Untangling returns to labor and capital

Yves Smith in a recent post says about Piketty "It also ignores that capital goods have a large labor component, so untangling returns to capital v. labor isn’t set in stone either." This seems to be true and this is what Seth Ackerman addresses in the Jacobin article. His explanation is to forget about neoclassical explanations and go by data
 " the elasticity of substitution simply cannot be regarded as a meaningful measure of an economy’s technology (or anything else), or as providing any clue to its future.

What’s essential, rather, is Piketty’s empirical demonstration that the rate of return on wealth has been remarkably stable over centuries — and, contraSummers, with no visible tendency to vary in any consistent way against the “supply of capital.”"

Ackerman's interpretation towards the end is:

"Think about how r - g works: it increases the pace of wealth accumulation for capital income earners relative to labor income earners, for any given pattern of saving rates between the two groups. But the same logic can apply withinthe universe of labor-earners — that is, between the top earners (say, the top 1% or 5%) and everyone else. To the extent that the growth rate of labor income at the top exceeds that for the bottom — call it t > b — the relative pace of wealth accumulation for the top group will be faster than for the bottom (for any given pattern of saving rates). And as long as the children of top labor earners are disproportionately likely to become top labor earners themselves — which is true in spades — then top wealth will accumulate across generations, not just over lifetimes, and top labor earners will become not only high-paid “workers” but heirs as well.

On the surface, this dynamic differs from Piketty’s r > g scenario in that Piketty’s rentiers can be totally idle, rather than being worker-heirs. But if we admit that mores have changed, and that tomorrow’s heirs will most likely work even if they don’t “need” to, the distinction between r > g and t > bcollapses."