Thomas Piketty and the Search for r

In: Historical Materialism

Thomas Piketty’s magnum opus on the accumulation and distribution of wealth over the last 200 years has been greeted with the biggest noise from mainstream (and heterodox) economics of any economics book. Piketty shows that inequality of wealth and income is inherent to capitalism and it is getting worse. The reason for the rise in the inequality of wealth is a rise of income going to capital in the form of profits, rent and interest. Inequality is not due to higher-skilled labour getting higher income than the lower-skilled. The central question for Piketty’s thesis is whether rising inequality is the central contradiction of capitalism and thus its gravedigger. Is it a tendency for a rising net return on capital (Piketty) or is it the tendency for a falling rate of profit (Marx) that is the key contradiction of capitalism in the twenty-first century?

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  • 2

    Milanovic 2014.

  • 3

    Krugman 2014.

  • 4

    Wolf 2014.

  • 5

    Cassidy 2014.

  • 6

    See Piketty and Zucman 2013.

  • 7

    Oxfam International 2014. Actually it is probably only 67 people since Oxfam’s data were compiled according to the website of the independent-left Senator Sanders of Vermont – see Moreno 2014.

  • 8

    Piketty 2014ap. 577.

  • 11

    See Saez and Zucman 2014.

  • 13

    Kuznets 1955. Kuznets predicted that inequality in economies would take the form of a bell curve: rising inequality as market economies emerged then as they matured falling inequality. In contrast Piketty sees a U-curve: high inequality with a brief period of lower inequality and then a return to high inequality. See Piketty 2014a p. 13.

  • 16

    Piketty 2014ap. 1.

  • 17

    Piketty 2014ap. 9.

  • 18

    Piketty 2014ap. 10.

  • 19

    Piketty 2014ap. 27.

  • 21

    Piketty 2014ap. 46.

  • 22

    Piketty 2014ap. 47.

  • 23

    Piketty 2014ap. 53.

  • 24

    Piketty 2014ap. 48.

  • 25

    Piketty 2014ap. 52.

  • 27

    Piketty 2014ap. 170.

  • 28

    Piketty 2014ap. 348.

  • 29

    Piketty 2014ap. 77.

  • 31

    Piketty 2014ap. 93.

  • 32

    Piketty 2014ap. 97.

  • 33

    Piketty 2014ap. 55.

  • 34

    See Ibbotson and Sinquefield 2010.

  • 36

    Picketty 2014ap. 118.

  • 37

    Picketty 2014ap. 122.

  • 39

    Piketty 2014ap. 173.

  • 40

    Piketty 2014ap. 191.

  • 41

    Picketty 2014ap. 173.

  • 42

    Solow 1956.

  • 43

    Piketty 2014ap. 173.

  • 45

    Piketty 2014ap. 173.

  • 46

    Piketty 2014ap. 463.

  • 47

    Piketty 2014ap. 466.

  • 48

    Piketty 2014ap. 228.

  • 49

    Marx 1976pp. 130–1.

  • 50

    Maito 2014a and Moseley 1988.

  • 51

    For example see Carchedi and Roberts 2013which also references many other studies on p. 114.

  • 52

    Maito 2014b.

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