Piketty’s data

[Young Master Smeet]

 don't know if anyone is readin/going to review the Piketty book, but his data is online, and is quite startling, certainly for propaganda purposes.

http://piketty.pse.ens.fr/files/capital21c/en/pdf/F10.3.pdf

OK, so his series are subject to a lot of adjustment and technical debate, but even still, if correct they are startling, especially as they show a clear trend since 1970 towards greatr inequality.  So, we can now reasonably confidently state that the top 10% own 70% of the wealth, and the top 1% own about 29% (lets hammer homw what that means in disparity of share, the top ten own seven times their share, while the top one own 29 times their equal share).

The US is fascinating, as a tiny property owning class clearly emerges at the end of the 19th C. and recovers:

http://piketty.pse.ens.fr/files/capital21c/en/pdf/F10.5.pdf

Here's what he has to say:

Piketty wrote:

I believe that the data we have on wealth inequality is sufficient to reach a number of conclusions. Namely, wealth inequality was extremely high and rising in  European countries during the 19th century and up until World War 1 (with a top 10% wealth share around 90% of total wealth in 1910), then declined until the 1960s-1970s (down to about 50 -60% for the top 10% wealth share); and finally increased moderately since the 1980s – 1990s. In the United States, wealth inequality was less extreme than in Europe until World War 1, but it was less strongly affected by the 20thcentury shocks, and in recent decades it rose more strongly than in Europe. Both in Europe and in the United States, wealth inequality is less extreme than what it was in Europe on the eve on World War 1.

In any case, we need to say this again and again.

 

[ALB]

Was reviewed in the May Socialist Standard:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2014/no-1317-may-2014/cooking-books-capitalism-and-inequalityKey point is:

Quote:

The similarity between Piketty’s view and that of Marx on how capitalism works to make the rich richer is obvious but there is a difference. Piketty is more concerned with the distribution of the income from capital while Marx was concerned with the accumulation of capital itself irrespective of who owns it (whether individuals, corporations or the state) or who benefits personally from it.

Also this from the dreaded David Graeber (which is not too bad, considering it's him):http://www.theguardian.com/commentisfree/2014/may/30/savage-capitalism-back-radical-challenge

[Ozymandias]

It's been reported in the past ten days that some experts from the FT or LSE are claiming that Piketty's sources are inaccurate. What a shame that his book has been a best seller yet his conclusions are pathetic reformism. Marx turning in his grave again.

[LBird]

Ozymandias wrote:

What a shame that his book has been a best seller yet his conclusions are pathetic reformism.

But surely, if this has happened once…

Piketty wrote:

Namely, wealth inequality was extremely high and rising in European countries during the 19th century and up until World War 1 (with a top 10% wealth share around 90% of total wealth in 1910), then declined until the 1960s-1970s (down to about 50 -60% for the top 10% wealth share);…

… Piketty can logically argue that it can happen again?Can reforms once again reduce the 'top 10% wealth share' to '60%'?If not, why not?

[DJP]

LBird wrote:

… Piketty can logically argue that it can happen again?Can reforms once again reduce the 'top 10% wealth share' to '60%'?If not, why not?

That begs the question. Was it reforms that affected the distribution of wealth, or something else i.e economic conditions?

[LBird]

DJP wrote:

LBird wrote:

… Piketty can logically argue that it can happen again?Can reforms once again reduce the 'top 10% wealth share' to '60%'?If not, why not?

That begs the question. Was it reforms that affected the distribution of wealth, or something else i.e economic conditions?

Well, if it wasn't 'reforms' (by active human actions, however defined, even 'warfare' and 'welfare'), then was it the 'economic conditions' that reduced the share of the ruling class from 90% to 50%?If so, why shouldn't the 'economic conditions' be able to either move the share back up to 90% or even down further to, say, 40%, at some point in the future?Is the secret of 'reformism' to just await the economic flood tide, and then claim agency? Canute in reverse?

[alanjjohnstone]

I think they did the same with the original Capital. Marx use of the parliamentary Blue Books were subject to scrutiny and challenged for accuracy. I thought this was quite an insightful (inciteful) view of the book from an interesting anglehttp://www.counterpunch.org/2014/06/02/tinkering-with-capitalism/

[ALB]

LBird wrote:

… Piketty can logically argue that it can happen again?Can reforms once again reduce the 'top 10% wealth share' to '60%'?If not, why not?

Piketty's basic argument is that the returns to capital tend to increase faster than production (GDP) and that, as a consequence, those who hold capital (the rich) get richer in relation to those who don't.This is not incompatible with a change in the distribution of the income from capital which would reduce wealth inequality. For instance, the same total capital income could be divided between a large number of small property owners or a smaller number of large property holders. In fact in Britain the latter is the case due to members of the capitalist class, such as the Duke of Westminster,  whose wealth originally came from owning land in town centres as opposed to industrial production; which is not the case in other countries, where the distribution of wealth is not so unequal.While he doesn't think that the basic tendency for returns to capital to increase faster than production can be changed (at least I don't think he does), he does think that its consequences can be mitigated through government intervention to reduce the amount of income from capital going to individuals and to distribute it differently. He is on record as advocating for instance an 80% tax on property incomes and a world-wide wealth tax to achieve this.As Graeber says:

Quote:

Piketty, in contrast, begins his book by denouncing "the lazy rhetoric of anti-capitalism". He has nothing against capitalism itself – or even, for that matter, inequality. He just wishes to provide a check on capitalism's tendency to create a useless class of parasitical rentiers. As a result, he argues that the left should focus on electing governments dedicated to creating international mechanisms to tax and regulate concentrated wealth. Some of his suggestions – an 80% income tax! – may seem radical, but we are still talking about a man who, having demonstrated capitalism is a gigantic vacuum cleaner sucking wealth into the hands of a tiny elite, insists that we do not simply unplug the machine, but try to build a slightly smaller vacuum cleaner sucking in the opposite direction.

This is not going to happen of course even if theoretically it could. But even if it did there would still be capitalism and the exploitation of wage-labour as this is the source of capital incomes. And it's this that we are against not the way its proceeds are distributed, isn't it? In other words, we are against the fact of there being income from capital rather than how this income is distributed.

[LBird]

ALB wrote:

This is not going to happen of course even if theoretically it could. But even if it did there would still be capitalism and the exploitation of wage-labour as this is the source of capital incomes. And it's this that we are against not the way its proceeds are distributed, isn't it?

Yeah, our issue as Communists is ‘production’, but for most workers the issue is ‘distribution’.The overwhelming majority of workers on this planet are not opposed to ‘capitalism’ (as a system of production and exploitation), but are opposed to the current distribution of wealth.

ALB wrote:

In other words, we are against the fact of there being income from capital rather than how this income is distributed.

Again, workers are not against there being ‘income from capital’, but are against the proportion going to the capitalists. And Piketty’s data seems to prove that, by some method, whether by the human agency of reformism or the ‘objective’ movement of ‘economic conditions’, that the proportion being distributed to workers can grow, and the proportion being distributed to capital can fall, without the need for socialism, that is, changing the system of production.

ALB wrote:

Graeber wrote:

Piketty, in contrast, begins his book by denouncing "the lazy rhetoric of anti-capitalism". He has nothing against capitalism itself – or even, for that matter, inequality. He just wishes to provide a check on capitalism's tendency to create a useless class of parasitical rentiers. As a result, he argues that the left should focus on electing governments dedicated to creating international mechanisms to tax and regulate concentrated wealth. Some of his suggestions – an 80% income tax! – may seem radical, but we are still talking about a man who, having demonstrated capitalism is a gigantic vacuum cleaner sucking wealth into the hands of a tiny elite, insists that we do not simply unplug the machine, but try to build a slightly smaller vacuum cleaner sucking in the opposite direction.

Similarly, most workers have nothing against ‘inequality’; they’re quite happy with the ‘vacuum cleaner’ model of wealth suction, and just want a portion diverted to them. They fear that, without the ‘vacuum cleaner’, they’ll have to go back to ‘brush and shovel’.I don’t think that there is necessarily anything within the ‘vacuum cleaner’ method that will make workers reject its method of operation. In fact, the 20th century proves that they’ll do anything to maintain its working.To me, the ‘questioning’ of the system has to come from outside the working of the system; that is, it’s an issue of ‘human agency’ rather than ‘economic conditions’. Workers must want more than a greater ‘distribution’ for themselves; they must want to question the ‘vacuum cleaner’. If they don’t, all the ‘vacuum cleaning’ in the world won’t make them critical. Whilst the only alternative they can picture is ‘brush and shovel’, then Piketty and the reformists will hold sway.Since I think that the only way forward is for workers who are already Communists to persuade other workers that Communism is possible, and since that is a task of education and propaganda, I think that we are failing to explain our ideas to workers. To me, the history of the socialist movement is the failure to explain to workers in terms that they themselves can understand. I’m still yet to hear a good explanation of Capital, for example, as opposed to simply regurgitating Marx’s mysterious words. Only with understanding can come the confidence to act for oneself. Acting for others (employment within capitalism) will not in itself produce enlightenment about one’s actions. There has to be a ‘critical break’ by each worker, as an individual. We’re not helping to develop this ‘critical break’, which can only come about with thought, and not through day-to-day life, of mere experience of ‘economic conditions’.

[Young Master Smeet]

ISTR that in fact Adam Smith advocated a wealth tax (as opposed to taxes on income, sales or land), and indeed, this would be a good way of clearing out the non-capitalist rentiers and property owners, but they wouldn't put up with that for long.So, up to 1970 the top 10% only had six times their share: and that was with a tight labour market, relative to the capital available.  They broke out with the expanding  worldwide available labour force (and under those conditions it's arguable that state action actually savd the capitalists money by refining the labour market).Where Piketty is right is that capitalism is global and we need to (and indeed can only) act globally.

[Young Master Smeet]

ALB wrote:

Was reviewed in the May Socialist Standard:

Was that actually a review (as in the author had read the whole book)?  I took it as a report of the news controversey, and we were waiting for a more detailed review. Anyway, I think someone has linked to Harvey's review before, but in case not:http://socialistworker.org/blog/critical-reading/2014/05/18/david-harvey-reviews-thomas-pi

[Young Master Smeet]

And here's a savaging from the ultra keynsian JK Galbraith:http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-centurythis is an interesting bit:

Galbraith wrote:

Thanks to the French Revolution, registry of wealth and inheritance has been good in Piketty’s homeland for a long time. This allows Piketty to show how the simple determinants of the concentration of wealth are the rate of return on assets and the rates of economic and population growth. If the rate of return exceeds the growth rate, then the rich and the elderly gain in relation to everyone else. Meanwhile, inheritances depend on the extent to which the elderly accumulate—which is greater the longer they live—and on the rate at which they die. These two forces yield a flow of inheritances that Piketty estimates to be about 15 percent of annual income presently in France—astonishingly high for a factor that gets no attention at all in newspapers or textbooks.

[twc]

This rather fine article is not written by the “ultra keynesian” John Kenneth Galbraith, who died back in 2006.  It is written by his son James K Galbraith. On the evidence of this article, James is far from being the “ultra keynesian” his father was and, if he is a keynesian at all, he can only be called, at best, a highly unorthodox one.In Section 1 of the article, James K Galbraith neatly summarizes the Marxian and the marginalist conceptions of capital, and comes out on the side of Marx.  He soundly criticizes the neoclassical physicalist “production function” and thereby criticizes his father’s master, Keynes himself.James presents the pithiest summary I’ve ever read of the famous, but abstruse, Cambridge capital controversies of the 1960s, in which Samuelson graciously conceded losing the battle, but in which the pyrrhic marxians lost the war (they effectively succeeded in demolishing Marx’s Capital for a whole generation until Andrew Kliman rescued it in the year James K Galbraith’s father died).Importantly for socialists, James K Galbraith’s criticism of physicalism [accounting capital in physical units], as Andrew Kliman proved in Reclaiming Marx’s Capital, lays a devastating blow on neo-Ricardian, or Sraffian, economics as well as on neo-classical, or marginalist, economics.  It is the proof of Marx’s social relations of production conception of value, though James K Galbraith may not see it that way.In any case, this man is no orthodox keynesian, at least as far as his explicit theory goes in this article.Piketty, of course, is totally different.  He is a pure phenomenologist, not in Hegel’s sense, but in the sense of an empirical scientist, not a theoretical one.  He is a modern day Thomas Tooke, whose History of Prices and of the State of the Circulation during the Years 1703–1856  was a mine of empirical data for Marx.Fact, or data, begs explanation; it is not its own ineffable explanation.  Fact, as nothing-generating-something, is what Hegel implies by being–nothing–becoming. The world won’t let us sit on the piketty fence.

[LBird]

twc wrote:

Fact, or data, begs explanation…

It's more accurate to say that 'explanation reaps facts'.

twc wrote:

…it is not its own ineffable explanation.

Quite.No one, not even Piketty, is an 'empirical scientist'. That is a myth of 'bourgeois science'.Piketty, like every scientist, starts from assumptions. From these (often unspoken or even unconscious) assumptions and axioms are generated hypotheses (or tentative explanations). If these assumption-based hypotheses seem to reap 'empirical facts', then they are deemed to be an 'explanation'.We Communists start from different assumptions, so our explanations will not only be different from those of Piketty and other pro-capitalist thinkers, but both sets of 'explanations' will be intolerable to each other.We laugh at Piketty's childish attempts; Piketty mocks our infantile explanations.'Fact, or data' will not solve this clash. We pick our ideology, and reap 'fact or data' to suit. That is the nature of science. Knowledge of the economy is a social construction. Different classes will 'explain' the 'facts' differently. There is no 'objective truth' to the 'facts or data'. As you say, they are 'ineffable' without human creativity.

[Young Master Smeet]

TWC,cheers for clarifying that.  I was mislead by him having the same initials.  I shall write to him forthwith demanding a name change.

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