WATCH: Sen. Elizabeth Warren and author Thomas Piketty discuss economic inequality (via Raw Story )
A discussion between Sen. Elizabeth Warren (D-MA) and economist Thomas Piketty regarding income inequality and how to combat it will air Monday night at 8:30 p.m. EST. “It’s fundamentally this question about whether or not the game is rigged,”…
2 comments:
Should be interesting.
Piketty's discusses ways in which the game might be rigged. (i.e. executives awarding themselvees super-salaries.) But his main view would seem to be that capitalism that is not subject to democratic control has a tendency to generate increasing inequality even when it is not rigged.
Even without government, unless the unrealistic assumptions of neoclassical economics apply — perfect competition, symmetrical information, etc. — then economies of scale will take over and eventually monopolies, monopsonies, and oligopolies will form, introducing power relationship that enable rent extraction.
It takes law to establish fair markets, enforce contracts, etc, and and soon as there is law, there is government. Government are subject to capture in democracies, and other forms of government capture power for a cohort by design.
Fair markets are not completely free from exogenous intrusion since some intrusion of law and justice is required for markets to function in an orderly way. This introduces institutional power.
Any attempt to exclude institutional influences or not take them sufficiently into account is bound to abort any attempt to create economic models sufficiently rich and robust enough to represent actual conditions.
Neoclassical economics, especially when used as the basis for neoliberalism as a social, political and economic program for a society, is essentially propaganda for the wealthy and powerful.
Neoclassical modeling may be useful for creating gadgets for heuristic use, but for modeling the world representationally, not. There is no homo economicus, nor is there an economic space. These are simply fictions, and potentially very misleading ones at that.
Piketty seems to suggest this for what I gather from reading reviews, but he does not seem to pursue it, since that is not is purview in the book. I would say that he certainly seems to recognize it though.
Elizabeth Warren gets it out of the box since he is coming at it as a lawyer and understand institutional arrangements and how they operate. This is her focus.
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