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The book is very good and interesting, but it has pretty obvious weaknesses. Though economists are really not good at predicting the future, Piketty makes a series of educated guesses about the next century.Well, that's a pretty obvious weakness, anyway. I mean, some of those predictions may well fail to come true, depending on what they are. So it turns out that there's no need to read it, which is a good thing, since it probably has a lot of math in it.
But that doesn't mean we can't propose a three-point program. Since economists may not be good at predicting the future, but non-economists are great at coming up with prescriptions for how to cope with what they can't imagine:
First, acknowledge that the concentration of wealth is a concern with a beefed up inheritance tax.No, that sentence structure is a tad overpacked: he doesn't mean the concentration is a concern with an inheritance tax, which wouldn't I think mean anything at all, but that the acknowledgment of concern should be through the inheritance tax; i.e., we will beef up the inheritance tax in order to acknowledge our concern (as opposed to, uh, in order to do something about the problem). At the moment it's a flat 40% rate with an exemption of $5.34 million—I don't know whether Brooks is planning to raise the rate or lower the exemption, but I do know that he may have a little trouble persuading the Senate and House Republicans to tighten up on what they've been calling the "death tax" since 1937.
Second, emphasize a contrasting agenda that will reward growth, saving and investment, not punish these things, the way Piketty would. Support progressive consumption taxes not a tax on capital. Third, emphasize that the historically proven way to reduce inequality is lifting people from the bottom with human capital reform, not pushing down the top. In short, counter angry progressivism with unifying uplift.Here's where you might want, before commenting on a book, to—I won't say read it, because I realize a pandit is a busy guy, but, once again, maybe a couple of reviews. Because it seems that if anything around the issue has ever been historically proven, it is in Capital in the Twenty-first Century, through the examination of massively larger amounts of data over a far longer period of time than have ever been examined before, and it's that the only way inequality has ever been reduced is through an aggressively progressive tax regime on capital as from around 1910 to around 1970.*
Lolwut moment:
The reaction to Piketty is an amazing cultural phenomenon. But it says more about class rivalry within the educated classes than it does about how to really expand opportunity. Of course, this perspective could just be my own prejudice. When it comes to cultural analysis, I, like Piketty, am quasi-Marxist.I do not think that word means what you think it means. Say, what do you think it means?
*Incidentally, in claiming that you know a "historically proven way" aren't you making one of those no-good economist predictions? Though one that is clearly rather than merely possibly wrong? Let alone the fact that it hasn't been proven yet that a "progressive consumption tax" can even exist, let alone work.
Oh, also Krugman writes his own indispensable column on "The Piketty Panic" right across the page—
“Capital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”—which is thus festooned with Pikettys like Chinese door gods, and Driftglass does a glorious "Look first upon this picture, then on this" number with the results. Krugman may have explained "quasi-Marxist":
the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue—and Brooks just had to get the word in somewhere, as old Mr. Buckley taught him to do, but couldn't think of a more graceful way to do it without learning something first.
Lastly, all this Piketty nonsense misses what Steve M notices, namely what Brooks is actually up to, painting a picture of a new kind of class war between us (putatively pro-Piketty) intellectual elites and our "cultural capital" (expression crazily misappropriated from Pierre Bourdieu to mean something quite different) and the (presumably anti-Piketty) job creators with their capital capital, in which if you happen to know stuff about stuff that's just a nasty liberal way of displaying your class envy.
