Capital in the 21st Century: Chapter 6

Data provenance

The data were downloaded as Excel files from: http://piketty.pse.ens.fr/en/capital21c2.

Loading relevant libraries and data

This document depends on the xlsx, reshape2, scales, plyr, and ggplot2 packages.

library(ggplot2)
library(xlsx)
library(reshape2)
library(scales)

Fig 6.1

# series used for figures 6.1, 6.3 et S6.1
s1 = read.xlsx("../_data/Chapter6TablesFigures.xlsx", sheetName="TS6.1", rowIndex=8:33,colIndex=1:3,header=TRUE)
 
names(s1) =  c('Year','Capital Income', 'Labor Income')

s1 <- melt(s1, id.vars = 'Year')

ggplot(data = s1, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, 1, 0.1), labels=c('0%', '10%','20%', '30%','40%', '50%','60%', '70%','80%', '90%','100%'))+
  scale_x_continuous(breaks=seq(1770, 2010, 20), labels=seq(1770, 2010, 20))+
  ylab('Labor and capital income (% national income')+
  xlab('During the 19th century, capital income (rent, profits, dividends, interest,..) \n absorbed about 40% of national income, vs. 60% for labor income (salaried and non salaried).\n Sources and series: see piketty.pse.ens.fr/capital21c.
')+
  ggtitle('Figure 6.1. The capital-labor split in the Britain, 1770-2010  
')+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank())+ # remove legend title
  theme(legend.position="bottom") # remove legend title

plot of chunk fig6.1Plot

Fig 6.2

# series used for figures 6.2, 6.4 et S6.2
s2 = read.xlsx("../_data/Chapter6TablesFigures.xlsx",
               sheetName="TS6.2", rowIndex=6:26,colIndex=1:3,header=TRUE)
 
names(s2) =  c('Year','Capital Income', 'Labor Income')

s2 <- melt(s2, id.vars = 'Year')

ggplot(data = s2, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, 1, 0.1), labels=c('0%', '10%','20%', '30%','40%', '50%','60%', '70%','80%', '90%','100%'))+
  scale_x_continuous(breaks=seq(1820, 2010, 20), labels=seq(1820, 2010, 20))+
  ylab('Labor and capital income (% national income')+
  xlab('In the 21st century, capital income (rent, profits, dividends, interest,..) \nabsorbs about 30% of national income, vs. 70% for labor income (salaried and non salaried).\n Sources and series: see piketty.pse.ens.fr/capital21c.')+
  ggtitle('Figure 6.2. The capital-labor split in France, 1820-2010')+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank())+ # remove legend title
  theme(legend.position="bottom") # remove legend title

plot of chunk fig6.2Plot

Fig 6.3

# series used for figures 6.1, 6.3 et S6.1
s3 = read.xlsx("../_data/Chapter6TablesFigures.xlsx",
               sheetName="TS6.1", rowIndex=8:33,colIndex=c(1,4:5),header=TRUE)
 
names(s3) =  c('Year','Observed', 'Pure')

s3 <- melt(s3, id.vars = 'Year')

ggplot(data = s3, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, 0.16, 0.02), labels=c('0%', '2%','4%', '6%','8%', '10%','12%', '14%','16%'))+
  scale_x_continuous(breaks=seq(1770, 2010, 20), labels=seq(1770, 2010, 20))+
  ylab('Annual rate of return')+
  xlab('The pure rate of return to capital is roughly stable around 4%-5% in the long run.\n 
Sources and series: see piketty.pse.ens.fr/capital21c.')+
  ggtitle('Figure 6.3. The pure return to capital in Britain, 1770-2010')+
  scale_shape_discrete(name='', 
                       breaks=c('Observed', 'Pure'),
                       labels=c('Observed average rate of return to capital', 
                                'Pure rate of return to capital (estimate)'))+
  scale_color_discrete(name='', 
                       breaks=c('Observed', 'Pure'),
                       labels=c('Observed average rate of return to capital', 
                                'Pure rate of return to capital (estimate)'))+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank())+ # remove legend title
  theme(legend.position="bottom") # remove legend title

plot of chunk fig6.3Plot

Fig 6.4

# series used for figures 6.1, 6.3 et S6.1
s4 = read.xlsx("../_data/Chapter6TablesFigures.xlsx",
               sheetName="TS6.2", rowIndex=6:26,colIndex=c(1,4:5),header=TRUE)
 
names(s4) =  c('Year','Observed', 'Pure')

s4 <- melt(s4, id.vars = 'Year')

ggplot(data = s4, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, 0.16, 0.02), labels=c('0%', '2%','4%', '6%','8%', '10%','12%', '14%','16%'))+
  scale_x_continuous(breaks=seq(1820, 2010, 20), labels=seq(1820, 2010, 20))+
  ylab('Annual rate of return')+
  xlab('The observed average rate of return displays larger fluctuations than the pure rate of return during the 20th century.\nSources and series: see piketty.pse.ens.fr/capital21c.')+
  ggtitle('Figure 6.4. The pure rate of return to capital in France, 1820-2010')+
  scale_shape_discrete(name='', 
                       breaks=c('Observed', 'Pure'),
                       labels=c('Observed average rate of return to capital', 
                                'Pure rate of return to capital (estimate)'))+
  scale_color_discrete(name='', 
                       breaks=c('Observed', 'Pure'),
                       labels=c('Observed average rate of return to capital', 
                                'Pure rate of return to capital (estimate)'))+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank())+ # remove legend title
  theme(legend.position="bottom")

plot of chunk fig6.4Plot

Fig 6.5

# series used for figures 6.1, 6.3 et S6.1
s5 = read.xlsx("../_data/Chapter6TablesFigures.xlsx",
               sheetName="TS6.3", rowIndex=4:45,colIndex=1:9,header=TRUE)
 
names(s5) =  c('Year','U.S.', 'Japan', 'Germany', 
               'France',	'U.K.',	'Italy',	'Canada',	'Australia')

s5 <- melt(s5, id.vars = 'Year')
# round data for rChart tooltip display
s5$value <- round(s5$value, 2)

ggplot(data = s5, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
#   geom_point(aes(shape=variable))+
  scale_y_continuous(labels = percent)+
  scale_x_continuous(breaks=seq(1975, 2010, 5), labels=seq(1975, 2010, 5))+
  ylab('Capital income (% national income)')+
  xlab('Capital income absorbs between 15% and 25% of national income\n in rich countries in 1970, and between 25% and 30% in 2000-2010.\n Sources and series: see piketty.pse.ens.fr/capital21c')+
  ggtitle('Figure 6.5. The capital share in rich countries, 1975-2010')+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank())+ # remove legend title
  theme(legend.position="bottom")

plot of chunk fig6.5Plot

Fig 6.5 with rCharts

The plot above is rather difficult to read with so many series. Recommend taking advantage of an interactive rChart. Now we can toggle the countries on and off by clicking the legend labels.

require(devtools)
install_github('rCharts', 'ramnathv')

library(rCharts)

Error in library(rCharts): there is no package called 'rCharts'

fig6.5 <- nPlot(value ~ Year, group = 'variable', data = s5, type = 'lineChart')

Error in eval(expr, envir, enclos): could not find function "nPlot"

fig6.5$yAxis(axisLabel = 'Capital income (% national income)')

Error in eval(expr, envir, enclos): object 'fig6.5' not found

fig6.5$chart(margin = list(left = 100)) # margin makes room for label

Error in eval(expr, envir, enclos): object 'fig6.5' not found

fig6.5$yAxis(tickFormat = "#! function(d) {return Math.round(d*100*100)/100 + '%'} !#")

Error in eval(expr, envir, enclos): object 'fig6.5' not found

fig6.5$xAxis(axisLabel = 'Year')

Error in eval(expr, envir, enclos): object 'fig6.5' not found

fig6.5$chart(useInteractiveGuideline=TRUE)

Error in eval(expr, envir, enclos): object 'fig6.5' not found

fig6.5$show('inline', include_assets = TRUE, cdn = TRUE)

Error in eval(expr, envir, enclos): object 'fig6.5' not found

Fig 6.7

# series used for figures 6.6-6.8 and S6.3
s7 = read.xlsx("../_data/Chapter6TablesFigures.xlsx", sheetName="TS6.4", rowIndex=5:120,colIndex=1:6,header=TRUE)
 
names(s7) =  c('Year','Housing share in national income',
               'Gross profit share in gross value added',
               'Net profits share in net value added',
               'Capital share in national income',
               'After-tax capital income excl. retained earnings'
               )

s7 <- melt(s7, id.vars = 'Year')
s7 =s7[s7$variable == 'Housing share in national income', ]

ggplot(data = s7, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, .12, .02)
                     , labels=seq(0, .12, .02))+
  scale_x_continuous(breaks=seq(1900, 2008, 6)
                    , labels=seq(1900, 2008, 6))+
  ylab(unique(s7$variable))+
  xlab('The share of housing rent (rental value of dwellings) \n rose from 2% of national income in 1948 to 10% in 2010. \n Sources and series: see piketty.pse.ens.fr/capital21c.')+
  ggtitle('Figure 6.7. The share of housing rent \n in national income in France, \n 1900-2010')+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank() )+ # remove legend title
  theme(axis.text.x = element_text(angle = 45, hjust = 1)) +      theme(legend.position = "none")

plot of chunk fig6.7Plot

Fig 6.8

# series used for figures 6.6-6.8 and S6.3
s8 = read.xlsx("../_data/Chapter6TablesFigures.xlsx", sheetName="TS6.4", rowIndex=5:120,colIndex=1:6,header=TRUE)
 
names(s8) =  c('Year','Housing share in national income',
               'Gross profit share in gross value added',
               'Net profits share in net value added',
               'Capital share in national income',
               'After-tax capital income excl. retained earnings'
               )

s8 <- melt(s8, id.vars = 'Year')
s8 <- s8[s8$variable == 'Capital share in national income',]

ggplot(data = s8, aes(x=Year, y=value))+
  geom_line(aes(color=variable))+
  geom_point(aes(shape=variable))+
  scale_y_continuous(breaks=seq(0, .5, .1 )
                     , labels=seq(0, .5, .1 ))+
  scale_x_continuous(breaks=seq(1900, 2008, 6)
                    , labels=seq(1900, 2008, 6))+
  ylab(unique(s8$variable))+
  xlab('The share of capital income (net profits and rents) \n  rose from 15% of national income in 1982 to 27% in 2010. \n Sources and series: see piketty.pse.ens.fr/capital21c. ')+
  ggtitle('Figure 6.8. \n The capital share in national income in France, \n 1900-2010')+
  theme_bw(10)+ # Make b/w theme
  theme(legend.title=element_blank() )+ # remove legend title
  theme(axis.text.x = element_text(angle = 45, hjust = 1)) +      theme(legend.position = "none")

plot of chunk fig6.8Plot