Corvinus
Corvinus

So what is Capital in the Twenty-First Century? Some notes on Piketty’s book Working paper, forthcoming in Capitalism & Society

Kornai, János (2016) So what is Capital in the Twenty-First Century? Some notes on Piketty’s book Working paper, forthcoming in Capitalism & Society. Working Paper. Corvinus University of Budapest Faculty of Economics.

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forthcoming in Capitalism & Society

Abstract

This study was inspired by Piketty’s excellent and important book. Its title and numerous statements in it arouse in readers expectations of a comprehensive analysis of capitalism. By comparison the author of this paper felt important aspects were lacking. The capitalist system has numerous immanent traits and innate tendencies, of which the paper takes a closer look at three properties. 1. One basic feature is dynamism, innovation, and creative destruction. No picture of capitalism can be full if this basic aspect is ignored. 2. Capitalism inevitably brings about a high degree of inequality; this must be eased by reforms, but cannot be entirely overcome. 3. The basic characteristics of capitalism – private ownership and the dominance of market coordination – give rise to strong incentive mechanisms that encourage but owners and enterprise executives to innovate and to cooperate effectively. One of the main incentives is competition, especially oligopolistic competition. There are strong mutual effects among these three important tendencies. It is impossible to understand well Piketty’s main subject, the distribution of income and wealth, if it is divorced from the other two tendencies. The study ends with its author’s own value judgements on the favourable and harmful, unjust attributes of the capitalist system.

Item Type:Monograph (Working Paper)
Series Name:Corvinus Economics Working Papers - CEWP
Series Number / Identification Number:2016/09
Uncontrolled Keywords:capitalism, comparative approach, innovation, income distribution, incentives, sources of top income
JEL classification:D21 - Firm Behavior: Theory
D30 - Distribution: General
D60 - Welfare Economics: General
N10 - Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: General, International, or Comparative
O31 - Innovation and Invention: Processes and Incentives
P10 - Capitalist Systems: General
P51 - Comparative Analysis of Economic Systems
Subjects:Economics
ID Code:2299
Deposited By: Ádám Hoffmann
Deposited On:12 Apr 2016 11:45
Last Modified:12 Apr 2016 11:45

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