Piketty discusses Capital and inequality in San Francisco

Capital in the the 21st Century author Thomas Piketty addresses a San Francisco audience.
Steven T. Jones

French economist Thomas Piketty got a warm welcome in San Francisco last night [Tues/22] when nearly 200 people turned out to hear him discuss what is fast-becoming the defining book of this new Gilded Era of escalating disparities in wealth: Capital in the 21st Century.

“The book has been so popular that Harvard University Press has run out,” The Green Arcade owner Patrick Marks said in introducing Piketty at an event held across Market Street from the bookstore, in the McRoskey Mattress Company, in order to accommodate the large crowd.

Indeed, Capital has recently been lauded by a string of influential publications, ranging from The Nation through The New York Times to the Wall Street Journal, all acknowledging this as perhaps the most exhaustive study on wealth data ever collected — and a clear-eyed warning that capitalism isn’t the self-correcting system that its biggest boosters claim it is.

Piketty’s work shows how when the return on capital is greater than the annual growth rate of the overall economy, which is usually the case (except when interrupted temporarily by the major wars of the 20th Century, or the 90 percent tax rate on the highest US incomes after World War II), that dynamic consolidates wealth in ever-fewer hands, which is bad for the health of the economic system.

The only real cure, Piketty concludes, is a progressive global tax on wealth. Yet Piketty tries to avoid being too prescriptive, choosing to let his research speak for itself. “All I’m trying to do is present this book so everyone can make up his own mind,” Piketty told the gathering. In fact, he thinks the cure he outlines at the end of his book is less important than what comes before it: “You can disagree with everything in Part IV and still find interest in Parts I, II, and III.”

Piketty is critical of his economics profession for focusing too much on abstract theories and mathematical modeling while avoiding the real world calculations of how wealth is distributed and its implications, which he says should be the central question for economists.

He says wealth is more important than income to gauging how we live, which is why he has culled and analyzed most available gauges of global wealth distribution going back to the French Revolution of 1789. “The book is trying to shift the discussion from the study of income to the study of wealth,” he said.

That analyis is particularly illuminating for the United States, which is now experiencing one of the most rapid and extreme consolidations of wealth in history. “It is clear the rise of inequality in the US has been much more spectacular than in Europe,” he said.

Yet Piketty can’t bring himself to criticize capitalism itself, even as his work makes clear this inherent flaw in the system. Indeed, he writes critically of the “lazy rhetoric of anticapitalism” and declares in the book’s introduction, “I have no interest in denouncing inequality or capitalism per se.”

I asked Piketty about that point and about why he’s unwilling to support calls for a more fundamental transformation of the global economic system. He repeated points made in his book about coming of age during the fall of communism in 1989, feeling no sympathy for autocratic leftist regimes, and accepting private property as a basis for the economic system.

I pressed him with follow-up questions about how global warming and other externalities of capitalism seem to be call for new economic models, but he resisted going anywhere that might be seen as ideological. That didn’t play well with the San Francisco audience — indeed, about a dozen people came up to me afterward to compliment my line of questioning — but it has probably helped innoculate Piketty against criticisms that might undermine the impact of his work.

In fact, Capital in the 21st Century seems to destroy many of the faith-based economic fallacies that drive much of the political discourse in the US, from our persistent belief in trickle-down economics to the obsession with our national debt, which conservatives use to promote austerity measures that punish the poor.

Such austerity agendas don’t make sense to Piketty, who says they won’t work now any better than the did in 19th Century Great Britain, which funded its wars with public debt rather than higher taxes, thus devoting too much of the national income to paying interest to the wealthy bond holders.

“A progressive tax on public wealth is a better way to reduce public debt at a faster pace,” Piketty said in the same matter-of-fact style that he uses to apply data-driven analysis to controversial political realms. “I believe in progressive taxation of wealth, but that requires coordination among countries.”

Similarly, Piketty says he is not daunted by the political difficulties in implementing a global tax on wealth, which seems all but impossible to most political observers.

“I’m not terribly impress by people who say this can’t happen,” Piketty said of his proposed global tax on wealth, noting how the conventional thinking used to be that a progressive income tax, like the one adopted in the US in 1913, could never happen. “I am not as pessimistic as a lot of people seem to believe.”


"... accepting private property as a basis for the economic system"

nice one!

Posted by Guest on Apr. 23, 2014 @ 5:45 pm

Too funny, most oligarchs in the third world can't even be taxed by the local governments. The richest people in some of these countries are high level government functionaries, who certainly would not be letting Steve Jones pour over the books alive.

Middle class American left wing dreamers now think they are entitled to the wealth of post Soviet union industrialist/gangsters and third world kleptocrats.

What left and right dreamers can't tell us is the golden ratio on taxes, and yet they tell us the other side is intellectually bankrupt and anyone who doesn't follow there goofy sides nonsense is a simpleton.

Posted by Guest on Apr. 23, 2014 @ 11:30 pm

of other nations to store their wealth there to avoid taxation.

"Tax the rich" has never worked because the rich simply move their money. It only works, to a limited extent, on the one thing that cannot be moved - real property.

Posted by Guest on Apr. 24, 2014 @ 1:39 am

leaching off the international wealth tax.

SEIU members worldwide protesting outside the gates of the countries that don't sign on to the wealth tax.

"Those people are keeping us from getting our raise"

Posted by Guest on Apr. 24, 2014 @ 9:04 pm
Posted by Guest on Apr. 24, 2014 @ 1:40 am

That doesn't mean that the rest of us are any poorer, however.

Successful people create wealth - they do not destroy it.

No poor person ever gave me a job.

Posted by Guest on Apr. 24, 2014 @ 7:52 am

All poor people ever did for me is take a dump on my sidewalk.

Posted by Guest on Apr. 24, 2014 @ 8:39 am

and cast a spell to destroy Airbnb and bring down the capitalist system!!

Posted by Guest on Apr. 24, 2014 @ 9:11 am

and then we can thank Steven for converting us into North Korea.

Posted by Guest on Apr. 24, 2014 @ 10:02 am

Because the latter was purely domestic and, although the constitution had to be changed, we didn't have to negotiate a wealth tax globally.

You would only need one nation to say NO to a global wealth tax and it would not work, because assets would flow there.

Posted by Guest on Apr. 24, 2014 @ 10:31 am

Is Steven in the picture too?

Posted by Chromefields on Apr. 24, 2014 @ 11:33 am

I think you can see his pinkie in the lower left hand corner of this pic.

Posted by Guest on Apr. 24, 2014 @ 12:25 pm

The major question here is whether Marx was wrong that capitalism as an economic system was a base upon which all of the superstructure has to be subservient to capitalism. That is, under capitalist economics, must politics exist only in service to capitalist economics?

Marx argued that all cultural forms that rise from an economic system reflect that economic system. Law, education, government, etc, in a capitalist system are all creatures of and dependent upon capitalism.

If it is possible for capitalist economics to exist under a political system that is not beholden to and controlled by capital, then there might not be a need to dispense with capitalism.

But if capitalism as an economic system holds the political system hostage, if the political system cannot be used to trump capitalist imperative, then the choice has to be made between private capital and democracy.

Posted by marcos on Apr. 25, 2014 @ 8:46 am

The workers own the means of production and share in the profits, just like Marx claimed was inevitable.\

The big difference is that we got there through peaceful evolution of capitalism, while the nations that tried to get there through Marxist revolution all failed.

Posted by Guest on Apr. 25, 2014 @ 9:45 am

I all the time used to read article in news papers but now
as I am a user of net so from now I am using net
for articles, thanks to web.

Posted by www.israelnews.co on Aug. 03, 2014 @ 7:37 am

"He repeated points made in his book about coming of age during the fall of communism in 1989, feeling no sympathy for autocratic leftist regimes, and accepting private property as a basis for the economic system."

I've read the book, a good study of The New Gilded Age and Belle Epoque in which the super-wealthy increasingly grab assets.

But Steve is right. This man needs to be VOTED OFF THE PROGRESSIVE ISLAND immediately. He doesn't pass the orthodoxy test.

Private property is evil.

Posted by Guest on Apr. 26, 2014 @ 9:47 am

""but he resisted going anywhere that might be seen as ideological.''

Oh, that's not good. That's not good at all.

He needs to be more ideological.

Posted by Guest on Apr. 26, 2014 @ 9:49 am
Posted by Guest on Apr. 26, 2014 @ 10:56 am

Ya know, Steven, what really gets me is that every time there is a criticism of any aspect of capitalism, the immediate demand from activists is why the critic did not attack capitalism itself.

This has been a perennial problem for activism that sets meaningful, attainable goals, but which finds itself in a pincer movement between leftists demanding that which is impossible under the context and the collaborationists which sell out on the cheap.

In Occupy Wall Street, the anti-capitalists insisted upon hijacking public disgust with the corruption of Wall Street and the warmongers into demands to end capitalism while the unions and nonprofits sabotaged from the inside, and it is happening with the anti-gentrification campaigns today where the anti-capitalists preempt any significant demands for concessions from the neoliberals and the nonprofits are there to stand down once they're paid.

If you want to have a conversation on replacing capitalism, you're an author, why not try to write a NYT bestseller that takes on that weighty task instead of demanding that others write your rather than their book? To my mind, Piketty takes as a point of departure a place closest to a structural critique and where most folks are today. That he's been able to begin to dismantle the presumptions of a self-correcting system, to start questioning the conventional wisdom, is a good start, better than any of us have done.

Posted by marcos on Apr. 29, 2014 @ 8:14 am

anything. What is need is compromise and consensus.

The problem is that the left is useless at that. They will support a polarizing extremist like Campos over a collegiate consensus-builder like Chui because they would rather achieve nothing than ruin their purity.

But in the end, we have capitalism because a majority like it. Nations that don't have capitalism have to build fences to stop their people escaping to places that do.

Posted by Guest on Apr. 29, 2014 @ 8:32 am

Neoliberalism is highly polarizing and it is dominating politics by force of cash.

Posted by marcos on Apr. 29, 2014 @ 7:18 pm

A number of journalistic sources covering Piketty's appearances have posted them on pages with comments sections. People have had actual conversations about it.

Here, an unknown quantity of anonymous people calling themselves "Guest" have posted dumb snipes, with the exception of @marcos, whose comments have only attracted more dub snipes.


Posted by Not Marcos on Apr. 29, 2014 @ 2:11 pm

Post new comment

The content of this field is kept private and will not be shown publicly.