Guess what book is number one on Amazon this week? Capital in the Twenty-First Century by French economist Thomas Piketty is currently America’s best-selling book. It is the first best-selling book by Harvard University Press, the book’s publisher, despite being in existence for a century.
The book focuses on income inequality in Europe and in the United States since the 18th Century. Of course, Piketty is not the only economist who has been complaining about income inequality and how the wealthy make too much capital. This book is different because of Piketty’s outlandish, apocalyptic predictions and his radical public policy proposal: a global income tax of 80% on incomes over $500,000 per year.
Piketty’s book, Capital, has been heavily compared to Karl Marx’s Das Kapital. They essentially make the same arguments:In capitalism, the rich get richer and the poor get poorer. Over time, the masses get more and more exploited as income inequality increases. When capital income gets reinvested, inherited wealth also grows faster than the economy. More and more of labor income will go to a small group of elitists who rig the executive pay system in their favor.
Piketty further argues that the elite will take over “the meritocratic values on which democratic societies are based.” James Pethokoukis of the American Enterprise Institute summarizes Piketty’s silly argument in saying “The political process will be hopelessly captured by a tiny elite of rent seekers and trust-fund kids. America (and then the other advanced economies) will become what Occupy Wall Street types and Elizabeth Warren think it already is.”
Writing for National Review, AEI contributor Jim Pethokoukis disagrees with Piketty’s predictions, arguing that “skyrocketing corporate pay doesn’t much reflect how technology and globalization have enabled top executives to manage or perform on a larger scale.”
Cato Institute economist Michael D. Tanner argues that “Instead of attacking capital and capitalism, why not expand the number of people who participate in the benefits of having capital? In other words, let’s make more capitalists. Yet, the Left is unremittingly hostile to exactly those policies that would give workers more access to capital.”
Writing for the Heritage Foundation, economist Stephen Moore explained: “Here’s an amazing statistic that Piketty chooses to ignore. When the highest income tax rate was 70 percent in the 1970s, the richest 1 percent paid about 19 percent of all federal income taxes. But with a rate of 35 percent on the rich in 2011, the rich paid close to 38 percent of all income taxes.”
Instead of complaining about how rich the so-called 1% is, how about we talk about economic policies that help the middle-class and the poor? I have a really good idea: let’s discuss ways to provide more opportunities to the poor (equality of opportunity and economic mobility), instead of devising ways to take money from the wealthy and giving them to the poor.
Views expressed are not put forth or endorsed by Red Millennial.