Just finished this long review of Thomas Piketty’s new book last night. Sounds as Though Piketty is a thorough economic scientist, and like most scientific writing, offers some measurements with conclusions with which the rest of us then run wild, like birthday kids on cookie cake.
I don’t read much cause for pessimism in Piketty’s analysis, at least as presented in the more sober reviews. The concentration of money and capital has *always* lead to an explosion/diffusion/redistribution of that money and capital. The Roman empire gave rise to the trade and expansion of the MIddle Ages. Feudal barons wanting territory money for their wars gave rise to the anti-feudal merchants. The empires of the UK and Europe gave rise to the United States and, more controversially, sparked a change in those of Latin/South America, Africa etc.
Looking at the current accumulation of wealth/capital in today’s oligarchies/aristocracies, ^why should it be any different today^? We may d*mn well be building up to the next explosion – the marshaling of resources behind the colonization of space.
Certainly there is a “democratization of technology” concurrent with inherently destabilizing aspects of this centralization/oligarchic expansion: higher taxes, infringement on constitutional rights, “imperial” overstretch, and all the other things that piss citizens off and weaken States. Then there’s the damage to the environment, which gives you a great reason to *leave*. And the social changes wrought by economically-empowered citizens: civil rights, marriage equality, citizen diplomacy, etc.
It seems foolish to treat Piketty’s measurements of wealth-to-income as “measuring the air left to breathe”. Rich getting richer *ON A GLOBAL SCALE* does not mean everyone else will suffocate. And some of Piketty’s proposed solutions like a “wealth tax” seem unlikely, given that the “rich get richer” means the rich will also have an increasing say in governance, if the financial industry is any example. Regulatory capture aside, what about competence? Why do we want the same current policy-making institution to have *more* money coming in?
Number wizards are already engaged with Piketty’s metrics, but I’m pretty sure he did not half-ass those. I’m always more interested in the definition of “wealth”. first, before one measures it.
If it’s just money and property, then it sort of sucks but sort of seems logical that those who already have it can make more of it. Does it include what a person can do with their money/property (and what property they can own)? – If so then that wealth is politically defined, and as such makes sense that “money -> power -> regulatory capture” will again give more to folks with more.
But what if wealth is an abstraction? What if it is the ability to do things? Without getting too T.Friedman, what about the diffusion of wealth as technology and the taking of new people and resources “on line” (e.g. new consumers/producers in African countries, China – e.g. time, land, transportation).