Feb
4
Class #3 Tina Jing Ru Shen
February 4, 2015 | Leave a Comment
I found it interesting that we are focusing on Piketty this class. But are we really? Or are we trying to extract Piketty’s ideas and apply it to our existing knowledge of income inequality from the first class? Although Piketty proposes extreme and controversial measures to monitor income inequality, I agree with some of his ideas.
Piketty states in Capital in the Twenty-First Century that the global economy will fall back to how it was in the Western European 18th and 19th centuries. It does seem that several countries today are suffering economic instability, a rippling effect of the World Wars, and only a small group of people are overwhelmingly wealthy. However, I do not agree that we will likely return to the severe inequalities suffered in the old days because our society is different from those in the 18th and 19th centuries. Today, people in most countries have freedoms that they did not have back then, and most of the modern countries are, or are developing to become, democracies.
Without an all powerful force that suppresses the people as featured in the monarchies and dictatorships of the past, we can detect and expose corruption much more easily. Additionally, with media that can spread information around the world within a second, news if inequalities spread like wildfire. If people around the world speak up to social, economic, and political injustices, corrupted groups would have no choice but to reform. I believe that with the just systems that we have established today (checks and balances, the United Nations), it would be difficult for us to neglect growing inequalities, and allow us to step backward in our existing progress and become an economically divided society.
One point that Piketty proposes in his book that I partially agree with is that we should impose heavier taxes on the wealthy. Because they earn more, they should give back more. Similar to Wilkinson in the TED talk, Piketty agrees that the wealthy should be taxed higher. But, I am not sure if the 80% tax rate is reasonable. I wonder how Piketty came up with this number. And according to The Economist, he does not justify his claim that the wealthy should be taxed. Like The Economist notes, this lack of explanation reduces Piketty’s credibility. Also, couldn’t we do something about the poor? From The Economist‘s summaries, it seems that Piketty will only take measures targeting the wealthy. But what can we do to level the middle and lower class?
The articles that critiqued Piketty’s work state that the characteristics of the wealthy today are different from the wealthy from before. In reference to The Great Gatsby, the rich were “old money” back then, but today the affluent are “new money” that actually earned their economic status. Yes, a lot of the richest today worked hard to get up top, but if we look more into the future (or even read about the disappointing news of celebrity children partying, overdosing, and living off of their parents), won’t the richest people today just pass their wealth down to their lazy kids? Of course not all rich children are incompetent and eat off of their parents, but there has been a trend this decade in which people, especially rich ones, are having children much later in their lives. As a result, parents cherish their children more, and sometimes in a bad way.
More parents are spoiling their children than parents in previous centuries – as in the past children started working and supporting their families at very young ages. Because of this spoiling, a lot of kids miss opportunities of becoming independent and self-sufficient. The problem of slacking children is most obvious in China, as kids were spoiled by their families before the one-child policy was uplifted. This issue of spoiling children could lead to the issue that Piketty mentions. Perhaps these rich spoiled children will grow up to be the rich that inherit their families’ wealth.
I agreed with some of Piketty’s claims, such as a potential setback to “old money” elites. However, I do not think that we will be experiencing a second Gilded Age. Unlike the societies during the past centuries, we have advanced technology and new governing systems that can monitor corruption. As an aside, I found Piketty’s research interesting, and I would like to learn more about his findings when he compared trends of inequality throughout history. However, One of the biggest questions I have is: Is Piketty the only one who is making these critical claims? Why are we solely focusing on Piketty’s work this class? And since Piketty’s work went viral over a night, does that mean actions towards income inequality will be taken soon? If yes, would countries accept Piketty’s proposals?
