Again, I like Piketty’s book overall but I really don’t think his macroeconomic credentials are up-to-scratch. This leads to a lot of silly sections and a lot of misleading interpretations....
Thus, Piketty’s should be seen as one of those books that will open discussion on a topic without much contributing to it....Fixing the Economists
For those of us interested in the study of inequality this is wonderful. Although expect a debate that has been taking place behind the scenes in a very focused manner to quickly become filled with sludge as every crackpot economist puts forward their little model explaining, in one fell swoop, the rise of income inequality while simultaneously handing us the silver bullet to rid us of it.
Piketty’s Regressive Views on Public Debt and the Potential Impact of His Book
Philip Pilkington
4 comments:
Well, I suspect in a world prior to the rise of fiat money, public debt does in fact redistribute wealth to the wealthy. It is also a tool of domestic political stability coincident with the rise of the nation state. The rise of institutionalized public debt funds was a way for the affluent to invest in the operations of the state itself, giving them a vested interest in its continued integrity, and a way for the well off to collect rent on national prosperity.
In the fiat age, whether or not this kind of upward redistribution occurs is in part determined by whether or not the central bank allows interest rates on government securities to rise, and also on other factors related to the general state of economic equality or inequality in the society's capital structure.
More quotes from Pilkington:
in some ways, the book is a mess owing to a lack of a solid macroeconomic framework...
The more I read Piketty the more I see him as synonymous with the Hollande government in France; proposing taxes at a time when these would ruin the economy while maintaining very mainstream opinions on the role of the public debt in the economy
Hollande has been a big disappointment. Hollande and Piketty both have ties to the French Socialist Party...
Probably the reason that Piketty proposes a global wealth tax is because a national one will just result in capital flight, which it has not only in France. In fact, the world is now entering a race to the bottom in taxing capital. This race is already taking place in the US with Texas leading the charge. Then are are all the tax shelters, such as the Caymans, which one of the world's chief capital centers.
I think that Piketty is saying that under capitalism, only a global wealth tax can be really effective in maintaining a semblance of equality.
If a global wealth tax is not feasible to impose, then another system must be instituted to replace capitalism, in which money and machines dominate over people. That's some form of socialism, in which people are in charge in government of the people, by the people and for the people instead of those who own governing oligarchically.
Doh.
What happened to the old adage: if you want access to our markets you have to play by our rules.
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