Feb
5
#3 Post – Josh Solomowitz
February 5, 2015 | Leave a Comment
Picketty really changed how our society looks at economics and the inequality gap simply by publishing a book. It’s insane to me that one person, throughout the course of history, can have such a large impact on our societies. This was proven over and over again in time from people like Newton, Einstein, Jobs, Gates, and Edison, among many others. Their contributions have had compounding effects over time and have led to major innovations and advancements in society. It usually only takes one person.
That being said, I think that Picketty (at least the articles describing it) brings up some good points. First off, income equality is a by-product of capitalism – it’s an outcome that is unavoidable. With generated wealth from individuals comes an ever-increasing gap between them. It is difficult to stop this gap from getting bigger unless an official body were to step in. Naturally, I don’t think it would stop on its own.
These articles, for the most part, were very critical of Picketty and his ideas. I think that he proposes some ideas that many find threatening or are just afraid of. I don’t think that his ideas, being as new as they are, could be implemented now. Some things need to change first before radical ideas go into effect. Theoretical models and ideas come first, then they are remodeled and changed to work on a realistic platform. It seems to me that this is the case and that Picketty has already done the theoretical part.
Some of his ideas are a bit too extreme, in my opinion, and I agree with some of the critique. For example, I don’t think that the upper class should be taxed 80% of their income. The wealthy in our societies (and all of those who want to become wealthy) would be discouraged and would not want put their best efforts forward. Wealth is a great driver for innovation – the motivation to succeed, in most cases, is simple cash. The growth rate is far below the the return on capital – people just continuing to grow their wealth. These two should be somewhat close to each other; today though, they are infinitely apart.
The graphs really resonated with me; it provided much needed visuals. It only makes sense that the wealthy influence governmental policy – otherwise most of the wealth in our country wouldn’t be controlled by so few! There needs to be more regulation and more taxes on the upper class – not an overwhelming amount – but a good chunk of their income should be taxed. This would not only reduce the income gap, but also bring much needed income into the government that could go towards supporting the lower and middle class.
I think that history always will repeat itself in some way or form. “The more things change, the more they stay the same.” The majority of wealth in America was controlled by the few in the early 1900’s, then decreased in the middle of the century, and have gone even above to what they were today. It is on a path to only increase in the coming years.
Picketty being compared to Marx only puts a negative connotation to him – anything dealing even remotely to communism is viewed poorly in Western societies. The thought of communism scares many people, even though it does have its merits. While never having read the book itself, I have heard great reviews of it (other than some of these articles). I look forward to picking up a copy of it soon!
