Piketty Asserts the Logical Impossible

There are many ways in which Piketty is wrong. However, it seems nobody has noticed it is logically impossible for his primary empirical assertion to be correct. (There is no true a priori statements, but given that, I think the term can be re-purposed for things like this.)

As per the above link, GDP growth is asserted to be, rounded, 1% and return on capital is 5%. If this were true, non-capital forms of income would see decline, and hit zero quite quickly due to exponential compounding.

Say 50% of GDP is return on capital and 50% is other forms of income. Say GDP grows 1% and capital return is 5%, so capital amounts to 1000% of GDP. Let's just call it $1000 because why not. So GDP year 0 is $100.

Next year capital is $1050. GDP is $101. Capital return is still 5%, so $52.50. Call it 53.
Income is now $48. Capital is now $1103

GDP $102.01. Again I'll drop the cents from income and capital - $47 and $1158

GDP is $103.03 Income - $45 Capital - $1216

$104.06 || $43 || $1277

$105.10 || $41 || $1341

Etc. After only five years, income is now down nearly 20%. If population has grown, most would be dramatically poorer. In fact, everyone has been getting richer. Eventually income will hit zero, and capital returns will begin tanking. Though of course income = zero means everyone starves and the economy collapses entirely long before that.

Obviously this is slower if return on capital is a lower portion of total GDP, but it is logically impossible that return on ALL capital could be more than GDP growth for hundreds of years. If he hasn't fudged his numbers, all he's proven is that GDP is a worthless measure.

(Indeed it's slightly worse than this - if any of that income isn't spent, it becomes capital and reduces future income even further.)

So at 50%, non-capital income sees 3.3% decline.
Let's say capital is only 10%. $200.
$101 || $90.5 || $220.5

Income sees 0.6% growth in the first year. Capital is still, by definition, seeing 5%. Within decades non-capital income will stagnate. By year 10 it's already down to 0.3%. Imagine your final, year-65 retirement wage being less than 15% higher than your first job.

This non-capital decay only doesn't happen if capital is an utterly negligible part of the economy.

Unproductive Moral Fisking

This will learn me to stop clicking SSC links.

The consistently one attempts to adhere to an ideology, the more one's sanity becomes a series of unprincipled exceptions.

Neon Hillism: keep the exception and sacrifice the principle. It's not necessary to understand what you're doing all the time. If you can work out a new principle that doesn't fail, great. Otherwise, Accept your Ignorance. Hasn't failed on me yet.

In reality it’s pretty hard to come up with way of valuing animals that makes this work.

If by 'hard' you mean 'super easy.'
In fact animals have zero moral value. I still want them to not suffer, though. This value isn't in any way different from my value of not dying or finding ice cream tasty. The market will (eventually) provide an efficient balance of animal-not-suffering to ice cream once it is allowed to do so. That's what it's for. Just don't forget that animal suffering only has valence through the dire apes who care about it, which means it matters exactly to the extent the dire apes care about it.

But going from “just my community” to “also foreigners” is a difficult step that’s kind of at the heart of the effective altruism movement.

I have worked out what's wrong with this. It's basically statistical unsophistication. Not all cars are worthy transport, and it correlates weakly with firm and country of origin. Simlarly, not all people are worthy of concern, and it correlates weakly with ancestry and country of origin. Turns out this test is also super easy: will they show you reciprocal concern? If so, then be nice. If not, fuck 'em.

allowing starving Third World people into the circle of concern totally pushes out most First World charities like art museums and school music programs and holiday food drives. This is a scary discovery and most people shy away from it.

Which is fine, because it's wrong.
Letting die is not murder. My paragraph above is about who it's wrong to murder, e.g, not animals.
Who it's wrong to let die: anyone you've promised to not let die. Starving third-worlders can no more legitimately demand resources for free than anyone else. They claim they're starving? Fine, I claim to be a utility monster. "That's not reasonable!" Oh, we're using common sense now? (Special pleading.)
Further, as frequently demonstrated, first-worlders are quite willing to trade for resources on very favourable terms for the third-worlder. This would simply not be an issue if state coercion were not involved.

It is Gnon's judgement that third worlders will starve until they stop driving full tilt into starvation situations. Coercive first world aid cannot revoke Gnon's judgement, which is half the teleological reason it only ends up destroying local textile manufacturing, enriching revolting tyrants, and causing the AIDS plague.

No kind of free aid can revoke Gnon's judgement. Trade, however, can, though the intricacies of how this works are beyond the scope here. Though it's also relevant that if you were starving, no third-worlder would help you, even if they easily could.

I’d lend it to him, but I wouldn’t give him exactly half my money no-strings-attached on the grounds that he is exactly as important to me as I am.

Because you can't trust your brother as much as yourself. If he would likewise give you half his money, then there would be no need to keep separate bank account at all, as he would weigh his values exactly as heavily as yours. He won't, though, out of ignorance at least as much as out of selfishness and hypocrisy. This kind of principle only gives advantage to anyone claiming to be a utility monster.
Which I guess is fine. The utility monsters eat all the insane moral-signallers, then I hunt the utility monster, and sanity returns.

We can argue about what 'should' happen in this case as long as we like, but it won't change what will happen, which is Gnon will harshly judge anyone who treats the selfish as unselfish. The action symmetry is empirically not there.

my friends. We all raised a lot of money to help Multi

In case anyone thinks SSC is truly a symmetric, disinterested moralist, Multi has explicitly called for my death in particular. They are not banned from SSC, whereas I'm maybe one indiscretion away from being banned. Benefit of the doubt: not deserved.

I suppose, though, this is SSC insulting Multi and complimenting people like me. They are not a threat, no matter how vile their rhetoric. I am a threat, no matter how polite mine is. (It still encourages the vile.)

well, I know myself better than I know my brother, and I know Multi better than I know strangers, so I’m more effective

Compare to two quotes up, and remember the cowpox of doubt.

I don’t think I can make a principled defense of doing this. But I think I can claim I’m being unprincipled in a meta-consistent and effectively sanity-protecting way.

Turns out insane beliefs are sanity-destroying if you try to take them seriously. Who knew.
I dunno. If I found out one of my beliefs was paying 'rent' in the form of attacking my sanity, I would question its rationality. I mean, this is kind of an obvious reaction, right?