Author of ‘The Politically Incorrect Guide to Capitalism’ takes on Piketty’s inequality argument

Robert Murphy devotes a column posted at the Rare website to documenting flaws in French economist Thomas Piketty’s well-publicized arguments about income inequality.

The most obvious problem with Piketty’s book is that he wants to make workers poorer, just so long as it will hurt rich capitalists even more. No economist denies that as the stockpile of “capital”—which Piketty broadly defines to include real estate and all forms of non-human wealth—expands, that the absolute wages of the workers will rise. After all, if workers have more tools, machines, and equipment augmenting their labor, they are going to be more physically productive per hour, and hence will be paid more.

Yet the continual increase in the workers’ standard of living is not enough to placate Piketty and his fans. Indeed, Nobel laureate Robert Solow admits that capital accumulation will make the workers better off in absolute terms, but worries that they might be worse off relative to the capitalists.

If Piketty and Solow saw a vision of the future that looked like The Jetsons, they wouldn’t marvel at the unbelievable convenience and luxury that the family enjoys, all provided by George’s two hours of labor per week. No, instead of thanking capitalism for providing flying cars to the average family, instead Piketty and Solow would be complaining about how unfair it was that a short bald guy got to own Spacely Sprockets all by himself. …

… [Y]ou might be tempted to excuse Piketty’s numerous, fatal errors because after all, his goal is to help poor people. Yet as I document elsewhere, the book is filled with shocking quotations making it perfectly clear that Piketty’s proposed taxes are not designed to raise revenue, but instead are designed to prevent people from creating large wealth and incomes in the first place.

I must admit, I learned a lot from reading Piketty’s book. Specifically, I learned how many self-styled progressives today are willing to sacrifice the standard of living of billions of poor people, in order to prevent a few people from becoming really rich.

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