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Piketty on income inequality

Piketty on income inequality

Taking away the bulk of the rich’s money will fix income inequality, according to French economist Thomas Piketty:

Piketty’s terror at rising inequality is an important data point for the reader. It has perhaps influenced his judgment and his tendentious reading of his own evidence. It could also explain why the book has been greeted with such erotic intensity….

It’s no surprise that the idea of levying enormously high taxes on rich people’s money has had rising support in this era of proudly unearned self-esteem and entitlement, as well as decline in the power of religious prohibitions such as the commandment against covetousness.

More at the WSJ:

While America’s corporate executives are his special bête noire, Mr. Piketty is also deeply troubled by the tens of millions of working people—a group he disparagingly calls “petits rentiers”—whose income puts them nowhere near the “one percent” but who still have savings, retirement accounts and other assets. That this very large demographic group will get larger, grow wealthier and pass on assets via inheritance is “a fairly disturbing form of inequality.” He laments that it is difficult to “correct” because it involves a broad segment of the population, not a small elite that is easily demonized.

Oh, but it can be done. Where there’s a will, there’s a way. Piketty need only take lessons from Stalin re the kulaks, and from Pol Pot re—well, re just about everybody.

This is what Piketty proposes as a remedy for the terrible problem of income inequality [emphasis mine]:

Mr. Piketty urges an 80% tax rate on incomes starting at “$500,000 or $1 million.” This is not to raise money for education or to increase unemployment benefits. Quite the contrary, he does not expect such a tax to bring in much revenue, because its purpose is simply “to put an end to such incomes.” It will also be necessary to impose a 50%-60% tax rate on incomes as low as $200,000 to develop “the meager US social state.”

In case you’re wondering, Piketty’s book has been hailed almost universally on the left—and by “left” I mean almost everyone except the right.

They have turned to “income inequality” as the big bad issue because the actual plight of the poor in objective terms can’t be the point any more, since the poor are doing a lot better than they used to be in terms of their standard of living in most first world countries. In fact:

…[T]he last few centuries have seen us banish starvation and famine from a large part of the Earth. In the most successful countries, the average citizen now enjoys a material standard of living that would have made the greatest king of two hundred years ago turn green with envy…

To see how much more an American worker can buy today, compare the number of hours he would have had to work to obtain various items in 1895 versus 2000 (Table 1). Whereas a one-hundred-piece china set would have taken 44 hours of labor income in 1895, a twenty-first-century American would need to work 3.6 hours or less for it. The numbers are 28 versus 6 hours, respectively, for a gold locket; and 260 versus 7.2 hours for a one-speed bicycle (taken from De Long 2000, based on prices in the 1895 Montgomery Ward catalog). Comparing the prices charged in the Montgomery Ward catalog with prices today—both expressed as a multiple of the average hourly wage—provides an index of how much our productivity in making the goods consumed back in 1895 has multiplied…

As all this was going on, expectations and demands have risen, and so income inequality has been the new buzzword. Stamp it out, because it somehow “offends democracy.” The fact that the remedy Piketty and many others propose offends liberty, and the strong possibility that it could end up killing the goose that laid the golden egg, are both ignored and/or minimized in the rush to social and economic “justice”—that is, equality of outcome rather than opportunity.

I’ll let the inimitable Margaret Thatcher have the last word here (the following clip is from 1990):

[Neo-neocon is a writer with degrees in law and family therapy, who blogs at neo-neocon.]


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One wonders how many people have actually read this book and have the background to evaluate it. The blather about inequality raises the question as to whether the source is value-creating activity or whether it is the exploitation of others, which occurs primarily through exploiting political connections to gain rents.

The attitude of Piketty toward the kulaks (aka the Tea Party) is telling. They must be reduced to dependency on the all-powerful state. The state cannot tolerate individuals and families that have earned for themselves a comfortable life apart from that all-powerful state, who think for themselves and who insist on the liberty to live their lives and raise their children as they see fit.

This is a kind of totalitarian Marxism that coexists with markets. It accepts the undeniable truth that planned economies do not work. But who are the winners in this utopian world? They are the commissars that control the state, the priestly class of academics that teaches the orthodoxy of the moment, the news media and entertainers who produce the propaganda,the police who enforce the commissars’ benevolent policies and the petty little bureaucrats who harass ordinary people in return for a small share of the spoils.

    Your comment ought to be made into pamphlet for mass distribution. (permission please?)

    It is by far the most crystal clear summation and resounding rebuke of the morally dishonest arguments and fraudulent generalities by which modern tyrants have claimed the right to rob and subjugate us.

By what possible moral orientation has Piketty become so offended by “income inequality”? He appears to have a psychotic obsession with the wealthy. There is no such moral foundation for money-grabbing looters. “Thou shall not covet’ is already on the Books. Is he using the “Social Justice ploy?”

“Social justice” is just another way of saying “we are going to make sure that every one leaving the ‘party’ has the same amount of ‘stuff’ in their ‘gift’ bags.”

We all know, us earthlings anyway, that equal opportunity does not equate to equal outcomes. The difference in outcomes is the human element.

By removing the human factor from economic outcomes materialism, found in the DNA of Darwinian materialism, becomes preeminent. When materialism takes primacy, mankind is dehumanized in the process. Not to mention that it makes for a bunch of lazy-ass people who are kind of like monkeys who sit on their ass all day long picking at their rear ends

This ‘wealth’ obsession, this ‘other’ form of psycho-morbidity is akin to “affirmative action” and is meant, as Piketty wants us to understand, for punitive purposes, as a means to purposefully discriminate against certain segments of the private sector.

Essentially Piketty is invoking class warfare: the promotion and hoped-for legalization of discrimination (codified covetousness) towards the ‘wealthy.’ It is also the promotion of the coercive taking of someone else’s private property and likely meant to satisfy the ‘pseudo-Ghandi’ in the tenured academic elitists.

No doubt Piketty’s message is also coveted – as a self-promoter in hopes of gaining a few more invitations to the cocktail parties of ‘wealthy” elites who want to help us little people.

As I’ve often said, “income” is a crappy measure of wealth.

That may seem to some to be counter-intuitive, but economic verities often are.

The much better standard, and the correct one to apply, is “standard of living”.

Americans who have a LOT of money enjoy very little that those of us in the middle class cannot. And we all, including those we call “poor” in America, live like only kings or tycoons of a century ago could live.

Market economics gave that to us. All Collectivist notions have done is drain wealth, slow progress, and kill millions while wasting the lives of tens of millions more.

Also, note the theme I’ve mentioned: the Collective HATES the middle class, and seeks to reduce or destroy it.

    This is a very good point. Ever wonder why the progs love to define ‘poverty’ as some magical percentage of mean or median income? Think about it…. when using this definition of ‘poverty’ there is only one way to eliminate ‘poverty’…. everybody gets the same.

    Just another prog spin on the famous words of their God, Karl Marx: ‘From each according to his ability, to each according to his need.’

      Ragspierre in reply to Paul. | April 24, 2014 at 2:29 pm

      It is also worth noting that the Obamic Decline has seen the decline in the American standard of living, the explosion of the “poor”, and the diminution of the middle (income) class.

Interesting take, with a link to a leftist take on the Pee-kitty (sorry, I could not refrain) book.

The man is not really a serious thinker. Which means he will be adored by the Collective, and ironically die a wealthy man.

Is it wrong to be intolerant of people who would kill you, steal from you, or otherwise enslave you, should they be given the power to do so?

If society cannot effectively prevent such people from seizing the reins of power, what then must we do to protect ourselves from their predations?

How’s that for some Orwell-grade political calculus?

And this, my friends, is the true reason why the progs are so eager to regulate, confiscate and abolish gun ownership. How will they ever confiscate all of your earnings and assets if you can defend yourself from their tyranny? The fact that we have so many people in this country, many of them ‘thought leaders’, who buy into this marxist claptrap makes me want to puke… or at the very least retreat to my ranch in the Hill Country and oil my weapons. Come and Take It.

    There’s another aspect to liberal’s hatred of other people having money of their own. It’s that they worship power, not money. So they figure that when everyone is poor, they will still have the power and the privileges that come with it. It’s like being rich only without all that evil money.

    A bizarre way of melding self-righteousness and greed but there it is.

cwillia1, Jennifer, Paul, Ragspierre, Immolate — all excellent, literate and incisive comments.

I had the same opportunities everyone else has had.
I either squandered them or did not have the needed talent for some.
how is that the fault of others that had the talent?
its not.
income inequality is jealousy and greed rolled up into a pithy term used by dumba***es.

I love the Thatcher video and not just because she is so obviously right.

The thing that really stands out is that the politicians involved were actually talking to each other. In this country, if the politicians are even in the same room together, it must be a fund raiser.

I miss Margaret Thatcher.

    Paul in reply to irv. | April 24, 2014 at 12:10 pm

    Yeah, she was one for the ages for sure. She had that ability, like Reagan, to point out the wrongheadedness of her opponents while being funny, or at least lighthearted about it.

More than half of all adult Americans will be at or near the poverty line at some point over the course of their lives; 73 percent will also find themselves in the top 20 percent, and 39 percent will make it into the top 5 percent for at least one year. Perhaps most remarkable, 12 percent of Americans will be in the top 1 percent for at least one year of their working lives.

Read the whole thing.

There are not “classes” in American society. There are only “earnings”, and they can vary greatly over our individual life-times. They do so because of OPPORTUNITY, which gives us both the possibility of success AND of failure. Both of which CAN be great teachers informing our NEXT opportunity.

    Immolate in reply to Ragspierre. | April 24, 2014 at 5:16 pm

    Rags – very useful data that. I started out lower class, below the poverty line when I left the service in 1987. I owned nothing of value and got a job making not much more than minimum wage. By the next year my wife had a full-time job and I had one a bit better. 27 years later and I’m securely in the top 20% with sixteen years left to 67.

      Ragspierre in reply to Immolate. | April 24, 2014 at 5:31 pm

      People who study such things call this “churn”. American have always been very “churnish” people.

      If I recall correctly, Milton Friedman’s mom worked in a sweat shop in New York City…and was delighted to have the opportunity.

      I had a friend born in Germany during WWII. His father was a tradesman. My friend WOULD be a tradesman, too, had he not migrated to the U.S. That was what the stratified structure of Europe at the time dialed in.

      The ideal of “cultural democracy”…where we move up and down in income AND we go to the symphony along with super-rich friends…is pretty unique to America. In some parts of the world, it is unheard of. Children are NOT supposed to do better than parents.

      With the Obamic Decline, we are seeing that imposed by economic failures.

Henry Hawkins | April 24, 2014 at 12:38 pm

The goal is socialism and concentration of power at the center. Claiming ‘income equality’ and labeling it a bad thing is just a handy tool to whip up emotions towards supporting actions the average supporter doesn’t realize are intended to further the overall, aforementioned goal of socialism and concentration of power.

It’s the same with global warming, to make you feel guilty or frightened about AGW so you’ll support an agenda that’s really just a global push towards the same goal on a global scale: socialism and concentration of power.

It’s the same with The Republican War On Women, evoke emotions sufficient to override intellect, towards the goal of winning elections in favor of socialistic, central power freaks – more rowers for the agenda ship.

Just like Obamacare, that agenda cannot be sold on its merits, so it must be hidden, lied about, candy-coated and snuck into being on the sly, a political war with no rules or ethics wherein ends justify means, as it always does with self-appointed elitists who are by self-definition incapable of being wrong.

2nd Ammendment Mother | April 24, 2014 at 3:19 pm

What drives me nuts is the failure to understand that when you confiscate wealth, the first people you harm are the people at the bottom. When I have a little extra money, I spend it on things like going to the movies, getting a manicure, eating out and so forth. All of those things contribute towards another business being successful, their employees earning a living and their vendors also profiting. And those people all turn around and spend that money on things. When I have to give that money to the government – then I don’t have it to spend. Out of every dollar the government takes, most of it feeds a growing bureaucracy with a very high overhead.

No one ever heard of this moron Piketty before he came out with this crappy leftist tract. It’s all very cynical, he wrote it to advance his career because he knew there was an audience that would eat it all up. The starting assumption is that all of society’s wealth belongs to the government by default and anything they let you keep is lese majesty.