Deborah Boucoyannis — Adam Smith is not the antidote to Thomas Piketty

 Where Smith emerges as more “radical,” ironically, is in his insistence that if we see high profits (a high r) it is sophistry, deception, and power that are to blame, not technology and trade increasing demand for capital. He may have said, faced with Piketty’s turn to taxation to fight inequality, that this treats the symptom, not the disease; that we should not be just treating inequality as pathological and inefficient, but high profits, too. As I argued also here, unless we start seeing high profits as a symptom of something wrong, any effort to limit them, either before or after taxes, will founder faced with the “insolent outrage of furious and disappointed monopolists.” And that is Smith talking, not Marx.

Lots of other good stuff on Adam Smith. He was as much concerned about rents, power and privilege with with market liberalization, since these are forces that tilt the playing field, reducing market efficiency, distorting capital formation and allocation, and introducing privilege that implies asymmetrical political power and market power.

The Washington Post
Adam Smith is not the antidote to Thomas Piketty
Deborah Boucoyannis | Assistant Professor of Politics, University of Virginia
(h/t Mark Thoma at Economist's View)

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