Tuesday, December 8, 2015

Piketty and the inequality of wealth

This article at Crooked Timber is a must read.

On the ideological front, several theories served to rationalized policy shifts in favor of increasing capital shares and top labor incomes. The stagflation of the 1970s was successfully blamed on Keynesian economics, fiscal irresponsibility, a bloated welfare state, militant labor unions, state regulation of the economy, and supposedly incentive-destroying high marginal tax rates on capital incomes and the rich. At the same time, the ideology of maximizing shareholder value took hold. Corporate executives who formerly lived merely like an especially comfortable middle class, and who gained prestige from sharing rents widely among corporate stakeholders, narrowed their focus to serving capital interests exclusively, and obtained compensation packages that tied their fates to that goal alone.

Elizabeth Anderson does a great job discussing the economic work of Piketty and dissecting the policies that lead to income inequality.

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