Re: Capital in the Twenty-First Century, by Thomas Piketty (Crypto Renaissance)
With all due respect, Picketty's book is a complete piece of crap. He uses a wrong theory, supported by wrong data, to reach wrong conclusions.
His main thesis is that the return on invested capital increases faster than the general growth of the economy, leading to increasing inequality (because those with capital to invest get richer faster than the rest). To begin with, he confuses return on invested capital with the growth rate of capital of corporate profits - a mistake that is unforgivable even for a 1st year graduate student of economics.
His data are cherry-picked and wrong - and they are always wrong in the direction that supports his thesis, which makes him intellectually dishonest:
His conclusions are that we should increase taxes to 80% (just a reminder - taxes are basically capital stolen by the government from the productive businesses, which capital is then wasted on crap like mass spying, wars and further expansion of the government bureaucracy), wealth tax (i.e., just because you have accumulated some wealth - and paid taxes in the process of accumulating it - should be a reason enough for it to be stolen from you) and government confiscation of your business after your death, so that it cannot be passed onto your descendants).
If it is still not blindingly obvious to you how wrong and harmful his teachings are, just stop for a moment and ponder the following: the wealth inequality between the richest and the poorest in the past wasn't much different than today's (e.g., compare the wealth of Craesus with that of a destitute Roman paysan and the wealth of Bill Gates with that of some no-job, no-education, no-income, no-future schmuck from Detroit). Yet just 200 years ago, a nobleman would live in a drafty castle that couldn't possibly be heated properly in wintertime. There was no running water, no sewer and no water boiler. There was no computer, no internet, no radio, no car, no TV, and most certainly no smart phone. There wasn't even electricity (imagine, the only light at night coming from candles!), not to mention modern medicine. If one could make any of today's poor from a typical industrialized nation switch places with said nobleman for just one or two days, they would probably soon beg to be sent back. Clearly the increasing of capital returns due to capitalism has done a little something to improve the general standard of living of humanity.
The problem in today's society is not inequality. The problem is the lack of free markets, the governments meddling with idiotic regulations that prevent small businesses from getting off the ground (while not troubling the big businesses at all and even helping reduce their competition), crony capitalism, price fixing (including the price of credit, i.e., the interest rates), money printing, waste of capital by the government on wars and various uneconomic boondoggles and so on.
Not surprising that the mainstream economists (paid stooges of the governments) loved Picketty's book, though, especially the part where he says they should increase taxes.
His main thesis is that the return on invested capital increases faster than the general growth of the economy, leading to increasing inequality (because those with capital to invest get richer faster than the rest). To begin with, he confuses return on invested capital with the growth rate of capital of corporate profits - a mistake that is unforgivable even for a 1st year graduate student of economics.
His data are cherry-picked and wrong - and they are always wrong in the direction that supports his thesis, which makes him intellectually dishonest:
His conclusions are that we should increase taxes to 80% (just a reminder - taxes are basically capital stolen by the government from the productive businesses, which capital is then wasted on crap like mass spying, wars and further expansion of the government bureaucracy), wealth tax (i.e., just because you have accumulated some wealth - and paid taxes in the process of accumulating it - should be a reason enough for it to be stolen from you) and government confiscation of your business after your death, so that it cannot be passed onto your descendants).
If it is still not blindingly obvious to you how wrong and harmful his teachings are, just stop for a moment and ponder the following: the wealth inequality between the richest and the poorest in the past wasn't much different than today's (e.g., compare the wealth of Craesus with that of a destitute Roman paysan and the wealth of Bill Gates with that of some no-job, no-education, no-income, no-future schmuck from Detroit). Yet just 200 years ago, a nobleman would live in a drafty castle that couldn't possibly be heated properly in wintertime. There was no running water, no sewer and no water boiler. There was no computer, no internet, no radio, no car, no TV, and most certainly no smart phone. There wasn't even electricity (imagine, the only light at night coming from candles!), not to mention modern medicine. If one could make any of today's poor from a typical industrialized nation switch places with said nobleman for just one or two days, they would probably soon beg to be sent back. Clearly the increasing of capital returns due to capitalism has done a little something to improve the general standard of living of humanity.
The problem in today's society is not inequality. The problem is the lack of free markets, the governments meddling with idiotic regulations that prevent small businesses from getting off the ground (while not troubling the big businesses at all and even helping reduce their competition), crony capitalism, price fixing (including the price of credit, i.e., the interest rates), money printing, waste of capital by the government on wars and various uneconomic boondoggles and so on.
Not surprising that the mainstream economists (paid stooges of the governments) loved Picketty's book, though, especially the part where he says they should increase taxes.