Piketty Debate Exposed The Failure of Economics. 5 Steps to Fix It.

[applegrove]

Piketty Debate Exposed The Failure of Economics. 5 Steps to Fix It.

By George Cooper at Evonomics

http://evonomics.com/piketty-debate-exposed-the-failure-of-economics/

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In short, the partnership of democracy and capitalism established a circulatory flow of wealth through the economy – capitalism pushed wealth up the social pyramid and democracy pushed it back down. Together this partnership of capitalism and democracy placed the whole of society onto an invigorating competitive treadmill, enabling those at the bottom of the pyramid to compete and also obliging those at the top to compete.

It is forgivable that Marx failed to recognise that his revolution was already in progress as he wrote his ‘Capital’. Indeed it could be argued that his writings helped complete those revolutions. On the other hand I have rather less sympathy for the stance taken in Piketty’s ‘Capital’ where, like Marx before him, he chooses to analyse capitalism as an isolated entity, largely ignoring the role of the state sector with its progressive taxation and transfer payments. For example, his r > g relationship fails to take into account that, when thinking of wealth accumulation, we should consider returns net of taxation.

In Marx’s ‘Manifesto of the Communist Party’ he calls for a number of reforms. Two of the most important – “A heavy progressive or graduated income tax” and “Free education for all children in public schools” – have already been implemented. We should not now resurrect a new version of Marx’s critique of capitalism without acknowledging that these countervailing redistributive arrangements are already in place. A more reasonable approach would be to recognise their presence and to debate their size and construction.

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Thinking about our economic system with a circulatory flow model is far from a complete model of an economy. It may better be thought of as the kernel of a new approach to economic thinking – the first step in rethinking economics. Nevertheless, with only a little thought it becomes possible to see how such a circulatory growth model could reconcile the key ideas of Smith, Marx, Keynes, Hayek, Minsky, Schumpeter, Fisher, Veblen and Darwin with the ideas of the institutional, historical and behavioural schools of economics.



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[SoLeftIAmRight]

1. I will say again...

The Clinton economic philosophy is rooted completely and blindly in the failed trickle down Chicago school of thought.

Nothing she says or does indicates that she has any understanding or even knowledge of any other options. Two generations of economist and business men/women are infused with these destructive ideas. They heap scorn on dissenters like the church did when it was faced with the idea that the earth revolves around the sun. Forty years of declining prospects for the American people has done nothing to shake the unfailing worship of Chicago school philosophy.

One of the more insidious pillars of this philosophy is that unemployment is necessary. Let that sink in. Unemployment is necessary.

For me, supporting a system or supporting the advocates of a system that ensures many millions of people must scramble and struggle to survive is abhorrent.

Full employment, a high minimum wage and income security changes everything.

Everything.

And that is what this fight is about. Far too many of the comfortable among us fear change and they will blindly fight against the ideas that they do not understand or care about.