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LBird wrote:

… the gaps in Piketty's book …

What, apart from his non-socialist ideology, are these gaps? Are you saying that the facts and figures he has selected are biased or should be rejected? Do you agree with the criticism of the Financial Times and others who have challenged his figures on the degree of concentration of wealth ownership in recent years as overestimates? Or do you think he understimates it? What facts on the ownership of wealth would you select from your ideological point of view and how would you present them? 

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SocialistPunk wrote:

This question is to those who are reading Piketty's book. Does he at all suggest why the rich seem to be getting a lot richer?I'm referring to the possibility it might have a little to do with the deregulation of the finance industry that happened in America and Britain in the eighties. If I am not mistaken it allowed vast sums of wealth to be stashed away in untouchable investment options and offshore banks.

Yes he does mention this but sees the basic cause of the rich getting richer over the past 60 or so years as the widening of the gap between r (the rate of return on capital) and g (the rate of increase of income per head) after 1950 (caused by a fall in g rather than a rise in r), resulting in those with property-incomes accumulating proportionately more wealth than those whose income is derived from work. Which shows up as the top 1% and the next 9% getting to own a higher and higher proportion of total wealth.Re tax havens, he makes the point (pages 465-6) that the global balance of payments (that is, of all countries together) is negative; which is theoretically impossible as the deficit of some countries should be balanced by the surplus of others. He accepts the view that

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the most plausible reason for this discrepancy is that large amounts of unreported financial assets are held in tax havens.

As you point out, financial deregulation made this easier.Tax havens contribute to the rich getting richer to the extent that they allow some of them to avoid paying income tax so leaving them with more to accumulate but this won't be the main reason why the rich have been getting richer.

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Piiketty isn't a Marxist and doesn't claim to be and so doesn't use Marxian categories. In fact he uses those of conventional bourgeois academic economics and of national accounting. I would have thought that it is significant that despite this he reaches the conclusion (given that there's not the slightest likelihood of a global tax on capital ever being adopted)  that this century the top 10 percent will get proportionately richer and richer:

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I have also discovered some objectively disturbing trends: without a global tax on capital or some similar policy, there is a substantial risk that the top decile's share of global wealth will continue to grow indefinitely. (p. 519)

and towards the pre-WWI level of 90 percent.I can think of criticisms — that he confuses capital and wealth and the accumulation of capital with the accumulation of property titles and that he gets Marx wrong — but not that he has written a book that socialists should reject out of hand because he hasn't adopted Marxian categories.Anyway, L. Bird, read on and see, even if he's not fishing in the same pond as you, if he's not catching some of the same fish.

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SocialistPunk wrote:

Adam, I could be wrong, but when I saw Piketty on the BBC HardTalk program I got the distinct impression that he did indeed want to salvage capitalism from itself.

Actually, according to a few throwaway lines in the book, insofar as he wants to save caitalism, it is from populist nationalist movements or "various forms of retreat into national and other identities" (p. 471) which are of course another form of capitalism. Since this (eg protectionism, controls on the movement of capital, withdrawal and break-up of EU, etc) is proposed by the state-capitalist left (as well as by the right) it is no wonder they are gunning for him.I wouldn't have thought that he would want to save capitalism from socialism as we understand it if he thought it was a realistic proposition. I think he is or was a supporter of the French "Socialist" Party. His parents were members of the French Trotskyist group Lutte Ouvrière.Having said that, his ideal solution of a "global wealth tax" is completely unrealistic and is not going to happen. It seems more likely that there will be moves in the opposite direction, as evidenced by the rise of UKIP in Britain and of the Front National in France and which could be triggered by Britain withdrawing from the EU (not that I think that's going to happen but it could).I've reached page 550 and so should finish reading it today.

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alanjjohnstone wrote:

Piketty, in Naidu's view, is limited by his unwillingness to challenge capitalism itself……..Piketty wants desperately to salvage capitalism, even if that means proposing something that every capitalist will hate: a global wealth tax. ………

I don't know if this is your view or Naidu's but I don't think it's fair or true to say that Piketty "wants desperately to salvage capitalism". It's more that he doesn't see any practical alternative to it and therefore settles for trying to make the best of it.But to return to "the facts",  The first clause of our declaration of principles starts:

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That society as at present constituted is based upon the ownership of the means of living (i.e. land, factories, railways, etc.) by the capitalist or master class …

It clearly strengthens our case if we can produce evidence to back this up, as provided in the early years by statisticians such as in Britain Chiozza Money and Bowley. Since the last world war we now have official government statistics which researchers like Piketty can analyse. In fact, as far as I know, his book is the first to examine the inequality of wealth ownership in different countries and over time (couple of centuries). Just as significant as was (Liberal MP as well as historian) Thorold Rogers' Six Centuries of Work and Wages in its time.

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I'm not a Guardian-reader but another comrade has pointed to this article, which seems relevant to this thread:http://www.theguardian.com/politics/2014/jul/01/-sp-tory-summer-party-drew-super-rich-supporters-with-total-wealth-of-11bn

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Vin Maratty wrote:

The centre of Durham is closed to traffic from 7.00 am. How have members managed to get the table, banner, lit etc to the racecourse in the past?

I emailed this question to comrade JB who used to organise having our stall there and his reply is:

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In the past it's been a case of us turning up before 7am at the gala – always with a car which is parked on the main field behind the gazebo ( stall holders are allowed vehicles on the field) – it makes for a long day though as you usually can't get off the site until about 5.30 pm.

This year we won't have an official stall but when I went there once I just parked my car anywhere and walked. Two people should be able to carry a paste table and bag with pamphlets to the field and set up an unofficial stall (as has been suggested). In the past we had a gazebo (which is still in JB's house in Newcastle) which would be a different proposition.

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The various versions of our old Questions of the Day pamphlet used to have a notice at the back saying read the Socialist Standard

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For the socialist viewpoint on current affairs backed by incontrovertible facts and logical argument.

We seem to be re-running the old "is socialism a moral as well as a scientific case" discussion. It would be an own goal if the "moralists" denied any place for facts and logical arguments just as much as if the "scientists" ruled out indignation at what capitalism does to people as part of the socialist case.OK. Piketty's book is some 600 pages long but this has never put socialists off recommending a book. After all, Thorold Rogers Six Centuries of Work and Wages which the early party used to recommend and EP Thompson's The Making of the English Working Class which we still recommend are just as long. Piketty's book is not full of algebraic formula as are many modern academic books on economics (less so than Marx's Capital in fact) and is a relatively easy read as unlike most French academics he writes clearly, simply and unpretentiously.

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Of course we don't agree with Piketty's reformist politics but I think it is unfair to use this as a reason for not regarding his research and conclusions as worth taking into account and quoting. After all, in the 1910s and 1920s we used to quote the findings on the distribution of wealth of Sir Leo Chiozza Money and Sir Arthur Bowley despite their politics (Chiozza Money was a Liberal MP for a time).You say, Alan, that we all know that the rich get richer but surely it is relevant to know why and also how and why the distribution of wealth and income has changed over time which is what Piketty's book is about. When the party was founded over a hundred years ago, the top 10% did own 90% of wealth ( a statistics we frequently quoted), but this fell in the period 1910-1950 to about 60%. Piketty argues that it was this period, not the pre-WWI period, that was exceptional as during it wars and inflation destroyed or devalued much capital (so g grew faster to recover and the famous gap between the r and g was less). He argues that the "natural" tendency under capitalism is not just for the rich to get richer but for the distribution of wealth to return towards pre-1910 levels. This, surely, is a powerful finding and argument to expose the futility of reformist attempts to redistribute wealth from the rich to the rest.There has, as Piketty's describes, been an apparent evolution in this direction (though not as a result of government policies) which is here to stay: the middle 40% below the top 10% and above the bottom 50% have come to acquire some wealth (mainly a house they've finished paying for but also some interest-bearing savings). This doesn't make them capitalists of course nor enable them to avoid selling their ability to work for a wages or a salary. The position of the bottom 50% has not changed.There are other interesting and relevant findings in his book. For instance, a hundred years ago the income of the top 1 percent came overwhelmingly from owning property (profit, interest, rent, dividends). Today an equal amount comes from the "salaries" that "supermanagers" pay themselves.  Does this require us to widen the definition of a capitalist as someone who is simply a rentier? Are these super-salaries an alternative way of distributing surplus value to the rich?

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One for our media dept then. Perhaps the trots concerned will change their name back to Militant to avoid getting confused with us. I'm sure the AWL too will be shocked to be accused of being associated with us. One of our members who is in the NUT I talked to didn't think much of the Leftwing caucuses in it. He said they weren't really representative of the membership.

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Heard Ed Balls on the radio yesterday trying to jump on the current anti-immigrant bandwagon by saying that the Labour government had made a mistake in 2004 in allowing straightaway unlimited immigration from Poland, etc when they joined the EU (they could have delayed this for 5 years as was done when Rumania and Bulgaria joined).But the "mistake" here was to believe and act on the basis of Gordon Brown's claim to have eliminated the boom/slump cycle. The Labour government assumed in 2004 that boom conditions would continue and so that an inflow of workers would be needed. The boom came to an end in 2008 so not so many immigrant workers were required. But they will be if/when the recovery speeds up. At that point the anti-immigrant bandwagon will slow to a halt even if UKIP get off and try to push it on.

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rodshaw wrote:

But has the party, or any sympathisers, even tried to get in touch with him?

Yes, he has been given a copy of the article (also used for a leaflet) on him in the Socialist Standard via a member who knows his father:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2013/no-1312-december-2013/russell-brand-attacks-capitalism

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Thanks, YMS, for his appendix on Marx. Actually, his "first fundamental law of capitalism" (page 52)  α = r x ß, or share of income from capital in national income = rate of return on capital x stock of capital/national income, can be  translated into crude Marxian categories (s = profit; v = wages, C = stock of capital).In crude Marxian categories his first law is s/(s + v) = s/C x C/(s + v)As this is an identity it can be turned round to get:rate of return =  share of income from capital in national income x national income/stock of capitalor s/C = s/(s + v) x (s + v)/CThe (s + v)s cancel each other out, leaving s/C = s/CHis "second fundamental law of capitalism" (page 166), ß = s/g, or capital income ratio = rate of saving divided by rate of growth of national income per head, is more tricky but it would be something like: percentage of (s + v) accumulated as new capital divided by rate of increase of (s + v) per head. This is not an identity but depends on what s and g happen to be at any time in any country.I know he's going to end up concluding that where r (rate of return on capital) is larger than g (rate of increase of national income per head) then α (share of income from capital in national income) will increase and the rich will get richer compared to the rest of the population whose income comes from work, but I haven't reached there yet and am waiting to see the steps he takes to arrive at this (though it does seem to be intuitive).Then, of course, he's got to show that there is in practice a tendency under capitalism for r to larger than g (and that this tendency isn't be nullified by any counter-tendencies).

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To be more scientific, he defines Occupy's top 1% as the first centile. Now that's a slogan: Down with the First Centile !

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Stuart, pgb and anyone else reading or who has read Piketty's Capital, I have just finished reading chapter 6 but I can't understand the criticism of Marx he makes in the section "Back to Marx and the Falling Rate of Profit" (which I've read three times).He seems to be attributing to Marx the view that there is no growth of national income per head under capitalism or at least of not taking this into account. I can understand why Piketty might want to discuss an interesting limiting case where there is no such growth, but not why he would want to attribute this view to Marx (and Ricardo, John Stuart Mill, etc). Perhaps because he seems to think that Marx held the rate of profit will fall "inexorably" as capital accumulation proceeds.Anyway, what do others think he is trying to get at or of what he says?The ironic thing is that in this chapter Piketty argues that there is a tendency for the rate of profit (as the rate on return on capital as he defines it) to fall, though for different reasons than Marx or Ricardo, but that this can, has been and is offset by counter tendencies. Which of course was Marx's view too.Despite what he is reported to have said, Piketty clearly has read some of Marx as he discusses what Marx wrote in part of Volume I of Capital and in Value, Price and Profit. In fact, in footnote 33 on pages 600-1 he says he has done a detailed analysis of what Marx wrote in these places about profits' share and the rate of exploitation and that this is in the "online technical appendix". I can't find this part of the appendix online if anyone can help.

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