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David Harvey Reviews Piketty's Capital in the 21st Century

David Harvey Reviews Piketty's Capital in the 21st Century | It Comes Undone-Think About It | Scoop.it

There is much that is valuable in Piketty’s data sets. But his explanation as to why the inequalities and oligarchic tendencies arise is seriously flawed. His proposals as to the remedies for the inequalities are naïve if not utopian. And he has certainly not produced a working model for capital of the twenty-first century. For that we still need Marx or his modern-day equivalent.


Via jean lievens
Eli Levine's insight:

If you applied the logic of Complex Adaptive Systems Theory to economics, it would make perfect intutive sense as to how economies with high inequality remain stagnant and how high inequality happens when there is no distributive function applied an economy.  Very simply put, when people aren't able to afford to buy, invest or save, the economy isn't able to grow because of the lack of participants in the market.  Access is denied, and people are stuck using their increasingly meager earnings to buy necessities rather than the goods, services and investments that they'd ordinarily be making, not to mention also being less able to save safely to guard against economc misfortune.  That's how the economy stagnates when only a few are allowed to have so much while many are denied the ability to maximize their well being and quality of life.

 

As for how this comes to be, it's simply a case of wealth enabling one to accumulate more wealth, especially if they're disinclined to spend money on a regular basis.  The current rich reflect those who have husbanded money and essentially hoarded it, relative to what they brought in, thus enabling them to accumulate more and more of it through low-risk capital investments.  Their priority is the accumuation of financial wealth, not necessarily the enjoyment of it. There's also the social network that wealth enables, which helps to preserve the production of wealth amogst a few individuals who are able to stay well connected to one another.

 

Factor in the policy changes and chages in attitude that Ronald Reagan and Margaret Thatcher brought into government during the 1980's, and you've got the poitical conditions conducive to allowing economic inequality to thrive and real economies to stagnate.  Think of it as a change in operating system on a computer drive.  The different programs instituted and present in government enabled conditions in society to tend towards these less equal and less growth conducive states that we're all presently in.

 

Therefore, taxation possibly isn't the answer, but an increase in wages across the board to reflect the real profit value of labor in the market.  These concepts were known at the time of Adam Smith and advocated for by Adam Smith, as opposed to the traditional "laissez-faire" attitude that has been ascribed to him after a serious misinterpretation of his work, "The Wealth of Nations".  It's important to remember that Mr. Smith viewed profit as something that should not be had in "immoderate amounts" and that it is secondary to the well being and rent value of the economy (which is where David Ricardo steps in to advocate for a minimum wage based on rent/profit value of the work that is produced in the economy.  Marx foresaw the inherent flaws in the Capitalist system and predicted its downfall very accurately (although some 150-200 years early) and none of them foresaw or thought of the environmental impacts of our economic activity that is more vital to our survival and well being than any amount of economic growth, real or unreal.

 

It's time we really get away from the Neoclassicists and especially the Neoliberals who don't view the economy as the complex system that it is.  There is no lasting equilibrium in the economy, and everything doesn't balance out into neat, rational little equations.  It's a large messy system that we're only starting to get insight into, and it's time we take that into consideration along with its interconnectiveness to our governments, our societies, our environments and our universes and social relations.  Failure to do this will result in continued poor policy from both the Left and the Right and people will just get frustrated with the politcal powers that be, regardless of ideology, and just swing helplessly back and forth from mediocrity to mediocrity, until the string snaps and they go into another level of mediocrity.

 

It's sad.  It's predictable.  It's the story of us.  And I see no reason to believe that the present is going to be really any different than it has for the past several thousand years.

 

Think about it.

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EU “has the power” to put in place a universal basic income

EU “has the power” to put in place a universal basic income | It Comes Undone-Think About It | Scoop.it
From Martin Luther King to Erich Fromm, the universal – or unconditional – basic income (UBI) has always had its supporters. The idea is not new. But the economic crisis has brought it back to the forefront “as a solution” to the most pressing issues facing the EU today.

Via Willy De Backer
Eli Levine's insight:

Economic wealth and liberty leads to the ability to participate in the society, polity and economy as a generally equal member.  This is not the crude "liberty" of the ability to act with impunity to the consequences of your actions, but the ability to act as a human being with all of the dignity and rights that the individual needs in order to produce a sustainable, functional and relatively prosperous society.

 

Laissez-faire policies, when left unchecked, leads to the concentration of wealth in the hands of a few individuals who connive and cheat their way to the top, such that they are able to assert an undemocratic influence over a given people, regardless of their actual merit or intentions or ability to be held accountable.  Laissez-faire leads to the centralization of wealth in the hands of a few, and, as a result of that economic centraliziation, the centraliziation of power in the governmental instrument that needs to be working for everyone's interests, not just the elite's small-self perceived interests.  This is the empirical result of a wide range of historical economic research, ranging from the fall of the Roman Republic to the Second Gilded Age in which we're living at present.  Government is simply a tool for those who have economic and social power within the economy/society.  It is a neutral puppet in and of itself.  It is whomever is backing it and occupying it that gives it its actual character, especially stemming from the top executive and legislative levels.  It's influence and power is limited by the needs, wishes and sentiments of the general public of society.  It will have no more influence or control over what it is  practically and legitimately given by the members of the external society.

 

A shame that so few people understand this fact about government or society, for the sake of an ideological belief or personal interest that the ought not have.

 

Silly brains.


Think about it.

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Willy De Backer's curator insight, April 15, 2014 3:52 AM

Very good EurActiv report of an EESC conference in Brussels.

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Mindsets and Money: Breaking the Grip of Distorted Economics

Mindsets and Money: Breaking the Grip of Distorted Economics | It Comes Undone-Think About It | Scoop.it

"Some businesses are beginning to expand their focus beyond the surprisingly recent, single-minded obsession with maximizing shareholder value. Yet we haven’t solved the core problem, because the game is fundamentally defined by its rules. And markets, for all their agility and elegance, are massively distorted in several critical ways:..."


Via Willy De Backer
Eli Levine's insight:

I've been saying this for a few years now.

 

Money HAS to be put in its place, relative to the biological, social and environmental needs of humanity, in both the short and the long term.  Otherwise, we're going to kill ourselves for what amounts to pieces of cloth rag or digital signatures that we don't honestly need and shouldn't really want, if produced by those methods which kill our society, our environment and, ultimately, ourselves through killing our society and environment.

 

This would all start in the private financial sector which makes the investments and the decisoins as to what gets funded and what doesn't.  Who cares if the return is less, especially if you're still able to make a return?  Why should society and the will of society as expressed through the law tolerate or accept the pathological behavior of a few individuals who have mistaken money for something that they need over their physical, social and environmental needs?

 

Think about it.

 

Because it is a pathological mindset/brain type that's at work here.  It shows in the person's behavior, actions, perspectives and attitudes about all things that relate to them.  They need help, more than anything.  And, I don't think they should have a choice about whether they receive help or not, considering how dangerous their actions are for themselves and the rest of us.

 

Think about it.

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Willy De Backer's curator insight, March 10, 2014 3:32 PM

Excellent ideas from Gil Friend on the radical business reforms needed to make our economies sustainable.

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Economist receives rock star treatment

Economist receives rock star treatment | It Comes Undone-Think About It | Scoop.it
The reception for his “Capital in the 21st Century” has led the French economist Thomas Piketty to Washington’s halls of power and New York’s media outlets.

Via Willy De Backer
Eli Levine's insight:

The one who points out a possible theory of function is hailed as a hero and villain for the public to see.

But the one who points out the impending collapse of civilization, based on evidence gathered from history, is left in obscurity.

 

I'm young, I get it.

 

But that doesn't make what I've said any less valuable or accurate.

 

But will anyone listen to me, even though I've basically got the essence of how to get out of this mess, from which either party could capitalize considerably from for generations to come?

Of course not.

 

I'm just a "kid" after all.

 

And these adults with so much negative experience are just going to keep doing what their brains have programmed themselves to do.

 

Think about it.

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Willy De Backer's curator insight, April 19, 2014 4:18 AM

More praise for Thomas Piketty in the NY Times

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What if economic growth is no longer possible in the 21st century?

What if economic growth is no longer possible in the 21st century? | It Comes Undone-Think About It | Scoop.it
The postwar economic model is no longer sustainable or effective. That means we must turn to redistribution if we want to save the middle class.

Via Willy De Backer
Eli Levine's insight:

The elephant in the room.

 

What is the point of economic growth if it does not enrich all of our lives?  What good is it if we impoverish ourselves and our environment in order to get it?

 

We're not all going to be millionaires, nor does one/their family need to be millionaires in order to be happy, well off and able to take care of themselves.  What is the point of prioritizing pieces of cloth rag over our physical, psychological, social and environmental health?  Why not let growth happen organically, based upon the natural ebbings and flowing of goods and services, technological development and resource conservation?

 

What good is money if you poison yourself for it?

 

Think about it.

 

 

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Willy De Backer's curator insight, March 20, 2014 5:40 PM

Great article - the answer is simple; the politics impossible. A post-growth society will need a new prosperity paradigm, new institutions and new leaders. Think this will happen without collapse and hard shocks? think again.