imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Piketty's Big Data

by Rainer Rilling and Robert Misik Monday, Nov. 17, 2014 at 12:44 PM
marc1seed@yahoo.com

The empirical-historical analysis of the top incomes and their wealth are in the center with Thomas Piketty's "Capital" (2014). The share of the top 10% was never below 60% from 1917 to 2012. A wealth tax is vital to reverse the exploding inequality.

PIKETTY’S BIG DATA



By Rainer Rilling



[This article is translated from the German in the free Rosa Luxemburg book “Oh, Gott!” (2014) www.rosalux.de. Rainer Rilling is a sociologist and senior fellow at the Institute for Social Analysis of the Rosa Luxemburg foundation.]



Unlike the left deconstruction of the distribution- and inequality question focused mostly on poverty, the empirical-historical analysis of the development of the top incomes and their wealth are in the center with Thomas Piketty’s Capital (2014). The international research group claims to have built the most comprehensive data collection on the historical income- and wealth research with the World Top Income Database (WTIP). Since the beginning of the last decade, it has published 22 country studies and 45 more are underway. The analyses refer back to tax data. From this, they draw conclusions on incomes (dividends, interests, rent etc) from capital. Other sources are cited so statements can be made about wealth development. The journal Science that devoted its May 2014 issue titled “Science of Inequality” to the “haves and have-nots” compared the WTID with the grail of the natural science data world, the Human Genome Project (HGP) decoding the human genom.



Capital repeatedly hits the mark. All the studies and empirical findings in Capital (like the data base) are openly accessible on the Internet. If the HGP and the corollary projects open up a new dimension of commodification and new capital investment possibilities, this project of large-scale economic research is a case of public science that actually ends up as politicization, not commercialization. As there is a broad debate and the beginnings of a public sociology (above all in the US) on Michael Buraway’s initiative, the WTID and Piketty’s Capital give a critical scholarly impetus for shifting political relations. Piketty himself places his text in political economy,



Capital’s big data from the last 250 years counters the habit of the rich and “their” sciences of making their wealth as invisible as possible. That is part of public political economy. Its empirical data brings a distribution-critical approach with the means of an empirical-historical analysis and also stands up to the first critical polemics (e.g. The Financial Times). For a long time, big data was hardly a field of conflict between the subordinate and the rich. This changed with Capital. “Refusing to deal with numbers rarely serves the interests of the least well-off” (Piketty 2014a, 577).





THE NEW PERSPECTIVE



From the treatment of his data, Piketty votes for a fundamental change of view on the history of inequality in capitalism. He formulates a counter-thesis to the “great fairy tale” (Piketty) of US economics about economic growth and income inequality told by the president of the American Economics Association, Simon Kuznets in 1953. According to this fairy tale, the growing inequality in the initial phase of capitalism was superseded by a perpetual era of increasing equality with the increasing industrialization. Against this, Piketty says: the expansion of income and assets inequality in capitalism is normality, not an exception. There are regions and periods of time when inequalities declined – in Europe in the period between 1914 and the beginning of the 1970s. The everyday consciousness and the leading scholarly conceptions were marked by this. The two great narratives of the “Age of Catastrophes” (up to 1945) and the following “Golden Age” (Hobsbawm) were hegemonial. Generations were marked by this integrative social narrative of capitalism’s promises of equality. However this is an exception for Piketty, not a new normality. Capitalism is a machine of growing inequality if it is not checked and ultimately stopped.



THE TURN TO WEALTH ANALYSIS



Piketty’s political motivation is coupled to a research interest that is different from the current approach of his guild. “I wanted to understand how wealth or super-wealth is working to increase the inequality gap. What I found […] is that the speed at which the inequality gap is growing is getting faster and faster. You have to ask what does this mean for ordinary people who are not billionaires and will never be billionaires. I think it means deterioration in the first instance of the economic well-being of the collective, in other words the degradation of the public sector […]. There is a fundamental belief among capitalists that capital will save the world and it just isn’t so” (Guardian 4/13/2014). Piketty, Anthony Barnes Atkinson, Gabriel Zucman, Emmanuel Saez and others diagnose a massively escalated concentration of income and wealth in the example of the US (and with the help of two dozen other countries). The share of the top ten percent in income from assets in the US was never below 60 percent between 1917 and 2012, continuously increased since 1987 and currently is at 75 percent. In Europe, it amounts to 65 percent. The share of the top one-percent rose from 25 to around 40 percent between 1978 and 2013; thus it increased more intensely. In the course of the last 30 years, more than 15 percent of US national income shifted from the bottom 90 percent of the population to the top 10%. The share of the richest (the top 0.01 percent, 16,000 households with over 0 million) in US wealth multiplied in the last 35 years (from 4 to 11 percent in 2013). The music plays there. (Boyer 2013). The wealth of the richest persons in the world grows three times as fast as the average income. The frequent reference to the rise of the middle classes in the BRIC-states or to global adjustments of the average incomes is not an argument against the enormous differences in wealth. “Theoretically in 30 to 40 years, a few rich could possess nearly all assets worldwide” (Piketty 2014b).



PATRIMONIAL CAPITALISM



Piketty emphasizes the growing significance of inherited wealth. The four members of the Walton family (Wal Mart) alone take the 9th, 10th, 11th and 12th places on the Bloomberg list of the global rich and possess more inherited wealth than the lower 50 million families in the US. Inherited wealth already amounts to a third of the “Forbes 400.” In countries like France and Germany, the rise of the highest incomes and the increase of wealth through inheritance has become a key question again in the last quarter of a century. Already in 2010 inherited capital in France amounted to two-thirds of private capital. Inheritance policy and inheritance taxes becomes a central field of distribution- and justice-policy since capital from inheritances or capital under family- and clan control has become a central political actor today in a series of countries. Patrimonial capitalism casts a long shadow.



CAPITAL IS BACK R > G



What is the background of these developments? The top-medium of market radicalism – the British Economist - summarizes Piketty’s core thesis in the sentence: wealth grows faster than the whole economy. Piketty sees here “the fundamental force for divergence” (2014a, 25), a “principle destabilizing force” (ibid, 571) and even “the central contradiction of capitalism” (ibid). For a long time – in capitalism and before – the return on capital grew faster than the growth rate of income from labor and capital, that is value creation (g). Incomes and assets concentrate more and more at the top of the social pyramid. Piketty follows the widespread assumption that rising productivity through technological progress and increasing population growth is the real driving force of growth. Inequality increases with strongly growing returns on capital or declining growth (also population growth). Around half of the growth of the GDP in the last century referred back to population growth – a trend that ended for Piketty and Zucman (2014): “Capital is back because low growth is back.” The growing inequality goes back to the increase of income that flows into capital in the form of profits, rental incomes or interests seeking investment since only a small part is consumed. If the general growth rate declines, the growth of income from capital must also fall but more slowly. The income from capital is the great driver of inequality, not the movement of income from labor.



The return on capital (r), the profit rate on tangible- and financial assets, was between four and five percent a year in the last 250 to 300 years compared to the growth from all income, the GDP (g) that increased between one and two percent a year in the rich countries. Piketty (2014a, 27) concludes: “The more perfect is the capital market (in the economist’s sense), the more likely r is to be greater than g.”



What Piketty condenses to a formula (r > g) is cautiously described as a “probability” or “tendency” by his critics. In an interview (2014b), he emphasizes: “I do not claim the future cannot be different. A prediction about the coming decades is fraught with many uncertainties. Capital returns need not remain so high and economic growth can increase again and thereby reduce the inequality. But there is a risk that it will rise again and we must be aware of that.” He summarizes: “To sum up: the inequality r > g has clearly been true throughout most of human history right up to the eve of World War One and will probably be true again in the 21st century. Its truth depends however on the shocks to which capital is subject as well as on what public policies and institutions are put in place to regulate the relationship between capital and labor” (2014a, 358).



NO END OF THE GREAT DIVERGENCE?



Piketty describes the possible consequences of this development of a new great divergence as “terrifying.” A permanently lower growth rate can be expected, a clearly lower growth rate of the population of one percent (reducing the supply of workers) and a constant technological progress despite robot capitalism. A return of the time before the First World War looms if the return on capital r remains at a rate between four and five percent – thus no shocks , no catastrophes, no capital devaluation on a large scale, no environmental collapse, no political intervention toward a great transformation (and thus no squeeze!) and growth at around 1.5 percent. Piketty: »I have used the demographic and economic growth predictions [...] according to which global output will gradually decline from the current 3 percent a year to just 1.5 percent in the second half of the twenty-first century. I also assume that the savings rate will stabilize at about 10 percent in the long run. With these assumptions, the [...] global capital/income ratio will quite logically continue to rise and could approach 700 percent before the end of the twenty- first century, or approximately the level observed in Europe from the eighteenth century to the Belle Époque. In other words, by 2100, the entire planet could look like Europe at the turn of the twentieth century« (ebd., 195).



Is Richistan, a land of courtiers, toadies, flatterers and family dynasties the land of the future? Hardly. Rather a Richistan 2.0 of a gated capitalism where markets and financialization allow and demand a historically unparalleled generalization of inequality, power and subordination appears so fussy compared to the Victorian-Wilhelminish Downton-Abbey time as the British TV station presents to us so wonderfully in its soap about the decaying parallel societies of the British low nobility.



OUTBREAK, ERUPTION AND POLITICAL RADICALISM



With his demand for clear and permanent global taxation of the highest incomes and mammoth assets, Piketty is not afraid of political radicalism forced by his historical view of the disastrous future of present capitalism. Political radicalism is on the agenda more urgently than ever with and after Piketty. With new emphasis, Capital dramatizes a global problem situation that will be intensified and not solved (according to his argumentation) through the further course of things. The central moment of wealth breaks out with a great dynamic from the many axes of the conditions of inequality…. Suddenly time becomes short. Parallels to climate policy suggest themselves. The release and deregulation of the wealth machine in the neoliberal age has limits, if one believes Piketty.



The time period available for a solid contra-intervention is limited. The direction in which it must go is unavoidable. A long period of the transformation from r > g into r


A detailed German version of this text under the title “Die Ungleichheitsmaschine” was published on Telepolis (www.heise.de/tp).



LESS INEQUALITY WOULD BE GOOD FOR EVERYONE



On the German edition of Thomas Piketty’s “Capital in the 21st Century”



By Robert Misik



[This article published on October 13, 2014 in Neues Deutschland is translated abridged from the German on the Internet, http://www.misik.at.]



When a book is a big hit like Thomas Piketty’s monumental “Capital in the 21st Century,” that is mostly due to its effect on the world, not only on its quality. This book will “change economics,” so Nobel Prize winner Paul Krugman praised the work.



Summarizing Piketty’s study in a lively way, we could say: it shows that inequality grows and “injustice” increases in capitalism (and in an intensified way in the past thirty years) and secondly this contributes to a growing instability of the system.



Inequality is not necessarily identical with injustice. What form of distribution is “just” is always controversial… When lunch is distributed unequally, that can be just and needs justifications like: papa receives more because he works so hard or the child is given more because he must grow.



Unequal distribution can be regarded as “just”… Everyone lives according to his or her preferences… Market distribution is the result of a subjectless mechanism, not an allocation (no one distributes the layer cake). This is like happiness and chance. When one wins in the lotto and others do not win, that is not unjust. It would only be unjust if a minister determines who wins and who loses in the lotto. From this perspective, market results are always “just.” It could be objected the market economy is a “power economy,” not a market economy in this sense. Whoever has will be given. Whoever has economic power determines the rules of the game… More equal distribution (even if not absolutely totally equal distribution) would also be more just.



The neoclassical economic theory would protest that no one would have anything from such justice. Administrative redistribution from top to bottom makes the economy as a whole less prosperous and everyone could have less at the end. There would be less inequality but on a lower level. If that comes true, justice would be just but would prove counter-productive.



The point of Piketty’s study and the analyses of others (Krugman, Stiglitz and the “neo-Keynesian” school) is that more equality would not only be more just but also economically useful. A more egalitarian distribution stabilizes the economy, even under the conditions of a capitalist market economy. It strengthens domestic demand and leads to more stable growth so more people can make something of their lives and develop their talents (which leads to higher productivity). It increases work satisfaction and so on. Crass unequal distribution does not only lead to lower growth (and lower profit chances in the real economy). It also results in excess in wealth and indebtedness, the hunt for speculative profits and therefore makes financial crisis more likely.



But this is not the end of the song. Many sociological studies in the last years have documented that the general life satisfaction of nearly all citizens is greater in more equal societies. Very colloquially, everyone is happier in egalitarian societies. Everyone – even the rich – is unhappier in unequal societies. In his book “The Happy Society,” Richard Layard stresses “that people are not happier today than 50 years ago – even though the real average income has more than doubled in this time period.” When the wealth of a society grows – that is the per capita national income – and also the inequality, people are often more unhappy. Then a “status race” starts and we feel a great need to keep pace with others.” In their path-breaking work “Equality is Happiness,” Richard Wilkinson and Kate Pickett showed with an abundance of facts from 200 international data banks that people on average are unhappier in societies with gross inequalities. In these societies, the rich are happier than the poor but persons in every income segment are unhappier than in more egalitarian societies. Thus the richest are in no way especially happy in societies that are sharply split in rich and poor. Quite the contrary! In short, egoism is uncomfortable for the egoists. The authors rely on soft parameters like “subjective life satisfaction” and on hard quality of life parameters like life expectancy, risk of sickness, mental problems, violent criminality, obesity, teenage pregnancies, social mobility etc.



Inequality puts everyone under stress with those on the lower rungs of the social ladder paying by far the highest price. Degraded existence, the underprivileged, material privation, disturbed social relations, cultural dependence and disrespectfulness – all this is rampant in societies with crass and growing inequalities. When the winners want to make us believe inequality is functional for well-being or prosperity because it rewards achievement, they gladly ignore the costs for society. Whoever is on the bottom in society with intensified status competition feels humiliated. Degraded and dependent existence makes people mentally ill. The social state guarantee of the existential minimum can not really change much. Whoever is on the bottom is harassed daily, exposed to disrespectfulness, a target of continual sicknesses, stamped a loser and becomes a victim. This means he or she has no subject status any more and is only an object of social work management. Societies rot from within when many people are exposed to daily humiliations.

Report this post as:

Local News

Why Should California Choose De Leon Over Feinstein? O10 9:55PM

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

The Montrose Peace Vigil at 12 Years M22 8:01PM

Unity Archive Project M21 9:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 10:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 9:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 8:57PM

California police agencies violate Brown Act (open meetings) M02 8:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 11:47PM

Change Links May 2018 A27 8:40AM

Worker-Owned Car Wash on Vermont Closed A27 5:37AM

More Local News...

Other/Breaking News

Paraphysique du microcosme macrocosme O15 6:44AM

September 2018 Honduras coup update O15 3:31AM

The Nation Unites Against Brian Kemp, Most Racist Secretary of State in US O14 7:34AM

The Nation Unites Against Brian Kemp, Most Racist Secretary of State in US O14 7:23AM

Paraphysique de l'ubérisation O13 7:56AM

22 Ways Trump Has Increased US Deficit By 4 to 5 Trillion Dollars O12 10:34PM

Debunking Some Anti-Prop 10 Propaganda O12 6:56AM

Plus d'hôpitaux, à bas les aéros O12 6:38AM

When Banana Ruled (documentary) O11 3:00AM

Outstanding Report By RAMOLA D &Dr.Tomo Shibata O10 9:17PM

Dark Clouds Gather on Horizon for Financial System, Warns International Monetary Fund O10 1:51PM

Fbi pure evil & immorality O10 5:39AM

Reality Check: Palestinian-Israeli Coexistence is a Big Lie O09 7:40PM

Voiceless Animals: 2018 Candidates They Oppose O09 7:01PM

IMF Lowers Global Growth Projections and Raises Concerns of Financial Crisis O09 3:27PM

Canitie, l'inhumanité vieillit O09 7:13AM

L'anarchie en quelques exemples O07 6:50AM

100 Ways GOP Have Stolen Elections Since 1876 O06 12:03AM

Proximospective de l'univocité réifiée O05 6:27AM

“Kava-no!!!” O04 6:42PM

Trump & Palestine vs. Genesis, Rashi & The Land of Israel O03 6:29PM

The Criminality of the Elites O03 11:35AM

Business de l'inhumanitaire O03 7:51AM

Marriage Rape/Date Rape Highest Rapes O02 2:59PM

Women I Know Get Raped - Too Many Times To Count! O02 2:55PM

Women In USA Have Stockholm Syndrom O02 2:50PM

Shooting Drill's Are Political Actual Shootings O02 2:47PM

Dr. Ford's Father Works With CIA O02 2:44PM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy