Many C.E.O.s receive a lot of stock and stock options. Over time, they and oth­er rich peo­ple earn a lot of mon­ey from the cap­i­tal they have accu­mu­lat­ed: it comes in the form of div­i­dends, cap­i­tal gains, inter­est pay­ments, prof­its from pri­vate busi­ness­es, and rents. Income from cap­i­tal has always played a key role in cap­i­tal­ism. Piket­ty claims that its role is grow­ing even larg­er, and that this helps explain why inequal­i­ty is ris­ing so fast. Indeed, he argues that mod­ern cap­i­tal­ism has an inter­nal law of motion that leads, not inex­orably but gen­er­al­ly, toward less equal out­comes. The law is sim­ple. When the rate of return on capital—the annu­al income it gen­er­ates divid­ed by its mar­ket value—is high­er than the economy’s growth rate, cap­i­tal income will tend to rise faster than wages and salaries, which rarely grow faster than G.D.P.

John Cas­sidy: Is Surg­ing Inequal­i­ty Endem­ic to Cap­i­tal­ism? : The New Yorker

Anoth­er piece on Piket­ty, more bal­anced than the Guardian inter­view and with some addi­tion­al inter­est­ing insights into the emer­gence of “super­man­agers” and the impor­tant point that eco­nom­ics and pol­i­tics must be stud­ied together.

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Kars Alfrink

Kars is a designer, researcher and educator focused on emerging technologies, social progress and the built environment.