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by whakim
1382 days ago
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Actually, Piketty doesn't concede this point and makes the extremely important distinction between aggregate wealth and wealth distribution. What Rognlie does point out is the incredible importance of real estate in the growth of capital income - far more than Piketty originally credited it with in Capital in the Twenty-First Century. As Piketty points out in the interview, an explanation based around real estate literally cannot explain the growth in wealth share of the top 1% or top 0.1% or top 0.01%, because the wealthier you are, the smaller a percentage of your wealth consists of real estate. Which then naturally leads to the conclusion that Georgism/land value taxes are an insufficient tool for combating extreme inequality. Also, non sequitur: while I enjoyed A Brief History of Equality, I feel that it tried to stuff too much historical detail into so short a work - it reads a bit like a condensed version of Capital and Ideology. I found the most enlightening parts of Piketty's previous works involved the tracing of political and economic minutiae across time and space, and I'm not sure I would have actually enjoyed A Brief History of Equality if I didn't already have that background. |
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"PIKETTY: If you look at the top of the wealth distribution, I don’t see a lot of real estate. I don’t think Matt Rognlie or anyone is saying that the huge rise in billionaire wealth in the US has anything to do with real estate. As far as I know, nobody has ever tried to put this theory on the table.
"I’m not saying real estate is not important. I think for middle-class assets and lower-middle-class and upper-middle-class assets — for the middle of the distribution — real estate is, of course, very important. The movement in real estate prices explains a lot of what’s going on, both in terms of aggregate value and distribution. I’m not saying it’s not important. It is very important.
"If you go back to our paper with Gabriel Zucman, which was published, now, almost 10 years ago in the Quarterly Journal of Economics in 2014, called “Capital is Back: Wealth-Income Ratios in Rich Countries, 1700–2010,” you will see, we have complete decomposition about the role of real estate in aggregate wealth accumulation, and it’s absolutely central for many countries over many periods of time."