Tag Archives: Business

If Capital Grows This Fast, How Come Fortunes Disappear?


BOOK REVIEW

Capital in the 21st Century, Author: Thomas Piketty.

By Mark Gimein – 5 percent rate of growth routinely cited by Balzac and Austen is quite close to the mark; Thomas Piketty’s own calculations yield a number somewhere in the 4 or 5 percent range for the period in which they worked.

And that, unfortunately, is a lot faster than most economies grow.

Some of that capital, of course, gets spent to maintain the lifestyles of the rentiers. But the rest gets reinvested.

If the holders of capital manage to reinvest, say, three-fifths of their money (a number that Piketty takes as reasonable assumption), they will see their fortunes grow 3 percent a year.

That’s much faster than economies expanded through most of history. more> http://tinyurl.com/m29md7n

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Ordinary Americans are powerless, but the US isn’t really an oligarchy


By Matt Phillips – If you were a betting person placing a wager on a political outcome, you’d pretty much always want to bet on the outcome that the affluent are in favor of.

The opinions of the affluent and business groups were a far better predictor of actual policy outcomes than the opinions of Americans with median incomes. more> http://goo.gl/Z4ZoBG

Heartbleed’s Password Heartbreak


BOOK REVIEW

The Story of an Accidental Revolution, Author: Linus Torvalds.

By Leonid Bershidsky – Linux [2, 3] creator Linus Torvalds wrote, “in a society where survival is more or less assured, money is not the greatest of motivators. It’s been well-established that folks do their best work when they are driven by a passion.”

Two conclusions follow.

First, where there are people passionate enough about a product to work for free, others will claim their work and use it for profit because they are equally passionate about money.

Second, open-source software will never be painstakingly debugged: No one is passionate about that kind of drudgery.

This does not mean commercially-produced software is free from bugs, but at least paid developers bear responsibility for the products. more> http://tinyurl.com/kxt58eg

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When credit is too much of a good thing


By Edward Hadas – What does credit do after it has finished the job it was designed for?

The supply of credit ought to stop at funding productive activity.

But the reality is different. Surplus credit fuels dangerous asset price inflation and funds profligate governments.

Credit too easily goes astray and there is no natural force to rein it in. Without firm regulatory guidance, credit seems to expand indefinitely, until the financial system explodes. That has been the pattern since the end of the Second World War. more> http://tinyurl.com/pyl26kh

The short guide to Capital in the 21st Century


BOOK REVIEW

Capital in the 21st Century, Author: Thomas Piketty.

By Matthew Yglesias – There are different concepts of capital floating around in the economics literature. But Piketty uses an expansive definition of capital so that it is the same as wealth.

The fortunes of the wealthy were destroyed by two world wars, the Great Depression, and extreme wartime finance measures.

Then a few decades of rapid economic growth created a situation in which newly earned income was a much bigger deal than old wealth.

In the contemporary environment of slow economic growth, Piketty says this process is over.

Unless drastic measures are taken, the future belongs to people who simply own stuff they inherited from their parents. more> http://tinyurl.com/lyn4pjv