Niimo?

I'd like to remain anonymous; hence, Niimo. Two i's because there's this German rapper (below) who goes by Nimo and I prefer we didn't get mixed up.

Writings

I'll be posting thoughts about crypto, tech, business, design, science... pretty much whatever interests me.

If any of that tickles your fancy, I'm your sapien.

I love constructive criticism, and hopefully I can stir a conversation or two with this blog.

Sneak a Peek

As a primer of what you might find on my blog, here's a book analysis of Thomas Piketty's Capital in the 21st Century so you don't have to read that 696 page tome.

Capital in the 21st Century – Thomas Piketty

Part 1: Income and Capital

1. r > g
   1. r = rate of return on capital
   2. g = growth rate of economy
   3. This simple inequality states that those who hold capital, especially those who inherit wealth, see greater returns on their money, than the general economy does (increases disparity with little production coming from those who inherit wealth).
2. First Law of Capitalism
   1. alpha = r x B
      a. alpha = share of income from capital
      b. B = capital/income ratio
      c. Shows that higher r leads to higher alpha and lower B. People can sit on their increasing stockpiles of wealth without working. Rich get richer.
3. Foreign investments is pretty much balanced (what US invest is China is offset by what China invests in US +- 1-2 %)
4. Under-developed countries
   1. Show high growth during catch-up phases, but then stall and see divergent inequality when they don’t invest in themselves (can’t converge inequality if receving outside investment – think China in Africa)
5. Laws of Cumulative growth
   1. Major impact on future generations (even if as small as 1% per yr)
6. High population growth and per capital growth reduces influence of inherited capital

Part 2: The Dynamics of Capital/Income Ratio

1. Second Law of Capitalism
   1. B = s/g
      a. s = saving rate
      b. g = growth rate
2. Private vs. public wealth
   1. Private wealth greater
   2. Private profits from public debt when non-inflationary
3. Asset prices (stocks, real estate, etc.) and commodity prices (goods, oil, etc.) reflect one another
4. In a pure market,
   1. Rate of return on capital (r) = marginal product of capital
   2. This is not the case today…
5. In a perfect market,
   1. Capital market is perfect if it enables each unit of capital to be invested in the most productive way possible & to earn maximal marginal product economy allows
   2. Too much capital kills return of capital
   3. Both of these are not the case today…
6. Economic Progress
   1. Economic and technological rationality does not equal meritocratic and democratic rationality b/c technology increases need for nonhuman capital, even though it increases need for human skill/knowledge
      a. In other words, displaces wage earners for knowledge workers (wealth is not distributed as widely)
7. What determines r?
   1. Technology (what is capital used for)
   2. Abundance of capital stock (too much capital kills capital stock)
8. What is capital used for?
   1. Housing
   2. Facilitating Production

Part 3: The Structure of Inequality

1. Capital more unequally distributed than labor
2. Historical inequality
   1. Explosion after 1980’s
   2. Has risen to pre-WW1 heights
   3. Increase in inequality contributed to financial crisis 2008 b/c lower purchasing power of lower/middle class caused houses to take on more debt
3. Rise of supersalaries
   1. Marginal prod. does not equal supersalaries
   2. Think Tim Cook or Gates, etc.
      a. Is there marginal productivity REALLY worth $100 million per yr?
4. Race between education and technology
   1. More education leads to higher wages
   2. Tech displaces workers who don’t have the right knowledge
5. How to increase long run wages
   1. Invest in education and skills
6. Rentiers
   1. Enemies of democracy b/c capital yields rent that an owner obtains w/out working
7. Inflation
   1. Generally bad for lower classes as they see their savings disappear in bank accounts (relative to purchasing power)
      a. They don’t have access to diversified portfolio or real estate
8. Funds
   1. Sovereign wealth funds and Chinese pension funds, left unchecked, could own 10-20% of global GDP in 3-4 decades

Part 4: Regulating Capital in the 21st Century

1. The Social State
   1. Why don’t we modernize instead of dismantle it??
2. Progressive tax on capital
   1. Rather than just on income. Inherited wealth is absurd
3. Global tax on capital
   1. Useful utopian ideal to battle tax havens (which lessen the observable inequality). Tax havesn actually make it seem like Earth is in a net negative asset position to Mars; so much wealth unaccounted for)
4. Return on Capital
   1. Little, if any relation to talent and “hard work”

Conclusion

1. Central contradiction of capitalism: r > g
   1. Entrepreneur that initially creates value becomes a rentier on society, dominant over those who own nothing but labor
      a. Leads to political revolutions as very few hold massively disproportionate wealth/influence over the many
2. 20th century
   1. wars wiped away inequality, providing the illusion that capitalism was utopian and that r > g had been overcome
3. Global progressive tax on capital
   1. Would contain the unlimited cumulative growth of inherited wealth and capital, which is progressing at an unsustainable rate
4. Inequality
   1. Has little to do with entrepreneurial activity, talent, or work ethic
   2. Is often little to no use in promoting growth or facilitating production
   3. Not of any common utility
      To regain control of capitalism, must bet on democracy and regional cooperation.

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Thanks!

More to come :)