Piketty and the non-applicability of neoclassical economics

LARS P. SYLL

economic-mythIn yours truly’s On the use and misuse of theories and models in economics the author of Capital in the Twenty-First Century is criticized for not being prepared to fully take the consequences of marginal productivity theory — and the alleged close connection between productivity and remuneration postulated in mainstream income distribution theory — over and over again being disconfirmed both by history and, as shown already by Sraffa in the 1920s and in the Cambridge capital controversy in the 1960s, also from a theoretical point of view:

Having read Piketty (2014, p. 332) no one ought to doubt that the idea that capitalism is an expression of impartial market forces of supply and demand, bears but little resemblance to actual reality:

“It is only reasonable to assume that people in a position to set their own salaries have a natural incentive to treat themselves generously, or at the very…

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