American Elephants


Why is the Left So Suddenly Rapturous About Income Inequality? by The Elephant's Child

Inequality is currently a big deal because 1). Barack Obama wants to use it in his campaign for keeping the Senate in the fall elections 2). the lapdog media is obediently cooperating in emphasizing Obama’s theme of the moment and 3). A new book by French economist Thomas Piketty which is focused on inequality, wealth redistribution, capitalist wealth, and the horrors of capitalism. Karl Marx is revisited for the 21st century.

From Cato’s Michael Tanner:

Capital in the Twenty-First Century provides a serious critique of inequality in modern capitalist economies and warns that market economies “are potentially threatening to democratic societies and to the values of social justice on which they are based.” To remedy this, he argues for a globally imposed wealth tax and a U.S. tax rate of 80 percent on incomes over $500,000 per year.

The Left has been rapturous. In the last two months, Piketty’s book has been cited more than a half-dozen times by the New York Times, something that has happened with no other book in recent memory. Paul Krugman hails it as “the most important economics book of the year.

From Daniel Suchman in the Wall Street Journal:

Thomas Piketty likes capitalism because it efficiently allocates resources. But he does not like how it allocates income. There is, he thinks, a moral illegitimacy to virtually any accumulation of wealth, and it is a matter of justice that such inequality be eradicated in our economy. The way to do this is to eliminate high incomes and to reduce existing wealth through taxation. …

Soaring pay for corporate “supermanagers” has been the largest source of increased inequality, according to Mr. Piketty, and these executives can only have attained their rewards through luck or flaws in corporate governance. It requires only an occasional glance at this newspaper to confirm that this can be the case. But the author believes that no CEO could ever justify his or her pay based on performance. He doesn’t say whether any occupation—athletes? physicians? economics professors who sell zero-marginal-cost e-books for $21.99 a copy?—is entitled to higher earnings because he does not wish to “indulge in constructing a moral hierarchy of wealth.”…

He assumes that the economy is static and zero-sum; if the income of one population group increases, another one must necessarily have been impoverished. He views equality of outcome as the ultimate end and solely for its own sake. Alternative objectives—such as maximizing the overall wealth of society or increasing economic liberty or seeking the greatest possible equality of opportunity or even, as in the philosophy of John Rawls, ensuring that the welfare of the least well-off is maximized—are scarcely mentioned.

Michael Tanner had the most obvious answer to the problem of the inequality of the lower classes, or the less fortunate: “Instead of attacking capital and capitalism, why not expand the number of people who participate in the benefits of having capital? In other words, let’s make more capitalists.”

It should not be surprising then that “the Left is unremittingly hostile to exactly those policies that would give workers more access to capital.” They want to abolish 401(k) plans, replace them with social insurance, limit tax breaks for wealthier participants, and expand (the broke) Social Security instead.




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