Why the Rate of Return Exceeds the Growth Rate

I have been scratching my head over the elementary inequality $latex r>g$ for some time. As you probably know, this inequality is central to the "actuarial" mechanism that drives stratification in Piketty's work. Basically, if the rate of return (net of depreciation) outpaces the growth of the overall economy, the capital-to-output ratio, $latex \beta=K…