It's striking how many mainstream economists, financial journalists, and gnomes
of Wall Street have welcomed Piketty's best seller, or at least don't see it as
particularly threatening, as Piketty himself has acknowledged. The liberal
bourgeoisie believes the point has been reached where some measures to restore
mass purchasing power are necessary to revive the stagnant economy, and have
seized on Piketty's work to support the claim.
Even Billionaires Love This Guy’s Book About Inequality
By Mark Gimein
Bloomberg News
April 24, 2014
Among the fans of French economist Thomas Piketty, count one you may not have
expected, who seems to have been reading his book, "Capital in the 21st
Century" with keen interest:
@Carl_C_Icahn: Spent weekend reading great new book "Capital in the
Twenty-First Century" by Thomas Piketty. The book highlights future problems
for our economy brilliantly. I intend to discuss it more on Shareholders'
Square Table shortly.
Carl Icahn announcing that he's reading Piketty's book probably works to the
advantage of both: Icahn shows he's intellectually engaged, Piketty gets to
know he's reaching the corridors of power. That Icahn should actually bother to
read the book, though, has incited disbelief:
@pkedrosky: Speaking of Piketty's book, laughed out loud at Carl Icahn
claiming he read Piketty's book over weekend. Sure you did Carl. Sure.
Really, though, it's less of a surprise than you might think at first blush.
Icahn (net worth $22.7 billion; rank among world's billionaires: 32) acquired
his wealth starting from modest circumstances. He grew up in the outskirts of
Queens... it contains hardly anyone who is truly rich.
A self-made billionaire being somewhat in tune with Piketty’s book is not
shocking. More perplexing is why in an era of massive self-made fortunes like
Icahn’s, Piketty chooses to talk largely about the dangers of dynastic fortunes
built up through inheritance.
No question, the income gap between rich and poor has skyrocketed in the U.S.
and Europe. But the driver of that in the United States has not been
inheritance. On the contrary, the general trend over the last decades has been
for more of the wealth at the top to be earned through wages and
entrepreneurship. The main source for that information is work by theUC
Berkeley economist Emmanuel Saez together with … yes, Thomas Piketty.
This is true just about any way you look at it. The share of income for the top
0.5% of Americans coming from capital gains was just 13.4 percent. Even for the
very top of the pyramid (the 0.01%) the share was 41.3 percent, much less than
the share of top incomes that came from capital gains in the 1960s and 1970s.
Meanwhile, dividends — once the main source of income for those at the very top
— diminished. Until 1980, the top 0.01% got more of their income from dividends
than than from wages (for much of that period, four times as much).
So why does Piketty spend much of his book concentrating on inherited wealth?
He may simply be prescient. Taking a long view of history, a return to those
days of rentier’s living off bond coupons — maybe somewhat harder than Piketty
asserts — could be around the corner.
Still it’s worth pointing out that the problem of inequality that comes from
inherited wealth is less thorny than the problem of wealth that is acquired
through effort — or even luck. Piketty writes:
“The significance of inequalities of wealth differs depending on whether those
inequalities derive from inherited wealth or savings. … Inequality is not
necessarily bad in itself: the key question is to decide whether it is
justified, whether there are reasons for it.”
The buildup of inherited wealth is the easiest kind of inequality on which to
get a consensus. There’s nothing especially admirable about being born with a
trust fund.
Billionaires and socialists agree about expanding opportunity. Much harder is
figuring out what to do when even relatively fair opportunities still yield
brutally unequal results.
Plenty of the well-off will wring their hands over the dangers of dynastic
fortune. Good luck reaching the same kind of consensus about the earnings of a
chief executive, the programming team at a successful startup, the creators of
a TV show — or a billionaire mogul who worked his way up from Queens.
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l
