“One of the greatest battles in post-industrial economic and social history – the conflict between labor and capital over the distribution of profits – is practically over, at least here in Australia”. This bold statement prefaces an interview with Gordon Hagart, a geophysicist who went into finance, who now heads the 'Australian Council of Superannuation Investors' – an association of individual ('DIY') retirement funds. The reason is simple, and, incidentally, it is also a reason that concerns the underlying thesis of Thomas Piketty's bestseller – 'Capital in the XNUMXst century'.
The reason is that pension funds – individual or collective – in Australia today manage A$1,6 trillion, around 100% of GDP. And a large part of this money is invested in the stock market, which means that collectively labor (in the form of those 'deferred wages' which are pensions) owns a large part of the capital. In short, the 'social security revolution' has aligned the interests of workers with those of companies.
Piketty, reasoning in terms of factorial distribution (between capital and labour) argues that inequalities will increase because the return on capital is higher than the growth rate of the economy. But this would only translate into greater inequality if the holders of capital were different from the holders of labour. If that's not the case, don't worry.
