Memes

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.