Piketty argues that if r > g, wealth will accumulate into fewer and fewer hands over time. R is the rate of return of capital (rents, stocks, bonds, etc) and g is the growth of the economy over time.

If the economy grows at a higher rate than the rate of return, the pie gets bigger at a higher rate than wealth can concentrates. If the rate of return accumulates capital at a higher rate than the growth of the economy, wealth will inevitably concentrate over time.

He uses a lot of examples and economic history to argue that r > g, except for a few small periods. I think given the amount of wealth concentration we are seeing, and the political effects thereof, it is a compelling argument. Taxation (of wealth) is the proposed solution.

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WalterBright an hour ago | parent [-]

Since wealth does not "concentrate" in a market economy, I wonder what else Picketty got wrong. (Using the word "concentrate" implies a transfer of wealth. Wealth is created, not transferred.)

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sfifs 14 minutes ago | parent | next [-]

Picketty's analysis has been empirical. The assumption that is likely mistaken is there is such a thing as market economy.

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intended an hour ago | parent | prev | next [-]

Then you are using terms in a manner that is effective for semantic victory, but not the spirit of actual discussion the other users are engaging in.

	▲	WalterBright an hour ago \| parent [-]
		Marxist viewpoints are a trap, as its basic tenets are simply wrong.

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salawat an hour ago | parent | prev [-]

...You are using "wealth" in a way completely foreign to how I have ever seen it used linguistically. The abundance of resources available to an individual that we call "wealth" colloquially being transferable or tradable is basically the hallmark of a market economy. It can absolutely concentrate within one, because if it can be traded, it can absolutely be not traded decreasing the velocity of that value transfer to zero. So... Yes. If only one or a handful of people are buying, because everyone else is having to sell to stay alive, then wealth does, in fact, concentrate.

	▲	WalterBright 25 minutes ago \| parent [-]
		Again, wealth is created, not "concentrated". The term "wealth" means the dollars you would get if you sold everything. > wealth does, in fact, concentrate Nope, because the people trading with you thought the exchange was of equal value, or they wouldn't have engaged in it.