Capital in the Twenty-First Century (119 page)
Read Capital in the Twenty-First Century Online
Authors: Thomas Piketty
58
. This is due mainly to the fact that wages are generally aggregated in a single line
with other intermediate inputs (that is, with purchases from other firms, which also
remunerate both labor and capital). Hence published accounts never reveal the split
between profits and wages, nor do they allow us to uncover possible abuses of intermediate
consumption (which can be a way of augmenting the income of executives and/or stockholders).
For the example of the Lonmin accounts and the Marikana mine, see the online technical
appendix.
59
. The exigent attitude toward democracy of a philosopher such as Jacques Rancière
is indispensable here. See in particular his
La haine de la démocratie
(Paris: La Fabrique, 2005).
1
. Note, too, that it is perfectly logical to think that an increase in the growth
rate
g
would lead to an increase in the return on capital
r
and would therefore not necessarily reduce the gap
r
−
g.
See
Chapter 10
.
2
. When one reads philosophers such as Jean-Paul Sartre, Louis Althusser, and Alain
Badiou on their Marxist and/or communist commitments, one sometimes has the impression
that questions of capital and class inequality are of only moderate interest to them
and serve mainly as a pretext for jousts of a different nature entirely.
Malthus, Young, and the French Revolution
Ricardo: The Principle of Scarcity
Marx: The Principle of Infinite Accumulation
From Marx to Kuznets, or Apocalypse to Fairy Tale
The Kuznets Curve: Good News in the Midst of the Cold War
Putting the Distributional Question Back at the Heart of Economic Analysis
The Major Results of This Study
Forces of Convergence, Forces of Divergence
The Fundamental Force for Divergence:
r
>
g
The Geographical and Historical Boundaries of This Study
The Theoretical and Conceptual Framework
Part One:
Income and Capital
The Capital-Labor Split in the Long Run: Not So Stable
The First Fundamental Law of Capitalism:
α
=
r
×
β
National Accounts: An Evolving Social Construct
The Global Distribution of Production
From Continental Blocs to Regional Blocs
Global Inequality: From 150 Euros per Month to 3,000 Euros per Month
The Global Distribution of Income Is More Unequal Than the Distribution of Output
What Forces Favor Convergence?
2.
Growth: Illusions and Realities
The Stages of Demographic Growth
Growth as a Factor for Equalization
What Does a Tenfold Increase in Purchasing Power Mean?
Growth: A Diversification of Lifestyles
An Annual Growth of 1 Percent Implies Major Social Change
The Posterity of the Postwar Period: Entangled Transatlantic Destinies
The Double Bell Curve of Global Growth
The Great Monetary Stability of the Eighteenth and Nineteenth Centuries
The Meaning of Money in Literary Classics
The Loss of Monetary Bearings in the Twentieth Century
Part Two:
The Dynamics of the Capital/Income Ratio
3.
The Metamorphoses of Capital
The Nature of Wealth: From Literature to Reality
The Metamorphoses of Capital in Britain and France
The Rise and Fall of Foreign Capital
Income and Wealth: Some Orders of Magnitude
Public Wealth in Historical Perspective
Great Britain: Public Debt and the Reinforcement of Private Capital
The Ups and Downs of Ricardian Equivalence
France: A Capitalism without Capitalists in the Postwar Period
4.
From Old Europe to the New World
Germany: Rhenish Capitalism and Social Ownership
Shocks to Capital in the Twentieth Century
Capital in America: More Stable Than in Europe
The New World and Foreign Capital
Canada: Long Owned by the Crown
New World and Old World: The Importance of Slavery
Slave Capital and Human Capital
5.
The Capital/Income Ratio over the Long Run
The Second Fundamental Law of Capitalism:
β
=
s/g
Capital’s Comeback in Rich Countries since the 1970s
Beyond Bubbles: Low Growth, High Saving
The Two Components of Private Saving
Private Capital Expressed in Years of Disposable Income
The Question of Foundations and Other Holders of Capital
The Privatization of Wealth in the Rich Countries
The Historic Rebound of Asset Prices
National Capital and Net Foreign Assets in the Rich Countries
What Will the Capital/Income Ratio Be in the Twenty-First Century?
6.
The Capital-Labor Split in the Twenty-First Century
From the Capital/Income Ratio to the Capital-Labor Split
Flows: More Difficult to Estimate Than Stocks
The Notion of the Pure Return on Capital
The Return on Capital in Historical Perspective
The Return on Capital in the Early Twenty-First Century
The Notion of Marginal Productivity of Capital
Too Much Capital Kills the Return on Capital
Beyond Cobb-Douglas: The Question of the Stability of the Capital-Labor Split
Capital-Labor Substitution in the Twenty-First Century: An Elasticity Greater Than
One
Traditional Agricultural Societies: An Elasticity Less Than One
Medium-Term Changes in the Capital-Labor Split
Back to Marx and the Falling Rate of Profit
Capital’s Comeback in a Low-Growth Regime
Part Three:
The Structure of Inequality
7.
Inequality and Concentration: Preliminary Bearings
The Key Question: Work or Inheritance?
Inequalities with Respect to Labor and Capital
Capital: Always More Unequally Distributed Than Labor
Inequalities and Concentration: Some Orders of Magnitude
Lower, Middle, and Upper Classes
Class Struggle or Centile Struggle?
Inequalities with Respect to Labor: Moderate Inequality?
Inequalities with Respect to Capital: Extreme Inequality
A Major Innovation: The Patrimonial Middle Class
Inequality of Total Income: Two Worlds
The Chaste Veil of Official Publications
Back to “Social Tables” and Political Arithmetic
A Simple Case: The Reduction of Inequality in France in the Twentieth Century
The History of Inequality: A Chaotic Political History
From a “Society of Rentiers” to a “Society of Managers”
The Different Worlds of the Top Decile
The Limits of Income Tax Returns
The Chaos of the Interwar Years
The Increase of Inequality in France since the 1980s
A More Complex Case: The Transformation of Inequality in the United States
The Explosion of US Inequality after 1980
Did the Increase of Inequality Cause the Financial Crisis?
Cohabitation in the Upper Centile
Wage Inequality: A Race between Education and Technology?
The Limits of the Theoretical Model: The Role of Institutions
Wage Scales and the Minimum Wage
How to Explain the Explosion of Inequality in the United States?
The Rise of the Supermanager: An Anglo-Saxon Phenomenon
Europe: More Inegalitarian Than the New World in 1900–1910
Inequalities in Emerging Economies: Lower Than in the United States?
The Illusion of Marginal Productivity
The Takeoff of the Supermanagers: A Powerful Force for Divergence
10.
Inequality of Capital Ownership
Hyperconcentrated Wealth: Europe and America
France: An Observatory of Private Wealth
The Metamorphoses of a Patrimonial Society
Inequality of Capital in Belle Époque Europe
The Emergence of the Patrimonial Middle Class
Inequality of Wealth in America
The Mechanism of Wealth Divergence:
r
versus
g
in History
Why Is the Return on Capital Greater Than the Growth Rate?
The Question of Time Preference
Is There an Equilibrium Distribution?
The Civil Code and the Illusion of the French Revolution
Pareto and the Illusion of Stable Inequality
Why Inequality of Wealth Has Not Returned to the Levels of the Past
Some Partial Explanations: Time, Taxes, and Growth
The Twenty-First Century: Even More Inegalitarian Than the Nineteenth?
11.
Merit and Inheritance in the Long Run
Inheritance Flows over the Long Run
The Three Forces: The Illusion of an End of Inheritance
Wealth Ages with Population: The
μ
×
m
Effect
Wealth of the Dead, Wealth of the Living
The Fifties and the Eighties: Age and Fortune in the Belle Époque
The Rejuvenation of Wealth Owing to War
How Will Inheritance Flows Evolve in the Twenty-First Century?
From the Annual Inheritance Flow to the Stock of Inherited Wealth
The Basic Arithmetic of Rentiers and Managers
The Classic Patrimonial Society: The World of Balzac and Austen
Extreme Inequality of Wealth: A Condition of Civilization in a Poor Society?
Meritocratic Extremism in Wealthy Societies
The Society of Petits Rentiers
The Rentier, Enemy of Democracy
The Return of Inherited Wealth: A European or Global Phenomenon?
12.
Global Inequality of Wealth in the Twenty-First Century
The Inequality of Returns on Capital
The Evolution of Global Wealth Rankings
From Rankings of Billionaires to “Global Wealth Reports”
Heirs and Entrepreneurs in the Wealth Rankings
The Pure Return on University Endowments
What Is the Effect of Inflation on Inequality of Returns to Capital?
The Return on Sovereign Wealth Funds: Capital and Politics
Will Sovereign Wealth Funds Own the World?
International Divergence, Oligarchic Divergence
Are the Rich Countries Really Poor?
Part Four:
Regulating Capital in the Twenty-First Century
13.
A Social State for the Twenty-First Century
The Crisis of 2008 and the Return of the State
The Growth of the Social State in the Twentieth Century
Modern Redistribution: A Logic of Rights
Modernizing Rather Than Dismantling the Social State
Do Educational Institutions Foster Social Mobility?
The Future of Retirement: Pay-As-You-Go and Low Growth
The Social State in Poor and Emerging Countries