Home > inequality, upward income and wealth redistribution > “Meritocratic Extremism”

“Meritocratic Extremism”

from Edward Fullbrook

Merijn is ahead of me as I have only just ordered Thomas Piketty’s Capital in the Twenty-First Century. The book is receiving masses of favorable media attention in the West, including from The New Yorker, the Financial Times, the Economist and The Observer where yesterday Piketty and his book occupied the cover of the newspaper’s review section. This attention is surprising given the book’s central message (one often expressed on this blog), that capitalism has now failed the world and that inequality is now accelerating at a very dangerous pace and that the rule of the ultra-rich over the everyone else is a form of gangsterism. The Observer’s feature writer went to the École d’économie de Paris to interview Piketty, and here are a couple of quotes.

“I began with a straightforward research problematic,” he says in elegant French-accented English. “I began to wonder a few years ago where was the hard data behind all the theories about inequality, from Marx to David Ricardo (the 19th-century English economist and advocate of free trade) and more contemporary thinkers. I started with Britain and America and I discovered that there wasn’t much at all. And then I discovered that the data that did exist contradicted nearly all of the theories including Marx and Ricardo. And then I started to look at other countries and I saw a pattern beginning to emerge, which is that capital, and the money that it produces, accumulates faster than growth in capital societies. And this pattern, which we last saw in the 19th century, has become even more predominant since the 1980s when controls on capital were lifted in many rich countries.”

 

“This is true,” he says. “Of course it is true. But it is also true, as I and my colleagues have demonstrated in this book, that the present situation cannot be sustained for much longer. This is not necessarily an apocalyptic vision. I have made a diagnosis of the past and present situations and I do think that there are solutions. But before we come to them we must understand the situation. When I began, simply collecting data, I was genuinely surprised by what I found, which was that inequality is growing so fast and that capitalism cannot apparently solve it. Many economists begin the other way around, by asking questions about poverty, but I wanted to understand how wealth, or super-wealth, is working to increase the inequality gap. And what I found, as I said before, is that the speed at which the inequality gap is growing is getting faster and faster. You have to ask what does this mean for ordinary people, who are not billionaires and who will never be billionaires. Well, I think it means a deterioration in the first instance of the economic wellbeing of the collective, in other words the degradation of the public sector. You only have to look at what Obama’s administration wants to do – which is to erode inequality in healthcare and so on – and how difficult it is to achieve that, to understand how important this is. There is a fundamentalist belief by capitalists that capital will save the world, and it just isn’t so. Not because of what Marx said about the contradictions of capitalism, because, as I discovered, capital is an end in itself and no more.”

 

 

  1. April 14, 2014 at 9:27 pm

    “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha’‘

    Why not ‘due examination ‘of :
    … Prof. Michael Hudson ; http://www.globalresearch.ca/index.php?context=va&aid=28938 . “…. The Mathematics of Compound Interest A syndicate of less than one hundred American capitalists, if allowed to collect interest on their capital at a low rate and re-invest for 150 years or less, would at the end of that time own the earth and all real and personal property thereon. This is a simple mathematical proposition, capable of exact demonstration, and any one who doubts the truth of this statement may set all doubts at rest by computing compound interest on one and one-half billions of dollars for one hundred and fifty years, at five per cent per annum. …Flürscheim elaborated that “All exertions, all improvements in the methods and tools of labor, the strictest economy, the severest self-denial, are powerless to compete with the rapidity of self-increase possessed by capital placed at compound interest, and they cannot keep up with its demands.” To illustrate the dynamic at work, he composed an allegory (pp. 327ff.). Many ages after man was driven from Paradise and told “to earn his bread by the sweat of his brow, mercy began to prevail. A loving angel was sent down by the Great Master, charged with the task of lightening the burden. The angel’s name was Spirit of Invention. He began his work by teaching man to make useful tools” and tame animals, and in time to mobilize water power, air and wind power, fire and steam power to drive machinery. “It seemed that at last the golden era had come of which men had dreamed for ages past,” but “that envious spirit, that fallen angel, Satan,” was jealous that his own empire would soon be over for ever.
    Why not..
    …“Capitalism is the “best” system to date devised by mankind. As it is administrated, perhaps, is where the “flaw” is manifested. If capitalism used its Central Bank properly,that is for the betterment of the common good, with equality and justice for all, capitalism would be the best ways and means to help “form a more perfect union….”, Pontifical Council.
    Precisely. Soddy/Pontifical Council are/were perfectly conceptually aligned with Social Credit in this regard. However, power and profit require a symmetrically separate and equally powerful countervailing administrative agency that acts “in the betterment of the common good, with equality and justice for all,”BFWR commented on ” Is economics ripe for disruption? . .”
    If it were possible to sum up the single greatest flaw to capitalism ,it would be :It allows for the “most powerful force in the universe”… to quote( Einstein ? ),” compounding interest ,” to be used against that society.The lender becomes the owner of all the money based upon the act of compounding at any rate within a long period of time.
    …As Soddy said, every monetary system must at long last conform, if it is to fulfil its proper role
    as the distributive mechanism of society. To allow it to become a source of revenue to private issuers
    is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough
    ultimately to overthrow all other forms of government.”
    He got it wrong ! They are no longer secret and illicit !
    The banks openly,legally ‘print’ currencey issuance and tax it, called interest.

    Frederick Soddy writings, namely “The Role Of Money”
    (Entire book as a free download… http://archive.org/details/roleofmoney032861mbp

  2. April 15, 2014 at 6:15 am

    It seems nonsense to me, if it is favorable to the mainstream media then it probably would be, though I haven’t read the book.

    What we have now or in recent past is NOT capitalism, because selected private enterprises have not been allowed to fail, because the government interferes with subsidies, guarantees, bail-outs, bail-ins etc. Some call this crony capitalism.

    Are most economists so blind that they cannot see that zero interest rate policy is the “euthanasia” of the savers and the pensioners? At the same time, trillions in various currencies (of your choice) of taxpayers money through escalating national debts, have been, and still are, given to too-big-to-fail banks, to play in the game of casino capitalism.

    Millions in bonuses are rewards for high-frequency traders, hedge fund managers, bank CEOs, etc. This is monstrous theft, wealth transfer of historic proportions from the ordinary people to the already rich. Do we need to collect years of data to know the source of inequality? It is simply government and business collusive fraud and corruption.

    Please do not call what we have capitalism. If Piketty has even bother to define capitalism, he would not be saying what I’m reading in the quotes given in this post. He has a sloppy mind, it seems.

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