though.

    Marx’s analysis is a really useful tool which informs much/most of my guff on here about politics.
    I was impressed by the account of Marxist ideas in that Corbynism book. They basically critiqued the idea of value as a fixed quantity that resides in the objects produced by workers and explain how this leads to the conception leads to the idea that you can preserve it within national boundaries i.e. Lexit. They explain value as a social relationship instead which seems much more acute.

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    Quote Originally Posted by DannyL View Post
    I was impressed by the account of Marxist ideas in that Corbynism book. They basically critiqued the idea of value as a fixed quantity that resides in the objects produced by workers and explain how this leads to the conception leads to the idea that you can preserve it within national boundaries i.e. Lexit. They explain value as a social relationship instead which seems much more acute.
    That’s good.

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    Quote Originally Posted by DannyL View Post
    How hard was Capital to read? I've always assumed that Piketty would be relatively easy, once one got going. Not read it myself but I do read economics and enjoy it (pervert) so maybe I will.
    Vol 1 is easy if you read it as something explaining the underlying mechanisms of being on the dole.

    Vols 2-3 are much more hardcore.

    honestly though, most marxists haven't even read vol 1 and that's a walk in the park if you read it from the perspective of the reserve army of labour (unemployment) so dive straight in.

    Oh and read it from the perspective of peasants being thrown off the land and reduced to a class of criminal vagabonds during the enclosures. then it all makes much more sense.
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  7. #21
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    What makes 2-3 much more hardcore?

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    Stingier rations
    Took a rest stop that wasn't on the schedule

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  10. #23
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    Quote Originally Posted by version View Post
    What makes 2-3 much more hardcore?
    The subject matter is a bit more heavy going.

    Plus Iirc both vols were compiled by Engels from Marx’s notes after he died. Engels was a less entertaining writer.

  11. #24
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    Plucked this line from Harvey's review of Piketty, not having finished reading even that yet: “Money, land, real estate and plant and equipment that are not being used productively are not capital.”

    Not having started Marx's, and not having plans for Piketty's, I am fascinated by capital in the overlap of its economic and philosophic capacities - as I'm sure many, if not all, of you are.

    Maybe thirdform can help out here, or john.

    Can we figure capital as the head of a growing stock? Something that only is as long as the stock is growing? Thus, removing your stock from any kind of circulation/reproduction would be, as it were, decapitating your stock, and issuing in a plateau-unto-decline. Once the head of an ale diminishes, the flattening commences (alongside its consumption).

    So yeah, all capital is surplus stock, but not all surplus stock is capital?

    How can we generalize, then, capitalism (as a set of beliefs/practices surrounding a reproductive use of stock) from its economic context? In what other manners can one be a capitalist?

    As anathema as it is in my eyes, I do sense a profound capitalism in the way I go about learning. If there is not a perpetual increase/exercise of skills-of-abstraction, a sense of insufficiency sets in - the head dissipates.

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