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Read Tyler Cowan's critique of Piketty which was just published today. My favorite bit is near the end, where Cowan reinforces that by Piketty's own admission,

by nugget 12y ago

Read Tyler Cowan's critique of Piketty which was just published today. My favorite bit is near the end, where Cowan reinforces that by Piketty's own admission, the proposed wealth tax would shift up to 75% of national income to the Government: ''Therein lies the most fundamental problem with Piketty’s policy proposals: the best parts of his book argue that, left unchecked, capital and capitalists inevitably accrue too much power -- and yet Piketty seems to believe that governments and politicians are somehow exempt from the same dynamic.'' I took a class from a famous economics professor who had emigrated from the former Soviet Union after its collapse. He made the point one day that there have always been rich and poor - and always will be. In America, the predominant distinction is capital wealth - dollars. In the USSR, it was political power; if you had political power, you had private planes, villas, and servants. At the end of the day, the inequality is always present. Link: http://www.foreignaffairs.com/articles/141218/tyler-cowen/capital-punishment http://www.foreignaffairs.com/articles/141218/tyler-cowen/ca...

mncolinlee 12y ago
Interesting enough, Thomas Paine argued the exact opposite in his famous pamphlet arguing for Social Security. Paine is that American revolutionary you always see quoted at anti-tax rallies. His pamphlet on Social Security shared the same conclusions as Piketty's "Capital" except written two centuries earlier. "It is wrong to say God made rich and poor; He made only male and female, and He gave them the earth for their inheritance." -- Thomas Paine, On Agrarian Justice http://www.ssa.gov/history/paine4.html http://www.ssa.gov/history/paine4.html The Social Security system Paine advocated was more targeted to 21 year olds and was designed to offer everyone opportunity at the height of their lives. While he also theorized keeping the elderly from poverty, it was not the core idea of his plan.
panarky 12y ago
> there have always been rich and poor - and always will be Yes, and Jesus said[1] "ye have the poor always with you." Likewise, there will always be crime, and disease, and suffering. But do you agree that extreme inequality is a bad outcome? That putting more and more wealth and power into the hands of fewer and fewer monopolists and oligopolists is toxic to democracy and freedom? If so, then working to reduce extreme inequality is a noble cause just like reducing crime, disease and suffering is worthwhile. Even if these maladies will always be with us. [1] http://biblehub.com/kjv/matthew/26.htm#6 http://biblehub.com/kjv/matthew/26.htm#6
- nugget 12y ago
  Let's say I live in a 1000 sq ft house and everyone else in my town lives in a 500 sq ft house; there is a certain level of inequality. Years pass, the economy rumbles on, we invent new products and more efficient services, and now I live in a 5000 sq ft mcmansion, and everybody else lives in 1000 sq ft houses. Inequality has increased, but the net standard of living has increased as well. Objectively, everyone is better off. Of course, some people may feel poorer because now they see the mcmansion on the hill and wonder why they don't live in that level of luxury (which didn't even exist before). Most economists seem to credit capitalism with the extreme advancements in quality of life, even for the poorest citizens, in first world economies. Sometimes the problem isn't inequality but envy and jealousy - I believe the Bible speaks to these two emotions as well.
  - shiven 12y ago
    ... now I live in a 5000 sq ft mcmansion, and everybody else lives in 1000 sq ft houses. So what did you do so special that you get a 5-fold increase in your living area and what did others do so wrong that they got a 2-fold increase only? Sometimes the problem isn't inequality but envy and jealousy - I believe the Bible speaks to these two emotions as well. The part that grinds on the human psyche is just a plain old sense of fairness and justice. Why muddy it up with religion?
    - timtas 12y ago
      If I experience a 2-fold increase, and it's "grinding on my psyche" that that someone else got a 5-fold increase, you can bet it's because someone with something to gain is whispering discontent into my ear.
      - shiven 12y ago
        Or, I see the ever-widening gap with my own eyes? Not requiring the use of my ears at all.
  - jljljl 12y ago
bjt 12y ago
Judging by the dates on the comments, Cowen's review came out more like a month ago.
tcc2161 12y ago
While the famous economics prof's point makes sense, I don't believe inequality has to be inevitable. "The always will be" argument could have been applied to slavery for most of human history, and while it's true slavery remains a problem in the present day (ie human trafficking) it is not now treated as inevitable nor is it officially condoned. The definition of poverty also shifts ... in North America today everyone has a tv, and probably a computer, all of which could be considered luxury goods at points in the past - no one lives today like the poor of a hundred years ago, but we still have people who we consider poor, and who consider themselves poor.
barrkel 12y ago
Of course inequality is always present. That's not an argument against anything. But does it always need to grow without bound? Is it the same in all countries - and if not, why not? And how does welfare for the worst off change with different amounts of inequality?

by nugget 12y ago

mncolinlee 12y ago

Interesting enough, Thomas Paine argued the exact opposite in his famous pamphlet arguing for Social Security. Paine is that American revolutionary you always see quoted at anti-tax rallies. His pamphlet on Social Security shared the same conclusions as Piketty's "Capital" except written two centuries earlier. "It is wrong to say God made rich and poor; He made only male and female, and He gave them the earth for their inheritance." -- Thomas Paine, On Agrarian Justice http://www.ssa.gov/history/paine4.html http://www.ssa.gov/history/paine4.html The Social Security system Paine advocated was more targeted to 21 year olds and was designed to offer everyone opportunity at the height of their lives. While he also theorized keeping the elderly from poverty, it was not the core idea of his plan.

panarky 12y ago

> there have always been rich and poor - and always will be Yes, and Jesus said[1] "ye have the poor always with you." Likewise, there will always be crime, and disease, and suffering. But do you agree that extreme inequality is a bad outcome? That putting more and more wealth and power into the hands of fewer and fewer monopolists and oligopolists is toxic to democracy and freedom? If so, then working to reduce extreme inequality is a noble cause just like reducing crime, disease and suffering is worthwhile. Even if these maladies will always be with us. [1] http://biblehub.com/kjv/matthew/26.htm#6 http://biblehub.com/kjv/matthew/26.htm#6

nugget 12y ago
Let's say I live in a 1000 sq ft house and everyone else in my town lives in a 500 sq ft house; there is a certain level of inequality. Years pass, the economy rumbles on, we invent new products and more efficient services, and now I live in a 5000 sq ft mcmansion, and everybody else lives in 1000 sq ft houses. Inequality has increased, but the net standard of living has increased as well. Objectively, everyone is better off. Of course, some people may feel poorer because now they see the mcmansion on the hill and wonder why they don't live in that level of luxury (which didn't even exist before). Most economists seem to credit capitalism with the extreme advancements in quality of life, even for the poorest citizens, in first world economies. Sometimes the problem isn't inequality but envy and jealousy - I believe the Bible speaks to these two emotions as well.
- shiven 12y ago
  ... now I live in a 5000 sq ft mcmansion, and everybody else lives in 1000 sq ft houses. So what did you do so special that you get a 5-fold increase in your living area and what did others do so wrong that they got a 2-fold increase only? Sometimes the problem isn't inequality but envy and jealousy - I believe the Bible speaks to these two emotions as well. The part that grinds on the human psyche is just a plain old sense of fairness and justice. Why muddy it up with religion?
  - timtas 12y ago
    If I experience a 2-fold increase, and it's "grinding on my psyche" that that someone else got a 5-fold increase, you can bet it's because someone with something to gain is whispering discontent into my ear.
    - shiven 12y ago
      Or, I see the ever-widening gap with my own eyes? Not requiring the use of my ears at all.
- jljljl 12y ago

bjt 12y ago

Judging by the dates on the comments, Cowen's review came out more like a month ago.

tcc2161 12y ago

While the famous economics prof's point makes sense, I don't believe inequality has to be inevitable. "The always will be" argument could have been applied to slavery for most of human history, and while it's true slavery remains a problem in the present day (ie human trafficking) it is not now treated as inevitable nor is it officially condoned. The definition of poverty also shifts ... in North America today everyone has a tv, and probably a computer, all of which could be considered luxury goods at points in the past - no one lives today like the poor of a hundred years ago, but we still have people who we consider poor, and who consider themselves poor.

barrkel 12y ago

Of course inequality is always present. That's not an argument against anything. But does it always need to grow without bound? Is it the same in all countries - and if not, why not? And how does welfare for the worst off change with different amounts of inequality?