Maybe it’s already banned in these countries and there could be an assumption that it is already banned in most countries too, which make it seem like a less important issue.

This is an impossibility. Capital owners and workers will always be unequal, if there were no measurable benefit for being an owner, then everyone would be a worker.

What you’re arguing here is Piketty’s accumulation view. Rognlie and Stiglitz have pretty convincing arguments against this. First, there is no such thing as a pure “worker” and a pure “capitalist”. Capitalists work and consume and workers save out of their wages (e.g. through pensions). Stiglitz argues “For the wealth–income ratio of capitalists to be ever increasing would require sr > g, but in standard Solow model of growth, where workers save at the same rate that capitalists do, that inequality does not hold in the long run.” “Secondly, the return to capital should be treated as endogenous. If the increase in wealth represented an increase in “capital,” then the law of diminishing returns would imply that the return to capital should have decreased.” - Stiglitz. Third, and most importantly, Stiglitz argues that when taking rents (what separates wealth from capital) out the equation, there is no measurable benefit for being an owner. He calls the capitalized value of rents, the “wealth residual”. He mainly focuses on rents caused by land ownership, market power, patents and assymmetric information. After all these rents are taken away, there is maybe one type of rent left that would make being a capitalist worthwhile for those who have a good idea/good understanding of markets - basically who is good at the labor of running a business. It is quasi-rents. They are always temporary, because they are the reward for having an idea and executing it until competition copies it. They are what are often extended through patents, a debatable policy. The temporarity of quasi-rents implies a necessity for a continuity of keeping innovation going, which becomes the labor of the capitalist. If all other rents than quasi-rents disappeared, the only benefit accruing to a capitalist would be the reward for the labor and knowledge required to come up with new products, production methods, etc and succeeding with it. And it challenges your statement “if there were no measurable benefit for being an owner, then everyone would be a worker.” because it would be similar to comparing two jobs.

The first, is that the Soviet Union presented an alternative to Capitalism, and Capital was scared of worker revolution.

Yes, a lot of these policies were inspired by socialist regimes. This does not prove that socialism is better, but if anything it implies that a mix of the two is better than pure capitalism.

The second, is that these are always temporary measures, as you noted, these waned over time. They were not granted democratically, but as a consequence of labor organization, these band-aids happened to prevent the system from collapsing under its own contradictions, that were particularly dire after World War I and II.

These measures were certainly not sufficient solutions to the problem of rents, and in countries like the US, the institutions preventing politicians buying elections were not strong enough, if not non-existent. But these “temporary” measures have sustained in Scandinavia, where democracy is stronger.

Profit comes from the surplus value created by workers, so the workers are getting their value siphoned through employment.

Yes, without competition. But with competition, firms cannot pay less than the market salary without having a shortage of workers.

The real (inflation-adjusted) incomes of the poorest half of the Chinese population increased by more than four hundred percent from 1978 to 2015, while real incomes of the poorest half of the US population actually declined during the same time period.

While this is true, wasn’t this also true for the US, when they had their main growth from 1945-78?

I don’t really know what you mean, here. What “deep flaws” does Central Planning have?

The main flaw is explained by complexity science. Society is a complex, self-organizing system composed of countless interacting agents, each with varying, dynamic, and unique preferences and constraints. As Hayek argues, such systems exhibit emergent order that cannot be planned or predicted in detail. Central planning assumes that outcomes can be engineered from above, but in reality, only general patterns—not specific results—can be anticipated. Just as evolutionary theory explains broad tendencies without predicting exact species, economic systems can only be understood through principles, not precise outcomes. Central planning fails because it attempts specific predictions in a domain where only qualitative ones are possible.

Why is Socialism not democratic enough in your eyes? Any system that leaves Capitalists in control of the State will always fail to deliver on what you say you want.

I never said socialism specifically is not democratic enough. I said that whatever system we have, we cannot trust those in power to act for the social good without proper institution-which there is no country in the history of the world that has perfected. The assumption that a democratically elected government will act in the public interest relies on both a perfect democracy and of altruistic public actors. In reality, there is both government and market failures. Buchanan showed that government actors are more interested in being reelected than improving outcomes for everyone, which are different incentives. A company buying a politician is a likely as a government agent providing benefits to groups they align with purely out of own self-interest. What matters most, whichever system we have, is designing the proper institutions to prevent these from happening. How would you decide who gets what in a socialist system? Under which ethical framework should this be decided? No matter which system you decide, there will be losers and winners. Will your choice depend on your own biases? If it is purely democratically chosen, what will happen to minorities?

Thanks for the reply. I think you’re right to stress the violence and coercion that sustains the link between imperialism, underdevelopment, and the global hierarchy of value capture is indeed central.

About your land as capital section, I want to add that if rent didn’t exist (economic rent, Ricardian rent, monopoly rents, political rents etc.), then capitalism would not lead to inequality. Competition would, in theory, balance returns to capital and wages, as reflected in Kaldor’s stylized facts. Land is unique in this context because its supply is fixed, so all land ownership inherently generates rents. By contrast, not all capital ownership results in rents, because competitive pressures can erode excess returns. I think, to speak the language of rents from a socialist perspective, your argument is that: “yes, but in a capitalist system, all of these rents are bound to happen (and increase over time), because the ones with money influence the rules that allow these rents (especially monopoly rents) either through misinforming voters or buying politicians”. I think both of us would agree with this - granted that we allow it to happen.

I think you’re right that our difference lies in what it means to stop this from happening. Both in terms of how do we do it, but also in what needs to be done. I would argue that the rents have increased from 70s to now in the US and many other western countries, but they also decreased from 30s to 50s and remained low for two more decades - and this change happened not through a revolution or seizing all companies. It happened democratically through the creation of a welfare state, through seizing some natural monopolies, unions, insurances, worker’s rights, and through public investment in innovation. These reforms show that systems can curb rentier dynamics without dismantling markets entirely.

I also argue that rent-seeking isn’t exclusive to capitalism. Socialist systems can face similar dynamics through regulatory capture, elite collusion, or state corruption. It’s not just a capitalism problem; it’s a human problem, and any system needs institutional checks to limit rent extraction. Looks like China’s share of wealth accruing to the top 10% has gone from around 42% in 1990s to around 68% in 2024 https://wid.world/country/china/.

Ultimately, I don’t think any system should be purely one or the other. Central planning has deep flaws, and so do unregulated markets. If we can maintain a democratic structure with a well-informed public, then we have a real chance to strike the right balance: limiting rents, promoting equity, and preserving freedom.

Maybe I just have a bit more faith that we can beat the capitalist forces by standing together and remain well-informed. Right now their strategy is to split us apart. In my view, people like you and I are on the same side, and if we push enough, we can win. I think taking a hard socialist stance might be counterproductive as many people don’t identify with this idea, making it harder for us to stand together. An idea could be to focus on reuniting, not under the banner of an ideology, but under the banner of the injustice we are subject to.

Just use KSuite instead

For a more all-round perspective, I recommend Hajoon Chang’s “economics: the user’s guide”.

I love MD editors too, but I find it very hard to collaborate with others on writing because I don’t see any coworking tools for it, and it’s also difficult to convince coworkers to switch from word.

You’re misunderstanding many of my points. Market concentration is one aspect of how Capitalism functions, and is why it can’t last forever and is bound to be replaced by planning or by barbarism. Land ownership is a part of that process as well. However, the negative consequences of these facts are minimized in areas like Scandinavia through Imperialism.

I follow the logic here. So the inequalities that would have happened in Scandinavia is outsourced to countries with less worker rights and thus lower pay, and you evaluate the inequality of the whole economic ecosystem including these outsourcing countries. I always thought of it as a natural progression - that when these countries grow, the rights of their workers will grow too, which will reverse the trend or move the outsourcing to a new country until there are none left. It doesn’t negate your argument however, and aside from institutions that reinforce these inequalities like the IMF, isn’t outsourced labor also creating some positives for these countries in terms of growth and raising people out of poverty? How would these workers have faired without the outsourced labor?

I am not engaging mostly with the stats you bring up because they are one-sided and really serve to apologize for Capitalism and Imperialism, by focusing on land ownership alone when it’s a giant and interconnected system. I’m skeptical that the impact is as big as you say it is, but even if we accept them all as true, you’re still only analyzing one factor and thus miss the true problems at play. Marx elaborates as such in this letter discussing Henry George.

Again I’m not bringing up the stats to argue that only land is important. I feel like I’ve stressed this in almost every comment, but you keep saying that I’m only looking at land - that is the position of some Georgists maybe, but as I said, I’m not a Georgist. Unfortunately when you do a PhD, you have to make a focus, and the focus of mine is land rent. It does not mean that I remain shut off to other theories and ideologies. As I said, I do believe in the existence of exploitation rents and monopoly rents. Even Adam Smith believed in taxing land and stopping monopolies. I bring up land ownership, because it seems vastly underrated in comparison to how much it contributes to inequality, recessions, urban sprawl, stagnated growth, and housing unaffordability. The numbers I show, should be quite convincing to most people that land makes up the majority of the rise in inequality, and I would love to see empirical arguments as to why this is not the case. Without it, I cannot change my current judgment of its importance, which seems to be increasing exponentially as an increasing population is competing for the same scarce land - which again is NOT to say that market power and exploitation isn’t important and doesn’t deserve debate and reform.

The role of land. My point is that a Land Value Tax will not solve the problems of Capitalism. It can certainly play a role in a larger transition to Socialism, but it alone will simply pave the way for new avenues of exploitation, as has happened every time a “progressive Capitalism” has been enacted.

Again, I never stated that an LVT will solve the problems of capitalism. I said in many comments that I believe exploitation rents and monopoly rents should also be solved. I have spend time eloborating on the problems of rising market power in the west. I have said I believe in state owned natural monopolies and that we should have stronger antitrust laws, better institutions preventing companies from owning modes of communication, making bought elections illegal, making political ownership of stocks illegal. I understand that you don’t believe these things are sufficient, but that is different from saying that I only focus on land, which I don not.

Capital, and its role. Land is one aspect of Capital, just as financial Capital and Industrial Capital are.

You are stating this as if it’s a fact, but these are normative arguments that the classical economists disagreed with. And a main reason land was consolidated with capital in the neoclassical economic school was because of some simplifying assumptions when they attempted to make economics more mathematical.

You taking specific aim at Land ownership, and not at the system of private ownership as a whole, is why you have an incomplete view.

Again, focusing on land ownership, does not mean I ignore everything else, and isn’t any view incomplete - and who decides which view is complete? George was mistaken in not thinking at all about monopoly rents. Also, are you saying that all private ownership is a problem?

We agree already that Land needs to be tackled, and you agree that markets centralize and thus are better to have those monopolies folded into the public sector, but what happens after that? How do we get there in the first place? We keep folding into the public sector and abolish classes, and we get to there in the first place through revolution. We don’t sieze for the sake of seizing, but because it becomes an economic necessity as production increases in complexity. It has never genuinely been possible for any working class to gain power by asking for it, ever. Only revolution has worked.

I’m not dismissing revolution as unnecessary. But the historical record of revolutionary transitions is complex, and there’s no clear blueprint. There are revolutions that have advanced human flourishing, and there are those that have produced new forms of domination. The welfare state in much of Europe was built incrementally through democratic politics, trade union pressure, and policy innovation—not revolution. Civil rights movements in the US achieved a lot of changes in law, education, voting, and labor rights through organizing, protest, and legal pressure, not regime overthrow. The Iranian revolution replaced a secular authoritarian monarchy with a theocratic regime. Even revolutionary regimes often reproduce the same dynamics of rent-seeking and monopolization under different banners, which is why institutional design matters after revolution. My work doesn’t reject revolutionary change, but it asks what institutions are necessary before and after revolution to prevent new monopolies from forming. I don’t present a land value tax as panaceas, but it can help lay groundwork for a big part of the problem.

You do focus, but you over-focus, which is why you miss the key points. This is why there aren’t really any Georgists anymore, the right-Georgists become Social Democrats or Neoliberals, and the Left-Georgists become Marxists. Georgism occupies a niche underdeveloped in economics, which explains its scarcity. The largest economy by Purchasing Power Parity is run by Marxists, while Georgists don’t run anywhere.

The history of Georgism is complex. The neoclassical school were only able to argue that land was capital through assumptions that simplified the analysis for mathematical conceptualizations that ignored economic rent, and John Bates Clark, who initiated the marginalist revolution, was paid large sums of money to take down Henry George. He did it by making assumptions about land that would make it equal to capital, ignoring it’s differences. And as I said, Henry George was wrong in ignoring monopoly rents. Ryan-Collins and co-authors in “rethinking the economics of land and housing” argue that it was one of the main reasons Marx had more succes than Henry George; he had a too narrow focus. I’m not taking his position.

I also don’t know what you mean by “ethical problems” with respect to Marxism. Marxism, if anything, is more ethical as it aims to abolish class society as a whole, rather than apologize for a large part of it and focus on one aspect.

This is true from a consequentialist ethics point of view, but not from a deontological ethics point of view. A system grounded only in consequentialist ethics risks justifying coercive or unjust means if they are believed to serve long-term egalitarian ends which can override individual autonomy. On the other hand, a purely deontological view of property rights can enforce structural inequalities by treating existing distributions as fair, however unfair these might be. I believe that a fair and resilient economy should balance the need for redistributive justice while respecting individual freedoms and rule of law. This means recognizing the moral legitimacy of correcting advantages—such as unearned economic rents, monopoly rents, exploitation rents or inherited wealth—while also preserving basic rights, procedural fairness, and pluralism. I think the balance is found democratically, which is why I believe so strongly in improving the institutions that strengthen democracy. I might have my own opinions on this balance, and it all depends on the trade-offs in different situations.

I don’t think I’m being rude. I do disagree with your analysis quite sternly because I think you quite nearly get it. You fall just short, and it’s frustrating, if I’m being honest. If that manifests in rudeness on my part I apologize.

I guess it’s not a rudeness I’m observing. I think what I interpreted as rude was the absolutism in your replies. The main problems I have with your replies is first that you are making my arguments into strawmen, and second that you are evaluating the truth of my arguments not out of a scientific point of view, but out of whether it aligns with what you believe. I believe you have done a great deal of research, but I’m getting the feelings from your replies that Marxism is more important to you than truth. If you are arguing that Marx is the one and only truth, then it is not much different from religion. I’m trying to synthesize findings, not defend an ideology.

Rising wealth inequality doesn’t say much about capitalists if that wealth inequality is tied to pensions (the case in the Netherlands) or housing. Denmark has one of the world’s highest mortgage interest deductions giving massive transfers of wealth to homeowners and lenders. This was a failed social attempt to improve homeownership in the whole global north.

I would love to see some statistics on rising market concentration in Scandinavia, cause isn’t that your argument? That the cause of inequality is due to rising market concentration?

I agree that imperialism is important. And I wish that organizations like UN had more power and credibility to uphold countries’ responsibilities of fairness. What exactly is Scandinavia doing according to you in the global south (I always assumed they are, but you seem to know more)? I’d love to hear more. I know that the IMF keeps lenders in poverty for example.

I’ve shown you myself that there is definitely concentrations of wealth. But in my last comment I explained to you that this rise in wealth is mainly attributed to housing. I showed you the statistics. I haven’t really seen you engage with that, was it because you don’t believe it? Or do you just need more time to look into it?

Monopoly rents happen when competition is reduced - from being able to charge more due to the lack of competition. Economic rents accrues to owners of fixed resources. They are both related to scarcity, but one is created and one is inherent. Land is not capital according to classical economists. This is because of its unique properties: https://www.cooperative-individualism.org/gaffney-mason_land-as-a-distinctive-factor-of-production.pdf for example it cannot be moved (capital can), it cannot be produced (capital must), it is necessary for production (capital is not - technically).

Land wealth is much more unearned than capital wealth, cause at least some capital wealth can be attributed to innovation and consumer preferences research. No increase in land values were ever fairly earned by the landowner cause land values only increase from scarcity, public investments, qualities of neighbors and private amenities popping up.

I never said land is the full picture, but what I said was that the data says it’s the biggest part. In the stiglitz quote I added it even recognized the importance of exploitation rents, monopoly rents etc. I’ve repeated that I think market power is a problem, but you seem to think I think it’s not. I’m not sure why you think that?

We agree that wealth inequality is rising, we agree that market power plays a role in that, we agree that it’s beneficial for at least some companies to be publicly owned, we agree that land plays a role in that, we agree that between country inequality is perpetuated by the global north to some extent, and probably we agree that imperialism left a power vaccuum and made it difficult for these countries to develop their own institutions.

We seem disagree about

• the extent to which land plays a role in rising inequality - for which I have showed data that in my view should be quite convincing - let me know if you see any flaws?
• conversely, the extent to capital (produced assets) plays a role in rising inequality - I’m not saying it doesn’t, just that land plays a a bigger role
• how much capital it is necessary for the government to seize - again I believe natural monopolies have good reason to be publicly owned and that antitrust laws should have more power (and that politicians should not be allowed to own stocks, take campaign money or in any way make deals with companies)
• how sceptical one should be in the possibility that society can democratically create anti monopolistic institutions that prevent market power from taking too much control. I have a bit of hope in that. Not sure what else you can do but learn, inform, and take action.

We just need to be focused. And that means to focus on the problem: land rents, monopoly rents, exploitation rents etc. Marxism offers one way to solve the problem. I believe at a big cost from a deontological ethics perspective. I believe there are other ways that would have lower costs.

But we could also just leave it at that, It seems you are set and at the same time being a bit rude. I see disagreement as an opportunity to learn. I think this is the best way to go about it, don’t you? Have you learned something from this conversation?

There’s proof of it happening but not falsifiable. What I mean is that, I believe it is not happening in Scandinavia for example, but I could be wrong! I mean I feel like Scandinavia has enough “people power” to counteract that force - but it’s only based on some inequality stats. Not actual deep dive into market concentration.

In piketty’s capital in the twenty first century you see that income inequality has decreased in France, Germany, Sweden, Japan, Italy, Denmark and Spain from 1910 to 2010 without a subsequent increase. But of course you have to look at a capital/income ratio (even this is flawed because capitalists and workers are not two distinct groups). And then there is this graph (figure 4) from https://cepr.org/voxeu/columns/wealth-and-history-reappraisal showing that top 1% wealth share in France, Germany, Spain, Sweden, and the UK has only gone dow from 1896-2019.

And from this paper: https://www.sciencedirect.com/science/article/abs/pii/S0014498324000500 - you see how housing wealth makes up more and more wealth. The graph I’m referring to is also seen in https://cepr.org/voxeu/columns/wealth-and-history-reappraisal (Figure 3).

Then, if capitalists are winning, you would see the capital share of GDP increasing. Matthew Rognlie examined this: https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf He found that if you take housing out of the “capital” equation, capital share is not increasing. He concludes “these results suggest that concern about inequality should be shifted away from the overall split between capital and labor”.

I’m not a Georgist, if you show me evidence that suggests otherwise, I will reconsider my belief that land is the most important component in explaining rising inequality, but you would have to show me a lot, because I’ve found quite a lot of valid evidence so far that it is a big part of the problem.

https://www.aeaweb.org/articles?id=10.1257%2Faer.20150501 Found that 80% of changes in house prices are explained by land.

In https://www.bloomsbury.com/uk/rethinking-the-economics-of-land-and-housing-9781350374270/ they find that 87% of the rise in capital/income ratios can be explained by housing.

Why is all this happening? Because land is scarce and has ricardian rents. People hoard land and don’t give up part of their land as more people arrive to the world or the city. There is not mechanism for that without a land value tax (or public ownership of land for which you would charge a rent for people to use, which is the same as a land value tax). You just reap the benefits of increased land values from its scarcity as more people move in. As a result every new birth cohort owns less housing than the previous. A pattern that has not changed according to OECD’s “the squeezed middle class”.

It’s not monopoly rents that happen from land ownership, it’s called economic rent and Ricardian rent. There might also be monopoly rents if one landlord owns a whole neighborhood, but that’s rarely the case. Economic rents come from the scarcity and ricardian rents come from the differences in land values due to natural features, public investments and private amenities.

Capitalists only swallow up productivity gains if they have monopoly rents, which is not necessarily the case everywhere as there is still competition, and capital is not inelastic. Land is inherently inelastic and thus swallows up everything. This is explained by Gaffney in https://www.emerald.com/insight/content/doi/10.1108/03068290910947930/full/html

Stiglitz adds to the discussion in “inequality and growth” http://link.springer.com/10.1057/9781137554543 He makes the following conclusions: “ That is, observed increases in wealth and wealth–income ratios cannot be explained by the steady process of the accumulation of capital. • An important component of the “wealth residual” is associated with an increase in rents: land rents, exploitation rents – including those associated with information asymmetries, monopoly and other forms of market power – and returns on intellectual property. Any theory attempting to explain the evolution of the economy must thus focus on explaining the increase in rents and their capitalized value, which are an increasingly important share of overall wealth.”

I think if I was American, I would be focusing a little more on capital than otherwise because there’s obvious huge concerns in that regard. But still, land seems to be more than half of the problem, so I prefer to focus on the big things - especially since it seems to be underrated in part due to how we measure all land held by businesses as business assets. But I’m from Scandinavia. I don’t see the private market’s influence having a concerning amount of political power, but I will change my stance if I see evidence otherwise. Again, I want to focus on the biggest part first. And as I’ve made clear, I still support public ownership of natural monopolies. I also support antitrust laws. I believe there are huge flaws in our democracies, when the private market can influence the public by owning the news outlets and buy politicians. We need stronger institutions against this.

I think we don’t disagree that much actually. I’m just a little more optimistic that we can inform ourselves enough to create strong enough anti-monopolistic institutions, coming from a country where I at least don’t feel like the government is bought. I’ve already started getting interest in big tech and how to break up these monopolies. I guess most people on this app have that interest. I switched my email, browser, search engine, and will in the future buy a Fairphone with the eOS ecosystem.

I don’t see myself as a Georgist. I don’t think it’s helpful for my scientific openness to label myself with an identity. Then I become too attached to the ideas and fail to look beyond.

Sorry this post became a bit messy and incoherent. I enjoy the conversation though, hope you can follow my point despite the lacking structure.

I already know these theoretical arguments you’re presenting, but they are not worth as much when there’s no empirical proof. You didn’t answer my more empirical questions, which are the main source of the counter arguments. Why are there capitalist countries that don’t see a rise in inequality? Where is housing in your analysis, which makes up more than 50% of all wealth (up from 15-20% 100 years ago). Why is the capital to income ratio not rising when housing is taken out of the equation? Why is every productivity gain in society accompanied by equally rising housing rents?

Yeah why do people have such strong views against it?

Also Linux is a great anti tech giant alternative.

Yeah that’s called economies of scale, these are not big in all industries and barriers of entry are also not big in all industries. So your argument is a good argument for why we have antitrust laws and why we need some companies and industries to be publicly owned, but this is not the case for every industry.

So what does your analysis of wealth concentration say? Has every capitalist country had increased wealth concentration? What type of wealth has increased in concentration?

Based on what evidence? Where I’m from, which is a capitalist country, inequality hasn’t risen and union membership has stayed strong.

Yes a balance found with the trade-off between the minimization of rent-seeking/market power and the idea that market companies tend to perform better by having stronger incentives to innovate and understanding consumer needs better. This of course relies on competition. So where there are only one or few market actors, the trade-off will be in favor of public ownership.

Sometimes it’s the lack of laws or institutions that prevent competition. For example, social media companies have huge market power because every user that wants to switch has to convince their friends to switch too. This is because these companies have made it difficult to switch out of their ecosystem. Europe is trying to build laws that means that friends can be automatically transferred or that you can chat to WhatsApp users from another app. We need to think better about how we can promote competition. Look at YouTube. If the government had a website where you could upload your videos and check off every YouTube alternative you wanted to upload it to, then it would be much more likely that the same videos could be found on for example PeerTube, making it a more competitive alternative.

With other companies like rail, ports, power, water, and other utilities, you cannot promote competition without losing economies of scale. And these are also not areas with a lot of benefits of privatization (innovation, consumer understanding), so these have a big benefit of being public.

Capital is not going to get unchecked increasing power as long as there is enough competition.

The georgist definition capital is the same as the classical economic one. The only school that doesn’t see it that way is the neoclassical one. And the only reason they don’t is because they made simplified assumptions in the marginalist revolution. Marx made similar simplifications in other ways.

It is true. What I’m saying does assume that we can democratically win against this ruling class. But lets say we do rise against them. Violently or not. And we then Implement a change in the system. I don’t think it’s necessary to seize all means of production in order to achieve that. I think it’s all about balance.

Well according Stiglitz, Zucman, and Josh Ryan-Collins, housing is the dominant aspect. Land is the main explanation for both inequality, housing unaffordability, recurring recessions, stagnating growth and urban sprawl - all of which Henry George (the first big advocate of land value taxes) predicted. The rest is what plays a smaller role according to the data they present on wealth. Housing makes up more than half of all wealth (it used to be more like 20%). Land is worth more than 25% of GDP. Housing makes 30-40% of people’s budgets and this is increasing rapidly. Every cohort is less about to buy a house.

Kuznets argued that inequality wouldn’t rise based on some very fundamental economic laws. These include Kaldor’s stylized facts. One of them says that the share of growth accruing to capital is expected to remain constant.

Piketty said that this is no longer true. Capital share of gdp is rising. His argument was initially that this is happening because the return to capital is rising above the general growth rate.

However the discussion has shifted in light of new data. Rognlie found that if you exclude housing from the equation, capital share is no longer rising. Meaning capitalists in general terms are not getting richer, property owners are. Or to be more exact, landowners are. Knoll found that 80% of changes in house prices are due to land scarcity. Keep in mind how much of company assets are tied to land wealth.

Stiglitz concludes from this discussion and his own analysis that wealth-to-income ratios rising is not because capital is increasing, but because we are including types of wealth in the term “capital” that are not actually capital. Land is not capital. He says that the main cause of the rise in inequality and stagnating growth is the rise in the capitalized value of rents, and that the majority of these rents come from land. But he says they also come from market power rents, political rents, patent rents and information asymmetry rents and other researchers focus on these rents.

This is what is meant by rentier capitalism. Without rents, capital wouldn’t accumulate. What you’re essentially arguing is that capitalism is bound to be rentier capitalism - there’s nothing we can do to stop it so, we should go a different route. Im happy to go on that route, I just don’t think it means the same as you. I’m a bit more optimistic if we manage to get society to target this rent-seeking behavior and create strong institutions against rent seeking.

I’m on board that the complicated nature of our legal system is exploited by companies to increase barriers of entry. I don’t think this means that institutions can’t do the opposite too. I think laws should be made simpler, but it’s possible to do so in way that also realigns them with societal goals of minimizing market power.

I’m also on board with the idea that there are certain industries that should be state owned such as management of natural resources, roads, rails, heating, health care etc.

You say that economics and history proves that capital concentrates in fewer and fewer hands. If you dissect what kind of capital that is, it’s actually housing that explains 87% of the rise in wealth to income ratios. And land explains 80% of changes in house prices. So Georgism may not be as small of a part of the problem as you think. Land is not capital.

If you move towards socialism when you vote left and move towards capitalism when you vote right, isn’t it possible to be halfway and be happy with being there?

Even the analysis of who has the political power. Democracy implies one person one vote, but the US has one dollar one vote. This is not democracy. It is capitalist yes, but it’s also possible to have capitalism with institutions that prevent money from getting too much political power both in terms of influencing politicians and media.

Btw, capitalists are not bound to get richer than workers. Over time, economic theory suggest that this remains in balance due to competition. You will find that the wealth to income ratio has risen over time. But wealth is not capital. Stiglitz argues quite convincingly that the only difference between wealth and capital is the capitalized value of economic rents. This is what I mean by rentier capitalism. Economic rents are the root of inequalities, stagnating growth, recurring recessions, unaffordable housing and urban sprawl. I recommend reading up on Georgism. You probably agree with it a lot more than you think ;)

Public vs private ownership of companies is a case by case basis. Many “capitalist” countries have many publicly owned companies. We used to have even more before Thatcher and Reagan. Now we have moved into a more public private partnership idea, which is a compromise.

Monopolies are able to extract monopoly rents through market power. This is one of the problems of rentier capitalism. That is why we have antitrust laws. We also need a system that prevents political rents from lobbyism for example by making it illegal for politicians to have stocks or to take campaign money from donors. We also have land rents from private land ownership. Singapore has a public land lease model, but a land value tax would achieve the exact same outcome.

In economics you talk about natural monopolies which is when initial investment costs are too high for competitors to exist or when physics or other constraints prevent competition (think of a railway line between two cities). There are many ways to argue that these types of companies should be publicly owned within a capitalist framework.

So yes, there is an in-between. And it depends exactly how much business is left to the government and how much is left to companies. This balance is defined by politics.