Month: May 2014
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Wealth Is Not Capital: The Brilliant Seth Ackerman Explains It All 4 U
I’m stunned by how good the new Jacobin piece by Seth Ackerman is: “Piketty’s Fair-Weather Friends.” It gives what I find to be the best understanding so far of the whole Piketty “think space.” It’s so good that I can’t encapsulate it, so I’ll just share some of the passages I’m most taken with, with my…
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Has Tyler Cowen Updated His Priors on Wealth Concentration and Inequality?
Noah Smith has documented the “anti-Piketty crusade” by Tyler Cowen, Chairman and General Director of the Koch-brothers-funded Mercatus Center. (The post seems to have gone missing from Noah’s site [pourquoi?]; here’s Google’s cached version.) The latest from Cowen is here, joining in the right-wing chorus desperately trying to debunk the long and widely documented increase in wealth inequality (documented…
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We Have No Idea What Our Capital is Worth
That headline makes quite a statement. But it’s true. The stock of so-called “financial capital,” or wealth — all the financial assets out there, which are ultimately claims on real capital — represents only the most tenuous long-term approximation of what our real capital is worth. Certainly true: the stock (total dollar value) of “financial capital” goes up…
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More on Money, Currency-ness, Wealth, and Spending
Arthur over at New Arthurian Economics has posted a much-appreciated though decidedly negative reply to my recent post on the nature of money and financial assets. He and I have had very similar thinking over the years (and he has provided me, at least, with some Aha! moments), so I’d much like to convince him to…
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Answering Brad DeLong’s “Deep Question”: Productivity vs. Power
As a naive young noodler on economic topics I always wondered: Why are players in the financial industry — which produces very few real, human, consumable goods and services that people value in their lives — so well-paid? I figured it out pretty quickly: it’s because they are able to control who gets that real…
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(Modern) Monetarist Thoughts on Wealth and Spending: Volume or Velocity?
I’ve bruited the notion in the past that “money” should be technically defined, as a term of art, as “the exchange value embodied in financial assets.” In this definition, counterintuitively relative to the vernacular, dollar bills aren’t money. They’re embodiments of money, as are checking-account balances, stocks, bonds, etc. etc. Money and currency aren’t the…
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Eighty percent of current jobs may be replaced by automation in the next several decades.
That’s the conclusion of Stuart W. Elliott in his recent paper, “Anticipating a Luddite Revival.” (Hat tip: RobotEconomics.) We’ve seen that scale of transformation before. But this one promises to be roughly four times as fast, dwarfing Luddite-era concerns: …the portion of the workforce employed in agriculture shifted from roughly 80% to just a few…
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The Lump-of-Capital Fallacy
Dean Baker gives me the courage, in his recent post on Pikkety, to reiterate a statement I’ve made some few times in the past: Economists have no coherent or consistent idea of what they’re talking about when they use the word “capital.” They lump together real capital — fixed, human, organizational, whatever — with “financial capital,”…