Sawicky Concedes the Point

  1. Net operating surplus includes the surplus of owner-operated businesses like the Trump Organization, some of which is really labor income not capital income. This is true and it is impossible to disentangle that. But even if you assume (heroically in my view) that fully 70% of this income is really labor income, that still leaves you with an operating surplus of $3.84 trillion.
  2. Net operating surplus includes the imputed rents of owner-occupied dwellings, like Bill Gates’s mansion. This is true, but irrelevant. The imputed rent of owner-occupied dwellings is absolutely operating surplus. In a society where the housing stock was socialized, that amount would be available for a social dividend.
  3. Net operating surplus includes “not just the income pocketed by capital owners but also the funds they reinvest in their businesses.” Of course, funds for investment come from a lot of places, not just out of capital’s share. The accounts tell us how much profit is undistributed ($461 billion) but it does not tell us how much of that is reinvested. Even if you assume 100% of it is reinvested and subtract $461 billion from the $3.84 trillion from (1) above, that gets you to $3.38 trillion, which is still higher than the $3.2 trillion needed.

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Law and welfare knower.

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Matt Bruenig

Matt Bruenig

Law and welfare knower.

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