Economists Discover Capital or, Marx with g=0, β↑∞, r→0: revolution, war


It seems like economists are starting to realize that capitalism exists. This is an improvement from the past. We should welcome this  discovery.

An economic historian named Thomas Piketty will release a book in English this year called Capital in the 21st century (slideshow version here). In it, he argues that  the normal state of capitalism is inequality, growing inequality. He shows this with graphs and history. Such inequality was blocked for six decades of the 20th century only due to massive wars. In the 21st century, the inequality, which is now at pre-World War 1 levels,  will cause “severe social disruption” unless a simultaneous, uniform global tax on capital occurs. Since Piketty thinks that this will not occur, the picture is bleak. For Marx, he thinks the solution was the following:

Marx: with g=0, β↑∞, r→0 : revolution, war

Piketty is not a communist, and so he thinks we should rather try to figure out something nicer to do than revolution. Like a tax. A big tax.

Such great premises, such weak conclusions.

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