Capital in the Twenty-First Century by Thomas Piketty

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Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, Cornelius Vanderbilt, corporate governance, correlation does not imply causation, creative destruction, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, Solyndra, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, wealth creators, women in the workforce, working poor, zero-sum game

Stiglitz, “Equal Opportunity, Our National Myth,” New York Times, February 2013, http://opinionator.blogs.nytimes.com/2013/02/16/equal-opportunity-our-national-myth/ (accessed April 12, 2015). 3. Thomas Piketty, “Capital in the Twenty-First Century,” March 2014, http://piketty.pse.ens.fr/en/capital21c2 (accessed April 12, 2015). 4. On some of the problems with Piketty’s data on wealth inequality, see Phillip W. Magness and Robert P. Murphy, “Challenging the Empirical Contribution of Thomas Piketty’s Capital in the Twenty-First Century,” Journal of Private Enterprise, Spring 2015, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2543012 (accessed April 12, 2015); Malin Sahlén and Salim Furth, “Piketty Is Misleading about the Swedish Case,” Timbro, November 7, 2014, http://timbro.se/en/samhallsekonomi/articles/piketty-is-misleading-about-the-swedish-case (accessed April 12, 2015); Phillip W.

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,” Policy Analysis, November 5, 2007, http://object.cato.org/sites/cato.org/files/pubs/pdf/pa-603.pdf (accessed May 28, 2015). 60. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap, 2014), pp. 247–49. 61. Johnny Munkhammar, “The Swedish Model: It’s the Free-Market Reforms, Stupid!” Wall Street Journal, January 26, 2011, http://www.wsj.com/articles/SB10001424052748704698004576104023432243468 (accessed April 13, 2015). 62. Piketty, Capital in the Twenty-First Century, p. 246. Chapter 5 1. Joseph Stiglitz, “America Is No Longer a Land of Opportunity,” Financial Times, June 25, 2012, http://www.ft.com/intl/cms/s/2/56c7e518-bc8f-11e1-a111-00144feabdc0.html (accessed April 28, 2015). 2.

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Ferdinand Protzman, “East Germany’s Economy Far Sicker Than Expected,” New York Times, September 20, 1990, http://www.nytimes.com/1990/09/20/business/east-germany-s-economy-far-sicker-than-expected.html (accessed April 21, 2015). 46. Thomas Piketty interview with Russell Roberts, “Thomas Piketty on Inequality and Capital in the Twenty-First Century,” EconTalk, September 22, 2014, http://www.econtalk.org/archives/2014/09/thomas_piketty.html (accessed May 4, 2015). 47. See, for instance, John Cochrane, “Why and How We Care about Inequality,” The Grumpy Economist, September 29, 2014, http://johnhcochrane.blogspot.com/2014/09/why-and-how-we-care-about-inequality.html (accessed May 28, 2015), and Ayn Rand, “Egalitarianism and Inflation,” reprinted in Ayn Rand, Philosophy: Who Needs It (New York: Signet, 1984). 48.

Unsustainable Inequalities: Social Justice and the Environment by Lucas Chancel

"World Economic Forum" Davos, Anthropocene, behavioural economics, biodiversity loss, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, centre right, clean water, COVID-19, disinformation, Donald Trump, energy security, energy transition, financial deregulation, Francis Fukuyama: the end of history, Gini coefficient, green new deal, income inequality, Indoor air pollution, job satisfaction, low skilled workers, offshore financial centre, oil shock, price stability, purchasing power parity, Ronald Reagan, Simon Kuznets, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, trade liberalization, Tragedy of the Commons, transaction costs, urban planning, very high income, Washington Consensus

For a specific discussion of the US trajectory see Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, “Distributional National Accounts: Methods and Estimates for the United States” (working paper no. 22945, National Bureau of Economic Research, December 2016), rev. version published in Quarterly Journal of Economics 133, no. 2 (2018): 553–609. 7. On the relation between capital and wealth, see Piketty, Capital in the Twenty-First Century, 47–49. 8. See particularly Alvaredo et al., World Inequality Report 2018, section 4. 9. For a detailed analysis see Piketty, Capital in the Twenty-First Century; Anthony B. Atkinson, Inequality: What Can Be Done?

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Nevertheless, there is every reason to suppose that it is in fact possible—for it is actually taking place now. PART ONE The Sources of Unsustainable Development 1 Economic Inequality as a Component of Unsustainability THE RESOUNDING success of French economist Thomas Piketty’s Capital in the Twenty-First Century, a massive work on the dynamics of inequality, marked a turning point in contemporary economic debate.1 The increase in inequalities of various kinds is now at the center of political debate as well. In 2013, Barack Obama called the rise in income inequality the “defining challenge of our time.”2 Institutions that had not previously been known for their egalitarian sympathies began to warn against the levels of inequality reached in both developed and developing countries.

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A future that will be both just and sustainable is not yet an impossibility. NOTES Introduction 1. The term social-ecological state was coined by the economist Éloi Laurent in his book Social-écologie (Paris: Flammarion, 2008). 1. Economic Inequality as a Component of Unsustainability 1. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Belknap Press of Harvard University Press, 2014). 2. Barack Obama, “Remarks by the President on Economic Mobility,” December 4, 2013, https://obamawhitehouse.archives.gov/the-press-office/2013/12/04/remarks-president-economic-mobility. 3.

Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee, Esther Duflo

3D printing, accelerated depreciation, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, basic income, behavioural economics, Bernie Sanders, Big Tech, business cycle, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon tax, Cass Sunstein, charter city, company town, congestion pricing, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, endowment effect, energy transition, Erik Brynjolfsson, experimental economics, experimental subject, facts on the ground, fake news, fear of failure, financial innovation, flying shuttle, gentrification, George Akerlof, Great Leap Forward, green new deal, high net worth, immigration reform, income inequality, Indoor air pollution, industrial cluster, industrial robot, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jean Tirole, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kevin Roose, labor-force participation, land reform, Les Trente Glorieuses, loss aversion, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, middle-income trap, Network effects, new economy, New Urbanism, no-fly zone, non-tariff barriers, obamacare, off-the-grid, offshore financial centre, One Laptop per Child (OLPC), open economy, Paul Samuelson, place-making, post-truth, price stability, profit maximization, purchasing power parity, race to the bottom, RAND corporation, randomized controlled trial, restrictive zoning, Richard Thaler, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, school choice, Second Machine Age, secular stagnation, self-driving car, shareholder value, short selling, Silicon Valley, smart meter, social graph, spinning jenny, Steve Jobs, systematic bias, Tax Reform Act of 1986, tech worker, technology bubble, The Chicago School, The Future of Employment, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, trickle-down economics, Twitter Arab Spring, universal basic income, urban sprawl, very high income, War on Poverty, women in the workforce, working-age population, Y2K

The Ones Without Principals Are,” Quarterly Journal of Economics 116, no. 3 (2001): 901–32. 57 Scharfstein and Greenwood showed that in most continental European countries the share of finance in the economy either did not grow much in the 1990s and 2000s, or it even declined. Robin Greenwood and David Scharfstein, “The Growth of Finance,” Journal of Economic Perspectives 27, no. 2 (2013): 3–28. 58 Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard University Press, 2014), 550–51, and Emmanuel Saez and Gabriel Zucman, “Alexandria Ocasio-Cortez’s Idea Is Not about Soaking the Rich,” accessed April 20, 2019, https://www.nytimes.com/2019/01/22/opinion/ocasio-cortez-taxes.html. 59 Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva, “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities,” American Economic Journal: Economic Policy 6, no. 1 (2014): 230–71. 60 Maury Brown, “It’s Time to Blowup the Salary Cap Systems in the NFL, NBA, and NHL,” Forbes, March 10, 2015, accessed April 11, 2019, https://www.forbes.com/sites/maurybrown/2015/03/10/its-time-to-blowup-the-salary-cap-systems-in-the-nfl-nba-and-nhl/#1e35ced969b3. 61 Our discussion in this section and the next draws heavily on the work of Thomas Piketty, Emmanuel Saez, and Gabriel Zucman.

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In their wonderfully refreshing book, Banerjee and Duflo delve into impressive areas of new research questioning conventional views about issues ranging from trade to top income taxation and mobility, and offer their own powerful vision of how we can grapple with them. A must-read.” —Thomas Piketty, professor, Paris School of Economics, and author of Capital in the Twenty-First Century “A magnificent achievement, and the perfect book for our time. Banerjee and Duflo brilliantly illuminate the largest issues of the day, including immigration, trade, climate change, and inequality. If you read one policy book this year—heck, this decade—read this one.”

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Doom: Debating the Future of the US Economy,” debate, Chicago Council of Global Affairs, October 31, 2016. 16 Alvin H. Hansen, “Economic Progress and Declining Population Growth,” American Economic Review 29, no. 1 (1939): 1–15. 17 Angus Maddison, Growth and Interaction in the World Economy: The Roots of Modernity (Washington, DC: AEI Press, 2005). 18 Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2013), 73, table 2.1. The data Piketty uses for long-term growth originally comes from Angus Maddison, and can be found on the Maddison project data base at https://www.rug.nl/ggdc/historical development/maddison/releases/maddison-project-database-2018. 19 For the interested reader who decides to peruse this literature, it will be useful to know that economists call well-being “welfare” (by which they are not referring to welfare programs).

The Limits of the Market: The Pendulum Between Government and Market by Paul de Grauwe, Anna Asbury

Alan Greenspan, banking crisis, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, conceptual framework, crony capitalism, Easter island, Erik Brynjolfsson, eurozone crisis, Honoré de Balzac, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kitchen Debate, means of production, Money creation, moral hazard, Paul Samuelson, price discrimination, price mechanism, profit motive, Robert Gordon, Robert Solow, Ronald Coase, Simon Kuznets, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, trickle-down economics, ultimatum game, very high income

The Love of Money, and the Case for the Good Life (London: Allen Lane, ). . Facundo Alvaredo, Tony Atkinson, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, The World Wealth and Income Database (WID), <http://www. wid.world>, and Tony Atkinson and Salvatore Morelli, The Chartbook of Income  NO TE S . . . . . . . . . . . Inequality, VoxEU (), <http://www.voxeu.org/article/chartbook-economicinequality>. See Raghuram G. Rajan and Luigi Zingales, Saving Capitalism from the Capitalists (New York: Crown Business, ), and Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Belknap Press, ).

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Milton Friedman and Anna Jacobson Schwartz, A Monetary History of the United States, – (Princeton, NJ: Princeton University Press, ). Thomas Piketty, Le capital au XXIe siècle (Paris: Editions du Seuil, ); Eng. Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard University Press, ). Odran Bonnet, Pierre-Henri Bono, Guillaume Camille Chapelle, and Étienne Wasmer, ‘Capital is not back: A comment on Thomas Piketty’s “Capital in the st Century” ’, VoxEU ( June ), <http://www.voxeu.org/article/ housing-capital-and-piketty-s-analysis>. Paul De Grauwe and Yuemei Ji, ‘Panic-driven austerity in the Eurozone and its implications’, VoxEU ( February ), <http://www.voxeu.org/article/panicdriven-austerity-eurozone-and-its-implications>.  INDEX Note: text within tables, figures, and boxes is indicated by t, f, and b following the page number.

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This has led Robert Solow, the great American economist who won the Nobel Prize for his contribution to the theory of economic growth, to the conclusion that the new technologies are visible everywhere except in productivity growth statistics. We see a similar trend in other developed countries, including those of the EU, as represented in Figure .. This is based on Thomas Piketty’s authoritative book Capital in the Twenty-First Century, which I will discuss in Chapter . Figure . shows the development of production per capita since the industrial revolution. These figures are not directly comparable with those of Figure ., showing production per hour, which is a better measure of productivity.

The Globalization of Inequality by François Bourguignon

Berlin Wall, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Credit Default Swap, deglobalization, deindustrialization, Doha Development Round, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, financial intermediation, gender pay gap, Gini coefficient, Glass-Steagall Act, income inequality, income per capita, labor-force participation, liberal capitalism, low interest rates, minimum wage unemployment, offshore financial centre, open economy, Pareto efficiency, purchasing power parity, race to the bottom, Robert Gordon, Simon Kuznets, structural adjustment programs, The Spirit Level, too big to fail, very high income, Washington Consensus

During the last few years, rising inequality in certain countries, notably the United States, has been the subject of or inspiration for several major books—among which it would be difficult to overstate the importance of two recent books by Joseph Stiglitz and Thomas Piketty, the success of which is a clear sign of the mounting public interest in the issue of inequality.2 While few books address global income inequality directly, with the exception of Branko Milanovic’s Worlds Apart,3 many have analyzed inequalities in development between 2 Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012); Thomas Piketty, Capital in the Twenty-­First Century (Cambridge, MA: Harvard University Press, 2013). 3 Branko Milanovic, Worlds Apart, Measuring International and Global Inequality (Princeton, NJ: Princeton University Press, 2005).

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For example, lawyers who take part in litigation involving large sums of money will often be compensated directly in proportion to 10 Carola Frydman and Raven Saks, “Executive Compensation: A New View from a Long-­Term Perspective, 1936–2005,” Review of Financial Studies 23, no. 5 (2010): 2099–2138. In Capital in the Twenty-­First Century, Thomas Piketty relates the explosion in top executives’ pay to the drop in top marginal income tax rates in the 1980s, the argument being that it was not worth negotiating a high level of compensation when 70% would go to the state. I’ll return to the tax issue later. 90 Chapter 3 the sums in question.

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But there are also non-­monetary forms of inequality—some of which can be measured and some of which cannot—that are also socially and economically significant from the point of view of both social justice and the perity in India and China prior to 2002 was estimated by Sanjay Ruparelia et al., Growth, Reforms and Inequality: India and China Since the 1980s, APSA 2010 Annual Meeting Paper, 2010. 11 Piketty, Capital in the Twenty-­First Century. Are Countries Becoming More Unequal?61 ception that the public may have of the equity of the economy. This is the case, in particular, of the inequality of opportunities. Two individuals or two families whose economic standards of living, measured by income or consumer spending are identical, will not necessarily feel “equal” or be considered equal in the eyes of an observer.

The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, Admiral Zheng, Alvin Toffler, Andy Kessler, autonomous vehicles, basic income, Bernie Sanders, Big Tech, bread and circuses, Brexit referendum, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon footprint, Cass Sunstein, clean water, company town, content marketing, Cornelius Vanderbilt, creative destruction, data science, deindustrialization, demographic transition, deplatforming, don't be evil, Donald Trump, driverless car, edge city, Elon Musk, European colonialism, Evgeny Morozov, financial independence, Francis Fukuyama: the end of history, Future Shock, gentrification, gig economy, Gini coefficient, Google bus, Great Leap Forward, green new deal, guest worker program, Hans Rosling, Herbert Marcuse, housing crisis, income inequality, informal economy, Jane Jacobs, Jaron Lanier, Jeff Bezos, Jeremy Corbyn, job automation, job polarisation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, life extension, low skilled workers, Lyft, Marc Benioff, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, megacity, Michael Shellenberger, Nate Silver, new economy, New Urbanism, Northpointe / Correctional Offender Management Profiling for Alternative Sanctions, Occupy movement, Parag Khanna, Peter Thiel, plutocrats, post-industrial society, post-work, postindustrial economy, postnationalism / post nation state, precariat, profit motive, public intellectual, RAND corporation, Ray Kurzweil, rent control, Richard Florida, road to serfdom, Robert Gordon, Salesforce, Sam Altman, San Francisco homelessness, Satyajit Das, sharing economy, Sidewalk Labs, Silicon Valley, smart cities, Social Justice Warrior, Steve Jobs, Stewart Brand, superstar cities, technological determinism, Ted Nordhaus, The Death and Life of Great American Cities, The future is already here, The Future of Employment, The Rise and Fall of American Growth, Thomas L Friedman, too big to fail, trade route, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, unpaid internship, upwardly mobile, Virgin Galactic, We are the 99%, Wolfgang Streeck, women in the workforce, work culture , working-age population, Y Combinator

New York Times, August 5, 2017, https://www.nytimes.com/2017/08/05/opinion/sunday/when-will-the-tech-bubble-burst.html. 8 Kevin Starr, Coast of Dreams: California on the Edge, 1990–2003 (New York: Knopf, 2004), 271–75. 9 Scott Galloway, “Silicon Valley’s Tax-Avoiding, Job-Killing, Soul-Sucking Machine,” Esquire, February 8, 2018, http://www.esquire.com/news-politics/a15895746/bust-big-tech-silicon-valley/. 10 Shira Ovide, “Big Tech Has Dug a Moat That Rivals and Regulators Can’t Cross,” Yahoo, July 5, 2019, https://finance.yahoo.com/news/big-tech-dug 11 Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap/Harvard, 2014), 174; “Richest people in the world,” CBS News, https://www.cbsnews.com/pictures/richest-people-in-world-forbes/12/. 12 Carter Coudriet, “13 Under 40: Here Are The Youngest Billionaires On The Forbes 400 2019,” Forbes, October 31, 2019, https://www.forbes.com/sites/cartercoudriet/2019/10/02/forbes-400-youngest-under-40-zuckerberg-spiegel/#7fd35f5a5a0e. 13 Sally French, “China has 9 of the world’s 20 biggest companies,” Market Watch, May 31, 2018, https://www.marketwatch.com/story/china-has-9-of-the-worlds-20-biggest-tech-companies-2018-05-31. 14 Farhad Manjoo, “Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future,” New York Times, January 20, 2016, https://www.nytimes.com/2016/01/21/technology/techs-frightful-5-will-dominate-digital-life-for-foreseeable-future.html; Dana Mattioli, “Takeovers Roar to Life as Companies Hear Footsteps From Tech Giants,” Wall Street Journal, November 20, 2017, https://www.wsj.com/articles/takeovers-roar-to-life-as-companies-hear-footsteps-from-tech-giants-1511200327. 15 “Why startups are leaving Silicon Valley,” Economist, August 30, 2018, https://www.economist.com/leaders/2018/08/30/why-startups-are-leaving-silicon-valley; Rex Crum, “Let’s make a deal: SV150 firms spent $41 billion on acquisitions in 2016,” Mercury News, May 1, 2017, https://www.mercurynews.com/2017/05/01/lets-make-a-deal-acquisitions-were-all-over-the-sv150-in-2016/; “Too much of a good thing,” Economist, March 26, 2016, https://www.economist.com/brieing/2016/03/26/too-much-of-a-good-thing. 16 Christopher Mims, “Why Free Is Too High a Price for Facebook and Google,” Wall Street Journal, June 8, 2019, https://www.wsj.com/articles/why-free-is-too-high-a-price-for-facebook-and-google-11559966411; Andy Kessler, “Antitrust Can’t Catch Big Tech,” Wall Street Journal, September 14, 2019, https://www.wsj.com/articles/antitrust-cant-catch-big-tech-11568577387; David Dayen, “Trump’s Antitrust Cops Fail to Police Big Business—Again,” American Prospect, July 24, 2019, https://prospect.org/power/trump-s-antitrust-cops-fail-police-big-business-again/; Andrew Orlowski, “Google had Obama’s ear during antitrust probe,” Register, August 18, 2016, https://www.theregister.co.uk/2016/08/18/google_had_obamas_ear_on_antitrust_probe/. 17 Bryan Clark, “Facebook’s new ‘early bird’ spy tool is just tip of the iceberg,” Next Web, August 10, 2017, https://thenextweb.com/insider/2017/08/10/facebooks-new-early-bird-spy-tool-is-just-the-tip-of-the-iceberg/#; Betsy Morris and Deepa Seetharaman, “The New Copycats: How Facebook Squashes Competition from Startups,” Wall Street Journal, August 9, 2017, https://www.wsj.com/articles/the-new-copycats-how-facebook-squashes-competition-from-startups-1502293444. 18 Crunchbase, Google Acquisitions, updated January 15, 2020, https://wwwcrunchbase.com/organization/google/acquisitions/acquisitions_list#section-acquisitions; Ben Popper, “Failure is a feature: how Google stays sharp gobbling up startups,” The Verge, September 17, 2012, https://www.theverge.com/2012/9/17/3322854/google-startup-mergers-acquisitions-failure-is-a-feature; Tim Wu and Stuart A.

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CNN, May 6, 2017, https://money.cnn.com/2017/05/26/news/economy/mark-zuckerberg-universal-basic-income/index.html; Chris Weller, “Elon Musk doubles down on universal basic income: ‘It’s going to be necessary,’” Business Insider, February 13, 2017, https://www.businessinsider.com/elon-musk-universal-basic-income-2017-2; Patrick Caughill, “Another Silicon Valley Exec Joins the Ranks of Universal Basic Income Supporters,” Futurism, September 8, 2017, https://futurism.com/another-silicon-valley-exec-joins-the-ranks-of-universal-basic-income-supporters; Sam Altman, “Moving Forward on Basic Income,” Y Combinator, May 31, 2016, https://blog.ycombinator.com/moving-forward-on-basic-income/; Diane Francis, “The Beginning of the End of Work,” American Interest, March 19, 2018, https://www.the-american-interest.com/2018/03/19/beginning-end-work/. 14 “The YIMBY Guide to Bullying and Its Results: SB 827 Goes Down in Committee,” City Watch LA, April 19, 2018, https://www.citywatchla.com/index.php/los-angeles/15298-the-yimby-guide-to-bullying-and-its-results-sb-827-goes-down-in-committee; John Mirisch, “Tech Oligarchs and the California Housing Crisis,” California Political Review, April 15, 2018, http://www.capoliticalreview.com/top-stories/tech-Oligarchs-and-the-california-housing-crisis/; Joel Kotkin, “Giving Common Sense a Chance in California,” City Journal, April 26, 2018, https://www.city-journal.org/html/giving-common-sense-chance-california-15868.html. 15 Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap/Harvard, 2014), 85. 16 VanderMey, “Why Are Young Billionaires So Boring?” 17 Fernand Braudel, The Structures of Everyday Life, vol. 1 of Civilization and Capitalism, 15th–18th Century, trans. Sian Reynolds, (Berkeley: University of California Press, 1992), 334. 18 Laura Sydell, “In Google’s Vision of the Future, Computing is Immersive,” NPR, May 20, 2017, https://www.npr.org/sections/alltechconsidered/2017/05/20/529146185/in-googles-vision-of-the-future-computing-is-immersive. 19 Jason Pontin, “Silicon Valley’s Immortalists Will Help Us All Stay Healthy,” Wired, December 15, 2017, https://www.wired.com/story/silicon-valleys-immortalists-will-help-us-all-stay-healthy/; Dom Galeon and Christianna Reedy, “A Google Exec Just Claimed the Singularity Will Happen by 2029,” Science Alert, March 16, 2017, https://www.sciencealert.com/google-s-director-of-engineering-claims-that-the-singularity-will-happen-by-2029. 20 Alvin Toffler, The Third Wave (New York: Bantam, 1980), 158–59; Kevin Carty, “Tech giants are the robber barons of our time,” New York Post, February 3, 2018, https://nypost.com/2018/02/03/big-techs-monopolistic-rule-is-hiding-in-plain-sight/; Jia Tolentino, “The End of the Awl and the Vanishing of Freedom and Fun from the Internet,” New Yorker, January 18, 2018, https://www.newyorker.com/culture/cultural-comment/the-end-of-the-awl-and-the-vanishing-of-freedom-and-fun-from-the-internet; Andrew Orlowski, “Google, propaganda, and the new New Man,” Register, September 4, 2017, https://www.theregister.co.uk/2017/09/04/google_propaganda_and_the_new_new_man; Aaron Renn, “How Apple and Google Are Censoring the Mobile Web,” Real Clear Politics, August 24, 2017, https://www.realclearpolitics.com/2017/08/24/how_apple_and_google_are_censoring_the_mobile_web_419092.html; Kenneth P.

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Cantor, Medieval History: The Life and Death of a Civilization (New York: Macmillan, 1963), 50–51, 69–70, 97, 101. 5 Pitirim Sorokin, The Crisis of Our Age (London: Oneworld Publication, 1992), 20–21, 67–69, 81. 6 Adam K. Webb, “Class and Clerisy,” Front Porch Republic, October 19, 2010, https://www.frontporchrepublic.com/2010/10/class-and-Clerisy. 7 Max Weber, Economy and Society (Berkeley: University of California Press, 1978), vol. 1: xcviii; Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap/Harvard, 2014), 345. 8 Barbara Tuchman, The March of Folly: From Troy to Vietnam (New York: Ballantine, 1984), 6–7; John Hale, The Civilization of Europe in the Renaissance (New York: Touchstone, 1993), 413–19. 9 H. G. Wells, Anticipations of the Reaction of Mechanical and Scientific Progress Upon Human Life and Thought (1901; Mineola, N.Y.: Dover Books, 1999), 85–87, 99, 151; Fred Siegel, The Revolt Against the Masses: How Liberalism Has Undermined the Middle Class (New York: Encounter, 2015), 100. 10 Peter Bachrach, The Theory of Democratic Elitism (Boston: Little Brown & Co., 1967), 58–60; Arthur Herman, The Idea of Decline in Western History (New York: Free Press, 1997), 17; Talcott Parsons, “The Distribution of Power in American Society,” in The Power Elite, ed.

The Scandal of Money by George Gilder

Affordable Care Act / Obamacare, Alan Greenspan, bank run, behavioural economics, Bernie Sanders, bitcoin, blockchain, borderless world, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, Claude Shannon: information theory, Clayton Christensen, cloud computing, corporate governance, cryptocurrency, currency manipulation / currency intervention, currency risk, Daniel Kahneman / Amos Tversky, decentralized internet, Deng Xiaoping, disintermediation, Donald Trump, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, glass ceiling, guns versus butter model, Home mortgage interest deduction, impact investing, index fund, indoor plumbing, industrial robot, inflation targeting, informal economy, Innovator's Dilemma, Internet of things, invisible hand, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Jeff Bezos, John Bogle, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, Law of Accelerating Returns, low interest rates, Marc Andreessen, Mark Spitznagel, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Money creation, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Nixon triggered the end of the Bretton Woods system, obamacare, OSI model, Paul Samuelson, Peter Thiel, Ponzi scheme, price stability, Productivity paradox, proprietary trading, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, reality distortion field, reserve currency, road to serfdom, Robert Gordon, Robert Metcalfe, Ronald Reagan, Sand Hill Road, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, secular stagnation, seigniorage, Silicon Valley, Skinner box, smart grid, Solyndra, South China Sea, special drawing rights, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, time value of money, too big to fail, transaction costs, trickle-down economics, Turing machine, winner-take-all economy, yield curve, zero-sum game

Across the Atlantic, in France and the United Kingdom, influential people have noticed the hypertrophy of finance and called for a new economic theory. Several candidates offer policy breakthroughs intended to be as far reaching as the New Deal that supposedly ended the Great Depression. We have already met the Frenchman Thomas Piketty, that cherubic scourge of wealth, bearing credentials from Harvard and MIT, electrifying the crowds with Capital in the Twenty-First Century and its new “laws of capitalism.”1 Piketty warns that a society that stops growing will grow fat on finance and real estate. The accumulated overhang of capital and inheritance will overwhelm the future as entrepreneurs become mere rentiers of old wealth.

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Since everyone refused the offer, Summers concludes that, adjusted for quality, healthcare has not risen in price. Thus productivity in healthcare has improved far more than the measured gains. See also Bret Swanson, “Moore’s Law and the Productivity Paradox,” AEIdeas (blog), November 25, 2015, https://www.aei.org/publication/moores-law-and-the-productivity-paradox/. 4.Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University, Belknap Press, 2014). 5.Ta-Nehisi Coates, Between the World and Me (New York, NY: Spiegel and Grau, 2015). See also Kyle Smith, “The Hard Untruths of Ta-Nehisi Coates: A Bestselling Polemic Riven with Hatred Thrills the Liberal Elite,” Commentary, October 2015, pp. 20–25. 6.Yuval Levin, “The Mobility Crisis,” Commentary, March 2015, pp. 12–20. 7.Kwasi Kwarteng, War and Gold: A 500-Year History of Empires, Adventures, and Debt (New York, NY: PublicAffairs, 2014), 219–20. 8.Peter Thiel with Blake Masters, Zero to One: Notes on Startups, or How to Build the Future (New York, NY: Crown Business, 2014), 5–11 and passim.

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(London: The Institute of Economic Affairs, 1990). 5.Ametrano, “Hayek Money,” 20. 6.Ametrano, presentation to the Central Bank of Italy, June 9, 2014. 7.George Gilder, Telecosm: The World after Bandwidth Abundance (New York, NY: Simon & Schuster, 2002). 8.Board of Governors of the Federal Reserve System, “Current FAQs: Informing the Public about the Federal Reserve,” http://www.federalreserve.gov/faqs/faq.htm. 9.Richard Vigilante, personal communication. 10.Hayek, “A Free-Market Monetary System,” lecture at the Gold and Monetary Conference, New Orleans, LA, November 10, 1977, Journal of Libertarian Studies 3, no. 1. 11.Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System,” Bitcoin.org, 2008. 12.George Sammon, speech to CoinAgenda, Las Vegas, October 2014. CHAPTER 9: THE PIKETTY-TURNER THESIS 1.Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University, Belknap Press, 2014). 2.“The Scandal of Money,” chapter 12 in George Gilder, Knowledge and Power: The Information Theory of Capitalism and How It Is Revolutionizing Our World (Washington, DC: Regnery Publishing, 2013), 113–23. 3.Adair Turner, Between Debt and the Devil: Money, Credit, and Fixing Global Finance (Princeton, NJ: Princeton University Press, 2016). 4.Joseph E.

Capital in the Twenty-First Century by Thomas Piketty

accounting loophole / creative accounting, Asian financial crisis, banking crisis, banks create money, Berlin Wall, book value, Branko Milanovic, British Empire, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, central bank independence, centre right, circulation of elites, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation coefficient, David Ricardo: comparative advantage, demographic transition, distributed generation, diversification, diversified portfolio, European colonialism, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, Future Shock, German hyperinflation, Gini coefficient, Great Leap Forward, high net worth, Honoré de Balzac, immigration reform, income inequality, income per capita, index card, inflation targeting, informal economy, invention of the steam engine, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Arrow, low interest rates, market bubble, means of production, meritocracy, Money creation, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, open economy, Paul Samuelson, pension reform, power law, purchasing power parity, race to the bottom, randomized controlled trial, refrigerator car, regulatory arbitrage, rent control, rent-seeking, Robert Gordon, Robert Solow, Ronald Reagan, Simon Kuznets, sovereign wealth fund, Steve Jobs, Suez canal 1869, Suez crisis 1956, The Nature of the Firm, the payments system, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade liberalization, twin studies, very high income, Vilfredo Pareto, We are the 99%, zero-sum game

Capital in the Twenty-First Century CAPITAL IN THE TWENTY-FIRST CENTURY Thomas Piketty Translated by Arthur Goldhammer The Belknap Press of Harvard University Press CAMBRIDGE, MASSACHUSETTS LONDON, ENGLAND 2014 Copyright © 2014 by the President and Fellows of Harvard College All rights reserved First published as Le capital au XXI siècle, copyright © 2013 Éditions du Seuil Design by Dean Bornstein Jacket design by Graciela Galup The Library of Congress has cataloged the printed edition as follows Piketty, Thomas, 1971– [Capital au XXIe siècle. English] Capital in the twenty-first century / Thomas Piketty ; translated by Arthur Goldhammer.

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English] Capital in the twenty-first century / Thomas Piketty ; translated by Arthur Goldhammer. pages cm Translation of the author’s Le capital au XXIe siècle. Includes bibliographical references and index. ISBN 978-0-674-43000-6 (alk. paper) 1. Capital. 2. Income distribution. 3. Wealth. 4. Labor economics. I. Goldhammer, Arthur, translator. II. Title. HB501.P43613 2014 332'.041—dc23 2013036024 Contents Acknowledgments Introduction Part One: Income and Capital 1. Income and Output 2. Growth: Illusions and Realities Part Two: The Dynamics of the Capital/Income Ratio 3. The Metamorphoses of Capital 4.

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The Capital-Labor Split in the Twenty-First Century Part Three: The Structure of Inequality 7. Inequality and Concentration: Preliminary Bearings 8. Two Worlds 9. Inequality of Labor Income 10. Inequality of Capital Ownership 11. Merit and Inheritance in the Long Run 12. Global Inequality of Wealth in the Twenty-First Century Part Four: Regulating Capital in the Twenty-First Century 13. A Social State for the Twenty-First Century 14. Rethinking the Progressive Income Tax 15. A Global Tax on Capital 16. The Question of the Public Debt Conclusion Notes Contents in Detail List of Tables and Illustrations Index Acknowledgments This book is based on fifteen years of research (1998–2013) devoted essentially to understanding the historical dynamics of wealth and income.

The Hidden Wealth of Nations: The Scourge of Tax Havens by Gabriel Zucman, Teresa Lavender Fagan, Thomas Piketty

Berlin Wall, Bretton Woods, British Empire, Capital in the Twenty-First Century by Thomas Piketty, dematerialisation, Fall of the Berlin Wall, financial innovation, financial intermediation, high net worth, income inequality, means of production, new economy, offshore financial centre, proprietary trading, transfer pricing

Tax authorities can verify that taxpayers indeed declare all the financial securities included in the register. Source: Depository Trust Company (USA). A Tax on Capital The world financial register is intimately linked to the proposal for a global wealth tax made by Thomas Piketty in Capital in the Twenty-First Century. This proposal has generated a heated controversy, and I don’t want to repeat it here. Quite simply, let’s assume that a tax on wealth might turn out to be desirable in certain places, at certain times, if wealth concentration was to reach extreme levels above which inequality harms growth, innovation, or the well functioning of our democratic institutions.

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Index Africa, 31, 32–33, 53 Amazon, 104 Apple, 1, 104 arm’s-length pricing, 103 Austria, 69, 70 automatic exchange of data: EU savings tax directive and, 68, 69; FATCA and, 64–65, 66, 73–74; first international treaty for, 59; on inheritances in France, 57–59; progress toward a global system, 64–65; to end tax fraud, 5 Bahamas, 23, 35, 71, 85 Bank for International Settlements (BIS), 39 bank note wealth, 43 Bergier, Jean-François, 13 Bergier commission, 13, 15, 16, 20 Bermuda, 4, 103, 104, 105, 107, 109, 111 Birkenfeld, Bradley, 68 Bretton Woods, 23 British Virgin Islands, 1, 26, 28, 31, 33, 43, 45, 73, 77 BSI, 67 Cahuzac, Jérôme, 62 Caillaux, Joseph, 57, 58 Canada, 21, 53, 85 Capital in the Twenty-First Century (Piketty), 98 Cayman Islands: dominance in hedge funds, 27; financial wealth held in tax havens, 35; role in routine tax fraud, 10–11; role in world’s asset/liability imbalance, 38; trust registration in, 28 Clearstream, 4, 94–95 Common Consolidated Corporate Tax Base (CCCTB), 112 Congress of Vienna (1815), 9 Convention IV, 21 cost of offshore tax evasion.

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The Hidden Wealth of Nations The Hidden Wealth of Nations The Scourge of Tax Havens Gabriel Zucman Translated by Teresa Lavender Fagan With a Foreword by Thomas Piketty The University of Chicago Press Chicago and London GABRIEL ZUCMAN is assistant professor at the London school of economics. The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London © 2015 by The University of Chicago Foreword © 2015 by Thomas Piketty All rights reserved. Published 2015. Printed in the United States of America 24 23 22 21 20 19 18 17 16 15 1 2 3 4 5 ISBN-13: 978-0-226-24542-3 (cloth) ISBN-13: 978-0-226-24556-0 (e-book) DOI: 10.7208/chicago/9780226245560.001.0001 Originally published as La richesse cachée des nations: Enquête sur les paradis fiscaux © Editions du Seuil et la République des Idées, 2013 Library of Congress Cataloging-in-Publication Data Zucman, Gabriel, author.

The Upside of Inequality by Edward Conard

affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Albert Einstein, assortative mating, bank run, Berlin Wall, book value, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Climatic Research Unit, cloud computing, corporate governance, creative destruction, Credit Default Swap, crony capitalism, disruptive innovation, diversified portfolio, Donald Trump, en.wikipedia.org, Erik Brynjolfsson, Fall of the Berlin Wall, full employment, future of work, Gini coefficient, illegal immigration, immigration reform, income inequality, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invention of the telephone, invisible hand, Isaac Newton, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, Kodak vs Instagram, labor-force participation, Larry Ellison, liquidity trap, longitudinal study, low interest rates, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, meta-analysis, new economy, offshore financial centre, paradox of thrift, Paul Samuelson, pushing on a string, quantitative easing, randomized controlled trial, risk-adjusted returns, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, selection bias, Silicon Valley, Simon Kuznets, Snapchat, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, total factor productivity, twin studies, Tyler Cowen, Tyler Cowen: Great Stagnation, University of East Anglia, upwardly mobile, War on Poverty, winner-take-all economy, women in the workforce, working poor, working-age population, zero-sum game

Ironically, their solutions make matters worse for the very people they are intended to help. In the long run, they slow middle- and working-class employment and wage growth. Evidence Shows the 0.1 Percent Earned, Not Unfairly Negotiated, Their Pay Thomas Piketty has spearheaded the attacks on individuals who comprise the 0.1 percent by insisting their growing success is unearned. In his book Capital in the Twenty-First Century, Piketty rejects claims that income inequality results from skill-biased technological change, globalization, low-skilled immigration, or growing returns to skill that have driven up the pay of the most successful Americans.

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Driving Population Growth and Change Through 2065,” September 28, 2015, http://www.pewhispanic.org/files/2015/09/2015-09-28_modern-immigration-wave_REPORT.pdf. Chapter 1: The Causes of Growing Inequality 1. Joseph Stiglitz, Rewriting the Rules of the American Economy (New York: W. W. Norton, 2015). 2. Martin Ford, Rise of the Robots: Technology and the Threat of a Jobless Future (New York: Basic Books, 2015). 3. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2013). 4. Alyssa Davis and Lawrence Mishel, “CEO Pay Continues to Rise as Typical Workers Are Paid Less,” Economic Policy Institute, June 12, 2014, http://www.epi.org/publication/ceo-pay-continues-to-rise. 5. Bruce Greenwald and Judd Kahn Globalization: n.

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Chapter 3: The Myth That Incentives Don’t Matter 1. Peter Diamond and Emmanuel Saez, “The Case for a Progressive Tax: From Basic Research to Policy Recommendations,” Journal of Economic Perspectives 25, no. 4 (2011): 165–90, http://eml.berkeley.edu/~saez/diamond-saezJEP11opttax.pdf. 2. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2013). 3. Lawrence Summers, “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” Business Economics 49, no. 2 (February 24, 2014), http://larrysummers.com/wp-content/uploads/2014/06/NABE-speech-Lawrence-H.

A World Without Work: Technology, Automation, and How We Should Respond by Daniel Susskind

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Airbnb, Albert Einstein, algorithmic trading, AlphaGo, artificial general intelligence, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, Big Tech, blue-collar work, Boston Dynamics, British Empire, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, computer age, computer vision, computerized trading, creative destruction, David Graeber, David Ricardo: comparative advantage, deep learning, DeepMind, Demis Hassabis, demographic transition, deskilling, disruptive innovation, Donald Trump, Douglas Hofstadter, driverless car, drone strike, Edward Glaeser, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, financial innovation, flying shuttle, Ford Model T, fulfillment center, future of work, gig economy, Gini coefficient, Google Glasses, Gödel, Escher, Bach, Hans Moravec, income inequality, income per capita, industrial robot, interchangeable parts, invisible hand, Isaac Newton, Jacques de Vaucanson, James Hargreaves, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joi Ito, Joseph Schumpeter, Kenneth Arrow, Kevin Roose, Khan Academy, Kickstarter, Larry Ellison, low skilled workers, lump of labour, machine translation, Marc Andreessen, Mark Zuckerberg, means of production, Metcalfe’s law, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, pink-collar, precariat, purchasing power parity, Ray Kurzweil, ride hailing / ride sharing, road to serfdom, Robert Gordon, Sam Altman, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, social intelligence, software is eating the world, sovereign wealth fund, spinning jenny, Stephen Hawking, Steve Jobs, strong AI, tacit knowledge, technological solutionism, TED Talk, telemarketer, The Future of Employment, The Rise and Fall of American Growth, the scientific method, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, Travis Kalanick, Turing test, Two Sigma, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, upwardly mobile, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, wealth creators, working poor, working-age population, Y Combinator

Robert Gordon, The Rise and Fall of American Growth (Oxford: Princeton University Press, 2017). 77.  In eighty-seven years’ time because 100 × 1.00887 = 200.01, to two decimal places. If the United States were to return to the 2.41 percent growth rate, the same doubling of wealth would take just twenty-nine years: 100 × 1.024129 = 199.50. Thomas Piketty makes a similar point in Capital in the Twenty-First Century (London: Harvard University Press, 2014), p. 5, noting that “the right way to look at the problem is once again in generational terms. Over a period of thirty years, a growth rate of 1 percent per year corresponds to cumulative growth of more than 35 percent. A growth rate of 1.5 percent per year corresponds to cumulative growth of more than 50 percent.

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There are very few exceptions to this…” 11.  See, for instance, Piketty, Capital in the Twenty-First Century, p. 266. 12.  These are post-tax and transfer Gini coefficients for 2017, or latest available year. This is an updated version of Figure 1.3 in OECD, “In It Together: Why Less Inequality Benefits All” (2015), using OECD (2019) data; http://www.oecd.org/social/income-distribution-database.htm (accessed April 2019). 13.  John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1999), p. 266. 14.  These are pre-tax income, from Appendix Data FS40 in Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, “Distribution National Accounts: Methods and Estimates for the United States,” Quarterly Journal of Economics 133, no. 2 (2018): 553–609.

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Alibaba and Amazon are nominally classified in the “consumer services” category, but both are better thought of as technology companies instead. 41.  Piketty, Capital in the Twenty-First Century, p. 244. 42.  Melanie Kramers, “Eight People Own Same Wealth as Half the World,” Oxfam press release, 16 January 2017. 43.  “Are Eight Men as Wealthy as Half the World’s Population?,” Economist, 19 January 2017. 44.  Dabla-Norris, Kochhar, Ricka, et al., “Causes and Consequences of Income Inequality,” p. 16. 45.  Here, “richest” is “richest in wealth”; see Piketty, Capital in the Twenty-First Century, table 7.2, pp. 248–49 and 257. 46.  Ibid., p. 257. 47.  Joseph Stiglitz, “Inequality and Economic Growth,” Political Quarterly 86, no. 1 (2016): 134–55. 48.  

Capital Without Borders by Brooke Harrington

Alan Greenspan, banking crisis, Big bang: deregulation of the City of London, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, classic study, complexity theory, corporate governance, corporate social responsibility, diversified portfolio, emotional labour, equity risk premium, estate planning, eurozone crisis, family office, financial innovation, ghettoisation, Great Leap Forward, haute couture, high net worth, income inequality, information asymmetry, Joan Didion, job satisfaction, joint-stock company, Joseph Schumpeter, Kevin Roose, liberal capitalism, mega-rich, mobile money, offshore financial centre, prudent man rule, race to the bottom, regulatory arbitrage, Robert Shiller, South Sea Bubble, subprime mortgage crisis, the market place, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, transaction costs, upwardly mobile, wealth creators, web of trust, Westphalian system, Wolfgang Streeck, zero-sum game

Arthur Kennickell, “Ponds and Streams: Wealth and Income in the US, 1989 to 2007,”Finance and Economics Discussion Series, Federal Reserve Board, Washington, DC, 2009. 7. Thomas Piketty, “On the Long-Run Evolution of Inheritance: France 1820–2050,” Working Paper, Paris School of Economics, 2010. 8. Santiago Budría, Javier Díaz-Giménez, José-Victor Ríos-Rull, and Vincenzo Quadrini, “Updated Facts on the US Distributions of Earnings, Income, and Wealth,” Federal Reserve Bank of Minneapolis Quarterly Review 26 (2002): 2–35. 9. John Langbein, “The Secret Life of the Trust: The Trust as an Instrument of Commerce,” Yale Law Journal 107 (1997): 165–189. 10. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). 11.

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Cap-Gemini, World Wealth Report. 32. William Robinson, “Social Theory and Globalization: The Rise of a Transnational State,” Theory and Society 30 (2001): 165. 33. James Davies, Rodrigo Lluberas, and Anthony Shorrocks, Global Wealth Report (Zurich: Credit Suisse, 2013). 34. Ibid. 35. Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA: Harvard University Press, 2014). 36. Melvin Oliver and Thomas Shapiro, Black Wealth, White Wealth: A New Perspective on Racial Inequality (New York: Routledge, 1995). 37. Palan, Murphy, and Chavagneux, Tax Havens, 12. 38. For the $21 trillion figure, see Heather Stewart, “Wealth Doesn’t Trickle Down—It Just Floods Offshore, New Research Reveals,” The Guardian, July 21, 2012.

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Emma Duncan, “Your Money, His Life,” Intelligent Life (supplement to The Economist), September 2007, 73–79. 2. George Marcus, “The Fiduciary Role in American Family Dynasties and Their Institutional Legacy,” in George Marcus, ed., Elites: Ethnographic Issues (Albuquerque: University of New Mexico Press, 1983), 227. 3. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). See also Arthur Kennickell, “Ponds and Streams: Wealth and Income in the US, 1989 to 2007,” Federal Reserve Board Finance and Economics Discussion Series, Washington, DC, 2009, www.federalreserve.gov/pubs/feds/2009/200913/200913pap.pdf.

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, classic study, clean water, collapse of Lehman Brothers, collective bargaining, company town, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, gentrification, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, Glass-Steagall Act, global macro, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Savings and loan crisis, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

Putting all of this together, one reaches a disappointing result: overall inequality, in the way it is conventionally measured (the Gini coefficient, a number ranging from zero, with perfect equality, to one, with perfect inequality), has barely budged. The Piketty Phenomenon The final two articles of this section are, in part, a response to the enormous success of the economist Thomas Piketty’s book Capitalism in the Twenty-First Century. The success of that book echoed the growing concern about inequality, a concern expressed in Davos by the world’s elite, and consistent with the way my own article “Of the 1 percent, by the 1 Percent, for the 1 Percent” had gone viral. President Obama had in 2013 declared that inequality would in fact be the focus of his attention for the remaining three years of his office.

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They are not places in which most of us would want to live, whether in their cloistered enclaves or their desperate shantytowns. ______________ * New York Times, October 13, 2013. DEMOCRACY IN THE 21ST CENTURY* THE RECEPTION IN THE UNITED STATES, AND IN OTHER advanced economies, of Thomas Piketty’s recent book Capital in the Twenty-First Century attests to growing concern about rising inequality. His book lends further weight to the already overwhelming body of evidence concerning the soaring share of income and wealth at the very top. Piketty’s book, moreover, provides a different perspective on the 30 or so years that followed the Great Depression and World War II, viewing this period as a historical anomaly, perhaps caused by the unusual social cohesion that cataclysmic events can stimulate.

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. ______________ * Project Syndicate, September 1, 2014. PHONY CAPITALISM* AMERICANS ARE FINALLY BEGINNING TO APPRECIATE THE magnitude of the inequalities in income and wealth that mark our society. Lately, this realization has been helped along by an unexpected source: the French economist Thomas Piketty, whose Capital in the Twenty-First Century is the surprise bestseller of the year. Piketty has collected the most extensive evidence available of the increases in economic inequality and inherited wealth over the past forty years, which are creating a new plutocracy. But while Piketty is right about the severity of the problem, he is not completely right about its cause—and how to fix it.

Open: The Progressive Case for Free Trade, Immigration, and Global Capital by Kimberly Clausing

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active measures, Affordable Care Act / Obamacare, agricultural Revolution, battle of ideas, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, climate change refugee, corporate social responsibility, creative destruction, currency manipulation / currency intervention, David Ricardo: comparative advantage, Donald Trump, fake news, floating exchange rates, full employment, gig economy, global supply chain, global value chain, guest worker program, illegal immigration, immigration reform, income inequality, index fund, investor state dispute settlement, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, meta-analysis, offshore financial centre, open economy, Paul Samuelson, precautionary principle, profit motive, purchasing power parity, race to the bottom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Tax Reform Act of 1986, tech worker, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transfer pricing, uber lyft, winner-take-all economy, working-age population, zero-sum game

A robust estate tax helps counter the worries of patrimonial capitalism raised in Thomas Piketty’s best-selling book, Capital in the Twenty-First Century. The masterful data collection efforts of this book documented worrisome trends in the role of capital in the economy.2 Left unchecked, high capital-to-income ratios risk creating societies where wealth and political power are too concentrated. ________________________ 1.  Center on Budget and Policy Priorities, “Policy Basics: The Estate Tax,” Report, August 14, 2017. 2.  Thomas Piketty, Capital in the Twentyb-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014).

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But many argue that the bargaining process between workers and their managers is affected by tax rates. If tax rates at the top of the distribution decline, this provides more incentive for those at the top to aggressively increase their compensation. Figure 2.17: US Tax Rates and Income Shares for the Top 1 Percent Data sources: World Top Incomes Database; Thomas Piketty, Capital in the Twenty-First Century, (Cambridge: Harvard University Press, 2014). The era of increasing income inequality has also corresponded to lower tax rates on capital income, a source of income that is far more concentrated in the hands of high-income households. Capital gains tax rates were over 30 percent for most of the 1970s, fell to between 20 percent and 29 percent during the 1980s and the 1990s, and then fell to about 15 percent for most of this century, before increasing to 25 percent in 2013.40 Dividends were taxed as ordinary income until 2003, but have since been taxed at far lower rates, with a top rate of 15 percent before 2013, and a top rate of 20 percent since then.41 Indeed, high tax rates serve as a brake, or speed limit, on earnings by high-income earners.

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American Economic Review 99:1 (2009), 25–48; Peter Diamond and Emmanuel Saez, “The Case for a Progressive Tax: From Basic Research to Policy Recommendations,” Journal of Economic Perspectives 25:4 (2011), 165–190; Emmanuel Farhi, Christopher Sleet, Iván Werning, and Sevin Yeltekin, “Non-Linear Capital Taxation Without Commitment,” The Review of Economic Studies 79:4 (2012), 1469–1493; Thomas Piketty and Emmanuel Saez, “A Theory of Optimal Capital Taxation,” Working Paper 17989, NBER Working Papers, National Bureau of Economic Research, 2012; Thomas Piketty and Emmanuel Saez, “A Theory of Optimal Inheritance Taxation,” Econometrica 81:5 (2013), 1851–1886. 5. In recent years, there was a large preference for pass-through income relative to corporate income for domestic companies.

Makers and Takers: The Rise of Finance and the Fall of American Business by Rana Foroohar

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, Alan Greenspan, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, Bear Stearns, behavioural economics, Big Tech, bonus culture, Bretton Woods, British Empire, business cycle, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, data science, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, electricity market, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial engineering, financial intermediation, Ford Model T, Frederick Winslow Taylor, George Akerlof, gig economy, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, Greenspan put, guns versus butter model, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", John Bogle, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, Kickstarter, knowledge economy, labor-force participation, London Whale, Long Term Capital Management, low interest rates, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, proprietary trading, quantitative easing, quantitative trading / quantitative finance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Ronald Reagan, Satyajit Das, Savings and loan crisis, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, TED Talk, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, Tragedy of the Commons, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, vertical integration, zero-sum game

Financiers and the corporate supermanagers whom they enrich represent a growing percentage of the nation’s elite precisely because they control the most financial resources. These assets (stocks, bonds, and such) are the dominant form of wealth for the most privileged,51 which actually creates a snowball effect of inequality. As French economist Thomas Piketty explained so thoroughly in his 696-page tome, Capital in the Twenty-First Century, the returns on financial assets greatly outweigh those from income earned the old-fashioned way: by working for wages.52 Even when you consider the salaries of the modern economy’s supermanagers—the CEOs, bankers, accountants, agents, consultants, and lawyers that groups like Occupy Wall Street rail against—it’s important to remember that somewhere between 30 and 80 percent of their income is awarded not in cash but in incentive stock options and stock shares.

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Indeed, finance has become more costly and less efficient as an industry as it deployed new and more advanced tools over time.16 It’s also telling that during the last few decades financiers have earned three times as much as their peers in other industries with similar education and skills.17 As Thomas Piketty put it in Capital in the Twenty-First Century, financiers are, in some ways, like the landowners of old. Instead of controlling labor, they regulate access to things even more important in the modern economy: capital and information. As a result, they represent the largest single group of the richest and most powerful people on earth.

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The CEO, who grew up working class in Detroit and worked a welding line for years before going to college on scholarship, has continued to push forward his agenda within Aetna; in 2015 he gave all his top executives something that’s not yet on the typical MBA reading list—a copy of Thomas Piketty’s Capital in the Twenty-First Century. Companies, says Bertolini, shouldn’t just be moneymaking machines. They also have to invest in people, the real economy, and society as a whole if they want to succeed in the long term. “Capital is the resource that we often manage well, but in my opinion, the scarce resource is a talented and engaged workforce.”

A Fine Mess by T. R. Reid

accelerated depreciation, Affordable Care Act / Obamacare, Alan Greenspan, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Donald Trump, Double Irish / Dutch Sandwich, game design, Gini coefficient, High speed trading, Home mortgage interest deduction, Honoré de Balzac, income inequality, industrial robot, land value tax, loss aversion, mortgage tax deduction, obamacare, Occupy movement, offshore financial centre, oil shock, plutocrats, race to the bottom, Ronald Reagan, seigniorage, Silicon Valley, Skype, Snapchat, sovereign wealth fund, Tax Reform Act of 1986, Tesla Model S, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, We are the 99%, WikiLeaks

But in those early months of 2014, there was enormous prepublication buzz about a forthcoming Harvard book. It was an unlikely blockbuster, to be sure: a 699-page treatise on economics written by a scholar who was hardly a household name even in his own neighborhood in Paris. But Professor Thomas Piketty’s tome Capital in the Twenty-First Century, thick as a brick and somewhat heavier, rocketed to the top of the bestseller lists as soon as it hit America’s bookstores. A New York Times story on the Frenchman’s U.S. book tour was headlined “Economist Receives Rock Star Treatment.” The reason that an unknown French economist suddenly achieved rock-star stature in the United States was that Piketty’s book focused squarely on an increasingly worrisome issue in the American zeitgeist: the inequality of wealth and income

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Whatever changes we eventually make, almost every observer agrees that the current corporate income tax is not working. The corporate income tax, once a key source of funding for the U.S. government, has become just another minor revenue source. There are already many of those. 9. THE SINGLE TAX, THE FAT TAX, THE TINY TAX, THE CARBON TAX—AND NO TAX AT ALL Thomas Piketty’s surprising bestseller, Capital in the Twenty-First Century, sold nearly a million copies in the year after its publication, a stunning development for a heavyweight economics tome. But Piketty is a piker compared with an earlier author who wrote a similarly hefty volume on the same subject. The newspaperman Henry George’s economic magnum opus, Progress and Poverty, first published in 1879, sold more than three million copies in the late nineteenth and early twentieth centuries.

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Widespread concern over this trend was the reason Piketty’s heavy economics tome became a number one bestseller in the United States. Still, it was not exactly beach reading. Because you, gentle reader, have been kind enough to read this book, I will repay the favor by providing a summary of the professor’s argument, thus saving you the $40 price of the book and the hours required to read it. Capital in the Twenty-First Century is actually more like three books than one. First, it’s a history of the rich/poor divide, based on three centuries of wealth and income data that Piketty and his colleagues gathered from the United States, the U.K., France, and Sweden. Piketty relies heavily on mathematical models and statistical tables, but he thoughtfully spares his readers all that stuff, sticking it in a “technical appendix” on the Internet.

The Tyranny of Merit: What’s Become of the Common Good? by Michael J. Sandel

affirmative action, Affordable Care Act / Obamacare, anti-communist, Berlin Wall, Bernie Sanders, Boris Johnson, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, centre right, coronavirus, COVID-19, Credit Default Swap, Deng Xiaoping, Donald Trump, ending welfare as we know it, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial engineering, financial innovation, global supply chain, helicopter parent, High speed trading, immigration reform, income inequality, Khan Academy, laissez-faire capitalism, meritocracy, meta-analysis, Nate Silver, new economy, obamacare, Occupy movement, open immigration, Paris climate accords, plutocrats, prosperity theology / prosperity gospel / gospel of success, Rishi Sunak, Ronald Reagan, smart grid, social distancing, Steve Jobs, Steven Levy, the market place, The Wealth of Nations by Adam Smith, W. E. B. Du Bois, Washington Consensus, Yochai Benkler

In the United States, most of the economic growth since 1980 has gone to the top 10 percent, whose income grew 121 percent; almost none went to bottom half of the population, whose average income (about $16,000) in 2014 was about the same as it was in real terms in 1980. For working-age men, the median income was “the same in 2014 as in 1964, about $35,000. There has been no growth for the median male worker over half a century.” Piketty, Saez, and Zucman, “Distributional National Accounts,” pp. 557, 578, 592–93. See also Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), p. 297, where Piketty states that from 1977 to 2007, the richest 10 percent absorbed three-quarters of the entire economic growth of the U.S. 32. Americans agree by 77 to 20 percent that “most people can succeed if they are willing to work hard.”

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There has been no growth for the median male worker over half a century.” Thomas Piketty, Emmauel Saez, and Gabriel Zucman, “Distributional National Accounts: Methods and Estimates for the United States,” Quarterly Journal of Economics 133, issue 2 (May 2018), pp. 557, 578, 592–93, available at eml.berkeley.edu/~saez/PSZ2018QJE.pdf ; Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, World Inequality Report 2018 (Cambridge, MA: Harvard University Press, 2018), pp. 3, 83–84. Income distribution data for the U.S. and other countries is also available at the online World Inequality Database, wid.world . See also Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), p. 297, where Piketty states that from 1977 to 2007, the richest 10 percent absorbed three-quarters of the entire economic growth of the United States.

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60 Throughout much of the twentieth century, parties of the left attracted those with less education, while parties of the right attracted those with more. In the age of meritocracy, this pattern has been reversed. Today, people with more education vote for left-of-center parties, and those with less support parties of the right. The French economist Thomas Piketty has shown that this reversal has unfolded, in striking parallel, in the U.S., the U.K., and France. 61 From the 1940s to the 1970s, those without a university degree voted reliably for the Democratic Party in the United States, the Labour Party in Britain, and the various left-of-center parties in France.

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

23andMe, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, Albert Einstein, Alvin Toffler, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, Big Tech, book value, Brexit referendum, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, cloud computing, cognitive bias, computer age, congestion pricing, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial engineering, financial innovation, full employment, fundamental attribution error, future of work, gentrification, gigafactory, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, Jeremy Corbyn, job automation, Kanban, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low interest rates, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, Ocado, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, private spaceflight, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, sunk-cost fallacy, survivorship bias, tacit knowledge, tech billionaire, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, TSMC, Tyler Cowen, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

Review of Economics and Statistics 39 (3): 312–20. doi:10.2307/1926047. Solow, Robert M. 1987. “We’d Better Watch Out.” New York Times Book Review. http://www.standupeconomist.com/pdf/misc/solow-computer-productivity.pdf. ———. 2014. “Thomas Piketty Is Right: Everything You Need to Know about ‘Capital in the Twenty-First Century.’ ” New Republic, April 22, 2014. https://newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed. Song, Jae, David J. Price, Fatih Guvenen, Nicholas Bloom, and Till von Wachter. 2015. Firming Up Inequality. NBER, Working Paper, No. 21199. doi:10.3386/w21199. Soto, Hernando de. 2001.

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The same journalist might call a long-term financier like Warren Buffett an “investor” and his short-term rivals “speculators.” Someone considering going to college might be advised that “education is the best investment you can make.” The terms “assets” and “capital” are also used in a confusing variety of ways. In his justly famous Capital in the Twenty-First Century, Thomas Piketty (2014) defined capital as “all forms of wealth that individuals . . . can own.” Marxist writers commonly ascribe to “capital” not just an accounting definition, but an entire exploitative system. “Assets” also have different definitions. Many firms think of their business assets as their stock of plant and equipment.

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The world’s richest people have done well too. But one big group has not done as well: people between the seventy-fifth and ninety-fifth percentiles of world income—which represents a lot of the traditional working class in developed countries. Thomas Piketty’s blockbuster book added another flavor of inequality to the mix: inequality of wealth. One of the many dazzling features of Piketty’s Capital in the Twenty-First Century (2014) and the research that underpins it was the light it cast on the wealth of the very rich, which is often hard to measure. It will not come as a huge surprise that this showed that the wealth of the richest in countries like the United States, the UK, and France has increased dramatically in the past few decades.

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

My New Mexico State University (NMSU) colleague Mark Walker, who was writing a book on the Basic Income Guarantee as I wrote this one, first encouraged me to consider inequality from a historical perspective. The NMSU conference that Mark organized on the Basic Income Guarantee in 2014 introduced me to scholars who have long worked on the philosophy of contemporary inequality. Simultaneously, participation in an ad hoc reading group facilitated by NMSU student Alan Dicker on Thomas Piketty’s Capital in the Twenty-First Century helped to get my thoughts flowing My NMSU colleagues Lori Keleher, Peter Kopp, and Julie Rice, and my former graduate student Ryan MacLennan, all provided helpful suggestions at crucial moments. In the later stages of the project’s completion, Tim Ketelaar of the psychology department at NMSU gave me the opportunity to present the ideas contained in this book to a wider general audience, allowing me to better focus my message.

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The New York Times in 2005 ran a series of articles on class, pointing out for its readership that, contrary to popular belief, the United States is not the most upwardly mobile country in the world.9 A number of recent books question the notion that deregulation, budget cuts to safety nets, free trade promotion, and privatization have promoted growth to benefit all.10 Despite its length and serious subject matter, economist Thomas Piketty’s Capital in the Twenty-First Century (2014) was widely read and reviewed. Historian Steven Fraser’s Age of Acquiescence (2015) compared the modern American public unfavorably with Americans in the late nineteenth and early twentieth centuries, who were not afraid to call out class warfare against the working poor when they saw it.11 Former Secretary of Labor Robert Reich’s documentary Inequality for All (2013) reached a wide audience, with an accessible message: the prosperity of the United States hinges on the middle class having an income to spend.

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They called for austerity instead, and President Barack Obama lacked the political capital to press the issue.20 The Great Recession thus came and went with no significant steps taken to prevent inequality from causing another economic panic. Many structural features of the modern American economy promote inequality. In his well-received book Capital in the Twenty-First Century (2013), economist Thomas Piketty argued that out-of-control executive compensation has caused much of the growth in inequality across Europe and in the United States. Executives are granted enormous salaries by boards of directors whom the CEOs themselves control, in a direct conflict of interest.21 Executive compensation hides the real inequity in the share of compensation going to labor: “In 2002–2012 the bottom 90 percent of the population saw their average family income … drop by 11 percent, while those in the top .1 to .01 percent saw theirs rise by 30 percent.”

Capitalism, Alone: The Future of the System That Rules the World by Branko Milanovic

affirmative action, Asian financial crisis, assortative mating, barriers to entry, basic income, Berlin Wall, bilateral investment treaty, Black Swan, Branko Milanovic, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, colonial rule, corporate governance, creative destruction, crony capitalism, deindustrialization, dematerialisation, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, full employment, ghettoisation, gig economy, Gini coefficient, global supply chain, global value chain, Great Leap Forward, high net worth, household responsibility system, income inequality, income per capita, invention of the wheel, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, low skilled workers, Lyft, means of production, new economy, offshore financial centre, Paul Samuelson, plutocrats, post-materialism, purchasing power parity, remote working, rent-seeking, ride hailing / ride sharing, Robert Solow, Silicon Valley, single-payer health, special economic zone, Tax Reform Act of 1986, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, uber lyft, universal basic income, Vilfredo Pareto, Washington Consensus, women in the workforce, working-age population, Xiaogang Anhui farmers

These people are wage workers who need to work in order to draw their large salaries.8 But these same people, whether through inheritance or because they have saved enough money through their working lives, also possess large financial assets and draw a significant amount of income from them. The rising share of labor income in the top 1 percent (or even more select groups, like the top 0.1 percent) has been well documented by Thomas Piketty, in Capital in the Twenty-First Century (2014), and other authors.9 We shall return to that topic later in the chapter. What is important to realize here is that the presence of high labor income at the top of the income distribution, if associated with high capital income received by the same individuals, deepens inequality.

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Cambridge, MA: Belknap Press of Harvard University Press. Rawls, John. 1999. The Law of Peoples. Cambridge, MA: Harvard University Press. Raworth, Kate. 2018. Doughnut Economics: Seven Ways to Think Like a 21st Century Economist. White River Junction, VT: Chelsea Green. Ray, Debraj. 2014. “Nit-Piketty: A Comment on Thomas Piketty’s Capital in the Twenty-First Century.” Unpublished manuscript, May 25, https://www.econ.nyu.edu/user/debraj/Papers/Piketty.pdf. Rognlie, Matthew. 2015. “Deciphering the Fall and Rise in the Net Capital Share: Accumulation or Scarcity?” Brookings Papers on Economic Activity, Spring. https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf.

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As countries grow richer, they acquire more wealth from savings and successful investments (just like individuals do). Moreover, the increase in their capital overtakes the increase in their income, and they gradually become more “capital-intensive” or “capital-rich.” This relationship—the ratio between capital and income—was a central feature of Piketty’s Capital in the Twenty-First Century. Countries with higher income (GDP per capita) not only have more wealth per person, but their wealth-income ratio (denoted by β) is higher (Table 2.2). Thus in terms of GDP per capita, Switzerland is 53 times better off than India, but it has almost 100 times more wealth per adult than India.

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, Alvin Toffler, American Society of Civil Engineers: Report Card, back-to-the-city movement, Bob Noyce, Boston Dynamics, California gold rush, Californian Ideology, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, classic study, Cornelius Vanderbilt, creative destruction, crony capitalism, David Graeber, degrowth, deindustrialization, do what you love, don't be evil, Downton Abbey, driverless car, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Future Shock, Gini coefficient, Google bus, Herman Kahn, housing crisis, income inequality, independent contractor, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kevin Roose, labor-force participation, Larry Ellison, Lewis Mumford, low interest rates, low-wage service sector, Marc Andreessen, Mark Zuckerberg, Mary Meeker, mass affluent, McJob, McMansion, medical bankruptcy, microapartment, Nate Silver, National Debt Clock, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, post-industrial society, public intellectual, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Solyndra, Steve Jobs, stock buybacks, tech worker, techlash, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, Tony Fadell, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, Virgin Galactic, War on Poverty, women in the workforce, working poor, young professional

Consequently, the new progressive politics of inequality have become the primary themes of the nation’s political leaders and the Clerisy. Oddly enough, much of the thinking behind this new focus is drawn primarily from European models, even as Europe’s dismal prospects have inspired the lowest levels of political support in several decades.4 In his influential book Capital in the Twenty-First Century, French economist Thomas Piketty argues powerfully that the only way to confront increasing inequality and prevent deeper social fracturing is to expand the “social state” that forcibly redistributes wealth. In his mind, economic growth, traditionally a prime source of social uplift, is little more than an “illusory” solution.

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Pew Research Social & Demographic Trends, “The Lost Decade of the Middle Class: Fewer, Poorer, Gloomier,” report, August 22, 2012, http://www.pewsocialtrends.org/files/2012/08/pew-social-trends-lost-decade-of-the-middle-class.pdf. 5. Associated Press, “The Future’s NOT So Bright: Americans Predict a Dark Downward Spiral over the Next Four Decades,” Daily Mail, January 3, 2014. 6. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard UP, 2014), pp. 23–24, 192–96, 321–23, 347. 7. Annie Lowrey, “The Rich Get Richer Through the Recovery,” Economix (blog), New York Times, September 10, 2013, http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery. 8.

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Braconi, Citizens Housing and Planning Council of New York, Inc., “Environmental Regulation and Housing Affordability,” Cityscape: A Journal of Policy Development and Research, vol. 2, no. 3 (September 1996): 82–106. 9. Annie Lowrey, “Even Among the Richest of the Rich, Fortunes Diverge,” New York Times, February 11, 2014; Piketty, Capital in the Twenty-First Century, p. 173; Ryan Dezember, “Blowout Haul for Buyout Tycoons,” Wall Street Journal, March 3, 2014; Lawrence Mishel and Natalie Sabadish, “CEO Pay and the Top 1%,” Economic Policy Institute Issue, Issue Brief, no. 331, May 2, 2012, http://www.epi.org/publication/ib331-ceo-pay-top-1-percent. 10.

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality by Brink Lindsey

Airbnb, Asian financial crisis, bank run, barriers to entry, Bernie Sanders, Build a better mousetrap, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, Cass Sunstein, collective bargaining, creative destruction, Credit Default Swap, crony capitalism, Daniel Kahneman / Amos Tversky, David Brooks, diversified portfolio, Donald Trump, Edward Glaeser, endogenous growth, experimental economics, experimental subject, facts on the ground, financial engineering, financial innovation, financial intermediation, financial repression, hiring and firing, Home mortgage interest deduction, housing crisis, income inequality, informal economy, information asymmetry, intangible asset, inventory management, invisible hand, Jones Act, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, knowledge worker, labor-force participation, Long Term Capital Management, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass immigration, mass incarceration, medical malpractice, Menlo Park, moral hazard, mortgage debt, Network effects, patent troll, plutocrats, principal–agent problem, regulatory arbitrage, rent control, rent-seeking, ride hailing / ride sharing, Robert Metcalfe, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, Silicon Valley ideology, smart cities, software patent, subscription business, tail risk, tech bro, too big to fail, total factor productivity, trade liberalization, tragedy of the anticommons, Tragedy of the Commons, transaction costs, tulip mania, Tyler Cowen, Uber and Lyft, uber lyft, Washington Consensus, white picket fence, winner-take-all economy, women in the workforce

They need to recognize that inequality is a threat to the political consensus in favor of market competition and dynamism. Liberals and progressives have a mirror-image problem. Many on the left rail against unrestrained capitalism’s innate and immoral tendency toward invidious inequality. Thomas Piketty caused a sensation with his book Capital in the Twenty-First Century by arguing at magisterial length that this tendency reflects the workings of a basic law of economics.12 Because the rate of return on capital (allegedly) outstrips the rate of economic growth, increasing inequality is written into the DNA of capitalism, which means that only massive taxes and transfers are capable of reversing hyper-inequality.

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Finally, zoning’s contributions to economic inequality go beyond widening income gaps, whether geographic or socioeconomic in nature. In addition, tightening restrictions on building appear to be the driving force behind rising wealth inequality. At least that is the conclusion of Matt Rognlie, who as a 26-year-old grad student at MIT leaped to prominence with his bold critique of Thomas Piketty’s bestselling Capital in the Twenty-First Century. Piketty famously argued that there is a fundamental tendency in capitalism toward ever-greater concentration of wealth, a tendency that was checked in the twentieth century only because of global depression and war, and then only temporarily. Specifically, he argued that over the long run, the rate of return on wealth tends to outstrip the rate of economic growth, with the result that the share of national income that compensates owners of capital grows inexorably (and the share that goes to workers shrinks concomitantly).

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Moss, Preventing Regulatory Capture: Special Interest Influence and How to Limit It (New York: Cambridge University Press, 2014). 11.See, e.g., N. Gregory Mankiw, “Defending the One Percent,” Journal of Economic Perspectives 27, no. 3 (Summer 2013): 21–34, https://www.aeaweb.org/articles?id=10.1257/jep.27.3.21. 12.See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press, 2014). 13.Barry Goldwater, The Conscience of a Conservative (New York: MacFadden Books, 1960), p. 23. 14.Interview on National Public Radio, Morning Edition, May 25, 2001. 15.Anna Persson and Bo Rothstein, “It’s My Money: Why Big Government Is Good Government,” Comparative Political Studies 47, no. 2 (January 2015): 231–49. 16.Joseph Stiglitz, Nell Abernathy, Adam Hersh, Susan Holmber, and Mike Konczal, “Rewriting the Rules of the American Economy,” http://rooseveltinstitute.org/rewriting-rules-report/. 17.Frank Levy and Peter Temin, “Inequality and Institutions in 20th Century America,” SSRN Working Paper 07-17, June 27, 2007. 18.The connection between excessive governmental informalism and capture by the organized was recognized on the left as far back as Theodore Lowi’s great book, The End of Liberalism (New York: W.

Social Class in the 21st Century by Mike Savage

Bullingdon Club, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clapham omnibus, Corn Laws, deindustrialization, deskilling, Downton Abbey, emotional labour, financial independence, gender pay gap, gentrification, Gini coefficient, income inequality, liberal capitalism, Mark Zuckerberg, megacity, meritocracy, moral panic, New Urbanism, Occupy movement, old-boy network, precariat, psychological pricing, Sloane Ranger, The Spirit Level, the strength of weak ties, unpaid internship, upwardly mobile, very high income, winner-take-all economy, young professional

In making this argument, there is a clear overlap with our findings in Chapter 7 regarding the power of elite universities, all of which are located close to London. London is now a vortex – a voracious and intense space, in which an elite class finds its home. In the early twenty-first century, the very wealthy are subject to increasing attention. The remarkable reception of Thomas Piketty’s Capital in the Twenty-first Century, allied to increasing concern about spiralling remuneration at the top, has made the sociological analysis of the elite essential. But we need to guard against the view that this new, wealth-elite marks a return to the aristocratic, landed and gentlemanly class which held sway in Britain until the later twentieth century.

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Subsequent analysis by Sam Friedman, David Laurison and Andrew Miles in ‘Breaking the “Class” Ceiling? Social Mobility into Elite Occupations’, Sociological Review, 63(2), 2015, 259–89 (which compares the GBCS findings with those from the Labour Force Survey on individual incomes), suggests that similar patterns can be found in both sources. 7. See Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA: 2014), p. 116, Figure 3.1. 8. Markus Jäntti, Eva Sierminska and Philippe Van Kerm, ‘The Joint Distribution of Income and Wealth’, in Janet C. Gornick and Markus Jäntti (editors), Income Inequality: Economic Disparities and the Middle Class in Affluent Countries (Redwood City, CA: 2013), pp. 312–33. 9.

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See Mike Savage, Brigitte Le Roux, Johannes Hjellbrekke and Daniel Laurison, ‘Espace culturel britannique et classes sociales’, in Frédérie Lebaron and Brigitte Le Roux (editors), La méthodologie de Pierre Bourdieu en action: espace culturel, espace social, et analyse des données (paris. 2015). 2. Danny Dorling, Inequality and the 1% (London: 2014), Thomas Piketty, Capital in the Twenty-first Century (Cambridge, MA: 2014). 3. The same general point also applies to gender: but because we asked about household income, gender differences are not well defined when using the GfK sample (since some badly paid women might be living with well-paid men, and vice versa). 4. We repeat our earlier comments about the problems of using the GBCS and the GfK survey to analyse ethnicity in detail.

The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, An Inconvenient Truth, Andrew Keen, basic income, battle of ideas, Black Lives Matter, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, classic study, clean water, cognitive bias, conceptual framework, critical race theory, David Brooks, deindustrialization, demographic transition, desegregation, disinformation, Donald Trump, en.wikipedia.org, Evgeny Morozov, fake news, Francis Fukuyama: the end of history, gentrification, German hyperinflation, gig economy, Gini coefficient, Herbert Marcuse, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, Jeremy Corbyn, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, microaggression, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, Rutger Bregman, secular stagnation, sharing economy, Steve Bannon, Thomas L Friedman, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

Josh Constine, “Facebook Now Has 2 Billion Monthly Users … and Responsibility,” Techcrunch, June 27, 2017, https://techcrunch.com/2017/06/27/facebook-2-billion-users/. 29. George Orwell, “Second Thoughts on James Burnham,” Polemic 3 (May 1946). 5. Economic Stagnation 1. See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014), 72–112. 2. S. N. Broadberry and Bas van Leeuwen, “British Economic Growth and the Business Cycle, 1700–1870: Annual Estimates,” Working Paper, Department of Economics, University of Warwick, Coventry, UK, February 2011, CAGE Online Working Paper Series, vol. 2010 (20), http://www2.warwick.ac.uk/fac/soc/economics/events/seminars-schedule/conferences/venice3/programme/british_economic_growth_and_the_business_cycle_1700-1850.pdf. 3.

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Keohane, “The Global Politics of Climate Change: Challenge for Political Science,” PS: Political Science & Politics 48, no. 1 (2015): 19–26. 48. There have been many reasons for this, from the Great Recession to Occupy Wall Street. But the book that has catalyzed most of this discussion has undoubtedly been Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014). 49. On the role of lobbying in politics, see Jane Mayer, Dark Money: The Hidden History of the Billionaires behind the Rise of the Radical Right (New York: Doubleday, 2016); and Lee Drutman, The Business of America Is Lobbying: How Corporations Became More Politicized and Politicians Became More Corporate (New York: Oxford University Press, 2015).

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In effect, England had, in the span of a quarter century, gone from the level of income inequality recorded in today’s Iceland to the level of income inequality recorded in today’s India.3 Then another big aberration in human history set in: a period of unprecedented economic equality. Back in 1928, Thomas Piketty shows, the richest 1 percent could expect to capture 15–20 percent of income in European countries like France or the United Kingdom and almost 25 percent of income in the United States. By 1960, the wealth distribution had flattened considerably: In France and the United Kingdom, the richest 1 percent now captured less than 10 percent of income.

Angrynomics by Eric Lonergan, Mark Blyth

AlphaGo, Amazon Mechanical Turk, anti-communist, Asian financial crisis, basic income, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big Tech, bitcoin, blockchain, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collective bargaining, COVID-19, credit crunch, cryptocurrency, decarbonisation, deindustrialization, diversified portfolio, Donald Trump, Erik Brynjolfsson, Extinction Rebellion, fake news, full employment, gig economy, green new deal, Greta Thunberg, hiring and firing, Hyman Minsky, income inequality, income per capita, Jeremy Corbyn, job automation, labour market flexibility, liberal capitalism, lockdown, low interest rates, market clearing, Martin Wolf, Modern Monetary Theory, precariat, price stability, quantitative easing, Ronald Reagan, secular stagnation, self-driving car, Skype, smart grid, sovereign wealth fund, spectrum auction, The Future of Employment, The Great Moderation, The Spirit Level, universal basic income

Despite the fact that many of the features of the trends in income and wealth inequality date back to the early 1980s, the topic has only started to dominate political discourse across the developed world in the last five to ten years in particular, highlighted by the publication and extraordinary success of Thomas Piketty’s Capital in the Twenty-First Century. Also, it is a very complex area – measurement is extremely difficult, and there is a lot of difference in the trends geographically. I want to stress one of the sources for my caution about the role of inequality as a singular cause behind angrynomics is that anger is a universal feature of politics across the world, but trends in inequality are not.

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As such, the rate of capital formation, a core determinant of investment, is slowing as the dependency ratio – the ratio of workers to retirees – is shifting over time, which in turn slows future growth, while still compounding the massive amount of assets that those “top twenty” boomers have accumulated already. ERIC: This is why, at least in part, the economist Thomas Piketty thinks that intergenerational inequality is a necessary part of our future, unless we choose to do something about it. Piketty’s book, Capital in the Twenty-First Century, is famous for putting inequality back on the political agenda in a serious way. But his book is as much about economic growth as it is inequality. Piketty’s framework for thinking about economic growth allows us to see the long-run consequences of these observations about aging.

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Kate Raworth’s Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist (London: Random House, 2017) is a brilliant rebalancing of how economics should be done, putting true sustainability at its core. For a much less hopeful, but equally plausible account, see Branko Milanovic’s brilliant Capitalism, Alone: The Future of the System that Rules the World (Cambridge, MA: Harvard University Press, 2019). A huge amount has now been written about inequality. Thomas Piketty’s masterpiece, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014) can take a lot of credit for this. But despite being a bestseller, and having influenced both of us in different ways, it is really a book for specialists – and if anything has provoked as much controversy as agreement, at least among economists.

Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity by Douglas Rushkoff

activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, bank run, banking crisis, barriers to entry, benefit corporation, bitcoin, blockchain, Burning Man, business process, buy and hold, buy low sell high, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, centralized clearinghouse, citizen journalism, clean water, cloud computing, collaborative economy, collective bargaining, colonial exploitation, Community Supported Agriculture, corporate personhood, corporate raider, creative destruction, crowdsourcing, cryptocurrency, data science, deep learning, disintermediation, diversified portfolio, Dutch auction, Elon Musk, Erik Brynjolfsson, Ethereum, ethereum blockchain, fiat currency, Firefox, Flash crash, full employment, future of work, gamification, Garrett Hardin, gentrification, gig economy, Gini coefficient, global supply chain, global village, Google bus, Howard Rheingold, IBM and the Holocaust, impulse control, income inequality, independent contractor, index fund, iterative process, Jaron Lanier, Jeff Bezos, jimmy wales, job automation, Joseph Schumpeter, Kickstarter, Large Hadron Collider, loss aversion, low interest rates, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, Marshall McLuhan, means of production, medical bankruptcy, minimum viable product, Mitch Kapor, Naomi Klein, Network effects, new economy, Norbert Wiener, Oculus Rift, passive investing, payday loans, peer-to-peer lending, Peter Thiel, post-industrial society, power law, profit motive, quantitative easing, race to the bottom, recommendation engine, reserve currency, RFID, Richard Stallman, ride hailing / ride sharing, Ronald Reagan, Russell Brand, Satoshi Nakamoto, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, social graph, software patent, Steve Jobs, stock buybacks, TaskRabbit, the Cathedral and the Bazaar, The Future of Employment, the long tail, trade route, Tragedy of the Commons, transportation-network company, Turing test, Uber and Lyft, Uber for X, uber lyft, unpaid internship, Vitalik Buterin, warehouse robotics, Wayback Machine, Y Combinator, young professional, zero-sum game, Zipcar

Financial services, slowly but inevitably, become the biggest players in the economy. Between the 1950s and 2006, the percentage of the economy (as measured by GDP) represented by the financial sector more than doubled, from 3 percent to 7.5 percent.13 This is why, as Thomas Piketty demonstrated in Capital in the Twenty-First Century, the rate of return on capital exceeds the growth rate of the economy.14 Money makes money faster than people or companies can create value. The richest people and companies should, therefore, position themselves as far away from working or creating things, and as close to the money spigot, as possible.

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Vivek Wadhwa, “The End of Chinese Manufacturing and Rebirth of U.S. Industry,” forbes.com, July 23, 2012. 44. Daniel Bell, The Coming of Post-Industrial Society: A Venture in Social Forecasting (New York: Basic Books, 1976). 45. David Rotman, “How Technology Is Destroying Jobs,” technologyreview.com, June, 12, 2013. 46. Ibid. 47. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap Press, 2014). 48. Bernard Lietaer, The Mystery of Money: Beyond Greed and Scarcity, 148 [PDF]. 49. Jeff Tyler, “Banks Demolish Foreclosed Homes, Raise Eyebrows,” Marketplace, American Public Media, October 13, 2011. Transcript available at www.marketplace.org/topics/business/banks-demolish-foreclosed-homes-raise-eyebrows/. 50.

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Betsy Corcoran, “Blackboard’s Jay Bhatt Strikes Up the Brass Band,” edsurge.com, July 23, 2014. 35. Justin Pope, “E-Learning Firm Sparks Controversy with Software Patent,” washingtonpost.com, October 15, 2006. 36. withknown.com. 37. Carlota Perez, Technological Revolutions and Financial Capital (Cheltenham, England: Edward Elgar Press, 2002). 38. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, Mass.: Belknap Press, 2014). 39. Mario Preve, quoted in Ernst & Young and Family Business Network International, “Built to Last: Family Businesses Lead the Way to Sustainable Growth” (n.p.: Ernst & Young Global Limited, 2012), www.ey.com/Publication/vwLUAssets/EY-Built-to-last-family-businesses-lead-the-way-to-sustainable-growth/$FILE/EY-Built-to-last-family-businesses-lead-the-way-to-sustainable-growth.pdf. 40.

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, back-to-the-city movement, basic income, Bernie Sanders, bike sharing, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, gentrification, Gini coefficient, Google bus, high net worth, high-speed rail, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, megaproject, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, off-the-grid, opioid epidemic / opioid crisis, Paul Graham, plutocrats, RAND corporation, rent control, rent-seeking, restrictive zoning, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, SimCity, sovereign wealth fund, streetcar suburb, superstar cities, tech worker, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Rise and Fall of American Growth, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Tyler Cowen, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

In New York’s SoHo, the artistic and creative ferment I had observed as a student was giving way to a new kind of homogeneity of wealthy people, high-end restaurants, and luxury shops. Truth be told, the downsides of the urban revival had captured my attention fairly early on. Back in 2003, well before Occupy Wall Street drew attention to the rise of the “one percent,” or Thomas Piketty’s Capital in the Twenty-First Century opened our eyes to global inequality, I warned that America’s leading creative cities were also the epicenters of economic inequality. My research found that the metros with the highest levels of wage inequality were also those with the most dynamic and successful creative economies—San Francisco, Austin, Boston, Seattle, Washington, DC, and New York.3 But even as I was documenting these new divides, I had no idea how fast they would metastasize, or how deeply polarized these cities would become.

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Sugrue, The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (Princeton, NJ: Princeton University Press, 1996). 2. Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community, and Everyday Life (New York: Basic Books, 2002); Florida, The Rise of the Creative Class Revisited (New York: Basic Books, 2012). 3. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2013); Richard Florida, “The New American Dream,” Washington Monthly, March 2003; Richard Florida, The Flight of the Creative Class (New York: HarperCollins, 2005). 4. Richard Florida, “More Losers Than Winners in America’s New Economic Geography,” CityLab, January 30, 2013, www.citylab.com/work/2013/01/more-losers-winners-americas-new-economic-geography/4465. 5.

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The correlation between housing cost and creative-class wages left over after paying for housing is positive and significant (0.58). The correlations between housing costs and wages left over after paying for housing are negative and significant for the service class (–0.36) and the working class (–0.20). 31. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2013); Matthew Rognlie, “Deciphering the Fall and Rise in the Net Capital Share,” Brookings Papers on Economic Activity, Brookings Institution, March 2015, www.brookings.edu/~/media/projects/bpea/spring-2015/2015a_rognlie.pdf.

Wealth, Poverty and Politics by Thomas Sowell

affirmative action, Alan Greenspan, Albert Einstein, British Empire, Capital in the Twenty-First Century by Thomas Piketty, colonial exploitation, colonial rule, Cornelius Vanderbilt, correlation does not imply causation, cotton gin, Deng Xiaoping, desegregation, European colonialism, full employment, government statistician, Great Leap Forward, Gunnar Myrdal, Herman Kahn, income inequality, income per capita, invention of the sewing machine, invisible hand, low skilled workers, mass immigration, means of production, minimum wage unemployment, New Urbanism, profit motive, rent control, Scramble for Africa, Simon Kuznets, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, transatlantic slave trade, transcontinental railway, trickle-down economics, vertical integration, very high income, W. E. B. Du Bois, War on Poverty

Armine Yalnizyan, The Rise of Canada’s Richest 1% (Ottawa: Canadian Centre for Policy Alternatives, December 2010). 10. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, Massachusetts: Harvard University Press, 2014), p. 252. 11. Thomas A. Hirschl and Mark R. Rank, “The Life Course Dynamics of Affluence,” PLoS ONE, January 28, 2015, p. 5. 12. Ibid. 13. Paul Krugman, “Rich Man’s Recovery,” New York Times, September 13, 2013, p. A25. 14. U.S. Department of the Treasury, “Income Mobility in the U.S. from 1996 to 2005,” November 13, 2007, p. 4. 15. Thomas Piketty, Capital in the Twenty-First Century, pp. 253, 254. 16. Ibid., p. 278. 17. U.S. Department of the Treasury, “Income Mobility in the U.S. from 1996 to 2005,” November 13, 2007, pp. 2, 4. 18.

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Transients in the various income brackets are spoken of as if they were continuous residents in those brackets. Time and Turnover Understandable and commendable as it may be to be concerned about the fate of fellow human beings, that is very different from being obsessed with the fate of numbers in abstract categories. To say, as Professor Thomas Piketty does in his much acclaimed book, Capital in the Twenty-First Century, that “the upper decile is truly a world unto itself”10 is to fly in the face of the fact that most American households— 53 percent— are in the top decile at some point in their lives,11 usually in their older years. For most Americans to envy or resent the top ten percent would be to envy or resent themselves.

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Schumpeter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 529. 24. Martin Feldstein, “Piketty’s Numbers Don’t Add Up,” Wall Street Journal, May 15, 2014, p. A15; Alan Reynolds, “Why Piketty’s Wealth Data Are Worthless,” Wall Street Journal, July 10, 2014, p. A11. 25. Thomas Piketty, Capital in the Twenty-First Century, pp. 473, 507; Robert A. Wilson, “Personal Exemptions and Individual Income Tax Rates, 1913–2002,” Statistics of Income Bulletin, Spring 2002, p. 219. 26. W. Michael Cox and Richard Alm, Myths of Rich & Poor: Why We’re Better Off Than We Think (New York: Basic Books, 1999), p. 16. 27.

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, antiwork, barriers to entry, basic income, battle of ideas, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Big Tech, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, central bank independence, clean water, collective bargaining, company town, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, DeepMind, deglobalization, deindustrialization, disinformation, disintermediation, diversified portfolio, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fake news, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, Glass-Steagall Act, global macro, global supply chain, greed is good, green new deal, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low interest rates, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, search costs, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, surveillance capitalism, TED Talk, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population, Yochai Benkler

Stiglitz, “New Theoretical Perspectives on the Distribution of Income and Wealth among Individuals.” For a discussion of the role of housing, see Matthew Rognlie, “Deciphering the Fall and Rise in the Net Capital Share: Accumulation or Scarcity?,” Brookings Papers on Economic Activity 46, no. 1 (Spring 2015): 1–69. See also Thomas Piketty, Capital in the Twenty-First Century. 17.The right to obtain a certain rent stream, year after year, has a market value, and this is called the capitalized value of the rents. Thus, owning a monopoly will give the owner profits each year. The owner could sell that stream of profits. The value today of that stream is called the capitalized rents. 18.See Mordecai Kurz, “On the Formation of Capital and Wealth: IT, Monopoly Power and Rising Inequality” (Stanford Institute for Economic Policy Research Working Paper 17-016, 2017). 19.In mid-twentieth-century capitalism, corporations with market power shared their monopoly rents with their unionized workers.

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A quick search of “patent infringement” shows numerous cases, in the hundreds of millions of dollars, between Qualcomm and Apple, Apple and Samsung, and so forth. The only sure winners in all of these suits are the lawyers; the only sure losers are consumers and small firms unable to enter the fray. Such is American-style capitalism in the twenty-first century. Our “innovative” firms do not rest their anticompetitive practices there. They have pioneered new contractual arrangements to leverage their market power. In credit cards, these new contractual forms do not allow, for instance, stores to charge customers who use credit cards with high rewards—and high merchant fees—for the use of these high-cost credit cards.

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These insights fly in the face of Reagan-style “supply-side” policies, based on the assumptions that deregulation would free up the economy, lower taxes would incentivize it, and the two together would lead to economic growth. However, after Reagan’s reforms, growth actually slowed. Deregulation, especially of the financial market, brought us the downturns of 1991, 2001, and most grievously, the Great Recession of 2008. And lower taxes did not have the energizing effect that supply-siders claimed. Thomas Piketty and his coauthors have documented that lowering top tax rates has actually been accompanied by unchanged or lower growth around the world.43 As anticipated by the critics of these tax cuts, neither Reagan’s cuts for the rich nor the later cuts enacted under George W. Bush led to increased labor supply or savings44—and accordingly, neither led to faster growth.45 Evidently, there is much less than meets the eye to “supply-side” economics and its faith in the unfettered free market as the path to growth.

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite by Daniel Markovits

8-hour work day, activist fund / activist shareholder / activist investor, affirmative action, algorithmic management, Amazon Robotics, Anton Chekhov, asset-backed security, assortative mating, basic income, Bernie Sanders, big-box store, business cycle, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, carried interest, collateralized debt obligation, collective bargaining, compensation consultant, computer age, corporate governance, corporate raider, crony capitalism, David Brooks, deskilling, Detroit bankruptcy, disruptive innovation, Donald Trump, Edward Glaeser, Emanuel Derman, equity premium, European colonialism, everywhere but in the productivity statistics, fear of failure, financial engineering, financial innovation, financial intermediation, fixed income, Ford paid five dollars a day, Frederick Winslow Taylor, fulfillment center, full employment, future of work, gender pay gap, gentrification, George Akerlof, Gini coefficient, glass ceiling, Glass-Steagall Act, Greenspan put, helicopter parent, Herbert Marcuse, high net worth, hiring and firing, income inequality, industrial robot, interchangeable parts, invention of agriculture, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kevin Roose, Kiva Systems, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, Larry Ellison, longitudinal study, low interest rates, low skilled workers, machine readable, manufacturing employment, Mark Zuckerberg, Martin Wolf, mass incarceration, medical residency, meritocracy, minimum wage unemployment, Myron Scholes, Nate Silver, New Economic Geography, new economy, offshore financial centre, opioid epidemic / opioid crisis, Paul Samuelson, payday loans, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, precariat, purchasing power parity, rent-seeking, Richard Florida, Robert Gordon, Robert Shiller, Robert Solow, Ronald Reagan, Rutger Bregman, savings glut, school choice, shareholder value, Silicon Valley, Simon Kuznets, six sigma, Skype, stakhanovite, stem cell, Stephen Fry, Steve Jobs, stock buybacks, supply-chain management, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Theory of the Leisure Class by Thorstein Veblen, Thomas Davenport, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, traveling salesman, universal basic income, unpaid internship, Vanguard fund, War on Poverty, warehouse robotics, Winter of Discontent, women in the workforce, work culture , working poor, Yochai Benkler, young professional, zero-sum game

Inequality’s modern critics no doubt employ a less systematic method and strike a more moderate tone, but the conventional wisdom to this day pursues a similar style of argument, a variation on Marx’s rentier theme. Critics still commonly connect economic inequality to the familiar political and economic battle between capital and labor, associating the rich with capital and inequality’s increase with capital’s renewed dominance. Thomas Piketty’s formidable book Capital in the Twenty-First Century gives this view its now-canonical statement. Familiar laments about the decline of labor unions, rising market power among large employers, and outsourcing and globalization also share this general attitude. These complaints capture something real. Unions have been systematically dismantled in recent decades.

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outright fraud: See, e.g., Russell Sobel, “Crony Capitalism Pays Well for Rent-Seeking CEOs,” Investor’s Business Daily, July 9, 2014, accessed June 14, 2018, www.investors.com/politics/commentary/political-activity-and-connections-dont-make-business-profitable/. a rising oligarchy: See Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Belknap Press of Harvard University Press, 2014). Hereafter cited as Piketty, Capital. denounce real targets: In addition to Piketty’s work, canonical accounts along these lines include Joseph E. Stiglitz, The Price of Inequality (New York: W.

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., 181, 317nn(18), 330n(67), 335n(87), 337n(93), 341n(104), 351n(127), 352n(130), 355n(134), 364n(166), 365n(171), 366nn(174), 369n(179), 371–72nn(182–83), 375nn(185–87), 383n(220), 396n(267), 401n(282), 402nn(293, 298), burnout, 43 Bush, Barbara, 229 Bush, George W., 68, 197, 198, 224 Bush, Jenna, 229 campaign financing, 52 Cantor, Eric, 57 capital asset pricing model, 237–38 capital deepening, 253–54 capital dominance, 13, 15, 18, 88–89, 92–94 Capital in the Twenty-First Century (Piketty), 88 Cappelli, Peter, 333n(83), 358nn(140–41), 359n(141), 364n(167), 365nn(169–70), 366–67nn(173–74, 176), 368nn(176–77), 370n(180), 371n(182), 379n(203), 392n(248) Carnegie, Andrew, 51 Carnevale, Anthony, 353n(132), 354n(132), 356nn(136), 359nn(141), 372nn (182–83), 374n(183), 403nn(305) carried interest, 91–92 casino lobby, 54 celebrities, 85, 97 Census Bureau, U.S., 314n(3), 316n(13), 318nn(21–23), 319nn(23, 25), 322nn(41), 324n(46), 325nn(48, 50), 334nn(85–86), 339nn(99–100), 340–41nn(102–4), 345n(117), 346nn(118), 349n(125), 350–51n(126–27), 354nn(132–33), 357n(138), 359nn(141–42), 365n(169), 368nn(177–78), 372nn(182), 375n(186), 378n(201), 382nn(216), 393n(251), 401n(292), 402n(293), 403nn(305–6) Center for American Progress, 283 CEOs.

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, Big Tech, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, currency risk, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, driverless car, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, financial engineering, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, general purpose technology, gig economy, global supply chain, global value chain, heat death of the universe, hydraulic fracturing, income inequality, independent contractor, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low interest rates, low skilled workers, lump of labour, Lyft, machine translation, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Robert Solow, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, tacit knowledge, TaskRabbit, tech billionaire, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, warehouse robotics, working-age population

For an awful lot of people, work has become a less certain and often less remunerative contributor to material security. It is a development that makes political forces of populist outsiders, such as Donald Trump and Marine Le Pen, and bestsellers of wonky economics books, such as Thomas Piketty’s Capital in the Twenty-First Century,10 an analysis of global inequality published in 2014 that flew off the shelves. Work is not just the means by which we obtain the resources needed to put food on the table. It is also a source of personal identity. It helps give structure to our days and our lives. It offers the possibility of personal fulfilment that comes from being of use to others, and it is a critical part of the glue that holds society together and smoothes its operation.

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Authors like Martin Ford, whose 2015 book Rise of the Robots20 described a vision of a post-work world, argue that robots and machine intelligence will create a world wholly different from anything that has come before, and that a techno-socialism of sorts will need to be adopted to keep society functioning. Economist Thomas Piketty’s aforementioned masterpiece, Capital in the Twenty-First Century, set out a bold theory of inequality and predicted trouble ahead, as did Chris Hayes, whose book Twilight of the Elites21 was an incisive examination of the loss of faith in elite institutions and technocrats, who have struggled to manage recent economic change.

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The rising tide didn’t wash away inequities, but it kept both capital and labour satisfied enough to hold the revolution at bay. From 1875 until the eve of the First World War, the world’s industrialized economies were extraordinarily unequal, but rising living standards for workers kept revolutionary fervour in check. Yet societies were not exactly living harmoniously, either. As Thomas Piketty notes, in Capital in the Twenty-First Century, it took the turmoil of the first half of the twentieth century to undo the inequality that developed in the nineteenth. War, taxation, inflation and economic depression destroyed many of the great fortunes of the industrial era. They ushered in an entirely new state structure, in which extensive taxation was used to fund massive welfare states.

Restarting the Future: How to Fix the Intangible Economy by Jonathan Haskel, Stian Westlake

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, Andrei Shleifer, Big Tech, Black Lives Matter, book value, Boris Johnson, Brexit referendum, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, Charles Lindbergh, charter city, cloud computing, cognitive bias, cognitive load, congestion charging, coronavirus, corporate governance, COVID-19, creative destruction, cryptocurrency, David Graeber, decarbonisation, Diane Coyle, Dominic Cummings, Donald Shoup, Donald Trump, Douglas Engelbart, Douglas Engelbart, driverless car, Edward Glaeser, equity risk premium, Erik Brynjolfsson, Estimating the Reproducibility of Psychological Science, facts on the ground, financial innovation, Francis Fukuyama: the end of history, future of work, general purpose technology, gentrification, Goodhart's law, green new deal, housing crisis, income inequality, index fund, indoor plumbing, industrial cluster, inflation targeting, intangible asset, interchangeable parts, invisible hand, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, knowledge worker, lockdown, low interest rates, low skilled workers, Marc Andreessen, market design, Martin Wolf, megacity, mittelstand, new economy, Occupy movement, oil shock, patent troll, Peter Thiel, Phillips curve, postindustrial economy, pre–internet, price discrimination, quantitative easing, QWERTY keyboard, remote working, rent-seeking, replication crisis, risk/return, Robert Gordon, Robert Metcalfe, Robert Shiller, Ronald Coase, Sam Peltzman, Second Machine Age, secular stagnation, shareholder value, Silicon Valley, six sigma, skeuomorphism, social distancing, superstar cities, the built environment, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, Tyler Cowen, Tyler Cowen: Great Stagnation, Uber for X, urban planning, We wanted flying cars, instead we got 140 characters, work culture , X Prize, Y2K

Wilkinson and Pickett’s best-selling book The Spirit Level argues that inequality leads to crime, poor health, and unhappiness not just among the poor but also across society.6 In 2011, the Occupy movement popularised the meme of “The 99%,” highlighting the dichotomy between a rich elite and the population as a whole. And Thomas Piketty’s Capital in the Twenty-First Century brought decades of empirical work on wealth inequality to bear on the public debate.7 FIGURE 1.3: Growth by Income Group in the World, 1980–2016. Source: Figure E4 in Alvardero et al. (2020). We observe the material inequality in rich countries both in people’s wealth and in their income.

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Intangible investment allows professional services employers to replace egalitarian work cultures, where pay is often based on seniority, with sharply incentivised ones, where workers “eat what they kill.” The rise of intangible investment also has an indirect but powerful effect on wealth inequality. Following the publication of Thomas Piketty’s landmark Capital in the Twenty-First Century, it became clear that a significant proportion of the increased wealth inequality that Piketty observed (almost all of it, according to Matt Rognlie)11 derived from the dizzying increase in property prices in the late twentieth and early twenty-first centuries. These increases did not arise everywhere.

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Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change. Princeton, NJ: Princeton University Press. Philippon, Thomas. 2019. The Great Reversal: How America Gave Up on Free Markets. Cambridge, MA: Belknap Press of Harvard University Press. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press. Porta, Rafael La, Florencio Lopez-De-Silanes, Andrei Shleifer, and Robert W. Vishny. 1997. “Legal Determinants of External Finance.” Journal of Finance 52 (3): 1131. https://doi.org/10.2307/2329518. Posner, Eric, and E. Glen Weyl. 2018. Radical Markets: Uprooting Capitalism and Democracy for a Just Society.

Global Inequality: A New Approach for the Age of Globalization by Branko Milanovic

Asian financial crisis, assortative mating, Berlin Wall, bitcoin, Black Swan, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, centre right, colonial exploitation, colonial rule, David Ricardo: comparative advantage, deglobalization, demographic transition, Deng Xiaoping, discovery of the americas, European colonialism, Fall of the Berlin Wall, Francis Fukuyama: the end of history, full employment, Gini coefficient, Gunnar Myrdal, income inequality, income per capita, invisible hand, labor-force participation, liberal capitalism, low skilled workers, Martin Wolf, means of production, military-industrial complex, mittelstand, moral hazard, Nash equilibrium, offshore financial centre, oil shock, open borders, open immigration, Paul Samuelson, place-making, plutocrats, post scarcity, post-industrial society, profit motive, purchasing power parity, Ralph Nader, Robert Solow, Second Machine Age, seigniorage, Silicon Valley, Simon Kuznets, special economic zone, stakhanovite, trade route, transfer pricing, very high income, Vilfredo Pareto, Washington Consensus, women in the workforce

This is why Tinbergen expected the skill premium to go to zero.2 But here too, the very opposite has happened: the skill premium has shown a strong increase in most advanced countries during the past twenty years. Note also that Tinbergen’s theory, like Kuznets’s, holds that inequality should be expected to decrease with development—a conclusion that is unambiguously contradicted by the facts. It was Thomas Piketty’s Capital in the Twenty-First Century, a book of extraordinary breadth and influence, that presented a theory to effectively displace Kuznets’s. The problem was how to explain both the decrease in inequality in rich countries in the period 1918–1980 and its subsequent increase. Piketty argued that the decrease was a special and unusual event driven by the political forces of wars, taxation to finance the wars, socialist ideology and movements, and economic convergence (which kept the growth rate of wages above the growth rate of income from property).

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Inequality as measured by the land rent/wage ratio probably went down in both cases, but not equally.18 Another type of catastrophic event that reduces inequality is war. For modern societies, the argument that war can be a force for equality, if an unwelcome one, recently received much attention in Piketty’s Capital in the Twenty-First Century. It was already present in Piketty’s earlier work on French inequality (2001a), which showed how inequality was affected by World War I and its aftermath. War reduces inequality through physical destruction of capital and inflation (creating real losses for creditors), resulting in a general decrease of income received from property.

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The traditional one, espoused largely by Kuznets himself, is that it was a product of various economic forces: a gradual end to the structural transformation whereby most of the population moved into urban areas and into manufacturing (thus eliminating the rural/urban gap that is one of the important contributors to inequality); increased schooling, which reduced the education premium (an explanation especially favored by Tinbergen [1975] and Goldin and Katz [2010]); the aging of the population, and thus greater demand for social services (social security, nationalized health), which in turn required greater taxation of the rich; and, possibly in the background, the need for greater social cohesion in the context of wars, including the Cold War, which meant that financing of wars should fall mostly on the rich.35 The second explanation, favored by Piketty, not only in his most recent book, Capital in the Twenty-First Century, but also in his earlier book Les Hauts revenus en France, published in 2001, is, unlike Kuznets’s theory, primarily a political theory. According to Piketty, the two world wars not only led to higher taxes but also destroyed property and reduced large fortunes. This was particularly true in France, which provided a template for his later work.36 In his book on France, Piketty shows that the concentration of capital declined after the wars and the largest French fortunes never recovered: around the year 2000, the highest-valued estates were still worth less than before World War I.37 The lower concentration of wealth combined with a lower capital-output ratio (because of the destruction of capital) resulted in a reduction of revenues from capital and a reduction of inequality.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It? by Brett Christophers

"World Economic Forum" Davos, accounting loophole / creative accounting, Airbnb, Amazon Web Services, barriers to entry, Big bang: deregulation of the City of London, Big Tech, book value, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, business process, business process outsourcing, Buy land – they’re not making it any more, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cloud computing, collective bargaining, congestion charging, corporate governance, data is not the new oil, David Graeber, DeepMind, deindustrialization, Diane Coyle, digital capitalism, disintermediation, diversification, diversified portfolio, Donald Trump, Downton Abbey, electricity market, Etonian, European colonialism, financial deregulation, financial innovation, financial intermediation, G4S, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, greed is good, green new deal, haute couture, high net worth, housing crisis, income inequality, independent contractor, intangible asset, Internet of things, Jeff Bezos, Jeremy Corbyn, Joseph Schumpeter, Kickstarter, land bank, land reform, land value tax, light touch regulation, low interest rates, Lyft, manufacturing employment, market clearing, Martin Wolf, means of production, moral hazard, mortgage debt, Network effects, new economy, North Sea oil, offshore financial centre, oil shale / tar sands, oil shock, patent troll, pattern recognition, peak oil, Piper Alpha, post-Fordism, post-war consensus, precariat, price discrimination, price mechanism, profit maximization, proprietary trading, quantitative easing, race to the bottom, remunicipalization, rent control, rent gap, rent-seeking, ride hailing / ride sharing, Right to Buy, risk free rate, Ronald Coase, Rutger Bregman, sharing economy, short selling, Silicon Valley, software patent, subscription business, surveillance capitalism, TaskRabbit, tech bro, The Nature of the Firm, transaction costs, Uber for X, uber lyft, vertical integration, very high income, wage slave, We are all Keynesians now, wealth creators, winner-take-all economy, working-age population, yield curve, you are the product

Using the neoliberal UK as its primary focus, this book explores the forms that Western rentier capitalism takes, the factors accounting for its materialization, and the consequences of its ascendancy. In recent years, much has been written about Western rentierism and rentier capitalism by some of the world’s highest-profile commentators on the economy. Thomas Piketty’s Capital in the Twenty-First Century, published in 2014, was a catalytic intervention in this regard.1 It is not a book about rent and rentiers per se; its primary focus is inequality. But rent is a pivotal variable in the book and in Piketty’s theorization of capitalism. As is by now well known, Piketty argues that, unless actively checked, wealth inequality tends under capitalism inexorably to rise because of the famous r > g dynamic, where g represents the rate of economic growth and r represents the rate of return on capital, or the rate at which rents can be extracted from the existing stock of assets.

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This ideology legitimizes wage deflation, and thus the channelling of income and wealth into the hands of manipulative capitalist rentiers. What is needed above all, then, is a fundamental revaluation of work and of what workers do. Notably, Piketty’s own follow-up to Capital in the Twenty-First Century, 2020’s Capital and Ideology, treads similar ground.18 Where Capital in the Twenty-First Century examined how and why capitalism creates inequality (giving a starring if abstracted role to rent), Capital and Ideology examines how social elites – capitalist or otherwise – historically have ideologically justified such inequality; and although rent and the rentier barely merit a mention this time, it is indisputably rentier capitalist societies whose ‘inequality regimes’ (his term) Piketty is principally concerned to elucidate.

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Harvey, The Limits to Capital (Oxford: Blackwell, 1982), p. 360. 61. Land Reform Review Group, The Land of Scotland and the Common Good (Edinburgh: Scottish Government, 2014), p. 87. 62. Piketty, Capital in the Twenty-First Century, pp. 115–16. 63. D. Harvey, Seventeen Contradictions and the End of Capitalism (London: Profile Books, 2014), pp. 139–40. 64. Piketty, Capital in the Twenty-First Century, p. 395. 65. Mann, In the Long Run We Are All Dead, pp. 355, 298. 66. K. Marx, ‘The Eighteenth Brumaire of Louis Bonaparte’, in T. Carver, ed., Marx: Later Political Writings (Cambridge: Cambridge University Press, 1996), pp. 31–127, at p. 57. 67.

Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath

active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Robert Solow, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, tacit knowledge, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population

But the evidence indicates that taxation and regulation did not have a significant effect on the ability of firms to produce real goods and services, and specifically there was no substantial shift in government policies around 2000 that could explain the growth slowdown. 15 Did Inequality Cause the Slowdown? From the Occupy Wall Street movement to Thomas Piketty’s Capital in the Twenty-First Century, economic inequality has gathered a lot of attention over the previous decade. And given that this coincided with the growth slowdown, it is natural to wonder whether inequality was a material cause of the slowdown in any way. From the perspective of the growth slowdown, though, the best way to view the rise in inequality is as just another symptom of the increasing market power of firms that we’ve already discussed rather than a separate cause in and of itself.

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The evidence here shows that much of the increase in inequality came from an increase in the wages earned by the top 1%. This shift toward wage income as a source of top-end inequality represented a distinct change from inequality in the past. The Piketty, Saez, and Zucman data gives us some information on the top 1%, but Thomas Piketty’s data from Capital in the Twenty-First Century provides more extensive insight into the fraction of income that is accounted for by capital (dividends, capital gains), labor (wages), and mixed income for subsets of the top 10%. Figure 15.3 shows wages as a percentage of total income for different groups within the top 10% for both 1929 and 2007.

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The real source of that decline in your tomato yield was the drought the year before, which in turn affected your ability to invest. The tomato analogy is oversimplified, but the same principle applies to talking about physical capital accumulation in the economy. Because physical capital depends on our ability to produce real GDP, the drop in the growth rate of physical capital in the twenty-first century may be as much a consequence of the growth slowdown as it is a cause. While arguments could be made that both human capital and the residual suffer from the same issue, they suffer far less than physical capital does. Lower growth in real GDP could, for example, limit the resources available to staff schools or universities, but most of the changes in human capital growth are driven by the demographics of people aging into or out of the labor force.

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, behavioural economics, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, export processing zone, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, general purpose technology, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, open immigration, Pareto efficiency, postindustrial economy, precautionary principle, price stability, public intellectual, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, Solyndra, special economic zone, spectrum auction, Steven Pinker, tacit knowledge, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, Tyler Cowen, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

Anat Admati and Martin Hellwig, The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It, Princeton University Press, Princeton and Oxford, 2013; Simon Johnson and James Kwak, White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You, Vintage Books, New York, 2012; Thomas Piketty, Capital in the Twenty-First Century, Harvard University Press, Cambridge, MA, 2014; Anthony B. Atkinson, Inequality: What Can be Done? Harvard University Press, Cambridge, MA, 2015; Mariana Mazzucato, The Entrepreneurial State: Debunking Public vs. Private Sector Myths, Public Affairs Press, New York, 2015; Ha-Joon Chang, Economics: The User’s Guide, Penguin, London, 2014; J.

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Theodore Pelagidis, “Why Internal Devaluation is Not Leading to Export-Led Growth in Greece,” Brookings Online, September 12, 2014, http://www.brookings.edu/blogs/up-front/posts/2014/09/12-internal-devaluation-export-growth-greece-pelagidis. 10. “Pour l’économiste Thomas Piketty: Macron, c’est ‘l’Europe d’hier’,” Le Point, February 20, 2017, http://www.lepoint.fr/presidentielle/pour-l-economiste-thomas-piketty-macron-c-est-l-europe-d-hier-19-02-2017-2105950_3121.php#section-commentaires. 11. “Emmanuel Macron proposes Nordic economic model for France,” Financial Times, February 23, 2017, https://www.ft.com/content/3691a448-fa1d-11e6-9516-2d969e0d3b65. 12.

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During the presidential campaign, he was frequently accused of lacking specifics. To many on the left and the extreme right, he is a neoliberal, with little to distinguish himself from the mainstream policies of austerity that failed Europe and brought it to its current political impasse. The French economist Thomas Piketty, who supported the socialist candidate Benoit Hamon, described Macron as representing “yesterday’s Europe.”10 Many of Macron’s economic plans did indeed have a neoliberal flavor. He has vowed to lower the corporate tax rate from 33.5 percent to 25 percent, cut 120,000 civil service jobs, keep the government deficit below the EU limit of 3 percent of GDP, and increase labor-market flexibility (a euphemism for making it easier for firms to fire workers).

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

"Friedman doctrine" OR "shareholder theory", Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, Alan Greenspan, bank run, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Bob Noyce, Boston Dynamics, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, compensation consultant, computer age, Cornelius Vanderbilt, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Dunbar number, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fairchild Semiconductor, Fall of the Berlin Wall, family office, financial innovation, full employment, gentrification, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, Herbert Marcuse, income inequality, independent contractor, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, Jeremy Corbyn, Jevons paradox, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, Maslow's hierarchy, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, passive investing, patent troll, Peter Thiel, plutocrats, prediction markets, prisoner's dilemma, proprietary trading, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, SoftBank, Steve Jobs, stock buybacks, tech billionaire, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, vertical integration, very high income, wikimedia commons, William Shockley: the traitorous eight, you are the product, zero-sum game

Voters know that something is rotten in capitalism, and the elite does as well. If voting for political outsiders is what the average person does, then pretending to read weighty books on capitalism is what the elite does. Nothing highlights the search for a diagnosis of our ills more than the extraordinary, puzzling success of Thomas Piketty's Capital in the Twenty-First Century. A 700-page economics book that is full of data tables and charts is hardly anyone's idea of a bestseller. There were no murder cases like in a Grisham book or any magical spells like in a J.K. Rowling book, yet Piketty's book sold more than 1.5 million copies. Everyone bought and pretended to read the book.

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Who cared about hundreds of pages of text when he had such good charts? Figure 10.1 Income Inequality in the United States, 1910–2015 The reviews of the book were ecstatic, even rapturous. The Economist said it was “the economics book that took the world by storm.” According to the Financial Times, “Thomas Piketty's book, ‘Capital in the Twenty-First Century’, has been the publishing sensation of the year. Its thesis of rising inequality tapped into the zeitgeist and electrified the post-financial crisis public policy debate.” Lawrence Summers's said this research “has transformed political discourse and is a Nobel Prize–worthy contribution.”

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In Houston, United has around a 60% market share, in Newark 51%, in Washington Dulles 43%, in San Francisco 38%, and in Chicago 31%.5 This situation is even more skewed for other airlines. For example, Delta has an 80% market share in in Atlanta and 77% in Philadelphia, while in Dallas-Fort Worth it has 77%.6 For many routes, you simply have no choice. The episode became a metaphor for American capitalism in the twenty-first century. A highly profitable company had bloodied a consumer, and it didn't matter because consumers have no choice. When consumers see a man bloodied by a big company or see a suffering patient gouged by a hospital, they get the sense that something is profoundly wrong with companies. All around the world, people have an overwhelming sense that something is broken.

The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

"World Economic Forum" Davos, 3D printing, agricultural Revolution, AI winter, Albert Einstein, AlphaGo, Alvin Toffler, anti-work, antiwork, autonomous vehicles, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Bletchley Park, blockchain, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, Chris Urmson, computer age, Computing Machinery and Intelligence, conceptual framework, corporate governance, correlation does not imply causation, creative destruction, David Ricardo: comparative advantage, deep learning, DeepMind, deindustrialization, Demis Hassabis, deskilling, Dr. Strangelove, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, facts on the ground, fake news, financial intermediation, full employment, future of work, Future Shock, general purpose technology, Great Leap Forward, Hans Moravec, income inequality, income per capita, industrial robot, Internet of things, invention of the wheel, Isaac Newton, James Watt: steam engine, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, license plate recognition, low interest rates, machine translation, Marc Andreessen, Mark Zuckerberg, market bubble, mega-rich, natural language processing, Network effects, new economy, Nicholas Carr, Ocado, Paul Samuelson, Peter Thiel, Phillips curve, positional goods, quantitative easing, RAND corporation, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Solow, Rutger Bregman, Second Machine Age, secular stagnation, self-driving car, seminal paper, Silicon Valley, Silicon Valley billionaire, Simon Kuznets, Skype, social intelligence, spinning jenny, Stanislav Petrov, Stephen Hawking, Steven Pinker, synthetic biology, technological singularity, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, universal basic income, US Airways Flight 1549, Vernor Vinge, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, wealth creators, winner-take-all economy, world market for maybe five computers, Y2K, Yogi Berra

These data come from World Inequality Database, https:/​/​wid.​world/​data/​ and Office for National Statistics, Effects of taxes and benefits on household income: historical datasets, https:/​/​www.​ons.​gov.​uk/​peoplepopulationandcommunity/​personalandhouseholdfinances/​incomeandwealth/​datasets/​theeffectsoftaxesandbenefitsonhouseholdincomehistoricaldatasets 6 Quoted by Schwab, K. (2018) Shaping the Future of the Fourth Industrial Revolution, Penguin Radom House: London, p. 23. 7 Kelly, K. (2012) Better than Human: Why Robots Will – and Must – Take Our Jobs, Wired, December 24, 2012, p. 155. 8 Brynjolfsson, E. and McAfee, A. (2016) The Second Machine Age, Work, Progress, And Prosperity in a Time of Brilliant Technologies, New York: W. W. Norton & Company, p. 157. 9 Ibid., p. 179. 10 Piketty, T. (2014) Capital in the Twenty-First Century, Massachusetts: Harvard University Press. 11 See “Thomas Piketty’s Capital, Summarised in Four Paragraphs,” The Economist, May 2014, Lawrence Summers, “The Inequality Puzzle, Democracy: A Journal of Ideas, No. 33 (Summer 2014; Mervyn King, “Capital in the Twenty-First Century by Thomas Piketty,” review, The Daily Telegraph, May 10, 2014. 12 See M. Feldstein in G. Wood and Steve Hughes, (eds) (2015) The Central Contradiction of Capitalism?

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So, globalization and digitization have been two powerful forces operating over the last two decades to drive an increase in inequality. And now into this world of burgeoning inequality there steps a Frenchman bearing (intellectual) gifts. In 2014 Thomas Piketty published a book explaining the trend toward increased inequality in a different and powerful way and forecasting that it would intensify. Piketty’s Capital in the Twenty-First Century became an international publishing sensation. It has proved to be the launching pad for thousands of books, academic papers, and PhD theses.10 Piketty’s thesis is that the distribution of wealth and income is set to become ever more unequal because, quite simply, the return on capital exceeds the economic growth rate.

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Third, Chris Giles, the Economics Editor of the Financial Times, has shown that there are serious problems with Piketty’s data at a detailed level, including discrepancies between the data in original sources and Piketty’s reproduction of them, as well as the crude insertion of “assumed” data where there are gaps in the original data. Giles says that: “The conclusions of Capital in the Twenty-First Century do not appear to be backed by the book’s own sources.”14 Theory and evidence Given how devastating these criticisms of Piketty’s data are, you might well think that it is superfluous to comment on the theoretical defects of Piketty’s thesis. Nevertheless, we should briefly consider the theory.

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, low-wage service sector, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Ross, Life of Adam Smith, p. 302. 26.  Smith, Wealth of Nations, bk IV, ch. 5, Digression concerning the Corn Trade and Corn Laws, para. 43. 2 – David Ricardo: Do Trade Deficits Matter? 1.    John E. King, 2013, David Ricardo, Basingstoke: Macmillan, p. 5. 2.    Ibid., pp. 15–16. 3.    Thomas Piketty, 2014, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, pp. 314–15. 4.    Nicholas Crafts, 2005, ‘The First Industrial Revolution: Resolving the Slow Growth/Rapid Industrialization Paradox’, Journal of the European Economic Association, 3(2/3), pp. 525–34. 5.    David Ricardo, 2011 [1817], The Works and Correspondence of David Ricardo, vol.

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Myth and Reality’, Centre for Economic Performance, London School of Economics and Political Science Discussion Paper No. 1246; http://cep.lse.ac.uk/pubs/download/dp1246.pdf Pigou, A. C., 1953, Alfred Marshall and Current Thought, London: Macmillan Pigou, A. C., ed., 1925, Memorials of Alfred Marshall, London: Macmillan Piketty, Thomas, 2014, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press Ranelagh, John, 1991, Thatcher’s People: An Insider’s Account of the Politics, the Power and the Personalities, London: HarperCollins Reagan, Ronald, 1986, ‘The President’s News Conference’, 12 August; www.presidency.ucsb.edu/ws/?pid=37733 ________, 1986, ‘Remarks to State Chairpersons of the National White House Conference on Small Business’, 15 August; www.reaganlibrary.gov/archives/speeches/1986/081586e.html Reich, Robert, 2012, Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It, New York: Vintage Books Ricardo, David, 2011 [1817], On the Principles of Political Economy and Taxation, London: John Murray Robinson, Joan, 1932, Economics is a Serious Subject: The Apologia of an Economist to the Mathematician, the Scientist and the Plain Man, Cambridge: Heffer ________, 1962, Economic Philosophy, Harmondsworth: Pelican Books ________, 1969 [1933], The Economics of Imperfect Competition, London: Palgrave Macmillan ________, 1974, Reflections on the Theory of International Trade: Lectures Given in the University of Manchester, Manchester: Manchester University Press ________, 1980, ‘Marx, Marshall, and Keynes’, Collected Economic Papers, vols.

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How would Marshall have viewed inequalities that have burgeoned as the benefits of a growing economy disproportionately accrue to the top 1 per cent? There’s no doubt that inequality is high on the policy agenda, a reminder that we must consider the quality and not just the speed of economic growth. A best-selling book on the topic of inequality is by the French economist Thomas Piketty. Its popularity reflects a widespread concern that inequality is as high now in America as the Gilded Age of the late nineteenth century. A recent economics Nobel laureate, Joseph Stiglitz, has even pointed to inequality as one of the causes of the slow recovery after the Great Recession. So, how would Marshall view the worsening of income inequality which is often perceived as an indictment of capitalism?

The Great Economists: How Their Ideas Can Help Us Today by Linda Yueh

3D printing, additive manufacturing, Asian financial crisis, augmented reality, bank run, banking crisis, basic income, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bike sharing, bitcoin, Branko Milanovic, Bretton Woods, BRICs, business cycle, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, Corn Laws, creative destruction, credit crunch, Credit Default Swap, cryptocurrency, currency peg, dark matter, David Ricardo: comparative advantage, debt deflation, declining real wages, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, endogenous growth, everywhere but in the productivity statistics, export processing zone, Fall of the Berlin Wall, fear of failure, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, fixed income, forward guidance, full employment, general purpose technology, Gini coefficient, Glass-Steagall Act, global supply chain, Great Leap Forward, Gunnar Myrdal, Hyman Minsky, income inequality, index card, indoor plumbing, industrial robot, information asymmetry, intangible asset, invisible hand, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, laissez-faire capitalism, land reform, lateral thinking, life extension, low interest rates, manufacturing employment, market bubble, means of production, middle-income trap, mittelstand, Money creation, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, Nelson Mandela, non-tariff barriers, Northern Rock, Occupy movement, oil shale / tar sands, open economy, paradox of thrift, Paul Samuelson, price mechanism, price stability, Productivity paradox, purchasing power parity, quantitative easing, RAND corporation, rent control, rent-seeking, reserve currency, reshoring, road to serfdom, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, school vouchers, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, special economic zone, Steve Jobs, technological determinism, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, total factor productivity, trade liberalization, universal basic income, unorthodox policies, Washington Consensus, We are the 99%, women in the workforce, working-age population

Ross, Life of Adam Smith, p. 302. 26. Smith, Wealth of Nations, bk IV, ch. 5, Digression concerning the Corn Trade and Corn Laws, para. 43. Chapter 2 – David Ricardo: Do Trade Deficits Matter? 1. John E. King, 2013, David Ricardo, Basingstoke: Macmillan, p. 5. 2. Ibid., pp. 15–16. 3. Thomas Piketty, 2014, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, pp. 314–15. 4. Nicholas Crafts, 2005, ‘The First Industrial Revolution: Resolving the Slow Growth/Rapid Industrialization Paradox’, Journal of the European Economic Association, 3(2/3), pp. 525–34. 5. David Ricardo, 2011 [1817], The Works and Correspondence of David Ricardo, vol.

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Myth and Reality’, Centre for Economic Performance, London School of Economics and Political Science Discussion Paper No. 1246; http://cep.lse.ac.uk/pubs/download/dp1246.pdf Pigou, A. C., 1953, Alfred Marshall and Current Thought, London: Macmillan Pigou, A. C., ed., 1925, Memorials of Alfred Marshall, London: Macmillan Piketty, Thomas, 2014, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press Ranelagh, John, 1991, Thatcher’s People: An Insider’s Account of the Politics, the Power and the Personalities, London: HarperCollins Reagan, Ronald, 1986, ‘The President’s News Conference’, 12 August; www.presidency.ucsb.edu/ws/?pid=37733 ———, 1986, ‘Remarks to State Chairpersons of the National White House Conference on Small Business’, 15 August; www.reaganlibrary.gov/sites/default/files/archives/speeches/1986/081586e.htm Reich, Robert, 2012, Beyond Outrage: What Has Gone Wrong with Our Economy and Our Democracy, and How to Fix It, New York: Vintage Books Ricardo, David, 2011 [1817], On the Principles of Political Economy and Taxation, London: John Murray Robinson, Joan, 1932, Economics is a Serious Subject: The Apologia of an Economist to the Mathematician, the Scientist and the Plain Man, Cambridge: Heffer ———, 1962, Economic Philosophy, Harmondsworth: Pelican Books ———, 1969 [1933], The Economics of Imperfect Competition, London: Palgrave Macmillan ———, 1974, Reflections on the Theory of International Trade: Lectures Given in the University of Manchester, Manchester: Manchester University Press ———, 1980, ‘Marx, Marshall, and Keynes’, Collected Economic Papers, vols.

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How would Marshall have viewed inequalities that have burgeoned as the benefits of a growing economy disproportionately accrue to the top 1 per cent? There’s no doubt that inequality is high on the policy agenda, a reminder that we must consider the quality and not just the speed of economic growth. A best-selling book on the topic of inequality is by the French economist Thomas Piketty. Its popularity reflects a widespread concern that inequality is as high now in America as the Gilded Age of the late nineteenth century. A recent economics Nobel laureate, Joseph Stiglitz, has even pointed to inequality as one of the causes of the slow recovery after the Great Recession. So, how would Marshall view the worsening of income inequality which is often perceived as an indictment of capitalism?

Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It by Richard V. Reeves

affirmative action, Affordable Care Act / Obamacare, An Inconvenient Truth, assortative mating, Bernie Sanders, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, circulation of elites, cognitive dissonance, desegregation, Donald Trump, Downton Abbey, full employment, ghettoisation, glass ceiling, helicopter parent, Home mortgage interest deduction, housing crisis, income inequality, knowledge economy, land value tax, longitudinal study, meritocracy, mortgage tax deduction, obamacare, Occupy movement, plutocrats, positional goods, precautionary principle, race to the bottom, randomized controlled trial, restrictive zoning, unpaid internship, upwardly mobile, W. E. B. Du Bois, War on Poverty, We are the 99%, working-age population, zero-sum game

Adam Swift, “Justice, Luck, and the Family: The Intergenerational Transmission of Economic Advantage from a Normative Perspective,” in Unequal Chances: Family Background and Economic Success, edited by Samuel Bowles, Herbert Gintis, and Melissa Osborne Groves (Princeton University Press, 2005), p. 267. 2. Thomas Piketty, Capital in the Twenty-First Century (Harvard University Press, 2014), p. 419. 3. William Mosher, Jo Jones, and Joyce Abma, Intended and Unintended Births in the United States: 1982–2010, National Health Statistics Report 55 (Hyattsville, Md.: National Center for Health Statistics, July 24, 2012) (www.cdc.gov/nchs/data/nhsr/nhsr055.pdf). 4.

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Producing another volume about class and inequality might then seem redundant. But I think some of the most popular efforts to date have diagnosed the class fracture incorrectly. Some analysts have let the upper middle class off the hook (yes, that would be you) by pointing at the “super-rich” or “top 1 percent.” Take the new rock star of economic history, Thomas Piketty. For him, inequality is pretty much all about the top 1 percent. Others have looked through a slightly wider lens. In Coming Apart, Charles Murray describes an isolated “New Upper Class,” comprised of the most successful adults (and their spouses), working in managerial positions, the professions, or with senior jobs in the media.

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But he adds: “What one’s children are like is not.”1 Children raised in upper middle-class families do well in life. As a result, there is a lot of intergenerational “stickiness” at the top of the American income distribution—more, in fact, than at the bottom—with upper middle-class status passed down from one generation to the next, as I’ll show in the next chapter. As Thomas Piketty writes in Capital: “A society structured by the hierarchy of wealth has been replaced by a society whose structure relies almost entirely on the hierarchy of labor and human capital.”2 Piketty cites American TV shows (House, Bones, The West Wing) as evidence of a belief in the moral virtue of learning, brains, and hard work.

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One by Meghnad Desai

3D printing, Alan Greenspan, bank run, banking crisis, Bear Stearns, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, BRICs, British Empire, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, correlation coefficient, correlation does not imply causation, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, Fall of the Berlin Wall, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, German hyperinflation, Glass-Steagall Act, Gunnar Myrdal, Home mortgage interest deduction, imperial preference, income inequality, inflation targeting, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, market bubble, market clearing, means of production, Meghnad Desai, Mexican peso crisis / tequila crisis, mortgage debt, Myron Scholes, negative equity, Northern Rock, oil shale / tar sands, oil shock, open economy, Paul Samuelson, Phillips curve, Post-Keynesian economics, price stability, purchasing power parity, pushing on a string, quantitative easing, reserve currency, rising living standards, risk/return, Robert Shiller, Robert Solow, Ronald Reagan, savings glut, secular stagnation, seigniorage, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Tobin tax, too big to fail, women in the workforce

Thus we might have a discussion about the cross-country linkages at an informal, journalistic level but no attempt to weave together a systematic theoretical account. But evidence of long cycles can still be seen in data even when we analyze single countries. Recently Thomas Piketty has analyzed the long-run trends in inequality in his book Capital in the Twenty-First Century. He finds evidence of long cycles of 40 to 50 years. Thus the share of labor income in Britain peaks in 1920 and again in 1970. In France the wage share exhibits a 40-year cycle with peaks in 1900, 1940 and 1980. In the US, Piketty’s data show a fall in income inequality from a peak in 1940 which is regained in the mid-1990s.1 Given the average length of 40 to 50 years, there can only have been about four or five cycles since the Industrial Revolution.

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See also Alan Greenspan, The Age of Turbulence, with a new epilogue (Penguin, New York, 2008). 7.Financial Services Authority, The Turner Review: A Regulatory Response to the Global Banking Crisis (Financial Services Authority, London, 2009), p. 39. 8.The case for the Keynesians is argued by Robert Skidelsky, Keynes: The Return of the Master (Penguin, London, 2009). 9.Milton Friedman and Anna Schwartz, A Monetary History of the United States 1867–1960 (Princeton University Press, Princeton, NJ, 1963). 10.For the background to the euro, see David Marsh, The Euro: The Battle for the New Global Currency (Yale University Press, New Haven, CT, 2009). 7 The Search for an Answer 1.Thomas Piketty, Capital in the Twenty-First Century (Belknap Press, Cambridge, MA, 2014), see figure 6.1, p. 200; figure 6.2, p. 201; figure 8.5, p. 291. 2.Meghnad Desai, “An Econometric Model of the Share of Wages in National Income: UK 1855–1965” (1984), republished in The Selected Essays of Meghnad Desai, vol. 1: Macroeconomics and Monetary Theory (Edward Elgar, Cheltenham, 1995). 3.Andrew Glyn and Robert Sutcliffe, “The Collapse of UK Profits,” New Left Review, 66 (Mar.

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See also Alan Greenspan, The Age of Turbulence, with a new epilogue (Penguin, New York, 2008). 7.Financial Services Authority, The Turner Review: A Regulatory Response to the Global Banking Crisis (Financial Services Authority, London, 2009), p. 39. 8.The case for the Keynesians is argued by Robert Skidelsky, Keynes: The Return of the Master (Penguin, London, 2009). 9.Milton Friedman and Anna Schwartz, A Monetary History of the United States 1867–1960 (Princeton University Press, Princeton, NJ, 1963). 10.For the background to the euro, see David Marsh, The Euro: The Battle for the New Global Currency (Yale University Press, New Haven, CT, 2009). 7 The Search for an Answer 1.Thomas Piketty, Capital in the Twenty-First Century (Belknap Press, Cambridge, MA, 2014), see figure 6.1, p. 200; figure 6.2, p. 201; figure 8.5, p. 291. 2.Meghnad Desai, “An Econometric Model of the Share of Wages in National Income: UK 1855–1965” (1984), republished in The Selected Essays of Meghnad Desai, vol. 1: Macroeconomics and Monetary Theory (Edward Elgar, Cheltenham, 1995). 3.Andrew Glyn and Robert Sutcliffe, “The Collapse of UK Profits,” New Left Review, 66 (Mar.–Apr. 1971). 4.Gerard Duménil and Dominique Lévy, “The Crisis of the Early 21st Century: Marxian Perspectives,” in R. Bellofiore and G. Vertova, eds, The Great Recession and the Contradictions of Contemporary Capitalism (Edward Elgar, Cheltenham, 2014). 5.Piketty, Capital in the Twenty-First Century, ch. 5. 6.Carmen M. Reinhart and Kenneth S. Rogoff, This Time Is Different: Eight Centuries of Financial Folly (Princeton University Press, Princeton, NJ, 2009). 7.Lawrence Summers, “Why Stagnation May Prove to Be the New Normal,” Financial Times, Dec. 15, 2013. 8.Julia Leung, The Tides of Capital: How Asia Surmounted the Crisis and Is Now Guiding World Recovery (Official Monetary and Financial Institutions Forum, London, 2015). 9.Karl Marx, Preface to A Contribution to the Critique of Political Economy (1859), trans.

Ten Lessons for a Post-Pandemic World by Fareed Zakaria

"there is no alternative" (TINA), 15-minute city, AlphaGo, An Inconvenient Truth, anti-fragile, Asian financial crisis, basic income, Bernie Sanders, Boris Johnson, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, car-free, carbon tax, central bank independence, clean water, cloud computing, colonial rule, contact tracing, coronavirus, COVID-19, Credit Default Swap, David Graeber, Day of the Dead, deep learning, DeepMind, deglobalization, Demis Hassabis, Deng Xiaoping, digital divide, Dominic Cummings, Donald Trump, Edward Glaeser, Edward Jenner, Elon Musk, Erik Brynjolfsson, failed state, financial engineering, Francis Fukuyama: the end of history, future of work, gentrification, George Floyd, gig economy, Gini coefficient, global pandemic, global reserve currency, global supply chain, green new deal, hiring and firing, housing crisis, imperial preference, income inequality, Indoor air pollution, invention of the wheel, Jane Jacobs, Jeff Bezos, Jeremy Corbyn, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Snow's cholera map, junk bonds, lockdown, Long Term Capital Management, low interest rates, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, means of production, megacity, Mexican peso crisis / tequila crisis, middle-income trap, Monroe Doctrine, Nate Silver, Nick Bostrom, oil shock, open borders, out of africa, Parag Khanna, Paris climate accords, Peter Thiel, plutocrats, popular capitalism, Productivity paradox, purchasing power parity, remote working, reserve currency, reshoring, restrictive zoning, ride hailing / ride sharing, Ronald Reagan, secular stagnation, Silicon Valley, social distancing, software is eating the world, South China Sea, Steve Bannon, Steve Jobs, Steven Pinker, Suez crisis 1956, TED Talk, the built environment, The Death and Life of Great American Cities, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tim Cook: Apple, trade route, UNCLOS, universal basic income, urban planning, Washington Consensus, white flight, Works Progress Administration, zoonotic diseases

Lesson Nine: The World Is Becoming Bipolar 187 “failed state”: George Packer, “We Are Living in a Failed State,” Atlantic, June 2020. 187 “secular stagnation”: Lawrence H. Summers, “Reflections on Secular Stagnation,” February 19, 2015, remarks at Princeton University’s Julis-Rabinowitz Center for Public Policy and Finance. 187 highlighted rising inequality: See, inter alia, Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2013). 187 “deaths of despair”: Anne Case and Angus Deaton, Deaths of Despair and the Future of Capitalism (Princeton, NJ: Princeton University Press, 2020). 188 Fintan O’Toole: Fintan O’Toole, “Donald Trump Has Destroyed the Country He Promised to Make Great Again,” Irish Times, April 25, 2020.

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Lesson Seven: Inequality Will Get Worse 147 “death is democratic”: Adriana Gomez Licon, “Mexican Day of Dead ‘Skeleton Lady’ Spreads Look,” Associated Press, October 31, 2013. 147 La Catrina: Simon Ingram, “La Catrina: The Dark History of Day of the Dead’s Immortal Icon,” National Geographic, October 18, 2019. 147 The Skull of Morbid Cholera: José Guadalupe Posada, La calavera del cólera morbo (1910), accessed via Library of Congress, https://www.loc.gov/pictures/item/99615954/. 148 “a very big problem”: Richard Wike, “The Global Consensus: Inequality Is a Major Problem,” Pew Research, November 15, 2013, https://www.pewresearch.org/fact-tank/2013/11/15/the-global-consensus-inequality-is-a-major-problem/. 148 narrowing over the same period: Taking on Inequality: Poverty and Shared Prosperity 2016, The World Bank Group, 9, 81, https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf. 149 forty-two saw rises: “Table 4.1: Trends in the Within-Country Gini Index, 1993–2013,” Taking on Inequality: Poverty and Shared Prosperity 2016, The World Bank Group, 86, https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf. 149 two where it fell: Ibid, 88. 149 twelve of the sixteen: Ibid. 149 gap has widened dramatically: Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, “World Inequality Report 2018,” 46, https://wir2018.wid.world/files/download/wir2018-full-report-english.pdf. 150 highest level since 1928: Markus P. A. Schneider and Daniele Tavani, “Tale of Two Ginis in the United States, 1921–2012,” Levy Institute Working Paper (January 2015), http://www.levyinstitute.org/pubs/wp_826.pdf; see also Thomas Piketty, Paris School of Economics, excerpted figures and tables, Table 1.1, http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014FiguresTables.pdf. 150 “defining challenge”: Barack Obama, “Remarks by the President on Economic Mobility,” White House, Office of the Press Secretary, December 4, 2013, https://obamawhitehouse.archives.gov/the-press-office/2013/12/04/remarks-president-economic-mobility. 151 five years ahead of schedule: United Nations, “Millennium Development Goals Report 2015,” 15, https://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20(July%201).pdf. 151 to 650 million: Max Roser and Esteban Ortiz-Ospina, “Global Extreme Poverty,” Our World in Data, 2019, https://ourworldindata.org/extreme-poverty. 151 mortality rate for young children dropped 59%: “Under-Five Mortality,” Global Health Observatory (GHO) data, WHO, https://www.who.int/gho/child_health/mortality/mortality_under_five_text/en/#:~:text=Trends,1%20in%2026%20in%202018. 151 just 14% of the world’s known deaths from Covid-19: Philip Schelle­kens and Diego Sourrouille, “Tracking COVID-19 as Cause of Death: Global Estimates of Relative Severity,” Brookings Institution, May 2020, https://www.brookings.edu/wp-content/uploads/2020/05/Tracking_COVID-19_as_-Cause_of_Death-Global_Estimates_of_Severity.pdf. 151 Heat may have some effect: Islam et al., “Temperature, Humidity, and Wind Speed Are Associated with Lower COVID-19 Incidence,” 2020, https://doi.org/10.1101/2020.03.27.20045658, cited in: Rapid Expert Consultation on SARS-CoV-2 Survival in Relation to Temperature and Humidity and Potential for Seasonality for the COVID-19 Pandemic (April 7, 2020), National Academies of Science, Engineering, and Medicine, https://www.nap.edu/read/25771/chapter/1. 152 170 million in 2019: “Chinese Tourists Made 169 Million Outbound Trips in 2019: Report,” China Global Television Network, February 29, 2020, citing China’s National Bureau of Statistics, https://news.cgtn.com/news/2020–02–29/Chinese-tourists-made-169-million-outbound-trips-in-2019-report-OtIYWsZmOQ/index.html. 152 thirty times: “Dharavi slum has a population density almost 30 times greater than New York—about 280,000 people per square kilometer”: Vedika Sud, Helen Regen, and Esha Mitra, Mercury News, citing CNN, April 4, 2020, https://www.mercurynews.com/2020/04/03/doctors-india-must-prepare-for-onslaught-of-coronavirus/. 152 two-thirds of people live in congested slums: According to Leilani Farha, the United Nations Special Rapporteur on housing, as of 2019: Paul Wallace and Tope Alake, “Lagos Building Luxury Homes in Face of Affordable Housing Crisis,” Bloomberg, December 20, 2019. 152 eight hospital beds for every 10,000 people: World Bank DataBank, “Hospital Beds (Per 1,000 People)—Bangladesh, European Union, United States,” https://data.worldbank.org/indicator/SH.MED.BEDS.ZS?

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A study looking at college admissions from 1999 to 2013 found a staggering result—the top 1% of earners are seventy-seven times more likely to have a child attend Ivy League or other elite schools, compared to poorer children from families in the bottom 20% of earners. Meanwhile, as the economist Thomas Piketty and others have noted, investment income is growing faster than wages. And as we have seen, routine work—at first blue-collar and now increasingly white-collar—can be done by someone in a low-wage country or a computer. The premium that labor could once command simply does not exist in a postindustrial world.

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis by Martin Wolf

air freight, Alan Greenspan, anti-communist, Asian financial crisis, asset allocation, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Berlin Wall, Black Swan, bonus culture, break the buck, Bretton Woods, business cycle, call centre, capital asset pricing model, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, debt deflation, deglobalization, Deng Xiaoping, diversification, double entry bookkeeping, en.wikipedia.org, Erik Brynjolfsson, Eugene Fama: efficient market hypothesis, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial innovation, financial repression, floating exchange rates, foreign exchange controls, forward guidance, Fractional reserve banking, full employment, Glass-Steagall Act, global rebalancing, global reserve currency, Growth in a Time of Debt, Hyman Minsky, income inequality, inflation targeting, information asymmetry, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, Les Trente Glorieuses, light touch regulation, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low interest rates, mandatory minimum, margin call, market bubble, market clearing, market fragmentation, Martin Wolf, Mexican peso crisis / tequila crisis, Minsky moment, Modern Monetary Theory, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, North Sea oil, Northern Rock, open economy, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, proprietary trading, purchasing power parity, pushing on a string, quantitative easing, Real Time Gross Settlement, regulatory arbitrage, reserve currency, Richard Feynman, risk-adjusted returns, risk/return, road to serfdom, Robert Gordon, Robert Shiller, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, shareholder value, short selling, sovereign wealth fund, special drawing rights, subprime mortgage crisis, tail risk, The Chicago School, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, too big to fail, Tyler Cowen, Tyler Cowen: Great Stagnation, vertical integration, very high income, winner-take-all economy, zero-sum game

On the forces driving inequality and their consequences, see Organisation for Economic Co-operation and Development, Divided We Stand: Why Inequality Keeps Rising (Paris: OECD, 2011), Joseph Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers our Future (New York and London: Norton, 2012), and Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA, and London, England, 2014). 59. See, in particular, a remarkable paper by Christoph Lakner and Branco Milanovic of the World Bank, ‘Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession’, World Bank Research Working Paper 6719, December 2013, http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2013/12/11/000158349_20131211100152/Rendered/PDF/WPS6719.pdf. 60.

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Mervyn King, ‘Banking from Bagehot to Basel, and Back Again’, 25 October 2010, The Second Bagehot Lecture, Buttonwood Gathering, New York City, http://www.bankofengland.co.uk/publications/Documents/speeches/2010/speech455.pdf, p. 18. 4. Luc Laeven and Fabian Valencia, ‘Systemic Crises Database: An Update’, International Monetary Fund Working Paper, WP/12/163, June 2102, http://www.imf.org/external/pubs/ft/wp/2012/wp12163.pdf. 5. This proposition is supported by Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA, and London: Harvard University Press, 2014). 6. For a detailed discussion of the evolution of real interest rates, see International Monetary Fund, World Economic Outlook, April 2014, ch. 3, http://www.imf.org/external/Pubs/ft/weo/2014/01/. 7.

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A fully worked out plan for such a reform is in Andrew Jackson and Ben Dyson, Modernising Money: Why our Monetary System is Broken and How it Can be Fixed (London: Positive Money, 2013). 17. See Andrew Smithers, The Road to Recovery: How and Why Economic Policy Must Change (London: Wiley, 2013). 18. See Piketty, Capital in the Twenty-First Century, Part Four. 19. For elements of the new Eurozone policy system, see ‘Stability and Growth Pact’, http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm; ‘Macroeconomic Imbalance Procedure’, http://ec.europa.eu/economy_finance/economic_governance/macroeconomic_imbalance_procedure/index_en.htm; ‘Treaty on Stability, Co-ordination and Governance’ (also known as the Fiscal Compact), http://european-council.europa.eu/media/639235/st00tscg26_en12.pdf; ‘European Semester’, http://ec.europa.eu/europe2020/making-it-happen; ‘Euro Plus Pact’, http://ec.europa.eu/europe2020/pdf/euro_plus_pact_background_december_2011_en.pdf; and ‘European Stability Mechanism’, http://www.esm.europa.eu/index.htm; ‘European Financial Supervision’, http://ec.europa.eu/internal_market/finances/committees; and ‘Banking Union’, http://ec.europa.eu/internal_market/finances/banking-union. 20.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

The lines in figure 1 were horizontal before 1970, but they are continuing their movements after 2014. Figure 1 shows that the income share lost by the middle class went to people earning more than double the median income. In short, the rich got richer, the poor did not disappear, and the middle class shrank sharply. We know from the work of Thomas Piketty in Capital in the Twenty-First Century that inequality has been increasing since 1970.2 Now we see that the income distribution is hollowing out. We are on our way to become a nation of the rich and the poor with only a few people in the middle. Figure 1 Percent of aggregate U.S. household income. Note: The assignment to income tiers is based on size-adjusted household incomes in the year prior to the survey year.

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John Edwards, a presidential candidate, observed in 2004, “We shouldn’t have two different economies in America: one for people who are set for life, they know their kids and their grand-kids are going to be just fine; and then one for most Americans, people who live paycheck to paycheck.”1 Where did the rest of the national product go? Not to the lower group shown in figure 1. It went instead to the upper group as shown in figure 3. This well-known graph comes from Thomas Piketty, author of Capitalism in the Twenty-First Century, and his colleagues who have developed data for the richest 1 percent of the population for many countries as far back as the data allow. The top group in figure 1 contains 20 percent of the population, and the path of what is called the “one percent” shows the pattern.

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Page, Bartels, and Seawright 2013; Ferguson 1995; Hacker and Pierson 2010; Gilens and Page 2014. 5. Autor 2015; Feinstein 1998. 6. Dewey 1935, 62; Piketty 2014, 481. 7. Heckman, Pinto, and Savelyev 2013. 8. Kremer 1993. 9. Dewey 1935, 66; Rawls 1999. Appendix: Models of Inequality The big book about inequality around the world is Thomas Piketty’s classic, Capital in the Twenty-First Century. Piketty worked mainly with tax data from various countries, and his sample was restricted to those developed countries that had good records extending back into history. In terms of figure 7, he focused on the growth of the global elite. And to show that politics matter, he contrasted the experiences of France and the United States.

How Elites Ate the Social Justice Movement by Fredrik Deboer

2021 United States Capitol attack, Affordable Care Act / Obamacare, anti-communist, Bernie Sanders, BIPOC, Black Lives Matter, Capital in the Twenty-First Century by Thomas Piketty, centre right, collective bargaining, coronavirus, COVID-19, data science, David Brooks, defund the police, deindustrialization, delayed gratification, Donald Trump, Edward Snowden, effective altruism, false flag, Ferguson, Missouri, George Floyd, global pandemic, helicopter parent, income inequality, lockdown, obamacare, Occupy movement, open immigration, post-materialism, profit motive, QAnon, Silicon Valley, single-payer health, social distancing, TikTok, upwardly mobile, W. E. B. Du Bois, We are the 99%, working poor, zero-sum game

For example, a 2018 paper: Jonathan Wai and Kaja Perina, “Expertise in Journalism: Factors Shaping a Cognitive and Culturally Elite Profession,” Journal of Expertise 1, no. 1 (June 2018): 57–78. Some of the most important work: Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). Piketty’s 2018 article “Brahmin”: Thomas Piketty, “Brahmin Left vs Merchant Right: Rising Inequality and the Changing Structure of Political Conflict,” WID.world Working Paper 7, 2018. the paper found that income: “Educated Voters’ Leftward Shift Is Surprisingly Old and International,” The Economist, May 29, 2021, https://www.economist.com/graphic-detail/2021/05/29/educated-voters-leftward-shift-is-surprisingly-old-and-international.

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To understand where we are, it’s essential to understand the rise of educational polarization as a defining factor—perhaps the defining factor for the more politically educated and engaged—in contemporary American political life. Education polarization refers to the way that the education level of a certain group predicts their ideological and political affiliation. Some of the most important work on educational polarization has been conducted by Thomas Piketty, the French economist whose bestselling 2014 book, Capital in the Twenty-First Century, argued that wealth inequality rises over time due to the structural relationship between interest and growth. The book caused a sensation, a remarkable feat for a dry academic text of economic history. Following its success, Piketty aimed to explain why traditional divides in ideological coalitions appeared to be changing—why the left, so long the political vehicle of the common man, was becoming associated with elitism.

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., 110 Biden, Joe, 41, 42, 50, 197 Black Americans and “Black bodies,” 201 classes among, 65 current status of, 47 education of, 47, 66 as liberal Democrats, 136 as moderate Democrats, 64 non-police violence against, 59–63 police presence desired by, 57–58, 64 police violence against, 47–49, 55–57, 199–200 professional-managerial class of, 54–68 and racial politics, 74–76 unjustified killing of, 37, 45–46, 55–57 violence within community of, 37, 59–62 Black Lives Matter (BLM), 45–77, 213 achievements of, 67–68 and defunding police, 38, 51–54 and Floyd’s murder, 6 lack of coherent demands of, 43 money donated to, 70–71 organizational difficulties in, 43 perceived criticisms of, 34, 35 profiteering from, 70–72 and racial violence, 47–51 responses to, 68–77 riots with, 94 those who speak for, 64–67 violence at protests of, 81 and voices for racial justice, 53–64 Black Lives Matter Global Network Foundation, 71 Bland, Sandra, 46 bobos, 137–139, 142 Bobos in Paradise (Brooks), 137 Bond, Lisa, 72 “Brahmin Left vs Merchant Right” (Piketty), 145 Bridgespan Group, 102 Bright, Liam Kofi, 63, 70 British NHS pamphlet, 202, 203 Brookings Institution, 167–168 Brooks, David, 137, 138, 142 Brown, Michael, 46 Bush, Cori, 52 Bush, George W., 14, 16, 25, 189 Campbell, David, 146 canceling, 132 Capital in the Twenty-First Century (Piketty), 144–145 capitalism, 52, 91–92, 135, 140–141 Carmichael, Stokely (Kwame Ture), 76, 77 Castro, Fidel, 93 “centering,” 176 Central Connecticut State University (CCSU), 3 Central Park Karen, 56 Chait, Jonathan, 25, 34 Charity Navigator, 101, 103 Chauvin, Derek, 5, 14, 39 civil rights movement, 69–70, 75, 182 class(es) Black, 65 and Occupy movement, 19 organizing along lines of, 194–197 revolutionary, 215 upper-middle, 150–151 class-first leftism, 164–192 advantages of, 174–183 both/and arguments in, 187–192 class reductionist view vs., 168–174 as pejorative term, 164–165 problems with, 196–197 and right-wing identity politics, 183–187 salience of, 168 class reductionists, 168–174 Clinton, Bill, 27, 28 Clinton, Hillary, 27–31, 152, 165–168, 186 Clough, Alina, 100–101 Coffey, Clare, 140–141 Cohn, Nate, 145–146, 148 Common Dreams, 106 communism, 29, 152, 190 Community Justice Action Fund, 60 Confederate statues, 81–82 Conference on College Composition and Communication, 67 Connecticut United for Peace (CutUP), 2 consensus decision-making, 23–24 conservatism, 114 conservatives as “classical liberals,” 134 Clinton obsession of, 27 Democrats identifying as, 136 focus of, 203 fundamental message of, 186 home field advantage of, 43 King presented as pacifist by, 85 and meritocratic system, 142 Obama as, 17 Republicans identifying as, 136 self-professed, 210–211 and violence among and toward Black people, 37 consistency, in justice, 123–125 conspiracy theories, 204 Cosby, Bill, 120 Cotton, Tom, 56 Covid-19 pandemic, 5, 13–14, 32, 41 crime, 37, 59–62 criminal justice reforms, 7, 49–54 Cuba, 88, 92, 93 Cuomo, Andrew, 122–123 D’Arcy, Stephen, 69 Davis, Angela, 51 Debs, Eugene, 9 decision-making, 19, 21–24 deep state, 114–115 deference politics, 155–163 defunding police, 38, 51–54, 58, 62–64 demands carefully developed and expressed, 117 coherent, 19–20, 43, 172 essential purpose of, 20 following Floyd murder, 38–39 framing of, 181–182 from #MeToo movement, 132 for political violence, 78–79 democracy, American, 92 Democratic National Committee, 41 Democratic Party as center-right party, 78 and education polarization, 148–149 leftist complaints about, 11 as left-leaning party, 135–136 liberals in, 136, 137 (see also liberals) messaging around economic issues in, 197 nonprofits as vehicles for, 107 and Obama’s cult of personality, 17 as overwhelmingly white, 136 as party of elites, 31 Perez appointment influenced by, 41 and political action, 207–209 Sanders’ impact on, 29 2016 primaries of, 27–29, 165–168 in 2020 election, 11, 40–42 2008 primaries of, 27 voters’ disillusionment with, 28 youth in, 79 Democratic Socialists of America (DSA), 29–30, 168, 177–179 Democrats center-left, analyses of, 134–135 and George Floyd Justice in Policing Act, 39 and labor unions, 195 liberals’ votes for, 135 moderates and liberals, 64 and police funding, 52 political positions of, 136, 189, 190 technocratic liberal voice of, 25 denunciation, 154 Depp, Johnny, 40, 120–121 DiAngelo, Robin, 71 direct democracy system, 21, 23–24 disabled people, 173, 178–180, 205–206 Dream Hoarders (Reeves), 150–151 Du Bois, W.

The Glass Half-Empty: Debunking the Myth of Progress in the Twenty-First Century by Rodrigo Aguilera

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist fund / activist shareholder / activist investor, Alan Greenspan, Anthropocene, availability heuristic, barriers to entry, basic income, benefit corporation, Berlin Wall, Bernie Madoff, Bernie Sanders, bitcoin, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, Capital in the Twenty-First Century by Thomas Piketty, capitalist realism, carbon footprint, Carmen Reinhart, centre right, clean water, cognitive bias, collapse of Lehman Brothers, Colonization of Mars, computer age, Corn Laws, corporate governance, corporate raider, creative destruction, cryptocurrency, cuban missile crisis, David Graeber, David Ricardo: comparative advantage, death from overwork, decarbonisation, deindustrialization, Deng Xiaoping, Doha Development Round, don't be evil, Donald Trump, Doomsday Clock, Dunning–Kruger effect, Elon Musk, European colonialism, fake news, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, fundamental attribution error, gig economy, Gini coefficient, Glass-Steagall Act, Great Leap Forward, green new deal, Hans Rosling, housing crisis, income inequality, income per capita, index fund, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, Jeff Bezos, Jeremy Corbyn, Jevons paradox, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Joseph Schumpeter, karōshi / gwarosa / guolaosi, Kenneth Rogoff, Kickstarter, lake wobegon effect, land value tax, Landlord’s Game, late capitalism, liberal capitalism, long peace, loss aversion, low interest rates, Mark Zuckerberg, market fundamentalism, means of production, meta-analysis, military-industrial complex, Mont Pelerin Society, moral hazard, moral panic, neoliberal agenda, Network effects, North Sea oil, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, Overton Window, Pareto efficiency, passive investing, Peter Thiel, plutocrats, principal–agent problem, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, risk tolerance, road to serfdom, Robert Shiller, Robert Solow, savings glut, Scientific racism, secular stagnation, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, Social Justice Warrior, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, Stanislav Petrov, Steven Pinker, structural adjustment programs, surveillance capitalism, tail risk, tech bro, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transatlantic slave trade, trolley problem, unbiased observer, universal basic income, Vilfredo Pareto, Washington Consensus, Winter of Discontent, Y2K, young professional, zero-sum game

The idea that, despite rising incomes and prosperity, the rich were getting an exaggeratedly large piece of the pie during this period is borne out by the statistics: the Gilded Age was one in which income and wealth inequality skyrocketed, and it was only the triple shocks of the two world wars and the Great Depression that brought down inequality to more acceptable levels (Figures 6.1-6.2). French economist Thomas Piketty, in his landmark study of inequality Capital in the Twenty-First Century (as well as his earlier work with Emmanuel Saez), showed just how the accumulation of wealth by the top 1% in the US and Europe fell dramatically during this time, reverting the “endless inegalitarian spiral” that occurs when the return on capital outpaces economic growth.2 Piketty summarized this relationship with the now famous equation r > g.

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The authors are open about the many caveats regarding accurate income data before 1950. 58 “Corn Laws”, UK Parliament Historic Hansard, HL Deb 02 April 1840 vol 53 cc398-404, https://api.parliament.uk/historic-hansard/lords/1840/apr/02/corn-laws Chapter Six: And Justice for All 1 Pilon, M., “Monopoly Was Designed to Teach the 99% About Income Inequality”, Smithsonian Magazine, Jan. 2015, https://www.smithsonianmag.com/arts-culture/monopoly-was-designed-teach-99-about-income-inequality-180953630/ 2 Piketty, T., Capital in the Twenty-First Century (Belknap Press, 2014), pg. 8. 3 Jordà, O. et al., “The Rate of Return on Everything, 1870-2015”, NBER Working Paper Series, 24112, May 2019, https://www.nber.org/papers/w24112 4 Milton Friedman himself stated that it would be the “least bad tax”. The Economist also tacitly supported it in a 2015 piece even if remaining skeptical about its implementation: “Why Henry George had a point”, Economist, 2 Apr. 2015, https://www.economist.com/blogs/freeexchange/2015/04/land-value-tax 5 Sheidel, W., The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century (Princeton University Press, 2017), pg. 94 6 A 1997 study showed that as many as 8% of CEOs were directly interlocked.

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A Literature Review”, Institute for Global Prosperity. 2019, https://ubs-hub.org/litreview2019/ 38 “Our Common Wealth: A Citizen’s Wealth Fund for the UK”, IPPR, Mar. 2018, https://www.ippr.org/files/2018-04/cej-our-common-wealth-march-2018.pdf 39 It has not been published in English at time of writing. Information on his proposals is from Elliott, L. “Thomas Piketty’s new War and Peace-sized book published on Thursday”, Guardian, 9 Sep. 2019, https://www.theguardian.com/business/2019/sep/09/thomas-pikettys-new-magnum-opus-published-on-thursday 40 Graeber, D., Bullshit Jobs: A Theory (Simon & Schuster, 2018), pg. 23 41 Brady-Turner, C., “The Relentless Misery of Working Inside an Amazon Warehouse”, OneZero, 11 Mar. 2019, https://onezero.medium.com/relentless-com-life-as-a-cog-in-amazons-e-tail-machine-d46b3ef05eb8 42 An excellent recent account of the authoritarian personality is Milburn, M.A. and Conrad, S.D., Raised to Rage: The Politics of Anger and the Roots of Authoritarianism (MIT Press, 2016) 43 “Was the EU Referendum Advisory?”

How Will Capitalism End? by Wolfgang Streeck

"there is no alternative" (TINA), accounting loophole / creative accounting, air traffic controllers' union, Airbnb, Alan Greenspan, basic income, behavioural economics, Ben Bernanke: helicopter money, billion-dollar mistake, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, junk bonds, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, low interest rates, market bubble, means of production, military-industrial complex, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, tacit knowledge, technological determinism, The Future of Employment, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

The content and goal of this new social and economic order can no longer be the capitalistic pursuit of power and profit; it must lie in the welfare of our people.’ 9Ironically, it was in the aftermath of the two great wars of the twentieth century, in 1918 and 1945, respectively, that the working classes under capitalism made their most effective advances in the capitalist political economy (Piketty, Capital in the Twenty-First Century). 10I have sketched out this dynamic in Buying Time. 11Merkel, ‘Is Capitalism Compatible with Democracy?’, p. 126. 12Mair, Representative versus Responsible Government. 13See ‘Jürgen Habermas im Gespräch: Europa wird direkt ins Herz getroffen’, Frankfurter Allgemeine Zeitung, 29 May 2014. One interesting irony is that Juncker ascended to the presidency shortly after the publication of Thomas Piketty’s now famous book in which he demands a general wealth tax to correct the long-term and inherent increase in inequality under capitalism (Piketty, Capital in the Twenty-First Century).

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‘SAC Starts to Balk over Insider Trading Inquiry’, New York Times, 17 May 2013, dealbook.nytimes.com, last accessed 30 November 2015. 45A fascinating example is the Koch brothers’ nurturing, over several decades, of James Buchanan’s Center for Study of Public Choice at George Mason University. See Nancy MacLean, Forget Chicago, It’s Coming from Virginia: The 1970s Genesis of Today’s Attack on Democracy, Unpublished Manuscript 2015. 46Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press 2014. 47An exception is David A. Stockman, ‘State-Wrecked: The Corruption of Capitalism in America’, New York Times, 31 March 2013, who may be considered particularly knowledgeable on the subject. 48‘Vernunft durch Strafen in Milliardenhöhe’, Frankfurter Allgemeine Zeitung, 29 June 2015, faz.net, last accessed 2 December 2015.

…

One interesting irony is that Juncker ascended to the presidency shortly after the publication of Thomas Piketty’s now famous book in which he demands a general wealth tax to correct the long-term and inherent increase in inequality under capitalism (Piketty, Capital in the Twenty-First Century). On the farce of last year’s ‘European election’ see Susan Watkins, ‘The Political State of the Union’. 14Merkel, ‘Is Capitalism Compatible with Democracy?’, p. 126. 15Mair, Ruling the Void. 16The project to give the European Union a constitution began in 2001 with a resolution to this effect by the then member states of the EU. Two years later a Convention appointed by the national governments went to work, and in 2004 the member states signed the document it had produced. What was billed as a ‘European Constitution’ was essentially a compilation of the existing treaties and consisted of a book of 160,000 words.

Inequality and the 1% by Danny Dorling

Affordable Care Act / Obamacare, banking crisis, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Boris Johnson, Branko Milanovic, buy and hold, call centre, Capital in the Twenty-First Century by Thomas Piketty, centre right, collective bargaining, conceptual framework, corporate governance, credit crunch, David Attenborough, David Graeber, delayed gratification, Dominic Cummings, double helix, Downton Abbey, en.wikipedia.org, Etonian, family office, financial deregulation, full employment, gentrification, Gini coefficient, high net worth, housing crisis, income inequality, land value tax, Leo Hollis, Londongrad, longitudinal study, low skilled workers, lump of labour, mega-rich, Monkeys Reject Unequal Pay, Mont Pelerin Society, mortgage debt, negative equity, Neil Kinnock, Occupy movement, offshore financial centre, plutocrats, precariat, quantitative easing, race to the bottom, Robert Shiller, Russell Brand, TaskRabbit, TED Talk, The Spirit Level, The Wealth of Nations by Adam Smith, trickle-down economics, unpaid internship, very high income, We are the 99%, wealth creators, working poor

Measuring Capital for the 21st Century’, Washington, DC, World Bank, 2006, at web.worldbank.org. 50. J. B. Stewart, ‘Calculated Deal in a Rate-Rigging Inquiry’, New York Times, 13 July 2012. 51. E. Logutenkova, ‘UBS, Barclays Dodge $4.3 Billion EU Fines for Rate Rigging’, Bloomberg News, 4 December 2013, at bloomberg.com. 52. T. Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press), pp. 515–17. 53. Ipsos MORI, ‘General Concern About the Economy Continues to Fall as Concern Shifts to Poverty/Inequality and the Personal Economy’, Economist/Ipsos MORI, 29 November 2013, at ipsos-mori.com. 54. P. Diamond, ‘Labour’s Economic Path to Power’, Policy Network, 2 December 2013, at policy-network.net. 55.

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A financial chasm is opening up between them and the best-off of the rest – the best-off of the 99 per cent. It is because this chasm is now so large that those at the bottom of the 1 per cent more often look up to see how small they are in comparison to the giants above them. Above them they see what Thomas Piketty has termed ‘meritocratic extremism’, people who try to justify huge incomes in terms of what is required to match the wealth of those who inherit the most.26 They are out of touch with the dwarfs of the 99 per cent. But they need to look down, because if they don’t they too will soon be in trouble.

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In 2012 Barclays ‘secured a non-prosecution agreement and agreed to pay a penalty of more than $450 million, a comparatively paltry sum for a bank that had more than £32 billion ($50 billion) in revenue in 2011’.50 But in 2013 Barclays was forced to begin to reveal more of its activities in order to avoid paying part of a $4.3 billion EU antitrust penalty.51 The 1 per cent is finding it progressively harder to hide its money and its corruption. Many people argue that concerted political action, including much more effective banking regulation, is needed to address the problem of increasing inequality. A global tax on capital was seriously proposed in 2014 by Thomas Piketty, one of the world’s leading economists, and a best-selling author in the US and UK that year.52 But successful social movements in the past, rather like the victors in wars, wrote their own history, and may have overstated the importance of overt politics. Campaigners want to say why they mattered; academics want to try to influence policy, and so look for evidence of their personal impact.

The Capitalist Manifesto by Johan Norberg

AltaVista, anti-communist, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, Boris Johnson, business climate, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Charles Babbage, computer age, coronavirus, COVID-19, creative destruction, crony capitalism, data is not the new oil, data is the new oil, David Graeber, DeepMind, degrowth, deindustrialization, Deng Xiaoping, digital map, disinformation, Donald Trump, Elon Musk, energy transition, Erik Brynjolfsson, export processing zone, failed state, Filter Bubble, gig economy, Gini coefficient, global supply chain, Google Glasses, Greta Thunberg, Gunnar Myrdal, Hans Rosling, Hernando de Soto, Howard Zinn, income inequality, independent contractor, index fund, Indoor air pollution, industrial robot, Intergovernmental Panel on Climate Change (IPCC), invention of the printing press, invisible hand, Jeff Bezos, Jeremy Corbyn, job automation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, lockdown, low cost airline, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, means of production, meta-analysis, Minecraft, multiplanetary species, Naomi Klein, Neal Stephenson, Nelson Mandela, Network effects, open economy, passive income, Paul Graham, Paul Samuelson, payday loans, planned obsolescence, precariat, profit motive, Ralph Nader, RAND corporation, rent control, rewilding, ride hailing / ride sharing, Ronald Coase, Rosa Parks, Salesforce, Sam Bankman-Fried, Shenzhen was a fishing village, Silicon Valley, Simon Kuznets, Snapchat, social distancing, social intelligence, South China Sea, Stephen Fry, Steve Jobs, tech billionaire, The Spirit Level, The Wealth of Nations by Adam Smith, TikTok, Tim Cook: Apple, total factor productivity, trade liberalization, transatlantic slave trade, Tyler Cowen, Uber and Lyft, uber lyft, ultimatum game, Virgin Galactic, Washington Consensus, working-age population, World Values Survey, X Prize, you are the product, zero-sum game

It changes very fast depending on the temporary stock prices of the companies the super-rich founded, so I’ll continue to use Gates as an example for a while. 9. Thomas Piketty, Capital in the Twenty-First Century, Belknap Press, 2014, p.444ff. 10. Ibid., p.31. 11. Ibid., pp.435–9. 12. Robert Arnott, William Bernstein & Lillian Wu, ‘The myth of dynastic wealth: The rich get poorer’, Cato Journal, vol.35, no.3, 2015. 13. William McBride, ‘Thomas Piketty’s false depiction of wealth in America’, Tax Foundation Special Report no.223, July 2014. Chris Edwards & Ryan Bourne, ‘Exploring Wealth Inequality’, Policy Analysis, no.881, Cato Institute, 5 November 2019. 14.

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The 1 per cent But how many of the super-rich are like Gates and Kamprad? Aren’t they more often people who sit on large inheritances and passive incomes? The French economist Thomas Piketty has shown that income from interest and gains on capital grow faster than growth (r > g) and that inherited properties just grow and grow until a small elite has almost everything. In the acclaimed Capital in the Twenty-First Century, Piketty therefore advocates what he himself calls ‘confiscatory taxes’ to squeeze the rich. He has no illusion that these taxes would generate large revenues. The important thing is that they end the big incomes.

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INDEX NB Page numbers in italics indicate illustrations Afghanistan, 160–61, 256 Africa, 30–35, 70, 267, 282 colonisation, 31 independence, 31–4 Sub-Saharan Africa, 30–31 AIM (AOL Instant Messenger), 170 Albania, 50 Algeria, 251 Alphabet, 179 AltaVista, 169, 174 Amazon, 169–72, 178–9 Amazon Prime, 179 Andersson, Magdalena, 8 Angola, 239 Annan, Kofi, 3 Ant Group, 227 AOL (America Online), 169–71, 174 Apple, 107–8, 159, 163, 169–73, 179 Apple TV, 179 Arab Spring, 215 Aristophanes, 73 Aristotle, 70 ARPA, 183–6 ARPANET, 184–5 Asia, 267, 282 Asp, Anette, 287 Attac, 2–3, 6 Australia, 11, 258, 267, 282, 285 Ayittey, George, 31 Bangladesh, 235 Bank for International Settlements (BIS), 144 Bankman-Fried, Sam, 153 Bao Tong, 212 Baran, Paul, 184, 186–7 Bastiat, Frédéric, 114 Beijing, China, 209 Belgium, 285 Berggren, Niclas, 62 Bergh, Andreas, 56, 103 Bezos, Jeff, 127 Biden, Joe, 76, 217 big companies, 141, 146–50, 176–7, 292 BioNTech, 177 biotechnology, 195 Björk, Nina, 263, 265, 272, 274–5, 278 BlackBerry, 174 Blair, Tony, 170 Blockbuster, 151 Blue Origin, 202 Bolivia, 47 Bolt, Beranek and Newman, 184 Bono, 4, 170 Botswana, 34–5 Boudreaux, Donald, 125 Boulevard of Broken Dreams (Lerner), 190 Brazil, 11, 29, 239, 258 Brexit, 116–18 Bullshit Jobs: A Theory (Graeber), 86, 98–9 business regulation, 139–41 Callaghan, James, 10 Canada, 102, 267, 283 Capital in the Twenty-First Century (Piketty), 128 capital income, 130–31 Carbon Engineering, 255 Cardoso, Fernando Henrique, 29 Carlson, Tucker, 146 cars, 158 Carter, Jimmy, 10 Case Deaton, Anne, 108–11, 136 Castillo, Pedro, 30 Chávez, Hugo, 43, 135 child labour, 20 child mortality, 19–20, 20 Chile, 11, 29–30 China, 5, 7, 11, 19, 24–5, 76, 78–80, 83–4, 104–7, 204–29, 239, 258 agricultural productivity, 206–7, 209 Communist Party, 182, 204–9, 211–12, 215–18, 221–3, 226–8 deindustrialization, 84 economic development, 205–29 environmental issues, 251–3, 257 exports, 209–10 industrial policy, 205, 212–13, 217, 223–4, 296 innovation strategy, 182, 192 innovation, 226–8 poverty, 213, 214 Reform and Opening Up programme, 212 state-owned companies, 208 WTO and, 205, 209, 211 China’s Leaders (Shambaugh), 215 Chirac, Jacques, 191 Chomsky, Noam, 49 Christianity, 264–5 Churchill, Winston, 135 Clark, Daniel, 87 climate change, 5–7, 230–60, 293 carbon border tariffs, 258 carbon tax, 256–7, 259 energy supplies, 233–5, 253–6, 259 greenhouse gas emissions, 231, 233–5, 238, 240–41, 244, 253–9 see also environmental issues Climeworks, 255 Clinton, Hillary, 140 Coase, Ronald, 206 Cohen, Linda, 189 communism, 2, 25–6, 241–3, 290–91 Communist Manifesto, The, 1848, 2 community, 267 Compaq, 174 Concorde, 191 Confucianism, 22, 25 Congo-Brazzaville, 30 Congo, 239 consumer culture, 160–62, 287–8 Cook, Tim, 173 cooperation, 278–9 Coopersmith, Jonathan, 188–9 Corbyn, Jeremy, 43 coronavirus see Covid-19 pandemic Council of Economic Advisers, 147, 152 Covid-19 pandemic, 8, 21, 76–81, 223, 232–3, 270 Cowen, Tyler, 154 Credit Suisse, 132–3 crony capitalism, 139–40, 291 culture wars, 12–13 Czechoslovakia, 26 Dalits, 63–4 dating profiles, 154 ‘deaths of despair’, 7, 108–10, 136, 271, 293 Deaths of Despair (Deaton and Case Deaton), 136 Deaton, Angus, 19, 108–119, 136 DeepMind, 177 degrowth, 232–5, 254–5 ‘deindustrialization’, 83–5 democracies, 26, 37, 46 Deneen, Patrick, 262–5 Deng Xiaoping, 24, 46, 205, 212–13 Denmark, 91, 285 ‘dependency theory’, 27–8 Detroit, Michigan, 87–8 dictatorships, 11, 24, 29, 32, 42–8 Digital Equipment Corporation, 174 disability-adjusted life years (DALY), 237 dishonesty, 153–6 Disney, 178 Dominican Republic, 225 Easterlin, Richard, 279 ‘Easterlin paradox’, 279–80 Easterly, William, 39 Ecclesiazusae (Aristophanes), 73 Economic Freedom of the World index, 35–7 economic freedom, 35–42, 36, 57, 58–62, 58, 77–8 Economist, The, 179, 192 education, 20, 94 Energiewende, 191, 192–3 Engels, Friedrich, 2, 277, 290–91 Enlightenment, 73 entrepreneurship, 123–4, 128–9, 152–4 ‘welfare entrepreneurs’, 197 environmental issues, 236–41, 245–52, 293 agriculture, 239–40 air pollution, 237–8 biodiversity, 238–9, 249–50 deforestation, 239 health and, 236–8, 237 plastics, 247–8 prosperity and, 245–52, 249 transportation, 250–51, 254–5 Environmental Performance Index (EPI), 248, 252 Estonia, 26 Ethiopia, 277 Europe, 22, 239, 267, 282 European Centre for International Political Economy, 79 European Union (EU), 4, 68, 79, 116, 164, 258–9 Everybody Lies (Stephens-Davidowitz), 155 Facebook, 163, 167–75, 179–80 Fallon, Brad, 192 famine, 29 Fanjul, Alfonso and José, 140 fascism, 75 Federal Communications Decency Act (USA), 174 Feldt, Kjell-Olof, 11 feudalism, 73, 75 Financial Fiasco (Norberg), 142 financial markets, 141–3 Financial Times, 8, 267 Finland, 76, 78, 268, 285 Foodora, 102 Forbes’ list, 129–30 forced technology transfers, 211 Foroohar, Rana, 8 Fortune 500 list, 151 Fortune magazine, 169 France, 79–80, 97, 159, 192, 281, 285 Fraser Institute, 35 free markets, 2–4, 6, 23, 58–62, 65–82, 83, 290–97 happiness and, 279–89, 282, 284, 286 human values and, 261–89 Friedman, Thomas, 204 ‘friendshoring’, 79 Friendster, 170 GAFAM (Google, Amazon, Facebook, Apple, Microsoft), 169–70 Gallup World Poll, 267 Gandhi, Indira, 245 Gapminder, 18 Gates, Bill, 124–7, 274 GDP (Gross Domestic Product), 5, 23, 26, 33, 35, 49–56 General Data Protection Regulation (EU GDPR), 164 generosity, 274–7 Georgia, 26, 215 Germany, 26, 84, 97, 101, 192–3, 196, 268 gig economy, 101–3 Gingrich, Newt, 191–2 Gini coefficient, 132 global financial crisis, 2008, 4–5, 142–3 global supply chains, 41–2, 58–61, 76, 81 Global Thermostat, 255 global warming see climate change globalization, 3–8, 17, 19, 80, 103–10, 117 Google, 163, 169–73, 179–80 Gorbachev, Mikhail, 215 Graeber, David, 86, 98–9 Grafström, Jonas, 240 Greece, 26, 254 Green Revolution, 239–40 green technology, 243, 251–5 Greider, Göran, 50, 241 growth, 49–57 degrowth, 232–5, 254–5 government and, 55–6 health and, 52–3 poverty and, 53–4 Guangdong, China, 207–8 Guardian, 3, 169 Halldorf, Joel, 262, 265 happiness, 279–89, 282, 284, 286 Hawkins Family Farm, 140 Hawkins, Zach, 140 Hayden, Brian, 161 Hayek, Friedrich, 66 Helm, Dieter, 193 Henrekson, Magnus, 56 Hertz, Noreena, 261, 262, 265, 268, 272, 274–5, 278 Hillbilly Elegy (Vance), 87 Hinduism, 22, 25 Hong Kong, 23, 205, 207 Horwitz, Steven, 294 housing market, 131, 142–3, 208–9 How China Became Capitalist (Wang and Coase), 206 How Innovation Works (Ridley), 188 Hsieh, Chang-Tai, 148–9 Hu Jintao, 215–16 Hugo, Victor, 25 Hume, David, 284 Hungary, 26, 283 IBM, 151 Iceland, 285 IKEA, 119, 141, 147 illiteracy, 20, 20 ‘import substitution’, 27–8 In Defence of Global Capitalism (Norberg), 3, 17, 33, 38, 42, 146, 151, 156, 169, 204, 214, 230–31 income, 22, 55, 88–96, 95, 134–5, 285, 291 low-income earners, 136–8 minimum wage, 90 wage stagnation, 89, 92–3 see also inequality India, 11, 24–5, 63–4, 70, 234, 239, 251, 258 caste system, 63–4 Indonesia, 239 industrial policy, 182, 188–203 Industrial Revolution, 22 inequality, 7, 27, 42, 54–5, 110, 131–8, 133, 285–7 happiness inequality, 131–2 income, 285–7 life expectancy and, 136–8 infant mortality, 19–20, 235, 291 Infineon, 196 inflation, 8, 10–11, 69 innovation, 65–6, 122–3, 125, 151, 181–203 government policy and, 181–203 innovation shadow, 169, 176 prizes and, 199 research, 199–200 subsidies and grants, 196–7 Instagram, 168, 177 integrity, 164 intellectual property, 41, 210–11 International Disaster Database, 235 International Union for the Conservation of Nature (IUCN), 238 internet, 162–8, 183–7 IPCC (Intergovernmental Panel on Climate Change), 231 iPhone, 107–8, 156, 159 Iran, 220 Iraq, 251 Ireland, 285 Italy, 97, 285 Jackson, Jesse, 43 Jacobs, A.

Origin Story: A Big History of Everything by David Christian

"World Economic Forum" Davos, Albert Einstein, Anthropocene, Arthur Eddington, butterfly effect, Capital in the Twenty-First Century by Thomas Piketty, Cepheid variable, colonial rule, Colonization of Mars, Columbian Exchange, complexity theory, cosmic microwave background, cosmological constant, creative destruction, cuban missile crisis, dark matter, demographic transition, double helix, Easter island, Edward Lorenz: Chaos theory, Ernest Rutherford, European colonialism, Francisco Pizarro, Haber-Bosch Process, Harvard Computers: women astronomers, Isaac Newton, James Watt: steam engine, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, Kim Stanley Robinson, Large Hadron Collider, Late Heavy Bombardment, Marshall McLuhan, microbiome, nuclear winter, Paris climate accords, planetary scale, rising living standards, Search for Extraterrestrial Intelligence, Stephen Hawking, Steven Pinker, Stuart Kauffman, TED Talk, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, trade route, Yogi Berra

Mark McClish and Patrick Olivelle, eds., The Arthasastra: Selections from the Classic Indian Work on Statecraft (Indianapolis: Hackett Publishing, 2012), sections 1.4.13–15, Kindle. 7. Ibid., sections 1.4.1–1.4.4, 1.5.1. 8. Ibid., section 2.36.3. 9. Ibid., section 2.35.4. 10. Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Cambridge, MA: Harvard University Press, 2014), 270, and see page 258, table 7.2. Chapter 10. On the Verge of Today’s World 1. Grace Karskens, The Colony: A History of Early Sydney (New South Wales: Allen and Unwin, 2009), loc. 756–79, Kindle. 2.

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But so huge was the increase in energy and wealth that, for the first time in human history, consumption levels began to rise for a growing global middle class of billions of people, far more people than the entire population of the world at the end of the agrarian era. Thomas Piketty estimates that in modern European countries, 40 percent of the population controls between 45 percent and 25 percent of national wealth. The appearance of this middle class was a new phenomenon in human history. And more and more people are joining the new middle class as the numbers living in extreme poverty fall. Paradoxically, increasing wealth also means increasing inequality, and even as the numbers living above subsistence are rising, the numbers living in extreme poverty remain higher than ever before in human history. Thomas Piketty estimates that in most modern countries, the wealthiest 10 percent of the population controls between 25 percent and 60 percent of national wealth, while the bottom 50 percent controls no more than 15 percent to 30 percent.

…

But after all these other outlays, there was little left to raise the living standards of the rest of the population. That is why all the evidence we have suggests that, though people surely enjoyed occasional luxuries, most of the time, most of them lived close to subsistence level throughout the agrarian era. The French economist Thomas Piketty has estimated that in most European countries as late as 1900, 1 percent of the population owned about 50 percent of national wealth, and 10 percent of the population accounted for 90 percent of national wealth. The other 90 percent of the population made do with just 10 percent of national wealth.

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era by Gary Gerstle

2021 United States Capitol attack, A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, Alan Greenspan, Alvin Toffler, anti-communist, AOL-Time Warner, Bear Stearns, behavioural economics, Bernie Sanders, Big Tech, Black Lives Matter, blue-collar work, borderless world, Boris Johnson, Brexit referendum, British Empire, Broken windows theory, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, Cornelius Vanderbilt, coronavirus, COVID-19, creative destruction, crony capitalism, cuban missile crisis, David Brooks, David Graeber, death from overwork, defund the police, deindustrialization, democratizing finance, Deng Xiaoping, desegregation, Dissolution of the Soviet Union, Donald Trump, Electric Kool-Aid Acid Test, European colonialism, Ferguson, Missouri, financial deregulation, financial engineering, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, future of work, Future Shock, George Floyd, George Gilder, gig economy, Glass-Steagall Act, global supply chain, green new deal, Greenspan put, guns versus butter model, Haight Ashbury, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, Ida Tarbell, immigration reform, informal economy, invention of the printing press, invisible hand, It's morning again in America, Jeff Bezos, John Perry Barlow, Kevin Kelly, Kitchen Debate, low interest rates, Lyft, manufacturing employment, market fundamentalism, Martin Wolf, mass incarceration, Menlo Park, microaggression, Mikhail Gorbachev, military-industrial complex, millennium bug, Modern Monetary Theory, money market fund, Mont Pelerin Society, mortgage debt, mutually assured destruction, Naomi Klein, neoliberal agenda, new economy, New Journalism, Northern Rock, obamacare, Occupy movement, oil shock, open borders, Peter Thiel, Philip Mirowski, Powell Memorandum, precariat, price stability, public intellectual, Ralph Nader, Robert Bork, Ronald Reagan, scientific management, Seymour Hersh, sharing economy, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, social distancing, Steve Bannon, Steve Jobs, Stewart Brand, Strategic Defense Initiative, super pumped, technoutopianism, Telecommunications Act of 1996, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Uber and Lyft, uber lyft, union organizing, urban decay, urban renewal, War on Poverty, Washington Consensus, We are all Keynesians now, We are the 99%, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, Works Progress Administration, Y2K, Yom Kippur War

., Industrial Democracy in America: The Ambiguous Promise (Washington, DC: Woodrow Wilson Center Press, 1993). 11.Sidney Fine, Sit-Down: The General Motors Strike of 1936–1937 (Ann Arbor: University of Michigan Press, 1969); Lichtenstein, The Most Dangerous Man in Detroit; Eric J. Hobsbawm, The Age of Extremes: A History of the World, 1914–1991 (New York: Pantheon Books, 1994), 9. 12.Lichtenstein, The Most Dangerous Man in Detroit, 288; Lichtenstein, State of the Union. 13.Gerstle, Liberty and Coercion, chapters 7 and 8; Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014). 14.Paul Krugman, The Conscience of a Liberal (New York: W. W. Norton, 2007), 46–47. 15.The turn toward government as a key facilitator of personal freedom was an instance of what the political philosopher Isaiah Berlin would later the label the shift from “negative liberty” to “positive liberty.”

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But It’s Helped Transform the American Left,” Vox, April 30, 2019, https://www.vox.com/the-highlight/2019/4/23/18284303/occupy-wall-street-bernie-sanders-dsa-socialism, accessed April 29, 2021. 60.Dissent (https://www.dissentmagazine.org) started publishing in 1954, N + 1 (https://nplusonemag.com) in 2004, and Jacobin (https://jacobinmag.com) in 2011. A middle-aged left/liberal magazine, The American Prospect, also revived at this time, staving off bankruptcy in 2012, and then flourished across a second life from 2014 forward: https://prospect.org/. And The Nation, of course, remained the left standard-bearer. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014) (originally published in French in 2013); Naomi Klein, No Logo: No Space, No Choice, No Jobs (New York: Fourth Estate, 2010); David Graeber, Revolutions in Reverse: Essays on Politics, Violence, Art, and Imagination (London: Minor Compositions, 2011); Katharine Q.

…

This high rate of taxation, in combination with the wage concessions that employers made to unionized workforces, resulted in a significant redistribution of resources from the rich to the working and middle classes of America. Economic inequality fell in the 1940s to its lowest point in the twentieth century, and it stayed there as long the New Deal order prevailed.13 Paul Krugman, Thomas Piketty, and other economists have labeled this fall in inequality the “great compression.”14 This fall was not a function of impersonal economic forces (which is what the term “great compression” is interpreted by some to mean) but of political struggle that yielded a class compromise between capital and labor.

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane

agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, book value, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, foreign exchange controls, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land bank, land reform, land tenure, land value tax, Landlord’s Game, low interest rates, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, Minsky moment, Money creation, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, Post-Keynesian economics, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Robert Solow, Second Machine Age, secular stagnation, shareholder value, subprime mortgage crisis, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

But since the birth of modern, capitalist economies other uses have become predominant: first as the site of industrial production, and later as the site of service provision and domestic housing. Today, it is in the housing market that the economic function of land is most visible, as the value of residential property has overtaken the value of land used for other purposes, as the economist Thomas Piketty (2014) makes clear in his recent book Capital in the Twenty-First Century. For this reason, much of the book focuses on housing as the main economic use of land. Land has several unique features that differentiate it from the other ‘factors of production’ that form the central focus of the economics discipline: capital and labour.

…

It has also increased considerably faster than national income in the UK, in particular since the 1990s, as discussed in Chapter 5. Indeed, in advanced economies generally, it is the increase in housing wealth that has been driving the trends that have been observed in the recent work of French economist Thomas Piketty (2014). Piketty’s book Capital in the Twenty-first Century contains data on what he calls the ‘capital to income ratio’ for the UK since the year 1700. In the book Piketty uses the terms capital and wealth interchangeably, as if they were perfectly synonymous, and does not attempt to separate capital from land and natural resources.

…

Perugini, Cristiano, Jens Hölscher, and Simon Collie. 2015. ‘Inequality, Credit and Financial Crises’. Cambridge Journal of Economics. doi:10.1093/cje/beu075. Pierson, Christopher. 2013. Just Property: A History in the Latin West. Volume One: Wealth, Virtue, and the Law. Oxford: Oxford University Press. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press. Piketty, Thomas, and Gabriel Zucman. 2013. ‘Capital Is Back: Wealth-Income Ratios in Rich Countries, 1700–2010’. http://www.piketty.pse.ens.fr/files/PikettyZucman2013BookRevQJE.pdf Pollock, Frederick, and Frederic William Maitland. 1899. The History of English Law before the Time of Edward I.

The Price of Time: The Real Story of Interest by Edward Chancellor

"World Economic Forum" Davos, 3D printing, activist fund / activist shareholder / activist investor, Airbnb, Alan Greenspan, asset allocation, asset-backed security, assortative mating, autonomous vehicles, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, Bear Stearns, Ben Bernanke: helicopter money, Bernie Sanders, Big Tech, bitcoin, blockchain, bond market vigilante , bonus culture, book value, Bretton Woods, BRICs, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cashless society, cloud computing, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, commodity super cycle, computer age, coronavirus, corporate governance, COVID-19, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cryptocurrency, currency peg, currency risk, David Graeber, debt deflation, deglobalization, delayed gratification, Deng Xiaoping, Detroit bankruptcy, distributed ledger, diversified portfolio, Dogecoin, Donald Trump, double entry bookkeeping, Elon Musk, equity risk premium, Ethereum, ethereum blockchain, eurozone crisis, everywhere but in the productivity statistics, Extinction Rebellion, fiat currency, financial engineering, financial innovation, financial intermediation, financial repression, fixed income, Flash crash, forward guidance, full employment, gig economy, Gini coefficient, Glass-Steagall Act, global reserve currency, global supply chain, Goodhart's law, Great Leap Forward, green new deal, Greenspan put, high net worth, high-speed rail, housing crisis, Hyman Minsky, implied volatility, income inequality, income per capita, inflation targeting, initial coin offering, intangible asset, Internet of things, inventory management, invisible hand, Japanese asset price bubble, Jean Tirole, Jeff Bezos, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, land bank, large denomination, Les Trente Glorieuses, liquidity trap, lockdown, Long Term Capital Management, low interest rates, Lyft, manufacturing employment, margin call, Mark Spitznagel, market bubble, market clearing, market fundamentalism, Martin Wolf, mega-rich, megaproject, meme stock, Michael Milken, Minsky moment, Modern Monetary Theory, Mohammed Bouazizi, Money creation, money market fund, moral hazard, mortgage debt, negative equity, new economy, Northern Rock, offshore financial centre, operational security, Panopticon Jeremy Bentham, Paul Samuelson, payday loans, peer-to-peer lending, pensions crisis, Peter Thiel, Philip Mirowski, plutocrats, Ponzi scheme, price mechanism, price stability, quantitative easing, railway mania, reality distortion field, regulatory arbitrage, rent-seeking, reserve currency, ride hailing / ride sharing, risk free rate, risk tolerance, risk/return, road to serfdom, Robert Gordon, Robinhood: mobile stock trading app, Satoshi Nakamoto, Satyajit Das, Savings and loan crisis, savings glut, Second Machine Age, secular stagnation, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, stock buybacks, subprime mortgage crisis, Suez canal 1869, tech billionaire, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tim Haywood, time value of money, too big to fail, total factor productivity, trickle-down economics, tulip mania, Tyler Cowen, Uber and Lyft, Uber for X, uber lyft, Walter Mischel, WeWork, When a measure becomes a target, yield curve

‘Main Street,’ wrote PIMCO’s ‘Bond King’ Bill Gross, ‘has failed to keep up with Wall Street and corporate America in the race to see who can benefit more from lower yields.’122 Ray Dalio, the hedge fund manager whose own fortune in 2018 was estimated at nearly $17 billion, noted that ‘Disparity in wealth, especially when accompanied by disparity in values, leads to increasing conflict and … revolutions of one sort or another.’123 Tech billionaire Nick Hanauer, an early investor in Amazon, penned an alarmist article for Politico entitled ‘The Pitchforks are Coming … for Us Plutocrats’. Hanauer warned that the United States was becoming less capitalist and more feudal, ‘and so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.’124 Piketty’s Error Thomas Piketty’s Capital in the Twenty-First Century became an overnight publishing sensation when it appeared in English translation in the spring of 2014 – more bought than read, but much discussed.125 Piketty rejected conventional explanations for inequality based on education and technology.126 Instead, he proposed a fundamental law: inequality rises whenever the return on capital (comprising profits, interest, dividends and rents) exceeds the growth rate of an economy.

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Morris Silver, ‘Modern Ancients’, in Commerce and Monetary Systems in the Ancient World: Means of Transmission and Cultural Interaction, eds. R. Rollinger and C. Ulf (Stuttgart, 2004). 49. Leemans, ‘Rate of Interest’; Silver, Economic Structures of Antiquity, p. 105. 50. Thomas Mayer, Frankfurter Allgemeine Zeitung, 17 September 2016. 51. Thomas Piketty, Capital in the Twenty-First Century (Harvard, 2014), p. 80. 52. David Hume, ‘Of Interest’, Selected Essays (Oxford, 1993), p. 181. See Chapter 9. 53. Homer and Sylla, History of Interest Rates, p. 38. 54. As Hume himself records, citing Dio Cassius (Selected Essays, p. 186). Hume maintains the effect was only temporary and that by the reign of Tiberius interest had returned to 6 per cent. 55.

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Warren Buffett, ‘Letter to Shareholders’, Berkshire Hathaway, February 2016. ‘For 240 years,’ Buffett writes, ‘it’s been a terrible mistake to bet against America, and now is no time to start.’ 9. Lukasz Rachel and Thomas D. Smith, ‘Secular Drivers of the Global Real Interest Rate’, Bank of England, December 2015. 10. Thomas Piketty, Capital in the Twenty-First Century, p. 80. 11. This point is made in ‘Long-Term Interest Rates: A Survey’, Council of Economic Advisers, July 2015. 12. See Charles Goodhart and Manoj Pradhan, The Great Demographic Reversal (Cham, Switzerland, 2020); also, Mikael Juselius et al., ‘Can Demography Affect Inflation and Monetary Policy?’

Free Money for All: A Basic Income Guarantee Solution for the Twenty-First Century by Mark Walker

3D printing, 8-hour work day, additive manufacturing, Affordable Care Act / Obamacare, basic income, Baxter: Rethink Robotics, behavioural economics, Capital in the Twenty-First Century by Thomas Piketty, commoditize, confounding variable, driverless car, financial independence, full employment, guns versus butter model, happiness index / gross national happiness, industrial robot, intangible asset, invisible hand, Jeff Bezos, job automation, job satisfaction, John Markoff, Kevin Kelly, laissez-faire capitalism, late capitalism, longitudinal study, market clearing, means of production, military-industrial complex, new economy, obamacare, off grid, off-the-grid, plutocrats, precariat, printed gun, profit motive, Ray Kurzweil, rent control, RFID, Rodney Brooks, Rosa Parks, science of happiness, Silicon Valley, surplus humans, The Future of Employment, the market place, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, universal basic income, warehouse robotics, working poor

And in chapters 6 and 7, we looked at ways to utilize the productivity of capitalism to generate more GNH and GNF. So, we have plenty of motivation to think about the future of capitalism. Seemingly relevant in this connection is Thomas Piketty’s recent and much discussed Capital in the Twenty-first Century. From the title, one might think the book was mostly forward-looking into the prospects of capital and capitalism in the twenty-first century; however, the book is mostly historical. Picketty does a marvelous job tracing the ebb and flow of the accumulation of capital over the past two centuries. He argues on the basis of historical enquiry that income and capital inequalities are the most important economic problems facing us in the twenty-first century.

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US Census Bureau, “Current Population Survey,” US Census Bureau, January 14, 2013, http://www.census.gov/hhes/www/ cpstables/032011/perinc/new01_001.htm. The New York Times, “Effective Income Tax Rates,” 2012, http:// www.nytimes.com/interactive/2012/01/18/us/effective-incometax-rates.html?_r=2&. Thomas Piketty, Capital in the Twenty-First Century (Massachusetts: Harvard University Press, 2014). Allan Sheahen (1932–2013) was a longtime proponent of BIG. We follow here Sheahen’s last major proposal: Sheahen, Basic Income Guarantee: Your Right to Economic Security. Many of Sheahen’s calculations can be found in Appendix A (153–160).

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Roediger and Philip Sheldon Foner, Our Own Time: A History of American Labor and the Working Day (London: Verso, 1989). 17. Edward P. Lazear and James R. Spletzer, The United States Labor Market: Status Quo or a New Normal? (National Bureau of Economic Research,2 012). 18. Widerquist, Independence, Propertylessness, and Basic Income: A Theory of Freedom as the Power to Say No,1 05. 19. Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014), 217. 20. Andrew Hind, “Brrrr! History of the Ice Industry,” History Magazine, 2010, 39–42. 21. Rebecca Weber, “The Travel Agent Is Dying, but It’s Not yet Dead—CNN.com,” CNN, accessed May 18, 2015, http://www. cnn.com/2013/10/03/travel/travel-agent-survival/index.html. 22.

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

"Friedman doctrine" OR "shareholder theory", 4chan, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Alvin Roth, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, behavioural economics, benefit corporation, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, Blitzscaling, blockchain, book value, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Carl Icahn, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, congestion pricing, corporate governance, corporate raider, creative destruction, CRISPR, crowdsourcing, Danny Hillis, data acquisition, data science, deep learning, DeepMind, Demis Hassabis, Dennis Ritchie, deskilling, DevOps, Didi Chuxing, digital capitalism, disinformation, do well by doing good, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Firefox, Flash crash, Free Software Foundation, fulfillment center, full employment, future of work, George Akerlof, gig economy, glass ceiling, Glass-Steagall Act, Goodhart's law, Google Glasses, Gordon Gekko, gravity well, greed is good, Greyball, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, independent contractor, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Zimmer (Lyft cofounder), Kaizen: continuous improvement, Ken Thompson, Kevin Kelly, Khan Academy, Kickstarter, Kim Stanley Robinson, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Ellison, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, machine readable, machine translation, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, Network effects, new economy, Nicholas Carr, Nick Bostrom, obamacare, Oculus Rift, OpenAI, OSI model, Overton Window, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, post-truth, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Rutger Bregman, Salesforce, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, stock buybacks, strong AI, synthetic biology, TaskRabbit, telepresence, the built environment, the Cathedral and the Bazaar, The future is already here, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Fadell, Tragedy of the Commons, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, two-pizza team, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

Wallace Turbeville, a former Goldman Sachs banker, aptly describes this as “something approaching a zero-sum game between financial wealth-holders and the rest of America.” Zero-sum games don’t end well. “The one percent in America right now is still a bit lower than the one percent in pre-revolutionary France but is getting closer,” says French economist Thomas Piketty, author of Capital in the Twenty-First Century. Lazonick believes his research demonstrates that this trend “is in large part responsible for a national economy characterized by income inequity, employment instability, and diminished innovative capability—or the opposite of what I have called ‘sustainable prosperity.’”

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Louis; https://fred. stlouisfed.org/series/CP, April 2, 2017; Gross Domestic Product (GDP), retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed. org/series/GDP, April 2, 2017. 246 “something approaching a zero-sum game”: Rana Foroohar, Makers and Takers (New York: Crown, 2016), 18. 246 “the one percent in pre-revolutionary France”: Rana Foroohar, “Thomas Piketty: Marx 2.0,” Time, May 9, 2014, http://time.com/92087/thomas-piketty-marx-2-0/. Retrieved April 2, 2017, http://piketty. pse.ens.fr/files/capital21c/en/media/Time%20-%20Capital%20in%20the %20Twenty-First%20Century.pdf. 247 “‘sustainable prosperity’”: Lazonick, “Stock Buybacks,” 2. 247 more of the compensation moved to stock: Foroohar, Makers and Takers, 280. 247 options had to be disclosed, but not valued: Hal Varian, “Economic Scene,” New York Times, April 8, 2004, retrieved April 2, 2017, http://people.ischool.berkeley. edu/~hal/people/hal/NYTimes/2004-04-08.html. 248 “profit extracted through harm to others”: Umair Haque, “The Value Every Business Needs to Create Now,” Harvard Business Review, July 31, 2009, https://hbr.org/2009/07/the-value-every-business-needs. 248 disinformation firms used by the tobacco industry: Naomi Oreskes and Erik Conway, Merchants of Doubt (New York: Bloomsbury Press, 2011). 249 “left holding the bag”: George Akerlof and Paul Romer, “Looting: The Economic Underworld of Bankruptcy for Profit,” Brookings Papers on Economic Activity 2 (1993), http://pages.stern.nyu. edu/~promer/Looting.pdf. 250 “The customer is the foundation of a business”: Peter F.

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A financial transactions tax calibrated to eliminate all the benefits of front-running and other forms of high-speed market manipulation would be a good place to start, but we could go much further in taxing financial speculation while rewarding productive investment with lower rates. Larry Fink, the CEO of BlackRock, suggests that at a minimum, long-term capital gains treatment should begin at three years rather than one, with a declining rate for each additional year that an asset is held. We could even institute a wealth tax such as that proposed by Thomas Piketty. And if we were to tax carbon rather than labor, rather than starting by substituting a carbon tax for income taxes, it might be better to substitute a carbon tax for Social Security, Medicare, and unemployment taxes. These rule changes might be costly to some capital owners but might well benefit society overall.

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, Airbnb, Alan Greenspan, balance sheet recession, bank run, banking crisis, barriers to entry, Basel III, basic income, behavioural economics, benefit corporation, Berlin Wall, bilateral investment treaty, business cycle, business process, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, deindustrialization, discovery of DNA, diversified portfolio, Donald Trump, eurozone crisis, Fall of the Berlin Wall, financial engineering, financial intermediation, Francis Fukuyama: the end of history, full employment, gender pay gap, George Akerlof, gig economy, Gini coefficient, Glass-Steagall Act, hiring and firing, housing crisis, Hyman Minsky, income inequality, independent contractor, inflation targeting, informal economy, information asymmetry, intangible asset, investor state dispute settlement, invisible hand, Isaac Newton, labor-force participation, liberal capitalism, low interest rates, low skilled workers, market fundamentalism, mini-job, moral hazard, non-tariff barriers, offshore financial centre, open economy, Paris climate accords, patent troll, pension reform, price mechanism, price stability, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, Robert Shiller, Ronald Reagan, selection bias, shareholder value, Silicon Valley, sovereign wealth fund, TaskRabbit, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, tulip mania, universal basic income, unorthodox policies, vertical integration, zero-sum game

For a review of the evidence on the link between inequality and growth in Europe, see Catherine Mathieu and Henri Sterdyniak, “Growth and Inequality in the European Union,” OFCE le Blog, Sept. 12, 2017, https://www.ofce.sciences-po.fr/blog/growth-and-inequality-in-the-european-union/; and Jonathan Ostry, Andrew Berg, and Charalambos Tsangarides, Redistribution, Inequality, and Growth (IMF Staff Discussion Note, SDN/14/02, International Monetary Fund, Feb. 2014), https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf; for a discussion of the link between inequality and political stability, see Joseph E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: W. W. Norton, 2012); Joseph E. Stiglitz, The Great Divide: Unequal Societies and What We Can Do about Them (New York: W. W. Norton, 2016); Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). 2. Brian Blackstone, Matthew Karnitschnig, and Robert Thomson, “Europe’s Banker Talks Tough,” Wall Street Journal, Feb. 24, 2012, https://www.wsj.com/articles/SB10001424052970203960804577241221244896782. 3. Report by the Commission on the Measurement of Economic Performance and Social Progress, chaired by Joseph E.

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For a detailed discussion of the reform needs and options for European tax systems from a gender perspective, see Åsa Gunnarsson, Ulrike Spangenberg, and Margit Schratzenstaller, Gender Equality and Taxation in the European Union, Study for the FEMM Committee (Brussels: Policy Department for Citizens’ Rights and Constitutional Affairs, Apr. 2017), http://www.europarl.europa.eu/RegData/etudes/STUD/2017/583138/IPOL_STU(2017)583138_EN.pdf. 6. Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva, “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities,” American Economic Journal: Economic Policy 6, no. 1 (2014): 230–71; and Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva, “Taxing the 1%: Why the Top Tax Rate Could Be Over 80%,” VoxEU, Dec. 2011, https://voxeu.org/article/taxing-1-why-top-tax-rate-could-be-over-80; Danny Yagan, Tax Progressivity and Top Incomes: Evidence from Tax Reforms (CEPR Discussion Paper no. 11936, Washington, DC: Center for Economic and Policy Research, 2015). 7.

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See Bert Brys, Sarah Perret, Alastair Thomas, and Pierce O’Reilly, Tax Design for Inclusive Economic Growth (Organisation for Economic Co-operation and Development Taxation Working Papers no. 26, Paris: OECD Publishing, July 2016), https://doi.org/10.1787/5jlv74ggk0g7-en; Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, World Inequality Report 2018 (Paris: Paris School of Economics, 2017). 3. Brian Sloan, Günther Ebling, Martin Becker, Luis Peragon Lorenzo, and Antonella Caiumi, eds., Taxation Trends in the European Union (Luxembourg: Publications Office of the European Union, 2018), https://ec.europa.eu/taxation_customs/sites/taxation/files/taxation_trends_report_2018.pdf. 4.

Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Alan Greenspan, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, behavioural economics, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, en.wikipedia.org, endowment effect, experimental subject, framing effect, full employment, Gary Kildall, high-speed rail, hindsight bias, If something cannot go on forever, it will stop - Herbert Stein's Law, income inequality, invisible hand, labor-force participation, lake wobegon effect, loss aversion, low interest rates, meritocracy, minimum wage unemployment, Network effects, Paradox of Choice, Paul Samuelson, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, selection bias, side project, sovereign wealth fund, Steve Jobs, the long tail, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy

What’s also clear is that the economic forces that have been causing the spread and intensification of winner-take-all markets have by no means run their course. We can expect continued growth in the intensity of competition on the buyers’ side for the best talent, and on the sellers’ side for the top positions. In his widely discussed 2013 book, Capital in the Twenty-First Century, Thomas Piketty suggested yet another reason for rising inequality, which is the historical tendency for the rate of return on invested capital to exceed the overall growth rate for the economy.10 When that happens, he argues, wealth continues to concentrate in the hands of those who own the most capital.

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Quarterly Journal of Economics 123.1 (2008): 49–100. 8. Adam Smith, The Wealth of Nations, book 1, chap. 10. 9. The Conference Board, “Departing CEO Age and Tenure,” June 13, 2014, https://www.conference-board.org/retrievefile.cfm?filename=TCB-CW-019.pdf&type=subsite. 10. Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, 2013. CHAPTER 4: WHY THE BIGGEST WINNERS ARE ALMOST ALWAYS LUCKY 1. High School Baseball Web, “Inside the Numbers,” http://www.hsbaseballweb.com/inside_the_numbers.htm. 2. See Wikipedia, List of World Records in Athletics, http://en.wikipedia.org/wiki/List_of_world_records_in_athletics#Men and http://en.wikipedia.org/wiki/Athletics_record_progressions. 3.

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., 73 Alou brothers, 33 American Dream, the, 4, 145 American Economic Association, 25 American Economic Review, 28, 126, 133, 171 American Enterprise Institute, 127, 171 American Society of Civil Engineers, 87 Anderson, Chris, 47 antlers in bull elk, 116–18, 118 Apotheker, Léo, 53 Apple, 44, 49, 132 Arab Spring, 107 Archilla, Gustavo, 106 artificial intelligence, 70 attention scarcity, 48–49 attribution theory, 77 austerity policies, 134 availability heuristic, 79, 80 baby boomer retirements, 97, 127, 167 Baker Library, 36 Bartlett, Bruce, 90 Bartlett, Monica, 101 Baumeister, Roy, 75 Beatty, Warren, 23 behavioral economics, 69, 70, 96 Bernanke, Ben, 133–35 best seller, xiii, 45 Betamax, 44, 45 birth order effects, 32 birth-date effects: in hockey, 38; in the workplace, 38 Blackstone, 103 Blockbusters, 48 Bloomberg Business, 132 Bonaparte, Napoleon, 7 Boudreaux, Donald, 122 Breaking Bad, 24, 31, 68 British accent, 4 Broderick, Matthew, 24, 68 Brooklyn Dodgers, 142 Brooks, David, 83, 84 Buffett, Warren, 12, 39 Bush, George H. W., 90 Bush, George W., 90 Caan, James, 23 Cabrera, Miguel, 63 Calvino, Italo, 128 Campanella, Roy, 142 Canada, 20, 88, 106 Capital in the Twenty-First Century, 55 Carroll, Robert, 127 Casablanca, 87 Cayuga Lake, 6 CEO pay, 49–51 character assessment, 129–31 Clinton, Bill, 126 Clotfelter, Charles, 72 Congressional Budget Office, 90 conservatives, xi, 17, 83, 171 context and quality assessment, 122, 123; a formal model of, 123 Cook, Philip, 9, 41, 42, 72 Cook, Tim, 133 Coppola, Francis Ford, 23 Corleone, Michael, 23 Corleone, Vito, 23 Cornell University, 4, 25–29, 59, 67, 125, 143 CP/M (computer operating system), 35 Cranston, Bryan, 24, 68 Cusack, John, 24, 68 da Vinci, Leonardo, 22 Dalai Lama, 29 Darwin, Charles, 73, 115, 116, 121 Darwin Economy, The, 117 Davidai, Shai, 81 Delaplane, VA, 60 dentists, 51 Department of Motor Vehicles, 17–19 depressive realism, 73 DeSteno, David, 98–101 Detroit Tigers, 63 DeWall, Nathan, 103 Dickens, Charles, 102 Dickens, Mamie, 102 Digdon, Nancy, 102 Digital Research, 34, 35 divine intervention, 2 Domenici, Pete, 126 Econometrica, 28 economic pie, 16 Educational Longitudinal Survey, 144, 145 Edwards, Mike, 2 Elberse, Anita, 48 Electric Light Orchestra, 2 Emmons, Robert, 102 environment, xvi, 8, 13, 115, 119, 123, 143, 144 envy, 112, 122, 132 estate taxation, 166, 167 expenditure cascades, 112, 113, 121, 165, 169 expertise, 77 Federal Reserve Board of Governors, 134 Ferrari, 15, 16, 91, 119 52 Metro, 30 Fitzgerald, F.

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Aaron Swartz, Adam Curtis, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, antiwork, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, Black Lives Matter, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, Clayton Christensen, collaborative economy, collective bargaining, commons-based peer production, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, degrowth, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, emotional labour, Ethereum, ethereum blockchain, Evgeny Morozov, Fairphone, Food sovereignty, four colour theorem, future of work, Gabriella Coleman, gentrification, gig economy, Google bus, holacracy, hydraulic fracturing, initial coin offering, intentional community, Internet Archive, Jeff Bezos, Jeremy Corbyn, jimmy wales, John Perry Barlow, joint-stock company, Joseph Schumpeter, Julian Assange, Kevin Roose, Kickstarter, low interest rates, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, Money creation, multi-sided market, Murray Bookchin, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, Pier Paolo Pasolini, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Rutger Bregman, Salesforce, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Bannon, Steve Jobs, Steve Wozniak, Stewart Brand, surveillance capitalism, tech worker, TED Talk, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, Vitalik Buterin, W. E. B. Du Bois, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, workplace surveillance , Y Combinator, Y2K, Zipcar

The rest of the value gets siphoned upward to the few and wealthy. More than pleasing customers, more than creating jobs, business keeps getting better at serving the single-minded goal of maximizing shareholder value—the rewards for those who already have excess to invest. Economist Thomas Piketty’s best-selling book Capital in the Twenty-First Century argued that the returns to investors are careening the world into a new feudalism; his most celebrated critic, twenty-six-year-old MIT graduate student Matthew Rognlie, differed only in stressing that the major share of the phenomenon was in real estate.4 An uptick in the minimum wage isn’t going to fix this.

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Black Lives Matter, 15, 165, 190, 199, 205–206 black power, 194–195, 199 blockchain, 107, 109, 111–114, 153, 157 Bluestone Farm, 33 Boggs, Grace Lee, 74–75, 92, 225 Boggs, Jimmy, 74, 78 Book of Acts, 21–22 Bookchin, Murray, 207 Botsman, Rachel, 91 Boulder Community Housing Association, 98, 100 Boulder Neighborhood Alliance, 98 Bradford, Mark, 81 Brain, Marshall, 222–223 Britain, co-op legislation in, 7, 50 British Cooperative Wholesale Society, 42–43 Bronec, Jasen, 173 Brown, Michael, 191 Brown-Davis, Della, 177, 179 “Building Global Community” (Zuckerberg), 219 Buni, Abdi, 85–86, 89 Buterin, Vitalik, 111–112, 114, 130 #BuyTwitter, 165–167 Byck, Maria Juliana, 28 Caesar, Julius, 21 Calafou, 124 Calvinists, 38 capital credits, 180 Capital in the Twenty-First Century (Piketty), 77 capitalism, 14–15, 75, 199, 203 co-op businesses compared to, 14–15 as feudal lord, 46–47 feudalism and, 212 Capra, Robert, 35 Carmichael, Stokely, 199 Carter, Jimmy, 171 Cartier-Bresson, Henri, 35 Catalan Integral Cooperative (CIC), 117, 121–127, 131 Aurea Social assembly of, 127–128, 128 (photo) Economic Commission of, 124–125 projects and budget of, 123 Catalan Supply Center, 122 (photo), 123 Catholicism, 24, 59–65, 232 Chaplin, Charlie, 35 Charter of the Forest, 38 Chartism, 48 Chavez, Chris, 32–34 Chesterton, G.

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Here Concept from Peter Turchin, “The Strange Disappearance of Cooperation in America,” Cliodynamica (blog) (June 21, 2013), peterturchin.com/cliodynamica/strange-disappearance. Data from Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (Simon & Schuster, 2000), 54, and Facundo Alvaredo, Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez, “The Top 1 Percent in International and Historical Perspective,” Journal of Economic Perspectives 27, no. 3 (Summer 2013): 3–20. Notes Introduction: Equitable Pioneers 1. LeRoy Croissant, Ancestors and Descendants of Fred Henry Croissant (1791–2001), private family history (2001); the cassette tapes were made as part of Croissant’s research for the book, recorded January 14 and 15, 1989. 2.

The Economics of Inequality by Thomas Piketty, Arthur Goldhammer

affirmative action, basic income, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, conceptual framework, deindustrialization, endogenous growth, Gini coefficient, income inequality, low skilled workers, means of production, middle-income trap, moral hazard, Pareto efficiency, purchasing power parity, Robert Solow, Simon Kuznets, Tax Reform Act of 1986, The Bell Curve by Richard Herrnstein and Charles Murray, very high income, working-age population

The large historical variations in top income shares also receive insufficient treatment in the present book, because the corresponding research became fully available only recently. Readers interested in a detailed account of that more recent research and the lessons that can be drawn from it are advised to consult the World Top Incomes Database (available online) and my book Capital in the Twenty-First Century (Belknap Press, 2014). Introduction The question of inequality and redistribution is central to political conflict. Caricaturing only slightly, two positions have traditionally been opposed. The right-wing free-market position is that, in the long run, market forces, individual initiative, and productivity growth are the sole determinants of the distribution of income and standard of living, in particular of the least well-off members of society; hence government efforts to redistribute wealth should be limited and should rely on instruments that interfere as little as possible with the virtuous mechanisms of the market—instruments such as Milton Friedman’s negative income tax (1962).

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THE ECONOMICS OF INEQUALITY Thomas Piketty Translated by Arthur Goldhammer The Belknap Press of Harvard University Press CAMBRIDGE, MASSACHUSETTS LONDON, ENGLAND 2015 Copyright © 2015 by the President and Fellows of Harvard College All rights reserved First published as L’économie des inégalités copyright © Éditions La Découverte, Paris, France, 1997, 2008, 2014 Jacket design by Graciela Galup 978-0-674-50480-6 (hardcover) 978-0-674-91558-9 (EPUB) 978-0-674-91557-2 (MOBI) 978-0-674-91556-5 (PDF) The Library of Congress has cataloged the printed edition as follows: Piketty, Thomas, 1971– [L’économie des inégalités.

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THE ECONOMICS OF INEQUALITY Thomas Piketty Translated by Arthur Goldhammer The Belknap Press of Harvard University Press CAMBRIDGE, MASSACHUSETTS LONDON, ENGLAND 2015 Copyright © 2015 by the President and Fellows of Harvard College All rights reserved First published as L’économie des inégalités copyright © Éditions La Découverte, Paris, France, 1997, 2008, 2014 Jacket design by Graciela Galup 978-0-674-50480-6 (hardcover) 978-0-674-91558-9 (EPUB) 978-0-674-91557-2 (MOBI) 978-0-674-91556-5 (PDF) The Library of Congress has cataloged the printed edition as follows: Piketty, Thomas, 1971– [L’économie des inégalités. English] The economics of inequality / Thomas Piketty ; translated by Arthur Goldhammer. pages cm Includes bibliographical references and index. 1. Income distribution. 2. Equality—Economic aspects. I. Title. HB523.P54713 2015 339.2'2—dc23 2015008813 Book design by Dean Bornstein Contents Note to the Reader Introduction 1. The Measurement of Inequality and Its Evolution 2. Capital-Labor Inequality 3. Inequality of Labor Income 4. Instruments of Redistribution References Contents in Detail Index Note to the Reader This book was written and first published in 1997.

The Globotics Upheaval: Globalisation, Robotics and the Future of Work by Richard Baldwin

agricultural Revolution, Airbnb, AlphaGo, AltaVista, Amazon Web Services, Apollo 11, augmented reality, autonomous vehicles, basic income, Big Tech, bread and circuses, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, commoditize, computer vision, Corn Laws, correlation does not imply causation, Credit Default Swap, data science, David Ricardo: comparative advantage, declining real wages, deep learning, DeepMind, deindustrialization, deskilling, Donald Trump, Douglas Hofstadter, Downton Abbey, Elon Musk, Erik Brynjolfsson, facts on the ground, Fairchild Semiconductor, future of journalism, future of work, George Gilder, Google Glasses, Google Hangouts, Hans Moravec, hiring and firing, hype cycle, impulse control, income inequality, industrial robot, intangible asset, Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Kevin Roose, knowledge worker, laissez-faire capitalism, Les Trente Glorieuses, low skilled workers, machine translation, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, Metcalfe’s law, mirror neurons, new economy, optical character recognition, pattern recognition, Ponzi scheme, post-industrial society, post-work, profit motive, remote working, reshoring, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, robotic process automation, Ronald Reagan, Salesforce, San Francisco homelessness, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, social intelligence, sovereign wealth fund, standardized shipping container, statistical model, Stephen Hawking, Steve Jobs, supply-chain management, systems thinking, TaskRabbit, telepresence, telepresence robot, telerobotics, Thomas Malthus, trade liberalization, universal basic income, warehouse automation

They are now back at their 1970s starting point and seem stable. The causes of these varied changes in income equality are many and complex. While this has been a topic in seminar rooms for many years, it burst into the open with the 99 Percent movement; the Occupy Wall Street movement; and Thomas Piketty’s transformative 2013 book, Capital in the Twenty-First Century. The explanations range from government deregulation and the rise of monopoly capitalism to the decline of labor unions and skill-biased technology progress. Technology surely played a role. Many elements of the ICT impulse tended to boost income and wealth inequality.

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Inequality fell quite dramatically in the UK as industrial growth got its second wind from the cluster of new industries. The income share of the top 5 percent dropped from 40 percent down to under 20 percent by the 1970s. Since then it’s been rising, but that’s a story for the next chapter. It is not easy to say exactly what causes these waves of inequality. It is the subject of much debate, as Thomas Piketty’s bestselling Capitalism in the 21st Century points out. By its very nature, inequality involves almost every aspect of the economic system—ranging from education, technology, and globalization to urbanization, voting rights, and imperialism. Most of these are interrelated. Figure 2.1 Income Inequality in the Great Transformation, 1688–2009.

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Lindert, “When Did Inequality Rise in Britain and America?,” Journal of Income Distribution 9 (2000): 11–25, and Anthony B. Atkinson, “The Distribution of Top Incomes in the United Kingdom 1908–2000,” in Top Incomes over the Twentieth Century: A Contrast between Continental European and English-Speaking Countries, ed. Anthony B. Atkinson and Thomas Piketty (Oxford: Oxford University Press, 2007), ch. 4. 9. The data is from Robert C. Allen, “Engel’s Pause: A Pessimists Guide to the British Industrial Revolution,” Department of Economics Discussion Paper Series no. 315, University of Oxford, April 2007. 10. Quoted in Carl Wittke, “The German Forty-Eighters in America: A Centennial Appraisal.”

Bootstrapped: Liberating Ourselves From the American Dream by Alissa Quart

2021 United States Capitol attack, 3D printing, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, Bernie Sanders, Black Lives Matter, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carried interest, coronavirus, COVID-19, critical race theory, crowdsourcing, Daniel Kahneman / Amos Tversky, David Graeber, defund the police, Donald Trump, Elon Musk, financial independence, fixed income, George Floyd, gig economy, glass ceiling, high net worth, housing justice, hustle culture, illegal immigration, impact investing, income inequality, independent contractor, invisible hand, Jeff Bezos, lockdown, longitudinal study, loss aversion, Lyft, Marc Benioff, Mark Zuckerberg, meta-analysis, microaggression, Milgram experiment, minimum wage unemployment, multilevel marketing, obamacare, Overton Window, payday loans, post-work, Ralph Waldo Emerson, ride hailing / ride sharing, Ronald Reagan, Salesforce, Scientific racism, sharing economy, Sheryl Sandberg, side hustle, Silicon Valley, Silicon Valley ideology, Snapchat, social distancing, Steve Jobs, Steve Wozniak, tech worker, TED Talk, Travis Kalanick, trickle-down economics, Uber and Lyft, uber lyft, union organizing, W. E. B. Du Bois, wealth creators, women in the workforce, working poor, Works Progress Administration

A Universal Desire for More Equal Pay,” Perspectives on Psychological Science 9, no. 6 (2014), https://www.hbs.edu/ris/Publication%2520Files/kiatpongsan%2520norton%25202014_f02b004a-c2de-4358-9811-ea273d372af7.pdf. Thomas Piketty estimated that roughly 60 percent: This wealth comes in the form of savings, houses, and investment, that “people with inherited wealth need save only a portion of their income from capital to see that capital grow more quickly than the economy as a whole.” Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). At the same time, Americans think their odds of success: Sweden, the home of copious social welfare, nonetheless has pessimistic citizens.

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The group United for a Fair Economy found in 2012 that over 60 percent of the Forbes 400 list of the richest Americans were already well-off when they began their careers. They might have had an upper-class upbringing and then the gift of start-up capital from a wealthy family member. Around the same time, French economist Thomas Piketty estimated that roughly 60 percent of America’s private wealth was inherited rather than the result of the much-ballyhooed hard work. At the same time, Americans think their odds of success, and of rising from the bottom to the top, are much higher than they are, and they have greater expectations based on more slender reeds than those relied on by their European counterparts.

Winners Take All: The Elite Charade of Changing the World by Anand Giridharadas

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, activist lawyer, affirmative action, Airbnb, benefit corporation, Bernie Sanders, bitcoin, Black Lives Matter, Boeing 747, Brexit referendum, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cognitive dissonance, collective bargaining, corporate raider, corporate social responsibility, critical race theory, crowdsourcing, David Brooks, David Heinemeier Hansson, deindustrialization, disintermediation, do well by doing good, Donald Trump, Edward Snowden, Elon Musk, fake it until you make it, fake news, food desert, friendly fire, gentrification, global pandemic, high net worth, hiring and firing, housing crisis, Hyperloop, impact investing, income inequality, independent contractor, invisible hand, Jeff Bezos, Kevin Roose, Kibera, Kickstarter, land reform, Larry Ellison, Lyft, Marc Andreessen, Mark Zuckerberg, microaggression, new economy, Occupy movement, offshore financial centre, opioid epidemic / opioid crisis, Panopticon Jeremy Bentham, Parag Khanna, Paul Graham, Peter Thiel, plutocrats, profit maximization, public intellectual, risk tolerance, rolodex, Ronald Reagan, shareholder value, sharing economy, Sheryl Sandberg, side hustle, side project, Silicon Valley, Silicon Valley billionaire, Silicon Valley startup, Skype, social distancing, Social Responsibility of Business Is to Increase Its Profits, Steven Pinker, systems thinking, tech baron, TechCrunch disrupt, technoutopianism, TED Talk, The Chicago School, The Fortune at the Bottom of the Pyramid, the High Line, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, Travis Kalanick, trickle-down economics, Two Sigma, Uber and Lyft, uber lyft, Upton Sinclair, Vilfredo Pareto, Virgin Galactic, work culture , working poor, zero-sum game

A Jesuit priest and political science professor named Matthew Carnes, with whom Cohen would soon work on a philanthropic project, told the newspaper that longtime critics of inequality on campus felt “vindicated” by the pope. And in the summer before Cohen’s senior year, Black Lives Matter was born, drawing many of her classmates into one of the more trenchant critiques of inequality in modern American history. As Cohen’s graduation neared, a little-known French economist named Thomas Piketty published the surprise bestseller Capital in the Twenty-First Century—a two-and-a-half-pound, 704-page assault on inequality. Piketty and some colleagues would later publish a paper containing a startling fact about 2014, the year of Cohen’s graduation and debut as a self-supporting earner. The study showed that a college graduate like Cohen, on the safe assumption that she ended up in the top 10 percent of earners, would be making more than twice as much before taxes as a similarly situated person in 1980.

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I am no less grateful to all those other subjects whom I did not know but who answered my emails and calls anyway, and took me up on sharing their stories and beliefs about making change. In a small handful of cases I have changed names to protect privacy. I am indebted to two professors. As I read Thomas Piketty’s masterpiece, Capital in the Twenty-First Century, I came upon a line that brought the purpose of my own book into focus. “Whether such extreme inequality is or is not sustainable,” Piketty writes, “depends not only on the effectiveness of the repressive apparatus but also, and perhaps primarily, on the effectiveness of the apparatus of justification.”

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On trust in government, see “Public Trust in Government Remains Near Historic Lows as Partisan Attitudes Shift” (Pew Research Center, May 3, 2017). On the uneven spread of the “fruits of change,” see “Distributional National Accounts: Methods and Estimates for the United States,” by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman (National Bureau of Economic Research Working Paper No. 22945, December 2016). On the changing realities of social mobility and the “opportunity to get ahead,” see “The Fading American Dream: Trends in Absolute Mobility Since 1940,” by Raj Chetty et al. (National Bureau of Economic Research Working Paper No. 22910, December 2016).

An Economic History of the Twentieth Century by J. Bradford Delong

affirmative action, Alan Greenspan, Andrei Shleifer, ASML, asset-backed security, Ayatollah Khomeini, banking crisis, Bear Stearns, Bretton Woods, British Empire, business cycle, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, centre right, collapse of Lehman Brothers, collective bargaining, colonial rule, coronavirus, cotton gin, COVID-19, creative destruction, crowdsourcing, cryptocurrency, cuban missile crisis, deindustrialization, demographic transition, Deng Xiaoping, Donald Trump, en.wikipedia.org, ending welfare as we know it, endogenous growth, Fairchild Semiconductor, fake news, financial deregulation, financial engineering, financial repression, flying shuttle, Ford Model T, Ford paid five dollars a day, Francis Fukuyama: the end of history, full employment, general purpose technology, George Gilder, German hyperinflation, global value chain, Great Leap Forward, Gunnar Myrdal, Haber-Bosch Process, Hans Rosling, hedonic treadmill, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, Hyman Minsky, income inequality, income per capita, industrial research laboratory, interchangeable parts, Internet Archive, invention of agriculture, invention of the steam engine, It's morning again in America, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, land reform, late capitalism, Les Trente Glorieuses, liberal capitalism, liquidity trap, Long Term Capital Management, low interest rates, manufacturing employment, market bubble, means of production, megacity, Menlo Park, Mikhail Gorbachev, mortgage debt, mutually assured destruction, Neal Stephenson, occupational segregation, oil shock, open borders, open economy, Paul Samuelson, Pearl River Delta, Phillips curve, plutocrats, price stability, Productivity paradox, profit maximization, public intellectual, quantitative easing, Ralph Waldo Emerson, restrictive zoning, rising living standards, road to serfdom, Robert Gordon, Robert Solow, rolodex, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Simon Kuznets, social intelligence, Stanislav Petrov, strikebreaker, structural adjustment programs, Suez canal 1869, surveillance capitalism, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, The Great Moderation, The Nature of the Firm, The Rise and Fall of American Growth, too big to fail, transaction costs, transatlantic slave trade, transcontinental railway, TSMC, union organizing, vertical integration, W. E. B. Du Bois, Wayback Machine, Yom Kippur War

Bradford DeLong, “Private Accounts: Add-on, Not Carve-Out,” Grasping Reality, May 3, 2005, https://delong.typepad.com/sdj/2005/05/private_account.html. 25. Thomas Piketty and Emmanuel Saez, “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (February 2003): 1–39, https://eml.berkeley.edu/~saez/pikettyqje.pdf. 26. Takashi Negishi, “Welfare Economics and Existence of an Equilibrium for a Competitive Economy,” Metroeconomica 12 (June 1960): 92–97. 27. Jeremiah 7:18. 28. “Globalization over Five Centuries, World,” Our World in Data, https://ourworldindata.org/grapher/globalization-over-5-centuries?country=~OWID_WRL. 29. Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, 2014. 30.

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Donald Sassoon, One Hundred Years of Socialism: The West European Left in the Twentieth Century, New York: New Press, 1996, xxxiii. Note that Sassoon does not especially like this transformation of the revolutionary idea into a celebration of the wonders of technology. 11. Thomas Piketty, Capital in the Twenty-First Century, Cambridge, MA: Harvard University Press, 2014, 24; Mark Twain and Charles Dudley Warner, The Gilded Age: A Novel of Today, Boone, IA: Library of America, 2002 [1873]. 12. On the lives of America’s industrial working class around 1900, see Margaret Frances Byington, Homestead: The Households of a Mill Town, New York: Charities Publication Committee, 1910. 13.

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A successful middle-class American in the age of neoliberalism would meet Bain CEO and future Massachusetts governor and US senator (R-UT) Mitt Romney and know that he had seven houses, some of them mansions, scattered around the country and, well, I do not know what models of cars he has driven, but I have been told that the house in La Jolla, California, near the beach, has a car elevator. Even when people have more material wealth at their disposal in absolute terms than their parents did, a proportional gulf that large that is growing that rapidly can make them feel small. French economist Thomas Piketty popularized an understanding of the striking differences between how the economy had functioned in the global north before World War I and how it functioned after World War II.29 In the First Gilded Age, before World War I, wealth was predominantly inherited, the rich dominated politics, and economic (as well as race and gender) inequality were extreme.

The Classical School by Callum Williams

"Friedman doctrine" OR "shareholder theory", bank run, banking crisis, basic income, Brexit referendum, British Empire, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Charles Babbage, complexity theory, Corn Laws, David Ricardo: comparative advantage, death from overwork, deindustrialization, Donald Trump, double entry bookkeeping, falling living standards, Fellow of the Royal Society, full employment, Gini coefficient, Gordon Gekko, greed is good, helicopter parent, income inequality, invisible hand, Jevons paradox, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, low skilled workers, Mahatma Gandhi, Martin Wolf, means of production, Meghnad Desai, minimum wage unemployment, Modern Monetary Theory, new economy, New Journalism, non-tariff barriers, Paul Samuelson, Post-Keynesian economics, purchasing power parity, Ronald Coase, secular stagnation, Silicon Valley, spinning jenny, The Wealth of Nations by Adam Smith, Thomas Malthus, universal basic income

To put that into perspective, back then the total annual value of all wages, salaries and employee benefits paid each year was worth perhaps 60% of GDP. So for every £1 earned in the labour market per year, 33p was received in inheritance. Society, therefore, was built around the idea that you needed to marry into the right family, thus assuring yourself a decent inheritance. Just read a Jane Austen novel (or Thomas Piketty’s Capital in the Twenty-First Century). Death duties in the mid-19th century were insignificant; it would have been too controversial to implement tough ones. Economists such as Condorcet, meanwhile, offered arguments against inheritance tax based on the idea of natural rights. But Mill hated the idea that people could simply sit there, wait for a loved one to die, and then cash in.

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Donald Winch puts it another way: “A secular upward trend in the price of wage or subsistence goods… became the main proposition dividing Smith’s world from that of Malthus, Ricardo, and all those who followed in their footsteps.” Now, does Ricardo’s theory hold in the real world? Clearly not. Look at data for Britain. Grain prices have not gone up and up over time–actually, food has got a lot cheaper since Ricardo wrote his tracts. Owners of land have not got richer and richer. In fact the opposite has happened. As Thomas Piketty’s calculations show, the value of agricultural land, relative to overall wealth, has plummeted as capitalist economies have advanced. The declining value of agricultural land, relative to the overall economy, is in part because during the 19th century, Britain flung open its ports to foreign trade.

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So just as for workers, the bare minimum profit rate is also the maximum profit rate. But what about landowners? According to Riley, “Mill reaffirms Ricardo’s conclusion that… economic growth tends to enrich the owners of resources without improving the lot of workers or capitalists.” Land is fixed but economic growth is not. So as Thomas Piketty puts it, “[t]he law of supply and demand then implies that the price of land will rise continuously, as will the rents paid to landlords.” With more people about, food prices will rise. That is great news for owners of land. Mill’s own words provide the best summary of the argument: “The economical progress of a society constituted of landlords, capitalists, and labourers, tends to the progressive enrichment of the landlord class; while the cost of the labourer’s subsistence tends on the whole to increase, and profits to fall [to the bare minimum level, in both cases].”

Big Capital: Who Is London For? by Anna Minton

"there is no alternative" (TINA), Airbnb, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, Donald Trump, eurozone crisis, Fall of the Berlin Wall, Frank Gehry, gentrification, high net worth, high-speed rail, housing crisis, illegal immigration, Kickstarter, land bank, land value tax, market design, new economy, New Urbanism, offshore financial centre, payday loans, post-truth, quantitative easing, rent control, rent gap, Right to Buy, Russell Brand, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, urban renewal, working poor

This has little to do with the process that Glass or even Lees describe, which saw capital invested in gentrifying parts of the city at a much slower rate, over generations rather than a few years: as such, it is crucial that the impact of global capital and foreign investment is scrutinized for its local effects. The title of this book is a nod to Thomas Piketty’s landmark study, Capital in the Twenty-First Century, which investigates the consequences for inequality when the rate of return on rent is greater than the rate of economic growth. I hope to expose the lie that the housing crisis is a market question of supply and demand. Governments of all stripes have argued that we simply need to loosen planning restrictions and build more homes for sale.

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In Barcelona and Berlin the city government has banned renting out whole properties through Airbnb, and at the time of writing the company was embroiled in a battle in New York over the same issue. But while regulation is being introduced, it is a notoriously hard business to regulate and raises contentious issues in a city such as Barcelona where it has become an important source of income for people on modest salaries. The success of the model fits perfectly into Thomas Piketty’s thesis that income from rent now far exceeds economic growth, let alone wages. As such, it is likely to remain a key feature of the contemporary property market. The bedroom tax presents a mirror image of Airbnb. In a society where the ideal of public housing has collapsed, a financial penalty is imposed on people in social housing with a spare room, while those who are lucky enough to own a house with one find themselves with an additional source of revenue.

The Road to Ruin: The Global Elites' Secret Plan for the Next Financial Crisis by James Rickards

"World Economic Forum" Davos, Affordable Care Act / Obamacare, Alan Greenspan, Albert Einstein, asset allocation, asset-backed security, bank run, banking crisis, barriers to entry, Bayesian statistics, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Benoit Mandelbrot, Berlin Wall, Bernie Sanders, Big bang: deregulation of the City of London, bitcoin, Black Monday: stock market crash in 1987, Black Swan, blockchain, Boeing 747, Bonfire of the Vanities, Bretton Woods, Brexit referendum, British Empire, business cycle, butterfly effect, buy and hold, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, cellular automata, cognitive bias, cognitive dissonance, complexity theory, Corn Laws, corporate governance, creative destruction, Credit Default Swap, cuban missile crisis, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, debt deflation, Deng Xiaoping, disintermediation, distributed ledger, diversification, diversified portfolio, driverless car, Edward Lorenz: Chaos theory, Eugene Fama: efficient market hypothesis, failed state, Fall of the Berlin Wall, fiat currency, financial repression, fixed income, Flash crash, floating exchange rates, forward guidance, Fractional reserve banking, G4S, George Akerlof, Glass-Steagall Act, global macro, global reserve currency, high net worth, Hyman Minsky, income inequality, information asymmetry, interest rate swap, Isaac Newton, jitney, John Meriwether, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, large denomination, liquidity trap, Long Term Capital Management, low interest rates, machine readable, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Minsky moment, Money creation, money market fund, mutually assured destruction, Myron Scholes, Naomi Klein, nuclear winter, obamacare, offshore financial centre, operational security, Paul Samuelson, Peace of Westphalia, Phillips curve, Pierre-Simon Laplace, plutocrats, prediction markets, price anchoring, price stability, proprietary trading, public intellectual, quantitative easing, RAND corporation, random walk, reserve currency, RFID, risk free rate, risk-adjusted returns, Robert Solow, Ronald Reagan, Savings and loan crisis, Silicon Valley, sovereign wealth fund, special drawing rights, stock buybacks, stocks for the long run, tech billionaire, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transfer pricing, value at risk, Washington Consensus, We are all Keynesians now, Westphalian system

Here’s what the G7 leaders: “G7 Ise-Shima Leaders’ Declaration / G7 Ise-Shima Summit, 26–27 May 2016,” G7 Ise-Shima Summit, May 27, 2016, accessed August 7, 2016, www.mofa.go.jp/files/000160266.pdf, 6–7. In particular, Piketty advanced the thesis: French economist Thomas Piketty advanced the thesis that high tax rates have been associated with strong economic growth and equitable income distribution, while low tax rates have been associated with weaker growth and extremes of income inequality. See Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press, 2014). Henry Kissinger offers a brilliant overview: For an in-depth history and analysis of the Westphalian state system, other historical forms of world order, and implications for policy today, see Henry Kissinger, World Order (New York: Penguin Press, 2014).

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The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It. New York: Bloomsbury Press, 2012. Palley, Thomas I. From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economics, 1st edition. New York: Cambridge University Press, 2012. Piketty, Thomas. Capital in the Twenty-First Century. Cambridge, MA: Belknap Press, 2014. Popper, Karl R. The Open Society and Its Enemies: Volume 1, The Spell of Plato. Princeton, NJ: Princeton University Press: 1971. ———. The Open Society and Its Enemies: Volume 2, The High Tide of Prophecy: Hegel, Marx, and the Aftermath. Princeton, NJ: Princeton University Press, 1971.

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The IMF, OECD, and G20 have all endorsed these efforts and have added their own calls for international information collection and information sharing. The G20 final communiqué from the November 2014 meeting in Brisbane, Australia, included technical papers describing an implementation program for data collection. Prominent economists including Nobelist Joseph Stiglitz and Thomas Piketty have joined the chorus calling for global taxation. In particular, Piketty advanced the thesis that high tax rates are not an impediment to growth. His thesis is riddled with flaws, but attracted a following among global elites nonetheless. Piketty recognizes that high tax rates will not achieve his redistribution goals if collections are thwarted by tax avoidance.

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer

Adam Curtis, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, American Legislative Exchange Council, An Inconvenient Truth, anti-communist, Bakken shale, bank run, battle of ideas, Berlin Wall, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, centre right, clean water, Climategate, Climatic Research Unit, collective bargaining, company town, corporate raider, crony capitalism, David Brooks, desegregation, disinformation, diversified portfolio, Donald Trump, energy security, estate planning, Fall of the Berlin Wall, financial engineering, George Gilder, high-speed rail, housing crisis, hydraulic fracturing, income inequality, independent contractor, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job automation, low skilled workers, mandatory minimum, market fundamentalism, mass incarceration, military-industrial complex, Mont Pelerin Society, More Guns, Less Crime, multilevel marketing, Nate Silver, Neil Armstrong, New Journalism, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, oil shock, plutocrats, Powell Memorandum, Ralph Nader, Renaissance Technologies, road to serfdom, Robert Mercer, Ronald Reagan, school choice, school vouchers, Solyndra, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, the scientific method, University of East Anglia, Unsafe at Any Speed, War on Poverty, working poor

Liberal critics: See Chrystia Freeland, Plutocrats: The Rise of the New Global Super-rich and the Fall of Everyone Else (Penguin, 2012), 3. “We are on the road”: Paul Krugman, speaking in an interview with Bill Moyers about Thomas Piketty’s book Capital in the Twenty-First Century. “What the 1% Don’t Want Us to Know,” BillMoyers.com, April 18, 2014. “Wealth begets power”: Joseph E. Stiglitz, “Of the 1%, by the 1%, for the 1%,” Vanity Fair, May 2011. Thomas Piketty: Thomas Piketty, Capital in the Twenty-First Century, trans. Arthur Goldhammer (Belknap Press/Harvard University Press, 2014). “disconnect themselves”: Mike Lofgren, “Revolt of the Rich,” American Conservative, Aug. 27, 2012.

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In the new millennium, however, this consensus was beginning to fray. A growing number of academics studying the nexus of politics and wealth regarded the accelerating inequality in America as a threat not only to the economy but to democracy. Thomas Piketty, an economist at the Paris School of Economics, warned in his zeitgeist-shifting book, Capital in the Twenty-First Century, that without aggressive government intervention economic inequality in the United States and elsewhere was likely to rise inexorably, to the point where the small portion of the population that currently held a growing slice of the world’s wealth would in the foreseeable future own not just a quarter, or a third, but perhaps half of the globe’s wealth, or more.

It's Better Than It Looks: Reasons for Optimism in an Age of Fear by Gregg Easterbrook

affirmative action, Affordable Care Act / Obamacare, air freight, Alan Greenspan, Apollo 11, autonomous vehicles, basic income, Bernie Madoff, Bernie Sanders, Black Lives Matter, Boeing 747, Branko Milanovic, Brexit referendum, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, clean tech, clean water, coronavirus, Crossrail, David Brooks, David Ricardo: comparative advantage, deindustrialization, Dissolution of the Soviet Union, Donald Trump, driverless car, Elon Musk, Exxon Valdez, factory automation, failed state, fake news, full employment, Gini coefficient, Google Earth, Home mortgage interest deduction, hydraulic fracturing, Hyperloop, illegal immigration, impulse control, income inequality, independent contractor, Indoor air pollution, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), invisible hand, James Watt: steam engine, labor-force participation, liberal capitalism, longitudinal study, Lyft, mandatory minimum, manufacturing employment, Mikhail Gorbachev, minimum wage unemployment, Modern Monetary Theory, obamacare, oil shale / tar sands, Paul Samuelson, peak oil, plant based meat, plutocrats, Ponzi scheme, post scarcity, purchasing power parity, quantitative easing, reserve currency, rising living standards, Robert Gordon, Ronald Reagan, self-driving car, short selling, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, Steve Wozniak, Steven Pinker, supervolcano, The Chicago School, The Rise and Fall of American Growth, the scientific method, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, transaction costs, Tyler Cowen, uber lyft, universal basic income, War on Poverty, Washington Consensus, We are all Keynesians now, WikiLeaks, working poor, Works Progress Administration

Stephen Rose, a labor economist at the Urban Institute: Stephen Rose, “The Growing Size and Incomes of the Upper Middle Class” (Washington, DC: Urban Institute, 2016). The most-talked-about serious book… bore the subhead: Christopher Lasch, The Culture of Narcissism (New York: W. W. Norton, 1979). “the simplest and most powerful measure” of inequality: Thomas Piketty and Emmanuel Saez, “Inequality in the Long Run,” Science, May 23, 2014. Piketty’s 2013 tome Capital in the Twenty-First Century was received: Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Harvard University Press, 2014). for the typical middle-class family, the value of federal benefits exceeds: “Distribution of Household Income and Federal Taxes, 2013” (Washington, DC: Congressional Budget Office).

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That it is also the simplest does not make it correct; height is the simplest measure of a basketball player, but choosing up a team based solely on height would not be wise. No one in the United States or Europe runs a family on pretax income alone. Tax rates, government benefits, consumer prices, and household size must be taken into account too. Piketty’s 2013 tome Capital in the Twenty-First Century was received by many editorialists and academics as having proven that rising inequality in pretax income means the Western economy is in an emergency situation. The book travels 704 pages without assessing how taxes, government benefits, and consumer prices impact the average people Piketty seeks to champion.

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THE PEW RESEARCH CENTER METRIC for gauging the extent of the middle class took into account pretax income only. Citing income numbers alone is the approach employed by Senators Sanders of Vermont and Elizabeth Warren of Massachusetts, who are the left wing’s most notable declinists, trafficking in anger and negativity. Income-only is the approach employed by Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley, who were favorite economists of the Obama White House. Piketty and Saez produced voluminous charts and graphs showing that because returns on capital exceed increases in wage income, the system is structured such that those at the top, who own the most equity (primarily as stock shares), will make out better than average people.

The Job: The Future of Work in the Modern Era by Ellen Ruppel Shell

"Friedman doctrine" OR "shareholder theory", 3D printing, Abraham Maslow, affirmative action, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, AlphaGo, Amazon Mechanical Turk, basic income, Baxter: Rethink Robotics, big-box store, blue-collar work, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, company town, computer vision, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, data science, deskilling, digital divide, disruptive innovation, do what you love, Donald Trump, Downton Abbey, Elon Musk, emotional labour, Erik Brynjolfsson, factory automation, follow your passion, Frederick Winslow Taylor, future of work, game design, gamification, gentrification, glass ceiling, Glass-Steagall Act, hiring and firing, human-factors engineering, immigration reform, income inequality, independent contractor, industrial research laboratory, industrial robot, invisible hand, It's morning again in America, Jeff Bezos, Jessica Bruder, job automation, job satisfaction, John Elkington, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, new economy, Norbert Wiener, obamacare, offshore financial centre, Paul Samuelson, precariat, Quicken Loans, Ralph Waldo Emerson, risk tolerance, Robert Gordon, Robert Shiller, Rodney Brooks, Ronald Reagan, scientific management, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, Steve Jobs, stock buybacks, TED Talk, The Chicago School, The Theory of the Leisure Class by Thorstein Veblen, Thomas L Friedman, Thorstein Veblen, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban renewal, Wayback Machine, WeWork, white picket fence, working poor, workplace surveillance , Y Combinator, young professional, zero-sum game

Most of this change is due not to any educational deficits; on the contrary, the younger you are, the more likely you are to have a college degree. Rather, the bulk of this change is due to an unequal distribution of economic growth. In his magisterial history of economic inequality, Capital in the Twenty-First Century, economist Thomas Piketty concludes that among a number of possible factors underlying income disparity, “the educational factor does not seem to be the right one to focus on.” Of the many ways we Americans manifest our boundless optimism, a commitment to universal education ranks near the top.

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Katz, The Race Between Education and Technology (Cambridge, MA: Belknap Press of Harvard University Press, 2009); also my own interview with Dr. Goldin. “being squeezed out of white collar work” Paul Douglas, “What Ever Happened to the White-Collar Job Market,” System: The Magazine of Business 49 (December 1926): 719. inequality declined Thomas Piketty and Arthur Goldhammer, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press of Harvard University Press, 2014). an “educational slowdown” Goldin and Katz, Race, 7. the nation’s “poorly educated” workforce See, for example, David C. Berliner and Bruce J. Biddle, The Manufactured Crisis: Myths, Fraud, and the Attack on America’s Public Schools (New York: Perseus, 1995), 133.

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The authors write, “The evidence indicates that…[the] net effect [of educational systems] is not to reduce the relationship between parental SES [socioeconomic status] and child achievement, but to maintain or strengthen patterns of differences in outcomes already evident at younger ages.” “the educational factor” Thomas Piketty and Arthur Goldhammer, Capital in the Twenty-First Century, 315. CHAPTER 8 “there is little to be gained from increasing potential supply” Lawrence Summers, “The Jobs Crisis,” Reuters, June 13, 2011, https://www.reuters.com/​article/​column-usjobs-summers/​rpt-column-the-jobs-crisis-lawrence-summers-idUSN1­2279957201­10613.

Reinventing Capitalism in the Age of Big Data by Viktor Mayer-Schönberger, Thomas Ramge

accounting loophole / creative accounting, Air France Flight 447, Airbnb, Alvin Roth, Apollo 11, Atul Gawande, augmented reality, banking crisis, basic income, Bayesian statistics, Bear Stearns, behavioural economics, bitcoin, blockchain, book value, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Cass Sunstein, centralized clearinghouse, Checklist Manifesto, cloud computing, cognitive bias, cognitive load, conceptual framework, creative destruction, Daniel Kahneman / Amos Tversky, data science, Didi Chuxing, disruptive innovation, Donald Trump, double entry bookkeeping, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Evgeny Morozov, flying shuttle, Ford Model T, Ford paid five dollars a day, Frederick Winslow Taylor, fundamental attribution error, George Akerlof, gig economy, Google Glasses, Higgs boson, information asymmetry, interchangeable parts, invention of the telegraph, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, joint-stock company, Joseph Schumpeter, Kickstarter, knowledge worker, labor-force participation, land reform, Large Hadron Collider, lone genius, low cost airline, low interest rates, Marc Andreessen, market bubble, market design, market fundamentalism, means of production, meta-analysis, Moneyball by Michael Lewis explains big data, multi-sided market, natural language processing, Neil Armstrong, Network effects, Nick Bostrom, Norbert Wiener, offshore financial centre, Parag Khanna, payday loans, peer-to-peer lending, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price mechanism, purchasing power parity, radical decentralization, random walk, recommendation engine, Richard Thaler, ride hailing / ride sharing, Robinhood: mobile stock trading app, Sam Altman, scientific management, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, Snapchat, statistical model, Steve Jobs, subprime mortgage crisis, Suez canal 1869, tacit knowledge, technoutopianism, The Future of Employment, The Market for Lemons, The Nature of the Firm, transaction costs, universal basic income, vertical integration, William Langewiesche, Y Combinator

If the link to labor share is real, this will prompt a further reduction in the share of income accruing to workers, while it enriches investors and banks. Concerns about the shrinking role of labor, and the shift in income distribution, have already caused alarm in many corners, from economists such as Thomas Piketty, whose 2014 book, Capital in the Twenty-First Century, a stinging critique of capitalism, became a global best seller, to populist movements (such as those led by Marine Le Pen and Donald Trump) that promise to eradicate the plight of the displaced worker. And two sets of relatively conventional ideas, one distributive and the other participatory, are being advanced by policy makers and debated in many nations as a response to this troubling trend.

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., Mark Graham, Isis Hjorth, and Vili Lehdonvirta, “Digital Labour and Development: Impacts of Global Digital Labour Platforms and the Gig Economy on Worker Livelihoods,” Transfer: European Review of Labour and Research, March 16, 2017, http://journals.sagepub.com/eprint/3FMTvCNPJ4SkhW9tgpWP/full. shrinking role of labor: Thomas Piketty, Capital in the Twenty-First Century (Cambridge, MA: Belknap Press, 2014). not necessarily to tax the economy more: See Ryan Abbott and Bret N. Bogenschneider, “Should Robots Pay Taxes? Tax Policy in the Age of Automation,” forthcoming in Harvard Law and Policy Review (March 13, 2017), https://ssrn.com/abstract=2932483.

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See Daimler; Ford Motor Company; General Motors; Tesla Autopilot, 78 Autor, David, 195 Avant, 151 Bacon, Francis, 223 Baidu, 30, 151 Bank La Roche, 136 banks, 11, 12, 137, 138–140, 146–156 capital share of, 185, 186 central, 134–135, 149 choice expansion in, 215–216 cost cutting in, 146–148 crisis facing, 134–136 government loans to, 134 investment planning by, 150, 154–155 Italian merchant families in, 91 lending by, 150–151 payment businesses competing with, 146–147 poor insight of, 154 regulations affecting, 139–140 reinvention of from within, 146, 149–156 traditional role of, 138–139 Barclays, 215 Bardi family, 91 Barkai, Simcha, 194, 195 barter economy, 45 Bastani, Aaron, 221 Bauer, Florian, 55 Bear Stearns, 155 Beer, Staffors, 175–176 Bethlehem Steel, 95 Betterment, 151, 153 Bezos, Jeff, 68, 88, 89, 96, 106, 107, 130 Big Data, 77, 213, 219, 222 See also data-rich markets Bitcoin, 48, 147 BlaBlaCar, 3, 9, 65 blockchain, 147, 148 BMW, 120 book value, 172 bookkeeping, 92–93 bounded rationality, 104 Brezhnev, Leonid, 221 Bridgewater Associates, 114–115 Brookings Institution, 186 Brown, John Seely, 31 Brynjolfsson, Erik, 184, 220 Buick Motor Company, 98 cacao beans (as currency), 48 Canada, 191–192 capital, 15, 133–156 abundance of, 142–143, 194 banks’ shift from, 134–136, 138–140, 146–156 future role of, 11–12, 141 problems caused by decline of, 141–144 signaling with, 141–143 steady value of predicted, 144 See also money; price capital gains tax, 187 Capital in the Twenty-First Century (Piketty), 186 capital share, 185–186, 193–195, 197, 198 Carnegie Mellon University (CMU), 60 Case, Bob, 133–134 castells, 17–20 cell phones. See mobile phones central banks, 134–135, 149 centralization, 13, 90, 95, 100 cognitive limitations and, 103 of communicative coordination, 28–30 matching and, 74 Champagne fairs, 160 Charles Schwab, 146 Charlotte, Queen, 94 checklists, 100–101 Chichén Itzá, 21 Chile, 175–179 Chilean Production Development Corporation, 175 China, 147, 196 communicative coordination in, 30–32 fintechs in, 151, 152 firms in, 28 labor market of, 184 choice, 6, 207–223 in banking and financial sector, 215–216 in education sector, 214 in energy markets, 213 in health care sector, 213–214 historical constraints on, 13–14 human error and, 14–15 questions about, 219–220 relinquishing some, 85 in retail sector, 207–212 about time management, 221–222 Chongqing Province (China), 31–32, 33 Cisco, 7 Claudico (machine learning system), 60 Coconut, 147 cognitive bias and constraints, 5, 62 automation and, 79, 80, 81 firms and, 102–104 markets and, 169–170 persistence of, 14–15 Colson, Eric, 209 command-and-control management, 29–30, 88, 120 Commerzbank, 136 communicative coordination, 10, 17–33 castell example, 17–20 effectiveness as measure of, 24–25 firms and, 26, 28–33, 90, 102 importance of, 20–23 markets and, 26–28, 30–33 price hampering of, 63 societal institutions and, 23–24 competition, 165–167, 202–203 comprehensive cost accounting, 94–95 concentrated markets, 161–169, 171, 217 Condorcet, Marquis de, 50 confirmation bias, 103 Confused.com, 52 conglomerates, 30 Consumer Reports, 51 Contix, 155 coordination.

Strangers in Their Own Land: Anger and Mourning on the American Right by Arlie Russell Hochschild

affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Black Lives Matter, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, clean water, collective bargaining, Deep Water Horizon, desegregation, Donald Trump, emotional labour, ending welfare as we know it, equal pay for equal work, Exxon Valdez, feminist movement, full employment, greed is good, guest worker program, invisible hand, knowledge economy, man camp, McMansion, minimum wage unemployment, new economy, obamacare, off-the-grid, oil shock, payday loans, precautionary principle, Richard Florida, Ronald Reagan, school vouchers, Silicon Valley, Solyndra, sovereign wealth fund, The Theory of the Leisure Class by Thorstein Veblen, Thorstein Veblen, urban sprawl, working poor, Yogi Berra

And those combining the incomes of both spouses—whatever the education of either—enjoyed incomes that were that high or higher. 150more profits to top executives and stockholders, and less to workers Robert Reich, Saving Capitalism: For the Many, Not the Few (New York: Knopf, 2015); John Ehrenreich, Third Wave Capitalism: How Money, Power, and the Pursuit of Self-Interest Have Imperiled the American Dream (Ithaca and London: ILR Press, an Imprint of Cornell University Press, forthcoming 2016); Thomas Piketty and Emmanuel Saez, 2007 Average Incomes, U.S. 1980–2012 (in real 2014 dollars). Also see Thomas Piketty, Capital in the Twenty-First Century (Boston: Harvard University Press, 2014). Thomas Piketty and his French-American colleague, Emmanuel Saez, base this distribution on income individuals hold in the absence of government activity—so it’s what people have if they neither pay taxes nor receive government distributions (e.g., Social Security, unemployment insurance, food stamps, Medicaid, or earned income tax credits).

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“Calcasieu, Cameron Areas ‘on Bubble’ with EPA for Air Quality.” American Press (July 11, 2014). http://www.americanpress.com/news/local/Air-quality. Phillips-Fein, Kim. Invisible Hands: The Businessmen’s Crusade Against the New Deal. New York: W.W. Norton & Company, 2007. Piketty, Thomas. Capital in the Twenty-First Century. Boston: Harvard University Press, 2014. Piketty, Thomas, and Emmanuel Saez. 2007 Average Incomes, U.S. 1980–2012 (in real 2014 dollars). The World Top Incomes Database. http://topincomes.g-mond.parisschoolofeconomics.edu. Porter, Michael, and C. Van der Linde. “Toward a New Conception of the Environment–Competitiveness Relationship.”