Them That Has, Gets

A well-known French economist, Thomas Piketty, has written a big book called Capital in the Twenty-First Century. It’s getting a lot of attention, because Piketty is an expert on wealth and income and he’s reached a disturbing conclusion: 

Modern economic growth and the diffusion of knowledge have allowed us to avoid the Marxist apocalypse, but we have not modified the deep structures of capital and inequality – or in any case not as much as one might have imagined in the optimistic decades following World War II.

When the rate of return on capital exceeds the rate of growth on output and income, as it did in the nineteenth century and seems likely to do again in the twenty-first, capitalism automatically generates arbitrary and extreme inequalities that radically undermine the meritocratic values on which democratic societies are based [1]

In other words, those relatively happy years in the 20th century, during which economic inequality declined in the developed world, was an aberration, the result of special circumstances. Global capitalism is now returning to its normal state: an extended Gilded Age in which the rich get richer, workers struggle, inequality grows and democracy suffers. It’s not a pretty picture, but it’s based on a great deal of historical data.

Piketty argues that “there are ways democracy can regain control over capitalism and insure that the general interest takes precedence over private interests” (for example, by instituting a tax on wealth), but that’s not going to be easy, since capitalists are so good at screwing with democracy.

They buy up and consolidate media outlets, make the majority of campaign contributions, hire armies of lawyers and lobbyists, fund political action committees, support “think tanks”, pay for advertising campaigns on “the issues” and keep the “revolving door” between government and business revolving. All of which contributes to low taxes on high incomes, minimal taxes on capital gains and large estates, corporations being treated as “people”, feeble campaign finance laws, weak labor unions, political gridlock, vote suppression, voter apathy and lots of average citizens thinking that the accumulation of vast wealth by a tiny minority is inevitable and/or good for the majority. 

If you’d like to read more about Capital in the Twenty-First Century, including some skeptical comments, take a look at this New Yorker article by John Cassidy. If you want to feel even more depressed, pissed off or motivated to work toward political reform, check out Paul Krugman’s less skeptical “Wealth Over Work” column at the New York Times.

It’s Nice When the World Makes Sense

Even if the underlying facts aren’t so great at all.

Case 1: Paul Krugman ties together two recent stories: how the economic evidence for cutting government spending during a recession is non-existent, and how cutting spending on programs like Medicare and Social Security is the preferred strategy of the rich. It probably won’t make any difference that the scientific support for government austerity during an economic downturn has been demolished, since facts don’t necessarily trump ideology. For the most part, the political class is subservient to the upper class. Marx, who helped generate a vast number of ideologists himself, wasn’t wrong about everything.

Krugman cites the study I wrote about under the title “What the 1% Want from Washington”:

Case 2:  According to the New York Times, the Boston police commissioner admitted this week that Dzhokhar Tsarnaev (joh-KHAHR’ tsahr-NEYE’-ehv) and the boat in which he hid were both in the 20-block search perimeter all along. It’s not clear why Tsarnaev wasn’t found during the manhunt, but it wasn’t because the boat was 1 block outside the search perimeter, as the Watertown police chief claimed. (See the post below, which includes a transcript of the police discussing where to search.)

In this case, it didn’t make sense that a small army of police failed to search an area 2 or 3 blocks from where the guy dumped his getaway car. What didn’t make any sense now makes some sense. People make mistakes and then make excuses. No shock there.