03 Jun 2014

Full Review of Piketty’s Capital in the 21st Century

Capital & Interest, Inequality, Piketty, Shameless Self-Promotion 28 Comments

Carlos Lara and I put out a monthly financial magazine, the Lara-Murphy Report. In May I had a full-length review of Piketty. The best way I could think to showcase it here, was to do screen shots of the pages. So here ya go:














28 Responses to “Full Review of Piketty’s Capital in the 21st Century

  1. Major-Freedom says:

    The good quality of the writing has the layout it deserves. Well done.

  2. Bob Roddis says:

    Apparently, I’m the only person concerned about the “progressives” calling THEIR beloved Keynesian funny money system (which was designed to loot the masses on behalf of the elite) “capitalism” AND their pathological refusal to address or engage our analysis (but which they constantly blame as a brake upon the full implementation of their marvelous “solutions”).

    • Major-Freedom says:

      Didn’t you get the memo? If the goal of any issuer or producer of X is to market and get more of X into society, and X is a monopolist’s toilet paper with pictures of dead monopoly mafia dons, then it makes sense for them to spend billions in purchasing power convincing people that more is better, or at least more toilet paper and less real wealth is better during certain circumstances, which of course really means always.

  3. Matt M -Dude Where's My Freedom) says:

    I like that you felt the need to cite your estimate of George Jetson’s labor. Wonder how many times the Wikipedia page for “The Jetsons” has been cited in a semi-scholarly article…

    • Bob Murphy says:

      Wasn’t an estimate, it was stated definitively on the Wikipedia page.

  4. Keshav Srinivasan says:

    Here’s a PDF version if anyone prefers that:

  5. Levi Russell says:

    So do the progs ever offer any sort of causal explanation for their inequality-causes-recession story?

    • Major-Freedom says:

      Their conceptual framework has always been Marx’s exploitation theory. Those who earn profits are fundamentally “taking” wealth away from the working class. The higher the profit, the higher the exploitation.

      • MichaelT says:

        I think Levi was asking why that accumulation of wealth causes recessions, not how they acquired it.

        • Major-Freedom says:

          I know. The exploitation theory provides the foundation. The causal story linking to recessions extends from it.

          • guest says:

            I think their argument would be that the more that Capitalists profit/exploit, the greater the number of people who can no longer afford what is being produced by the Capitalists, and so the economy crashes.

    • Bob Murphy says:

      So do the progs ever offer any sort of causal explanation for their inequality-causes-recession story?

      Yeah I’ve seen people argue that inequality is bad for economic growth because the rich just save it and don’t spend. So if more and more of income growth accrues to the upper 0.1% (or whatever), then expect stagnation forever…

  6. William Anderson says:

    Krugman often has praised the development during the 1930s when overall “inequality” lessened, with Krugman calling that period “the Great Compression.” Maybe we should stand back for a second and understand that Paul Krugman is claiming that the Depression period must have been a GOOD thing for lower-income people because they became wealthier, relatively speaking, to the rich.

    Likewise, Keynesians love to point to all of the employment figures of World War II as though they pointed to good times. What Krugman and the Keynesians leave out, of course, is the standard of living changes. They want us to believe that war goods were just as useful to consumers and consumption goods, as though an economy that made nothing but bombs and bullets would be rolling in prosperity.

    • khodge says:

      much the same as certain popular textbooks from the 70’s and 80’s showed that the Soviet Union had a very strong GDP growth during that time frame.


    • Tel says:

      Likewise, Keynesians love to point to all of the employment figures of World War II as though they pointed to good times. What Krugman and the Keynesians leave out, of course, is the standard of living changes.

      What Krugman leaves out of the World War II figures is the fact that dead people don’t work.

      Beyond just the cost of many lost lives (which is bad enough), the employment situation is not really improved by war. Think about it this way: suppose I have a small nation with a population of 1 million people, but only 50% of those people have jobs. The nation goes to war and 100k people die, and a further 100k people are badly injured and no longer able to work. After the war, suppose the population is 900k out of which 480k are working… now you have 53% of the population working, which is 20k fewer productive people than you had before, plus more invalids requiring care, and suffering reduced quality of life.

      In aggregate, the nation is worse off; but by conveniently ignoring the lost productivity of the dead, we can use a dodgy unemployment statistic to pretend something has been “solved”.

      You can look at this another (even more direct) way. Nation A has a population of 1 million people with 100k long term unemployed. Nation B is similar. The rulers of these two nations make an agreement to each force their 100k long term unemployed to fight to the death in pit fights against the other nation. I mean, that’s pretty much equivalent to having a war, isn’t it? After those pit fights, as the blood settles, both nations have “solved their unemployment problem” while also offering a convenient political scape goat by constantly blaming each other.

      Krugman jumps up to point out how lethal pit fighting is a great way to reduce unemployment… and the statistics do support that.

  7. Major-Freedom says:

    Most war goods are unfortunately war bads. But when the goal due to collectivist ideology becomes a game of manipulating a series of sterile, politburo statistics such as “GDP”, which includes said war bads as wealth, and “employment”, which includes TSA sexually harassing jagoffs and excludes lazy welfare collecting able bodies, then those premises have nowhere else to go than absurd conclusions that war makes people better off.

  8. ThomasL says:

    Seven words: PDF

    • Bob Murphy says:

      Funny, we distribute the PDF to our subscribers, and I often get pushback from people complaining that nobody wants to open a PDF anymore, and we should embed the images directly.

  9. Philippe says:


    on the first page you write:

    “It is because today’s self-described “progressives” share Piketty’s attired for economic inequality that they celebrate his book.”

    That isn’t accurate, is it. Piketty’s book is about rising, or increasing inequality – increasing indefinitely into the future. Which you and others apparently claim is not happening… because economic theory apparently says it shouldn’t happen – right?

    • Philippe says:

      that should be: “It is because today’s self-described “progressives” share Piketty’s hatred for economic inequality that they celebrate his book.”

      I copied and pasted from your text. I have no idea why ‘hatred’ came out as ‘attired’…?

      • RIchard Moss says:

        Progressives clearly hate the rising influence of Piketty’s critics, but that they do only shows it is inaccurate to say they hate any influence Piketty’s critics have?

        Sorry – that just doesn’t follow.

        • Philippe says:

          it doesn’t follow because it is irrelevant.

      • Dean T. Sandin says:

        So your claim is that progressives don’t hate current economic inequality? Just hypothetical future inequality?

        • Philippe says:

          Piketty doesn’t argue that everyone should have equal wealth or income.

          • Cosmo Kramer says:

            If true, then show me a graph of it (rising inequality) with US government size/ GDP.

            Pretty please

  10. Rodney Brett says:

    Nice review.. although I would probably add to your conclusion that some progressives(especially the die hard extreme left) would not only be willing to sacrifice the standards of living for the poor for the sake of “equality”, but the standards of the middle as well. In defense of the progressives that I know personally(being from the Bay Area, I know many), most of them believe that the high wealth tax on the rich is for the purpose of raising everyone’s living standards from where they are now.. so I’m pretty sure they’d be against Piketty’s actual analysis here, even though they agree with the ideological sentiment.

  11. Politics and that Bug | Louis Hissink's Crazy World says:

    […] Martin Armstrong was interviewed recently and the podcast is available here. Briefly, the present-day economic calamity is being implemented by the Davos Set, politically active billionaires and lightly educated leftover Marxists running the climate change religion. The calamity seems to be based on Thomas Piketty’s theories on capital accumulation proposing an inferred increase in global inequality; which Robert P. Murphy reviews here. […]

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