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Thomas Picketty did great research in this area. The way I understood part of his theory is that the rate at which the value of wealth increases is faster then

Thomas Picketty did great research in this area. The way I understood part of his theory is that the rate at which the value of wealth increases is faster then the rate at which wages increase. In other words, those people who own things like land and factories see the value of those things increase faster than workers see their wages increase.

bmurphy1976 7y ago
And that cycle usually ends when a few people get their heads chopped off and things reset. It would be nice if we could figure out a better way to spread the wealth without costly and violent revolutions.
- heavyset_go 7y ago
  There needs to be equity in employment relationships. A society that's stratified into two classes, the ownership class and the working class, will always result in the cycle you identified.
  - WalterBright 7y ago
    This time in history is the easiest ever for anyone to be owning the means of production, via the democratization of the stock market.
    - Thlom 7y ago
      Sure, but the normal working class hero have limited capital and limited time to research and limited knowledge of the stock market. Sure, he can own 0.00002% of a company, but in the end it doesn't really matter. He still doesn't have control over the means of production of which he puts his own labor into. He's still dependent on his salary which the true owner of the means of production can take away at any time.
      - WalterBright 7y ago
        > Sure, but the normal working class hero have limited capital Everyone has limited capital. You get it to grow by buying stock and participating in the ownership class. Poor people instead tend to buy lottery tickets, which have a negative return on capital, meaning lottery tickets are a route to poverty. Stocks have a positive return. (On average, of course.) > and limited time to research and limited knowledge of the stock market. There's never been more information about stock investing that's for free and just a click away. > Sure, he can own 0.00002% of a company, but in the end it doesn't really matter. He still doesn't have control over the means of production of which he puts his own labor into. He gets paid for his labor, which he can use to buy ownership stock. > He's still dependent on his salary Buying stock with one's salary is a route to financial independence. > which the true owner of the means of production can take away at any time. You are a true owner if you own stock.
    - claudeganon 7y ago
      https://en.m.wikipedia.org/wiki/Means_of_production https://en.m.wikipedia.org/wiki/Means_of_production
    - solidsnack9000 7y ago
      That kind of ownership does not yield the kind of returns we’re talking about, and more importantly does not allow for control. The centralization of returns and control reinforce one another.
      - WalterBright 7y ago
        > That kind of ownership does not yield the kind of returns we’re talking about Depends on which stock you bought. > does not allow for control One share equals one vote. The more shares you buy, the more you vote. > The centralization of returns and control reinforce one another With stocks you get the same returns and votes per share that anyone else does.
        nico_h 7y ago
        > With stocks you get the same returns and votes per share that anyone else does. I believe founders have wised-up to that and now there are differently voting shares, the most prominent being Facebook, which is controlled by the Zuck & friends even though they only own 18% of the stock https://www.cnbc.com/2018/03/20/shareholders-wont-force-zuckerbergs-hand-in-facebook-management.html https://www.cnbc.com/2018/03/20/shareholders-wont-force-zuck... >> Mark Zuckerberg owns the majority of the voting rights to Facebook due to a dual class structure that weights certain shares over others. >> Facebook’s Class B shares, controlled by Zuckerberg and a small group of insiders, has about 18 percent of the shares, but they also have 10 votes per share. >> Surprisingly, it’s not that uncommon: 355 of the companies in the Russell 3000 (11.8 percent) have a dual voting-class structure.
        WalterBright 7y ago
        Pick another stock, then.
        solidsnack9000 7y ago
        Not sure if you're pulling my leg here with the stock picking suggestion; but directly holding stocks seems to be overall a losing bet for retail investors. A few do well but most don't; and that makes sense because retail investors have full-time jobs and they're up against traders whose full-time job is investing.
- aantix 7y ago
  Can you not take on risk? Then you can obtain your own wealth.
  - Mikeb85 7y ago
    It's nice to think this and there certainly are high-achievers who accomplish this, but Piketty's research relates to the economy as a whole and the entire point is that the economy's aggregate return on capital is outpacing economic growth (r > g). This means even if some do obtain wealth, ultimately there's more losers than winners. Outliers mean little in statistics and economics.
  - solidsnack9000 7y ago
    Part of how returns to capital work is taking on risk and then hedging. Without significant cash (for hedged investments) or control (take care of that risk by dealing with it) taking on a lot of risk is just going to the casino. That’s why index funds work for casual investors and stock picking doesn’t.
- TazeTSchnitzel 7y ago
  The problem is building a stable system. You can have high taxes on the rich, but they will always use their riches to lobby to have them abolished. And even if you don't have an elite ultra-rich class and massive income equality, the nature of liberalism (in the classical sense) is this will always eventually happen through the upward flow of wealth. To have a system that won't destabilise itself like this you would need a radically different economy, but I don't know how.
- erik_seaberg 7y ago
  “It is well that war is so terrible, otherwise we should grow too fond of it.”
chibg10 7y ago
> Thomas Picketty did great research in this area. My understanding of the general consensus of economists on Piketty is that his data collection efforts were great work, but his analysis and interpretation of that data was not particularly excellent. His theories have been substantially criticized by that group. I’m not really in a position to evaluate the substance of the claims of either side but just want to point out that Piketty’s work isn’t by any means universally acclaimed and it isn’t just shills that have issues with it.

bmurphy1976 7y ago

And that cycle usually ends when a few people get their heads chopped off and things reset. It would be nice if we could figure out a better way to spread the wealth without costly and violent revolutions.

heavyset_go 7y ago
There needs to be equity in employment relationships. A society that's stratified into two classes, the ownership class and the working class, will always result in the cycle you identified.
- WalterBright 7y ago
  This time in history is the easiest ever for anyone to be owning the means of production, via the democratization of the stock market.
  - Thlom 7y ago
    Sure, but the normal working class hero have limited capital and limited time to research and limited knowledge of the stock market. Sure, he can own 0.00002% of a company, but in the end it doesn't really matter. He still doesn't have control over the means of production of which he puts his own labor into. He's still dependent on his salary which the true owner of the means of production can take away at any time.
    - WalterBright 7y ago
      > Sure, but the normal working class hero have limited capital Everyone has limited capital. You get it to grow by buying stock and participating in the ownership class. Poor people instead tend to buy lottery tickets, which have a negative return on capital, meaning lottery tickets are a route to poverty. Stocks have a positive return. (On average, of course.) > and limited time to research and limited knowledge of the stock market. There's never been more information about stock investing that's for free and just a click away. > Sure, he can own 0.00002% of a company, but in the end it doesn't really matter. He still doesn't have control over the means of production of which he puts his own labor into. He gets paid for his labor, which he can use to buy ownership stock. > He's still dependent on his salary Buying stock with one's salary is a route to financial independence. > which the true owner of the means of production can take away at any time. You are a true owner if you own stock.
  - claudeganon 7y ago
    https://en.m.wikipedia.org/wiki/Means_of_production https://en.m.wikipedia.org/wiki/Means_of_production
  - solidsnack9000 7y ago
    That kind of ownership does not yield the kind of returns we’re talking about, and more importantly does not allow for control. The centralization of returns and control reinforce one another.
    - WalterBright 7y ago
      > That kind of ownership does not yield the kind of returns we’re talking about Depends on which stock you bought. > does not allow for control One share equals one vote. The more shares you buy, the more you vote. > The centralization of returns and control reinforce one another With stocks you get the same returns and votes per share that anyone else does.
      - nico_h 7y ago
        > With stocks you get the same returns and votes per share that anyone else does. I believe founders have wised-up to that and now there are differently voting shares, the most prominent being Facebook, which is controlled by the Zuck & friends even though they only own 18% of the stock https://www.cnbc.com/2018/03/20/shareholders-wont-force-zuckerbergs-hand-in-facebook-management.html https://www.cnbc.com/2018/03/20/shareholders-wont-force-zuck... >> Mark Zuckerberg owns the majority of the voting rights to Facebook due to a dual class structure that weights certain shares over others. >> Facebook’s Class B shares, controlled by Zuckerberg and a small group of insiders, has about 18 percent of the shares, but they also have 10 votes per share. >> Surprisingly, it’s not that uncommon: 355 of the companies in the Russell 3000 (11.8 percent) have a dual voting-class structure.
        WalterBright 7y ago
        Pick another stock, then.
      - solidsnack9000 7y ago
        Not sure if you're pulling my leg here with the stock picking suggestion; but directly holding stocks seems to be overall a losing bet for retail investors. A few do well but most don't; and that makes sense because retail investors have full-time jobs and they're up against traders whose full-time job is investing.
aantix 7y ago
Can you not take on risk? Then you can obtain your own wealth.
- Mikeb85 7y ago
  It's nice to think this and there certainly are high-achievers who accomplish this, but Piketty's research relates to the economy as a whole and the entire point is that the economy's aggregate return on capital is outpacing economic growth (r > g). This means even if some do obtain wealth, ultimately there's more losers than winners. Outliers mean little in statistics and economics.
- solidsnack9000 7y ago
  Part of how returns to capital work is taking on risk and then hedging. Without significant cash (for hedged investments) or control (take care of that risk by dealing with it) taking on a lot of risk is just going to the casino. That’s why index funds work for casual investors and stock picking doesn’t.
TazeTSchnitzel 7y ago
The problem is building a stable system. You can have high taxes on the rich, but they will always use their riches to lobby to have them abolished. And even if you don't have an elite ultra-rich class and massive income equality, the nature of liberalism (in the classical sense) is this will always eventually happen through the upward flow of wealth. To have a system that won't destabilise itself like this you would need a radically different economy, but I don't know how.
erik_seaberg 7y ago
“It is well that war is so terrible, otherwise we should grow too fond of it.”

chibg10 7y ago

> Thomas Picketty did great research in this area. My understanding of the general consensus of economists on Piketty is that his data collection efforts were great work, but his analysis and interpretation of that data was not particularly excellent. His theories have been substantially criticized by that group. I’m not really in a position to evaluate the substance of the claims of either side but just want to point out that Piketty’s work isn’t by any means universally acclaimed and it isn’t just shills that have issues with it.