Reading the economy: From Harvey to Piketty

John Fram over at the Billfold provides a nice little introduction to Marxist readings on the state of the global economy. This part tying together David Harvey's The Engima of Capital and the Crises of Capitalism and Thomas Piketty's Capital in the Twenty-First Century is especially useful--plain and simple, too, without being simplistic:   

Harvey asserted theoretically in 2010 what Piketty has now asserted mathematically in 2014. When the economy is expanding at three percent (or the more common 2.25) those who have the money to get involved in the growth will do much better than the people in their employment. If you inherit, say, your father’s glove factory and $10 million in cash, and use that cash to open a second factory, even if you only net a profit of 2.25%, you’ll have $10,025,000 next year. In three years this factory will be making you $11 million a year. I think. As your income compounds, you can soon—by combining the income of your two factories and maybe an attractive low-interest loan—open a third factory. Soon you could open five. You could buy a stake in a new restaurant chain or buy some mortgage bonds. Eventually a broker will come knocking with news of a new investment scheme made possible by his friends in Washington that could provide returns of five, 10 or even 50 percent. Through a number of complex algorithms and workarounds, it is guaranteed to succeed. You’d be a fool to miss out on such an opportunity.

Granted, there is an element of risk involved, but provided you don’t invest too much of your father’s money into the system and overextend yourself, you could always just shut down a factory that isn’t turning a profit or close a few restaurants, at which point the newly unemployed workers are no longer your problem, but the government’s (though, theoretically, they could still be your problem by proxy, if you’ve been paying your taxes, but if you’re smart and have your company headquarters in Ireland, you haven’t been). And what does growth look like for your employees? A raise, the rate of which you, the owner of the factory, have set.

What's truly remarkable is that anyone finds this remarkable. I don't, and neither should you, dear reader.