Feb
5
Blog Post #3 Jake Greenberg
February 5, 2015 | Leave a Comment
I am yet to read Piketty’s, “Capital in the 21st Century” so I unfortunately can only go off of what I have heard and the four readings that attempt to summarize/interpret it. I am a big fan of Paul Krugman, however, so I put most of my focus on his feelings towards it. This is not simply out of bias, but because the two Economist articles mentioned little content, and the little they did they brushed off, rather than actually trying to interpret and understand the writing/theory. I am very interested in widespread economics because of how often it is used to determine policy, while manipulating the data in favor of whoever supports them and calling it facts. A big way of changing the data is by not including wealth, only counting incomes, which these articles address.
The “A Modern Marx” article seemed more unsure about how to assess Piketty than Mitt Romney was when asked why he wanted to be president. The article consistently attempts to downplay its role and significance as policy while, for the sake of not looking silly, also didn’t refute his correctness in his ideas. They simply acknowledged it as true, but simply theoretical rather than practical. What made me laugh, and showed how intimidated they were by this book, was when they say that this research isn’t conclusive because it is based off of…the past. The past!!!! The one thing from day one we are told never to ignore, the past. The one thing that continues to bight the world in the ass when it is ignored, the past. The thing that economists in general ignore in favor of “speculation” for the future, the past. The past is the best marker for how things will come because humans aren’t very complex, they might be different people from generation to generation but we do tend to repeat ourselves even as markets and technology change the field of play. I thought it was scoff-able that they would attempt to downplay his finding based on his rooted research in the past.
Similarly, the Economist summary article attempts to put Piketty’s book into 4 paragraphs, while using two and a half of them to abstractly discuss the topic rather than the content. This is supposed to be an article of review and yet both Economist articles spend only a page and a half on the topic. Both the New Yorker article and the Krugman article incorporate graphs and commentary based off of the actual book, which should be expected when discussing…a book. As the article does mention, wealth is reaching levels that haven’t been seen since a stratified time in the early 20th century, and this should worry everyone.
The New Yorker article is interesting because of its use of easily assessable, taken from the book, graphs that help illustrate the points as the discussion goes on. In past classes I have had to look into things like the Gini coefficient and I admit that even “understanding” it doesn’t necessarily make you any more sure of what it actually means in terms of the breakdown within each country of income disparity. What was also interesting was to see that none, or at least not most, of Piketty’s ideas are new. Many of them have been used or theorized by other prominent economists. The difference is that he added on a layer of research by using the idea of tax records and adding to that the new abilities and technology usable today to for more accurate statistics off of it. To think that 1 percent of a given population could have a third of a country’s entire wealth, or more due to the “invisible” nature of it, is frightening. In a time where lobbying is essential to moving on and passing legislation, to think that if every single person of the lower 50% of the country, every single one, put all their money towards lobbying for protection, they could be equally, or still probably outmatched based on the difference of income versus disposable income, matched by just 1% of the population. It is a republic, not a democracy, so the availability to control representatives is more significant that populous vote so this is a huge problem.
I didn’t want to focus on discussing the Krugman article at length because I would go on for a while, I’d like to discuss it in class, and I’m sure many people discussed him a lot. My question(s) however are based off of his arguments. Disposable income is inherently attached to “wealth” because of its very definition of accumulated, sustained monetary position, so why is it that it stays so invisible to economists and policy? Is it because income is really more important, or because of how much scarier the disparity would be if wealth was accounted for? This invisible wealth is exactly what makes of “The Giant Pool of Money” that sunk the world into such a recession in 2008, so how is it that they continue to create a birthright for their heirs while their is a whole class of “working poor”? As both Piketty and Krugman discuss, Krugman has discussed this in many articles over the past few years, a caste system is being created and equality, even in opportunity -which is supposedly why it is irrefutable to counter- isn’t equal. Education and career opportunity for those of accumulated wealth is exponentially higher than those who work towards those goals.
