14 ms·

I've been looking forward to a discussion on Thomas Piketty by the HN crowd for a long time, I was afraid it would never get here because it would have been be

by selmnoo 13y ago

I've been looking forward to a discussion on Thomas Piketty by the HN crowd for a long time, I was afraid it would never get here because it would have been be too 'political' - but I'm happy this has finally made the frontpage. For those who are still unfamiliar with the name Piketty: He's a French economist (who briefly enjoyed a stint at MIT as professor before becoming disenchanted with the state of things here and returning to his home-country of France). In his recent book "Capital in the 21st Century", he's done something very big. He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. He's done this with an enormous amount of data. His prescription for the cure is a little controversial though: progressive taxes (up to 80%) for the rich, and a "global wealth tax" that he wants America to orchestrate. For a good summary (that talks about this main discovery that "r > g" -- that return on capital is greater than the overall economic growth), watch this talk on Bill Moyers show with Krugman: https://www.youtube.com/watch?v=QzQYA9Qjsi0 https://www.youtube.com/watch?v=QzQYA9Qjsi0 - though this submission article seems to have a nice synopsis too. As an article on NYT earlier this week said it, the book heralds a song of American socialism in the future. His findings are just too compelling to ignore, they're going to fundamentally change the tone and substance of debate we have about economic policies.

lobster_johnson 13y ago
Paul Krugman also reviewed the book in the most recent New York Review of Books [1]. Good read for those interested. [1] http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/ http://www.nybooks.com/articles/archives/2014/may/08/thomas-...
- jmcmichael 13y ago
  Bill Moyers and Krugman discussed Piketty's book on his latest show: http://billmoyers.com/segment/preview-what-the-1-dont-want-you-to-know http://billmoyers.com/segment/preview-what-the-1-dont-want-y... This link was posted to HN yesterday briefly but was then deleted.
- csentropy 12y ago
  That is one strike against the book. If PK likes it, it has to be crap.
justincormack 13y ago
Would like to read the book but have not got a copy yet. All the physical shops I tried had sold out, seems to be selling well for an academic book.
- RestlessMind 13y ago
  I bought a digital copy on google play. It might be available on kindle as well.
- cylinder 13y ago
  Kindle. Can read on the desktop reader or smart phone.
WildUtah 13y ago
I haven't gotten my hands on a copy yet. But I'm reading that Piketty claims that the average return on capital over time in modern nations is 5%. This number is essential to his argument. Meanwhile the US government is selling trillions in bonds at rates around -0.2%. [0] Yes, negative point two percent. I'd like to know where Piketty suggests for me to find risk adjusted 5% returns. When someone makes a claim such as this which --if it were true -- would immediately make the claimant a billionaire or trillionaire in the markets with trivial trading, he loses all credibility. Well, loses all credibility unless he can show us the billions. Right now governments and pension funds across the world are going broke hunting for 5% returns. Maybe Piketty can solve the growing pension crisis for us as a first step. [0] http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield http://www.treasury.gov/resource-center/data-chart-center/in...
- jamesaguilar 13y ago
  If I were you, I would hesitate to assume a respected economist has no credibility, at least until I had read the paper. What is more likely: that he is trivially wrong, or that you have failed to understand some facet of his argument?
- tinco 13y ago
  If I understand it correctly (I'm not an economist) your argument is like the common global warming counter argument: It's so cold outside, global warming is a lie.
- gte525u 13y ago
  You've setup a helluva strawman. You're comparing returns of the entire capital stock for a chunk of the western world over the course of last century to the inflation adjusted yield curve of a specific government-bond calculated from last weeks prices.
  - waterlesscloud 13y ago
    That's not the point GP is making.
orasis 13y ago
Inequality is a fundamental to any network that features power-law like attachment of nodes - i.e. any sort of preferential attachment to nodes that are already well connected. Thus, in a way, inequality is "natural". So the criticism of just capitalism is too narrow. I think this criticism would apply to any economic system that features small world network type topology.
- wpietri 13y ago
  So what if it's natural? Cancer's natural, and nobody says, "Hey, your criticism of cancer is too narrow." That one could also critique multicellular organization in general is interesting, but irrelevant to anybody who actually has cancer. Civilization is all about shifting our situation from natural outcomes to outcomes we like. So if ever-increasing inequality is an outcome we don't like, we can do something about that.
  - onnoonno 13y ago
    Well, but I think we have to figure out what and whether we can do something about it (inequality), how much, and for what cost (cost in the non-economic sense). I think the observation that power accumulates in one way or the other, capitalism or not, seems to hold in any society. Being naive and not an economist, I would still believe that money is a form of distributed trust and thus power. Lots of money means lots of power, in the sense of causing a lot of change (negative as well as positive). And I do not think that there is necessarily something wrong with that. We all seem to praise the billionaire Elon Musk here on HN for making space flight more efficient. And I think he is a very capable individual who amassed a lot of power/money and is thus able to effect a lot of change. Why should I complain about this? I would argue that the only things that hurt a society when it comes to accumulation of wealth/power is actually _using it in a detrimental_ sense. Things such as: - luxuries - buying laws in your (corporations) favor - using a lot of resources (ore, land) inefficiently The more I think about it, and having recently read another person here on HN mention it, the more I think something that broadly falls under the idea of 'Geolibertarianism' would bring us closer to a more just society. And, no I am not talking about 'solving our problems' here, because I think having problems is inherent to being a human. Actually taxing the bad effects of money instead of owning/moving/etc. money itself would also solve e.G. the problem on how to deal with the existence crypto-currencies without resorting to draconian measures. Finally, I think that we as humans tend to shy away from even just criticizing the actual bad effects of power. I think this is as much a problem as the people with power misbehaving in the first place. Most of us, myself included, simply seem to have a very strong 'follow the leader' emotion, and we rather argue about secondary issues than the real problems. Or we invent powerless utopias and start to believe in them (Marxism, Feminism, ...), actually becoming controllable by the malevolent powers. But maybe I am just naive. *edit: typo(s)
beaner 13y ago
What I am surprised about, as a Capitalist, is that anyone assumed "equality" was a natural result of capitalism.
- ArkyBeagle 13y ago
  Two things - capitalism replaces Mercantilism, and declining marginal value of money. So yeah - there are equalizing forces within capitalism relative to other systems.
steveplace 13y ago
> He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. As I've not read his work nor critiques of his work, I'm curious to know if he puts any weight towards central bank policy and the widening inequality gap. Because from my well-worn armchair, it seems that interest rates are not a free market and that policies such as quantitative easing serve to benefit higher classes much more than others.
- dalek_cannes 13y ago
  > He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. One could argue, though, that the flaw is not in capitalist ideology per se, but that you can never fulfill its requirements perfectly: 1. Market information is never disseminated perfectly, i.e. to all parties, equally, at the same time with full accuracy. 2. Human beings are not rational. 3. Human rationality takes a nosedive if a person's wealth vs. time curve take a sudden upswing.
  - zo1 13y ago
    You missed the biggest one, bud: 4. Governments are guaranteed to interfere. Either to help, or impede.
    - wslh 13y ago
      And 5. Physical location matters, even if you are legally located in US, if you live/work outside the richer centers it is difficult to earn more.
      - zo1 13y ago
        Agreed. This has historically always been the case. There is a reason that early cities formed around navigable waterways, trade-routes, or near specific wealth-making resources. One need only look to the middle east that was almost entirely desert and small-towns a short while ago (relatively speaking) to get a more recent and visible example of this. Equality is the exception, not the rule throughout history, including the recent "enlightened" one.
stormbrew 13y ago
> In his recent book "Capital in the 21st Century", he's done something very big. He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. He's done this with an enormous amount of data. Am I missing something? Isn't this part of socialist analysis of capitalism from at least back to Marx?
- mynameishere 13y ago
  Well, it's a 700 page book that (I'm guessing) few of the reviewers have read, so it's entirely possible that you and many others are missing something. That said, if the main point of a huge book, even among many other smaller points, is an observation so ho-hum that it would make a college freshman's eyes roll, something else is going on. Maybe he proved his obvious thesis in an unusually gripping way. Maybe he proved the obvious threat to democracy in an unusually gripping way. (But why would it matter? Does anyone still think this is a democracy?) Or maybe all the lefty economists decided implicitly to push this particular warmed-over cliche as a great innovation. Who knows.
  - zo1 13y ago
    I'm still looking for a proof that income inequality is a "threat" to "democracy"... Or as he put it, the "meritocratic values of democracy". As if we have anything remotely resembling a "meritocratic" society, even if it was a democratic one.
    - lobster_johnson 13y ago
      The threat is of wealth becoming political power and the government becoming an oligarchy... which has happened in the US, as shown by the recent study Northwestern and Princeton. When the few have the majority of the influence, that is no longer democracy, and there is no reason to believe that the control exerted by the wealthiest players is made for the benefit of those at the bottom. This a flaw of government more than of capitalism itself, but it's a flaw nonetheless, seeing as the two — capitalism and government — are intertwined.
jaibot 13y ago
> that inequality is not an unintended result I haven't seen him argue that rising inequality is "intentional" - no one sat down and said "Hey, let's build a system that widens inequality indefinitely". For most of the twentieth century, people thought that inequality was going to keep shrinking, and most everyone was fine with it. The r>g problem looks like a real problem, but not an engineered one.
- deleted 13y ago
  [deleted]
- twoodfin 13y ago
  Didn't inequality, globally, keep shrinking? I suspect it's still shrinking now, and perhaps at an increasing rate.
  - jaibot 13y ago
    This is a good point (does anyone have a good source on global GINI?). But I suspect that what we're currently experiencing in the very-developed world is what's expected globally long-term. If global inequality is shrinking, it's probably down to deploying existing technologies and catch-up growth. When all that's over - when there's no such thing as the "developing" world anymore - at the End of History, r>g.
  - vbuterin 12y ago
    http://www.quora.com/Has-the-worldwide-GINI-coefficient-increased-or-decreased-over-the-last-50-years http://www.quora.com/Has-the-worldwide-GINI-coefficient-incr... You're completely correct.
- selmnoo 13y ago
  Perhaps I should have used a better word than "unintended". Sadly I'm out of the editing window for that post, so I can't really change it. Sorry about that.
WalterBright 13y ago
> He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. Of course it's an inherent feature of it. If, by some mechanism, every one was economically equal, what would be the point of anyone bothering to try to do anything?
- vanderZwan 13y ago
  I know that this concept it pretty ingrained in American culture, but there's like... decades of psychological research on the topic of motivation debunking it - not even people who believe this principle act according to it. I don't believe for one second that your prime motivation do make D was economical, for example.
  - WalterBright 13y ago
    Most people don't particularly like their jobs. Do you think people like cleaning carpets for a living, for example? How about the guy spending time away from his family, driving a truck?
    - vanderZwan 13y ago
      (just to be absolutely clear here: I'm not saying everyone should be economically perfectly equal) By that logic, cleaning carpets and truck driving should be among the highest paying jobs in the US, but I doubt that one would get a straight line if one were to plot "how much people hate their job" vs income. Also, it's probably a good rule of thumb to ask yourself with any economic theory of the last century that is of Western origin: "how much did the political pressure to prove the Soviets wrong at all costs influence this line of thinking, or the adoption of it?" I think it applies here. I am not saying carrots and sticks have no influence whatsoever, just that thinking it explains everything is extremely simplistic. Even if they did work universally, there are more types of carrots and sticks than just economical ones, and they are often conflicting. Then there are types of motivation that are different altogether. For example: there is clear evidence that rewards can be counterproductive to motivation in certain situations because they undermine intrinsic motivation (which works differently). Just look up the psychological research cited by critics of gamification, for example. Anyway, this topic is way to big for a HN comment, but what I'm trying to say is that there's much more to motivation. By and large, the evidence suggests that once a lack of money as an impediment to "personal freedom" (I'm oversimplifying here) is off the table, people are motivated by different reasons. Social reasons, moral reasons, hedonistic reasons, you name it.
wyager 13y ago
Piketty's claim is that, in a capitalist system, wealth disparity increases over time (measured in currency). I don't think he presented enough evidence to make that statement without a lot of qualifiers, but for now, let's just assume that it's correct. What Piketty absolutely failed to account for is that capitalism's greatest strength (and even Marx thought this) is that it causes the marginal utility of currency to decrease over time. That means that even if the dollar gap between rich and poor is bigger today than it was 200 years ago, the actual quality of life gap is just getting smaller and smaller. A billionaire can afford caviar and ten lamborghinis. A thousand-aire can afford hamburgers and a used civic. The billionaire is not a million times better off, and every year, as brutal market forces push the development of better and cheaper technology in every field, the difference between the rich man and the poor man, measured in the quality of food, goods, and services they have access to, gets smaller and smaller. For the most part, billionaires can only buy more of the same thing that almost everyone has access to. The rich guy can buy a harvard education, and the poor guy can buy a cheap but effective online education. The rich guy can buy a gold-plated iPhone, and the poor guy can buy a cheap Android. It's all the same stuff, just with different levels of class. Compare that to not so long ago when only the rich had cars, refrigeration, electricity, etc.
- DerpDerpDerp 13y ago
  Advanced medical treatments, robotics unavailable to the average person, space flight, the ability to avoid pervasive surveillance, a greatly disproportionate ability influence politics, etc. There are lots of things you have access to by having a great deal of wealth that are simply unavailable in even a reduced form to the average person.
  - tptacek 13y ago
    A homeless person in the US today has access to better health care than the President of the US did in, what? 1960? 1970? Maybe 1980? Are we really down to "lobbying power" and "spaceflight"? That seems like a weak argument against capitalism.
    - 13y ago
turbojerry 13y ago
Gross inequality is not a feature of capitalism per se, it is the feature of our current implementation, specifically the current banking system. This is due to a number of factors, the main ones being bankers being the first in line to obtain newly created credit, central banks central planning of interest rates, bank fixing of market rates like LIBOR, massive fraud and government handouts to the banks. All of the above can be fixed without having to tax those that create real wealth in the economy, however that isn't going to happen as the banks have far too much influence in politics and even if they didn't changing the situation without collapsing the current system seems impossible at this stage.
zby 13y ago
If we had these progressive taxes and this global wealth tax - would we still have capitalism? And if yes - would that mean that 'r > g' is not inherent to capitalism but rather to some special kind of capitalism?

by selmnoo 13y ago

lobster_johnson 13y ago

Paul Krugman also reviewed the book in the most recent New York Review of Books [1]. Good read for those interested. [1] http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/ http://www.nybooks.com/articles/archives/2014/may/08/thomas-...

jmcmichael 13y ago
Bill Moyers and Krugman discussed Piketty's book on his latest show: http://billmoyers.com/segment/preview-what-the-1-dont-want-you-to-know http://billmoyers.com/segment/preview-what-the-1-dont-want-y... This link was posted to HN yesterday briefly but was then deleted.
csentropy 12y ago
That is one strike against the book. If PK likes it, it has to be crap.

justincormack 13y ago

Would like to read the book but have not got a copy yet. All the physical shops I tried had sold out, seems to be selling well for an academic book.

RestlessMind 13y ago
I bought a digital copy on google play. It might be available on kindle as well.
cylinder 13y ago
Kindle. Can read on the desktop reader or smart phone.

WildUtah 13y ago

I haven't gotten my hands on a copy yet. But I'm reading that Piketty claims that the average return on capital over time in modern nations is 5%. This number is essential to his argument. Meanwhile the US government is selling trillions in bonds at rates around -0.2%. [0] Yes, negative point two percent. I'd like to know where Piketty suggests for me to find risk adjusted 5% returns. When someone makes a claim such as this which --if it were true -- would immediately make the claimant a billionaire or trillionaire in the markets with trivial trading, he loses all credibility. Well, loses all credibility unless he can show us the billions. Right now governments and pension funds across the world are going broke hunting for 5% returns. Maybe Piketty can solve the growing pension crisis for us as a first step. [0] http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield http://www.treasury.gov/resource-center/data-chart-center/in...

jamesaguilar 13y ago
If I were you, I would hesitate to assume a respected economist has no credibility, at least until I had read the paper. What is more likely: that he is trivially wrong, or that you have failed to understand some facet of his argument?
tinco 13y ago
If I understand it correctly (I'm not an economist) your argument is like the common global warming counter argument: It's so cold outside, global warming is a lie.
gte525u 13y ago
You've setup a helluva strawman. You're comparing returns of the entire capital stock for a chunk of the western world over the course of last century to the inflation adjusted yield curve of a specific government-bond calculated from last weeks prices.
- waterlesscloud 13y ago
  That's not the point GP is making.

orasis 13y ago

Inequality is a fundamental to any network that features power-law like attachment of nodes - i.e. any sort of preferential attachment to nodes that are already well connected. Thus, in a way, inequality is "natural". So the criticism of just capitalism is too narrow. I think this criticism would apply to any economic system that features small world network type topology.

wpietri 13y ago
So what if it's natural? Cancer's natural, and nobody says, "Hey, your criticism of cancer is too narrow." That one could also critique multicellular organization in general is interesting, but irrelevant to anybody who actually has cancer. Civilization is all about shifting our situation from natural outcomes to outcomes we like. So if ever-increasing inequality is an outcome we don't like, we can do something about that.
- onnoonno 13y ago
  Well, but I think we have to figure out what and whether we can do something about it (inequality), how much, and for what cost (cost in the non-economic sense). I think the observation that power accumulates in one way or the other, capitalism or not, seems to hold in any society. Being naive and not an economist, I would still believe that money is a form of distributed trust and thus power. Lots of money means lots of power, in the sense of causing a lot of change (negative as well as positive). And I do not think that there is necessarily something wrong with that. We all seem to praise the billionaire Elon Musk here on HN for making space flight more efficient. And I think he is a very capable individual who amassed a lot of power/money and is thus able to effect a lot of change. Why should I complain about this? I would argue that the only things that hurt a society when it comes to accumulation of wealth/power is actually _using it in a detrimental_ sense. Things such as: - luxuries - buying laws in your (corporations) favor - using a lot of resources (ore, land) inefficiently The more I think about it, and having recently read another person here on HN mention it, the more I think something that broadly falls under the idea of 'Geolibertarianism' would bring us closer to a more just society. And, no I am not talking about 'solving our problems' here, because I think having problems is inherent to being a human. Actually taxing the bad effects of money instead of owning/moving/etc. money itself would also solve e.G. the problem on how to deal with the existence crypto-currencies without resorting to draconian measures. Finally, I think that we as humans tend to shy away from even just criticizing the actual bad effects of power. I think this is as much a problem as the people with power misbehaving in the first place. Most of us, myself included, simply seem to have a very strong 'follow the leader' emotion, and we rather argue about secondary issues than the real problems. Or we invent powerless utopias and start to believe in them (Marxism, Feminism, ...), actually becoming controllable by the malevolent powers. But maybe I am just naive. *edit: typo(s)

beaner 13y ago

What I am surprised about, as a Capitalist, is that anyone assumed "equality" was a natural result of capitalism.

ArkyBeagle 13y ago
Two things - capitalism replaces Mercantilism, and declining marginal value of money. So yeah - there are equalizing forces within capitalism relative to other systems.

steveplace 13y ago

> He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. As I've not read his work nor critiques of his work, I'm curious to know if he puts any weight towards central bank policy and the widening inequality gap. Because from my well-worn armchair, it seems that interest rates are not a free market and that policies such as quantitative easing serve to benefit higher classes much more than others.

dalek_cannes 13y ago
> He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. One could argue, though, that the flaw is not in capitalist ideology per se, but that you can never fulfill its requirements perfectly: 1. Market information is never disseminated perfectly, i.e. to all parties, equally, at the same time with full accuracy. 2. Human beings are not rational. 3. Human rationality takes a nosedive if a person's wealth vs. time curve take a sudden upswing.
- zo1 13y ago
  You missed the biggest one, bud: 4. Governments are guaranteed to interfere. Either to help, or impede.
  - wslh 13y ago
    And 5. Physical location matters, even if you are legally located in US, if you live/work outside the richer centers it is difficult to earn more.
    - zo1 13y ago
      Agreed. This has historically always been the case. There is a reason that early cities formed around navigable waterways, trade-routes, or near specific wealth-making resources. One need only look to the middle east that was almost entirely desert and small-towns a short while ago (relatively speaking) to get a more recent and visible example of this. Equality is the exception, not the rule throughout history, including the recent "enlightened" one.

stormbrew 13y ago

> In his recent book "Capital in the 21st Century", he's done something very big. He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. He's done this with an enormous amount of data. Am I missing something? Isn't this part of socialist analysis of capitalism from at least back to Marx?

mynameishere 13y ago
Well, it's a 700 page book that (I'm guessing) few of the reviewers have read, so it's entirely possible that you and many others are missing something. That said, if the main point of a huge book, even among many other smaller points, is an observation so ho-hum that it would make a college freshman's eyes roll, something else is going on. Maybe he proved his obvious thesis in an unusually gripping way. Maybe he proved the obvious threat to democracy in an unusually gripping way. (But why would it matter? Does anyone still think this is a democracy?) Or maybe all the lefty economists decided implicitly to push this particular warmed-over cliche as a great innovation. Who knows.
- zo1 13y ago
  I'm still looking for a proof that income inequality is a "threat" to "democracy"... Or as he put it, the "meritocratic values of democracy". As if we have anything remotely resembling a "meritocratic" society, even if it was a democratic one.
  - lobster_johnson 13y ago
    The threat is of wealth becoming political power and the government becoming an oligarchy... which has happened in the US, as shown by the recent study Northwestern and Princeton. When the few have the majority of the influence, that is no longer democracy, and there is no reason to believe that the control exerted by the wealthiest players is made for the benefit of those at the bottom. This a flaw of government more than of capitalism itself, but it's a flaw nonetheless, seeing as the two — capitalism and government — are intertwined.

jaibot 13y ago

> that inequality is not an unintended result I haven't seen him argue that rising inequality is "intentional" - no one sat down and said "Hey, let's build a system that widens inequality indefinitely". For most of the twentieth century, people thought that inequality was going to keep shrinking, and most everyone was fine with it. The r>g problem looks like a real problem, but not an engineered one.

deleted 13y ago
[deleted]
twoodfin 13y ago
Didn't inequality, globally, keep shrinking? I suspect it's still shrinking now, and perhaps at an increasing rate.
- jaibot 13y ago
  This is a good point (does anyone have a good source on global GINI?). But I suspect that what we're currently experiencing in the very-developed world is what's expected globally long-term. If global inequality is shrinking, it's probably down to deploying existing technologies and catch-up growth. When all that's over - when there's no such thing as the "developing" world anymore - at the End of History, r>g.
- vbuterin 12y ago
  http://www.quora.com/Has-the-worldwide-GINI-coefficient-increased-or-decreased-over-the-last-50-years http://www.quora.com/Has-the-worldwide-GINI-coefficient-incr... You're completely correct.
selmnoo 13y ago
Perhaps I should have used a better word than "unintended". Sadly I'm out of the editing window for that post, so I can't really change it. Sorry about that.

WalterBright 13y ago

> He's pointed out that capitalism is flawed -- that inequality is not an unintended result, but rather an inherent feature of it. Of course it's an inherent feature of it. If, by some mechanism, every one was economically equal, what would be the point of anyone bothering to try to do anything?

vanderZwan 13y ago
I know that this concept it pretty ingrained in American culture, but there's like... decades of psychological research on the topic of motivation debunking it - not even people who believe this principle act according to it. I don't believe for one second that your prime motivation do make D was economical, for example.
- WalterBright 13y ago
  Most people don't particularly like their jobs. Do you think people like cleaning carpets for a living, for example? How about the guy spending time away from his family, driving a truck?
  - vanderZwan 13y ago
    (just to be absolutely clear here: I'm not saying everyone should be economically perfectly equal) By that logic, cleaning carpets and truck driving should be among the highest paying jobs in the US, but I doubt that one would get a straight line if one were to plot "how much people hate their job" vs income. Also, it's probably a good rule of thumb to ask yourself with any economic theory of the last century that is of Western origin: "how much did the political pressure to prove the Soviets wrong at all costs influence this line of thinking, or the adoption of it?" I think it applies here. I am not saying carrots and sticks have no influence whatsoever, just that thinking it explains everything is extremely simplistic. Even if they did work universally, there are more types of carrots and sticks than just economical ones, and they are often conflicting. Then there are types of motivation that are different altogether. For example: there is clear evidence that rewards can be counterproductive to motivation in certain situations because they undermine intrinsic motivation (which works differently). Just look up the psychological research cited by critics of gamification, for example. Anyway, this topic is way to big for a HN comment, but what I'm trying to say is that there's much more to motivation. By and large, the evidence suggests that once a lack of money as an impediment to "personal freedom" (I'm oversimplifying here) is off the table, people are motivated by different reasons. Social reasons, moral reasons, hedonistic reasons, you name it.

wyager 13y ago

Piketty's claim is that, in a capitalist system, wealth disparity increases over time (measured in currency). I don't think he presented enough evidence to make that statement without a lot of qualifiers, but for now, let's just assume that it's correct. What Piketty absolutely failed to account for is that capitalism's greatest strength (and even Marx thought this) is that it causes the marginal utility of currency to decrease over time. That means that even if the dollar gap between rich and poor is bigger today than it was 200 years ago, the actual quality of life gap is just getting smaller and smaller. A billionaire can afford caviar and ten lamborghinis. A thousand-aire can afford hamburgers and a used civic. The billionaire is not a million times better off, and every year, as brutal market forces push the development of better and cheaper technology in every field, the difference between the rich man and the poor man, measured in the quality of food, goods, and services they have access to, gets smaller and smaller. For the most part, billionaires can only buy more of the same thing that almost everyone has access to. The rich guy can buy a harvard education, and the poor guy can buy a cheap but effective online education. The rich guy can buy a gold-plated iPhone, and the poor guy can buy a cheap Android. It's all the same stuff, just with different levels of class. Compare that to not so long ago when only the rich had cars, refrigeration, electricity, etc.

DerpDerpDerp 13y ago
Advanced medical treatments, robotics unavailable to the average person, space flight, the ability to avoid pervasive surveillance, a greatly disproportionate ability influence politics, etc. There are lots of things you have access to by having a great deal of wealth that are simply unavailable in even a reduced form to the average person.
- tptacek 13y ago
  A homeless person in the US today has access to better health care than the President of the US did in, what? 1960? 1970? Maybe 1980? Are we really down to "lobbying power" and "spaceflight"? That seems like a weak argument against capitalism.
  - 13y ago

turbojerry 13y ago

Gross inequality is not a feature of capitalism per se, it is the feature of our current implementation, specifically the current banking system. This is due to a number of factors, the main ones being bankers being the first in line to obtain newly created credit, central banks central planning of interest rates, bank fixing of market rates like LIBOR, massive fraud and government handouts to the banks. All of the above can be fixed without having to tax those that create real wealth in the economy, however that isn't going to happen as the banks have far too much influence in politics and even if they didn't changing the situation without collapsing the current system seems impossible at this stage.

zby 13y ago

If we had these progressive taxes and this global wealth tax - would we still have capitalism? And if yes - would that mean that 'r > g' is not inherent to capitalism but rather to some special kind of capitalism?