This ‘ridiculously far-left’ economist is candy for liberals
By Kyle Smith
April 26, 2014
Photo: Post composite graphic
The No. 1 bestselling book on Amazon last week wasn’t about plucky teen girls battling for humanity in a futuristic dystopia. It wasn’t about a boy wizard or a college student who likes to be tied up and spanked.
No, it’s a 700-page French economics tome. And on the Left it’s been received with such a case of the hot-and-heavies that you can think of it as “50 Shades of Grey” for the Acela-corridor professional intellectual statist. “Oooh, hit me with the income-inequality chart again, please!”
The book is “Capital in the Twenty-First Century,” by the ridiculously far-left French economist Thomas Piketty. As its title makes obvious, it’s an unabashed sequel/homage/reboot of “Capital,” Karl Marx’s logically challenged bible of income and wealth redistribution. Neo-Marxism is all Piketty is about.
That has made him the hero of the leading left-wing economics writers of the age, who are feeling momentarily emboldened to wave the red flag. Paul Krugman calls the book “magnificent, sweeping,”Vox’s Ezra Klein thrills to what he says is the book’s prophecy of a “doom loop of oligarchy” and the New Yorker’s John Cassidy says it’s “a book that nobody interested in a defining issue of our era can afford to ignore.”
Actually, you can afford to ignore it, even though Esquire calls it “the most important book of the twenty-first century,” with its breathless writer Stephen Marche adding, “If I were a Republican policy-maker, if I were the Koch brothers, if I worked for Goldman Sachs, ‘Capital in the Twenty-First Century’ would frighten me more than anything at Occupy Wall Street.”
Yes, Lloyd Blankfein is still biting his nails about those capitalism-endangering Occupy kids! He only made $23 million last year. It’s like saying, “I’d like to introduce you to my new friend Kermit … He’s even scarier than Elmo.”
The original “Capital” argued that it was unfair that owners of companies (like Karl’s layabout buddy Friedrich Engels, whose family owned the factories in northern England that generated the profits that Engels gave Marx, enabling “Capital” to be written in the first place) got rich doing nothing when factory workers were doing all the labor. Marx argued — this was scientific fact, in his imagination — that this imbalance was bound to be redressed someday. In fact, low-skilled labor was never valuable and will never be well paid.
Piketty recasts the argument: As Krugman wrote in The New York Review of Books, “Piketty shows, however, that even today income from capital, not earnings, predominates at the top of the income distribution. He also shows that in the past … unequal ownership of assets, not unequal pay, was the prime driver of income.”
And we should be enraged about that because … why?
You can almost hear Krugman and his acolytes — the Krugtrons — say it: Because behind every great fortune is a great crime. Because From each according to his ability, to each according to his need. Because it’s not fair!
So?
Piketty’s book — call it “Capital II: The Wrath of Karl” — calls for a worldwide income tax of 80% on the rich, plus a wealth tax. Which means, I guess, that even after you have worked hard, saved up, paid all your taxes and brought home the Maybach, you’re supposed to sell off a wheel every year to pay yet another tax for having it.
So, yeah, there’s still only one road to the top of the Amazon bestseller list, and it’s sheer escapist fantasy, preferably aligned with adolescent magical thinking.
Piketty admits his book is “utopian,” and as you may remember from eighth grade, utopia means “nowhere.”
This country spent a decade squabbling about whether to restore the top marginal tax rate for couples earning $250,000 from 35% to 39.6% (the 1990s rate). The most liberal president in two generations couldn’t push that through and eventually gave up. Today the top tax rate is at 39.6%, but only for those couples earning $450,000.
Piketty calls for a 60% income tax starting at $200,000, and 80% on those above $500,000 (or maybe $1 million).
Taxation as a weapon of confiscation? Hot stuff to the beardy fellows in the tweed jackets with the patched elbows. Outside the faculty lounge, though, it doesn’t even pass the laugh test.
But then again, Piketty doesn’t get out much. He admits in the book that he has barely left Paris in the last 17 years, except for a few brief trips. Not France: Paris. Paris is smaller than The Bronx. It has as much intellectual diversity as a staff meeting at Mother Jones.
“Capital II,” which is frequently described as the long-awaited intellectual program to the street theater that was Occupy, is going to have exactly the same influence: None. (We often hear about the “Tea Party Wing” exerting its influence on the Republican Party, but do you ever hear of the Occupy Wing stirring up discord among Democrats?)
Just as no Democrat holding anything but a safe seat wanted to be seen as too cozy with Occupy, Piketty’s proposed solutions to the “problem” of wealth and income inequality are too out-there to be cited by any Democrat hoping to compete on the national stage.
We can only hope Hillary Clinton is dumb enough to agree with the Krugtrons that now is finally the moment to call for a hammer and sickle to be added to the stars and stripes.
Sorry, neo-Marxists: Americans, to the continuing surprise and exasperation of those who consider themselves our intellectual leaders, don’t particularly see why we should hate the rich. (Economist Justin Wolfers published an amusing pair of chartsproving that “Capital II” is being snapped up mainly by Boston-DC elites.)
In an April Gallup poll, just 3% of Americans asked to cite our most important problem mentioned the gap between rich and poor. Three times as many were worried about public debt. Twenty percent said “dissatisfaction with government.” The Krugtrons own the airwaves and the pages of the newspapers and the magazines. They try and try and try to sell their product, but they’re stuck with the Zima of social issues.
Americans have an intuitive grasp of how the marketplace works: It’s trickle-down economics, and it’s fine. You’re an electrician or a roofer or a mason, some hedge-fund type buys three properties down the road because he’s going to tear them down and build a mansion in their place, and what do you see? You see dollar signs, not class jealousy. So what if he’s rich? Some of his money winds up in your pocket. He makes the numbers dance on Wall Street but you get richer too, and after you spread the money around the stores in town your neighbors do too. When the Monopoly Man comes to town, everybody wins, from the monocle maker to the top-hat salesman.
It’s inconvenient for the Krugtrons to acknowledge this, but only they see the economy as a story of how you should be resentful of your growing wealth if somebody else’s wealth is growing faster.
Writes economist Arnold Kling, “Piketty’s nightmare scenario, in which capital accumulates and has a high return, is a terrific scenario for wages in absolute terms. If workers care about what they can consume, as opposed to the ratio of their net worth to that of the capital owners, they would hate to see any policy that might interfere with the high rates of investment that Piketty is envisioning.”
Liberals see Piketty’s book as the smoking gun that proves capitalism killed equality. Inequality is huge and growing. Piketty has proven it. It’s science!
But of course inequality is growing. So what? Every time another Mark Zuckerberg or Steve Jobs comes along, the “share” of wealth that is “distributed to” or “captured by” the top 1% increases. The way ordinary people think of all this is that rich people “create” or “build” wealth, and more wealth is a fine and respectable thing. When LeBron James goes from poor to stupendously rich, inequality over time registers an uptick — because he left one side of the graph and moved to the farthest reaches of the other side.
When Jobs died, did angry protesters throw bricks through the windows at Apple stores? What I saw was more like flowers and love poems. We admire our rich in this country and we don’t begrudge them their superior talents.
We even admire boorish rich people (Donald Trump), rich people who cheated (real-life Wolf of Wall Street Jordan Belfort gets $30,000 a speech) and those who did nothing to earn their lucre. The last member of the Kennedy family to earn an honest million, in finance and booze, was Joseph Senior. Do we see pitchforks and torches converging on Hyannisport?
The Kennedys portrayed themselves as champions of the little guy, just as the Krugtrons do, but they needn’t have bothered. It’s their glamour, not their economic policies (which anyway changed greatly between Jack and Teddy) that made them beloved royals.
So why do rich people like Paul Krugman fret so much about the riches of others?
For all its length, the story of “Capital II” is the story of its reception, because it’s the “Brief History of Time” of economics: many will buy but few will finish. And the rapturous reaction is the simple tale of Krugtrons who hate their betters: It’s the five percenters, three percenters and even one percenters railing against the 0.1 percenters.
Confiscating huge chunks of the paychecks of the super-rich would turn down the spigot, reduce the trickle-down and make all of us worse off. Piketty’s stated reason for this proposal is not to bring in a lot of revenue (it wouldn’t) or to provide balm for the masses but simply, he writes, “to put an end to such incomes.”
That’s spite: irrational and unproductive. Skip the 700-page French economic texts and never forget that life is like high school. Wall Street guys are like the football players, and the geeks will always resent the jocks.
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