Piketty - Capital in The 21. century

Victor-Storm · June 19, 2016

Hi! I have been wanting to read the book 'Capital in the 21. Century' by the French economist Thomas Pikkety for a while, and have finally started. The book has been receiving massive attention everywhere and is supposed to challenge the purely 'capitalist' way of thinking about economics, as it shows that wealth inequality has been rising steadily for many years all over the world, and that the rate of return on owning capital is now greater than the economic growth of nations.

I haven't read the whole book yet, but I was just wondering if FDR has commented on it anywhere in a video or in here? I remember when I first heard about it, I thought it would only be a matter of time until there would be a video out on the book, but there doesn't seem to be anything. Maybe I have just missed it, but it would be of interest to me to listen to an analysis of it here.

Somewhere · June 19, 2016

I've not read Piketty, although Thomas Sowell discusses his ideas in passing in his (good) book "Wealth Poverty and Politics: an International Perspective". Sowell says that Piketty treats "the 1%" as though they were the same people through time, which is absolutely not the case. There is huge downward mobility from "the 1%" (50% after 10 years, if we're talking about income) and it would be more accurate to call it "the 12%" because 12% of people in the US will at some stage in their lives have an income in the top 1%. Likewise, 56% of US households are in the top income decile at some point in their lives, so when people resent "the rich" they are quite likely to be resenting their future selves.

rosencrantz · June 19, 2016

I read a bit of Piketty and I found the book lacking. His theory is too narrow to be of any use. What helped me along was to understand the fundamental principles under which all markets (with banks) operate. Once you understand how money circulates https://en.wikipedia.org/wiki/Balances_Mechanicsand how it is created http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf you know more than Piketty and the common professor for economics. Add some MMT to that and you are lightyears ahead

Mister Mister · June 19, 2016

I think Stef has moved on from this kind of academic analysis. Maybe you or one of the other members can do a rebuttal video/article?

Off the top of my head, the two points I would make are: the poor have a way higher standard of living today than they did 100 years ago, and the role of central banking in providing artificially high returns on investments.

dsayers · June 19, 2016

The book has been receiving massive attention everywhere and is supposed to challenge the purely 'capitalist' way of thinking about economics

How? Did he not use his capital to think of and write the book? Is he giving it away for free?

it shows that wealth inequality has been rising steadily for many years all over the world, and that the rate of return on owning capital is now greater than the economic growth of nations.

I don't find comparing something to the trait of a fictitious entity to be a compelling argument. If he's going to talk about nations, then he has to talk about how he's NOT talking about free markets. And how State power is used coercively to force profits into the hands of those that can pay for it and incentivizes the poor to remain poor, etc. Theft is not a capitalist behavior.

Victor-Storm · June 20, 2016

How? Did he not use his capital to think of and write the book? Is he giving it away for free?

So let me just understand; you wouldn't accept any argument against what someone percieves as capitalism unless they are giving their work away for free? That wouldn't really change the arguments one way or the other, as far as I can see. I don't think Piketty would ever say that capital should not exist, or that we should not buy or sell things, that's beside the point.

I don't find comparing something to the trait of a fictitious entity to be a compelling argument.

Here's something I'm a bit confused about. In what way is a nation a fictitious entity? I mean, I'm from Denmark, and I would certainly say that there is such a thing as Danish culture and history. There are borders, and there is a government. I know that we as anarchist would like there not to be nations, but we can't ignore that they exist as the world stands today. For example, the whole discussion on immigrations, in which FDR members tend to argue against mass immigration, rests on the idea that there are nations with different cultures, and that people from various countries come into other countries and change them. Do you mean that nations don't exist because the borders are man made, and the government is just a word describing a group of people with power, and that the country/nation is nowhere to be found in physical space? Well, in that sense, do families exist? Do companies? Do soccer teams? Or is it because the participation of citizens in a nation is coerced? Then, did slavery exist, or was that just a fictitious entity that it doesn't make sense to talk about?

Besides, the point was not about nations, but that we now seem to be living in a world where it is more profitable to own capital than to work and produce it.

LovePrevails · June 20, 2016

Boohickey11 · June 20, 2016

Robert Murphy has answered Pikkety with the most academic responses, I think.

http://consultingbyrpm.com/blog/2014/06/full-review-of-pikettys-capital-in-the-21st-century.html

If you search his blog for Piketty you will find plenty of other smaller posts he has written and links to others responses.

In short though, since economics is a science in which experiements cannot be run (no variable control & no time travel to repeat experiments), all empirical data is useless anyway.

dsayers · June 20, 2016

you wouldn't accept any argument against what someone percieves as capitalism unless they are giving their work away for free?

No. I'm saying that EVERY argument against capitalism is a performative contradiction as the person making it is using their capital to do so.

In what way is a nation a fictitious entity?

"Nation" is a concept. It is not comprised of matter or energy. Kind of like the word "forest." Except forest DESCRIBES something that exists in the real world.

There are borders, and there is a government.

Churches are not proof that God exists; They are proof that some people behave as if God exists.

I know that we as anarchist would like there not to be nations

I don't even know what it means to say that we would like there not to be unicorns. Unicorns don't exist; it's not up to us.

the whole discussion on immigrations, in which FDR members tend to argue against mass immigration, rests on the idea that there are nations

No. It "rests on the idea" that there are people who will initiate the use of force in the name of the State in order to first steal from everybody to give to others, thus incentivizing immigration. Then secondly to stop people from stopping those immigrants from coming in. The fact that this violence is initiated in the name of the State means that there's a wrongfully perceived legitimacy that prevents most people from objecting to/opposing it. This is precisely why it's so important to understand that nations do not exist.

That's kind of beside the point in terms of the topic though. On topic, State force is used to skew wealth distribution away from earners. Thus any economic analysis that points to the EFFECTS of this without also acknowledging the cause--especially when used to feign a different cause--can be discarded as fiction/deceptive.