Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

boingboing.net

Post reply on HN
Print view View original

21–30 of 325 posts

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#21

Post by VodkaHaze »

roflc0ptic wrote: post #16
VodkaHaze wrote: post #12

Earlier quoted context omitted.

Picketty's re-response[1]. It gets rather technical from there on. It's not my area of expertise, either, so I won't come with my opinion on the matter. Acemoglu is a giant, and so is Picketty, so I watch the fight from afar. The first two levels of discussion (C21 and Acemoglu's immediate answer) are digestible, though. What's important to understand is that this is all part of a larger discussion on inequality, whi…

Safe to say I have no opinion I take seriously, for the reasons you mention. It's interesting as all get out, though. Thanks for the links.

I'd like to add that there seems to be more of a consensus in education inequality.

That is, noncognitive skills developed very early (age 0-4) are a huge factor in educational outcome and early childhood intervention is pretty close to agreed upon to be a necessary thing to improve the outcomes of children who grow up in a poor environment.

James Heckman's work on the topic might be worth reading.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#22

Post by patrickg_zill »

My problem with this book is that he doesn't deal at all with the gold standard. During the timeline of his survey, the currencies were almost all gold-backed and by the end, are all fiat currencies. He completely ignores it, yet at the least he should have explained why it was not relevant.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#23

Post by tmnvix »

trapperkeeper79 wrote: post #11

Wonderful talk. One thing he called for was a wealth tax, which is something that makes complete sense but is going to be very unpopular. On the otherhand, he also calls for progressive income taxes (something that is reported by the media and an easier pill to swallow) - in my country, Canada, progressive income taxes are not the answer IMHO. We didn't have as much inequality for education (i.e. lots of decent Unive…

Exactly. We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income). Taxing productive activity is literally counter-productive.

This will only become a more pressing issue once automation (esp. of the transport industry) gets into full-swing. Eventually we won't have a choice in the matter.

There are a whole host of current issues that are culminating in wealth and income distribution problems: the anglosphere's property frenzy and inevitable bust; quantitive easing pumping up asset prices while doing nothing for the real economy; global corporate tax avoidance; the rise of the low-paid 'gig' economy and under-employment; fewer high paid jobs all demanding workers with ever higher levels of education (unattainable-for-many); capitalism's tendency to concentrate wealth as demonstrated by Picketty.

A crisis is brewing. People know it. Trump and Sander's - though ostensibly very different - appeal to people who recognise that for them, the current path does not lead to a great place. Crises can be good of course. They leave us no option but to make changes.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#24

Post by rosser »

patrickg_zill wrote: post #22

My problem with this book is that he doesn't deal at all with the gold standard. During the timeline of his survey, the currencies were almost all gold-backed and by the end, are all fiat currencies. He completely ignores it, yet at the least he should have explained why it was not relevant.

I think the question of what's backing the units used to denominate wealth is pretty orthogonal to that of inequality, itself.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#25

Post by AimHere »

justin66 wrote: post #13
VodkaHaze wrote: post #5

Earlier quoted context omitted.

The fact that the book is a best seller when its intended audience is really people with a graduate education in economics tells me that most people bought is as a signal of smartness (or as an honest effort to inform oneself, but without actually slogging through the book)

How many pages have equations on them? I'm inclined to view your comment as cynical, but if it's more than 10 I'd admit that you've got a point.

Very few. Plenty of graphs and tables, but there are no obvious equations. What equations there are are inlined in the text, so that people wouldn't notice them while cursorily skimming the book, and they're very simple ratios of two properties.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#26

Post by metaphorm »

patrickg_zill wrote: post #22

My problem with this book is that he doesn't deal at all with the gold standard. During the timeline of his survey, the currencies were almost all gold-backed and by the end, are all fiat currencies. He completely ignores it, yet at the least he should have explained why it was not relevant.

what is the importance of that? can you inform me of any historical instances of currency being redeemed for its face value of gold?

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#27

Post by maxerickson »

eldavido wrote: post #15
trapperkeeper79 wrote: post #11

Wonderful talk. One thing he called for was a wealth tax, which is something that makes complete sense but is going to be very unpopular. On the otherhand, he also calls for progressive income taxes (something that is reported by the media and an easier pill to swallow) - in my country, Canada, progressive income taxes are not the answer IMHO. We didn't have as much inequality for education (i.e. lots of decent Unive…

I'm tempted to blame ultra-loose monetary policy, but I'm not so sure. I live in the Bay Area where house prices are also out of control, but I'm not sure why we focus on prices (rather than monthly debt payments) since what, 90% of the market is payment buyers? In any case, I do believe the current interest rate environment has distributional consequences that haven't been well-studied. It seems the biggest benefici…

The problem might be 40 years of tight monetary policy. The inflation that comes with a higher growth economy gives wage earners opportunity to move to new, better jobs. In a low growth economy, they fight over jobs and lose earning power.

A better national economy also probably has fewer people chasing the wealth in the valley.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#28

Post by smallnamespace »

patrickg_zill wrote: post #22

My problem with this book is that he doesn't deal at all with the gold standard. During the timeline of his survey, the currencies were almost all gold-backed and by the end, are all fiat currencies. He completely ignores it, yet at the least he should have explained why it was not relevant.

This is a sort of facile answer, since there are a lot of details to prove, but in short, because monetary policy over the long run should not have any effect on the real rate of return r and economy-wide growth rate g, which is what the book's argument hinges on.

The two big differences between the gold-backed system before the 70s and afterwards are:

- We picked fixed pegs to gold, meaning exchange rates were fixed and not floating as they are now

- Fixed exchange rates + free flow of capital is incompatible with being able to exercise monetary policy (banks can't print money since it needs to backed by gold) [1]

But it doesn't matter whether central banks exercise monetary policy or not!

Let's say a central bank today decides to print money. In the short run, that stimulates the economy, but in the long run it will lead to large rises in both nominal rates and inflation expectations, which cancel out (since real return = nominal return - inflation). The long run real rate of return is unaffected, as is the GDP growth rate.[2]

[1] https://en.wikipedia.org/wiki/Impossible_trinity

[2] http://www.frbsf.org/education/teacher-resources/us-monetary...

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#29

Post by bko »

VodkaHaze wrote: post #9
bko wrote: post #4

Suppose r > g as Picketty claims. What would be the implications? One I could think of is that rather than investing in human labor (e.g. education), it would make more sense to invest in capital (e.g. stock market) since that would yield you higher returns. Also, all the talk about wealth inequality uses percentages like the top 10%. However, the top 10% is not stable. In fact, the turnover is very high, much higher…

r > g doesn't actually explain that much in terms of wealth inequality. See Acemoglu and Robinson paper in my other reply. There is evidence that intergenerational mobility is going down, but not so much at the tippy top of the ladder. More on the "if you are born from lower class parents, you are likely to be lower class at 40" side. Early childhood education is shown to help with the lower rungs of the ladder; most…

Right, wealthy parents are able to provide more opportunities for their offspring. But hasn't that always been true? I imagine the education available to the least fortunate today is much better than the education available to someone in the lower class from 100 years ago. Capitalism has allowed for better high end services, like better teachers and tutors, but overall information and knowledge has been democratized. There is no secret math or science you learn for the right price.

The problem I see is that when we talk about social mobility, we always talk about relative classes, in which case there will always be 1/5th of the population in the bottom fifth. In terms of absolute wealth, my experience is that everyone, more or less, is better off from generation to generation, at least in material terms.

Re: Thomas Piketty’s Capital in the 21st Century, in 20 minutes (2014) [video]

#30

Post by smallnamespace »

metaphorm wrote: post #26
patrickg_zill wrote: post #22

My problem with this book is that he doesn't deal at all with the gold standard. During the timeline of his survey, the currencies were almost all gold-backed and by the end, are all fiat currencies. He completely ignores it, yet at the least he should have explained why it was not relevant.

what is the importance of that? can you inform me of any historical instances of currency being redeemed for its face value of gold?

It wasn't very long ago.

Up until 1968, dollars were convertible into gold and pegged at $35 / oz [1], meaning the government intervened to keep it at that price.

From 1968-1971, the US still honored that rate with other countries, but stopped intervening in the private gold market [2]. Then the US left the gold standard, and everyone else followed suit.

[1] https://en.wikipedia.org/wiki/History_of_the_United_States_d...

[2] https://en.wikipedia.org/wiki/Bretton_Woods_system

Post reply on HN