French economist Thomas Piketty appears to have shocked some members of the professional economist community with his massive (700 page) tome Capital in the Twenty-First Century. Piketty’s revelation based on solid data and analysis in layman’s terms?
Wealth begets wealth
Except he uses the correct term for wealth: capital. Who knew that capital figures large in capitalism?
PAUL KRUGMAN: Even the title, the first word in the title, “capital.” We stopped talking about capital. Even people like me stopped talking about capital because we thought it was all about human capital. We thought it was all about earnings. We thought that the wealthy were people who one way or another found a way to make a lot of money.
How is it possible that a Nobel Prize winning economist could be that naïve? Or was his comment disingenuous? A cover-up for the propaganda of his profession over the past fifty years? But he claims ignorance and not duplicitousness.
But we’re rapidly moving towards a state where inherited wealth dominates. I didn’t know that. I really was– I should’ve known it. I should’ve thought about it, but I didn’t. And so then here comes this book with– I mean, it’s beautiful– absolutely analytically beautiful, if that makes any sense at all.
Among well-regarded economists Paul Krugman is to the left of most of his colleagues. He’s the “good guy” for liberals and lefties.
Oy vey!
Here Paul, have a clue:
Revenues less costs and less income taxes = net income after tax (NIAT) = capital.
Lower income taxes, and presto, capital grows faster, and those that owned the original capital get a bigger pile of capital faster.
Keeping the minimum wage low and lower than the rate of general inflation and productivity gains also increases the rate of capital accumulation. Owners allowed not to recognize or pay for he real costs of their operations also increases capital and impoverishes the people and/or their government. Outsourcing, off-shoring, financial WMD, etc. were other scams perpetrated in the great game of capital capture by the 1%.
Nobody noticed anything untoward as the wealthy got wealthier and the poor got poorer. Economists and policy makers preaching for decades that that was an aberration and the trickle-down would begin as soon as the wealthy were wealthy enough. Demonstrating once again that ordinary Americans are suckers.
