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I think that the honest answer is currently we don't know for sure. Pickety's argument amounts to (IMO) that this is the mature state of our current system. Ca

I think that the honest answer is currently we don't know for sure. Pickety's argument amounts to (IMO) that this is the mature state of our current system. Capital generally grows faster than labour and (if it isn't spent), accumulates over time. I think he also implies that it's brought on (or exasperated by) prolonged peace. One of many ideas... "Capital" is defined (often explicitly) primarily by it's income generating potential. The iconic economist's definition of capital is factories, but most capital today is almost entirely abstract. Companies are some IP, but mostly it's just people. Contracts with people, cultures of people.. Banks are neither. Banks are mostly capital and contracts relating to capital. What does destruction of capital even mean today? I Krugman's point is tautological. If capital s big relative to labour in a company, that company is by definition labour intensive. "Capital" in modern times just means the amount of income that capital generates. Thinking in terms of factories is (IMO) just wrong if the economy isn't mostly factories. In any case, I don't think we know what's going on with any useful degree of certainty.

bufordsharkley 10y ago
> Pickety's argument amounts to (IMO) that this is the mature state of our current system. Capital generally grows faster than labour and (if it isn't spent), accumulates over time. From the article: > Then there’s the idea that landowners, not corporate overlords, are taking money away from workers. While analyzing the work of French economist Thomas Piketty, Matt Rognlie found that national income accounts showed an increasing amount flowing to owners of land. It's worth noting that in Rognlie's analysis, once we take away the effects of land, the return to capital ceases to outpace production. Anyway, as far as explaining the non-productive forms of capital we have so much of today―I'd simply conclude that they're not capital at all... Henry George's definition of capital, for instance, excludes them―he made a (IMO very neat) distinction between "Value from Production" and "Value from Obligation"[0] that is a very useful way for considering things. In time, things like "GDP" cease to seem very accurate or meaningful. [0] http://schalkenbach.org/henry-george/science-of-political-economy/spe214.html http://schalkenbach.org/henry-george/science-of-political-ec...

bufordsharkley 10y ago

> Pickety's argument amounts to (IMO) that this is the mature state of our current system. Capital generally grows faster than labour and (if it isn't spent), accumulates over time. From the article: > Then there’s the idea that landowners, not corporate overlords, are taking money away from workers. While analyzing the work of French economist Thomas Piketty, Matt Rognlie found that national income accounts showed an increasing amount flowing to owners of land. It's worth noting that in Rognlie's analysis, once we take away the effects of land, the return to capital ceases to outpace production. Anyway, as far as explaining the non-productive forms of capital we have so much of today―I'd simply conclude that they're not capital at all... Henry George's definition of capital, for instance, excludes them―he made a (IMO very neat) distinction between "Value from Production" and "Value from Obligation"[0] that is a very useful way for considering things. In time, things like "GDP" cease to seem very accurate or meaningful. [0] http://schalkenbach.org/henry-george/science-of-political-economy/spe214.html http://schalkenbach.org/henry-george/science-of-political-ec...