PSI Special Report on TISA

From TISA vs Public Services
"There is a virtual alphabet soup of new trade and investment agreements under negotiation – the TPP, TTIP, CETA, PA, TISA and more. Despite the bewildering array of acronyms, all of these negotiations tend to pursue a similar, corporate-driven agenda. Each agreement becomes the floor for the next, in a state of perpetual negotiation and re-negotiation. Hard-won exceptions to protect public services or insulate financial services regulations from investor-state challenge, for example, become targets for elimination in the next set of talks. Moreover, this frenzy of negotiating activity remains cloaked in a veil of secrecy......With a stroke of pen, a single neo-liberal government can essentially lock all future governments into a policy straight-jacket " 
More on TISA from Yves Smith http://www.nakedcapitalism.com/2014/06/wikileaks-exposes-super-secret-regulation-gutting-financial-services-pact.html

TISA

From Wilileaks press release "Despite the failures in financial regulation evident during the 2007-2008 Global Financial Crisis and calls for improvement of relevant regulatory structures2, proponents of TISA aim to further deregulate global financial services markets. The draft Financial Services Annex sets rules which would assist the expansion of financial multi-nationals – mainly headquartered in New York, London, Paris and Frankfurt – into other nations by preventing regulatory barriers. The leaked draft also shows that the US is particularly keen on boosting cross-border data flow, which would allow uninhibited exchange of personal and financial data.

TISA negotiations are currently taking place outside of the General Agreement on Trade in Services (GATS) and the World Trade Organization (WTO) framework. However, the Agreement is being crafted to be compatible with GATS so that a critical mass of participants will be able to pressure remaining WTO members to sign on in the future. Conspicuously absent from the 50 countries covered by the negotiations are the BRICS countries of Brazil, Russia, India and China. The exclusive nature of TISA will weaken their position in future services negotiations."

The release links to other documents including  http://www.ourworldisnotforsale.org/en/article/international-trade-services-agreement-tisa-why-proposed-free-trade-agreement-fta-services-d and

http://www.world-psi.org/sites/default/files/documents/research/en_tisaresearchpaper_hqp_internal.pdf

A Jogini in a Pakistan film?

It still seems prevalent in some southern states of India and Nepal. Some gruesome videos on YouTube.

Shift from growth paradigm?

May be a bit. 'Does culture matter for economic growth': Discussion in Economist's View.

Aljazeera article on marriage inGarasia tribe

Marriage an alien notion for Indian tribe :"Members of the indigenous Garasia tribe in the northwestern state of Rajasthan have been cohabiting in live-in relationships outside wedlock since time immemorial.

Social scientists studying the arrangement - called dapa and recognised through formal rituals - point to a low incidence of rape and dowry deaths in these communities where women retain a high status.

"These tribals, whose livelihood depends on farming and working as labour, marry their live-in partners only when they have sufficient money," said Shahid Pathan, a journalist who has gained an understanding of indigenous customs in the Kotra area.

"Needless to say, that happens much later in their lives, and in absence of money they continue living together for several years and even become parents without the fear of bearing a child out of wedlock."

Joint wedding

It was surprising for many visitors to the wedding of 70-year-old tribal Naniya Garasia to his 60-year-old live-in partner Kaali to discover that not only were his grandchildren present but also his three sons - Mugla, 50, Gana, 40, and Shankar, 35."

May be one way out of sexual violence problems is freer intermingling of sexes. An eye witness account earlier Alternate sexuality traditions 4: Garasia tribe

Pranab Bardhan reviews Piketty

and discusses the Indian case which is not much discussed in the book: Capitalist Dynamics and Plutocrats (EPW articles are available free on line for four weeks after publication)

The role of housing in the capital to income ratio

From The Economist Housing in the twenty-first century: "In my view, for example, one of the main contributions of the book is a mental framework, scrutable to the layman, for assessing how particular economic changes might influence the distribution of wealth......Part of the attraction of Mr Piketty's framework is that it leaves one free to make up one's own mind about what is likely to happen.....
The question I have raised is whether the importance of housing to Mr Piketty's story is a strength or, as some critics suggest, a weakness, possibly fatal. The housing critique, if I've understood it correctly, is as follows. Quite a lot of the recent rise in the ratio of national capital to national income can be attributed to growth in housing wealth; in some economies, like France, housing is basically the whole story. What's more, quite a lot of the rise in housing wealth is down to growth in housing values, and quite a lot of the growth in housing values can be attributed to restrictions on housing supply growth. What we're left with, then, is a mechanism for rising wealth inequality that does not seem to have much to do with the rate of return on capital r holding steady as the economic growth rate g falls.....Over the last few decades technological changes have greatly increased the return to locating in large cities filled with skilled people. Being in such places makes workers more productive and raises the income they are able to earn. But skilled cities have not allowed housing supply to expand to meet rising demand. Housing has therefore been rationed by price, pushing less productive workers toward cities where housing supply growth is higher and housing cost growth is lower. As a result, fewer people live in the most productive places, and quite a lot of the gain from employment in productive places is captured by landowners earning rents thanks to artificial housing scarcity. This may mean lower overall productivity, more income inequality, and more income flowing to capital rather than labour....I think economists want to read the book, and particularly its analytical framework, much more narrowly than is appropriate. They want the mechanics to be pinned down by a particular set of equations that can be understood to contain the entirety of the book's argument. But the book is a sweeping narrative about the relationship between wealth and labour over very long periods of time! There is a reason he didn't just scratch out a few equations and submit it to a journal for publication. "
And more.

Trading one capital for another

"Piketty may be right about the long-run evolution of the capital-income ratio β. Since 1970, the slow growth relative to savings in rich countries may have led to substantial accumulation of capital relative to income. But as my estimates for the trend in s*/g* show, this wealth has been amassed over the past 40 years through considerable depreciation of valuable energy, mineral and forest resources. In a sense, these economies have traded one form of capital—the earth’s riches—for another—human riches." - See more at:http://triplecrisis.com/natural-capital-in-the-twenty-first-century/#more-9953"

Forgotten singers: Rohini Roy and Mohantara Talpade

Joshua Gans on disruptive innovations

Joshua Gans on disruptive innovations "Instead, the focus on the doomed incumbent leads Christensen away from the obvious alternative. The incumbent should ‘wait and see.’ They will see all manner of potentially disruptive technologies being deployed and instead of removing them from their radar as irrelevant, they should continue to monitor them to see what happens. Because, when the one in ten or a hundred or whatever turns out to be successful, they can then move to acquire them and realise a more ‘orderly transition’ to the new technology. Indeed, as I read Lepore, I got the sense that even with Christensen’s iconic examples, the end result was incumbent preservation through acquisition."
P.S. More recent article (behind a firewall) by Clayton Christensen discussed in Daily Kos

Ae ri maito prem divani from Nau Bahar (1952) elsewhere

Several versions which come through out the film.https://youtu.be/iKMucBXstlQ

And many more by Geeta Dutt, Juthika Roy and others on YouTube.

Arvind Subramanian's reading list on development

http://www.cgdev.org/sites/default/files/development_reading_list_topic-wise_may_2014%20%282%29_0.pdf (via Chris Blattman)
I would add (at least)
Joe Studwell: How Asia Works
Marc Becker: Pachakutik
Shiva Naipaul: North of South
James Macdonald's "A Free Nation Deep in Debt: the Financial Roots of Democracy"
Glenn Davis Stone articles
Perhaps UNCTAD reports
and of course Michael Mann 'The Sources of Social Power'

More links

Telsa blog All our patents belong to you
Chile rejects $8 billion dam project in Patagonia
The French are right: tear up our public debt- most of it illegal anyway
(A 2006 discussion about public debt Economics and Democracy: key quote:
 "Given the simplicity and power of this argument, one reads the epilogue of this great book with surprise and sorrow. In MacDonald’s view, it’s all over. In the nuclear age, deficits and bond drives on the world-war scale are history, and the American citizenry has lost its pride of place as creditor of the American state. Today, financial intermediaries hold about 37 percent of U.S. public debt; Japan and China, along with other countries, now hold about 30 percent. The proportion of U.S. debt owned directly by Americans has fallen to below 10 percent; in 1945 (when the debt was more than twice as large in relation to GDP as now) citizen-creditors just about held it all. He concludes that the link is broken and "for all practical purposes, the venerable marriage between public credit and democratic government, so vital a factor in the history of the world, has been dissolved." ..."
We'll all be dying in debtor's prisons soon
South-east England, offshore financial centre

Links

Barry Ritholtz on June 4th  Top economists say that war is bad for economy
Tyler Cowen The lack of wars may be hurting economic growth
Dean Bakeron June 14th Does the right hold economy hostage to advance economic agenda? and discussion at Economist's View
Ismael Hossein-Zadeh A world war between classes not countries "A brief look at recent schemes of regime change in countries like Iraq and Libya, on the one hand, and Ukraine and Iran, on the other, can help an understanding of when or where the imperialist powers resort to direct military action to bring about regime change (as in Iraq and Libya), and where or when they resort to "soft-power" tactics to achieve the same goal, as in Ukraine and Iran."
Tony Cartalucci America's covert re-invasion of Iraq "It is a defacto re-invasion of Iraq by Western interests – but this time without Western forces directly participating – rather a proxy force the West is desperately attempting to disavow any knowledge of or any connection to. However, no other explanation can account for the size and prowess of ISIS beyond state sponsorship. And since ISIS is the clear benefactor of state sponsorship, the question is, which states are sponsoring it? With Iraq, Syria, and Iran along with Lebanese-based Hezbollah locked in armed struggle with ISIS and other Al Qaeda franchises across the region, the only blocs left are NATO and the GCC (Saudi Arabia and Qatar in particular)."
Haroon Khalid says "Yet the link in parts of Pakistan between the practice of Sufism and feudalism’s great injustices remains unacknowledged. Most of the Pirs in this part of Pakistan are also the feudal lords of their area. Many have capitalised on the international sentiment against puritanical Islam and positioned themselves as a counterpoint to its growth, even promoting their business interests in this manner." He is the author a book " A White Trail" about minorities in Pakistan. More on his timeline.
In a cricket article 'Murder in Multan' I find this " "In early days of the city, Multan had supposedly been home to the famed Prahladpuri temple, dedicated to Prahlad of Hindu mythology. According to the legend, Prahlad’s father, the asura king Hiranyakashipu, had been killed by Vishnu who had from inside a pillar, in his man-lion avatar known as Narasimha." See also Sehwag scoring his first 300.
Scientists have discovered vast water reserves near Earth’s mantle, a finding that could reshape our understanding of where Earth’s water came from.
The psychology of your future self by Dan Gilbert

Nur Jahan and Lata Mangeshkar

In an interesting article on Nur Jahan, Professor Ashraf Aziz says "Following Independence in 1947 – on both sides of the Indo-Pak border – two great female vocalists, Noor Jahan and Lata Mangeshkar, would sing of the broken promise of greater freedom for women (and most men) in their respective countries. In Pakistan Noor Jahan was singing Jigar ki aag mein is dil ko jalta dekhte jao (Dupatta, 1955) while in India Lata Mangeshkar asked Ab mera kaun sahaara? (Barsat, 1949)." The article has a nice photograph of Nur Jahan with Bade Ghulam Ali Khan, where Nur Jahan actually looks slim. I think Professor Aziz is probably reading too much into the events to link them with various type of liberation. But both the songs are quite nice. The first by Nur Jahan

And Lata's song

Three versions

Telugu version by T.S. Bhagavathi and P.Susheela

Tamil version (probably the original) by M.S.Rajeswari and T.S.Bhagavathi

Hindi version by Geeta Dutt and Lata Maneshkar
Hindi version seems a bit different. I think Lata Mangeshkar and T.S.Bhaavathi sang for Vyjayanthimala.

Modi's first international task?

From The Hindu WTO: Modi banks on BRICS:
"The Modi government’s first major international crisis is brewing at the World Trade Organisation (WTO) talks in Geneva, where even six months after the Bali ministerial conference, the United States has not allowed progress on talks to ensure permanent protection to India’s food subsidies from WTO caps."
C.P. Chandrasekhar in No help from abroad
 " With India’s integration with the global economy through trade and investment flows having increased significantly over the last quarter of a century, the days when domestic economic performance was relatively insulated from global trends are over. " 

Keynes in Globalization and self-sufficiency (1933):

"Ideas, knowledge, science, hospitality, travel – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.
For these strong reasons, therefore, I am inclined to the belief that a greater measure of national self-sufficiency and economic isolation among countries may tend to serve the cause of peace, rather than otherwise."

Real Economy

There is real economy somewhere Too few brickies

One more reason to preserve coral reefs.

 "But corals are actually more similar to humans in multiple ways, and flies and worms turn out to be very strange animals.” says Ed Yong 

Russia, China have their sights set on undercutting dollar’s dominance as reserve currency,

but economists are sceptical says Michael Pizzi in Aljazeera America. Patrick Young earlier:
"The singular superpower era has been fuelled by an American economy benefitting from “dollarization”. Global reserve currency status has hugely fuelled America’s ongoing experiment in "government by irrational exuberance." Washington has grown addicted to borrowing cheaply, exploiting its reserve currency to spend liberally on all vestiges of government. Thus the powerhouse private economy of the United States runs parallel to a massively inefficient government spending machine. Being a reserve currency has multiple benefits - other nations habitually trade in dollars thanks to global benchmarks. Hence, oil, gas and indeed illicit narcotics are all traditionally priced in the dear old greenback. Surplus dollars often find their way back to the USA and end up holding US Treasury Bonds - the debt which feeds big government.
......
While the US dollar epitaph has been written many times, it still isn’t imminent. However, a dollar centric era is clearly coming to an end. Despite the ongoing failure of the political euro to be recognised as a valid reserve currency, US dollar threats are emerging rapidly - free floating bitcoin, rubles and yuan can all become significant competitors to the greenback.
.... 
QE is akin to another reserve currency trait, known in the economics fraternity as “exorbitant privilege.”For the US to pay bills, it can just print more cash and satisfy any debt denominated in dollars. The increasingly integrated global economy has enabled Washington to abuse exorbitant privilege at a scale unknown to previous reserve currency nations such as Imperial Britain."
P.S. C.K.Liu in 2008 "Workers all over the world are oppressed victims of dollar hegemony, which turns the labor theory of value up-side-down. " http://www.atimes.com/atimes/China_Business/JG30Cb01.html

Another quote from Ha-Joon Chang

".. if you read only things like 'The Economist' and 'The Wall Street Journal', you would only hear about Singapore's free trade policy and its welcoming attitude towards foreign investment. This may make you conclude that Singapore's economic success proves that free trade and the free market are the best for economic development- until you also learn that almost all the land in Singapore is owned by the government, 85 percent of housing is supplied by government-owned housing agency (the international standard is about 10 percent). There is no single type of economic theory- Neoclassical, Marxian,Keynesian, you name it- that can explain the success of this kind of combination of free market and socialism."

Reading Ha-Joon Chang

"In his 1724 book ''A Tour Through the Whole Island of Britain' Daniel Defoe, the author of 'Robinson Crusoe', expressed delight in the fact that in Norwich, then a centre for cotton textiles, 'the very children after 4 or 5 years of age could everyone earn their own bread' thanks to the 1700 ban on the import of calicoes, the then prized Indian textile." from Chapter 2 of Ha-Joon Chang's introduction to economics. Only difficulty so far: he suddenly started using TWON without any explanation. I think that he is referring to 'The Wealth of Nations'. Interview here.
P.S. A friend suggests that it may be Vali-Sugriva story

Which Hanuman story is this?

https://www.youtube.com/watch?v=uairvH8LL-U

Forgotten composers: Iqbal Qureshi

More about him here.

From Babul (1950) with English subtitles

https://www.youtube.com/watch?v=GXFURlgbMF0

A common mistake in reading Piketty

Many seem to use the rate of return on capital to calculate the next year's wealth. I made the same mistake until I came to page 351 in Piketty. From Piketty and Zucman's paper, it is calculated as follows.
Wealth next year W_(t+1) is calculated from wealth this year W_t by the formula W_(t+1)=W_t (1+s/β) assuming that there is no capital gain or loss, where s is the savings rate and β the capital to income ratio. So wealth does not grow exponentially as some have been saying.  Suppose β=7 (sometimes Piketty writes this as 700%), current income 200 units so that , W_t is 1400,  s is 10%, and growth rate g=2%. We have the current income which  is 200 which goes to 204, the next year. Savings 20 is added so that W_(t+1) is 1420=1400(1+10/100times1/7)=1400(1+1/70)=1420 as it should be. So the next year  β goes down. On the other hand,  if  β=3 with others s,g the same, then income still goes from 200 to 204, W_t goes from 600 to 620, so now β  is slightly bigger than 3. In both cases, income grows at the rate of 1/50, but in the first case wealth grows at the rate 1/70 where as in the second case, it grows at the rate of 1/30. If s, g remain the same, in the long run  β converges to 5, assuming various conditions are satisfied through out. In any case, it is only a rule of thumb to see the direction of β under various restrictions. see also Dan Kervick's post (he says that he will have an update along the lines of his comment here. See also Seth Ackerman's comments on aggregate production functions and elasticity of substitution) 
http://ruggedegalitarianism.wordpress.com/2014/05/28/lets-end-the-confusion-over-pikettys-second-fundamental-law/ 
P.S. I made this comment (upto the links) in Naked Capitalism. Here is a response from one Paul Boisvert which explains better.

Hi, Gaddeswarup,

No need for corrections, you have it precisely correct!

The mistake you refer to (that of confusing the rate of return to capital with the rate of growth of capital), from which you no happily longer suffer, is (obviously) easy to make, since some very bright people have made it. To avoid it, one need only remember that owners of capital spend much of their return from that capital on consumption–they don’t save all of it as new capital. Moreover, those with no capital in January may save some of their labor income during the year, and thus own some (new) capital when December rolls around.

Thus, capital increases each year due to various people (owners of capital and owners of labor power alike) saving some (not all) of their income–but “r”, which refers only to the rate of return on previous capital, doesn’t indicate by itself how capital is growing. To know the latter fact, one also needs to know how much new income was created by labor and how much of all income was saved (became new capital.) These two additional factors, represented by g and s, together with r, determine the trend (towards some stable ratio of income from capital to total income) that Piketty analyzes mathematically, and which you have correctly captured in your comment.

Again, this doesn’t mean Piketty’s overall take is valid, or even relevant–it just means that there is no reason to believe that he made an elementary math mistake in his model, or that the fact that r could be greater than g for a long time leads to absurdities or infinities. Neither belief is warranted in the slightest. If one wants to critique Piketty, one has to do it on grounds other than that r > g leads trivially to mathematical fallacies.

Two recent articles of Glenn Davis Stone

I was not aware of this aspect, the role of Ayurveda and Kerala Chief Minister in blockin BT brinjal
The Trials of Genetically Modified Foods by C. Kudlu and G.D.Stone. Abstract:
"Although planting of genetically modified (GM) crops has topped 148 million ha. worldwide, direct consumption ofGMfoods remains extremely rare. The obstacles toGM foods are highly varied and they can provide windows into important cultural dynamics. India’s heated controversy over its would-be first GM food—Bt brinjal (eggplant)—is driven not only by common concerns overtesting and corporate control of food, but by its clash with the Ayurvedic medical establishment. GM brinjal may outcross with wild relatives commonly used in Ayurvedic medicine, and claims that outcrossing would not affect medical efficacy miss the point. Ayurveda emphasizes polyherbal treatments and has developed an epistemology oriented towards complex combinations of compounds. As such it does not recognize the authority of specific studies of transgene effects. The conflictis notwith genetic modification per se, but with the reductionism that is central
to the biotechnology approvals process. This opposition has played a significant role in the government moratorium on the plant."
But now, it has entered Bangladesh through USAID.
The second about the herd behaviour of Warangal BT cotton farmers in seed selection in the face of unknown technology Rhythms of the herd: Long term dynamics in seed choice by Indian farmers by Stone, Flacks and Diepenbrock. But as the authors note, there is an exceptional case in Gujarat described earlier by Stone(See also the Salon article Andrew Leonard The Napster pirates of trangetic Biotech). More article by Glenn Davis Stone on these topics at http://artsci.wustl.edu/~anthro/blurb/gds-abridged.htm

Gaming Democracy

“Gaming Democracy: Elite Dominance during Transition and the Prospects for Redistribution” is summarized here by the authors. From the summary
 "Democracy can, under the right conditions, be the great equalizer. We find that democratization induces greater redistribution when transition occurs in the wake of revolution or, alternatively, when elites are unable to impose a constitution that persists after transition. In short, this occurs when elites are weak on the eve of democratization. "
Towards the end of the summary:
"These forms of elite influence can choke off egalitarian policies even in well-established democracies such as the United States and Great Britain that democratized gradually and were never quite able to tame the disproportionate power of elites. Recent work by Gilens and Page makes this point abundantly clear – even going so far as suggesting that the United States looks more like an oligarchy in democratic clothing."
This seems fine as far as it goes. But we have now news that inequality in Sweden is increasing. The problem seems to be in a globalized world, every country will be buffeted by the dominant global forces. Competition, global supply chains, dollar as reserve currency, economic sanctions etc force other nations to tow the line. But thanks to Piketty, the literature on inequality seems to be getting noticed. Hopefully, the fact that the American middle classes are not doing as well as before, the rapprochement of Russia and China may slowly lessen the US influence and the currently dominant ideas of growth and exports. It is possible that elites in some countries may try to milk both sides like before but that may be difficult since both sides seem somewhat broke now.

Links

Bad Science "Not only do patents push higher prices onto consumers, they burden the research world with the increased costs of paying for the intellectual property needed to do further research. Research labs have to pay thousands of dollars for the strains and processes needed to build upon current developments, adding more costs to cutting-edge research."
2008 crash rescued Marx from the dustbin?
On higher education and inequality by Matt Bruenig. Lant Pritchett earlier in the context of developing countries.
Eulogy for NHS
Ed Yong on microbiological age
GM eggplants in Bangla Desh
An earlier post on BT brinjal

How to understand Piketty

Read Yourself says Cason Reily. I read but there were several points not too clear and reviews helped. Off and on he seems to use neoclassical economics and whether these confirm his data is not clear to me. Right now there is a debate going on about his second law. I found Seth Ackerman's review (and summary by Steve Roth) interesting in this respect. He believes the data, doubts the models (not even wrong) and reinterprets Piketty's conclusions. That is as far as I got and am still struggling to understand the significance of the second law and how it is used. At the moment, the explanation of Dan Kervick (the first comment in Brad DeLong's post) seems fine to me.

Patent medicine

From Bad Science by Llewllyn Hinkes-Jones "Not only do patents push higher prices onto consumers, they burden the research world with the increased costs of paying for the intellectual property needed to do further research. Research labs have to pay thousands of dollars for the strains and processes needed to build upon current developments, adding more costs to cutting-edge research."

Matt Bruenig on higher education and inequality

He is not convinced that higher education contributes the reduction of inequality. In the context of developing countries, Lant Pritchett says that the opposite is true:
"Education and technology aren’t the answer

One common belief among people working in international development is that a poor country can be changed by improving its education system, but Pritchett’s research suggests otherwise. The problem in poor countries is that they cannot make effective use of their people’s skills, Pritchett said, so giving them more skills does lead to development. Counter-intuitively, his research has shown that countries whose education system improves actually grow slower on average. He suggests that one reason for this may be that putting more educated people into a corrupt bureaucracy may result in more sophisticated corruption."

A recent article on subsidiarity

During the agitation for Telangana state 'Law and other things' had a few articles on 'subsidiarity'. One of the key articles linked is by N.W.Barber is behind a pay wall. Here is a new article and a passage from it "This difference does not just lie in the Catholic model’s attempt “to determine the bounds of the private sphere,” and the European model’s concern about “the allocation of power within the public sphere.” Rather, as N. W. Barber thoughtfully elaborates, the fundamental difference lies in the fact that the Catholic model does not address the procedural question of power
allocation at all: “there is always a right answer” requiring that “power be allocated to the correct institution.” In sharp contrast, under the European principle of subsidiarity, “centralizers must show that power can better be exercised by the Community, and that this improvement in efficiency is sufficient to warrant the shift”"
 According to the Wikipedia article:
"Subsidiarity is an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. The Oxford English Dictionary defines subsidiarity as the idea that a central authority should have a subsidiary function, performing only those tasks which cannot be performed effectively at a more immediate or local level. The concept is applicable in the fields of government, political science, cybernetics, management, military (Mission Command) and, metaphorically, in the distribution of software module responsibilities in object-oriented programming (according to the Information expert design guideline). Subsidiarity is, ideally or in principle, one of the features of federalism, where it asserts the rights of the parts over the whole.
The word subsidiarity is derived from the Latin word subsidiarius and has its origins in Catholic social teaching (see Subsidiarity (Catholicism)).[1] The concept or principle is found in several constitutions around the world (see for example the Tenth Amendment to the United States Constitution which asserts States rights.
It is presently best known as a fundamental principle of European Union law."

Rajiv Sethi discusses Piketty

Plots and Subplots in Piketty's Capital. I take part in the discussion but it did not lead anywhere.

Property owning democracy

"What, then, makes property-owning democracy distinct from welfare state capitalism? The distinction is to be found in the relative weight accorded in importance to “after-the-fact” social transfers relative to alterations in the distribution of property in achieving a relatively egalitarian economy. Welfare state capitalism aims at providing an economic baseline as well as certain public goods (education, health care, housing) to all citizens; this is achieved primarily through redistributive taxation (what Rawls terms transfers). Property-owning democracy also aims to provide an economic baseline to the “least well off,” but it has a further goal as well: preventing large concentrations of wealth and dispersing ownership of property as widely as possible. One might say that welfare state capitalism simply wants to provide a social baseline at the bottom, whereas property-owning democracy also wants to put limits on accumulation at the top, thereby narrowing overall inequality from both directions (top and bottom). Moreover, property-owning democracy is also concerned to engage in redistribution in additional dimensions: i.e., not just the redistribution of income characteristic of welfare state capitalism, but also the redistribution of wealth and capital assets (as well as ensuring a more equitable distribution of human capital)" from Property-Owning Democracy and Demands of Justice via Dan Little posts.

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."

I guess that does it

From Huffington Post:
"The report's authors, led by Ajay Singh Kapur of Merrill Lynch Hong Kong, brushed off a recent Financial Times critique of Piketty's work that questioned some of his data choices and basically accused him of making stuff up. Piketty has answered those charges, mostly to the satisfaction of other economists. And very few people (aside from critics on the right and maybe at the FT) question Piketty's vision of rising inequality. Not even Merrill Lynch doubts it.

"We are aware of the controversy over Piketty’s math (see the FT Money Supply blog), but are generally comfortable with the thrust of his analysis, having read his 577-pager, looked at his (problematic) spreadsheets, and cross-checked his data with alternative, credible sources," the authors wrote. "His questionable assumptions do not detract from the power of his thesis."

Merrill Lynch made this chart, using Piketty's numbers, predicting that wealth will rise much faster than economic growth in major economies all over the world:"

Robert Frank on Plutonomics

A 2007 article Plutonomics:
"Ajay Kapur, global strategist at Citigroup, and his research team came up with the term “Plutonomy” in 2005 to describe a country that is defined by massive income and wealth inequality. According to their definition, the U.S. is a Plutonomy, along with the U.K., Canada and Australia.

In a series of research notes over the past year, Kapur and his team explained that Plutonomies have three basic characteristics.

1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.

..........

Yet he maintains that the “the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years.”"

So Ajay Kapur was there before Piketty.

Check also this review of Plutocrats in FT mentioned earlier.

Plutonomy memos

I have posted a report about them earlier. Doug Henwood has an update and links to this Bank of America Merryl Lynch is 'comfortable with the thrust' of Piketty analysis. Earlier reports and the recent one seem to be by Ajay Kapur. In Doug Henwood's words "Business Insider has a write-up of a BoA Merrill Lynch report that declares that, the FT’s quibbles aside, Thomas Piketty is essentially right, and the super-rich is where the action is, so invest accordingly. "
A longer report in Huffington Post
More at Washington Center for Equitable Growth

Stipends for the poor

From What Happens When Poor receive Stipends? (via Miles Kimball):
"So when, in 1996, the Eastern Band of Cherokee Indians in North Carolina’s Great Smoky Mountains opened a casino, Jane Costello, an epidemiologist at Duke University Medical School, saw an opportunity. The tribe elected to distribute a proportion of the profits equally among its 8,000 members. Professor Costello wondered whether the extra money would change psychiatric outcomes among poor Cherokee families.

When the casino opened, Professor Costello had already been following 1,420 rural children in the area, a quarter of whom were Cherokee, for four years. That gave her a solid baseline measure. Roughly one-fifth of the rural non-Indians in her study lived in poverty, compared with more than half of the Cherokee. By 2001, when casino profits amounted to $6,000 per person yearly, the number of Cherokee living below the poverty line had declined by half.

The poorest children tended to have the greatest risk of psychiatric disorders, including emotional and behavioral problems. But just four years after the supplements began, Professor Costello observed marked improvements among those who moved out of poverty. "

And more from that study and other studies.

Whither Piketty?

It seems to me that Piketty's work may peter out in a morass of neoclassical reviews. The reason may as Ackerman points "At the heart of the neoclassical apparatus lie the twin concepts of marginal productivity and the aggregate production function (more on these below), and as Thomas Palley has written, when it comes to these totems, “you are either in or out.” " A review of Felipe and McCombie book on aggregate production function says, "‘This is an extremely important and long-awaited book. The authors provide a cogent guide to all that is wrong with the theory and empirical applications of the discredited notion of an aggregate production function. Their critique has devastating implications for orthodox macroeconomics.’" This seems to be where the problems are which are not mentioned in the reviews by conventional and powerful economists like Krugman and Sumners.
P.S. There is a discussion of Ackerman review in the latter comments of the CT post Political economy is political.

On the 'aggregate production function'

'Not Even Wrong' says this book by Jesus Felipe and John McCombie. The above link includes some reviews. Apparently this explains some of the discrepancies in the theory and emperics which Piketty outlines. The book is expensive but looking for extracts from it, I found that it is available for free reading  in some places (strangely in some Jesus files http://ebookspdfs.org/download/jesus-the-healer-e-w-kenyon ).

Two on sanitary facilities

From BBC News Why India's sanitation kills women "The gruesome rape and hanging of two teenage girls in the populous Uttar Pradesh state again proves how women have become the biggest victims of India's sanitation crisis.

The two girls were going to the fields to defecate when they went missing on Tuesday night." (via J.K. Mohana Rao)

From Scroll.in via Shivam Vij A new explanation for the child mortality puzzle among Muslims: open defecation "Hindus are, on average, richer and more educated than Muslims. But oddly, the child mortality rate for Hindus is much higher. All observable factors say Hindus should fare better, but they don't. Economists refer to this as the Muslim mortality puzzle.....They found that Muslims, regardless of income, were 20% more likely to use toilets than Hindus."

Cancer treatment?

A relative says that this worked for them (apparently free. To begin with, there is deposit which is returned at the end of the stay of 11 days) Dhariwal Cancer Hospital.

Steve Roth on Seth Ackerman on Piketty

From Angry Bear "I’m stunned by how good the new Jacobin piece by Seth Ackerman is: “Piketty’s Fair-Weather Friends.” It gives what I find to be the best understanding so far of the whole Piketty “think space.” "
I agree. Here is Seth's article at Jacobin.
I have also liked articles by Michael Hudson and Matt Bruenig. But probably Seth Ackerman's article does it for now.
P.S. An excerpt from Seth Ackerman's article"
"The statistical image that emerges from these numbers is neither Piketty’s vision of rising returns to “capital” as such, nor Krugman’s picture of an increase in returns to managerial “labor.” Rather, we see the burgeoning of a general surplus: an excess of national income over and above what’s needed to pay the nation’s non-managerial workers, appropriated broadly by all those who control capital — whether as shareholders, managers, or financiers............
Note the sheer size of the shift in this chart: had it not occurred, the average non-managerial worker’s compensation would be more than 20% higher today."
P.S. There is some discussion of Seth Ackerman's review in the comments in a CT post.