Parem delinquentis et suasoris culpam esse
from David Ruccio
The downward trend of labor’s share is not a recent phenomenon. It has been taking place (albeit not evenly or without disruption) since the mid-1970s.
Be that as it may, Paul Krugman now recognizes that the old storyline (of skills and education) no longer works to explain the obscene levels of inequality in the United States.
So the story has totally shifted; if you want to understand what’s happening to income distribution in the 21st century economy, you need to stop talking so much about skills, and start talking much more about profits and who owns the capital. Mea culpa: I myself didn’t grasp this until recently. But it’s really crucial.
Absolutely. We need to talk much more about profits and who owns capital. And, in addition, who appropriates and distributes the surplus and to whom that surplus is subsequently distributed. And then how they use that surplus to create the conditions whereby profits continue to rise and more capital deployed so that they get and keep even more profits.
Missing these elements of the story is not just Krugman’s mistake. The fault lies with an entire group of mainstream economists who assume—and, for generations, have attempted to persuade others—that the distribution of income corresponds to the choices people make, and that attempting to change the existing distribution of income would require changing human nature.