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The Piketty Observation Against The Institutional Background: How Natural Is This Natural Tendency And What Can We Do About It?, Karl Widerquist
The Piketty Observation Against The Institutional Background: How Natural Is This Natural Tendency And What Can We Do About It?, Karl Widerquist
Karl Widerquist
Thomas Piketty’s recent book, Capital in the Twenty-First Century, provides a great deal of empirical support for the observation that the rate of return on capital (r) is greater than the growth rate of the economy as a whole (g); i.e. “r > g”. From this observation, Piketty derives two important insights: entrepreneurs eventually become rentiers, and except during unusual circumstances, inequality tends to rise over time. This paper views Piketty’s observation against the institutional setting that has prevailed over the period of his study and makes two additional observations. First, whether Piketty’s two insights follow from his observation …