Lance Taylor on Piketty's Capital
(Jeff Susman, MV, and Lance Taylor, Beijing, 2001)
A short paper by Lance available here. From the conclusion:
Current flows of taxes on the upper percentiles of the income distribution and transfers to the bottom in the USA are on the order of ten percent of GDP. Meanwhile the income share of the top percentile rose by more than ten percent between 1980 and 2010 (Taylor, et. al., 2014), to a large extent due to a rising profit share. The tax/transfer program would have to be doubled in size (emphasizing estate taxes inparticular) to offset the “autonomous” increase in the profit share. On the policy front such an effort may not be likely.
With regard to political economy, the increase in the profit share (and therefore the profit rate) was not so autonomous after all. It was the outcome of a sociopolitical process which could be reversed. ... public intervention would go a long way toward maintaining aggregate demand and reducing capitalist control. Otherwise, wage repression leads to secular stagnation by enriching the rentier.Along the same lines of Galbraith and Palley Lance suggests that more than taxes would be necessary to reverse the conservative agenda of financial deregulation, union bashing and pro-market reforms that have dominated economic policy for the last 30 years or so.