Piketty's argument, as well as the findings of the IMF report, is that what you've called relative wealth and absolute wealth are linked: greater inequality leads to lower growth rates. The entire economy suffers for the benefit of a few. Eventually, inequality might choke growth out entirely, leading to crisis.
This seems to contradict r > g . Inequality results in investment, which shifts wealth from the g part of the economy to the r part, due to a lower propensity to consume among the wealthy.
Or are there second order effects that the reviews (I haven't read the book) don't discuss?
