Rogoff claims that the inequality issue is more complex globally than Piketty makes out and that different solutions than he proposes should be considered.
There are many practical policies that can be adopted to reduce inequality, in addition to a progressive consumption tax. Focusing on the US, Jeffery Frankel of Harvard University has suggested the elimination of payroll taxes for low-income workers, a cut in deductions for high-income workers, and higher inheritance taxes. Universal pre-school education would enhance long-term growth, as would a much greater emphasis on lifetime adult education (my addition), possibly via online courses. Carbon taxes would help mitigate global warming while raising considerable revenues.
In accepting Piketty’s premise that inequality matters more than growth, one needs to remember that many developing-country citizens rely on rich-country growth to help them escape poverty. The first problem of the twenty-first century remains to help the dire poor in Africa and elsewhere. By all means, the elite 0.1% should pay much more in taxes, but let us not forget that when it comes to reducing global inequality, the capitalist system has had an impressive three decades.Project Synicate
Where Is the Inequality Problem?
Kenneth Rogoff | Professor of Economics and Public Policy at Harvard University
6 comments:
This guy takes the cake... unbelievable.
The Africans need better leadership/institutional staffing (as do we also btw...) not "exporting" to the more developed world.
Trickle down.
Sure lets help others. But we have plenty of poverty and unemployment here at home. So I vote for starting here. If we address those problems ( in a serious way) plus health care, education and inheritance taxes we can fix a lot. Take you pick.
Overall, kudos to Rogoff (and Frankel) for these proposals.
Rogoff also says,
However, Piketty and Saez do not really offer a model; nor does this new book. And the lack of a model, combined with a focus on the world’s upper-middle-class countries, matters a lot when it comes to policy prescriptions.
Perhaps there's some merit to this criticism?
AS I have been saying for a long time, we need a model of the global economy as a close economy to take economic and financial sense in a globalized world. The closest we come to that it the economics of trade, but there is no model of the world economy as a complex adaptive system involving cultural and institutional arrangements that are highly relevant. If Ken Rogoff thinks he can write one, all the more power to him. Let's see it.
Well said, Tom. Thanks...
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