Jump to content


Capital in the Twenty-First Century

inequality taxes wealth economics

75 replies to this topic

#1 D. C. Sessions

    I don't have to pretend to be an adult any more

  • Members
  • PipPipPip
  • 9208 posts
  • LocationCentral New Mexico

Posted 09 April 2014 - 09:46 PM

As mentioned in other threads, Thomas Piketty's [1] new book Capital in the Twenty-First Century is out in English. Since I'm not about to wade through the whole book, before commenting [2], I'll commend Paul Krugman's review in the New York Review of Books to y'all for the condensed version, mostly without mathematics.

Then we can get on with the business of thread drift.

[1] Look at that freaking CV. And he's only in his early 40s. I'm sick with envy. This SOB is going to have a Nobel damn soon.
[2] tl;dr and besides since when have we actually read stuff before having opinions about it? This is America, damn it!
The way a lot of catastrophes happen is that X doesn't occur because there are safeguards in place, therefore people assume X isn't a worry and they remove the safeguards. Then X happens.
— Nate Silver
"Robots aren't the problem. Capitalism is." -- Last words of Stephen Hawking.
These days, "libertarian" is just a euphemism for a Nazi who's afraid to commit.
"If you're not outraged, you're not paying attention." -- Heather Heyer
"I'd rather have my child, but by golly, if I gotta give her up, we're gonna make it count." -- Her mother
"Your purpose, then, plainly stated, is that you will destroy the Government, unless you be allowed to construe and enforce the Constitution as you please, on all points in dispute between you and us. You will rule or ruin in all events." -- some RINO

#2 HockeyDon

    Mind blown...

  • Members
  • PipPipPip
  • 3601 posts
  • LocationNew Britain, CT

Posted 10 April 2014 - 08:13 AM

review link broken
Well, fuck.

How can I be expected to distinguish BS from reality when so much of my reality is utter BS?!

"There seems to be a lot of people dying of ignorance while living in the information age." my sister-in-law.

#3 indy

    Advanced Member

  • Members
  • PipPipPip
  • 9089 posts

Posted 10 April 2014 - 08:18 AM

http://www.nybooks.c...new-gilded-age/

#4 Traveler

    Rambling Member

  • Members
  • PipPipPip
  • 12905 posts
  • LocationPhilly Area

Posted 10 April 2014 - 08:19 AM

Just type in piketty in the search bar and it will come up. Same URL as the original link. Go figure.... tl/dr for now, but definitely on the list. Thanks DC.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#5 HockeyDon

    Mind blown...

  • Members
  • PipPipPip
  • 3601 posts
  • LocationNew Britain, CT

Posted 10 April 2014 - 10:44 AM

Just read Krugman's review. Really good piece. Well worth the time.
Well, fuck.

How can I be expected to distinguish BS from reality when so much of my reality is utter BS?!

"There seems to be a lot of people dying of ignorance while living in the information age." my sister-in-law.

#6 D. C. Sessions

    I don't have to pretend to be an adult any more

  • Members
  • PipPipPip
  • 9208 posts
  • LocationCentral New Mexico

Posted 10 April 2014 - 12:10 PM

I think I fixed the link. Might work now.
The way a lot of catastrophes happen is that X doesn't occur because there are safeguards in place, therefore people assume X isn't a worry and they remove the safeguards. Then X happens.
— Nate Silver
"Robots aren't the problem. Capitalism is." -- Last words of Stephen Hawking.
These days, "libertarian" is just a euphemism for a Nazi who's afraid to commit.
"If you're not outraged, you're not paying attention." -- Heather Heyer
"I'd rather have my child, but by golly, if I gotta give her up, we're gonna make it count." -- Her mother
"Your purpose, then, plainly stated, is that you will destroy the Government, unless you be allowed to construe and enforce the Constitution as you please, on all points in dispute between you and us. You will rule or ruin in all events." -- some RINO

#7 Sinan

    Advanced Member

  • Members
  • PipPipPip
  • 2725 posts
  • LocationCalifornia

Posted 10 April 2014 - 12:51 PM

Try reading the comments about it over at Angry Bear.

http://angrybearblog...ys-capital.html
"anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."
Kenneth Boulding

"A person who reads books lives a thousand lives. A person who never reads lives only one"
George Martin

"Is that a real poncho or a Sears poncho?"
Zappa

"and let not mankind bogart love"

Willie Nelson and Colbert

#8 Traveler

    Rambling Member

  • Members
  • PipPipPip
  • 12905 posts
  • LocationPhilly Area

Posted 10 April 2014 - 01:43 PM

View PostHockeyDon, on 10 April 2014 - 10:44 AM, said:

Just read Krugman's review. Really good piece. Well worth the time.
Just did. Thanks for that link. Really instructive, and ties into the thread re wages that Charles seems to think is so pedestrian. Charles, I hope you read that review. Well worth it.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#9 HockeyDon

    Mind blown...

  • Members
  • PipPipPip
  • 3601 posts
  • LocationNew Britain, CT

Posted 10 April 2014 - 02:01 PM

View PostSinan, on 10 April 2014 - 12:51 PM, said:

Try reading the comments about it over at Angry Bear.

http://angrybearblog...ys-capital.html

Also good. Denis Drew really dives into it.
Well, fuck.

How can I be expected to distinguish BS from reality when so much of my reality is utter BS?!

"There seems to be a lot of people dying of ignorance while living in the information age." my sister-in-law.

#10 Sinan

    Advanced Member

  • Members
  • PipPipPip
  • 2725 posts
  • LocationCalifornia

Posted 11 April 2014 - 11:35 AM

Angry Bear is a very good site. It is mentioned by many leading economic and legal blogs as one of the places you can go to hear from experts that think out of the box. I once joked to Bev Mann that I wanted to marry her when she was a regular over on Slate. Run is also a former colleague from Slate. The economics posts are astounding. One of these guys actually designed a model for aggregate demand and effective demand that surpasses anything I have seen anywhere else.
"anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."
Kenneth Boulding

"A person who reads books lives a thousand lives. A person who never reads lives only one"
George Martin

"Is that a real poncho or a Sears poncho?"
Zappa

"and let not mankind bogart love"

Willie Nelson and Colbert

#11 gmat

    Advanced Member

  • Members
  • PipPipPip
  • 3320 posts

Posted 13 April 2014 - 06:53 AM

Brad Delong built a little model to play around with Piketty's ideas here

http://equitablegrow...-april-12-2014/

#12 Traveler

    Rambling Member

  • Members
  • PipPipPip
  • 12905 posts
  • LocationPhilly Area

Posted 23 April 2014 - 08:39 AM

Some recent pushback by Megan against Picketty. She cites Clive Crook as a fellow skeptic. (Some of the comments are awesome- I like RadicalModerate even though I disagree on many points). She also cites Tyler Cowen as another skeptic. Difficult to argue with many of his ideas :

Quote

A more sensible and practicable policy agenda for reducing inequality would include calls for establishing more sovereign wealth funds, which Piketty discusses but does not embrace; for limiting the tax deductions that noncharitable nonprofits can claim; for deregulating urban development and loosening zoning laws, which would encourage more housing construction and make it easier and cheaper to live in cities such as San Francisco and, yes, Paris; for offering more opportunity grants for young people; and for improving education. Creating more value in an economy would do more than wealth redistribution to combat the harmful effects of inequality.

Myself, I see no problem with taxing capital like labor, with the expressed stipulation that such taxes be used for investment instead of redistribution. That is good for everyone. I think infrastructure and education are two segments of the economy that could very much benefit from such influx of capital. I also think that if rentiers were to be held to paying the externalized costs of their operations, particularly in the transportation, extraction and energy industries, the current transfer of wealth from the commons could then return to the commons, boosting restoration economies and efficiencies . No redistribution needed.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#13 J-CA

    Probably in one of my drunken stupors..

  • Members
  • PipPipPip
  • 4656 posts

Posted 23 April 2014 - 10:14 AM

I have not read the book but on Picketty's side we have changing the tax structure and on Cowen's side we have a laundry list of things that may or may not have any impact on wealth distribution? If the problem is the distribution of wealth shouldn't the solution simply be to redistribute the wealth?

Does anyone honestly think that "limiting the tax deductions that noncharitable nonprofits can claim" is going to make a lick of difference in the grand scheme of things?
I am the burrito until someone hands me to a philosopher.

#14 Sinan

    Advanced Member

  • Members
  • PipPipPip
  • 2725 posts
  • LocationCalifornia

Posted 23 April 2014 - 11:12 AM

Another great place to use to get reviews is at Amazon. Check this review out.

http://www.amazon.co...155&store=books

This one review is outstanding.
"anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."
Kenneth Boulding

"A person who reads books lives a thousand lives. A person who never reads lives only one"
George Martin

"Is that a real poncho or a Sears poncho?"
Zappa

"and let not mankind bogart love"

Willie Nelson and Colbert

#15 Banty

    Advanced Member

  • Members
  • PipPipPip
  • 5067 posts
  • LocationUpstate New York

Posted 23 April 2014 - 11:23 AM

View PostTraveler, on 23 April 2014 - 08:39 AM, said:

Some recent pushback by Megan against Picketty. She cites Clive Crook as a fellow skeptic. (Some of the comments are awesome- I like RadicalModerate even though I disagree on many points). She also cites Tyler Cowen as another skeptic. Difficult to argue with many of his ideas :


Myself, I see no problem with taxing capital like labor, with the expressed stipulation that such taxes be used for investment instead of redistribution. That is good for everyone. I think infrastructure and education are two segments of the economy that could very much benefit from such influx of capital. I also think that if rentiers were to be held to paying the externalized costs of their operations, particularly in the transportation, extraction and energy industries, the current transfer of wealth from the commons could then return to the commons, boosting restoration economies and efficiencies . No redistribution needed.

McArdle's article turned me off in several ways, but the main problem I see is this constant repetition that "we" know what's important for "them" (her list of what's important in life) with the clear implication that if these things are enabled, why worry about the rest. It's the bargain Putin and China have both made with their middle classes in return for autocracy and it just doesn't fly with me. People's aspirations aren't always of the nice-family-happy-activities type; these and the more conventional aspire to financial security and some justice as well, but most of all this but-let-them-eat-cake approach completely leaves out the *political* power that is flowing upwards along with the value derived in this country.

I haven't read The Book either (but hey I don't publish commentary to be widely read as if I'm an expert), but *does* Piketty advocate, not just a very progressive tax regime, but rank redistribution by handing out checks?
"It can happen here. It is happening here. No election has been more important in my lifetime." - Andrew Sullivan, 7/21/2016
It did happen here. - Banty 11/9/2016

#16 Traveler

    Rambling Member

  • Members
  • PipPipPip
  • 12905 posts
  • LocationPhilly Area

Posted 23 April 2014 - 11:35 AM

From Krugman's review, it seems primarily a progressive taxation scheme. The only I know about the redistributionist aspects are from our conservative writers which I thought were worth paying attention to. Frankly, I agree with J-CA that many of Cowen's ideas are BS, but I like the idea of investing the funds obtained. Except I would invest in infrastructure and education, not sovereign wealth funds. Its not like we have as much oil per capita as Norway. Its the principle of what you do with the funds that matters. I am not a total redistributionist, although I am on record as favoring some sort of GMI. But I would much rather let market forces provide the income by means of the investment, and by making the rentiers pay for the commons they despoil at the public expense. (Massey Energy and Macondo anyone?) Heck of a lot of work needed in restoration, and if required to pay for the costs foisted on us, while eliminating the subsidies we provide, that would definitely take a cut off the top of the rentier's income. So not redistributionist at all, while providing more jobs, and more incentives for efficient use of resources.
"Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing had happened."-- Winston Churchill
"Anyone who has the power to make you believe absurdities has the power to make you commit injustices" Voltaire

#17 Banty

    Advanced Member

  • Members
  • PipPipPip
  • 5067 posts
  • LocationUpstate New York

Posted 23 April 2014 - 11:56 AM

Yep.

I'm not a fan of grand redistribution schemes either (*not* on record as approving of any guaranteed income).

But I'm increasingly convinced that we need a more strongly progressive income tax, never give another inch on inheritance taxes, and invest largely in education and infrastructure.

There are cultural problems that we need to roll back, especially this worship of so called "job creators" and the increasingly widespread denigration of non-exec employees. Unions, as we've discussed many times had their problems with over reach and corruption, but maybe it's time for that pendulum to swing back.

And let's stop trying to enforce a Soviet-Man kind of standard on people that if they would only live according to the right script, their lives would fall in place and we'd not have to worry about anything else. These things are only about placing the burdens - again - on ordinary people that they should have no problems because they should arrange their lives to withstand better an economic environment where the will not see much of the rewards of the value that they generate.
"It can happen here. It is happening here. No election has been more important in my lifetime." - Andrew Sullivan, 7/21/2016
It did happen here. - Banty 11/9/2016

#18 AnBr

    Advanced Member

  • Members
  • PipPipPip
  • 12725 posts

Posted 23 April 2014 - 12:07 PM

View PostBanty, on 23 April 2014 - 11:56 AM, said:

But I'm increasingly convinced that we need a more strongly progressive income tax, never give another inch on inheritance taxes, and invest largely in education and infrastructure.

The inheritance tax issue may be one of the most important. It is one of the things that TR advocated the most along with a stiffly progressive tax rate. As Warren Buffett put it, money belongs in the hands of those who create it, not those who won the lottery of the womb. He sees that as being of the most benefit to society. He plans on leaving enough to his offspring to get rich if they put in the effort, but not enough to be rich.
Pray for Trump: Psalm 109:8

"Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children's or grandchildren's time - when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers arc in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what's true, we slide, almost without noticing, back into superstition and darkness.

— Carl Sagan
The Demon-Haunted World: Science as a Candle in the Dark
1995


“As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

— H.L. Mencken
On Politics: A Carnival of Buncombe


“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

— Franklin Delano Roosevelt
Second inaugural address January, 1937

#19 LFC

    Fiscal Conservative

  • Members
  • PipPipPip
  • 27020 posts
  • LocationPennsylvania

Posted 23 April 2014 - 01:23 PM

I've read the case that progressive federal taxes are required to balance out the number of regressive taxes and tax policies that exist. I tend towards a form of flat tax and we have a relatively flat system. The problem I have with these rates, though, is that my progressive exception is for income required for basic needs. If that was backed out of each of the brackets shown below, we'd see that the effective taxation of non-basic income falls most heavily on the bottom 90%. And as we've seen in many prior postings, the top 0.1% really get a break. It pisses me off that Mr Supposed 15% Rate Rmoney pays a lower rate than I do. So I'm probably not for as progressive a level of taxation as others here, but I'm certainly not a pure flat taxer.

And don't even get me started about the way people dodge gift and estate taxes through the use of trusts and family limited partnerships.

Posted Image
" 'Individual conscience' means that women only get contraceptives if their employers, their physicians, their pharmacists, their husbands and/or fathers, pastors, and possibly their mayors, Governors, State Secretaries of Health, Congressmen, Senators, and President all agree that in that particular case they're justifiable." --D.C. Sessions

"That's the problem with being implacable foes - no one has any incentive to treat you as anything more than an obstacle to be overcome."

"The 'Road to Serfdom' is really all right turns." --Progressive Whisperer

""The GOP ... where every accusation is also a confession." --Progressive Whisperer

#20 Sinan

    Advanced Member

  • Members
  • PipPipPip
  • 2725 posts
  • LocationCalifornia

Posted 23 April 2014 - 03:17 PM

I have watched Piketty on youtube explain his book and his conclusions. Here is a link to a series of videos by him which is a great way to get at the core of the book without reading it.

https://www.youtube....h?v=6lDq9e_a_ZI

This one link is to the 9th in a series, just look around to find the others in order. Piketty is very clear that what he suggests as remedies is really just a way for him to put his opinion out there for a discussion. Frankly, this book and this topic might do more for the world than any Occupy Movement ever could. I don't think we have ever seen this kind of information before and it has to impact the way all economists look at capitalism from here on out.
"anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."
Kenneth Boulding

"A person who reads books lives a thousand lives. A person who never reads lives only one"
George Martin

"Is that a real poncho or a Sears poncho?"
Zappa

"and let not mankind bogart love"

Willie Nelson and Colbert





1 user(s) are reading this topic

0 members, 1 guests, 0 anonymous users