> In peacetime, r has always been much greater than g
This is an ultra simplistic formula, made by someone who's been born, raised and fed in a highly socialist country where the only word politicians know is "tax".
No shit. What gave it away, the two terms or the inequality? :)
Joking aside, it's simplistic because it's elementary. If real returns exceed real growth, ceteris paribus, you have a net flow of principal (so to speak) from labour to capital. That doesn't mean one can conclude the argument with those two variables alone. But it's a valid starting point, and concludes with many solutions other than increasing taxes to reduce r.
This is an ultra simplistic formula, made by someone who's been born, raised and fed in a highly socialist country where the only word politicians know is "tax".