Piketty without mentioning Piketty. Actually, as Professor Ruccio points out, David Ricardo nailed it. It's capital versus labor share, stupid. But now we have to throw in the top 1% of labor in with capital (as I have been arguing).
Occasional Links & Commentary
The principal problem of Political Economy
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame
Here is the other side.
Marginal Revolution
Matt Rognlie on Piketty, net capital returns, and housing
Matt Rognlie on Piketty, net capital returns, and housing
- See more at:
http://marginalrevolution.com/marginalrevolution/2015/03/matt-rognlie-on-piketty-net-capital-and-housing.html#sthash.SEPBo4JK.dpuf
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center
Matt Rognlie on Piketty, net capital returns, and housing
- See more at:
http://marginalrevolution.com/marginalrevolution/2015/03/matt-rognlie-on-piketty-net-capital-and-housing.html#sthash.SEPBo4JK.dpuf
That was a very good post, Tom.
ReplyDeleteIt seems Tyler Cowen and Justin Wolfers are intent on making of Matthew Rognlie the next big thing. And, beyond the politics, Rognlie seems to be a smart cookie.
Perhaps you didn't notice, but in the WaPo's profile of Rognlie there was this bit which caught my attention:
"The second finding was that Piketty probably overestimated how high the returns to capital would be in the future. For his fears to come true, wealthy people who amass more and more capital would need to keep earning a high return on that capital. But, Rognlie’s research suggests, the returns to capital will decline over time unless it is very easy for the economy to substitute capital (like robots) for labor (workers) – far easier, in fact, than historical evidence suggests is normal.
I can't help to be reminded of You-Know-Who.
But, never fear, I won't mention He-Who-Must-Not-Be-Named, lest that cause offense to good and wise among us. :-)
Right. These folks have obviously never read HE Who Must Not Be Named other than derogatorily and don't realize that they are repeating his critique of capitalism based on its own internal contradictions
ReplyDeleteAnd of course if machines are substituted for workers, reducing the wage bill, where is the demand for products going to come from? Oh right, "exports." Like the Opium War, I guess.