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The Return Of “Patrimonial Capitalism”

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For anyone interested in the wider debate about where wealth distribution is going, I thought this was a pretty interesting read. It's a review of a book by a guy called Thomas Piketty called Capital in the 21st century. It was interesting to me because it offers a different explanation for what is happening than the whole "second machine age" narrative currently being pushed around in the media.

http://mpra.ub.uni-muenchen.de/52384/

The book must be pretty comprehensive, because the review is long enough!

So here's my TL;DR:

Piketty says inequality is driven mainly by returns to wealth [r] exceeding overall growth [g]. Data show that r > g until 1914. Then two world wars & the Great Depression destroyed so much wealth, and post-WW2 progressive taxation restricted profits, so r < g for a while.

Result: income distributions within countries got more equal.

In the last 30 yrs, however, the 20th century exception faded, and r > g again.

Piketty predicts a return to Victorian-style inequality, with inherited wealth becoming more & more important, and political equality aka democracy becoming less & less real (even if still upheld on paper).

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For anyone interested in the wider debate about where wealth distribution is going, I thought this was a pretty interesting read. It's a review of a book by a guy called Thomas Piketty called Capital in the 21st century. It was interesting to me because it offers a different explanation for what is happening than the whole "second machine age" narrative currently being pushed around in the media.

http://mpra.ub.uni-muenchen.de/52384/

The book must be pretty comprehensive, because the review is long enough!

So here's my TL;DR:

Piketty says inequality is driven mainly by returns to wealth [r] exceeding overall growth [g]. Data show that r > g until 1914. Then two world wars & the Great Depression destroyed so much wealth, and post-WW2 progressive taxation restricted profits, so r < g for a while.

Result: income distributions within countries got more equal.

In the last 30 yrs, however, the 20th century exception faded, and r > g again.

Piketty predicts a return to Victorian-style inequality, with inherited wealth becoming more & more important, and political equality aka democracy becoming less & less real (even if still upheld on paper).

That sounds like a depressingly accurate description of what's going on.

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That sounds like a depressingly accurate description of what's going on.

I just looked at this book on Amazon. It doesn't seem to deal with the role of ideology in achieving social progress during the twentieth century, and I think that the ideology of Labourism, Social Democracy, whatever you want to call it, played a part. The progress toward greater equality reversed under Thatcher as neo-Liberalism became the dominant ideology.

One of the reasons why I feel so pessimistic about the future is that I see no political party providing any real critique of the prevailing neo-Liberalism paradigm.

I intend to vote for UKIP in May purely on the European issue. I have no illusions as to their free market ideology which i do not support.

The book is out in April, although the kindle version is available now.

Thanks to the OP for bringing this topic up.

Edited by 1929crash

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I just looked at this book on Amazon. It doesn't seem to deal with the role of ideology in achieving social progress during the twentieth century, and I think that the ideology of Labourism, Social Democracy, whatever you want to call it, played a part. The progress toward greater equality reversed under Thatcher as neo-Liberalism became the dominant ideology.

One of the reasons why I feel so pessimistic about the future is that I see no political party providing any real critique of the prevailing neo-Liberalism paradigm.

I intend to vote for UKIP in May purely on the European issue. I have no illusions as to their free market ideology which i do not support.

The book is out in April, although the kindle version is available now.

Thanks to the OP for bringing this topic up.

I think you're right. It appears to be more about giving an economic explanation of the result, rather than a political explanation of the cause. This is why I thought it was interesting, because it frames the problem as something that *is* politically solvable. My big problem with the "second machine age" narrative is that it frames the situation as something inevitable. A "natural" process of technological evolution that cannot be interfered with, a scenario within which we cannot have technical advancement without unfairness.

But this book appears to offer a less ideological analysis, and concludes "This tendency could be checked only by worldwide taxation of capital".

Which comes back to your disillusionment with political parties. The Right will never support a shift in the balance of taxation from labour towards capital, and a recent editorial in the Guardian suggests that the Left don't get it either.

These kind of reforms are currently outside of the realms of acceptable debate, so you are probably justified in your pessimism.

Edited by Bear Goggles

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Thanks, I had forgotten this was coming out. I've seen some of the charts relating to the book over the past couple of months.

As someone with little to offer than a bit of educated labour, It doesn't offer much hope during the remainder of my working life.

Edited by 7 Year Itch

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I intend to vote for UKIP in May purely on the European issue. I have no illusions as to their free market ideology which i do not support.

But that's all that matters - all their social policies will flow from their faith in a primitive economic ideology.

Forget the Victorian model - look what the Americans achieved with New Orleans after Katrina - pure horror show of abuse by private contractors getting paid by the state. We joined that conga line a long time ago.

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That sounds like a depressingly accurate description of what's going on.

....therefore the best way around this is to tax wealth and non essential expenditure and not income......simples. ;)

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"This tendency could be checked only by worldwide taxation of capital".

The 'Turkeys vote for Christmas' plan. :lol:

The Victorians had a strong middle class to keep the thing on the rails- this time around it will be the middle class leading the revolution.

Your Job Taught to Machines Puts Half U.S. Work at Risk

Who needs an army of lawyers when you have a computer?

When Minneapolis attorney William Greene faced the task of combing through 1.3 million electronic documents in a recent case, he turned to a so-called smart computer program. Three associates selected relevant documents from a smaller sample, “teaching” their reasoning to the computer. The software’s algorithms then sorted the remaining material by importance.

“We were able to get the information we needed after reviewing only 2.3 percent of the documents,” said Greene, a Minneapolis-based partner at law firm Stinson Leonard Street LLP.

Artificial intelligence has arrived in the American workplace, spawning tools that replicate human judgments that were too complicated and subtle to distill into instructions for a computer. Algorithms that “learn” from past examples relieve engineers of the need to write out every command.

The advances, coupled with mobile robots wired with this intelligence, make it likely that occupations employing almost half of today’s U.S. workers, ranging from loan officers to cab drivers and real estate agents, become possible to automate in the next decade or two, according to a study done at the University of Oxford in the U.K.

The approach has powered leapfrog improvements in making self-driving cars and voice search a reality in the past few years. To estimate the impact that will have on 702 U.S. occupations, Frey and colleague Michael Osborne applied some of their own machine learning.

They first looked at detailed descriptions for 70 of those jobs and classified them as either possible or impossible to computerize. Frey and Osborne then fed that data to an algorithm that analyzed what kind of jobs make themselves to automation and predicted probabilities for the remaining 632 professions.

The higher that percentage, the sooner computers and robots will be capable of stepping in for human workers. Occupations that employed about 47 percent of Americans in 2010 scored high enough to rank in the risky category, meaning they could be possible to automate “perhaps over the next decade or two,” their analysis, released in September, showed.

http://www.bloomberg.com/news/2014-03-12/your-job-taught-to-machines-puts-half-u-s-work-at-risk.html

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Starved & evicted: Britain’s poor now treated worse than animals

http://rt.com/op-edge/uk-poor-treated-animals-398/

Cameron seems fixated on trying to stop the unemployed or other victims of his money laundering fraudster City funders from eating and sleeping. The Britain he wants to see is a sadistic place where, as US writer Gore Vidal mockingly commented: “It is not enough to succeed, others must fail.” Only the selfish, the ignorant and the rich count as human in Cameron’s financial determinism.

If there is a political backlash, he doesn’t care, he knows he’ll walk straight into a multimillion job in the EU's corporate world when his political bolt is shot. So as far as ‘Call me Dave’ and his Eton Bullingdon Club chums are concerned, the poor can just go to hell.

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Spot the problem here?

Result: income distributions within countries got more equal.

and

Piketty predicts a return to Victorian-style inequality, with inherited wealth becoming more & more important, and political equality aka democracy becoming less & less real (even if still upheld on paper).

The second follows inevitably from the first, yet you're suggesting them as opposing!

1. If there's no distinction in incomes, then income becomes irrelevant to social/economic mobility, and inherited or other unearned wealth becomes far more important. We've seen that in many trends, perhaps most importantly the social engineering of education to level down, as exemplified by the abolition of grammar schools.

2. As society gets richer, so the cost of both basics and unrationed luxuries falls to something neglible. This is where our housing policy is screwed up, treating it a luxury affordable only to the rich, then pouring money in to try and paper over the problems that creates. Two wrongs making a bigger wrong.

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Spot the problem here?

and

The second follows inevitably from the first, yet you're suggesting them as opposing!

1. If there's no distinction in incomes, then income becomes irrelevant to social/economic mobility, and inherited or other unearned wealth becomes far more important. We've seen that in many trends, perhaps most importantly the social engineering of education to level down, as exemplified by the abolition of grammar schools.

2. As society gets richer, so the cost of both basics and unrationed luxuries falls to something neglible. This is where our housing policy is screwed up, treating it a luxury affordable only to the rich, then pouring money in to try and paper over the problems that creates. Two wrongs making a bigger wrong.

There's quite a big difference between my "income distributions becoming more equal", and your "no distinction in incomes". You appear to be presenting a false dichotomy of the current situation OR authoritarian communism. Now that is a depressing choice.

So no the second doesn't inevitably follow the first. I'm not sure if there is much inevitability about any of this, although Karl Marx might disagree with me.

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I read that article but the Gore Vidal quotation passed me by at the time. And it is so true. :(

So let's get this straight, we've got an ex-BBC man ranting about the evils of British oligopoly on a state funded Russian news channel. Riiiiight...

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