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Published in:
2016 | OriginalPaper | Chapter
11. Piketty Reconsidered
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Abstract
In Capital in the 21st Century, Thomas Piketty argues that the rate of return on capital historically has always exceeded the rate of economic growth, giving rise to ever expanding dynastic wealth. However, instead of focusing on capital, one must look at the position of labor. Through a combination of economic and political factors, workers were better able to assert themselves from 1920 on, resulting in a precipitous drop in the return on capital. With the Thatcher/Reagan revolution, the process went into reverse and capital gained ground again, a process that accelerated after China’s accession to the World Trade Organization. Although advanced economies are aging and China will run out of its unlimited supplies of labor, labor’s prospects remain bleak in case robots take over.