Sunday 31st of May 2020

the bad economic fall-out from the two rentier capitalists of the 1980s...


This book by Thomas Piketty was first published in 2014 and became an instant best seller. It had taken the author some 15 years to research and complete, and deserves a detailed attention and analysis rather than the usual one-off, production-line tracts which are read and instantly forgotten. Piketty describes the end of an old epoch, the rise of the new – the golden age of welfare-capitalism, Le Trente Glorieuses, the Keynes/Beveridge consensus, call it what you will, circa 1945-1975 – and the re-emergence of a second rentier capitalism regime which began the early 1980s.

Using apposite literary references to writers of the first gilded age he quotes:


It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife.”
Jane Austen – Pride and Prejudice

An immortal sentence which says a thousand words. Such was the moral zeitgeist in Europe during the 19th century; Piketty then drives home the point by adding Honorė De Balzac’s novel Pėre Goriot which focuses on the decadent, money-grubbing dispensation of the Bourbon Restoration. Arguably the moral climate hasn’t appreciably changed in our money worshipping age, but the origins of a ‘good fortune’ has. What concerns Piketty, is the source and nature of this ‘good fortune’ which is so sought after, and also where this latest historical configuration is leading.

The world of Austen and Balzac lasted from roughly 1870-1910 representing the first belle époque of rentier capitalism. The system[1] involves ownership of capital assets – in the 19th century mainly land – and living from the rent (in the broad sense) derived from these assets. Latterly, in what is the second golden age of the rentier regime, the capital asset base has changed from simply land to ownership of financial assets, real estate, stocks and bonds and high corporate incomes.

This is not to say that the old rentier classes have ceased to exist, but they have been supplemented by an emergent new class of hedge-fund managers, corporate executives and CEOs, investment bank chiefs, and former entrepreneurs like Bill Gates – which for a better term, we will call the working rich. As Piketty explains:


The top decile (10%) always encompasses two different worlds: the 9% in which income from labour predominates, and the 1% (of true rentiers) in which income from capital becomes progressively more important.”


Thus, former entrepreneurs such as Bill Gates cease to live off their labour as their accumulation of capital enables them to enter the genuine rentier class, the class able to live off capital. The new rentiers would also include Heiresses such as Liliane Bettencourt of L’Oreal and Paris Hilton, neither of whom have ever done a day’s work in their lives. Consequently, the rentier class grows with every passage of successful entrepreneurs entering its ranks. It might also be added that there has also been the rise of a parasitic speculative financial sector class who make a living by purchasing and selling various asset classes, in the main stocks, property and bonds.

Historically speaking Piketty asserts that the trend line for return on capital has been 4/5% – this has been an historical fact rather than some inexorable law – whereas growth has lagged at 1 to 1.5%. This process is expressed in the equation r>g where r is return on capital and g is growth. Accumulated capital (as stock) has tended to increase as a ratio to income (as flow). Moreover, the distribution of national income (GDP) has become increasingly skewed to the top decile. According to Piketty this has been a technical as well as a social/political process the consequences of which will be profound.


When the rate of return on capital significantly exceeds the growth rate of the economy (as it did throughout history up to and including the 19th century and as is likely to be the case in the 21st century) then it logically follows that inherited wealth grows faster than output and income … Under such conditions, it is almost inevitable that inherited wealth will dominate wealth amassed from a lifetime’s labour by a wide margin, and that the concentration of capital will attain extremely high levels – levels potentially incompatible with the meritocratic values and principles of social justice fundamental to modern democratic societies.



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that this is happening here is unbelievable...

France gathered for the 14th week of Gilets Jaunes protests, with the injury toll of the worst civil unrest in decades now resembling that of a small war. Yet despite pleas from victims, Emmanuel Macron is tightening the screws. 

“This is not normal. We are in France, one of the oldest and best democracies in the world,” says Fiorina Jacob Lignier, who lost her eye at a demonstration in Paris on December 8. "We usually condemn from afar other countries where this occurs, that this is happening here is unbelievable."

Lignier, a 20-year-old philosophy student, traveled from the northern city of Amiens to march on the Champs-Elysees to protest against fuel taxes with her boyfriend, Jacob Maxime.

He told RT that they were marching with a column of peaceful demonstrators, when a group of masked radicals began to vandalize a shopfront more than 50 yards away.

The police “began shooting ‘Flash Balls’ and throwing grenades in all directions,” during which the couple spent two hours “penned in between a line of gendarmes and a wall, with no chance to flee.”

Lignier said the last thing she remembers was the cries of cops clearing the way for firemen, then a gas grenade hit her on the head, and she was on the ground.

When she woke up, her nose was broken, her face swollen from fractures, and she couldn’t see through her left eye. Over the next 16 days, Lignier underwent two surgeries, and is still waiting for two more.


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This item could appear unrelated to the "economic bastards of the 1980s", but Macron-le-Con could be declared the son of those two mongrels: Reagan and Thatcher. The "gilets jaunes" are easily victims of the "far right" thugs agents destructors/provocateurs, which to say the least in France could be aligned with the Macron government to shame the Yellow Vests. Not a new trick, already exposed on this site. 

out of the loop...

afraid...Yánis Varoufákis, la fin de l'Europe et de l'Euro ? [EN DIRECT]


In English:


Yanis explains clearly how the banking capitalist system has highjacked "democracy". Not only we live in a "technocracy" we live in an "oligarchic technocracy" where the super-rich and the governments who work for them use technology to keep us out of the loop, even when we vote...



making money from the lounge chair...

More than 1,200 billion euros were paid in dividends by the 1,200 largest listed companies. 2018 was the best year in history for shareholders, a better result than 2017, which was already a record year.

According to figures provided by investment management firm Janus Henderson from the results of the 1,200 largest publicly traded companies, 2018 is a record year for paying dividends to shareholders worldwide.

In 2018, companies paid a total of nearly $ 1,370 billion (€ 1,200 billion), an increase of 9.3% over the previous record; 2017, when 1,252 billion dollars (1,105 billion euros) had ended up in the pockets of shareholders.

To explain these good performances, the financial institution puts forward several factors such as the lowering of taxes in the United States, but also the evolution of the policy of companies in the mining, oil and banking sector that would have "managed" their dividend payments, after a period when their dividends were low or non-existent". Another reason cited is the large technology companies that "are increasingly adopting a culture of paying dividends".


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Translation by Jules Letambour.


Read from top. Were you working for wages, you made nothing more — except loose traction...


first of april tax...

Context is everything when we come to view events in history, both recent and ancient. Working class writers and participants in struggle should always be encouraged to document their experiences lest the critical role played by ordinary people in the advance of society is forgotten, or more likely hidden. The Poll Tax revolt was a mass working class rebellion against a Prime Minister who had appeared unbeatable and unstoppable. She had been daubed ‘The Iron Lady' across Europe due to her reputation for fighting political foes domestically and internationally.


Mrs Thatcher became the UK's first female Prime Minister in 1979 on the back of significant industrial unrest caused by the sitting Labour Government's policy of wage restraint on lowly paid public workers who had no alternative but to fight for better pay. What became known as the ‘Winter of Discontent' over 1978-1979 was the breeding ground for Thatcher to portray herself as a ‘strong' woman who could sort out Britain's problems, particularly high unemployment. The poster that defined that election was ‘LABOUR ISN'T WORKING' with a long queue of people depicted outside an unemployment office. The official rate of unemployment was sitting at 6%.

Thatcher was a brutal monetarist who believed in cutting taxes for the rich and wealthy on the basis that some of the wealth created would eventually ‘trickle down' to the poor and low paid. It is a theory as robust as the tooth fairy tales but slick advertising and promotion convinced many it would work. Deciding to turn the UK from a manufacturer of goods into a supplier of services Thatcher began a de-industrialisation process that saw steelworks, shipyards, coal mines and car factories reduced in size and often closed. The Finance Capital wing of the Tory party was dominant. The market trading yuppies and expert sellers of stocks and shares were in the ascendancy. Lots of money was being made but nothing of value was being made [created].

READ MORE: UK Absolute Child Poverty Hits 3.7m Amid Brexit Chaos, Jumps 200,000 In One Year

From 1979 to 1982 Britain was subjected to a concerted policy of industrial vandalism under the cold and callous rule of Thatcher. The high unemployment of 6% in 1979 which gave rise to the ‘Labour Isn't Working' poster became mild compared to the 12% unemployment rate under Thatcher. She and her Government were increasingly unpopular and heading for electoral annihilation. They had fallen to only 30% support in opinion polls. Talk of deposing her from leadership of the Tories was open and constant. Then an Argentinian General struggling to stay in power domestically handed Thatcher the political lifeline she was desperate for.


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