Home > Economics - General > Piketty and nitpicky (updated with link to Piketty’s refutation of FT)

Piketty and nitpicky (updated with link to Piketty’s refutation of FT)

May 30th, 2014

I have a couple of pieces up on the topic that’s likely to consume much of my attention for some time to come: Piketty’s Capital in the 21st century.

Here’s a long review article at Inside Story focusing on the conditions that have made Piketty a bestseller. And here, at The Drum is my take on claims by Chris Giles at the Financial Times that Piketty’s data is fatally flawed.

Update Piketty has responded to the Financial Times. To sum up, as I said in the Drum piece, the criticisms are (mostly incorrect) nitpicks except for the point about UK wealth inequality. Here Piketty’s demolition is convincing. The FT hasn’t used a consistent series. Rather, it’s taken a recent survey estimate (likely to underestimate wealth) and spliced it onto older estate data to produce the counterintuitive finding that the inequality of wealth hasn’t increased.

Categories: Economics - General Tags:
  1. rog
  2. faust
    May 30th, 2014 at 07:07 | #2

    It is obvious that we’ll disagree on the political and substantive point about near-permanent wealth accumulation. Right now if you have capital to invest then there are many investment opportunities out there and if you look at equities or fixed income r>g. Yet these opportunities are grotesquely mispriced relative to risk and once interest rates rise I am pretty confident r<g for many of the wealthiest out there. Unfortunately, wealth includes pensions etc which is not only for the "top 1%" and many people are going to get similarly hit once rates start to rise.

    The other problem is that you do not offer solutions to the perceived problem of inequality. A global wealth tax? Seriously? Tax someone for their income, tax them on their savings, tax them on their capital gain and then tax them again for whatever is left over? That is confiscation not taxation.

    Overall, Piketty is an important contributor to the debate around wealth and inequality. Unfortunately those who praise him come up with hideous policy designs. Instead of tackling problems around lack of educational opportunities, poor public investment in productivity-enhancing physical and social infrastructure, and streamlining tax and regulations, you come up with pretty silly policy ideas that will never be implemented!

  3. J-D
    May 30th, 2014 at 07:18 | #3

    In Pride And Prejudice, the Bennet sisters’ uncle Mr Gardiner was ‘in trade’ — that is, a business proprietor — not a lawyer. It was their uncle Mr Phillips who was a lawyer: ‘their mother’s … father had been an attorney … She had a sister married to a Mr. Phillips, who had been a clerk to their father and succeeded him in the business, and a brother … in a respectable line of trade.’ Mr and Mrs Phillips play less part in the novel than Mr and Mrs Gardiner and are described in less flattering terms when they do appear.

  4. J-D
    May 30th, 2014 at 07:20 | #4

    I guess what you mean by ‘confiscation’ is taxation that you don’t like (so presumably confiscation that you do like is just taxation).

  5. faust
    May 30th, 2014 at 07:27 | #5

    An example of r>g is since 2008-14 US junk bonds have returns 146% to investors. Why so high? Because they absolutely tanked between 2007-08. If you invested in a 2006 issuance and had to sell in 2008 then you would have taken an absolute bath and probably would be fired if you were an investment “professional”. So r>g but also r<g. Timing is everything!

  6. faust
    May 30th, 2014 at 07:34 | #6


    Subjectivity is everything. What is excessive taxation? 20%? 40%? 80%? 93%?

    My view is anything over 40% is confiscation of wealth and income of an individual. You may think difference. The great thing about a democracy is the majority broadly make the choice.

  7. yuri
    May 30th, 2014 at 07:53 | #7

    So far I’ve read about 40 reviews of Piketty’s book in the hope of staving off the necessity to read it. (I confess that I haven’t yet read the last 10 words of Keynes’s General Theory or Tolstoy’s War and Peace so why should I feel embarrassed now?).

    Questions. Given that TP’s French and American backgrounds identify him as one of the world’s supersophisticates is it to cynical to wonder if his ridiculous policy prescriptions were part of the PR to make the book a best seller and get the author on every TV and radio station for interviews? To cut short argument on that “ridiculous” let me acknowledge that St Francis, Jesus and other charismatics have been almost equally ridiculous in their policy prescriptions.

    Another question. The simple logic that underlies progressive taxation (a dollar taken from a rich man hurts less than the dollar taken from the less rich) equally supports the need to pay the rich a lot more in order to add to their welfare compared with what needs to be paid to the less rich or the rich themselves when they were merely CFOs with a Harvard MBA earning a million a year. More generally, if you want to get people who are clever enough to become full professors of economics and become pundits in the 21st century to undertake the hard grind of becoming and remaining senior executives in large commercial institutions – or following their dreams as mineral explorers year after frustrating year – do you perhaps need to hold out exponentially, or at least geometrically larger financial rewards as the whole society grows richer and Maslow’s hierarchy applies??? (100 years ago Roger Federer might have been senior partner in a firm of accountants after a few years on the tennis circuit).

    Globalisation (some would say “again”: that we are barely back to the 1890s) is obviously important too. And the fact that a rich person like James Packer can now look abroad and see a Mexican worth $60 billion, several Chinese and Indians worth multples of his billions etc. Should perhaps remind us that owning more pigs so one could entertain the tribe more lavishly has always been part of competitive human nature way beyond the needs of consumption or even propagating one’s religion, ideas or ideology.

    And if no one cares much about inequality (apart from us chatterers) – at least as evidenced by their behaviour – that might have to do with the huge rise in real incomes over the lsdt ep years. In Australia anyway, and maybe in the US their old myths protect them from the effects of envy or a sense of injustice and a conspiratorial explanation.

  8. Salient Green
    May 30th, 2014 at 08:03 | #8

    The shabby secret of the wealthy is that the more power and wealth they have the more income they can extract from the economy. It has practically nothing to do with how hard they work or how much they contribute to society. How does the CEO of CBA contribute 150 times more to society than an aged care worker?

    I say the rest of us who get fleeced by them every day have a right to confiscate some of their obscene wealth to share it around. And that is actually good for the economy.
    (borrowed from a responder at The Drum)

  9. alfred venison
    May 30th, 2014 at 08:13 | #9

    The great thing about a democracy is the majority broadly make the choice.

    like in france, a democracy where the majority broadly chose, through their instrument francois hollande, to slap a wealth tax on the rich?

    or, like in australia, a democracy where the majority broadly will be presented with a free trade agreement that was negotiated without consultation with them, in secret?

    democracy is fine & dandy as long as the electoral system isn’t rigged.

    and whether a 40% tax rate is excessive would depend would depend to some extent on where the other tax brackets are set, wouldn’t it? -a.v

  10. yuri
    May 30th, 2014 at 08:46 | #10

    I’ve now read the Inside Story review article and just offer a couple of comments which I hesitate to characterise. (Is there not some spatial contradiction between “nitpicking” and “peripheral”?).

    I think it is just untrue that access to the Ivy league universities is only for the rich. Apart from the seriously well informed analysis by Ron Unz in The Myth of American Meritocracy a couple of years ago [thanks by the way to whoever it was that put me on to that and to his writing] I can cite the advice to some English friends who want their children to get into American universities if they can’t get into Oxbridge. They were told that being fluent in German, French and Spanish wouldn’t help. In other words a big part of what your rich parents can buy you doesn’t count.

    I also note that you have omitted to consider another kind of inheritance. There is parental/ancestral money and parental culture (though that can be just the work ethic of immigrant parents, often illiterate). But there is also biological inheritance. The ends of the Bell Curve will continue to extend (with or without lumpiness at either end) so long as assortative mating and the filtering of previously undereducated brains in the once deprived classes means that few smart people don’t get adequate education or financially useful training and, in all likelihood, marry and have children with some like themselves.

  11. yuri
    May 30th, 2014 at 09:05 | #11

    @Salient Green
    The shabby secret of the clever and energetic (and ordinarily egotistic) is that the cleverer and more determined they are the more income they can extract from the economy. It has practically nothing to do with how hard they work or how much they contribute to society. How dare the the CEO of CBA collect only 150 times as much in salary and bonuses as a childcare worker and then insult us all by paying 3000 times as much in tax?

    “Obscene” indeed. Let all those of us who are confident enough of our virtue and brave enough to stand up to charges, justified charges, that we violate the rule of natural justice against being judges in our own cause break free from the bonds of convention and grab some of what he has for ourselves. We can’t acquire brains or character so we will have to demean ourselves by taking money.

  12. john
    May 30th, 2014 at 09:11 | #12

    Interesting idea on assortative mating, but if the ends of the bell curve were always extending, why hasn’t humanity evolved into opposed camps of tall/short, pretty/plain (or any other dimension that has favoured and disfavoured ends) a hundred thousand years ago?

    There is also reversion to the mean. Not all the the alpha male’s daughters will be pretty.

    I suggest that for the social and economic changes of the last century cultural influences are probably more important.

  13. Fran Barlow
    May 30th, 2014 at 09:35 | #13


    How dare the the CEO of CBA collect only 150 times as much in salary and bonuses as a childcare worker and then insult us all by paying 3000 times as much in tax?

    Amusing. There were a whole bunch of years in the 1980s when I paid much more tax than Kerry Packer, despite supporting myself and my young family by taxi driving, occasional academic editing, tecnical writing and bus driving, and when Kerry Packer would lose more gambling at a casion in half an hour than I paid in tax all year.

    Salient is right. There’s simply no good warrant for one fulltime working person earning 150 times as another full-time working person — even allowing that both are doing what one could fairly call “work”.

  14. Fran Barlow
    May 30th, 2014 at 09:37 | #14


    How dare the the CEO of CBA collect only 150 times as much in salary and bonuses as a childcare worker and then insult us all by paying 3000 times as much in tax?

    Amusing. There were a whole bunch of years in the 1980s when I paid much more tax than Kerry Packer, despite supporting myself and my young family by taxi driving, occasional academic editing, technical writing and bus driving, and when Kerry Packer would lose more g*mbling at a cas|no in half an hour than I paid in tax all year.

    Salient is right. There’s simply no good warrant for one fulltime working person earning 150 times as another full-time working person — even allowing that both are doing what one could fairly call “work”.

  15. Midrash
    May 30th, 2014 at 10:22 | #15

    I agree with Yuri about assortative mating (so few people mention it despite the Ivy League universities being referred to as a marriage market for the upper-middle classes that I wonder if he’s got it from me. That would be the flattering kind of plagiarism).

    Regression towards the mean applies but the question has then to be asked as to what is the population towards whose mean the scores or other measures regress. To take an example which is unlikely to excite emotions, it would only be by the most unlikely fluke that the average of all Brahmins, Dalits and Parsees was one to which the scores in each of those communities tend to regress.

    That points to the answer to your hypothetical about the ends of the bell curve always extending. Indeed they weren’t and I understand Yuri’s proposition to apply merely to the new class/population of the (educationally selected) assortatively mating that he has identified and any other similar ones in the past (Hebrew upper classes returned from Babylon?) though I think he’s proposing that the phenomenon is now on a much larger scale.

    For my part I would agree that the cultural and environmental factors which have produced the Flynn Effect (so obviously not genetic even when you set aside extreme cases like Ireland where urbanisation has been more than co-incidental) have been huge but that, logically, could make the genetic (and perhaps family-cultural) factors all the more important because pretty well everyone has been educated into being a modern thinking literate person.

  16. Ikonoclast
    May 30th, 2014 at 11:14 | #16

    I think it is safe to assume that human ability and effort follow a bell curve or normal distribution. Indeed, I am sure numerous studies have demonstrated that. If rewards matched ability and application then wealth would also follow a bell curve distribution. In reality, in a capitalist country, wealth follows a very different distribution, a vastly different one in fact. I hope this links to the right graph (fingers crossed).


    Therefore, factors others other than direct reward for ability and effort must be at work. It seems a safe bet that the old adage “money makes money,” crudely describes what is at work here. At a certain point, accumulation of wealth (and power) reaches a critical mass which allows further rapid accumulation of more wealth and more power.

    There is another form of distribution which I think is called the “king distribution” but I am not sure if this is the right term. For example, the population of countries follows this distribution. There are couple of “kings of population” (India, China) several more big boys (USA, Indonesia, Brazil etc.), a modestly sized bunch of smallish middles and then a large string of very low of population countries.

    Much in nature, that is based on accretion, seems to follow this “king distribution”. Look at astronomical bodies; a few kings (by mass black holes probably) more princes (suns), many small bodies (planets) and numerous tiny bodies (asteroids, comets etc.) It is thus arguably a natural tendency of accumulation or accretion in nature. I am maybe drawing a long bow here, so comments are welcome. But while something is a natural phenomenon in this sense we should not equate “natural = right” in the moral sense.

    So while in an un-regulated system or a market regulated system (as opposed to a governed system) this tendency is natural, we have to ask ourselves is it right to allow it to play out unimpeded? It’s a moral question. The results of letting it play out unimpeded are now being seen in the USA for example.

    “In November 2012 the U.S. Census Bureau said more than 16% of the population lived in poverty, including almost 20% of American children, up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in poverty. Starting in the 1980s, relative poverty rates have consistently exceeded those of other wealthy nations. California has a poverty rate of 23.5%, the highest of any state in the country.” – Wikipedia.

  17. J-D
    May 30th, 2014 at 11:31 | #17

    So is Piketty, or John Quiggin, or anybody else proposing a tax of over 40%? If not, what are you complaining about?

  18. J-D
    May 30th, 2014 at 11:36 | #18

    If dollars taken from rich people reduce their welfare less than dollars taken from poor people, and if you are aiming to collect dollars with the least reduction in welfare, then you should aim to collect those dollars more from rich people than from poor people.

    If dollars given to rich people add to their welfare less than dollars given to poor people, and if you are aiming to distribute dollars so as to achieve the greatest increase in welfare, then you should aim to distribute those dollars more to poor people than to rich people.

    Also, what makes you think people don’t care much about inequality? If you think that’s what their behaviour shows, what behaviour are you talking about?

  19. J-D
    May 30th, 2014 at 11:44 | #19

    If, for the sake of argument, it’s true that assortative mating produces, over time, distribution curves with longer and longer tails, then it’s clearly inadequate by itself to explain changes in the distributions of income and of wealth where only one of the tails is getting longer and longer.

  20. Fran Barlow
    May 30th, 2014 at 11:50 | #20


    If dollars given to rich people add to their welfare less than dollars given to poor people, and if you are aiming to distribute dollars so as to achieve the greatest increase in welfare, then you should aim to distribute those dollars more to poor people than to rich people.

    Of course, but one might add too, that some of the dollars redistributed to poor people also, ultimately, contribute to the happiness of some of the rich people from whom the money for redistribution was taken.

    While the wealthiest people can probably insulate themselves entirely from the sight of poverty and become totally dissonant the exercise costs money and the layers of privileged people below them find it a good deal harder. Having to walk past the homeless and perhaps feeling threatened, being accosted in the traffic by people wanting to wash your windscreen and seeing stories of degradation undoubtedly spoils the enjoyment of privilege.

    So even large layers of the privileged have a collective interest in the social difference between themselves and others being substantially narrowed. They may not appreciate the benefits of that until the negative consequences of inequality manifest of course, which is why the state not permitting them to become too relatively privileged may actually be in their interests.

  21. yuri
    May 30th, 2014 at 12:34 | #21

    I think there is a fallacy in your reasoning that relies on pointing to a big diiference between the normal curve and the distribution of income. First, it doesn’t allow for age differences. More important it overlooks the the shape of the distribution if you were to construct an index made up of appropriatele weighted contributions of many relevant factors, including, e.g., IQ, energy (perhaps = number of hours a day of effective output), emotional intelligence, quality of parenting received, availability of capital when needed.

    I am not sure about “king distributions” but in recent years there has been much mention of power laws. It has at least served to remind people that the normal distribution assumes each event or measurement is independant of previous ones. That may be relevant to the point made above because good health coul connect them all an ensure they correlate positively with each other advantageous trait.

  22. Megan
    May 30th, 2014 at 12:35 | #22

    @Fran Barlow

    That is a point I have made here before.

    Public education, health, sanitation and transport were introduced and championed by the wealthy/privileged for that very reason. Apart from any compassionate or charitable considerations they simply realised that a society full of poor, sick and stupid people was unpleasant to live in and innefficient/counter-productive for their own enterprises.

  23. yuri
    May 30th, 2014 at 12:36 | #23

    True: see my last comment.

  24. J-D
    May 30th, 2014 at 12:43 | #24

    If you have some evidence to show that the size of the income a person can extract is primarily determined by cleverness, you’re not sharing it with us.

  25. J-D
    May 30th, 2014 at 12:46 | #25

    If you accept that the income distribution curve has to be explained as the result of a complex interaction of different factors, what’s your justification for emphasising assortative mating?

  26. J-D
    May 30th, 2014 at 12:48 | #26

    Midrash and yuri share the same view about assortative mating? Doesn’t that make it more likely that it’s wrong?

    What’s that you say? You think that if they agree that makes it more likely that they’re right? No, I don’t see why that should be. I’m sticking with my first thought.

  27. yuri
    May 30th, 2014 at 12:59 | #27

    You mistake the very limited point I was making, namely that we tend to overlook the logical corollary that, if you need to motivate someone and need to do it with money then each dollar added does less and less and, logically, you will have to pay a lot more. Extrapolating that to communities as a whole you are going to have to increase rewards for getting people who have alternatives to take the less attractive jobs. If you could live in Oxford or Cambridge as a fellow of an ancient college and still get married and have your children well educated wouldn’t it take a lot of money to persuade you to become CFOVof Universal Widgets in Newcastle (either one)?

    And aren’t there now, compared with 1950, far more attractive academic jobs, museum curatorships and so on? True it is probably irrelevant to the Nathan Tinklers of this world. (Doesn’t he make Kerry Packer look good? Just showing that I share some of this blogs characteristic snobberies

  28. yuri
    May 30th, 2014 at 13:08 | #28

    Your first thought may have one thing right though you don’t seem to appreciate it. If two people used different methodologies to come to the same conclusion that might be additional support for the view both arrive at. But if, as seems likely in the case of Midrash and myself, the reasoning seems to flow from similar understandings of the latest and best literature and authorities then there is no special validation by consilience. We are just both correct.

    Do you know anything about assortative mmating BTW?

  29. Tony Lynch
    May 30th, 2014 at 13:09 | #29

    Was wondering how long it would take for the climate denialist strategies to kick in on this issue. FT first off the blocks.

  30. J-D
    May 30th, 2014 at 13:15 | #30

    If you need to motivate somebody, and if you only have money available as a motivator, then each successive dollar will be less effective than the one before (which, among other things, suggests that perhaps you should be investigating whether there’s anything apart from money you can use as a motivator).

    But the practical significance (if any) of this observation depends on answering questions about who it is that you want to motivate and why. Why, in your example, would you be trying to motivate an Oxbridge college fellow to take a job as CFO of Universal Widgets?

    (Since you mention it — although I don’t know why you mention it — it is true that there are more academic jobs now than there were in 1950. I haven’t seen the evidence that would show that they’re more attractive, though. What I’ve heard inclines me to suspect the opposite.)

  31. zoot
    May 30th, 2014 at 13:27 | #31

    And aren’t there now, compared with 1950, far more attractive academic jobs, museum curatorships and so on?

    There may be more academic jobs, but I get the distinct impression they are not as attractive as they were in 1950. These days they share far too many conditions with the fast food industry.

  32. andrewt
  33. faust
    May 30th, 2014 at 19:13 | #33

    @Salient Green

    I don’t think the CEO of CBA should earn that much money because I don’t think the CEOs of Australia’s major banks are terribly good. They are terribly lucky, though. Overall, the Australian banks did not collapse due to a number of factors of which good internal risk management is one of them. I think the Australian banking sector is the closest in the major developed economies to being a utility and I am inherently uncomfortable with shareholders rewarding utility management like they are entrepreneurs.

  34. yuri
    May 30th, 2014 at 20:43 | #34

    This is a reply to your challenge to me to produce evidence to justify a view that I didn’t express (even I think in my satirical response to Salient Green) namely that the income someone extract is primarily determined by cleverness. Not only didn’t I say that; I have already pointed to multifactorial explanation and indicated that I was not suggesting any particular weighting. I have to wonder if you are trolling in the hope that you can sit back and chortle at having provoked exasperated rudeness from someone. Surely anyone can agree that in any given competitive context where several people are aiming to extract top dollar then, cet.par. the odds are on the cleverest winning, but also with cleverness being one of the things held equal the odds will be on the winners being those who can concentrate and work 18 hours a day, and so on.

  35. yuri
    May 30th, 2014 at 20:58 | #35

    Agreed though I wouldn’t mind, for example if Mike Smith’s taking ANZ into Asia made him fabulously rich in his holding of ANZ share because he succeeded and he didn’t depart on the cusp of disaster, provided that other shareholders got full value for the risks they had let him take and he went off with no golden parachute if he failed. (I think there is an inevitable asymmetry which had a lot to do with the causes of the GFC. Particularly in highly geared financial businesses there is a huge temptation, if not incentive, to go for the huge reward even at high risk of failure because the penalties for failure are not certain or severe enough. If one in three of the bigger failures were chosen by lot to be hung drawn and quartered it might dampen enterprise a bit but would surely mean fewer bank failures. As it is some get away with having put the mansion and holiday house in the spouse’s name and even get to keep the spouse while they start again).

  36. yuri
    May 30th, 2014 at 21:07 | #36

    What’s my justification for “emphasising” assortative mating? Yes, I think you might be trolling hoping for a gotcha moment when you provoke the explosion. You don’t really need me to provide the answer do you?

    As you should know and acknowledge I didn’t emphasise its causal importance. I merely pointed to its omission in JQ’s and, almost certainly, TP’s analysis.

  37. J-D
    May 30th, 2014 at 21:11 | #37

    Salient Green wrote: ‘The shabby secret of the wealthy is that the more power and wealth they have the more income they can extract from the economy.’

    You wrote, in response: ‘The shabby secret of the clever and energetic (and ordinarily egotistic) is that the cleverer and more determined they are the more income they can extract from the economy.’

    By taking Salient Green’s sentence and then substituting ‘clever’ for ‘wealthy’, I understood you to be suggesting that cleverness plays a larger role in explaining why some people have larger incomes than does an initial position of wealth.

    If your intended meaning was something different from that, it’s not clear to me what it was.

    If I only wanted to state that lots of different factors affect people’s incomes, without suggesting anything about the relative importance of any specific factors, then I would write ‘Lots of different factors affect people’s incomes’ without making any specific mention of any individual factors. By choosing to mention some specific factors, you create the appearance that you want to emphasise them. Why?

  38. J-D
    May 30th, 2014 at 21:14 | #38

    Out of all the possible factors that might have been omitted, why did you choose that particular one to mention?

    No, since you ask, I don’t know what the answer to that question is if you don’t choose to state it.

  39. yuri
    May 30th, 2014 at 21:38 | #39

    To your three par post: pretending to be obtuse again?

    Why would I seek to motivate Oxbridge dons to be CFOs at Widget Manufacturers? Wrong question. If business needs people of the kind of intelligence and work habits which qualifies them for stimulating and otherwise pleasant academic posts then it will have to offer them incentives to choose one rather than the other. Clearly old college port, a panelled dining room lined with portraits of great historical figures and genial relaxed conversation with one’s non-competing peers is not part of the incentive package….

    And you must see – contrary to what you say – why I mention that there are (far) more academic posts now than in, say, 1950. After all my point was that the (supposed) fact that there are more ways for an intelligent hardworking person to live an agreeable life without undue financial stringency was reason for thinking that, if you had to secure their services in grubby “trade” and had to do it with money you would, logically, have to offer a lot more money.

    A serious argument from you might have treated the question as an empirical one and offered evidence, or just a speculation, that the number of potential JQs had risen so fast that they were overflowing academe and just begging to be taken on as bank trainees….. No, I don’t think so either.

    As to your querying the average punter’s relative lack of concern over inequality (apart from the occasional flurry which can apply briefly to many issues whipped up recently in the media) I remember seeing poll results which had inequality as a low rated issue in terms of relative importance, and the voters are constantly confirming that almost everywhere. (Have you noticed the ALP picking up all Ken Henry’s egalitarian nasties?).

  40. yuri
    May 30th, 2014 at 21:59 | #40

    You make good though empirically testable and contestable points, partly dealt with in my last response to J-D.

    It must certainly right that the average academic job today – in some quite important respects anyway – is less attractive than the typical position in 1950. That’s because the grand old universities remain the few grand old universities with their ancient charns, traditions and prestige. And while I don’t think the same applies to art gallery directorships, museum curatorships, film production and directing orchestras, dance and opera, the pleasantness of such positions might now be reduced by the fierceness of competition and the rate if change. I would accept that I have raised an empirical question but I think it is well worth considering when the favoured alternative explanation for higher pay for executives has something of the flavour of conspiracy theory (albeit in a spirit of scepticism which Adam Smith would not have disavowed). Not that any one simple explanation suffices.

  41. faust
    May 30th, 2014 at 22:01 | #41


    ANZ is looking good now but let’s wait to see how they look when the cycle turns. It is easy to expand into a growing region where key competitors are withdrawing. What really matters is when the cycle turns (the ‘Emperor has not clothes moment’).

  42. yuri
    May 30th, 2014 at 22:19 | #42

    Without trawling laboriously through my mind when I chose to mention it I suppose it popped up in my mind by reason of some more or less chance neural connections whose immediate stimulus or stimuli I am almost inevitably unable to pinpoint (desire to make a brief clever-dick input to the conversation? Desire to say something JQ wouldn’t say, or maybe think of? Who knows?). Obviously I think it a valid if not clearly correct and important observation and decidedly one unlikely to amongst the commonplaces of most blogs, let alone this one. So, add potential rarity value to the list.

    Now over to you. You have stuck your neck out more than you may have intended by saying there other omitted matters – of presumably greater weight – that I might have mentioned. You owe it to us to back that up with examples and to justify your assessment of their relative importance. Otherwise the implication in your question just fail, it falls flat at the threshold.

  43. May 30th, 2014 at 22:20 | #43

    There is an article in the current edition of Science (which incidentally is devoted to inequality) about a physicist who looks at income in the same way as physicist look at the distribution of the speeds of molecules in a gas. Most gas molecules have around the same speed, but a few have a succession of collisions that result in much greater speed, giving a distribution with a long tail.

    This mechanism ignores the details of the way society is organised, just relying on random interactions and the law of large numbers. Of course society is complicated, but I reckon the way to go is to start with this “statistical mechanics” model, and then add to it.

  44. yuri
    May 30th, 2014 at 22:25 | #44

    …doesn’t just fail, it falls flat at the outset.

    Apologies for another couple of typos too.

  45. yuri
    May 30th, 2014 at 22:35 | #45

    @ John Brookes
    I agree. I tried saying “Seconded” but it refuses to appear.

  46. Midrash
    May 30th, 2014 at 23:10 | #46

    The China connection.
    I have just read a Guardian piece gleefully pointing to apparent errors by the FT’s Chris Giles who found errors in Piketty’s research. While reading it I was provoked to consider how far TP’s work stands up or is even relevant when you factor in the vast increases in the wealth of citizens of what is soon to become the world’s biggest economy (where BTW Piketty’s g greatly exceeds everyone else’s r). And that’s before you factor in globalisation and international trade as causes for the changes in inequality in other countries. China incidentally is almost certainly a country where the rise in inequality would almost universally be accepted as the price to pay for general prosperity.

    Also just read is the Henry Thornton blog quoting a Nobel Prize winning economist and a successful builder both saying wages in Australia would have to fall, the builder explicitly making the China connection. Not perhaps directly relevant to the TP tome but it does reinforce the question whether he needs to pay more attention to countries other than those whise records he has been able to trawl.

  47. Midrash
    May 31st, 2014 at 01:23 | #47

    You raise the question why I mentioned specific factors and the answer lies principally in my understanding and experience of the way people’s minds work and of communications. (You might reasonably object that if I care so much about communication I might hire an editor or take the time myself to make everything I write simpler and as clear and free from ambiguity as possible but that takes a great deal of time for those with high standards but without the talent of a Bertrand Russell or a George Simenon).

    Formulations such as the generalisation you proferred I immediately feel inclined either to dismiss as waffle or to cross-examine irritably seeking detail or examples. The concrete and the specific I was always taught to prefer in communications over the abstract or general and I still think it has more than one merit. “The particular is all important” was the formulation of a famous judge expressing a view, I suppose, on the advocate’s art.

  48. Midrash
    May 31st, 2014 at 01:34 | #48

    Sorry for butting in. I had so agreed with Yuri’s frustration at what I can understand him regarding as obtuse and with the points about assortative mating and how that was presented that when I flicked down the blog and found stuff from you unresponded to I took it personally… I hope Yuri, if not sensibly retired for the night by now, would applaud me as his unwitting champion on this occasion.

  49. Ikonoclast
    May 31st, 2014 at 06:20 | #49

    I wonder how many people who call for lower wages live on a wage? What level of low wages would those making such calls be happy to see? Oh, wait a minute, we have an answer. Gina Rihehart suggested $2.00 a day.

    Poor countries pay poor wages. They are not necessarily poor countries because they pay poor wages. Such countries are poor for historical and developmental reasons. However, the flip side question must be asked. Can rich countries return to paying poor wages and still remain rich countries? I have strong doubts. USA is trying the experiment.

  50. J-D
    May 31st, 2014 at 07:00 | #50

    No, I am not pretending to be obtuse.

    You write: ‘If business needs people of the kind of intelligence and work habits which qualifies them for stimulating and otherwise pleasant academic posts then it will have to offer them incentives to choose one rather than the other.’

    Do you have any reason to think that business needs the kind of people who qualify for academic posts? Do you have any reason to think that the supply of such people is so low as to create serious competition for them between business and academic employers?

  51. J-D
    May 31st, 2014 at 07:04 | #51

    If you think it’s well worth considering the empirical question of the attractiveness of employment in academic positions, why have you not investigated the evidence? If you don’t do that before drawing your conclusions, of what value are your conclusions?

  52. Salient Green
    May 31st, 2014 at 07:08 | #52

    What we are seeing now amongst the rich is unrestrained gluttony. Higher tax rates once reined in the worst excesses of greed. The gap between rich and poor is far more than mere dollars and cents. Income inequality also manifests itself psychologically in the lack of empathy seen in Ikonoclast’s example at 48 by Gina Rinehart.

  53. J-D
    May 31st, 2014 at 07:19 | #53

    I referred to other possibly omitted factors on the basis of your previous statements about the role of multiple (unspecified) factors in explaining variation in incomes. If you challenge me to provide evidence for the view that many factors influence variation in incomes, you create the impression that you are disavowing that view, which previously you seemed to endorse. Since I was commenting in response to your stated views, I should like to be clear on what your view is. If you think that many factors influence variation in incomes, why do you think that? or, if you think that few factors influence variation in incomes, why do you think that? or do you have no sufficient basis for forming a view?

    As for your answer to my question, what I wanted to know was not what made one particular idea pop into your head, but rather what made you think it was worth mentioning. Many things pop into my head: some of them are worth mentioning, but some of them are not. If you are serious about the possibility that you made your comment as a clever-dick input into the conversation, then what you wrote was something not worth mentioning. If you had written at the time ‘this isn’t worth taking seriously, so don’t bother responding to it seriously’ this whole exchange between us would not have taken place.

  54. J-D
    May 31st, 2014 at 09:27 | #54

    @John Brookes
    Different physical variables have different probability distribution functions. Some conform to normal distributions; some to log-normal distributions; some to exponential, or Pareto, or Cauchy distributions. I see no reason to expect incomes to behave like gas molecules in particular rather than following some other pattern.

  55. Ikonoclast
    May 31st, 2014 at 10:30 | #55

    It’s worth posting this link for Singapore again.


    The general shape of the second graph would hold for all capitalist nations. The first is the normal distribution if wealth matched ability and effort which for humans follow a normal distribution.

    The second graph shows the existent wealth distribution with many poor and very few rich. The two graphs are complete mismatch. Therefore wealth distribution does not follow ability and effort.

  56. J-D
    May 31st, 2014 at 11:41 | #56

    You have shown no basis for your confidence that there would be almost universal acceptance in China for rising inequality as a concomitant to increasing prosperity.

    You have also shown no basis for any expectation that increasing prosperity in China must mean declining prosperity in Australia, but even if it does, declining prosperity is just as compatible with decreasing inequality as with increasing inequality.

  57. May 31st, 2014 at 14:35 | #57

    Steve Kates has identified a basic error in economic theory in Capitalism in the Twenty-First Century:

    He has confused a shift in demand (ie a movement of the demand curve) with a change in quantity demanded (the effect on the number of units bought caused by a change in the price). For an economist, you cannot be more wrong than that.

    So it follows that the 1% have not become richer, and more politically influential relative to the rest of the population. Dr Piketty should be thrown out of the economic profession and his book is worthless. Or are there alternative explanations?

  58. J-D
    May 31st, 2014 at 16:59 | #58

    I am sorry if I did not make the meaning of my question clear enough.

    My question was not just about why yuri had chosen to use specific rather than general terms but also about why yuri had chosen to mention some only of the specifics. Saying ‘the pattern of variation in incomes depends on identifiable factors [X], [Y], and [Z]’ is more specific than saying ‘the pattern of variation in incomes depends on multiple factors’, and this specificity can be good. (It does depend on being able to identify X, Y, and Z.) Saying ‘the pattern of variation in incomes depends on [X]’ or ‘the pattern of variation in incomes depends on [X] and other factors’ suggests not only a desire for greater specificity (which is well enough in itself) but also some reason for referring to X but not to Y and Z, perhaps because you consider X to the most important variable, which prompts questions like mine about why one specific factor is being emphasised over other specific factors.

    However, since then we’ve had further comment from yuri suggesting that the comment may have reflected no such serious analysis and may perhaps have been a mere piece of smart-aleckry, not to be taken seriously.

  59. John Quiggin
    May 31st, 2014 at 20:02 | #59


    It’s a cheap gotcha rather than a substantive criticism of the main argument. The comment thread suggests a bit of sloppiness in the translation was to blame. Haven’t bothered checking on this.

  60. May 31st, 2014 at 20:34 | #60

    Worthwhile plug (not completely ‘off topic’ because we’re talking about inequality):

    Watch SBS1 in about 3 minutes time, Pilger’s latest damning film “Utopia” is on. It’s about our disgraceful treatment of our first nations peoples.

  61. faust
    May 31st, 2014 at 21:32 | #61

    Someone needs to explain why inequality is a bad thing when Australia has a massive transfer payments in the form of welfare and relatively low tax rates. What is bad about someone wanting to be rich by risking their own cash? If an entrepreneur risks his/her money, works 80+ hrs per week, sacrifices comfort and earns a shed-load down the line, what right do you have to confiscate that wealth through extraordinarily high taxes in the name of “inequality” and “fairness”?

  62. J-D
    May 31st, 2014 at 21:55 | #62

    If you think inequality is a good thing, then surely you should be thrilled to bits that somebody has found evidence that it’s increasing and also that it is on course to continue doing so?

    Is Piketty saying that it’s bad for people to get richer and richer by their own efforts? or is he rather saying that it’s bad for people to get richer and richer by inheritance?

  63. BilB
    May 31st, 2014 at 22:10 | #63


    Steve Kates is both taking a quote out of context and missreading it. Piketty makes only an incidental assumption between demand and price a not causal link on the the one hand and implies a broad time frame on the other. As I se it, the impatient Kates demands instantaneous transition in his wilful missinterpretation of the point Piketty is suggesting.

  64. May 31st, 2014 at 22:11 | #64

    In a book that size and with so much data it is no surprise that there are a few innocent errors.

    there are also nitpickers who like to check quotes to their original source to find minor errors as well.

  65. faust
    May 31st, 2014 at 23:33 | #65


    Then that requires an inheritance tax, not an 80% tax on high incomes or a “global wealth tax”.

  66. May 31st, 2014 at 23:56 | #66

    David Leyonhjelm was on the ABC the other day trying to explain his position, as a fascist, on certain issues (of course that terminology is mine. “Hypocrite” is probably more accurate).

    He said that all tertiary education should be provided by the private sector without any public funding whatsoever.

    He acknowledged his own scholarship (that old fascist/libertarian/neo-con chestnut about “worthies” being chosen for the kind of ‘special’ treatment they would deny the unworthies).

    His point was that the “free market” should reign supreme and that only those who could afford tertiary education (or those who won a prize) should get tertiary education.

    I could follow that ‘libertarian’ point of view until he argued that students who couldn’t afford to pay could be offered “loans” (at usurious rates – presumably from the ‘free market’) so they could go to these profit-driven universities.

    So market distortion is perfectly OK if it tilts the way of the wannabe neo-feudal class, apparently.

    That is not only stupid, it’s just mean.

    PS: I see David Leyonhjelm is a long time IPA type.

  67. Collin Street
    June 1st, 2014 at 02:14 | #67

    > “free market” should reign supreme

    Free markets, of course, weigh people’s preferences in proportion to their income. Isn’t it odd that a small group of rich people would prefer that economic and policy issues be resolved through people voting with their dollars rather than voting with their ballots?

    [incidentally, faust, this is the heart of the per-se problem with inequality: the best possible overall compromise given other factors might have a certain degree of inequality, but all else being equal — which it isn’t, yes — more inequality means lower average and overall utility/welfare. More inequality means trading off lots of people being able to get their second priority for a few people able to get their third: this is a terrible tradeoff, because the benefit is both smaller per-person [the marginal happiness of giving someone their third priority is less than the marginal happiness of giving someone their second priority], and given to fewer people. Which I’ve gone over before.]

  68. Collin Street
    June 1st, 2014 at 02:17 | #68

    Also, faust: taxes-and-transfers reduce the inequality of any particular income distribution, but if the underlying income distribution becomes more unequal over time then taxes-and-transfers will only make the final inequality smaller over time if taxes-and-transfers grows over time and faster than inequality.

    Which I’m reasonably confident isn’t the case.

    This is a stocks-vs-flows error, or rather a flows-vs-rate-of-change-of-flows error.

  69. Nathan
    June 1st, 2014 at 12:35 | #69

    Also, by what measure do you decide Australia has “massive” transfer payments? Our welfare spending is modest by international standards

  70. Socrates
    June 1st, 2014 at 17:37 | #70

    I have a copy of Piketty and am only slowly reading it. It is a large task and so it is easy for critics to confuse people by quoting bits of it in isolation. I have read the FT criticism and now Piketty’s thorough response. I think at this point, the critics are desperately trying to find some flaw in the work, not to ensure an impartial overall judgement, and certainly not to engage in genuine debate. To acknowledge that Piketty’s overall conclusion on wealth is correct would force them to admit their beliefs about economic policy are false. Much better to try to destroy the evidence that you are wrong, than to admit it. It is the climate change debate all over again.

    At this point I think that the FT critic has done his own credibility considerable damage. He has been disingenuous. His claims about the UK economy are plainly false. Never mind, he will pick up plenty of work in the private sector, or for various right wing think tanks who generate justifications for inequitable policies. To solve this debate we need an ethicist, and maybe a psychiatrist. No amount of economic debate will make the defenders of unregulated capitalism admit they are wrong. It would damage their egos and possibly incomes too much.

  71. June 1st, 2014 at 22:19 | #71


    You are painting a picture of “Piketty denialists”, who no doubt will employ the techniques of the global warming denialists.

    I’m in favour of continual redistribution of wealth to make a fairer society. Extremely high rates of income tax in the middle part of the 20th century failed to stop the US being a super power. My own observation of the behaviour of ambitious hard working people is that they enjoy the process just as much as the reward. The argument that high rates of taxation will cause these people to down tools and leave us lesser mortals drifting rudderless in a sea of despair is utter rubbish.

  72. faust
    June 1st, 2014 at 23:16 | #72

    @John Brookes

    Why do you deserve my money? I work for it: you take it by force (tax). That makes you extraordinarily greedy.

  73. June 1st, 2014 at 23:40 | #73


    I think the term greedy is probably better used to describe the people who go to a great deal of trouble to get lots of money.

    Redistribution of wealth is not greedy. Its simply a measure to fix a flawed system. We have a system that enshrines property in law and protects it, but there is no particular reason to believe that such a system is in any way ordained.

    I think that such a system is good at producing material prosperity, but bad at distributing wealth. No one deserves your money. Its just a better system if there is redistribution. Its no big deal.

  74. John Quiggin
    June 1st, 2014 at 23:54 | #74


    And of course, the social and economic system, including technology and legal systems, that enables you to earn high wages was entirely your personal creation, so you are entitled to be outraged if it asks for a return from you.

  75. John Quiggin
    June 1st, 2014 at 23:55 | #75


    I note the implication that its OK to confiscate unearned income such as inheritances, dividends etc. Was that your intention?

  76. June 2nd, 2014 at 00:11 | #76


    I’ll hop in as well:

    Why do you deserve my money?

    What “money” is that? You mean plastic notes created by the ‘mint’ that I pay for with my taxes?

    Why do you deserve to use my money to claim a unique right for yourself?

    How did you make this money of yours, about which you are so protective?

    Please explain how you can make “money” completely and absolutely independent of a structured society such as we have in Australia today.

    None of us who live in a relatively democratic and civilised society can claim 100% entitlement to “our money”. You included, unless you are a master counterfeiter.

  77. James Wimberley
    June 2nd, 2014 at 03:31 | #77

    @John Quiggin
    The translation is not at fault (I have checked with the French text). But John is right that it’s a cheap gotcha that fails to engage with the argument. Piketty is a classical not a marginalist economist; he does not AFAICT believe the real economy is ever in equilibrium for the aggregates in which he is interested. The context is the scarcity and price of urban real estate, and he suggests it may take decades for adjustments like population shifts to the countryside to take place.

  78. Julie Thomas
    June 2nd, 2014 at 06:58 | #78


    How are you forced to pay tax? You have choices; you can move to a lower taxing country or go Sea Steading.

  79. Collin Street
    June 2nd, 2014 at 07:07 | #79

    Also, faust, you can’t argue that the problems of increasing inequality are fixed by taxes if you’re also arguing that taxes are wrongful.

  80. BilB
    June 2nd, 2014 at 09:16 | #80


    Your tax money is spent serving your own personal interests, no-one elses.

    It sounds like you would prefer to be a free loader.

  81. J-D
    June 2nd, 2014 at 09:39 | #81

    If there is going to be government at all, it has to be paid for somehow. Some people maintain, consistently, that there should be no government at all, with the corollary of no taxation. Some people maintain, consistently, that there should be government and that taxation is justified to pay for it. If you have a third option, I am keen to hear what it is.

  82. Collin Street
    June 2nd, 2014 at 10:23 | #82

    > Please explain how you can make “money” completely and absolutely independent of a structured society such as we have in Australia today.

    Money is meaningless absent people to exchange it with, of course: there’s a case you could make that property rights in objects are not rooted in communal agreement, but for cash money that’s just plain silly.

  83. Ikonoclast
    June 2nd, 2014 at 12:10 | #83


    No government means anarchy. Anarchy is never benign. It is the law of the jungle. The big eat the small metaphorically speaking.

    Government of society is necessary. Indeed, without government, there is nothing cohesive and coherent enough to call a society. Then, the problem becomes, good government or bad government.

    Of the three options, anarchy, bad government or good government, only good government is good. It’s almost a truism of course.

  84. Jim Birch
    June 2nd, 2014 at 13:33 | #84

    You might have missed something Faust.

    Having spent a bit of time observing non-human and human animals I can reliably state that formal ownership is a delusion that is peculiar to humans. In other species, it is essentially a case of take it if you can, and, on the other side, defend it to the point where the physical risk becomes too great. The assessment of the risks of taking and maintaining ownership relies on evolved heuristics. Without these evolved-in heuristics the whole idea of ownership would be considered obviously fanciful or crazy, as indeed human ownership claims are often found to be in the face of superior fire power or regime change.

    Ownership may be a useful delusion in humans as it allows the accumulation of productive resources but the operational delusion and the can only be maintained by force, habit or compact. Obviously, there will be a practical mix will required, but in the end, if we assume modern ideals like democracy, we will ultimately rely on some kind of compact: violence is undesirable and habit (alone) is unreliable. The haves must offer the have-nots something for the benefit of the maintenance of the ownership delusion by the force of the state.

  85. J-D
    June 2nd, 2014 at 16:13 | #85

    I am not persuaded that the arguments of anarchists can be dismissed as glibly as you think. I don’t think it’s necessary to take a position one way or the other on the merits of anarchism in order to make the point I was making: to be consistent, faust should either frankly and avowedly take up an anarchist position, explain how government can be funded without taxation, or acknowledge that at least some taxation is justifiable.

  86. Fran Barlow
    June 2nd, 2014 at 17:21 | #86

    I know that anarchy is often used to mean no more than absence of laws, but anarchists don’t describe their politics this way. Anarchy can be a society in which there are no identifiable rulers or elites — our caricature in the early scenes from Holy Grail sketches a vision (despite his poor nomenclature — “anarcho-syndicalist” in a society without organised social labour and unions LOL).

    In practice, I don’t accept that anarchism is possible this side of the disappearance of class society, which is in turn a consequence of scarcity. In theory however, it is possible, albeit, we won’t live long enough to see it.

  87. alfred venison
    June 2nd, 2014 at 18:03 | #87

    we prefer to call it “anarchism” – a la “liberalism” or “communism” or “individualism” or “socialism” – and leave “anarchy” to polemicists. i’m glad i don’t have to defend against that old canard of a false equivalence between “anarchy” and “anarchism”. thanks to whose who agitated for clarity before i got home. if anyone really wants to know the range of what anarchism proposes in lieu of the stat.e george woodcock’s “the anarchist reader” is as good a place as any to start. what Jim Birch says about animals sounds like kropotkin. -alfred venison

  88. alfred venison
    June 2nd, 2014 at 18:15 | #88

    “anarcho-syndicalism” does not propose a society without unions. it is a philosophy which proposed to use the power of unions to force a general strike to confront the system & bring it down. europe arguably could have done with a dose of anarcho-sydicalism in 1914, rather than socialists voting the imperialists their war credits. would that juares hadn’t been shot dead before the vote in paris! nettl in his biography says rosa luxemberg was coming around to the idea of the general strike as an instrument to rock capitalism towards the end of her life. -a.v.

  89. Fran Barlow
    June 2nd, 2014 at 18:21 | #89

    @alfred venison

    You misunderstood me, AV. Of course anarcho-syndicalism looks to unions — that is the syndicalist part. There were no unions implied in that scene from Holy Grail, nor even industrial workers or capitalists.

  90. alfred venison
    June 2nd, 2014 at 18:36 | #90

    looks like i did misunderstand. apologies. good to see you’re up to speed 😉 the scene in monty python looked, no offence intended, like primitive communism to me. -a.v.

  91. alfred venison
    June 2nd, 2014 at 19:46 | #91

    oh sigh, i get it now, Fran Balrow; its been a long arduous monday for me and memory has not served me well. enough. -a.v.

  92. kevin1
    June 2nd, 2014 at 21:51 | #92

    I haven’t read the Piketty book but Wayne Swan has given some confirmation of Piketty’s analysis in his Guardian article today: “When Rudd was prime minister and I was treasurer, our electorates ranked 22nd and 46th out of 150 respectively…All the Liberal party’s recent leaders have come from four of the five wealthiest electorates in the country.” If you add to this list the Man Who Squibbed It, Peter Costello MHR for Higgins, it’s probably 5 out of the 6 wealthiest electorates. What a powerful conclusion: class analysis is as relevant now as ever.

    The flat real wages of recent times (see Ian Verrender at The Drum, “Slashing wages could smash our economy”) challenges their authority. As well as winning the intellectual argument, this is a strength for democratic representation, because there’s more of us than them. “They” circulate in a different world to the rest of us, and are exposed as reflecting their daily experience, which is different to ours.

  93. June 2nd, 2014 at 23:20 | #93

    The “Monday” thread is closed, so I’ll put this here (and make it “on topic” by stating that inequality in the US so often manifests itself in the targeting of the masses by 1% military industrial complex propaganda).

    There is a great mid-1997 De Niro/Hoffman film called “Wag The Dog”. In the film the US needs a propaganda distraction and enlists the best PR/Advertising/Hollywood talents for the task. At one point they come up with an invented story of a soldier captured by the terrrsts the US is fighting.

    They fabricate his entire story for the purposes of domestic PR consumption – which works precisely as planned. The PR narrative works on the idea that he is like “Good Old Shoe”, a fabricated ‘old classic tune’.

    Long story short: “Bowe Bergdahl”.

    It is too perfect for words.

    PS: It’s not just a good film in the ‘dark satire’ genre, it is alarmingly prescient.

  94. faust
    June 3rd, 2014 at 06:37 | #94


    I mentioned earlier that I think a 40% top rate of income tax is appropriate anything more becomes legalised theft.

    Yet no one has explained why you are entitled to my hard work. Arguing that the government must be paid for is one thing: but that does not entitle you to a majority of the income I create whether by work or taking risks with my own capital that I have accumulated. What right do you have to determine that my wealth accumulation is evil, but your envy/desire/moral outrage is appropriate and that whatever I produce a majority of which should be taken in order to prevent me from becoming very wealthy?

    So far all I have heard is that I should be happy to be slugged with massive tax rates and that this should not be a disincentive. Indeed, it seems that everyone here wishes me to work hard and take those risks in order to make you rich and me poor!

  95. Julie Thomas
    June 3rd, 2014 at 07:22 | #95


    I don’t accept that you work hard; what does that mean? How do you judge your work making money and climbing the ladder is harder than the work that I do?

    List your criteria for assessing your self as a hard worker.

  96. Collin Street
    June 3rd, 2014 at 07:35 | #96

    > Yet no one has explained why you are entitled to my hard work.

    Posts 23, 24, 26, 31, 32 [by implication], 34. Essentially two reasons:
    + your property was made yours by a process that involves a whole lot of work from the rest of the community, and the community — which is essentially identical with the state for our purposes — can set terms for its involvement the same as you can.
    + on a larger scale, the whole “property” thing is a creation of the state anyway, and the state can/must set limits on what constitutes property rights and what they can be held over with an eye to the best interests of the whole community, not just the “property-rights holder”. If it’s necessary for the best interests of the population collectively — which isn’t the same thing as “if it wants to”, btw — the state can take away all your property rights, in the same way as if it’s necessary the state can have you live out the rest of your life in a small locked room [say for taking property the state has assigned to other people].

    So you can’t say that explanations haven’t been given. You may not understand or agree with the explanations, but for that you’d best look at yourself: in general you can’t expect to understand your errors even when they’re pointed out, because this amounts to belief in your own infallibility.

  97. Fran Barlow
    June 3rd, 2014 at 08:15 | #97

    As there seems to be no open thread, here’s one for Ikono … And perhaps Megan.


    I am saying that 2c is a bridge too far … Still, it’s a fun populist romp so what the hey …

  98. J-D
    June 3rd, 2014 at 08:40 | #98

    It is unreasonable for you to expect people to respond to your requests for explanation when you resist responding to theirs.

    What is your position?
    Is it your position that there should be no government?
    Or is it your position that there should be government, but that it should be paid for by some other method than taxation; if so, how?
    Or is it your position that there should be government, and it should be paid for by taxation, but that there should be some limits on that taxation; if so, what limits are you proposing and how are they derived; are your complaints only about income tax or about all forms of taxation?

    It doesn’t make you sound as if you know what you’re talking about when you refer to a 40% top marginal rate of income tax and then complain about having over half your income taken away.

    I’m not asking to have you taxed to make me rich. I do not know anything of your financial affairs and don’t wish to, but I don’t mind telling you that I am paying income tax at the top marginal rate.

  99. Ikonoclast
    June 3rd, 2014 at 08:41 | #99

    Edward Fullbrook is bang on correect;

    “Over the past thirty years in the US and the UK there have been large upward redistributions of
    income from the bottom 90 per cent to the top 1 per cent and especially to the top .1 per cent.
    These redistributions are specific to these economies rather than a general phenomenon of
    advanced economies. This paper argues that these redistributions have taken place because
    of fundamental changes, albeit informal, in the political structures of the US and the UK.
    Drawing on Citigroup reports and charting the interplay between Goldman Sachs and the
    Obama administration, the paper argues that these changes have been realised through
    organized, systematic, conceptualized and financially motivated subversions of the democratic
    process. Strategies for effecting and preserving these changes are examined.

    Some of the changes in law and government policy which were enabled by the new political structure and which in turn enabled the creation of the most recent financial bubble are listed. The paper concludes that it is in the interests of the new political order, secretly called “plutonomy” by its insiders, to have more financial bubbles in the future.”

    Of course this is what is happening. If you think the plutocracy don’t have a plan and all this is happening by accident then you also must believe in the tooth-fairy.

  100. J-D
    June 3rd, 2014 at 08:47 | #100

    If you are suggesting that Wag The Dog illustrates the depths to which some people are capable of sinking because of their utter lack of moral scruples, you are correct: that is what satire is for, and there’s nothing prescient about it: such unscrupulous people were contemporary with the film’s making, not just a feature of our present being predicted in advance.

    If you are suggesting that Wag The Dog is an accurate literal description in practical terms of the kind of events that could and would actually take place, the evidence suggests the opposite to me. If you are suggesting that the case of Bowe Bergdahl parallels the events of the film to the extent that the story of his being held prisoner was entirely fabricated from beginning to end for US propaganda purposes, I haven’t seen that evidence either.

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