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on February 21, 2018
This is an exceptional, scholarly work, which ought to be required reading for every graduate student in any field. While it is extremely detailed and not a quick read, Piketty does not leave you guessing as to his evidence, which he piles on you. It is a depressing book, however. The American people who supported Trump believe the Horatio Alger story of hard work will make you successful and everyone can be rich. Wrong. They also don't realize the gap between typical starting salaries for retail and service jobs around $35,000 and who they consider "wealthy" because they earn $250,000 from two incomes and maybe a rental property is not even close to the cavernous, monstrous gap between those $250,000 earners and the top .5% who control most of the wealth in America who do not have jobs--they clip coupons or call their brokers and are taxed at 15% BEFORE deductions. Also, the "tax cut" we just got may feel good, but remember, Trump and Congress added to the deficit and BORROWED a trillion dollars to let most of us keep a hundred or two a month to give billions in cuts to corporations and the investor class. So, the wealth is continuingly piling up at the top and will keep on. Piketty shows graph after graph, proving all of this.
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on July 11, 2014
Thomas Piketty's book, "Capital in the Twenty First Century," has been resoundingly endorsed by Nobel Prize winning economist Paul Krugman. Since the reactionaries were freaking out, I couldn't resist reading it and finding out for myself what the hoopla was all about. The reason for the reactionary freak out is explained below.

Anyone who has bothered to read this book must admit that the writer is rigorous in his analyses and my impression was the writer eschews prejudgment. Piketty provides exhaustive data throughout in a fascinating historical analysis of capital and the inevitable pitfalls of indecent inequality of wealth ("...the `first globalization of finance and trade (1870-1914) is in many ways similar to the `second globalization' which has been underway since the 1970's." and, "...capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.") There were reasons for the financial shocks and the world wars of the 20th century, and if we're not paying attention...

Piketty notes that, "Economists are all too often preoccupied with petty mathematical problems of interest only to themselves." Nevertheless, the essential economic equations and trend analyses are sufficiently addressed and easily understandable by all. He notes that economics should be considered a branch of social science, i.e., "...politics is ubiquitous and...economic and political changes are inextricably intertwined and must be studies together."

If nothing else, the reader is warned, "...all citizens should take a serious interest in money, its measurement, the facts surrounding it, and its history. Those who have a lot of it [money] never fail to defend their interests. Refusing to deal with numbers rarely serves the interests of the least well-off."

So why are reactionaries freaking out over this book? Piketty concludes that national debt can only be reduced by: repudiation (bad), inflation (horrible), austerity (really horrible), or a progressive tax on capital (reasonable). Further, he recommends that the only reasonable way to address indecent wealth inequality is a progressive global tax on wealth, which in turn requires global transparency of accounts and an end to foreign tax havens; he goes on to say none of these measures will be easy, but does offer practical suggestions. Clearly, the plutocrats would panic over popularization of such a suggestion, and it only takes a word or two from them to spin up their PACs and puppet organizations (I won't name names) into blindly trashing these rational suggestions. Thus the one-star reviews from those who haven't read the book.

Other specifics of note:

* His rational explanation of what central banks do and why they are necessary is excellent and should be understood by all.

* His discussion of past and recent European economic issues, the creation the Euro, and administration by the ECB and European Committee should be of great interest to most Americans.

* The fact that income taxes were not invented by Woodrow Wilson and had been used successfully in Europe for many decades before that is probably news to most Americans.

* The real reasons why the gold standard had to be abandoned and is no longer feasible should be better understood by many.

* His explanation of what "rentiers" are (i.e. those with sufficient wealth to live off dividends, rents, and other financial instruments) is something that should be better understood by all. At some point, wealth takes on a life of it's own whenever r>g and this and what amounts to regressive taxation at the top of the pyramid, are the driving force behind income inequality.

* His explanation of the recent phenomenon of "super managers" who demand salaries in the tens of millions (the ones that piss everyone off), and how it was a result of the conservative revolution of the 1980s' is something that should be understood by all.

Though it's a tough slog for me, but I highly recommend this book be read be all. I recommend someone write a "Reader's Digest" version that could reference the original, since the average reader may struggle with it.
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on August 15, 2014
This is an important book and there is much to think about in it. I give it four stars for stylistic reasons only.

The book has 577 pages excluding references, index, etc. The first half was devoted to a historical analysis of income and wealth inequality, and some basic economic equations explaining the trends. During these sections the author did not express his conclusions or the points the he wanted to make in the book and so would be easy to give up on the book as being too dense and boring. It was only through public knowledge that I knew the author would prescribe a global tax on wealth to rein in growing inequality and so continue to read.

It wasn’t until the middle of the third chapter, page 300 or so, where the author got to his summaries and put the historical analysis into context. I would have preferred that he wrote a more condensed volume and put much of the historical data into footnotes or shortened them and interspersed into the summary analysis.

The author’s main point is that in the long run the return on capital will be 4 -5 percentage points greater than economic growth and so wealth will accumulate to those that have it to the detriment of everyone else. Wealth will become increasingly concentrated because of the role of inheritance and because large wealth gets a higher rate of return than smaller wealth. The only way to mitigate it is a global tax on wealth.

I do not necessarily disagree with the author’s conclusion but would have liked him to expand on some points. These are some.

Why does the return on capital exceed economic growth? He did not explain this very well.

What would happen to economic growth if the tax on unearned income was taxed at the same marginal rates as earned income, or even at higher rates?

What economic effects would there be if the wealthy were to liquidate assets to pay the wealth tax in currency?

The author seemed to simplify the process required to get a fix on total global wealth ownership and allocating the tax among the various nations. How would this work?

What is the harm of high wealth inequality and where would equilibrium be reached? Is there no merit to the idea that the high wealthy are the job creators?

More analysis of alternative ways to bring down income and wealth inequality, and exploration of the idea that less inequality might actually be good for the economy.
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on October 13, 2014
Piketty, benefitting from the vantage point of an outsider, recognizes an important attribute of American taxation and its history that many Americans overlook: progressive taxation serves the purpose of reducing inequality. And a society that is more so (than less) economically egalitarian has fewer social problems. (If you missed Wilkinson and Pickett's The Spirit Level: Why Greater Equality Makes Societies Stronger, put it on your reading list now - Bloomsbury, 2009.) Piketty reminds his readers that the great country that led the way in democracy and egalitarianism - America - was also one of the last Western nations to abolish slavery. US society maintains a certain schizophrenic attitude about equality and inequality - we tolerate and accept both simultaneously. "This complex and contradictory relation to inequality largely persists in the United States to this day: on the one hand this is a country of egalitarian promise, a land of opportunity for millions of immigrants of modest background; on the other hand it is a land of extremely brutal inequality, especially in relation to race, whose effects are still quite visible."

Inequalities based on individual talent and effort, Piketty asserts, are quite acceptable in democratic societies. But when the deck is stacked, so to speak, democracy is threatened. Whereas today in the Scandinavian countries, along with France, Germany, England, and Italy, the richest 10 percent own between 50 and 60 percent of national wealth - in the United States, the richest 10 percent claim 72 percent of America's wealth, with the bottom half (the majority of these being women) holding just 2 percent. These figures for the European nations and the United States are similar to what they were at the end of the Gilded Age, shortly before the intervention of World War I. Piketty also argues that the Great Depression was a similar type of intervention to counter the rising inequality of the Roaring '20s. What is to intervene now and combat, as it were, this current era's rising tide of inequality? The 2007-08 recession hurt most everyone's bottom line, but the inequality gap is unaffected; it's as wide now as it was before the recession.

Additionally, Piketty warns that inequality will reach historic levels in the US by 2030 if current trends continue. If you're wondering what kind of society we will be leaving to our grandchildren, Piketty's Capital has to be on your must-read list.
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on September 14, 2014
The Great Recession and its aftermath laid bare the stark differences in wealth and income between those on the top and those on the bottom of the economic ladder. Unfortunately, questions about economic inequality, at least in the United States, have been captured by the stale debates of the Cold War era. Either you're a believer in the free market and, thus, a friend to America or your a Marxist/Communist and, therefore, an enemy to America. Because of this any discussion on economic equality has ground to a halt. Into this fray comes this work of economic history by the French economist Thomas Piketty and this book. The most interesting thing about this book is how broad Mr. Piketty's research on inequality is. He draws not just from recent examples of economic history, but looks about as far back as he can go in the historical tax records of countries in Europe and America and then attempts to stretch to even further back by peering into the distant past at times, right up to the beginning of the common era 2,000 years ago. He even draws from examples in 19th century literature to show how capital has evolved from the rentier period of Jane Austen's time to the mixed combo of rentiers and managers of today. As a history buff, I particularly appreciated his free use of history and historic trends to predict the future trends of capital and draw conclusions. While freely admitting that the data is imperfect due to poor tax policies and records keeping in the past, the conclusions he comes to, in a lot of economic jargon, are these: 1. inequality from capital returns have always far exceeded inequality from incomes, with the exception of the war period of 1914-1945; and 2. with current global trends of low economic and population growth, if left unchecked capital inequality could reach levels at or greater than those of the 19th century, if they haven't already. This calls into question the democratic controls of the economy that are the bedrock of any free people and nation. Although most people will recall his idea of a global tax on capital as being a recent hot topic in political debates, really his analysis of the current trends in inequality ought to be what is discussed with his global capital tax being the starting point on debates regarding what to do about it. I won't lie to you, this book is a tough read. It features a lot of economic jargon that is not easy for anyone who isn't a trained economist to wrap their heads around. And even if you have a rough understanding of economic terms, the concepts may still go over your head. I'm not even sure I caught everything in this book. Still, for those with the intellectual grit to slug it out with this book, the rewards of better understanding a complex topic that affects us all will be immeasurable.
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on January 18, 2015
Thomas Piketty's "Capital in the Twenty-First Century" is a sprawling examination of the developed world's capital/income ratio and wealth and income concentrations over three centuries. The essence of Piketty's argument is that under normal conditions (that is to say, slow growth and no radical destruction of capital), the rate of return on capital exceeds the rate of growth, which causes large fortunes to grow faster than the labor income of the middle class or poor. Everyone agrees that the "patrimonial middle class" (the ownership by people in the 10-50 percent share of the economy of a quarter to a third of a developed country's wealth) is a recent phenomenon, but there are disagreements on how it came to be. Piketty's thesis is that the World Wars and the Great Depression reduced the rate of return on capital (and, he does not emphasize, increased spending by the government) to the point that the growth in national income could overtake the rate of return on capital and spread the wealth to a larger proportion of the rich world's population than had ever before been possible.

Piketty's insistence on linking economics to other disciplines, in particular literature and history, is one of the nobler aspects of this magisterial book. Evidence for the stagnation and extreme inequality of society just two hundred years ago is provided by Piketty's two favorite authors, Honore de Balzac and Jane Austen, whose protagonists naturally assumed that a "decent" life was only possible on at least 50 times the average income. Piketty notes (unfortunately in passing) that the increase in purchasing power is the reason it is possible for someone with an average or slightly above average income to 1) invest in things like his book, and 2) take the time to appreciate it. Rising levels of education and technology are the primary reason for this increase in purchasing power, but both education and technology, he implies, may be nearing their limits, or at least cannot be expected to increase as rapidly as they did in the twentieth century. For certain, the human population (especially in developed countries) will not increase as fast, which will tend to increase the importance of inherited wealth.

Piketty spends roughly the first four-fifths of the book providing data and the theoretical background of the problem, and the last fifth proposing solutions. At the national level, he believes a more sharply progressive income tax is in order, but would also like to see a global, or at least pan-European, tax authority to impose a progressive tax on wealth itself, a tax that for the largest fortunes would be between 2 and 10 percent. As long as countries are competing against each other to provide lower taxes and therefore higher post-tax rates of return on capital, the common people of all countries will lose. The alternative of reducing the rate of return on capital through war would appear not to be viable in the nuclear era and the inflation associated with war at any rate does not reduce the rate of return on capital unless it dwells in unproductive asset categories like bank accounts.

Some of the projections in this book (such as $200 a barrel oil by 2020) are wildly off the mark, but most of them appear to be on it. The alternative of not acting to restrain the economic forces building up higher levels of inequality could lead to the top one thousandth of the world's population owning 60 percent of all assets by the middle of this century. Piketty doubts that a machinery of repression sufficiently robust to prevent revolution in such circumstances exists anywhere but this level of inequality could in the end be just the challenge the NSA is looking for. A revolution in some developed countries but not others would set up another world war, which would make the question of income and wealth distribution among humans academic, as they could no longer live on Earth. Piketty therefore sees the peaceful reinforcement (through progressive taxation of both income and wealth) of the "social (welfare) state" as the only solution.
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on July 17, 2014
This is not easy reading although it is far more understandable that I feared it might be. It's lessons and assumptions are clear. The inequality of the distribution of wealth across the world is becoming a major problem. When a very few individuals control the majority of the wealth in the world and the number of truly poor people continues to grow because there is no way for them to grab their piece of the economic pie, something must be done to rebalance the system. Corporations move their businesses to tax sheltered places, avoiding taxes in the countries in which they produce most of their revenue, denying governments the tax dollars they deserve to uphold the society corporations want but are refusing to support. For me, it was an interesting read but not a quick one. Not being an economist, it took me a while to more clearly understand what I read.
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on August 24, 2017
In his introduction to this book, Piketty states, “When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.” He further states that “Intellectual and political debate about the distribution of wealth has long been based on an abundance of prejudice and a paucity of fact.” He then addresses this paucity with the presentation and analysis of the results the project he led to acquire an enormous volume of historical data about global income and wealth.

In the introduction, he briefly reviews the contributions but also the errors of earlier debate without data. These included Malthus’s concern with overpopulation and the need to end all welfare, Ricardo’s principle of scarcity with population and production growing as land becomes increasingly scarce, and Marx’s principle of infinite accumulation with the industrial revolution leading to no limit on the accumulation of capital (which did not consider coming social democracy, technological progress, and how to organize society without private capital). The Kuznets Curve of 1955 introduced data from US tax returns and Kuznets’s own estimates of national income to conclude that inequality increased in the early phase but declined in the later phases of industrialization. Unfortunately, this curve greatly understated the roles of the World Wars and violent economic and political shocks that led to the reduction in inequality between 1914 and 1945 and failed to explain the rising inequality after 1970.

Piketty seeks to contribute “to the debate about the best way to organize society…to achieve a just social order….achieved effectively under rule of law…subject to democratic debate.” He states he has “no interest in denouncing inequality or capitalism per se…as long as they are justified.” He worked briefly in the US and found the work of US economists unconvincing. “There had been no significant effort to collect historical data on the dynamics of inequality since Kuznets, yet the profession continued to churn out purely theoretical results without even knowing (the) facts.” He found that “the discipline of economics has yet to get over its childish passion for mathematics and the purely theoretical and often highly ideological speculation.” Subsequently, he returned to France and set out to collect the missing data.

He gathered data in two main categories: 1) inequality in distribution of income and 2) inequality in the distribution of wealth and the relation of wealth to income. For income, he built the World Top Incomes Database (WTID), which is based on the joint work of some thirty researchers around the world. This data series begins in each country when an income tax was established (usually 1910-1920 but as early as the 1880s in Japan and Germany). For wealth his sources included estate tax returns (usually dating back to the 1920s, but in a few cases as far back as the French Revolution), the relative contributions of inherited wealth and savings, and measures of the total stock of national wealth. In collecting as complete and consistent a set of historical sources as possible, he had two advantages over previous authors—a longer historical perspective (now including data from the 2000s) and advances in computer technology.

Piketty reports two major conclusions from his study. “The first is that one should be wary of any economic determinism in regard to inequalities of wealth and income (that they emerge according to immutable natural laws). The history of the distribution of wealth has always been deeply political and it cannot be reduced to purely economic mechanisms. In particular, the reduction of inequality…between 1910 and 1950 was above all a consequence of war and of policies adopted to cope with the shocks of war.” “The resurgence of inequality after 1980 is due largely to political shifts…especially in regard to taxation and finance. The history of inequality is shaped by the way…actors view what is just…as well as the relative power of those actors.”

The second conclusion is “that the dynamics of wealth distribution reveal powerful mechanisms pushing alternately toward convergence (equality) and divergence (inequality)….There is no natural, spontaneous process to prevent destabilizing ineqalitarian forces from prevailing permanently.” “Over a long period of time, the main force in favor of greater equality (convergence) has been the diffusion of knowledge and skills.” Other proposed forces for greater equality, such as advanced technology creating a need for greater skills or class warfare giving way to less divisive generational warfare as the population ages, appear to be largely illusory.

“No matter how potent a force the diffusion of knowledge and skills may be, it can nevertheless be thwarted and overwhelmed by powerful forces pushing…toward greater inequality (divergence).” With respect to income, the spectacular increase in inequality from labor income, particularly in the US and UK, largely reflects the recent marked separation of the top managers of large firms from the rest of the population, not because of increased productivity, but because they can set their own remuneration. This separation is amplified by marginal tax rates that actually decrease for the highest incomes. Capital income from large fortunes also contributes to income inequality but may be understated due to hidden off-shore accounts and by producing only the relatively small portion of income needed for expenses while the rest remains within the fortune. (Fig. I.1 shows income inequality in the US from 1910 to 2010.)

With respect to wealth, inequality (divergence) is increased when the rate of return on capital significantly exceeds the growth rate of the economy (r > g) as it did until the nineteenth century and is likely to in the twenty-first century. “Under such conditions it is inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labor by a wide margin” and lead to extreme inequality. This increasing inequality of wealth is greatly amplified by structural factors leading to higher rates of increase for the largest fortunes that are no longer related to whatever entrepreneurial activities were at the onset of their origin. (Fig. I.2 shows wealth inequality in Europe from 1870 to 2010.) This analysis also shows a major shift in the main components of wealth from land, slaves (in the US), and colonies (in Europe) to domestic capital and housing.

Historically, the rate of return on capital was 4.5-5% from antiquity to 1913, fell to 1.5% by 1950, and is rising again to 4% or more by 2012 and beyond. During the same period, the global rate of growth was close to zero before the industrial revolution, rose to 1.5% by 1913 and to 3.5% in the mid to late twentieth century (due to catch-up after World War II and in the developing world), and is now falling and projected to be 1-1.5% in the twenty-first century. Thus the unusual fall of the return on capital (r) below growth (g) in the mid twentieth century was associated with a temporary reduction in the rate of increasing inequality. (Fig 10.10 shows a comparison of the return on capital [r] to growth [g] from antiquity to 2100.)

This review barely scratches the surface of the core contribution of this book, which is the enormous volume of data and analysis it provides. The numerical information is presented in a very well developed series of 97 illustrations and 18 tables. This information is used as support for extensive analysis and discussion of the many aspects of historical, present, and likely future inequality that often contradict positions related to ideology and simplistic models. An excellent 22 page overview of “A Social State for the Twenty-First Century” is provided at the beginning of the fourth and final part of the book. This is followed by “Rethinking the Progressive Income Tax,” “The Question of the Public Debt,” the author’s preference for “A Global Tax on Capital,” and finally, the conclusion.

The conclusion reiterates that the principal destabilizing force leading to ever-increasing inequality is a return on capital (r) significantly higher than the rate of growth of income and output (g) for long periods of time. Hence wealth accumulated in the past grows more rapidly than output and wages, and the entrepreneur inevitably tends to become a rentier no longer of use in promoting growth. A progressive annual tax on capital would be the right solution to this problem, although it would require a high level of international cooperation. Piketty objects to the expression “economic science” which implies little to do with the logic of politics or culture in conclusions about inequality. He prefers the expression “political economy” which considers economics as a sub discipline of the social sciences, alongside history, sociology, anthropology, and political science. He insists that economic and political changes are inextricably entwined and must be studied together.

This review is supplemented by a relatively random selection of multiple comments and assertions from the book:

“The nature of capital has changed: it once was mainly land but has become primarily housing plus industrial and financial assets.”

“Capital…is always risk-oriented and entrepreneurial, at least at its inception; yet it always tends to transform itself into rents as it accumulates….”

With respect to global inequality, the industrial revolution led to growth of Europe and America’s share of global output to two to three times their share of population. This share is now rapidly decreasing due to higher growth in developing economies in the “catch-up” phase than in mature economies.

Europe and America’s share of global production of goods and services rose from about 30-35% in 1700 to 70-80% from 1900 to 1980, fell to 50% by 2010, and may go as low as 20-30% later in the twenty-first century.

European and American national inequality rose to record heights in 1910, decreased markedly by the 1940s due to the world wars and Great Depression, then began a rapid return to high levels after the 1970s, particularly in the US.

The share of national income for the top 10% in Europe was over 45% in 1910, under 25% in 1970, and about 30% in 2010. In the US it was over 40% in 1910, under 30% in 1970, and nearly 50% in 2010.

“Numerous studies mention a significant increase in the share of national income in the rich countries going to profits and capital after 1970, along with the concomitant decrease in the share going to wages and labor.”

In the past several decades, the share of national income for the top 0.1% increased from 2 to 10% in the US, from 1.5 to 2.5% in France and Japan, and from 1 to 2% in Sweden.

“It is important to note the considerable transfer of US national income—on the order of 15 points—from the poorest 90% to the richest 10% since 1980”— 5 to 7 times greater than the 2 to 3 points in Europe and Japan.

“The vast majority (60 to 70%)…of the top 0.1% of the income hierarchy in 2000-2010 consists of top managers. By comparison, athletes, actors, and artists of all kinds make up less than 5% of this group.”

“At the very highest levels salaries are set by the executives themselves or by corporate compensation committees whose members usually earn comparable salaries….”

“It is when sales and profits increase for external reasons that executive pay rises most rapidly. This is particularly clear in the case of US corporations…pay for luck.”

Global inequality of wealth in the early 2010s is comparable to that of Europe in 1900-1919. The top 0.1% own nearly 20%, the top 1% about 50%, the top 10% between 80 and 90%, and the bottom half less than 5%.

The share of national wealth ownership in Europe for the top 10% and top 1% was 90% and over 50% in 1910, 60% and 20% in 1970, and about 63% and 24% in 2010. During this time, the share for the 50th to the 90th percentile increased from 5% to 40%, creating a middle class, but the share for the bottom 50% remained at 5%.

In the US, shares for the top 10% and top 1% were about 80% and 45% in 1910, 64% and 30% in 1970, and about 70% and 34% in 2010—with a much more rapid increase after 1970 than in Europe, reaching 70% and 34% versus 63% and 24% by 2010 (while the bottom half claim just 2%).

Inherited wealth is estimated to account for 60-70% of the largest fortunes worldwide. This figure is lower than the 80-90% reached during the belle Epoque, but trending strongly toward a return to that level.

Forbes magazine divides billionaires into three groups—pure heirs, heirs who subsequently grow their wealth, and pure entrepreneurs, with each of these groups representing about a third of the total.

Due to increased life expectancy, the average age of heirs at the age of inheritance has increased from thirty in the nineteenth century to fifty in the twenty-first century, although with larger inheritances.

Today, transmission of capital by gift is nearly as important as transmission by inheritance. This change counters increased life expectancy and accounts for almost half of the present inheritance flows.

“No matter how justified inequalities of wealth may be initially, fortunes can grow and perpetuate themselves beyond all reasonable limits and beyond any possible rational justification in terms of social utility.”

Large fortunes experience increasing rates of growth related to size alone independent of their origins—
10% from $15-30 billion, about 9% from $1-15 billion, about 8% from$500 million to $1 billion, about 7% from $100-500 million, and about 6% below $100 million for university endowments.

From 1990 to 2010, the fortune of Bill Gates, the Microsoft genius, grew from $4 billion to $50 billion, while that of Liliane Bettencourt, a cosmetics heiress who never worked a day in her life, grew at a similar rate from $2 billion to $25 billion.

In 2013, sovereign wealth funds were worth $5.3 trillion ($3.2 trillion from petroleum exporting states and 2.1 trillion from nonpetroleum states like China, Hong Kong, and Singapore), similar to the total of $5.4 trillion for Forbes billionaires. Together, these sources account for 3% of global wealth.

Large amounts of unreported financial assets are held in tax havens—approximately 10% according to the negative global balance of payments (more money leaves countries than enters them).

In the US, parents’ income has become an almost perfect predictor of university access—average income of parents of Harvard students is currently about $450,000.

“Broadly speaking, the US and British policies of economic liberalization (after 1980)…neither increased growth nor decreased it.”

The US economy was much more innovative in 1950-1970 than in 1990-2010….Productivity growth was nearly twice as high in the former period as in the latter.

In most countries taxes have (or will soon) become regressive at the top of the income hierarchy.”

The optimal tax rate in the developed countries is probably above 80%.

One of the most important reforms (is) to establish a unified retirement scheme based on individual accounts with equal rights for everyone, no matter how complex one’s career path.

Debt often becomes a backhanded form of redistribution of wealth from the poor to the rich (who as a general rule ought to be paying taxes rather than lending).

Inflation is at best a very imperfect substitute for a progressive tax on capital. It is hard to control, and much of the desired effect disappears once it becomes embedded in expectations.

Defining the meaning of inequality and justifying the position of the winners is a matter of vital importance, and one can expect to see all sorts of misrepresentations of the facts in service of the cause.

No hypocrisy is too great when economic and financial elites are obliged to defend their interests—and that includes economists, who currently occupy an enviable place the US income hierarchy.

“Modern meritocratic society, especially in the United States, is much harder on the losers, because it seeks to justify domination on the grounds of justice, virtue, and merit, to say nothing of the insufficient productivity of those at the bottom.”

The history of the progressive tax over the course of the twentieth century suggests that the risk of a drift toward oligarchy is real and gives little reason for optimism about where the United States is headed.
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on April 8, 2018
For someone with no background in economics, this was still a really good read. I learned a lot and really gained a historical perspective on inequality. I do think I would have been better off getting a bit of an econ background before reading this, but with a bit of effort it was pretty easy to follow.
In contrast, I'm also reading "the price of inequality" and it's almost too easy to read. It's got no graphs, or figures, no real stats and no real construction of a systemic way of understanding the issue. It reads more like a long essay, which is ok, but I definitely got more out of Capital.
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on August 25, 2017
A lot of the technical data went straight over my head, but the principles of distribution, the arguments for distribution, and the reality which the author conveys made this a great read. I did agree with every argument, nor statement, but I do agree in general with the theme of this book and especially the necessity for regulation.
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