Continuing Conversation... Daron Acemoglu on Inequality, Institutions, and Piketty
By Amy Willis
Russ Roberts welcomed MIT’s Daron Acemoglu back to EconTalk, in an episode focused on the interplay between institutions and inequality.
Check Your Knowledge:
1. What does Acemoglu mean when he speaks of the “endogenous evolution” of institutions, and how does he claim that Thomas Piketty takes insufficient account of this in his analysis?
2. Toward the end of the episode, Roberts suggests that Karl Marx (and Piketty) are both guilty of “mean reversion,” or “Galton’s Fallacy.” What does this mean, and how does this help illustrate the importance Roberts and Acemoglu grant to institutions?
3. Acemoglu says there are four things wrong with Piketty’s r > g identity, which Piketty dubs the central contradiction of capitalism. What are these four problems, and to what extent do they refute Piketty’s claims?
4. Both Roberts and Acemoglu agree that focusing on the top 1% in discussions of inequality is faulty. Why? How do Acemoglu’s views on inequality differ from Roberts’s? With whom are you in more agreement, and why?
5. Roberts and Acemoglu have slightly different views on the contributions of American labor unions in the 20th century. In your opinion, have labor unions been a net positive or negative for workers? What evidence can you provide in support of your answer? Do you think the answer would be different depending on the time period under consideration?