tag:blogger.com,1999:blog-8839412.post461069646255179448..comments2024-03-19T07:48:54.021-06:00Comments on Gus Van Horn: Stossel on PickettyGus Van Hornhttp://www.blogger.com/profile/05126749051688217781noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-8839412.post-28228698001671252952014-06-06T05:10:48.949-06:002014-06-06T05:10:48.949-06:00There is more on this point (as it related to the ...There is more on this point (as it related to the minimum wage) in a post at <a href="http://ari.aynrand.org/blog/2014/06/05/the-minimum-wage-vs-reality" rel="nofollow">Voices for Reason<i></i></a> that I ran into this morning.Gus Van Hornhttps://www.blogger.com/profile/05126749051688217781noreply@blogger.comtag:blogger.com,1999:blog-8839412.post-515246884295320282014-06-05T12:04:20.910-06:002014-06-05T12:04:20.910-06:00That's good to know about, in the same way tha...That's good to know about, in the same way that numerous other leftist tropes are already known to be economic nonsense, but you are right, "[T]his will probably have no effect on the lefterati[.]" <br /><br />They are more concerned about following their altruistic morality than with the truth, which is the reason Binswanger argues that the whole notion that, "Social distinctions can be based only on common utility," is what ultimately needs fighting.Gus Van Hornhttps://www.blogger.com/profile/05126749051688217781noreply@blogger.comtag:blogger.com,1999:blog-8839412.post-22542181012160141672014-06-05T04:46:19.699-06:002014-06-05T04:46:19.699-06:00Yo, Gus, a good roundup of more directly economic ...Yo, Gus, a good roundup of more directly economic articles taking Piketty to task is <a href="http://blog.skepticallibertarian.com/2014/05/20/piketty-roundup-and-the-non-contradictions-of-capitalism/" rel="nofollow">this post</a> at <i>The Skeptical Libertarian</i>, which is a good group blog. The <a href="http://blog.independent.org/2014/05/15/pikettys-capital-ii/" rel="nofollow">first review listed</a> cuts to the heart of Piketty's central formulaic nonsense: He reverses cause and effect on a basic level:<br /><br /><i>A larger problem is that Piketty assumes capital earns some rate of return, r, so the share of income going to capital, α, is determined by the value of capital times the return it earns. This is exactly backwards.<br /><br />Capital does not have some value, which then earns a return to provide income to the owners of capital. Rather, capital consists of productive assets that generate a return, and the value of the stock of capital is determined by the return it generates, rather than, as Piketty depicts it, the return being determined by its value.<br /><br />This makes a difference because it misrepresents how capital owners earn their incomes. In fact, capital must be allocated to productive uses in order to generate a return, and the job of the capital owner is to allocate that capital as productively as possible. Successful owners of capital will earn higher returns, and unsuccessful owners may lose their investment altogether, and see the value of their capital drop to zero.</i><br /><br />Other reviews in the list show that the income data that everyone trumpets is pretty seriously flawed on a basic level: Confusing taxable income with real income, ignoring the effects of progressive taxation, ignoring lots of unreported income for individuals below the top 10%, using individual rather than household incomes, and so on. And finally, the review in the <i>Financial Times</i> claims to have found serious errors in Piketty's data, formulas, and spreadsheets such that when they are corrected his conclusions are simply not borne out at all. Of course, this will probably have no effect on the lefterati, but at least it's good to have it to hand for bystanders.Snedcatnoreply@blogger.com