Piketty argues that if r > g, wealth will accumulate into fewer and fewer hands over time. R is the rate of return of capital (rents, stocks, bonds, etc) and g is the growth of the economy over time.

If the economy grows at a higher rate than the rate of return, the pie gets bigger at a higher rate than wealth can concentrates. If the rate of return accumulates capital at a higher rate than the growth of the economy, wealth will inevitably concentrate over time.

He uses a lot of examples and economic history to argue that r > g, except for a few small periods. I think given the amount of wealth concentration we are seeing, and the political effects thereof, it is a compelling argument. Taxation (of wealth) is the proposed solution.

If the top 10% of people suddenly had their wealth double overnight, it would have absolutely disastrous effects for the lower 90% of people. Prices for scarce goods (e.g. housing) would increase dramatically. The price increase dampens the overall demand for housing since a large fraction of the 90% are now priced out. The wealthy homeowners have an incentive to maintain that scarcity, and freely use their resources to preserve the status quo by preventing desperately-needed housing from being built.

Those with wealth will tend to steer the economic system more towards their own interests in a runaway feedback loop, often in ways which create no overall net welfare for society.

Let me address the second part.

If we define wealth as it's often used colloquially -- the amount of liquid cash one has -- then your potential share of the pie of goods and services shrinks. This is true unless the pie itself grows proportionately.

Without agreeing or disagreeing with parent comment, the rate of growth of the pie certainly does not feel like it is growing as fast as accumulation of nominal wealth of some.

Historically one usually amassed monetary wealth in exchange of providing goods and services. Stock markets, high frequency arbitrage markets have broken this. Yes there is liquidity insertion, but is that liquidity worth so much ? At microsecond scale ? I don't think so.

Stock market let's one encash a perception of promised future delivery of goods and services without the need to actually deliver it. Yes the market will eventually, hopefully, price it correctly, but by then some other retail sucker is holding that bag.

When people complain about others getting disproportionately wealthy they are talking about the shrinking share of the pie.

your first question was better.

"how does creating wealth hurt others?"

most of this "wealth" is not "created" out of thin air. nor created at all.

more like, transferred.

That depends how they got wealthy.

Did they steal everything outright? Someone is worse off in that transaction. (Or everyone a little bit worse off if it’s government grift).

Did they create all that value themselves? Might be fine - positive sum games do exist.

Did they create some system where a bunch of money flows just to them based on the labour of others? Maybe it depends on the details, like how much the labour is paid.

I think Piketty’s point was around capital and wealth tending to accumulate unless something forces it to disperse. This can get worse over time. The last couple hundred years were relatively “good” due to the way revolutions and WWI and WWII basically eliminated many of the wealthy families in the west, a couple times, and the post-war societies were “reset” with good equality that has slowly eroded since (due to insufficient “friction” to prevent accumulating extreme wealth over time, such as high loophole-free wealth and inheritance taxes). Or so the theory goes.

Building on that, when you get extreme wealth you get individuals with power to affect policy for their personal good. Some will choose to be selfish (it’s human nature). Policy shifts in their favour. We end up going in the opposite direction to that since the Great Depression - which really was a collectivist culture of everyone getting a share of the wealth of the nation, rather than being screwed over by rich and powerful folks. (McCarthyism somewhat put the brakes on that in the US in particular, though, which is why you can get e.g. free health care elsewhere in the west).

I have not read Piketty. But I could imagine a society where the poor are 10% better off and the rich are 1000% better off to be a less stable society that ends up falling apart.

> We could start off with how are you worse off because of people wealthier than you?

You are smart enough to come up with some answers of your own. It's rude to demand others to do your own thinking for you.

It’s a rather public example but DOGE did immense damage and was facilitated by the ability to leverage wealth into power. There is a dangerous feedback cycle.

Walter, I believe the idea against wealth inequality is not purely that there are wealthier people but that their wealth should be redistributed such that the wealthier people are less wealthy (but still wealthier) and the poorer people are less poor (but still poorer).

I'm not worse off, just because some chucklefuck has a yacht or a jet. I'm worse off when their wealth lets them out bid me for things that are scarce. Housing is currently in short supply in in-demand areas. Access to doctors is another one. The rich still only get one vote, but let's be real, being rich means buying tons of ads pushing a rich person's agenda in the run up to an election. Also tax codes. The rich get to put their kids in private schools, rather than having better public schools. That goes for other public goods too.