The Economist declared that Piketty’s book may "revolutionize the way people think about the economic history of the past two centuries" and started an online reading group to discuss it chapter by chapter. The British magazine Prospect added Piketty to its annual list of the most influential world thinkers, and his book was said to be making the rounds in the office of Ed Milliband, the British Labour Party leader. Documentary filmmakers were vying for the chance to turn the book into a movie; a composer was seeking Piketty’s blessing to make it an opera.
Now the 42-year-old Frenchman had come, like a wonkish heir to de Tocqueville, to tell Americans how to salvage what he called their "egalitarian pioneer ideal" from a potentially devastating "drift toward oligarchy." His anointment was all the more remarkable in that he intended his book not just as a novel argument about inequality but as a pointed rebuke to his field—in particular its American wing.
On Monday, Piketty’s stops included the White House Council of Economic Advisers, the Government Accountability Office, and the office of the Treasury secretary, Jacob Lew, who summoned him for a private sit-down to discuss his proposal for a progressive tax on wealth. On Tuesday, he appeared in the company of Nobelists: George Akerlof, who, introducing Piketty to a group at the International Monetary Fund, declared that he had "entered rock stardom—economist-style"; and Robert Solow, who, at the Economic Policy Institute, where a crowd of several hundred had braved a freezing downpour to hear Piketty talk, praised the originality of his argument and the "sheer collection, presentation, and analysis" of his data, predicting that "we’re going to be digesting that for a long time."
The Chronicle of Higher Education
Capital ManEmily Eakin
(h/t Brad DeLong)
The elites got hold of him now. His ideas will be snuffed out pretty quick.
ReplyDeleteAs Matt keeps reminding us, aren't all discussions of the forms of "capital" pretty much just reminding us of what Aristotle et al wrote down 2300 years ago?
ReplyDeleteIt seems that it is not the concepts that matter, but the population penetration.
We discussed this a lot on Mosler's blog ~4yrs ago. Until at least 10% of a population grasps something simultaneously, it's unlikely to be permanently captured.
Wake me up when 10% of the US electorate reads & agrees with Piketty's book.
We're talking ~16 million people. It'll take even more next year.
Not a peep out of the right as far as Picketty (yet).... I've been looking for it....
ReplyDeleteHe is more or less 'preaching to the choir' on the left...
If the right picks up on this they will dismiss it as just more left-wing 'class warfare' now with charts and graphs...
Rsp
My guess is that the economists on the Right will just say: "Where are the microfoundations? Not worth responding to."
ReplyDelete...praised the originality of his argument...
ReplyDeleteThey're going to flatter him to death.
If I have to read another review of Piketty I'm going to shoot myself. It was a decent read that had the magic of being the right book at exactly the right time, maybe a bit late. I'm getting bored with all the hoopla and big ideas about what was a very simple problem. Unemployment was too high because government wasn't spending enough. To attribute all the social effects of low wages to a cabal of the .01% is silly and actually dangerous. Low demand for labor causes the top to become wealthy, not the other way around. Not the other way around. We created political systems that didn't maximize labor usage, we've never had a world engaged in this sort of trade before, we've never attempted to industrialize and lift billions of humans from poverty before and the old flavor of economics didn't work. I'm ready to throw out economics but not the political system and move to a Hickey vision of fascist technocrats.
ReplyDeleteI like the work Tom Hickey does and have tremendous respect for him but I don't agree with most of this contention about inequality being a result capitalism-democracy failing. It goes a step too far and smacks of opportunism. He has all but dismissed MMT and gone with a utopian vision of what he would like to see happen politically-economically. He's gone off the farm and decided MMT isn't enough to fix the economy.
MMT in fact isn't enough to fix the economy or our society - not even close. It's just a component. And knowledge of the insights of MMT about the workings of the monetary system could be used for reactionary as well as progressive ends.
ReplyDeleteWell said, Dan.
ReplyDeleteFrom my perspective, probably about 25% of the population of the country lives in geographical areas where there is again near zero unemployment. In parts of the midwest, south, west wages are rising rapidly and there are far more jobs than people. Jobs at the low end of wages simply can not be filled, while specialized skills can't be found at any price. The companies and .01% wealthy aren't keeping 'the man' down. On the contrary they are the ones hiring and pushing up wages. So to me, it seems silly to blame them. Many of these industries pushing wages up are the very ones that the progressives rail against, yet here they are making millionaires out blue collar workers, engineers, writers... pick your trade. There is a disconnect between the populist progressive rhetoric and reality. I've not completely wrapped my head around it yet but I'm calling BS.
ReplyDeleteRyan, I think you and I appear to live in a different world. When I look at the state by state unemployment/underemployment rates, I do not find your statement to be truthful.
ReplyDeleteSorry to rain on the parade, Clonal.
ReplyDeleteBLS Release Here
Where are the rich getting richer and poor getting poorer?
Anecdotes
Digging into the numbers
As they have said over at peakoil, "Reports of us economic demise are greatly exaggerated." As is usual, the economists are looking at a world that was thrown into chaos as wild expansion of trade in goods distorted labor markets but are now failing to pay attention to the new real resource problems that are occurring as a result of the billions of people consuming according to their middle class lifestyles. I'd argue Labor supply/Inequality was the biggest problem of the last 30-40 years but is probably getting better on its own even with clueless policy.
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ReplyDeleteMMT in fact isn't enough to fix the economy or our society - not even close. It's just a component. And knowledge of the insights of MMT about the workings of the monetary system could be used for reactionary as well as progressive ends.
ReplyDeleteExactly, as an economic theory or part of one, MMT says nothing about politics issues such as class and power structure that influence cultural conventions and institutional arrangements, although all the MMT economists are institutionalists and understand these issues very well. The closest that MMT comes to being political is its policy emphasis on full employment, which is fundamental to any Keynesian thinking that is actually based on the work of Keynes: " Look after the unemployment, and the Budget will look after itself."
I have been encouraging MMT economists to collaborate with MMT ally Jamie Galbraith on updating John Kenneth's institutional work, in particular The Good Society, in light of MMT. MMT shows how the issue is not affordability but rather real resources. From this perspective the focus is investment-driven, as well as ecological, and in the Keynesian view, investment is demand-driven, and saving is the outcome of investment. So to maintain broad-based demand, maintain full employment within a welfare state the economic objective of which is distributed prosperity (rather than growth defined as per capita GDP and rising productivity from technology), full employment (defined as guaranteed employment for anyone willing and able to work) and relative price stability.
However the way that MMT is often stated in terms of government offsetting changes in non-government saving desire in order to maintain FE implies that government continuously funds a flow of funds to the top, where they get saved on the balance sheets of the already wealthy, increasing the financial wealth of the elite and therefore their power as well.
I don't think that MMT will fly with the left very well until the socio-economic and political issues are addressed as well, and MMT economists have the institutionalist chops to do so. But so far, the decision seems to be that MMT rocks the boat enough without going all radical. I think it is entirely possible to hold that MMT as an economic theory is policy neutral and also to take policy stances, as well as to integrate MMT insights into a comprehensive socio-economic program together with policy to advance it.
I personally feel that we are now seeing iterations like global Occupy-Indignados-Arab Spring and Piketty's instant celebrity toward a shift in collective consciousness away from Western liberalism. As the world integrates under global institutions that combine the traditions of the West and the East, the Global North and South the perceived need will be to harmonize liberty, egality, and community. The traditional emphasis of the US on individualism is incompatible with the traditions of the rest of the world which are more communally based, where American individualism is viewed as narcissistic and cowboy culture.
continued
continuance
ReplyDeleteI am a libertarian of the left and highly value personal freedom, but I am also aware that the Lockean view of classical liberalism in which the right to private property supposedly stemming from usufruct is ahistorical and just made up. When it is held to be fundamental to all other rights and therefore superior to human rights and civil rights, the result is propertarianism of one sort or another rather than democracy as governance of the people, by the people and for the people. In it's worst form it results in the doctrine of self-ownership and sovereign individuality.
In my view the political goal is government of the people, by the people and for the people in a community where people are mature enough, educated enough and spiritually awake enough to handle the task of self-governance. That means viewing liberty not only in terms of reciprocity but also the use of liberty in giving rather than taking. Until then, an elite will continue to govern, and not being sufficiently enlightened to be above narrow self-interest they will govern based on self-interest, class interest and a power structure they control, with cultural conventions and institutional arrangements reflecting this. Authoritarian hierarchical government is needed only as long as intelligent, voluntary, empathetic, and consensual governance for mutual benefit is lacking.
Sorry to go against the grain (except for Ryan) but if MMT could really fix all of the ills of society then it would not be a scientific theory.
ReplyDeleteIt would be snake oil, fit to be thrown to the dustbin.
MMT is a necessary but not a sufficient condition for the betterment of economies; it demonstrates how modern money can provide for the full employment of resources. A great improvement over the neo-classical shamanic myths.
As for the cultural contents of a government platform based on the MMT insights, it's true it can be used for either left, center or right wing "values".
But that is the case with practically all theories. It was the great Joseph Schumpeter (one of founders of endogenous money theory) that said, long ago, that socialism was a cultural blank slate - in the sense that a government that abolished private property could choose to either implement left egalitarian values or extremely hierarchical, militaristic ones. And it would still be "socialist " in both of these states of the world.
So my suggestion is for MMTers to stick to their guns, promote their theory over the neoclassical crap and not think too much about fashionable Frenchmen providing important data, yes - but apparently clueless as far as the operation of the monetary system is concerned.
I think it would be a good idea for MMTers to do more to participate in ongoing economic debates.
ReplyDeleteTom,
ReplyDelete"In it's worst form it results in the doctrine of self-ownership"
What do you think is wrong with the doctrine of self-ownership?
Ryan Harris,
ReplyDelete"I'm ready to throw out economics but not the political system and move to a Hickey vision of fascist technocrats."
I don't understand - are you saying Tom advocates a system run by fascist technocrats, or is that what you are advocating?
The doctrine of self-ownership is that of personal autonomy in the sense of not being subject to any authority other than one's own will, so that only voluntary contracts are binding. This means that one is not subject to a governing authority unless one voluntarily submits. It's an extension of the absolute right of property to one's own person, and it replaces the concept of human rights and civil rights. Voluntarism of this sort is basically a repudiation of the rule of law in organized society. It's an extreme form of anarchism and it lies at the basis of anarcho-capitalism.
ReplyDeleteRyan, the BLS data you cite is flawed, because it is looking at U3 unemployment, the most flawed of the BLS measurements. Look instead at the population to employment ratios in the different areas - you get a very different picture.
ReplyDeleteFurther, the Unemployment numbers do not look at the quality of jobs. The increase in employment has been mostly in service jobs, and at the lowest wage levels. The last resort of the desperate to stave off starvation. This is what I see sitting in Silcon Valley.
Again, I do not see what you see in the very same statistics you cite.
Y,
ReplyDeleteIn his own words,
" the political goal is government of the people, by the people and for the people in a community where people are mature enough, educated enough and spiritually awake enough to handle the task of self-governance" ... "Authoritarian hierarchical government is needed only as long as intelligent, voluntary, empathetic, and consensual governance for mutual benefit is lacking."
I'm more of a democracy kind of guy. Not a republic though. I place mutual dependence, kindness and non-violence above wisdom, right and wrong on the philosophical pecking order. Minor disagreement is all.
Clonal, The BLS says that 49 of 372 Metro areas dropped below 5% unemployment. Many were large populous metros. I don't like government u3 unemployment data any better than you, I'm always a bit suspicious, especially in election years when the once in a decade odd "model" changes seem to happen in Oct.
ReplyDeleteRyan,
ReplyDeleteI think Tom was referring to the current 'democratic' system as authoritarian and hierarchical. Possibly he thinks that all centralized democratic systems are authoritarian and hierarchical.
I think his ideal is a decentralized system based on local democracy or something. But as far as I can see the key for him is the need for a 'spiritual awakening' in order for this to work.
"The companies and .01% wealthy aren't keeping 'the man' down. On the contrary they are the ones hiring and pushing up wages."
ReplyDeleteI never got a job from a poor person.
"I never got a job from a poor person"
ReplyDeletehas a poor person never bought something from you, or paid you for something? You could argue that's a form of 'employment'.