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Thomas Piketty’s blockbuster Capital in the Twenty-First Century was followed by the publication of Capital and Ideology in early 2020. This paper looks at the differences between the two books, and provides an analysis and a critique of the main advances in the new book. First, Piketty drops r>g as an explanation for rising inequality. Instead, inequality is generated and constrained by economic power supported by an ideology. Second, there is a focus on the political consequences of inequality, including the rise of right-wing populism and the election of people like Donald Trump. Third, there is a new policy proposal-changes in corporate governance that gives labor and government seats on the Board of Directors of public corporations.

Abstract:This paper shows how cumulative causation supports Kaldor’s main policy proposals. Kaldor advocated an expenditure tax to encourage savings, which would lead to technological advancement, productivity growth, income growth, and more savings. Second, Kaldor argued that tax policy should favor the manufacturing sector. Because productivity growth is greater there, this would lead to greater aggregate productivity growth and income growth, which increases the demand for manufactured goods and leads to a virtuous cycle of growth and improved living standards. Finally, Kaldor used cumulative causation arguments against monetarism and to support an incomes policy to stop the inflationary wage-price spiral.

This paper examines Robert Heilbroner’s 1950 article in Harper’s Magazine on poverty in the USA. It argues that this piece was the first attempt to raise popular concerns about poverty in the USA after World War II, and in many ways sought to do what John Kenneth Galbraith’s The Affluent Society and Michael Harrington’s The Other America accomplished. Heilbroner was not successful in bringing the issue before poverty to public attention because he wrote at a time of great economic growth and at a time before TV brought images and ideas to a large fraction of the American public. He also wrote in a very conservative era, where McCarthyism reared its ugly head and where calls to eradicate poverty were met with intimations of a Communist conspiracy.