Must-Read: Contra Dean Baker, I suspect that Thomas Piketty would say that the ability of the rich to manipulate property rights and market power in order to keep the rate of profit high even as the economy becomes more capital-intensive is a feature that is “intrinsic to capitalism.” Thus I think Piketty would say that Baker is wrong here at the end:
The Upward Redistribution of Income: Are Rents the Story?: “The top one percent of households have seen their income share roughly double…:
…from 10 percent in 1980 to 20 percent in the second decade of the 21st century. As a result of this upward redistribution, most workers have seen little improvement in living standards from the productivity gains over this period…. The bulk of this upward redistribution comes from the growth of rents in the economy in four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors and other highly educated professionals. The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality, as for example argued by Thomas Piketty.