The World's First Trillionaire

[August1991]

Given Piketty, bump.

Edited May 21, 2014 by August1991

[Michael Hardner]

Given the density of the previous post, I thought I would help out my old friend. I went to Google to find out what 'Piketty' meant.

http://www.theatlantic.com/international/archive/2014/05/thomas-piketty-and-the-end-of-our-peaceful-coexistence-with-inequality/371154/

To say he’s a French economist who recently published a dense, 700-page tome titled, [/size]Capital in the Twenty-First Century that quickly became an international bestseller does not do justice to the impact of this book and author. Piketty is a social, intellectual, and media phenomenon as well as an editorial success. His main thesis is that economic inequality is the inevitable collateral effect of capitalism—and that if governments don’t act decisively to contain it (mostly through higher taxes on wealth and incomes), it will steadily grow until it seriously threatens democracy and economic stability. According to Piketty, inequality grows when the rate of return on capital (“r”) is larger than the rate of growth in the economy (“g”); or, in his already well-known formulation, inequality grows when “r > g.”[/size]

There's nothing that surprising or even moral in what he's saying, I think. It's just math. R can't exceed G forever, right ?

And since there appear to be many on MLW who aren't aware of the history of the 1930s, I will point out that when G goes far lower than R, then drastic things can happen - such as right-wing politicians like RB Bennett proposing programs such as this:

""Following the lead of President Roosevelt's New Dal in the United States, Bennett, under the advice of William Duncan Herridge, who was Canada's Envoy to the United States, the government eventually began to follow the Americans' lead. In a series of five speeches to the nation in January 1935, Bennett introduced a Canadian version of the "New Deal," involving unprecedented public spending and federal intervention in the economy. Progressive income taxation, a minimum wage, a maximum number of working hours per week, unemployment insurance, health insurance, an expanded pension programme, and grants to farmers were all included in the plan.[11]"

http://en.wikipedia.org/wiki/R._B._Bennett#Federal_elections

[overthere]

First trillionaire?

I'll bet on Mukesh Ambani. He's well on his way.

Here is is a picture of his house:

http://archinect.com/news/article/101848/billion-home-is-complete-in-mumbai

Nice shack: 27 storeys, houses five in his family plus room for 600 servants.

Value $1 billion.

[August1991]

Given the density of the previous post, I thought I would help out my old friend. I went to Google to find out what 'Piketty' meant.

Piketty? It's a big deal.

[August1991]

First trillionaire?

I'll bet on Mukesh Ambani. He's well on his way.

Here is is a picture of his house:

http://archinect.com/news/article/101848/billion-home-is-complete-in-mumbai

Nice shack: 27 storeys, houses five in his family plus room for 600 servants.

Value $1 billion.

I doubt the first trillionaire will signal his wealth by the size of his house. "That's so Elvis and Graceland." Will Mukesh also have the shag carpet?

-----

overthere, you don't get it.

The world's first trillionaire will do something different - something that changes how the rest of us, or our children, live our lives.

Edited May 24, 2014 by August1991

[kimmy]

Piketty? It's a big deal.

Please elaborate. I gather this is some guy who wrote something about income equality or something, but please expand upon why you feel this is a big deal.

overthere, you don't get it.

The world's first trillionaire will do something different - something that changes how the rest of us, or our children, live our lives.

I strongly believe that you're the one who doesn't get it. The first trillionaire will do things exactly the same.

Regardless of who comes up with the next genius idea that chances how people live, it's a certainty that the people who succeed in monetizing it will come from the pool of those who are already wealthy beyond belief.

-k

[TimG]

Please elaborate. I gather this is some guy who wrote something about income equality or something, but please expand upon why you feel this is a big deal.

This is probably all you need to know: http://www.businessinsider.com/the-ft-accusation-against-piketty-2014-5

[overthere]

I doubt the first trillionaire will signal his wealth by the size of his house. "That's so Elvis and Graceland." Will Mukesh also have the shag carpet?

-----

overthere, you don't get it.

The world's first trillionaire will do something different - something that changes how the rest of us, or our children, live our lives.

Why would a rich person give a stuff about you, me or our children?

Rich people live in big houses, by and large.

[Icebound]

This is probably all you need to know: http://www.businessinsider.com/the-ft-accusation-against-piketty-2014-5

Yes.

What it made me know is that he put all the data on line for everyone to see.

Now, whether that kind of transparency becomes evidence of "fraud" as the article suggests.... or whether it becomes evidence that there is indeed something to what he says..... will probably take more than a week or two to digest and determine...

Having seen him explain and defend his thesis.... and then having seen the likes of Kevin O'Learly go ballistic and shout his ideas down without any attempt of discussion, debate, or reason.... assures that Piketty's ideas will be widely accepted, even WITHOUT scrutiny.

But it will be interesting to see where it goes from here.

Read Piketty together with: "Leverage: Why Cheap Money will Destroy the World" by Karl Denninger.

..

.

...

[TimG]

But it will be interesting to see where it goes from here.

A more neutral take on the dispute:

All told, Mr Piketty is guilty of sloppiness (certainly in his notation), and perhaps of some errors. But there is little evidence, so far, to support the serious charge of cherry-picking statistics. Nor have his findings that wealth concentration is, once again, rising been fatally undermined.

Nonetheless, Mr Giles’s critique is enormously useful. By taking a tooth-comb to the wealth-distribution numbers, he has provided a powerful reminder of the limitations of such historical data series. Mr Piketty’s conclusions are drawn from huge numbers of sketchy figures (many of which have not yet been subjected to such a review). He has pulled them together in what remains an impressive piece of scholarship. But just as the statistics have their limits, so does the certainty of the trends Mr Piketty identifies. The logic of “Capital in the Twenty-First Century” is not an iron law.

http://www.economist.com/news/finance-and-economics/21603022-latest-controversy-around-thomas-pikettys-blockbuster-book-concerns-its Edited June 1, 2014 by TimG

[Argus]

The age of the so-called 'robber barons' was also an age where the common man did better, yet somehow people were moved to act against concentrated wealth and force them to 'share'.

The common man did better? Better than who? Do you believe working in sweatshops was an improvement on working on farms?

Any idea what life was like in the mines a century or two ago?

[Argus]

How do you measure the wealth of a dictator?

Ask Vladimir Putin, reputedly the world's real richest man.

[Argus]

Nazi Germany is an example, they went from deep depression to being a world power in about 5 years.

And probably would have gone bankrupt had they lasted very much longer.

[Argus]

The world's first trillionaire will do something different - something that changes how the rest of us, or our children, live our lives.

Or he will simply be a dictator who robs his country blind.

http://www.therichest.com/celebnetworth/politician/president/vladimir-putin-net-worth/

Edited June 8, 2014 by Argus

[Argus]

You are dead wrong, Moonlight. The poor people of China and India (two examples) are far better off now than 40 years ago. In world terms, the poorest of the poor are getting richer.

As to the top 1%, you seem to care. Why? [Maybe you're in the top 10% and are simply jealous.]

I don't think resentment of the misnamed 1% (It's really more the 1% of the 1%) is simple jealousy, for the most part.

The issue here is that wealth begets power which begets more wealth. And while the first wealth might have come about through industriousness, cleverness and luck, it is the kind which comes about through the manipulation of the sytem which causes resentment.

For example, the wealthy coercing politicians to institute a number of tax code changes which enormously benefit them at the expense of public services they do not require but many ordinary people do.

The cuts to the tax levels of the wealthy over the past forty years, combined with tax changes which benefit corporations, and the tax changes to dividends and capital gains, have seen governments starved of money and conequently forced to go deep into debt as well as radically curtailing services to ordinary citizens. How could that NOT cause resentment?

[overthere]

And probably would have gone bankrupt had they lasted very much longer.

I doubt it, the Nazis and German industry had a strong and mutually profitable relationship.

Germany was doing just fine in the war and would have had a much better immediate outcome at the end of hostilities had Hitler not made one very critical mistake. He refused to listen to his very excellent generals on military matters, and made disastrous military decisions.

Mind you, Germany has done very well overall since the war despite him.

[overthere]

I don't think resentment of the misnamed 1% (It's really more the 1% of the 1%) is simple jealousy, for the most part.

The issue here is that wealth begets power which begets more wealth. And while the first wealth might have come about through industriousness, cleverness and luck, it is the kind which comes about through the manipulation of the sytem which causes resentment.

For example, the wealthy coercing politicians to institute a number of tax code changes which enormously benefit them at the expense of public services they do not require but many ordinary people do.

The cuts to the tax levels of the wealthy over the past forty years, combined with tax changes which benefit corporations, and the tax changes to dividends and capital gains, have seen governments starved of money and conequently forced to go deep into debt as well as radically curtailing services to ordinary citizens. How could that NOT cause resentment?

Your post ignores the other side of the equation.

Tax revenue is one side, but what of the other side, expensitures. The social contract we in the West enjoy now is very large, and is much. much more massive than dreamed about only a couple of generations ago. Our expectations have soared. Compared to what was available to average citizens 60 years ago services have not been 'radically curtailed', they have been exponentially increased.

[Argus]

I doubt it, the Nazis and German industry had a strong and mutually profitable relationship.

Yes, that was the problem. Too much interference from incompetent Nazi stooges like Goering in the economy and industry.

Also, they rebuilt their economy, and their armies, with borrowed money. You can't go on doing that forever before you wind up in bankrupt.

[Argus]

Your post ignores the other side of the equation.

Tax revenue is one side, but what of the other side, expensitures. The social contract we in the West enjoy now is very large, and is much. much more massive than dreamed about only a couple of generations ago. Our expectations have soared. Compared to what was available to average citizens 60 years ago services have not been 'radically curtailed', they have been exponentially increased.

Yes, we have radically increased our expenses, without a similar increase in productivity. Again, using a comparison to business, you can only go on doing that so long before you go out of business. Someone has to get those expenses back under control.

[eyeball]

How could that NOT cause resentment?

The antidote seems to be a slavish sycophancy, especially towards the system of governance that facilitates so much inequality in wealth, power and above all else, influence .

I'm of the opinion that we radically increase taxes on at least the top....25%...of taxpayers and legislate a national living wage (double the highest minimum) along with a maximum wage (no more that 30 times the lowest current minimum wage).

Failing that, I'd settle for outlawing in-camera lobbying.

Then maybe we can talk about cutting services.

[Argus]

I'm of the opinion that we radically increase taxes on at least the top....25%...of taxpayers and legislate a national living wage (double the highest minimum) along with a maximum wage (no more that 30 times the lowest current minimum wage).

So take away a lot more money from productive people (those bastards!) and give to the uh, non-productive people.

Seems to me that human nature being what it is, a guaranteed living wages just means people will do the easiest job they can find. And does this guarantee extend to welfare? I'm guessing it will, so that means a huge number of people will simply not bother to work at all.

But that's okay. We'll just raise taxes on the top 25% again.

[eyeball]

The money to run the country and pay for social programs has to come from somewhere.

What are you going to proscribe when robots make and do just about everything, just tell human beings to roll up their sleeves?

[-1=e^ipi]

The money to run the country and pay for social programs has to come from somewhere.

What are you going to proscribe when robots make and do just about everything, just tell human beings to roll up their sleeves?

The humans could always fuse with the robots and become cyborgs.

[Bonam]

The humans could always fuse with the robots and become cyborgs.

Pretty close to the mark. Humans are already cyborgs in some ways, the electronics just aren't usually implantable like science fiction envisioned but instead carried or worn on the person. Smart phones, augmented reality glasses, smart watches, etc, allow the individual human to be constantly connected to and interacting with the world's information, their friends and co-workers, etc. These devices allow an individual to be far more productive than would otherwise be possible, and of course that trend will only continue, so that humans will not be in competition with the devices we make but will rather work in unison with them, increasing net productivity.

[kimmy]

humans will not be in competition with the devices we make but will rather work in unison with them, increasing net productivity.

Producing what?

We have more and more people, but need less and less people to produce anything we need.

Wandering around with your Google Glasses sounds mildly interesting, but I imagine the pay sucks, and the people of the Fuuuture will still need an income.

-k