Thomas Piketty’s Radical Plan to Redistribute Wealth(nytimes.com) |
Thomas Piketty’s Radical Plan to Redistribute Wealth(nytimes.com) |
1) Rognlie[1] pointed out that Piketty's central premise -- that the returns to capital are growing faster than the overall growth rate of the economy -- falls apart when you properly account for asset class and depreciation. The accelerating returns are specifically to real estate, while the returns to capital (excluding real estate) are flat.
2) Tyler Cowen pointed this out on his interview [2] with Piketty and Piketty essentially conceded the point.
Tyler implied therefore that the natural conclusion is Georgism[3]
[1] https://www.brookings.edu/bpea-articles/deciphering-the-fall...
[2] https://conversationswithtyler.com/episodes/thomas-piketty/
[3] http://gameofrent.com/content/is-land-a-big-deal#a-brief-rec...
Also, non sequitur: while I enjoyed A Brief History of Equality, I feel that it tried to stuff too much historical detail into so short a work - it reads a bit like a condensed version of Capital and Ideology. I found the most enlightening parts of Piketty's previous works involved the tracing of political and economic minutiae across time and space, and I'm not sure I would have actually enjoyed A Brief History of Equality if I didn't already have that background.
"PIKETTY: If you look at the top of the wealth distribution, I don’t see a lot of real estate. I don’t think Matt Rognlie or anyone is saying that the huge rise in billionaire wealth in the US has anything to do with real estate. As far as I know, nobody has ever tried to put this theory on the table.
"I’m not saying real estate is not important. I think for middle-class assets and lower-middle-class and upper-middle-class assets — for the middle of the distribution — real estate is, of course, very important. The movement in real estate prices explains a lot of what’s going on, both in terms of aggregate value and distribution. I’m not saying it’s not important. It is very important.
"If you go back to our paper with Gabriel Zucman, which was published, now, almost 10 years ago in the Quarterly Journal of Economics in 2014, called “Capital is Back: Wealth-Income Ratios in Rich Countries, 1700–2010,” you will see, we have complete decomposition about the role of real estate in aggregate wealth accumulation, and it’s absolutely central for many countries over many periods of time."
He’s still just one man. There’s no need to listen to him.
I’d rather listen to the majority who are being fleeced by thought ending men like Rognlie. “Oh but don’t think to change things; see look here is other math!”
Humans don’t exist in a vacuum of externalities; Rognlies advice makes it seem so. Fidgeting with the numbers doing nothing real for the people in need is no different than “thoughts and prayers”.
Story mode still rules, as we keep setting aside work of value to people for the story of how some people earned their status. I don’t care what Rognlies credentials are; he’s one of seven billion.
I applied my masters in elastic structures to design power distribution equipment for people. Rognlie sits and pontificates. Screw him.
although the language of that Brookings article is obscure ( possibly deliberately )
it seems like he's nitpicking rather than acknowledging something's deeply wrong.
plus it's strange the way he quotes himself in 3rd person in the article he himself wrote
That's really unfortunate, and results in a lot of non-self-aware political bickering.
That said, I do wonder if we're looking at inequality (or more specifically hierarchy) through the wrong lens. It seems like almost all independent societies naturally develop some sort of hierarchy (chief, priest, leader) without any outside influence. To me that points to some underlying natural law or at least a biologically-influenced tendency that higher level social constructs will be ineffective at changing.
- If you don't allow foreigners, I'll argue that you haven't solved anything. You've simple picked the winners.
- If the ratio of inequality is disrupted, I'd also argue you haven't done anything other than move the problem (and the losers) to the future.
- If you decide not to redistribute, well that's the current situation for better or worse.
Personally I think a better problem to solve is for humanity in general to decide what the minimum level of prosperity should be, worldwide and slowly try to raise this bar. AFAIK this is basically what we're doing. We could raise the bar faster, though.
And doesn’t that institution also bear the responsibility of the generational social and cultural impacts?
Does wealth redistribution reach stasis at a standard of living that is lower than is currently achievable? Does the golden goose eventually stop laying eggs?
Social engineering experiments can have many unforeseeable impacts - both good and bad. There is no guarantee that the ultimate results will be better than the starting conditions.
Whatever is done, it should be done slowly and under controlled conditions so that the impacts can be measured.
( Discussion prompt: what are some radical ideas for slashing poverty/inequality globally in 2 decades or less - assuming the public support/political will can eventually be obtained through effort/luck )
That's really unfortunate, and results in a lot of non-self-aware political bickering.
For an overview and references, see:
- https://en.wikipedia.org/wiki/Myth_of_meritocracy
- https://en.wikipedia.org/wiki/Meritocracy#Meritocracy_trap
I am one of those people who certainly missed the boat due to my own missteps, mistakes, lack of motivation
But let's talk about those who don't/didn't have the favourable circumstances and opportunities I had/have
Is not being able to afford / be-accepted-for a life changing college degree that person's fault 50% of the time ? is it their parents' fault ? is it the grandparents' fault that the parents weren't better off ? if so ... where does this blame game stop ? at some point govt/society needs to step in and give you a boost regardless of your background
debatably, inheritance & land ownership are well executed systemic conspiracies
mistakes, missteps, lack of motivation, are all fine - but "lack of ability" ? you're arguing against yourself there - if there is such a thing as lack of ability - that's certainly a terrible reason to disqualify a person from having their basic needs met
We now see this kind of thing even infecting our education system, and it's driving a lot of liberal people to the political right. Look at how Asian American voters acted in the recent San Francisco school board recall, for example. (Also: try telling those people that their success in our society is due to luck, even though they came here in poverty and were discriminated against every step of the way...)
The idea is that we want the system to be more meritocratic, and that a good place to start is to acknowledge that it's currently not as meritocratic as we tend to think. That's what the "meritocratic trap" is: thinking we have meritocracy when we don't.
That was always reductionist. Many emigres from China, Japan, Korea, USSR states, the Middle East and India arrived with high education levels. For 20th century society, where war could blow up or seize all your assets, education you ship with you in your brain is wealth that matters. Lots of uneducated people left behind in those countries, they just died or their life sucks now.
Policy is decided, implemented and evaluated on the level of societies, not on a global level. We have no global government, and the only global cooperation is voluntary, with wealth redistribution only happening as much as one society arbitrarily chooses to spend on charity and foreign aid for another. Social policies are not implemented worldwide but rather by some society for its own benefit, and if some policy makes a society successful, that's a great policy for that society. Leaders in democratic societies are accountable to people of their society about ensuring that their needs, desires and choices get met, they are not accountable to humanity in general but rather the people they represent, and in general these voters give a very limited mandate to sacrifice prosperity of their society to "raise the bar" of worldwide prosperity. If the society chooses to make policies that benefit everyone else, great, but if it does not, then the policy is good if and only if it fits the choices of that particular society. We can make a strong argument that there is a moral imperative not to harm other societies, however, ignoring them is an acceptable 'default' state of noninterference.
If doing something allows you to "pick winners" so that all of your society are winners, that would be great (certainly better than what we have now) and would have effectively solved things that matter for that society, even if it does not extend to the world beyond its borders.
See for example the French Revolution. Millions of unnecessary deaths due to political repression and wars. And then, 80 years after it all started, finally achieving democracy. All because those in charge at any given moment cared more about their ideas than people.
If you think we can achieve utopia if only everyone signs on to your wonderful idea, it's a sign that you are not only wrong, but should seriously seek counseling.
2. Elimination of usury applied to the money supply of the country in question. That is, issuing money without having a central bank charge interest on the issuance.
I am sure there are more.
https://progressandpoverty.substack.com/p/norways-sovereign-...
https://slimemoldtimemold.com/2022/05/17/norway-the-once-and...
There’s not a radical solution where something bold needs to be done. There’s a lot of mundane progress that needs to be done, but before it’s done it needs to be identified and prioritized.
Nobody should get to be rich because of who their daddy was.
Why? It is non-obvious to me that we should have a collective say in why the rich become rich.
It feels like trust fund babies are pretty much everything that the US is not supposed to be about. Whenever I'm in a mood to discuss politics and someone brings up the "death tax" I say something like: "I agree, the world absolutely needs more people like Paris Hilton." (Not to pick on Paris Hilton, but I think that she's a visible example that people resonate with.)
Put pressure though taxes, regulations, etc that benefit people owning things to do stuff with them and penalize people owning things to make money from somebody else doing things with them.
Investment will always be an important mechanism, it just needs to be a bit more disadvantaged than it is at the moment.
One of the mechanisms is as simple as taxing vacancy. If you own commercial or residential property that isn’t occupied, your taxes go way up to encourage you to drop prices until it gets used or you decide to sell.
Agreed, but a failure to reduce it would probably lead to the same thing eventually.
they're also a big part of how humans fulfil the basic necessities of life
why should this "ownership" gained centuries ago through violence or social rank, be the reason for the average person of today having pay 50% of their wages in tribute to the descendant of that original conqueror/noble ?
There are more of us than them. Property rights are agreed and enforced by society.
Most objections to progressive policies boil down to the idea that the more fortunate people deserve what they have, and that redistribution would make less fortunate people not work as hard. In other words, the world is unfair because of "hand-wavy general incentives".
I am aware that second paragraph was not a great steel-man, and there are many variants and nuances of these positions, but generally the implicit assumption is that we have good (I did not say perfect) vertical mobility, when in reality this is not usually the case.
> believing where they are due to well executed systemic conspiracies rather than their mistakes, missteps, or a simple lack of motivation or ability
the implication certainly is that if you don't make mistakes, missteps, work hard and have talent - in other words if you are full of merit - you'll assuredly end up in a good place
sounds like saying we live in a meritocracy
I think this is a good point. Nobody should be disqualified, and there are in fact many programs available to help people achieve their personal best.
Community college is an excellent stepping stone, as are vocational training programs. These are available in some states at a very low cost.
There is self-affirmation in achieving completion of any project, and completion of a training program that enables one to work, to create, to contribute and to develop self-agency is a wonderful thing to do.
I’m not sure what kind of society you are arguing against, because it’s not the one we have.
It is true that life situations (poverty, lack of parental assistance, safety and security, cultural roadblocks, etc.) are impediments to successful participation in school.
But is “access to education” a a demonstrable problem? Many states offer very low cost or free access to community college higher education.
Some search queries I recommend (just as a starting point):
- "Factors in access to education"
- "Access to education causal"
- "Access to education in America"
- "Access to education world data"
- "Access to education developing countries"
- "Public education and vertical mobility"
- "Relationship between education and innovation"
- "Relationship between education and health"
- "Public health and economic productivity
- "Access to education and marginalized groups"
To wit: https://www.webfx.com/blog/internet/the-6-companies-that-own...
> Encourage long-term thinking, planning, and investment by taking away the fear that all this work will be taken away or have to be sold off for taxes.
I see exactly zero evidence that our current practice allowing obscene generational wealth is encouraging sound long-term thinking from our plutocract rulers.
Consider the first point: yes, you can make them "healthy long-term thinkers", but without resources — especially when those resources are expropriated for the value of those with far different or far less long-range aims for them — it will only get them so far. I'm suggesting that encouraging long-term thinking on the part of individuals and their families, with part of that encouragement allowing them to build and maintain significant financial reserves and control of businesses, resources, etc., will have far more salutary effects than allowing those resources to be strip-mined for the sake of investors, corporate raiders, and government indulgences. What is currently lacking is an incentive for those who hold great resources to do more than either live large off of them or put them into ridiculous "charities" or "foundations" that end up doing very, very little of use. At least Carnegie built libraries; today's people buying their consciences back tend to purchase an assortment of politicians. Such a great use of resources.
Anyway, we are not going to agree: you think a handful of hyperwealthy families will be better for humanity in the long term; I think a broadly shared prosperity is better. I believe historical evidence is on my side, but that's a much longer discussion than I'm willing to have here.
Point being that society loses nothing by increasing taxes on unimproved land except an opportunity for parasitic wealth extraction whereas by taxing spending you lose valuable and productive economic activity.
For the greatest political impact the money from a land value tax should initially be given to poverty stricken pensioners.
Great. What has been accomplished exactly? Georgism is not the solution. Relaxing zoning laws and bureaucracy is. Private money already wants to develop their unimproved land if it's economical to do so. If it's not, taxing them more won't accomplish anything other than result in the land going back to the government, who will do nothing (historically) with it.
100% is the level whereby 100% of the profit a landlord makes will be due to the quality of the improvements and 0% will be due to land speculation.
A landlord owning a shitty building in a hot location will lose money. Hopefully a lot. That is by design. They sell up, somebody demolishes it and builds something better and denser and therefore makes a profit.
>Private money already wants to develop their unimproved land
All the private money in the world isnt enough to convince land owners in San Francisco to demolish their low density housing and build high density housing to accomodate all the people who want to live there.
Tax them on the land and not only will they stop NIMBYing private money at every opportunity theyll sell up gladly to property developers to avoid paying their eye watering LVT bill.
The “racial or cultural superiority therefore black kids are fucked” thing you’re really believe in is stupid. It’s unactionable and nobody gives a fuck about that perspective. There are like a handful of legitimate ways to address the scarce spots for everyone not just high achievers, but the racial and cultural superiority people don’t spend even one iota of their time or one cent of their dollars making the good schools bigger. It’s a profoundly immature point of view, and its immaturity should give you insight for why people don’t like you.
The Republic model (not the one described by Plato) is the best solution we’ve found to date to deal with these flaws.
If you say you care about actual people, you should care about giving more of them a chance, and worry less about protecting the non-existent property interests of the dead.
This has nothing to do with tax. Just change the laws. smh.
Plenty of people want to develop their land in San Francisco. Here's one example: https://reason.com/2018/02/21/san-francisco-man-has-spent-4-...
Again, private money already wants to develop. Taxation is not necessary. Remove the red tape. Government involvement is the problem not the solution.
Those property owners with $3 million houses will do everything in their power to prop their value up. That means inhibiting high density development. That means pretending a laundromat is "historic".
With a 100% LVT their houses arent worth $3 million theyre worth exactly as much as an equivalent house in Omaha.
There is no point in NIMBYing to inhibit housing with stupid shit like pretending a laundromat is a historic building. Inhibiting development wont drive up property prices. Change those laws and others will be abused.
But those people with $3 million houses will do ANYTHING to prevent an LVT.
> With a 100% LVT their houses arent worth $3 million theyre worth exactly as much as an equivalent house in Omaha.
and this is just wrong.
Yeah, I mean the land owners got together and tried to declare a laundromat to be a historic building.
The problem here isnt so much with historic buildings OR the ability of people to club together to save them like you seem to think.
The problem is that a group of landowners abused that process to protect their net worth... which is high thanks to them owning a sliver of very valuable extremely untaxed land in the vicinity.
The more it is taxed the less valuable it is. If it's not valuable any more suddenly they wont give two shits about "historic laundromats".