Tuesday, April 22, 2014

Duh. As If

Better still, his theory makes arresting claims -- "that a market economy," as Piketty puts it, "if left to itself, contains powerful forces of convergence [in the distribution of wealth]...; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of social justice on which they are based." And he argues that the divergent forces are likely to be more powerful in the 21st century than they were in the 20th.

So what's the problem?
Quite a few things, but this to start with: There's a persistent tension between the limits of the data he presents and the grandiosity of the conclusions he draws. At times this borders on schizophrenia. In introducing each set of data, he's all caution and modesty, as he should be, because measurement problems arise at every stage. Almost in the next paragraph, he states a conclusion that goes beyond what the data would support even if it were unimpeachable.
Meaning, duh, as if it were possible to tell what role government plays in creating the inequality Mr. Piketty believes capitalism produces.  With government interwoven into nearly every economic transaction, if there's more inequality now than in this nation's past, who's to say that's not because of the role of government?  But more importantly, there's no reason to believe inequality per se makes things worse for those incompetents who are not able to compete in a capitalist system.  Generally, wealth producing economies make things better for folks of all levels of competence.

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