American Oligarchy

Thomas Piketty's book Capital in the Twenty-first Century was published earlier this year and continues to draw interest.  Paul Krugman discusses the book in an interview with Bill Moyers. Krugman notes that inequality in the United States is reaching new records.  He argues that that's bad for economic growth. Very few people are "making it" in America with more and more being left behind.

One point Piketty makes is that the years from about 1914 to 1974 were an aberration in history. Inequality went down temporarily, but now we've resumed the relentless logic of capital: the rate of return on capital exceeds the rate of economic growth.  The rich get richer and we soon become a society of inherited wealth.

Update (April 23):  More from Bill Moyers and the distribution of wealth in the U.S.

Also, why the Right fears Piketty's research.

Update (April 24):  An interview with Thomas Piketty.

Update (April 25):  Paul Krugman says conservatives are in a panic that Piketty's message will spread.

[W]hat’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.

Update (April 27):   Sean McElwee on the impact of Capital.

Update (April 28):  More about Piketty's work from Heidi Moore and Rebecca Rosen.

And this is, perhaps, the most significant point. Piketty has identified the mechanism by which inequality accelerates over time (Solow calls it, simply, the "rich-get-richer dynamic"). But the consequences of that distribution are not merely economic but political: A concentration of wealth leads to a concentration of power, which in turn protects the concentration of power. That our political system is incapable of tempering Piketty's dynamic is not a bizarre coincidence but a direct result.

Update (April 30):  I'm starting to have difficulty just keeping up with all the discussion about Piketty's work.

Update (May 1):  Jesse Myerson has a solution for "r > g".  Distribute r to everyone.  Does that mean state ownership of everything?  Doesn't that mean replacing capitalism with socialism?

Update (May 3):  A summary of articles about Piketty's work.  And a look at an empire in decline.



Update (May 4):  Sean McElwee has a guide to debating conservative attacks on Piketty.

Update (May 6):  Another interview with Thomas Piketty.

Update (May 8):  Chairman of the Council of Economic Advisers Jason Furman comments on Piketty's work.

Update (May 11):  Thomas Frank points out that as much as Piketty documents the growing imbalance between capital and labor, he overlooks the role of unions for addressing inequality. More democracy in the workplace directly counters the undemocratic force of concentrated wealth.  But allowing workers to organize is still a political choice--and the growing power of capital makes that increasingly difficult to achieve.

Update (May 23):  A story in the Financial Times raises questions about some of Piketty's data.

Update (May 24):  Where will we end up if growing inequality remains unchecked?

Update (May 27):  Reactions to the Financial Times article.

Update (June 1):  A short overview of Capital.

Update (June 2):  Matt Bruenig rebuts five misconceptions about Piketty's argument.  But Krugman points out that

inequality denial persists, for pretty much the same reasons that climate change denial persists: there are powerful groups with a strong interest in rejecting the facts, or at least creating a fog of doubt. Indeed, you can be sure that the claim “The Piketty numbers are all wrong” will be endlessly repeated even though that claim quickly collapsed under scrutiny.

Update (June 7):  The inequality discussion continues.  And even as the US reaches a new record in collective wealth, a report from the Economic Policy Institute addresses income inequality.

Update (June 28):  Noel Ortega of the New Economy Working Group says that Piketty overlooks the limits to economic growth.

At the center of the rapidly growing New Economy Movement are ecological balance, shared prosperity, and real democracy. If we can’t find a way to build all three, then the only economy worth measuring is the number of days we have left.

Fred Guerin agrees that we need to

ask the question whether we should continue advocating for a capitalist system that glorifies profit over people or start thinking about how to reorganize our economy around common goods such as the health and well-being of our present world.

Guerin disputes the idea that capitalism is the best we can hope for.

The fact is that though there are many manifestations of the capitalist system, the intentional logic of capitalism always was, and still is, the same: to protect and perpetuate the power, status and privilege of the few, while impoverishing everyone else.

Given this, you might think that we would seriously question anyone who asserts that capitalism best captures or reflects the essential capabilities, wants, desires or needs of human beings - or that it, in any way, helps to preserve or sustain the resources of the planet for future generations. If anything, capitalism has become the medium where what is worst in us is magnified and given legitimacy - materialism, greed, indifference to the suffering of others, deceitfulness and hubris - while diminishing the importance of justice, benevolence and environmental stewardship.

Update (October 19):  Luke Brinker criticizes Bill Gate's critique of Piketty.

Update (February 21, 2015):  Reflections by Piketty and the importance of emphasizing wealth inequality.

Update (February 8, 2017):  I like the ad for Pocket Piketty:

r Roine explains all things Piketty.

WEALTH ACCUMULATES, CAPITALISM REINFORCES INEQUALITY, WEALTH INEQUALITY IS  UNDEMOCRATIC.

Update (March 21, 2018): Paul Street writes about the Permanent Political Class.

Who will protect Americans from the American oligarchy? CNN and MSNBC shriek about our continuing vulnerability to evil Russian intrusion. They say nothing about how no steps are being taken to outlaw the controlling influence of nefarious homegrown American big money campaign funders, lobbyists, and, of course, corporate media.