It takes Piketty to make conservative elites panic? Really?
by David Atkins
Paul Krugman calls it the Piketty panic:
“Capital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue...
No, what’s really new about “Capital” is the way it demolishes that most cherished of conservative myths, the insistence that we’re living in a meritocracy in which great wealth is earned and deserved.
For the past couple of decades, the conservative response to attempts to make soaring incomes at the top into a political issue has involved two lines of defense: first, denial that the rich are actually doing as well and the rest as badly as they are, but when denial fails, claims that those soaring incomes at the top are a justified reward for services rendered. Don’t call them the 1 percent, or the wealthy; call them “job creators.”
But how do you make that defense if the rich derive much of their income not from the work they do but from the assets they own? And what if great wealth comes increasingly not from enterprise but from inheritance?
What Mr. Piketty shows is that these are not idle questions. Western societies before World War I were indeed dominated by an oligarchy of inherited wealth — and his book makes a compelling case that we’re well on our way back toward that state.
It's more than that, though. Mr. Piketty is certainly not the first to point that out.
What makes Piketty thesis so upsetting to conservatives is his argument that income inequality actually hampers economic growth. That's what makes up the bulk of his thesis, and that's what is most novel about it.
The immorality of income inequality and the trend toward aristocracy haven't bothered them much. But when someone points out that all of this immoral plutocracy actually hurts GDP growth, that's when the panic ensues.
It's almost as if the wealthy elite have turned GDP growth into a golden idol. It's been standard dogma that the dirty lefties are constantly besmirching the sacrament of growth. When someone starts pointing out that the high priests are defiling the altar, that's when chaos begins to engulf the temple.
That's pathetic.
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