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On September 23 2014 05:21 JonnyBNoHo wrote:Show nested quote +On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant.
The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work.
About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets).
You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics.
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On September 23 2014 05:02 WhiteDog wrote:Show nested quote +On September 23 2014 03:17 Nyxisto wrote:
I haven't read the whole Piketty book, but if I remember correctly all he called for was higher taxation, which doesn't exactly make you a Marxist. If I remember correctly his data also pointed out that inequality was never lower than "right now",as in the last 100-150 years, since mixed economies have become the norm in the Western World. Marx barely touched the subject of "what to do against inequalities", but he pointed out a tendancy in capitalism to push, through the search of profit from capitalists, to gradually accumulate all the wealth in the hands of those capitalists, effectively killing any possible for future profit, and putting the worker class at subsistance level (and unemployment). This idea of a tendancy of capitalism to go towards a completly inegalitarian society is at the core of marxism, and Piketty effectively proved that Marx was, more or less, right (under certain condition, which is low growth and no taxation on capital basically). The main difference is Marx go further in his analysis, and consider this tendancy is linked to the private property of means of production, which leads him to desire a common property of those means of production - the dreaded "communism".
That's true, but Marx also saw the government as a tool of the ruling class and thus wanted to see it gone, Piketty just seems to promote a very "soft" version of capitalism like it is practised in the Scandinavian countries. He doesn't seem to advocate the redistribution of the means of production or anything similar, so I don't think it makes much sense to call him a Marxist.
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On September 23 2014 05:27 Nyxisto wrote:Show nested quote +On September 23 2014 05:02 WhiteDog wrote:On September 23 2014 03:17 Nyxisto wrote:
I haven't read the whole Piketty book, but if I remember correctly all he called for was higher taxation, which doesn't exactly make you a Marxist. If I remember correctly his data also pointed out that inequality was never lower than "right now",as in the last 100-150 years, since mixed economies have become the norm in the Western World. Marx barely touched the subject of "what to do against inequalities", but he pointed out a tendancy in capitalism to push, through the search of profit from capitalists, to gradually accumulate all the wealth in the hands of those capitalists, effectively killing any possible for future profit, and putting the worker class at subsistance level (and unemployment). This idea of a tendancy of capitalism to go towards a completly inegalitarian society is at the core of marxism, and Piketty effectively proved that Marx was, more or less, right (under certain condition, which is low growth and no taxation on capital basically). The main difference is Marx go further in his analysis, and consider this tendancy is linked to the private property of means of production, which leads him to desire a common property of those means of production - the dreaded "communism". That's true, but Marx also saw the government as a tool of the ruling class and thus wanted to see it gone, Piketty just seems to promote a very "soft" version of capitalism like it is practised in the Scandinavian countries. He doesn't seem to advocate the redistribution of the means of production or anything similar, so I don't think it makes much sense to call him a Marxist.
You are talking about the solution, but as I said Marx barely ever touch the question of solution - in the critics of the gotha's program and that's it. The core of Marx work is the analysis of the dynamics of capitalism, in the capital and in the 1844's manuscripts mainly (altho from two completly different points of view).
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On September 23 2014 05:26 WhiteDog wrote:Show nested quote +On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics.
FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to.
The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent).
From the paper, here's capital in France broken down by components. The increase is due to housing:
+ Show Spoiler +
I'm not sure what point you are trying to make about financial assets. Are you trying to double count?
"False but a good intuition" is still false.
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On September 23 2014 05:48 JonnyBNoHo wrote:Show nested quote +On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false.
Piketty changed his data the day after and basically answered FT's critics.
The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english (click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ?
The paper you linked think not : First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not
That's a pretty particular view on inequalities...
False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all.
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I'm not really sure why you think Marx would be wrong just because profit hasn't fallen yet. When you have serious geographic discrepancies in a globalized economy you can easily maintain profit by exploiting those discrepancies, at least for a while.
Secondly most Western countries run on mixed economies anyway.
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On September 23 2014 05:48 JonnyBNoHo wrote:Show nested quote +On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false.
when it comes to housing as capital it would be interesting to see the distribution of the housing. if it's evenly spread out then in the france example it does serve as an argument against piketty's conclusion. if it is concentrated, then no.
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On September 23 2014 06:04 IgnE wrote:
I'm not really sure why you think Marx would be wrong just because profit hasn't fallen yet. When you have serious geographic discrepancies in a globalized economy you can easily maintain profit by exploiting those discrepancies, at least for a while.
Secondly most Western countries run on mixed economies anyway.
Yep, I'm curious what we'll happen when we "run out" of cheap labor.
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Cayman Islands24199 Posts
On September 22 2014 22:12 Gorsameth wrote:
The rich getting richer wouldn't be a problem if it wasn't over the backs of the poor.
rich here is defined relatively.
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On September 20 2014 12:05 Wolfstan wrote:Show nested quote +On September 20 2014 10:49 oneofthem wrote:
right wing economic policies won't give you oil. please. No but they will be easier to attract private investment for extraction. Building economically sensible pipelines will be easier. Those companies will not worry about excessive taxation or nationalization. Lack of a sense of entitlement and a 10% provincial flat income tax drains productive people to work here, providing funding for our social programs while leaving other jurisdictions with a smaller productive tax base.
yes, outright nationalization is bad. but surely you are not saying that is the only alternative besides wild west capitalism.
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On September 23 2014 06:06 oneofthem wrote:Show nested quote +On September 23 2014 05:48 JonnyBNoHo wrote:On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false. when it comes to housing as capital it would be interesting to see the distribution of the housing. if it's evenly spread out then in the france example it does serve as an argument against piketty's conclusion. if it is concentrated, then no.
That's one of the point the OFCE adress : in 1950 housing property is not very correlated with income (people who have housing are most often than not old, work in independant jobs or agricultural jobs, and do not necessarily have the highest income). Now it is different : inequalities between owners and not have increased, and the relationship between income and ownership is strong (there are work that point that out, this is one).
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On September 23 2014 03:48 aksfjh wrote:Show nested quote +On September 23 2014 02:45 Wolfstan wrote:
Piketty has some good data, bit I am in disageement with the conclusion. Capital income growing faster than labour os fine. His solution of a progressive global wealth tax needs many many more baby steps and decades to be possible. The secular shift from labour to capital is similar to the shift from agrarian to industrial to information to capital. How is it "fine"? Also, it's not some shift from one form to another, it's a reversion from the relative equality we had 40-70 years ago to the inequality we had 100 years ago. Show nested quote +On September 23 2014 03:17 Nyxisto wrote:
I haven't read the whole Piketty book, but if I remember correctly all he called for was higher taxation, which doesn't exactly make you a Marxist. If I remember correctly his data also pointed out that inequality was never lower than "right now",as in the last 100-150 years, since mixed economies have become the norm in the Western World. He notes that the 50s-70s were abnormal in their equality throughout history, not that "right now" is better than 100 years ago. He's warning us that we've returned to those levels.
It is "fine" because of the way the system is set up.
Assets - Liabilities = Owners equity
Revenues - Expenses = Net Income
The system is set up for these 2 equations to be sacrosanct. The vast majority of the people fail at financial literacy, both in running their own lives and engaging in policy debate. If you mess with those equations, bad things will happen. Just look at Venezuela vs. Airlines and Clorox, and hey, they have oil too. People who want to attack income and equity will fail, and raising the minimum wage will not change systemic inequality.
The proper way to accommodate this economic shift is to reduce the work week, buy legislating overtime at either 32 or 35 hours at first. Society only needs so much production to function, and with increases in productivity, you now have a large supply of man-hours chasing a limited demand of man-hours labour. Likewise, there are bubbles growing in both the dept and equity markets because a large amount of capital is chasing a limited amount of returns. Hopefully, the labour class is insulated when they pop.
The majority of economic participants "the middle class" have a personal budget of 33% housing, 15% Transport, 12% food, 3% clothing, and the remaining third split evenly between saving and consumption. The economy should be fine, inequality and all as long as these ratios stay intact for the majority of participants. The outliers, the rich and poor, will be dealt with by both social and economic forces. Social programs will ensure those who can't afford the necessities (housing, transport, apparrel, and food), have them. Market forces will destroy wealth of the investment class when bubbles burst. I support regulatory policies that insulate the "middle class" from these investment destroying bubbles.
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I'm not really sure you realize how schizophrenic your own analysis is. "Social programs will ensure those who can't afford the necessities have them." Legislating overtime at 32 or 35 only encourages companies to shift more employees around for fewer hours. Many part-time low-wage positions give very little notice for shifts, some requiring employees to constantly be "on-call", as computerized shift calculations try to predict exactly how few employees are needed at a given time to deal with the expected demand. Try holding two of those "part-time" jobs when you are constantly on-call, or given at most a few days' notice for shifts at each one. Or trying being a parent. Have to pick your kid up from school? Trying to organize childcare? Tough.
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On September 23 2014 05:53 WhiteDog wrote:Show nested quote +On September 23 2014 05:48 JonnyBNoHo wrote:On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false. Piketty changed his data the day after and basically answered FT's critics. The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english ( click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ? The paper you linked think not : Show nested quote +First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not That's a pretty particular view on inequalities... False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all.
Piketty changed his data... because the FT is stupid?
The paper I cited actually does consider housing to be relevant with regards to inequality. However, we would like to make it very clear that we do not deny that the rise in housing price has had real consequences on access to housing and inequality. At issue is not the role of housing on inequality. At issue is the role that house price valuation plays on the 'capital accumulation' story that Piketty writes about. If you do not understand what I mean, I can elaborate.
Also, in your example inequality does not rise. The ratio between the $1,000,000 house and the $100,000 house is 10:1. Ten years later, the values are $2,357,948 and $235,795 respectively and the ratio between the two is still 10:1.
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On September 23 2014 06:07 corumjhaelen wrote:Show nested quote +On September 23 2014 06:04 IgnE wrote:
I'm not really sure why you think Marx would be wrong just because profit hasn't fallen yet. When you have serious geographic discrepancies in a globalized economy you can easily maintain profit by exploiting those discrepancies, at least for a while.
Secondly most Western countries run on mixed economies anyway. Yep, I'm curious what we'll happen when we "run out" of cheap labor.
Not much, I would think. For example, there are estimates that manufacturing iPhones in the US would raise the price of an iPhone by, at most $65 (estimates go as low as $10), which is far less than Apple's profit margin on each phone. The differences in labor costs is simply exaggerated.
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I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials?
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Cayman Islands24199 Posts
running out of cheap labor would mean labori s getting paid more. which is good
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On September 23 2014 07:22 JonnyBNoHo wrote:Show nested quote +On September 23 2014 05:53 WhiteDog wrote:On September 23 2014 05:48 JonnyBNoHo wrote:On September 23 2014 05:26 WhiteDog wrote:On September 23 2014 05:21 JonnyBNoHo wrote:On September 23 2014 01:12 WhiteDog wrote:On September 22 2014 23:58 2primenumbers wrote:
Pikketty is a big fraud that uses models based on normalized statistical assumptions for real-world predictions, and the real-world has nothing to do with normalized statistical distributions. Pikketty is a big fraud! You wanting him to be a fraud is different from him actually being one. He did not use any models, but empirical data and assumption on a possible scenario based on those data. It's a fact that capital is rising. Well he's not a fraudster, but the FT did poke some holes in his empirical data sets ( source). They're a bit picky, but still worthwhile noting. Also, Piketty's charts on wealth accumulation (capital as % of GDP) are almost entirely driven by increases in housing prices. If you either ignore that, or if you use a different valuation method (value from rents), capital as a percent of GDP doesn't really begin to rise again after WW2 ( source). As for Marx, it seems that Piketty refutes Marx as much as anything. Marx wrote about capital growing faster than the economy, leading to a fall in profit (tendency of the rate of profit to fall). But Piketty insists that the rate of profit has and will remain constant. The FT critics are so stupid I'll not adress them - they basically poke some data problem (which work has none ?) that do not question Piketty's point at all but they somehow think it's enough to question his entire work. About housing prices, what makes housing irrelevant as a capital ? Not entirely true btw, there is also a great increase in other type of capital (financial assets). You didn't read Piketty's book maybe, but he basically says that the tendency of the rate of profit to fall is false but is a good intuition, then goes in length about how Marx was most likely in the right track but didn't have any statistics. FT critics aren't stupid. Like I said, they're a bit picky, but if you can't completely dismiss them just because you want to. The argument isn't that housing is irrelevant as capital, it's that housing is different enough from other forms of capital to deserve a closer look. For example, a house, unlike a factory, doesn't produce a stream of income for its owner. The exception to that is if the house is rented out, which is where the different valuation method comes into play (value from rent). From the paper, here's capital in France broken down by components. The increase is due to housing: + Show Spoiler +I'm not sure what point you are trying to make about financial assets. Are you trying to double count? "False but a good intuition" is still false. Piketty changed his data the day after and basically answered FT's critics. The paper you quoted consider that inequalities in housing are irrelevant - it's a point of view. The OFCE beg to differ here, in french. Here is a resume in english ( click). Just a point, for the paper you quoted, an increase in the value of housing is not relevant for inequalities. Take a second to think about it : if someone has a house in New York at 1 000 000 dollars value and that see an increase in value of say 10% per year for a decade, while another guy has house in a shitty city at 100 000 dollars value and see same increase in 10 % per year for a decade, do you think inequalities between the one that own the house in New York and the one that own the house in the shitty city did not increase ? The paper you linked think not : First, what inequality would there be if each household owned one painting and kept it throughout its lifetime? The wealthiest households might own a pricey Manet or Kandinsky. The poorest might own a painting by a local artist. Now, if the price of art increased uniformly, would this contribute to an explosion of inequality in the sense of a divergent and exponential accumulation of capital? The answer is clearly it would not That's a pretty particular view on inequalities... False because he couldn't refine doesn't mean he is completly false. Sorry if you wanted Marx to give you a "law" in an age where statistics were almost inexistant while even modern economy have no law at all. Piketty changed his data... because the FT is stupid? The paper I cited actually does consider housing to be relevant with regards to inequality. Show nested quote +However, we would like to make it very clear that we do not deny that the rise in housing price has had real consequences on access to housing and inequality. At issue is not the role of housing on inequality. At issue is the role that house price valuation plays on the 'capital accumulation' story that Piketty writes about. If you do not understand what I mean, I can elaborate. Also, in your example inequality does not rise. The ratio between the $1,000,000 house and the $100,000 house is 10:1. Ten years later, the values are $2,357,948 and $235,795 respectively and the ratio between the two is still 10:1.
FT is stupid, a minor data error changed a second later that has no incidence whatsoever on the core point of view of a book is not a valid critic.
I don't know why you talk about a ratio. In the first scenario the difference between the two (the inequality in capital assets) is 800 000 $, in the second it's 2 000 000 $, that's a flat increase in inequalities. Again, that's considering the increase in house value is homogeneous between a shitty town and new york, and that everybody has a house. Now if you take into consideration revenu, and thus the amount of work to acquire a house, it's pretty clear. As you say they don't deny it.
The OFCE respond to other type of critics coming from the paper, I'm just not going to bother playing a nitpick game with you on a book that basically state what everybody knows, which is that inequality have risen.
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On September 23 2014 07:07 IgnE wrote:
I'm not really sure you realize how schizophrenic your own analysis is. "Social programs will ensure those who can't afford the necessities have them." Legislating overtime at 32 or 35 only encourages companies to shift more employees around for fewer hours. Many part-time low-wage positions give very little notice for shifts, some requiring employees to constantly be "on-call", as computerized shift calculations try to predict exactly how few employees are needed at a given time to deal with the expected demand. Try holding two of those "part-time" jobs when you are constantly on-call, or given at most a few days' notice for shifts at each one. Or trying being a parent. Have to pick your kid up from school? Trying to organize childcare? Tough.
Legislating overtime at a lower hour count is designed to open the middle class jobs up to those underemployed in low wage
positions. I've said time and again that those retail positions aren't meant for "lifers" they are meant for high school students. The middle class "non-bullshit" jobs are not demanding more manpower, but if hours 32-40 required higher input costs the
5-day employer could decide to pay overtime increasing income for the employee or run 2 shifts for the week increasing employment for the economy. The 7 day companies would have 2 full-time shifts instead of a full-time and a part time employee underemployed.
The 2 job part time parent's situation would remain unchanged from how it is now. Historically, reduction of the workday when productivity increases has worked well to absorb less demand for labour to achieve production targets. The economy would adapt prices to keep the average housing, food, clothing, transportation expenses within the average household income.
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On September 23 2014 07:37 IgnE wrote:
I guess you think that the iPhone is price inelastic? Link your estimates. Do they include the cost of mining and processing the materials?
No, I don't think that iPhones are price inelastic. I don't think elasticity is relevant. There's room for Apple to lower the price if need be, and I don't think a marginal drop in US iPhone sales is particularly catastrophic. Would it suck for US consumers to have imports rise in price? Sure. But it would also help US workers to have our exports in higher demand.
The estimates come from NYT journalist Charles Duhigg speaking on NPR.
Materials are a small part of an iPhone's cost. You can see a cost breakdown from a few years back here.
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EPT![[image loading]](https://dl.dropboxusercontent.com/u/72070179/Capital%20France.PNG)
