What? I thought killed zee fucking monster with my popular economics book, but its back again. Its back from the grave. It will not die.
"What? I thought killed zee fucking monster with my popular economics book, but it's back again. It's back from the grave. It will not die."

The history of economics is basically the rich justifying their position of power. The problem is it's not obvious why a society should have a small group that claims most of its wealth (or capital).

In the 18th century, it was argued that the rich were important to society because they were not pressed to consume capital, which was hard to accumulate (Adam Smith). And without capital, there is no economic development. Toward the beginning of the 20th century, the father of modern economics, Alfred Marshall, wrote that the rich contributed their fair share by simply waiting. We paid them to wait (interest). Waiting had real economic value. Most need to get paid and blow cash right away. But not the rich, and this made larger, capital-intensive projects possible—the great waiting powers of Mr. Moneybags.

By the end of the 20th century, we were told that the richer the rich got, the more money fell down toward the poor. Though it takes only a small effort of thinking to reveal how bizarre justification is, it's still with us to this day. Trump, as Christopher Frizzelle pointed out yesterday, is now "doubling down on trickle down".

But each of these positions has been countered by economists who, until recently, were ignored. Karl Marx dismissed Adam Smith; John Maynard Keynes had no patience with Marshall's waiting rich; and, most recently, Thomas Piketty, the young and most famous economist of our times, made nonsense of the total nonsense of trickle down economics.

Piketty brought inequality and wage stagnation into mainstream discourse. In fact, even Trump uses the hard facts of wage stagnation to fire shots at his opponent. So, Piketty's picture of the economy won the day, and his critics retreated into the shadows. It was hard to argue against the facts of growing inequality and wage stagnation, and his book Capital in the Twenty-First Century was a huge success.

But now things have cooled down a little, the professional apologists for the immense concentrations of wealth (orthodox economist), are trying to make little noise. Wall Street Journal: "‘No Empirical Evidence’ for Thomas Piketty’s Inequality Theory, IMF Economist Argues" Experience, in this sense, is not empirical. No matter. We know Piketty is not wrong (wealth isn't distributed equally in the world), but somehow he might be wrong on paper. But what is the danger of being wrong on paper (empirical) and not in reality? His critic: We may introduce taxes that do the economy more harm than good. So, we are back to the same old same old: justifying the wealth of the rich.


Professor Mott Greene and I will discuss Piketty's Capitalism in the 21st Century, Inequality, and the Future tonight at 7pm at the Cloud Room. Please join us, if you are free.