top four radical conclusions From Piketty’s “Capital In The 21st Century” #Concentration_OfMarch 22, 2019
French political economist and author of “Capital In The 21st Century” Thomas Piketty is making a groundbreaking book tour of U.S. policy and academic centers armed with mounds of data that is shaking up economic prognosticators.
Even Robert Solow, Nobel Prize-winning economist, famed for discounting the dangers of excessive inequality over the “the long run” in market economies, was ready to dialog with Piketty at the Economic Policy Institute’s forum this past week.
Economic surveys defining the “top” incomes as the top “20 percent” disguised the rate of concentration in recent years.
But tax records reveal it.
And workers who fall below median income have seen their share of national wealth and income dramatically cut.
Concentration of wealth historically leads to concentration of political and institutional power, and concentration of political and institutional power leads to more concentration of wealth.
This is a stunning conclusion, at least for many mainstream economists, who assumed more faith in automatic market stabilizers for imbalances in national income and wealth distribution.
One of his conclusions, and a central theme is: the abandonment of classic political economy (the interaction of economics and public institutions) by many professional economists in the academic and government communities in favor of very mathematical models, was, and is, a mistake.
Global capital is too strong and mobile now for any one country to regulate it.
Piketty is right, and it’s simple to say: The returns to capital are too high; the returns to working people too low.