The new book by Piketty is causing quite a stir. No I haven’t read it.
But neither have many others, it seems.
Some mistakes: Piketty isn’t a Marxist. However, he is data driven, unlike many others who thrive in mathematical obscurantism.
What conservative critics don’t seem to understand is that Piketty isn’t advocating a classless society or public ownership of the means of production. Like Marx, his immediate problem is defining how capital works. Any good economist is going to spend some time defining what capital is and where it goes.
What Piketty has shown, according to his interviews and reviewers, is that unregulated markets do not distribute wealth equitably. Capital flows to the top. It does not trickle down. Government has been the engine that protects capital flow for the middle class.
This is not a moral argument. It’s a descriptive one. Except when it comes to the corollary that people who have a lot more money have a lot more political power. In the end, as one libertarian economist sheepishly admitted to me, one cannot have both the sort of markets that create income inequality, and the traditional, republican, community virtues. One must have an oligarchy, or a republic, and capital by and large leans toward the former.
Efficiency and economies of scale still produce hierarchies. But that’s not the primary point. He’s not arguing against income inequality, social stratification or corporate organization. He’s saying something about capital flow. But in some conversations he’s remarked that A CEO making 20-25 times the lowest paid worker will be no less productive than a CEO making 500 times that. He asserts that level of income inequality is simply not necessary for a market to function productively. And this is what has some conservatives hopping mad: it seems that they want it all.
So unregulated wealth flows upward. Now what? Well, I can’t affirm much about policy at this point. Our faith requires realism about wealth and a distinguishing between things and people. It takes a subtle conscience to acknowledge each financial misery, one’s own riches, how one’s own wealth is through grace. That kind of sophistication is rare: the eye of the needle, perhaps.
Our communities, however, can provide spaces where people are invited to be generous with each other. For we think it’s all God’s, and we should not be afraid of loss, not afraid of sharing, resentful of the prosperous, or judgmental of the poor. At least, however, Piketty has called us to pay attention and face the truth: capital flows toward the top, unless our public institutions ensure that it flows freely for all.