Piketty’s Missing Knowhow
Thomas Piketty argues that, because the world’s rich countries are growing at less than 4-5% per year, they are becoming more unequal. But, because Piketty splits the world into two fundamental substances – capital and labor – his calculations miss the crucial role of knowhow as a source of capital accumulation.
CAMBRIDGE – Theoretical frameworks are great because they allow us to understand fundamental aspects of a complex world in much simpler terms, just as maps do. But, like maps, they are useful only up to a point. Road maps, for example, do not tell you current traffic conditions or provide updates on highway repairs.