Piketty’s (r−g) Law Is Pareto’s Law: ‘Bad Faith’ in the Analysis of Income Inequality?

Jill Trinh and Michael McLure

History of Economics Review, 2021, vol. 80, issue 1, 2-17

Abstract: On the face of it, Pareto’s law and Piketty’s (r – g) law are inconsistent, with Pareto arguing that real per capita economic growth is the solution to the problem of income inequality and Piketty arguing for redistribution to be funded from a wealth tax. In this paper we make three contributions. First, we establish that Piketty’s and Pareto’s laws are essentially the same economic law when the same definition of inequality is adopted by the two scholars. Second, in highlighting the relationship between Pareto’s α and Piketty’s (r – g) is monotonic, we show that Piketty’s criticism of Pareto for assuming a constant α across the income range would also apply in similar measure to his own (r – g) law. Third, given the essential equivalence of Pareto’s law and Piketty’s (r – g) law, we reflect on Piketty’s curious accusation that Pareto undertook his analysis of the relationship between α and inequality in ‘bad faith’.

Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10370196.2021.1949171 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rherxx:v:80:y:2021:i:1:p:2-17

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rher20

DOI: 10.1080/10370196.2021.1949171

Access Statistics for this article

History of Economics Review is currently edited by John Harry Bloch and John Hawkins

More articles in History of Economics Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().