In his Monday NY Times' OpEd, Paul Krugman references French economist Thomas Piketty's "watershed" book, “Capital in the Twenty-First Century,” calling it "the most important economics book of the year — and maybe of the decade."
Wealth Over Work
NY Times (OpEd)
MARCH 23, 2014 (March 24th Edition)
It seems safe to say that “Capital in the Twenty-First Century,” the magnum opus of the French economist Thomas Piketty, will be the most important economics book of the year — and maybe of the decade. Mr. Piketty, arguably the world’s leading expert on income and wealth inequality, does more than document the growing concentration of income in the hands of a small economic elite. He also makes a powerful case that we’re on the way back to “patrimonial capitalism,” in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent.
To be sure, Mr. Piketty concedes that we aren’t there yet. So far, the rise of America’s 1 percent has mainly been driven by executive salaries and bonuses rather than income from investments, let alone inherited wealth. But six of the 10 wealthiest Americans are already heirs rather than self-made entrepreneurs, and the children of today’s economic elite start from a position of immense privilege. As Mr. Piketty notes, “the risk of a drift toward oligarchy is real and gives little reason for optimism.”
Indeed. And if you want to feel even less optimistic, consider what many U.S. politicians are up to. America’s nascent oligarchy may not yet be fully formed — but one of our two main political parties already seems committed to defending the oligarchy’s interests.
Despite the frantic efforts of some Republicans to pretend otherwise, most people realize that today’s G.O.P. favors the interests of the rich over those of ordinary families. I suspect, however, that fewer people realize the extent to which the party favors returns on wealth over wages and salaries. And the dominance of income from capital, which can be inherited, over wages — the dominance of wealth over work — is what patrimonial capitalism is all about…
… The important point to remember, however, is that the people inside the bubble have a lot of power, which they wield on behalf of their patrons. And the drift toward oligarchy continues.
I reported on Piketty's book in a post here on January 29th, on Columbia University Professor of Journalism Thomas Edsall's NY Times OpEd about it, that day...
Edsall: "Capitalism vs. Democracy" (Inequality Scholar Piketty Has Published "Watershed" Book)Edsall's column is truly outstanding! In follow-up to Krugman's far-too-brief mention of it in Monday's NYT, I'd strongly--as in: vehemently--suggest a full read of Edsall's much more in-depth column, linked above, for a far more substantive review of what Krugman barely touches upon in Monday's NYT. Obviously, this is one of the most important issues of our time.
January 29th, 2014
Many Kossacks have written about Emanuel Saez’ and Thomas Piketty’s work on income inequality, including yours truly. When it comes to virtually any intelligent, substantial discussion on the topic, these two university professors (Saez at UC Berkeley and Piketty at the Paris School of Economics) are widely considered to be the go-to authorities on the subject, worldwide.
Tonight, via Columbia University Professor of Journalism Thomas Edsall’s op-ed in Wednesday’s New York Times, we’re learning about the details regarding Piketty’s new book, “Capital in the Twenty-First Century.”
Some (see below) are referring to it as “the watershed book on economic thinking” of this generation.
This is, easily, the most interesting development concerning virtually anything I’ve read about the “dismal science” of economics in a long, long time (if for no other reason than the discussions that it will inspire).
I really hope you’ll take the time to read both Edsall’s entire column and the review of the book by World Bank economist Branko Milanovic, which is set for publication in the June issue of the Journal of Economic Literature. Apparently, as Edsall notes below, it’s “already caused a stir.” (If you’re into economics—at least when it’s written in easy-to-understand language--I think you’ll find the first few pages of Milanovic’s commentary to be nothing short of amazing!) ...
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Again, keeping this real and per my last post in this community, earlier this weekend (SEE: Moyers: On Dark Money and "Who's Buying our Midterm Elections?"), the fact of the matter is that this is very much a bipartisan problem, which even Krugman tacitly (finally) recognizes in the closing sentences of his OpEd in today's NYT: "...The important point to remember, however, is that the people inside the bubble have a lot of power, which they wield on behalf of their patrons. And the drift toward oligarchy continues."
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As I noted (h/t to University of Oregon economics professor Mark Thoma over at his Economist's View blog), above, the problems Krugman discusses are very much a part of the ingrained behavior of both major parties inside the Beltway, and Krugman focused a bit more upon this in a small post at his NY Times blog, earlier on Sunday...
[Public Address Announcement: "Paging Mr. Simpson and Mr. Bowles. Attention Mr. Simpson and Mr. Bowles. Mr. Krugman has left a message for you at the front desk..."]
The Crime of 2010
Conscience of a Liberal (NY Times) Blog
March 23, 2014, 11:01 am
The most important paper at the Brookings Panel was probably Krueger et al on the long-term unemployed...
...So let me make the obvious point, just in case anyone missed it: the “pivot” of 2010 — when all the Very Serious People decided that the danger from debt trumped any and all concern for job creation — was an utter disaster, economic and human. It was even a disaster in fiscal terms, because a permanently depressed economy will cost far more in revenue than was saved by slashing the deficit by a few percent of GDP in the short term.
Now, you might think that this post should be titled The Mistake of 2010 — but that would only be appropriate if it were truly an honest error. It wasn’t. Some of the austerians were self-consciously exploiting deficit panic to promote a conservative agenda; some were slipping into deficit-scolding rather than dealing with our actual problems because it felt comfortable; some were just going along for the ride, saying what everyone else was saying. Hardly anyone in the deficit-scold camp engaged in hard thinking and careful assessment of the evidence.
And millions of people will still be paying the price for that casual irresponsibility for many years to come.
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Meteor Blades, our community's philosophical Kossack-in-Chief, discusses Krueger's Brookings' paper and the travesty that is long-term joblessness in this evening's "Open thread for night owls: Jobs."
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