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I'm not sure I understand how this would work.
In what he calls capital, you find land and government bonds. These would not require any energy or manhours, would they?

I feel that something like productivity of the capital may be interesting. Very hard to measure, of course, but at the point where I am in the book it seems that Piketty just assumes it's pretty much 5% of its market value all the time (as a long run average at least), which would then make it somewhat tautological. But even if true (which I doubt to some extent), it may be 5% because it's heavily taxed and thus its market value drops, or because it's not taxed and the long-term market value would be very high.
You'd have very different societies in either case. And probably different growth and savings trajectories -and they have a major impact on the capital to revenue ratio in the long run of course.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Apr 12th, 2014 at 03:08:34 AM EST
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Well, it depends on what he uses the sum of capital for. I was thinking along the lines of problems with estimating value over time. So if you sum it up at market value and translate into man-hours at going rate, it doesn't change a thing at a particular point in time but if you look at time series it could make a difference. But then again if he just assumes 5% without checking if that holds, then I might be trying to answer something else then what he is writing about.

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by A swedish kind of death on Sat Apr 12th, 2014 at 04:41:32 PM EST
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Actually no, he does check it later in the book -although the values are uncertain, as I keep getting the impression that some of the costs of ownership are forgotten (but maybe also some of the benefits).

I now understand what you meant. I guess it could help in some ways, although you'd still have the problems of some countries having a lower market value, but in fact at least as much capital (indeed he gives an example of just that, when agricultural land was plentiful but almost free in the early USA).

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Apr 12th, 2014 at 05:58:16 PM EST
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