Debunking Piketty and the Left’s Celebrity Economists
If you were to browse the economics section of the majority of bookstores here in my home city, Dublin, you would find something of an odd phenomenon: these businesses which essentially exist because of free enterprise and voluntary exchange—i.e., because of capitalism—stock very few books by promarket/procapitalism economists.
To be sure, when looking through the shelves, the most frequently encountered names include Karl Marx, John Maynard Keynes, Paul Krugman, and David McWilliams (the latter being Ireland’s most famous economist—a fellow at the Sanders Institute who believes housing and education should be free). Having paid close attention to this over the past few years when in these bookstores, I can say with absolute honesty that I have never seen books by F.A. Hayek, Thomas Sowell, James M. Buchanan, Murray N. Rothbard, Walter E. Williams, Ludwig von Mises, or even one of the best-known and least radical, relatively promarket economists, Milton Friedman. And I have rarely seen them in independent or secondhand bookstores here, too.
Why this is, we can only theorize. One reason might be because in the West today, the dominant culture in major institutions, mainstream media, and corporations is centered around leftism, and the bookstore owners themselves are merely responding to consumer demand; if criticism of capitalism (rightism) is in vogue—and it is—more people may be likely to read anticapitalist books and authors.
One of the economists on the left whose works regularly reside in these bookstores is, of course, one of the most popular and bestselling living economists—Thomas Piketty, who has seen an incredible rise in popularity in recent years. I decided to pick up one of his works from one of those promarket-starved bookshelves: Chronicles, a collection of his writings since the 2008 financial crisis. I also took to reading more articles about, and interviews with the man who says the world is ripe for “participatory socialism.” Here are some of the problems with Piketty and his book.
Patrimonial Capitalism and the Once Poor Billionaires
It doesn’t take long to encounter problematic and easily disprovable statements by the French economist who has been referred to as “the modern Marx.” In the preface of Chronicles, Piketty opines that “in the long run, patrimonial capitalism is the only kind that can exist.” You may be thinking, What is patrimonial capitalism? It essentially means that throughout history the economic elite attain their fortunes through inheritance, not through innovation or entrepreneurship.
This claim does not stand up under the least bit of scrutiny. For example, 327 of the people on the 1987 Forbes 400 (a list of the richest Americans) had dropped off the list by 2014. The remaining 73 were mostly self-made entrepreneurs and investors. Also, Steve Kaplan of Chicago Booth and Joshua Ruah of Stanford found that 32 percent of the Forbes 400 in 2011 came from very rich families, down from 60 percent in 1982. Indeed, it would suffice to look to the fact that a large number of billionaires in recent years came from poverty to confidently dump the theory of patrimonial capitalism into the bin.
Corporate Tax Rates and the Health of Nations
In many of the essays featured in Chronicles (with intriguing titles
Article from Mises Wire