[Peace-discuss] CTFC reading group

[C. G. Estabrook]

The second meeting of the AWARE group reading “Capitalism in the Twenty-First Century” (Piketty) took place last evening.

We discussed  pp. 1-71 = “Introduction," and "Part One: Income and Capital / 1. Income and Output."*

The next meeting is scheduled for Wednesday 20 May, 5:30-7pm, at 5 Litchfield Lane, Champaign. 

Reading for that meeting is "Part One: Income and Capital / 2. Growth: Illusions and Realities."

On-line access: http://resistir.info/livros/piketty_capital_in_the_21_century_2014.pdf

Members and friends of AWARE are invited to join the group.

—CGE

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*This section contains practically the only equation to be found in CTFC (Piketty is scornful of the mathematization of contemporary economics, which he sees as an  historical and sociological study):

"…the capital/ income ratio ... I denote by the Greek letter β. For example, if a country’s total capital stock is the equivalent of six years of national income, we write β = 6 (or β = 600%). 

"…The capital/ income ratio β is related in a simple way to the share of income from capital in national income, denoted α. The formula is α = r × β where r is the rate of return on capital. For example, if β = 600% and r = 5%, then α = r × β = 30%. 13 In other words, if national wealth represents the equivalent of six years of national income, and if the rate of return on capital is 5 percent per year, then capital’s share in national income is 30 percent. The formula α = r × β is a pure accounting identity. It can be applied to all societies in all periods of history, by definition. Though tautological, it should nevertheless be regarded as the first fundamental law of capitalism, because it expresses a simple, transparent relationship among the three most important concepts for analyzing the capitalist system: the capital/income ratio, the share of capital in income, and the rate of return on capital."

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