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Old 05-24-2014, 09:54 PM   #61
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....

Here's a nice graph of the share of national income received by the top 10% by income of households from 1910 to 2010, built from data published in the book: ....

Here's what I feel is missing in those graphs (data which should not be ignored, IMO) - What about the rise in standard of living in less developed countries? Doesn't that matter? Why look only at the levels in developed countries?

I certainly can't say one way or the other, but it seems to me that the cheap labor in less developed countries is competing with the lower economic workers in the developed countries, but not with the wealthy. So maybe this is the 're-distribution' that we are seeing? Aw heck, I'll just quote myself from earlier...

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And I still think it is important to look at the global economy, rather than any specific country's economy. We may have a widening gap in developed countries, but if the developing countries are improving, maybe the global gap is narrowing? Personally, I think it is more important that the really poor people in this world ( literally risking starvation, devoid of a regular supply of clean water and basic medical standards) are moving up, than it is for a 'lower economic strata' person in the US to move closer to the upper tier in the US.
And I think something very important is missing in that little diagram of "Historical Social Pyramid" and "The American Dream" - if we added in a shape for 'Today', the baseline would start much higher than 'Historical". For me, that's more important than the shape of the top-bottom.


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Old 05-24-2014, 10:26 PM   #62
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I do think that his broader points about income inequality having dropped to a minimum by the mid-20th century and rising since then still hold.

Here's a nice graph of the share of national income received by the top 10% by income of households from 1910 to 2010, built from data published in the book:

There's a similar trend across Anglo-Saxon countries for the top 1%:


I've gotten the distinct impression that certain groups of critics would prefer that we believe these curves have all been flat since 1950, and are busily straining at gnats to convince us to ignore that strange man with the objectionable data set.

Bear in mind that the central thesis of the book is that inequality is not an accident bur a feature of capitalism that requires regulation of some form to inhibit or reverse. Even Adam Smith recognized that some intervention was necessary to establish ground rules for laissez-faire practices to prevent collapse into a mercantilist oligarchy (one of the stable end-states for an economic game).
I don't dispute that income inequality has risen in developed countries and the US more than most countries. I think I'll have to read the book myself to see how it addresses income transfers.

Megan McArdle poses a pretty interesting question.

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I’ve been reading Thomas Piketty’s "Capital in the Twenty-First Century." You’ll have to wait on my thoughts on the book until they’re a bit more fully formed. As I've been reading, though, I keep returning to a question I heard at an economics conference a couple of months back: If we did implement a wealth tax, should it tax tenure?
Professorial tenure is, after all, a valuable asset. As long as you show up and teach your classes, and you don’t make passes at your students or steal from the department’s petty cash drawer, you can draw a paycheck for the rest of your working life. And since the abolition of mandatory retirement ages, that working life can be as long as you like.
Now some of her examples are a bit silly, but I think her fundamental argument is spot on..

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The eye of the state is not very sharp; it can make only crude distinctions between fuzzy categories. And so the data we get from its tax collections are also extremely fuzzy. Yet once we have the numbers, we tend to treat them in public conversation as if they are hard and fast
So I think it is pretty important to double check his work on things which are easily verified so the minimum wage during most of the 1980s was $3.35 not $3.25, because it never was $3.25. If you are going to say that inequality was the lowest in that 50s, than you can't point your finger at the minimum wage because inflation adjusted the minimum wage is basically the same.

1938. $.25 2014$ $4.20
1950 $.75 2014$ $7.38

On the other hand if you want to cherry pick your data you sort specifically include or exclude data points that don't make your case. For instance I could have used the minimum wage of $.75 in 1955 $6.63 in 2014 as reference point ignoring the hike in 1956. Picketty implies that the evil Republican didn't hike the minimum wage. Ignoring Reagan took office right after4 years of annual minimum wage and the last couple of years of Bush 41 saw wage hikes.
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Old 05-25-2014, 10:12 AM   #63
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Why France is gloating over Piketty’s alleged errors – Quartz

This article says nothing new about the facts (the FT article), but it was interesting to read how badly the book was received in France when first published. It surprised me.
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Old 05-25-2014, 10:55 PM   #64
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Globalization may have raised the standard of living in China and other low wage nations, at the expense of lower skilled workers in developed nations.

However, the spoils of globalization also went mostly to the top tiers. Developed nations didn't purposely set out to make developing countries better paid at the expense of workers in their own countries. The theory, at least as claimed by proponents of globalization, was that overall, the developed nations would benefit.

And there have been benefits or it wouldn't continue. Just that most of the benefits have gone to a small number of people in the developed nations, unless you think cheap Chinese goods at Wal Mart makes up for the loss of manufacturing jobs wages to those people who lost those jobs.
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Old 05-26-2014, 01:27 PM   #65
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Globalization may have raised the standard of living in China and other low wage nations, at the expense of lower skilled workers in developed nations.

However, the spoils of globalization also went mostly to the top tiers. Developed nations didn't purposely set out to make developing countries better paid at the expense of workers in their own countries. The theory, at least as claimed by proponents of globalization, was that overall, the developed nations would benefit.

And there have been benefits or it wouldn't continue. Just that most of the benefits have gone to a small number of people in the developed nations, unless you think cheap Chinese goods at Wal Mart makes up for the loss of manufacturing jobs wages to those people who lost those jobs.
I agree. I'd think that some of the returns to capital in the last 30 years have come from adding hundreds of millions of new, low wage workers to the global capitalist system.

(Of course, Piketty might say that's the "normal" situation. The unusual period was following WWII when a combination of immigration controls in wealthy countries and the iron curtain significantly reduced the number of low wage workers competing in the wealthy capitalist countries.)
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