Geraldine completes a tight interview with Piketty to pull out the main themes of his work… capital accrues wealth faster than the waged, so tax capital (vs income) and pay a lot more attention to inequality.
Implementation of the ideas hinge on a lot of international cooperation, peace, love and mungbeans, but it remains a compelling and disruptive concept…
Check this awesome Chomsky comment:
Ne Obliviscaris :
12 Apr 2014 8:14:59am
People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits.
– Noam Chomsky on Adam Smith and the Wealth of Nations
http://www.abc.net.au/radionational/programs/saturdayextra/capital-in-the-21st-century/5362266
21st century capital
French economist Thomas Piketty has spent fifteen years collecting and analysing incomes reported on tax returns over the last 100 years to predict that the world is heading towards inequality rates not seen since the 19th century, unless there is global action to narrow the divide.
His book, Capital in the twenty first century, has been described by the former World Bank senior economist as “one of the watershed books in economic thinking” and The Economist magazine wrote it could change the way people think about the past two centuries of economic history.
Guests
- Thomas Piketty
- Professor at the Paris School of Economics
Publications
- Title
- Capital in the twenty-first century
- Author
- Thomas Piketty (translated by Arthur Goldhammer)
- Publisher
- Belknap Press of Harvard University Press
Credits
- Presenter
- Geraldine Doogue
- Producer
- Kate MacDonald
-
Comments (10)
Ne Obliviscaris :
12 Apr 2014 8:14:59am
People read snippets of Adam Smith, the few phrases they teach in school. Everybody reads the first paragraph of The Wealth of Nations where he talks about how wonderful the division of labor is. But not many people get to the point hundreds of pages later, where he says that division of labor will destroy human beings and turn people into creatures as stupid and ignorant as it is possible for a human being to be. And therefore in any civilized society the government is going to have to take some measures to prevent division of labor from proceeding to its limits.
– Noam Chomsky on Adam Smith and the Wealth of Nations
david hawcroft :
12 Apr 2014 10:04:24am
It took 20years of study to conclude that the rich get richer and the poor get poorer?
In case there’s anyone doesn’t know it’s an axiom – amongst the poor, who know from bitter experience going back generations.
Have you ever played Monopoly? The poor simply don’t exist, really. It’s a game between landowners, capitalists. And what happens? The capital finally concentrates in one player.
Economics 101 : ‘the rational investor will always seek to maximise profit’. Whereas the rational human being seeks to maximise humanity and love of friends and family at the expense of profit.
So in the end who gets most of which?
Which calls into question the definition of ‘profit’ which is a concept that should not be confined to money.
And calls into question the concept of ‘humanity’ which calls into question the concept of ‘civilisation’.
Clearly our civilisation is being run as though it were a business with economic rationalism the guiding force and monetary profit the great light in the sky.
All wrong. Needs rethinking. Needs philosophy. Political parties – as said somewhere I think this morning in this segment or somewhere – currently without any philosophy whatever.
At bottom what’s been lost is humanity.
You don’t run humanity as a business.
You don’t measure what profits humans in dollar terms.
We’re building a machine and populating it with robots – us. Daleks. We’re all becoming Daleks in a Dalek world.
Are the rich the only ones who can escape this and live human lives free of the economic bondage and the madness of a robot world? No. They are the ones that lost and went under first.
It is our blindness and stupid belief that they are ‘rich’, ‘succesful’, ‘powerful’, ‘safe’ etc.. etc.. that leads us to wish to emulate them, follow them, be them…
So we bend to our tasks and forsake our humanity and strive, strive, strive to become like those sorry creatures..
bloody shame, eh?
seyre :
16 Apr 2014 1:59:42pm
wonderful. YES! well said
Bob Elliston :
18 Apr 2014 1:52:35am
Thanks David.
You are quite right.
I’m reminded of Matthew 16:26:
“For what is a man profited, if he shall gain the whole world, and lose his own soul? Or what shall a man give in exchange for his soul?”
This dichotomy between the rich and the poor has troubled us for at LEAST two thousand years.
Time for a new economic system, one that is centred on fairness, justice and sustainability.
Mike Ballard :
12 Apr 2014 10:57:48am
I see no political will on the part of those who appropriate the wealth which the bottom 90% produce to allow their gains to be redistributed through a tax on their accumulated wealth. Furthermore, history has demonstrated that as soon as politicians suggest such a tax change, they are hounded out of office through a flurry of public relations propaganda directed at workers anxious about their job security, just as Kevin Rudd was after he introduced the mining tax.
Julia Gillard had Rudd’s tax renegotiated by a Labor right-winger, Martin Ferguson, and what was agreed to by the mining capitalists was the toothless tax we still have today; but which shall be axed after the new Tory dominated Senate convenes in July.
Cedric Beidatsch :
13 Apr 2014 10:14:59am
I stress these comments come from the radio interview, not the book, which I have not yet read (or even seen in the stores!) Piketty shows that inequality increases under capitalism as the owners of capital accrue wealth at a greater rate than wage earners. This did not occur in the period 1945 – 1973 when high growth rates were experienced and inequality decreased. Piketty concludes that there is no “logical reason” why inequality should increase like it does and that what “we” need to do is find institutions on a global scale that can for example progressively tax capital to reduce this inequality gap. I have no argument with the statistics that illustrate the growth in inequality; but would suggest that rather than seeing this as a return to some mythical nineteenth century “hierarchical society” this phenomenon is in fact about 500 years old and is inherent in structure of capitalism itself. Piketty simply has had too short a time horizon for his research. If we view capital in a proper historical perspective the 25 years post WWII stand out as an anomaly not a normal to which we can easily return. The explanation for the post war social democratic consensus should then be sought in specific historical circumstances. I would suggest there are the following: 1) the massive destruction of capital in the period 1914 – 1945; 2) the strength and power of working class struggle from 1917 on that put capital on the defensive; 3) the absence of any real competitors to American capital after 1945 until European and Japanese capital rebuilt by ca. 1965; 4) the hyper exploitation of the Third World which does not even get a look in Piketty’s analysis (as far as I can determine anyway). What Piketty overlooks totally is the issue of class and the power of classes. Post 1945 the working class were strong and were able to wring a reformist economic agenda from a capital owning class and via the state, which could be granted because the specific global economic conditions were supportive of a high rate of profit that compensated or progressive taxation in the developed world. The moment that particular combination of historical circumstances came to an end, between 1965 and 1973, the capital owning class went on the offensive to restructure the game. The capitalist class are in the present conjuncture simply way more powerful than the working class and there is no neutral way to impose the kind of institutions that Piketty suggests. Politics is not the realm of dispassionate reason but of class conflict and winner takes all. Piketty’s research and stats will be useful; his proposed remedies a chimera. Without a really strong working class offensive, or the kind of destruction of capital produced by the Great Depression and 2 world wars, the rich just keep getting richer and the rest of us work to make them richer
Pat :
13 Apr 2014 4:12:53pm
US ideologue economists are ‘revered’, unlike in France because they are serving to retail and legitimize cultivated triumphalist neoliberal economic rationalism (engendered via Hayek & in Friedman’s Chicago School lab) now become the only economics, the lingua franca under the global empire of conglomerated corporate capitalism. An elitist and rogue ideology, intentionally dissociated from and privileged above other social sciences. It is a purposefully designed system of exploitation for syphoning real wealth into fewer and fewer hands…..the cultivated “vampire squid” feeding the 1%. It is the functioning machine producing deliberate and massive inequality which runs the corporate empire (“the old industrial military complex”) and which occupies governments of the European “democratic” model via the paradigm of the revolving door between the various Wall Streets and Whitehouses. And globally via the architecture of the World Bank, IMF etc and a dysfunctional UN. The US CEO of this market empire has the NSA and the world’s biggest nuclear arsenal at his disposal. Why would this emperor supreme of crypto-fascism willingly, magnanimously (considering his late 20th century history of covert and overt operations, wars of aggression, assassinations/exercises of soft power etc) hand over this power and share his wealth without a fight after all the trouble he’s gone to in securing it? Koombyeya it won’t be.
Bryan Kavanagh :
14 Apr 2014 2:45:39pm
Good on you, Thomas Piketty! Now we’re getting to the nub of things about how wealth disparities have risen! In your own way, you’re coming to the same conclusion the American philosopher and economist, Henry George, came to in his “Progress and Poverty” – that the returns to labour and capital will always be diminished if rentiers are permitted to steal our publicly-generated rents via untaxed rent-seeking.
All we need in Australia is an all-in, single rate land tax, as suggested by the Henry Tax Review, because the wealthy own the more valuable land, and it can’t flee overseas. The first country to bring in a serious land tax will be the first country to reward workers and businesses with their fair due, and to redress the problem of economic rents flowing mainly to the 1%.
Geoff Saunders :
15 Apr 2014 7:45:17am
“…precious few solutions, it must be said…”
Gee. Let me think…oh, how about this one? Rich folks and corporations should pay a bit more tax back to the societies upon whose security, stability, infrastructure and amenity they base their wealth.
Call me Trotsky…
Groucho or Karl :
18 Apr 2014 9:26:40pm
Wonderful to have such a prominent (and modest) thinker on Aunty.
Thanks Geraldine.