Kot sem napovedal, je knjiga Thomasa Pikettyja “Capital in the Twenty-First Century” postala globalni akademski hit, must-read. Ni ga relevantnega časopisa, ki ima vsaj kanček intelektualne podstati, da ne bi objavil recenzije knjige. Britanski The Economist vsak teden objavi analizo enega poglavja knjige. Pikettyjeve predstavitve knjige širom sveta so razprodane. Do zdaj sem prebral najmanj 20 različnih recenzij knjige in vse so “navdušene“. Navdušene nad preprosto izpovedno močjo preproste formule, ki jo je lansiral Piketty – “r > g“: kadarkoli v zgodovini je bila stopnja donosa kapitala (r) večja od stopnje rasti BDP (g), se je močno povečevala neenakost v korist lastnikov kapitala.

Toda večina recenzij (vključno z Milanovicevo, Krugmanovo, Bakerjevo itd.) je ostala na površinski ravni, zadovoljna s to preprosto in elegantno ugotovitvijo ter ekonomsko-političnimi implikacijami Pikettyjevih ugotovitev. Vse do Jamesa K. Galbraitha iz University of Texas, ki si je vzel čas in se poglobil v temelje Pikettyjeve analize ter nanizal štiri skupine problemov oziroma potencialno trhlih temeljev knjige. Prvi problem je v definiciji socialne vloge kapitala (je to zgolj produktivni kapital ali kapital, ki omogoča družbeno in politično moč?), sledi problem pravilnega vrednotenja kapitala in donosa kapitala, nato problem pravilnosti merjenja neenakosti zgolj z davčnimi napovedmi in končno problem iskanja prave rešitve za obdavčenje vira povečane neenakosti (davek na kapitalsko premoženje, visoke mejne davčne stopnje na dohodke ali pa povečanje dohodkov lastnikov dela itd.?).

Gre za štiri skupine problemov s predpostavkami analize, ki jih bo treba poglobljeno nasloviti, če hočemo bolje razumeti tako način delovanja kapitalizma, njegove široke socialne in družbene učinke, kot tudi najti optimalne načine za njegovo regulacijo v smeri, ki bo zagotavljala doseganje družbeno zaželjenih učinkov kapitalizma. Zame so to vprašanja (a) prave mere neenakosti, ki še zagotavlja primerno stimulacijo za inoviranje in več dela, (b) prave mere socialne države in enakosti štartnih pogojev za vse in (c) stabilnega ravnotežja, ki omogoča stabilni gospodarski in družbeni razvoj na dolgi rok.

O tem bom več napisal v eni prihodnjih kolumen. Spodaj na kratko navajam štiri skupine problemov v Pikettyjevi analizi, kot jih je identificiral Galbraith.

(1) Problem v definiciji socialne vloge kapitala

What is “capital”? To Karl Marx, it was a social, political, and legal category—the means of control of the means of production by the dominant class. Capital could be money, it could be machines; it could be fixed and it could be variable. But the essence of capital was neither physical nor financial. It was the power that capital gave to capitalists, namely the authority to make decisions and to extract surplus from the worker.

Early in the last century, neoclassical economics dumped this social and political analysis for a mechanical one. Capital was reframed as a physical item, which paired with labor to produce output. This notion of capital permitted mathematical expression of the “production function,” so that wages and profits could be linked to the respective “marginal products” of each factor. The new vision thus raised the uses of machinery over the social role of its owners and legitimated profit as the just return to an indispensable contribution.

(2) Problem v vrednotenju kapitala

Symbolic mathematics begets quantification. For instance, if one is going to claim that one economy uses more capital (in relation to labor) than another, there must be some common unit for each factor. For labor it could be an hour of work time. But for capital? Once one leaves behind the “corn model” in which capital (seed) and output (flour) are the same thing, one must somehow make commensurate all the diverse bits of equipment and inventory that make up the actual “capital stock.” But how?

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… He is in some respects a skeptic of modern mainstream economics, but he sees capital (in principle) as an agglomeration of physical objects, in line with the neoclassical theory. And so he must face the question of how to count up capital-as-a-quantity.

… Then he estimates the market value of that wealth. His measure of capital is not physical but financial.

This, I fear, is a source of terrible confusion.

… A simple mind might say that it’s market value rather than physical quantity that is changing, and that market value is driven by financialization and exaggerated by bubbles, rising where they are permitted and falling when they pop.

Piketty wants to provide a theory relevant to growth, which requires physical capital as its input. And yet he deploys an empirical measure that is unrelated to productive physical capital and whose dollar value depends, in part, on the return on capital. Where does the rate of return come from? Piketty never says. …

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In short, the Cambridge critique made meaningless the claim that richer countries got that way by using “more” capital. In fact, richer countries often use less apparent capital; they have a larger share of services in their output and of labor in their exports—the “Leontief paradox.” Instead, these countries became rich—as Pasinetti later argued—by learning, by improving technique, by installing infrastructure, with education, and—as I have argued—by implementing thoroughgoing regulation and social insurance. None of this has any necessary relation to Solow’s physical concept of capital, and still less to a measure of the capitalization of wealth in financial markets.

There is no reason to think that financial capitalization bears any close relationship to economic development. Most of the Asian countries, including Korea, Japan, and China, did very well for decades without financialization; so did continental Europe in the postwar years, and for that matter so did the United States before 1970.

(3) Problem v merjenju neenakosti

Piketty shows that in the mid-twentieth century the income share accruing to the top-most groups in his countries fell, thanks mainly to the effects and after-effects of the Second World War. These included unionization and rising wages, progressive income tax rates, and postwar nationalizations and expropriations in Britain and France. The top shares remained low for three decades. They then rose from the 1980s onward, sharply in the United States and Britain and less so in Europe and Japan.

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Under President Reagan, changes to U.S. tax law encouraged higher pay to corporate executives, the use of stock options, and (indirectly) the splitting of new technology firms into separately capitalized enterprises, which would eventually include Intel, Apple, Oracle, Microsoft, and the rest. Now, top incomes are no longer fixed salaries but instead closely track the stock market. This is the simple result of concentrated ownership, the flux in asset prices, and the use of capital funds for executive pay. During the tech boom, the correspondence between changing income inequality and the NASDAQ was exact, as Travis Hale and I show in a paper just published in the World Economic Review.

 

The lay reader will not be surprised. Academics, though, have to contend with the conventionally dominant work of (among others) Claudia Goldin and Lawrence Katz, who argue that the pattern of changing income inequalities in America is the result of a “race between education and technology” when it comes to wages, with first one in the lead and then the other. (When education leads, inequality supposedly falls, and vice versa.) Piketty pays deference to this claim but he adds no evidence in favor, and his facts contradict it. The reality is that wage structures change far less than profit-based incomes, and most of increasing inequality comes from an increasing flow of profit income to the very rich.

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A likely explanation for the discrepancies is that income tax data are only as comparable as legal definitions of taxable income permit, and only as accurate as tax systems are effective. Both factors become problematic in developing countries, so that income tax data will not capture the degree of inequalities that other measures reveal. (And of oil sheikhdoms where income goes untaxed, nothing can be learned.) Conversely, good tax systems reveal inequality. In the United States, the IRS remains feared and respected, an agency to which even the wealthy report, for the most part, most of their income. Tax records are useful but it is a mistake to treat them as holy writ.

(4) Problem obdavčenja vira povečane neenakosti

Another part of the New Deal (mainly in its later phase) was taxation. With war coming, Roosevelt imposed high progressive marginal tax rates, especially on unearned income from capital ownership. The effect was to discourage high corporate pay. Big business retained earnings, built factories and (after the war) skyscrapers, and did not dilute its shares by handing them out to insiders.

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But would it work to go back to that system now? Alas, it would not. By the 1960s and ’70s, those top marginal tax rates were loophole-ridden. Corporate chiefs could compensate for low salaries with big perks. The rates were hated most by the small numbers who earned large sums with (mostly) honest work and had to pay them: sports stars, movie actors, performers, marquee authors, and so forth. The sensible point of the Tax Reform Act of 1986 was to simplify matters by imposing lower rates on a much broader base of taxable income. Raising rates again would not produce (as Piketty correctly states) a new generation of tax exiles. The reason is that it would be too easy to evade the rates, with tricks unavailable to the unglobalized plutocrats of two generations back. Anyone familiar with international tax avoidance schemes like the “Double Irish Dutch Sandwich” will know the drill.

If the heart of the problem is a rate of return on private assets that is too high, the better solution is to lower that rate of return. How? Raise minimum wages! That lowers the return on capital that relies on low-wage labor. Support unions! Tax corporate profits and personal capital gains, including dividends! Lower the interest rate actually required of businesses! Do this by creating new public and cooperative lenders to replace today’s zombie mega-banks. And if one is concerned about the monopoly rights granted by law and trade agreements to Big Pharma, Big Media, lawyers, doctors, and so forth, there is always the possibility (as Dean Baker reminds us) of introducing more competition.

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In sum, Capital in the Twenty-First Century is a weighty book, replete with good information on the flows of income, transfers of wealth, and the distribution of financial resources in some of the world’s wealthiest countries. Piketty rightly argues, from the beginning, that good economics must begin—or at least include—a meticulous examination of the facts. Yet he does not provide a very sound guide to policy. And despite its great ambitions, his book is not the accomplished work of high theory that its title, length, and reception (so far) suggest.

Vir: James K. Galbraith, University of Texas at Austin, and author of the forthcoming book, The End of Normal.