By Frank Thomas
This is a follow-up to the article Capitalism: A Comparison of Marx and Piketty by John Lawrence.
Utilizing massive historical documentation, Thomas Piketty argues that as returns to invested capital outstrip the rate of economic growth, income from wealth grows faster than the economy – concentrating more and more money and power in the hands of a few. As these returns are reinvested, inherited wealth will grow faster – concentrating even more money in fewer hands.
When incomes from capital become more concentrated than incomes from labor – e.g., today, the wealthiest 10% earn almost the same amount of income as the rest of the country – personal income distribution will also become more unequal. So far, this is not an earth-shaking economic revelation.
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