Monday, April 28, 2014

On r > g

I have not even started to read Thomas Piketty's Capital in the Twenty-First Century, but I have heard of Piketty as compared to Marx.

Whatever else Marx was, he was a very learned man. He read the works of virtually all political economists who came before him. And in his lengthy tomes, he would comment on them, not always fairly. He did not confine himself to ones that were politically influential among the elite. For example, consider Marx on the Ricardian socialists.

So if Piketty is like Marx, can I expect to find comments on the Cambridge equation, r = g/sc? Can I expect to find something about the models of growth and distribution put forward by Richard Kahn, Nicholas Kaldor, Luigi Pasinetti, and Joan Robinson? (Joshua Gans has also noticed a parallelism between the work of Piketty and the Post Keynesian theory of distribution.) Or maybe the analogy is not complete.

1 comment:

Tomboktu said...

Paul Mason in the Guardian says not

"Is Piketty the new Karl Marx? Anybody who has read the latter will know he is not. Marx's critique of capitalism was not about distribution but production: for Marx it was not rising inequality but a breakdown in the profit mechanism that drove the system towards its end. Where Marx saw social relationships – between labour and managers, factory owners and the landed aristocracy – Piketty sees only social categories: wealth and income. Marxist economics lives in a world where the inner tendencies of capitalism are belied by its surface experience. Piketty's world is of concrete historical data only. So the charges of soft Marxism are completely misplaced.

Piketty has, more accurately, placed an unexploded bomb within mainstream, classical economics. If the underlying cause of the 2008 bank catastrophe was falling incomes alongside rising financial wealth then, says Piketty, these were no accident: no product of lax regulation or simple greed. The crisis is the product of the system working normally, and we should expect more.