David F. Ruccio — Capital, labor, and inequality

... as I suspected, the main line of attack (at least within mainstream economic thinking) against Piketty’s treatment is to undermine the idea of capital versus labor and to focus instead on growing inequality among workers....

In my view, the problem with juxtaposing ownership-of-capital inequality and labor-earnings inequality is that it ignores the extent to which earnings at the top are themselves distributions of the income captured by capital. That’s a point that seems to have been missed by both Piketty and his critics.

A point I have made previously. Treating "income" at the top as income from work is just silly and completely ignores institutional arrangements and power. Much if not most of it is rent-extraction. Counting "income" of the top tier as "labor" share is an oxymoron. It's capture of the surplus, just because those that the top can, i.e., have the institutional power to do so.

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Capital, labor, and inequality
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame