Capital in the 21st Century
1Liner
: Piketty's new Socialist Manifesto concludes r>g and 80% of economists disagree.
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Ignoring that French Economist, is like saying pygmy basketball star. Piketty had 3 basic premises:
- that median household income had only risen 3.2% in the last 30 years (regurgitating Saez's work)
- that class mobility has all but stopped and most people are inherited rich
- that the way to solve inequality is to try to punish the successful, and redistribute their wealth down, to make things more fair (inferred)
He’s blatantly wrong on all of them.
The first is off by an order of magnitude. It turns out that incomes have risen at the lowest levels by 10x that amount. And when you factor in benefits and hand-outs, it's even higher.
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| Paul Krugman of course loved it. But other than Piketty, no other economist has been as wrong (and self-contradictory) as Paul. And macroeconomists posing as macroeconomists (wrapped in the skin of a political polemicist) are not where you should get your macroeconomic advice from. |
Multiple economists have shown that in the U.S. especially, 73% of people will touch every quintile in their lifetimes. And that there are more people that move across brackets than remain in only one. Mobility is high, and most of the rich today, were not the rich (or families of the rich) in the '80s. If they're different people, then it disproves his, "wealth is mostly inherited" premise.
And history has proven that redistribution gets politicized and never works (in the long run), while Capitalism was responsible for raising people out of poverty (the best system we’ve ever had), facts he sort of omitted in his analysis.
(3) is nuanced — just because it worked well in the past, doesn’t mean it will continue to work well in the future. We don’t know... we just strongly suspect. But his whole Malthusian Chicken-Little theory, is incredibly redundant: the world (as we know it) will end if you don’t give the leftists all your rights and all your money to let them shepherd us through these troubling waters. Historically, we ignored them more often than not and got through much better when we did. The few that were gullible enough to give up control so they could "help", ended in wars, purges, famines, re-education camps, mass murders, and other brutal violence and tyranny. But the only thing all these same theorists have in common, in all of recorded history, was they're wrong. I have little reason to think that Piketty is going to be the exception in the group.
So other than the 3 foundational premises are all wrong, and his conclusion having all of recorded history going against him, the Press loved it. The real economists hated it.
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