Rising wealth inequality doesn’t say much about capitalists if that wealth inequality is tied to pensions (the case in the Netherlands) or housing. Denmark has one of the world’s highest mortgage interest deductions giving massive transfers of wealth to homeowners and lenders. This was a failed social attempt to improve homeownership in the whole global north.

I would love to see some statistics on rising market concentration in Scandinavia, cause isn’t that your argument? That the cause of inequality is due to rising market concentration?

I agree that imperialism is important. And I wish that organizations like UN had more power and credibility to uphold countries’ responsibilities of fairness. What exactly is Scandinavia doing according to you in the global south (I always assumed they are, but you seem to know more)? I’d love to hear more. I know that the IMF keeps lenders in poverty for example.

I’ve shown you myself that there is definitely concentrations of wealth. But in my last comment I explained to you that this rise in wealth is mainly attributed to housing. I showed you the statistics. I haven’t really seen you engage with that, was it because you don’t believe it? Or do you just need more time to look into it?

Monopoly rents happen when competition is reduced - from being able to charge more due to the lack of competition. Economic rents accrues to owners of fixed resources. They are both related to scarcity, but one is created and one is inherent. Land is not capital according to classical economists. This is because of its unique properties: https://www.cooperative-individualism.org/gaffney-mason_land-as-a-distinctive-factor-of-production.pdf for example it cannot be moved (capital can), it cannot be produced (capital must), it is necessary for production (capital is not - technically).

Land wealth is much more unearned than capital wealth, cause at least some capital wealth can be attributed to innovation and consumer preferences research. No increase in land values were ever fairly earned by the landowner cause land values only increase from scarcity, public investments, qualities of neighbors and private amenities popping up.

I never said land is the full picture, but what I said was that the data says it’s the biggest part. In the stiglitz quote I added it even recognized the importance of exploitation rents, monopoly rents etc. I’ve repeated that I think market power is a problem, but you seem to think I think it’s not. I’m not sure why you think that?

We agree that wealth inequality is rising, we agree that market power plays a role in that, we agree that it’s beneficial for at least some companies to be publicly owned, we agree that land plays a role in that, we agree that between country inequality is perpetuated by the global north to some extent, and probably we agree that imperialism left a power vaccuum and made it difficult for these countries to develop their own institutions.

We seem disagree about

• the extent to which land plays a role in rising inequality - for which I have showed data that in my view should be quite convincing - let me know if you see any flaws?
• conversely, the extent to capital (produced assets) plays a role in rising inequality - I’m not saying it doesn’t, just that land plays a a bigger role
• how much capital it is necessary for the government to seize - again I believe natural monopolies have good reason to be publicly owned and that antitrust laws should have more power (and that politicians should not be allowed to own stocks, take campaign money or in any way make deals with companies)
• how sceptical one should be in the possibility that society can democratically create anti monopolistic institutions that prevent market power from taking too much control. I have a bit of hope in that. Not sure what else you can do but learn, inform, and take action.

We just need to be focused. And that means to focus on the problem: land rents, monopoly rents, exploitation rents etc. Marxism offers one way to solve the problem. I believe at a big cost from a deontological ethics perspective. I believe there are other ways that would have lower costs.

But we could also just leave it at that, It seems you are set and at the same time being a bit rude. I see disagreement as an opportunity to learn. I think this is the best way to go about it, don’t you? Have you learned something from this conversation?

There’s proof of it happening but not falsifiable. What I mean is that, I believe it is not happening in Scandinavia for example, but I could be wrong! I mean I feel like Scandinavia has enough “people power” to counteract that force - but it’s only based on some inequality stats. Not actual deep dive into market concentration.

In piketty’s capital in the twenty first century you see that income inequality has decreased in France, Germany, Sweden, Japan, Italy, Denmark and Spain from 1910 to 2010 without a subsequent increase. But of course you have to look at a capital/income ratio (even this is flawed because capitalists and workers are not two distinct groups). And then there is this graph (figure 4) from https://cepr.org/voxeu/columns/wealth-and-history-reappraisal showing that top 1% wealth share in France, Germany, Spain, Sweden, and the UK has only gone dow from 1896-2019.

And from this paper: https://www.sciencedirect.com/science/article/abs/pii/S0014498324000500 - you see how housing wealth makes up more and more wealth. The graph I’m referring to is also seen in https://cepr.org/voxeu/columns/wealth-and-history-reappraisal (Figure 3).

Then, if capitalists are winning, you would see the capital share of GDP increasing. Matthew Rognlie examined this: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf He found that if you take housing out of the “capital” equation, capital share is not increasing. He concludes “these results suggest that concern about inequality should be shifted away from the overall split between capital and labor”.

I’m not a Georgist, if you show me evidence that suggests otherwise, I will reconsider my belief that land is the most important component in explaining rising inequality, but you would have to show me a lot, because I’ve found quite a lot of valid evidence so far that it is a big part of the problem.

https://www.aeaweb.org/articles?id=10.1257%2Faer.20150501 Found that 80% of changes in house prices are explained by land.

In https://www.bloomsbury.com/uk/rethinking-the-economics-of-land-and-housing-9781350374270/ they find that 87% of the rise in capital/income ratios can be explained by housing.

Why is all this happening? Because land is scarce and has ricardian rents. People hoard land and don’t give up part of their land as more people arrive to the world or the city. There is not mechanism for that without a land value tax (or public ownership of land for which you would charge a rent for people to use, which is the same as a land value tax). You just reap the benefits of increased land values from its scarcity as more people move in. As a result every new birth cohort owns less housing than the previous. A pattern that has not changed according to OECD’s “the squeezed middle class”.

It’s not monopoly rents that happen from land ownership, it’s called economic rent and Ricardian rent. There might also be monopoly rents if one landlord owns a whole neighborhood, but that’s rarely the case. Economic rents come from the scarcity and ricardian rents come from the differences in land values due to natural features, public investments and private amenities.

Capitalists only swallow up productivity gains if they have monopoly rents, which is not necessarily the case everywhere as there is still competition, and capital is not inelastic. Land is inherently inelastic and thus swallows up everything. This is explained by Gaffney in https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html

Stiglitz adds to the discussion in “inequality and growth” http://link.springer.com/10.1057/9781137554543 He makes the following conclusions: “ That is, observed increases in wealth and wealth–income ratios cannot be explained by the steady process of the accumulation of capital. • An important component of the “wealth residual” is associated with an increase in rents: land rents, exploitation rents – including those associated with information asymmetries, monopoly and other forms of market power – and returns on intellectual property. Any theory attempting to explain the evolution of the economy must thus focus on explaining the increase in rents and their capitalized value, which are an increasingly important share of overall wealth.”

I think if I was American, I would be focusing a little more on capital than otherwise because there’s obvious huge concerns in that regard. But still, land seems to be more than half of the problem, so I prefer to focus on the big things - especially since it seems to be underrated in part due to how we measure all land held by businesses as business assets. But I’m from Scandinavia. I don’t see the private market’s influence having a concerning amount of political power, but I will change my stance if I see evidence otherwise. Again, I want to focus on the biggest part first. And as I’ve made clear, I still support public ownership of natural monopolies. I also support antitrust laws. I believe there are huge flaws in our democracies, when the private market can influence the public by owning the news outlets and buy politicians. We need stronger institutions against this.

I think we don’t disagree that much actually. I’m just a little more optimistic that we can inform ourselves enough to create strong enough anti-monopolistic institutions, coming from a country where I at least don’t feel like the government is bought. I’ve already started getting interest in big tech and how to break up these monopolies. I guess most people on this app have that interest. I switched my email, browser, search engine, and will in the future buy a Fairphone with the eOS ecosystem.

I don’t see myself as a Georgist. I don’t think it’s helpful for my scientific openness to label myself with an identity. Then I become too attached to the ideas and fail to look beyond.

Sorry this post became a bit messy and incoherent. I enjoy the conversation though, hope you can follow my point despite the lacking structure.

I already know these theoretical arguments you’re presenting, but they are not worth as much when there’s no empirical proof. You didn’t answer my more empirical questions, which are the main source of the counter arguments. Why are there capitalist countries that don’t see a rise in inequality? Where is housing in your analysis, which makes up more than 50% of all wealth (up from 15-20% 100 years ago). Why is the capital to income ratio not rising when housing is taken out of the equation? Why is every productivity gain in society accompanied by equally rising housing rents?

Yeah why do people have such strong views against it?

Also Linux is a great anti tech giant alternative.

Yeah that’s called economies of scale, these are not big in all industries and barriers of entry are also not big in all industries. So your argument is a good argument for why we have antitrust laws and why we need some companies and industries to be publicly owned, but this is not the case for every industry.

So what does your analysis of wealth concentration say? Has every capitalist country had increased wealth concentration? What type of wealth has increased in concentration?

Based on what evidence? Where I’m from, which is a capitalist country, inequality hasn’t risen and union membership has stayed strong.

Right but you don’t chug a pint of cocaine

Yes a balance found with the trade-off between the minimization of rent-seeking/market power and the idea that market companies tend to perform better by having stronger incentives to innovate and understanding consumer needs better. This of course relies on competition. So where there are only one or few market actors, the trade-off will be in favor of public ownership.

Sometimes it’s the lack of laws or institutions that prevent competition. For example, social media companies have huge market power because every user that wants to switch has to convince their friends to switch too. This is because these companies have made it difficult to switch out of their ecosystem. Europe is trying to build laws that means that friends can be automatically transferred or that you can chat to WhatsApp users from another app. We need to think better about how we can promote competition. Look at YouTube. If the government had a website where you could upload your videos and check off every YouTube alternative you wanted to upload it to, then it would be much more likely that the same videos could be found on for example PeerTube, making it a more competitive alternative.

With other companies like rail, ports, power, water, and other utilities, you cannot promote competition without losing economies of scale. And these are also not areas with a lot of benefits of privatization (innovation, consumer understanding), so these have a big benefit of being public.

Capital is not going to get unchecked increasing power as long as there is enough competition.

The georgist definition capital is the same as the classical economic one. The only school that doesn’t see it that way is the neoclassical one. And the only reason they don’t is because they made simplified assumptions in the marginalist revolution. Marx made similar simplifications in other ways.

It is true. What I’m saying does assume that we can democratically win against this ruling class. But lets say we do rise against them. Violently or not. And we then Implement a change in the system. I don’t think it’s necessary to seize all means of production in order to achieve that. I think it’s all about balance.

Well according Stiglitz, Zucman, and Josh Ryan-Collins, housing is the dominant aspect. Land is the main explanation for both inequality, housing unaffordability, recurring recessions, stagnating growth and urban sprawl - all of which Henry George (the first big advocate of land value taxes) predicted. The rest is what plays a smaller role according to the data they present on wealth. Housing makes up more than half of all wealth (it used to be more like 20%). Land is worth more than 25% of GDP. Housing makes 30-40% of people’s budgets and this is increasing rapidly. Every cohort is less about to buy a house.

Kuznets argued that inequality wouldn’t rise based on some very fundamental economic laws. These include Kaldor’s stylized facts. One of them says that the share of growth accruing to capital is expected to remain constant.

Piketty said that this is no longer true. Capital share of gdp is rising. His argument was initially that this is happening because the return to capital is rising above the general growth rate.

However the discussion has shifted in light of new data. Rognlie found that if you exclude housing from the equation, capital share is no longer rising. Meaning capitalists in general terms are not getting richer, property owners are. Or to be more exact, landowners are. Knoll found that 80% of changes in house prices are due to land scarcity. Keep in mind how much of company assets are tied to land wealth.

Stiglitz concludes from this discussion and his own analysis that wealth-to-income ratios rising is not because capital is increasing, but because we are including types of wealth in the term “capital” that are not actually capital. Land is not capital. He says that the main cause of the rise in inequality and stagnating growth is the rise in the capitalized value of rents, and that the majority of these rents come from land. But he says they also come from market power rents, political rents, patent rents and information asymmetry rents and other researchers focus on these rents.

This is what is meant by rentier capitalism. Without rents, capital wouldn’t accumulate. What you’re essentially arguing is that capitalism is bound to be rentier capitalism - there’s nothing we can do to stop it so, we should go a different route. Im happy to go on that route, I just don’t think it means the same as you. I’m a bit more optimistic if we manage to get society to target this rent-seeking behavior and create strong institutions against rent seeking.

I’m on board that the complicated nature of our legal system is exploited by companies to increase barriers of entry. I don’t think this means that institutions can’t do the opposite too. I think laws should be made simpler, but it’s possible to do so in way that also realigns them with societal goals of minimizing market power.

I’m also on board with the idea that there are certain industries that should be state owned such as management of natural resources, roads, rails, heating, health care etc.

You say that economics and history proves that capital concentrates in fewer and fewer hands. If you dissect what kind of capital that is, it’s actually housing that explains 87% of the rise in wealth to income ratios. And land explains 80% of changes in house prices. So Georgism may not be as small of a part of the problem as you think. Land is not capital.

If you move towards socialism when you vote left and move towards capitalism when you vote right, isn’t it possible to be halfway and be happy with being there?

Even the analysis of who has the political power. Democracy implies one person one vote, but the US has one dollar one vote. This is not democracy. It is capitalist yes, but it’s also possible to have capitalism with institutions that prevent money from getting too much political power both in terms of influencing politicians and media.

Btw, capitalists are not bound to get richer than workers. Over time, economic theory suggest that this remains in balance due to competition. You will find that the wealth to income ratio has risen over time. But wealth is not capital. Stiglitz argues quite convincingly that the only difference between wealth and capital is the capitalized value of economic rents. This is what I mean by rentier capitalism. Economic rents are the root of inequalities, stagnating growth, recurring recessions, unaffordable housing and urban sprawl. I recommend reading up on Georgism. You probably agree with it a lot more than you think ;)

Public vs private ownership of companies is a case by case basis. Many “capitalist” countries have many publicly owned companies. We used to have even more before Thatcher and Reagan. Now we have moved into a more public private partnership idea, which is a compromise.

Monopolies are able to extract monopoly rents through market power. This is one of the problems of rentier capitalism. That is why we have antitrust laws. We also need a system that prevents political rents from lobbyism for example by making it illegal for politicians to have stocks or to take campaign money from donors. We also have land rents from private land ownership. Singapore has a public land lease model, but a land value tax would achieve the exact same outcome.

In economics you talk about natural monopolies which is when initial investment costs are too high for competitors to exist or when physics or other constraints prevent competition (think of a railway line between two cities). There are many ways to argue that these types of companies should be publicly owned within a capitalist framework.

So yes, there is an in-between. And it depends exactly how much business is left to the government and how much is left to companies. This balance is defined by politics.

I’m getting a bit tired of seeing the communism/capitalism dichotomy. Guys let’s be pluralistic or at least see these two as a scale. There are a lot of solutions in between. Government failures exist just as much as market failures. Let’s focus on the actual root causes of our problems: externalities, rent seeking, private land ownership, too long patents, public good provision, overly complex legal system, information asymmetries in labor markets. We need unions, free health care, cheaper education, carbon taxes, land value taxes, simplified legal system that can’t be taken advantage of. Stop this capitalism vs communism bullshit. That’s not the cause of all this. Your real enemy is “rentier capitalism”.

How does this help “creative dressers”? And what trans overreach are you referring to?

I love shows like this that go into the detail of the emotions different people in the process are going through. It shows a different kind of realism. I recommend the show “the night of” for the same reason.

Yeah I also had to read the first title a few times before I realized they were saying the same thing. The change in word order makes you think the object and subject reversed.

Boycut companies with too much market power. They just happen to be quite concentrated in the US.

I’m not saying we don’t have things to work on, but it’s not black or white. Social injustice gets reduced over time in a democracy. Name a country that is not capitalist that has never done bad things.