https://youtu.be/wpGG3_pBHUc?feature=shared

https://youtu.be/HL-YUTFqtuI?si=5bveW471F_llMM2H

Capital and Ideology

Key definitions

r > g

Where r is capital return ang g is economic growth.

National income = domestic output + net income from abroad

Domestic output is GDP minus depreciation. Typically 90% of GDP.

Global income = global output

National income = capital income + labour income

Capital here is the total sum of nonhuman assets that can be owned and exchanged on some sort of market. All forms of wealth that can be owned, transferred or traded. It can include assets owned by government, public capital.

Piketty includes natural resources as capital as well. This makes it simpler but in effect he is lumping the commons in with capital. This may be problematic later in the book, but it is the way modern economics works.

The first rule of capital

$$ \alpha = r \times \beta $$

• α is the share of income from capital in national income.
• r is the rate of return on capital.
• β is the capital/income ratio. For instance if a countries total capital stock (total value of wealth owned at a given point) is the equivalent of six years of national income, then β = 6 (or β = 600%).