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Monday, October 24, 2016

Good News For Progressive Economics: Big Thinkers Like Piketty Are Back In Vogue

Good News For Progressive Economics: Big Thinkers Like Piketty Are Back In Vogue

Thomas Piketty’s success is no fluke; he and other progressive thinkers have redefined the public debate around inequality.

Inequality suddenly is the topic of the moment. Last weekend the French economist Thomas Piketty – whose recently published Capital in the Twenty-First Century is now #1 on the Amazon bestseller list, shocking for a 690-page macroeconomic tome – was not only the subject of dueling Paul Krugman/David Brooks op-ed columns in The New York Times. Piketty was also top of the fold in the Times’ Sunday Styles section (headline: “Hey, Big Thinker”), which made note of his “boyishly handsome” looks. Clearly, something is up.

At Boston Review, Roosevelt Institute Fellow Mike Konczal provides an excellent overview of the response to Piketty from both left and right. (You can also listen to him discuss it with WNYC’s Brian Lehrer.) Much of the commentary seems to have gone, in only two or three weeks, from economic and policy questions (about his core formula, r>g, or about whether his recommendation of a global tax on capital is actually realistic) to observations that he is a “sign of his times.” In my view, this observation is absolutely right. Piketty’s argument about increasing returns to capital, relatively weak returns to labor, sluggish growth, and the overall rise of both income inequality and wealth inequality, is in fact perfectly in tune with our political and economic concerns today.

However, I would go much further than to say that Piketty is merely a sign of his times. I would say that he and other economists have actually defined these times — or at least helped create today’s environment. Piketty and his colleague Emmanuel Saez have been developing their top incomes database for the last 15 years, and publishing results along the way. Since 2003, Piketty’s data, based on an exhaustive review of tax records, has been setting the agenda and driving a tremendous amount of research. I first encountered the data in Winner-Take-All Politicsalso a bestseller, by political scientists Jacob Hacker and Paul Pierson.

Moreover, a number of those involved credit Piketty’s data with sparking the 2011 rise of Occupy Wall Street and the 99 percent framing, which remains a central part of our national conversation. (Credit, according to many others, also goes to Roosevelt Institute’s Chief Economist Joe Stiglitz and his widely read April 2011 Vanity Fair piece, “Of the 1%, By the 1%, For the 1%.” )

My point is this: Big Thinkers, whether Thomas Piketty or Joe Stiglitz or others, are not just reflections of the times. They are creating today’s debate. Ideas really matter.

In congressional testimony on inequality Stiglitz gave three weeks ago, he noticed a real change in attitude among senators, who are open to everything from a carbon tax to changes in corporate taxation, carried income, and the like.

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  • ExRadioGuy15

    “Big thinking” is not needed here…the first and largest step that can be taken to address wealth and income inequality is to do just one thing: repeal the upward wealth redistribution tools known as the Bush 43 tax policies. You see, a misconception about the early 2013 “Fiscal Cliff” nonsense was that those policies were repealed. They were not. The only change made to those policies was that the tax rates on the wealthy went back to the Clinton-era levels. Corporate welfare went untouched and the thousands of other loopholes, exemptions and deductions that the wealthy and big corporations use to avoid paying taxes were left untouched as well. Repealing those tax policies, which can also be called “Fascist” and “Reverse Robin Hood”, would go a long way toward reducing wealth and income inequality.

  • Douglas Johnson

    Bush 43 was a well orchestrated attack on government and specifically the first amendment by the religious right, led by Antonin Scalia according to recently released Presidential documents. I remember my startled reaction when I heard the Bush White House started “faith-based” initiatives, a blatant violation of the First Amendment. No child left behind sounded good, but it was an overt attempt to bring education under control of the private sector and discredit science. Besides being an unfunded mandate. I tire.

  • Osaka Williams

    The notion that liberty means “freedom from obstacles” is often cited by central planners consolidating the power to coerce others.