BBS Book Thingie: Capital in the 21st Century. Discussion week 9 (ch. 8 &9)


#1

Continuing the discussion from BBS Book Thingie: Capital in the 21st Century. Discussion Week 8 (Chapter 7) — Inequality and Concentration: Preliminary Bearings:

Did we skip a week? it felt like we skipped a week? For the past two chapters then?


BBS Book Thingie: Capital in the 21st Century. Discussion week, er, 11? (ch. 9)
#2

Typo in your title :wink:


#3

Thanks… it’s sort of been that kind of week!


#4

So, I think this is where we can say that here is where the rubber meets the road (or whatever that saying is). In Chapter 8, he’s looking at historical evolution of inequality, which he does by looking at test cases, mainly France and the US. He argues that changes to inequality, historically, are the result of “development in other spheres” (274). I think this is an important point, as it points to his overall argument that inequality is not a natural outcome of the development of the capitalist economy, but the result of conscious political choices, and unintended consequences from other things. The drop in inequality in France is tied to the world wars and great depression. But in France, there wasn’t as much reassertion of inequalities (especially around wages), because there were periods where labor asserted itself, especially in the post 68 period. (see 287, for example). But after 83, it began to climb once again, and this he ties to political instead of some natural outcome of capitalism (288).

The US was different in that it started out in the Belle Epoque era with far less inequality than was seen in Europe. But inequality was different, he argues, in part because the first major spike was around capital investments (293). Since the stock market was so important to inequality, it’s not really surprise that there was a big drop during the depression and that the US was hit hard (harder than what or who?). The next spike comes in 1980, the Reagan era, which saw a slew of “reforms” which dropped tax rates on capital investments, and as a result saw an “increase in the uper deciles share”… which “appears to be relatively steady and constant.” (295). Again, the results of conscious policy choices historically speaking. And it was this increase in inequality that contributed to the 2008 crash - he sees a clear connection there (297). Yet it’s not the sole or primary cause. He turns to “super salaries” next. He argues that there is little wage mobility… so as the upper deciles income grew, the lower percentiles did not grow, relative to inflation (300). And this has been coupled with increased income from capital investments, which only reinforce this growing split. This group are what he calls “super managers” which dominate the upper .1% of rich Americans.

I still need to read through chapter 9, but I’ll comment as soon as I do.


#5

I will really, really need to catch up with this. But that red and white covered doorstop just sits there beside my bed,with an air of silent reproach.


#6

I think I read 8 this week. It sounds like what @mindysan33 posted. I’ll read ch 9 soon and post some thoughts.


#7

I have also not gotten to chapter 9, so we could always roll that over to next week if we need to do so.


#8

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