thomas piketty c/d

2014 #1 bestselling non-fiction book in america and everything

Non fiction

I have a copy here but every time I try and read it I fall asleep.

all-time classic

yeah, its a great book. i also enjoyed that delong post quite a bit

he's a bit too pugnacious for me. this is great though

[T]here are some better critiques of Piketty's argument out there. An MIT graduate student has mounted the best sustained critique: Matthew Rognlie points to a set of considerations that John Maynard Keynes called the “euthanasia of the rentier”. As capital accumulation proceeds, more and richer people seek to entrust their larger and larger wealth to entrepreneurs to buy machines relative to the number of workers who seek to be hired by entrepreneurs to work the machines. Thus by simple supply and demand the rate of profit declines. Thus increasing wealth accumulation enriches workers-their productivity at the margin rises and entrepreneurs are willing to bid more for their services. And increasing wealth accumulation does not impoverish the wealthy, but it does make their wealth less salient as a source of income.

Thomas Piketty's response to this is, roughly: Rognlie’s argument sounds very good in neoclassical economic theory, but fails in historical practice. Supply-and-demand tells us that when the economy's wealth-to-annual income ratio varies, the rate of profit should vary in the opposite direction. But history tells us that the rate of profit sticks at 5% per year, across eras with very different wealth-to-annual-income ratios.

Piketty, however, does not tell us why. Perhaps this is because at a technological level capital does not empower and complement but rather competes with and thus substitutes for labor. Perhaps this is because of successful rent-seeking by the rich who control the government and get it to award them monopoly rents. Perhaps it is because of a social structure that leaves wealth holders believing that a 5% per year is the "fair" rate of profit and are unwilling to underbid each other. Piketty is agnostic here.

This makes his argument both difficult to criticize, and less than fully satisfactory. For, Rognlie points out, the big news so far in the accumulation of wealth and the surge in income received by wealth holders comes from housing, which has risen from 3% of total income to 8% of total income here in the U.S. since World War II. Similar forces are at work in England and France: simply look at rents these days in central London or central Paris. And the collapse of the wealth of European Belle Époque elites after 1900—though not of American Gilded Age elites—owed a lot to the falling value of their broad-acre agricultural-land estates as globalization and rapid improvements in farm productivity enriched the economy as a whole but left agriculture relatively impoverished. In Rognlie's view, the connection between wealth inequality and income inequality is largely a reflection of the dynamics of housing prices—and, I would add, in Europe agricultural land values. And, in Rognlie's and Piketty's view, the rise in U.S. income inequality at the top up until now is only tangentially related to the concentration of wealth. Rather, it is the superincomes of corporate executives, anesthesiologists and allied specialties, and financiers that we have seen so far—and they have not had to have much wealth of their own to grasp these prizes. (Although, of course, their children will then start out with a great deal of wealth.)

i mean, i love delong smackdowns on his blog but adding little shots at per krusell over some unspecified "parameter" is weird in a longformey more considered piece

also piketty on econtalk is a worthwhile listen http://www.econtalk.org/archives/2014/09/thomas_piketty.html

pik responds to a crooked timber round table on the book

http://crookedtimber.org/2016/01/04/capital-predistribution-and-redistribution/

damn, that's actually kind of a masterpiece

" . . . a country where inequality in access to education has reached unprecedented heights, highlighting a gulf standing between the lives of most Americans, and the soothing meritocratic speeches pronounced by the winners of the system."

amen

http://www.theguardian.com/us-news/commentisfree/2016/feb/16/thomas-piketty-bernie-sanders-us-election-2016

i loved that line

dope

i'll put this here, why not

http://voxeu.org/article/what-s-your-surname-intergenerational-mobility-over-six-centuries

For example, Becker and Tomes (1986) argue that “almost all the earnings advantages or disadvantages of ancestors are wiped out in three generations”.

In a recent paper we challenge this view (Barone and Mocetti 2016). We focus on the Italian city of Florence, for which data on taxpayers in 1427 – including surnames, occupations, earnings, and wealth – have been digitalised and made available online. We matched these data with those taken from the tax records relating to the city of Florence in 2011. Family dynasties are identified by surnames. Table 1 offers a first flavour of our results. We report for the top five and bottom five earners among current taxpayers (at the surname level) the modal value of the occupation and the percentiles in the earnings and wealth distribution in the 15th century (the surnames are replaced by capital letters for confidentiality). The top earners among the current taxpayers were already at the top of the socioeconomic ladder six centuries ago – they were lawyers or members of the wool, silk, and shoemaker guilds; their earnings and wealth were always above the median. In contrast, the poorest surnames had less prestigious occupations, and their earnings and wealth were below the median in most cases.

surprised not to see a reference to this book from a couple years ago that invented the surnames method and showed that social mobility never existed

http://www.amazon.com/Son-Also-Rises-Surnames-Princeton/dp/0691162549/ref=sr_1_1?s=books&ie=UTF8&qid=1390142012&sr=1-1&keywords=the+son+also+rises

customers also bought section shows:

Garett Jones

guy creeps my shit right out

yeah he's the worst

gregory clark is cool though i don't think there is any creepy iq shit in his work

although you can imagine your taki-maggers don't have a hard time reconciling 'people with the same surnames tend to be rich' into their worldview

this video of Garett Jones being interviewed by John Stossel is like a hilariously pitch-perfect caricature of 'villainous economist opinions', by a guy whose dept runs on koch money

monopolies... so, those are actually good right?
yup
and minimum wages... bad?
you got it
price gouging?
bring it on

https://www.youtube.com/watch?v=BDCe2cxJfbw

great tweet

https://twitter.com/GarettJones/status/709851876380966912

http://piketty.pse.ens.fr/files/Piketty2018PoliticalConflict.pdf

Brahmin Left vs Merchant Right: Rising Inequality and the Changing Structure of Political Conflict
Evidence from France & the US, 1948-2017

Haven't had a chance to read this yet but I'm intrigued - I've literally just sat at my desk on the first day back at work after a long weekend so i shouldn't really crack it until after lunch lol/

This is a good interview. Piketty makes his case for why wealth inequality is important and why the political system is the best avenue for addressing it. Cowen pushes back enough to elicit strong counter-arguments from Piketty:

https://conversationswithtyler.com/episodes/thomas-piketty/