3 ms·

> According to Piketty, capitalism always leads to rich people running the show, and that always leads to the follies of the wealthy few taking precedence over

> According to Piketty, capitalism always leads to rich people running the show, and that always leads to the follies of the wealthy few taking precedence over the material needs of the majority, which eventually leads to some kind of collapse, wherein wealth is destroyed and a space opens for a new society. This is NOT what Piketty's work says. And I wish people would stop regurgitating it. The entire onus of his book (much contested) was that, in a natural order, private wealth grows faster than an economy overall. Everything past that is pure conjecture. And depending on what your view of what "capitalism" is, this probably supersedes it. The presence of market economies is irrelevant - his dataset included non-market based economies.

fallingfrog 4y ago
I think the truth is somewhere in between- Doctorow does seem to have overstated what Piketty said, but not by a huge margin. I don't think this error dilutes Doctorow's argument very much. From wikipedia (the article on Capital in the 21 Century): "The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability." Doctorow got a little hyperbolic and replaced "instability" with "some kind of collapse", and "capital" with "capitalism" which is, as you point out, misrepresenting what Piketty said. But not tremendously.
- imtringued 4y ago
  Honestly, in retrospect he is saying something very similar to Keynes who says unemployment is caused by an interest rate (r) above the marginal productivity of capital (g). The difference between Piketty and Keynes however is that Keynes has the concept of a liquidity premium which explains how it is even possible for r to exceed g assuming the central bank doesn't set interest rates.

fallingfrog 4y ago

I think the truth is somewhere in between- Doctorow does seem to have overstated what Piketty said, but not by a huge margin. I don't think this error dilutes Doctorow's argument very much. From wikipedia (the article on Capital in the 21 Century): "The book's central thesis is that when the rate of return on capital (r) is greater than the rate of economic growth (g) over the long term, the result is concentration of wealth, and this unequal distribution of wealth causes social and economic instability." Doctorow got a little hyperbolic and replaced "instability" with "some kind of collapse", and "capital" with "capitalism" which is, as you point out, misrepresenting what Piketty said. But not tremendously.

imtringued 4y ago
Honestly, in retrospect he is saying something very similar to Keynes who says unemployment is caused by an interest rate (r) above the marginal productivity of capital (g). The difference between Piketty and Keynes however is that Keynes has the concept of a liquidity premium which explains how it is even possible for r to exceed g assuming the central bank doesn't set interest rates.