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We Read Seven Thomas Piketty Think-Pieces For You

Thursday, May 01, 2014

Seemingly everyone has an opinion about French economist Thomas Piketty and his new book describing the rise of inequality. Mike Konczal, a fellow at the Roosevelt Institute who blogs about economics at Rortybomb, reviews the think-pieces and offers his own take.


Piketty Think-Piece Number One

“Piketty’s tome is exhaustively researched and contains numerous statistics showing that the American economist Simon Kuznets was wrong to argue back in the 1950s that economies would become more equal as they matured. Piketty argues that inequality has grown in the US and Europe over the past decade because a new cadre of “supermanagers” has captured more wage income, and returns on accumulated wealth have outstripped the (modest) pace of economic growth. This means that people who are already rich are becoming richer, and many inherit their wealth.” – Gillian Tett

Piketty Think-Piece Number Two

“Simply put the rate of return on investments has tended to be greater than the rate of economic growth. It means that the great period of the growing middle class, the golden age of prosperity for all, amounts to a historical blip. Piketty's book ends the idea that a rising tide lifts all boats.” – Stephen Marche

Piketty Think-Piece Number Three

“Piketty’s rather French idea of a global wealth tax isn’t getting nearly the same amount of acclaim as the rest of the book is, and is very unlikely to happen: countries will always compete with each other to attract the stateless rich by not taxing them.” – Felix Salmon

Piketty Think-Piece Number Four

“He is, in a way, saying: go ahead and make whatever reforms you want. Break up the banks. Pass the campaign finance package of your dreams. Reach deep into the bag and pass all the non-reformist reforms that you can think of. All your reforms can’t guarantee that you are safe from the logic of r > g.” – Mike Konczal

Piketty Think-Piece Number Five

“Laced throughout Piketty’s book is an almost medieval hostility to the notion that financial capital earns a return Mr. Piketty believes that the wealthier a society becomes, the more people will claw for the best relative social station and the more inequality will ensue.” -- Daniel Shuchman

Piketty Think-Piece Number Six

Conservatives must “emphasize that the historically proven way to reduce inequality is lifting people from the bottom with human capital reform, not pushing down the top. In short, counter angry progressivism with unifying uplift.” – David Brooks

Guests:

Mike Konczal

Comments [29]

Jessie Henshaw from Way Uptown

There's a repeated omission from this story that rather changes the message in the end. I won't bore you with the solution since for fine minds all you need is to catch a glimpse of the problem, and then try every possible route to the answer till you find it... ;-)

Sure, there does seems to be a strong case in how our economy works for old money making more money than anything else ***in the end***. That's Piketty's principle r > g. It says "the real productive system constantly loses money".

OK, well, the real question is how we get there ***from a beginning*** when the balance of economic forces is the opposite. That would be the time when the economy worked by the OPPOSITE PRINCIPLE, g > r. When growth begins it's both historical and logically obvious, as a "start-up" that in order to get going " the real productive system is what makes all the money".

What you can deduce from that is that money keeps making more and more money till the real productive system quite.... after getting a head start. That's the problem to solve.

May. 27 2014 02:55 PM

The "missing" seventh piece might be:
"This ‘ridiculously far-left’ economist is candy for liberals"
By Kyle Smith

http://nypost.com/2014/04/26/ridiculously-far-left-economist-is-candy-for-liberals/

May. 13 2014 02:21 PM


The Brian Lehrer Show
"We Read Seven Thomas Piketty Think-Pieces For You"

I'm glad you read all seven - but you only listed six

Piketty Think-Piece Number One
Gillian Tett

Piketty Think-Piece Number Two
Stephen Marche

Piketty Think-Piece Number Three
Felix Salmon

Piketty Think-Piece Number Four
Mike Konczal

Piketty Think-Piece Number Five
Daniel Shuchman

Piketty Think-Piece Number Six
David Brooks

Let me suggest a seventh:
Welcome to the Paradise of the Real | Kevin D. Williamson
http://www.freerepublic.com/focus/news/3148572/posts

May. 12 2014 12:55 PM
Astrid Hunt

Liked Rothmans comment the best ..However What are we going to do about the situation in "This Great Democracy"??????

May. 02 2014 12:27 PM
OC-Independent from California, USA

Most of the wealth at the top is doing nothing to create jobs, pay wages, build infrastructure. Most wealth invested in the stock market does not finance new companies but is merely buying existing ones at various prices. So "trickle down" does not work at all, and the occasional Rolls Royce or Masserati purchase is so infinitesmal compared to the scope of the wealth at the top that it hardly matters. No, most of the wealth at the top is designed to do one thing, and one thing only, -- produce more wealth.

May. 02 2014 11:18 AM
Taher from Croton on Hudson

There are two issues never discussed when the subject of economic/ social inequality comes up.
First it’s in the genes of capitalism itself that leads to absolute dramatic difference of wealth distribution and that a when the State/ government is bought reform is impossible.
Secondly the consequence of hyper capitalism is spoken of in terms of job losses, and general hand ringing. I believe a dramatic result of Capitalism inequality is people resorting to organized crime to make a living.
Mexico is an example. In the early 1990’s Mexico adopted the Washington Consensus, http://en.wikipedia.org/wiki/Washington_Consensus. That lead to massive job looses and poverty. To fill the cap criminal drug gangs were formed as an employer of the employed. The same situation has accrued in Russia.
Organized crime becomes the employer of last resort when people have no alternative irrespective of the country. Who is to say that is not America’s future?

May. 01 2014 11:19 AM
fuva from harlemworld

The Horatio Algers amongst the rich are relatively few. Not that this is a new phenomenon. A disproportionate number of tech entrepreneurs were born to academic/professional parents or other social capital...At least, in your resignation, don't be in denial.

May. 01 2014 11:13 AM

All of this rabble-rousing makes for nice intellectual entertainment but is not to be taken seriously. Capitalism is nature's way of materially rewarding the clever, the strong, the innovative, the good looking, the lucky and those relatively few who have the talent to climb the ropes to the top of the material ladder on the heads of those less capable. No revolution is ever going to change that.

May. 01 2014 11:02 AM
fuva from harlemworld

Poverty is relative. Comparing standards of living across communities and time usually misses the point for this reason...Much more at stake here than flat screen tvs (bought on credit). Sociopolitical power, economic productivity, democracy, social mobility, the expectation of these...

May. 01 2014 11:02 AM
Ira Gerson

I applaud David Brooks' emphasis on education. But where does he expect countries to get the monetary resources for this if not from increased revenues. And, I do not accept that this can be achieved solely by the private sector's doing; their first obligation, and rightly so, is to their bottom line.

May. 01 2014 10:55 AM

The "poor" in the West today have things that ancient kings and emperors couldn't dream of, such as widescreen TVs and videogames and the ability to talk to anybody across the planet or to text them. It is technology that has freed the slaves, made "work" relatively perspiration-free and so on.

The 10th commandment covered it:

10 “You shall not covet your neighbor's house; you shall not covet your neighbor's wife, nor his male servant, nor his female servant, nor his ox, nor his donkey, nor anything that is your neighbor's.”

May. 01 2014 10:47 AM
Jaycee Bohannon from Mount Vernon

To CaptainDrG
The "Federal" Reserve IS a cartel of "super rich bankers." It is not and never has been a true part of the U.S. government. In 1913 we ceded to this cartel the right to, in essence, print and issue currency in the form of debt, thus transferring an essential function of government to private hands. The problem with concentrated wealth is not that it deprives the masses but that it results in the concentration of POLITICAL power. We need not so much a redistribution of wealth as a redistribution of POWER. We can do that only through enacting the right laws and not allowing them to be hijacked by corporate lobbyists.

May. 01 2014 10:45 AM
H. M. Hoogenboom from New York

I'm afraid that Piketty's main point was missed by Mr. Konczal, Mr. Brooks and others, who focus on inequality. It's about DEMOCRACY. Piketty writes, on page 1, that "capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based." Or as he said recently, "I believe in private property, but capitalism and markets should be the slave of democracy and not the opposite (The New York Times, 4/19/14). Of course there is always inequality. The questions are about what kind and how much for the kind of democratic society we want to live in as a country. Read the book and skip the journalists. It's an accessible, well-written book for non-economists (like me).

May. 01 2014 10:41 AM

Although we didn't have the volume of numbers, Piketty's analysis of the overarching movement of capital vs workers over time is actually part of what I learned in my high school economics class! In fact, I've been arguing this with my libertarian friend for 15 years. I am grateful to Piketty for having done the vast research that supports this idea. Capitalism "saves" people from poverty in its initial stages but, once established, without "regulation" it crushes those at minimum wage and eventually all those who aren't part of "capital." That is how capitalism works because it is basically an a-moral system of production and distribution whose sole purpose is profit. Competition without regulatory law forces cruel decisions onto business because without those decisions they are out of business . . . dead . . .caputsky. Ironically, regulation can actually be said to save businesses and/or capitalism.

May. 01 2014 10:36 AM
fuva from harlemworld

It's unjust, antimeritocratic income/wealth concentration that BEGOT bolshevism...Ok, enough.

May. 01 2014 10:36 AM
fuva from harlemworld

Wow. Someone on this board seems to be suggesting that
• The death of the middle class should be accepted lest the "entire system be weakened for everyone"...Just who are the people that the dead middle class and the wage slaves -- the majority -- should be preserving the predatory system for?
• That unjust, antimeritocratic income/wealth inequality is not destabilizing, but highlighting and attempting to address is...Ever heard of a "banana republic"?
SMH, as usual. (And probably playing myself by even trying to make sense here.)

May. 01 2014 10:32 AM
John A

'Buz,
When freemarket forgets the poor,
The government should be there.
When the government forgets the poor,
the masses have to correct it.
Simple stuff.

May. 01 2014 10:30 AM

All of this neo-bolshevik baloney will only lead to bloodshed in our country and will solve nothing, as happened in Russia in 1917.
The poor will always be with us, and charity is the only answer besides modest government programs for those who really are incapable of work such as the aged and disabled.

May. 01 2014 10:18 AM
fuva from harlemworld

Current levels of income/wealth inequality are neither just nor sustainable for civilization. But any solution requires global cooperation; individual countries are faced with a prisoner's dilemma.

May. 01 2014 10:18 AM

Instead of taxing income,
We can save more than the entire present tax revenues by not giving welfare to super rich bankers:

Federal Reserve gave $16.1 Trillion since 2007 to:
Citigroup: $2.5 trillion ($2,500,000,000,000)

Morgan Stanley: $2.04 trillion ($2,040,000,000,000)

Merrill Lynch: $1.949 trillion ($1,949,000,000,000)

Bank of America: $1.344 trillion ($1,344,000,000,000)

Barclays PLC (United Kingdom): $868 billion* ($868,000,000,000)

Bear Sterns: $853 billion ($853,000,000,000)

Goldman Sachs: $814 billion ($814,000,000,000)

Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)

JP Morgan Chase: $391 billion ($391,000,000,000)

Deutsche Bank (Germany): $354 billion ($354,000,000,000)

UBS (Switzerland): $287 billion ($287,000,000,000)

Credit Suisse (Switzerland): $262 billion ($262,000,000,000)

Lehman Brothers: $183 billion ($183,000,000,000)

Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)

BNP Paribas (France): $175 billion ($175,000,000,000)

Federal Reserve's nearly 100 year history was posted on Senator Sander's webpage.
http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

May. 01 2014 10:18 AM
Barb from Manhattan

So-called trickle down economics (the GOP model, which remains controlling in the US, despite its glaring failures) is the ultra-rich as a male dog, lifting its leg and letting it trickle down on us. No thanks.

May. 01 2014 10:17 AM
JJ

You guest is talking about tax rates of political candidates, it was reported that deBlasio had an 8% tax rate when he released his taxes.... how does that square with his liberal views. Shouldn't he pay more??

May. 01 2014 10:14 AM
John A

Best single source on Piketty I've seen (page+onair). THX WNYC.
-
331X the Average workers salary (AFL-CIO 15april), No longer measured against the lowest workers salary. Now that's nuts.

May. 01 2014 10:14 AM

Return of estate tax?

May. 01 2014 10:13 AM

It was NEVER a capitalist idea that income inequality would disappear. Quite the contrary. People were essentially equal when we were hunter/gatherers with no property at all. Hunter-gatherers, as for example the "indians," had no notion of property. The clan or tribe shared in the kill.

It's only with the rise of trade, cities, civilizations that we have notions of private property which included land, gold and captured slaves and the creation of propertied elites. And when one nation conquered another their populations became temporarily "middle class" as stolen booty and slaves gave the winning nation a period of prosperity that did not last forever.

After WWI and WWII we developed a temporary middle class, as happens in countries that win wars and control trade and other developments for a while. But those temporary advantages go away and the normal balance reasserts itelf, which is a properties elite and their workers beneath them, including "wage slaves." That cannot be changed without weakening the entire system for everybody. The equilibrium will always reassert itself eventually.

May. 01 2014 10:13 AM
fuva from harlemworld

It's hard to get the book these days. B&N won't have it until May. Is Amazon behind this? They're sold out too.

Anyway, what I've heard about Piketty's analysis seems somewhat obvious.

May. 01 2014 10:13 AM
Hugh Sansom from Brooklyn

A few things to note:

1. There are some outstanding comments on Piketty not listed here, including especially comments by Bradford DeLong, James K. Galbraith, Paul Krugman, Robert Solow, and (in one piece) Jacob Hacker, Paul Pierson, and Branko Milanovic.

— Solow: http://www.newrepublic.com/article/117429/capital-twenty-first-century-thomas-piketty-reviewed

— Hacker et al: http://prospect.org/article/piketty%E2%80%99s-triumph

— DeLong: http://equitablegrowth.org/2014/04/12/notes-finger-exercises-thomas-pikettys-capital-twenty-first-century-honest-broker-week-april-12-2014/

— Krugman: http://www.nybooks.com/articles/archives/2014/may/08/thomas-piketty-new-gilded-age/

2. The David Brooks essay just gets basic facts wrong.

3. The importance of capital is strongly motivated _both_ by historical discussions of capital (like those of Marx) _and_ also the very common economic models of production that make production a function of capital and labor.

May. 01 2014 10:12 AM
Al from Reality

I knew they'd include a topic that would bring MChucklehead out of his bunker.

The morning never begins without you, C'twit!

May. 01 2014 10:01 AM

"French economist Thomas Piketty"

(LOL, gee, what sounds wrong about that phrase?)

Here's some balance to the usual Lehrer segment bias and the link-

"While not quite inducing Beatlemania, French economist Thomas Piketty’s visit this week to America has inspired the Washington analog of teenage frenzy."

http://www.forbes.com/sites/scottwinship/2014/04/17/whither-the-bottom-90-percent-thomas-piketty/

May. 01 2014 09:56 AM

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