≡ Menu

Quotation of the Day…

… is from page 29 of Eamonn Butler’s superb 2018 monograph, An Introduction to Capitalism:

The idea that capital is a permanent asset, which provides its lucky owners with a continuing stream of effortless benefits – like apples falling off a tree – is also mistaken. In fact, capital takes time, money and effort to preserve. It must be maintained and protected. And to keep its value in a changing and competitive world, it must be applied with constant diligence and focus.

DBx: This truth is so obvious that an explicit statement of it, to an audience of adults, ought not be required. And yet – amazingly – the theory that motivates Thomas Piketty’s 2014 Capital in the Twenty-First Century completely rejects this truth.

Let me over-belabor the obvious. The incessant clamoring of business owners (“capitalists”) for government-supplied protection from foreign competition – and these business-owners’ claims that free trade will destroy their firms – is evidence about as powerful as economic evidence ever gets of the deep error of those who, like Piketty, believe that the value of, and returns to, capital grow automatically and without any effort, creativity, and risk-taking by “capitalists.”


Next post:

Previous post: