Brian Fallow in the 23 Oct Herald alerts us to a change in economic debate with the publication of the The Piketty Phenomenon a collection of essays dealing with the groundbreaking work of the French economist’s Thomas Piketty’s Capital in the 21st Century. “His careful scholarship torpedoes the comfortable belief that economic growth is the rising tide that lifts all boats.”
The result of Piketty’s research, as Geoff Bertram (one of the essayists) puts it, is that: “Simply leaving the logic of the free market economy to work without restraint will produce a society with a super-rich patrimonial elite owning the lion’s share of the total wealth, and wielding the political power to go with it.” “Patrimonial” here refers to inherited wealth or belonging to what Warren Buffett has called “the lucky sperm club”.
Professor Tim Hazledine (another contributor) was struck not only by Piketty’s finding that the top 1 per cent have more than doubled their share of income since 1980 in English-speaking countries but by “the equally striking lack of such an increase in most other large rich countries such as Japan, Germany and France“.
That suggests rising inequality is the result of policy choices, in particular “the 1980s counter-Keynesian neoliberal revolution, which celebrated unrestrained greed in an ever-more permissive policy environment“.
I have lived through the crazy days of Reagan, Thatcher and “Rogernomics” from the eighties onwards. I was always struck by the audacity of the advocates of thieving by the elites from all of us of not possessing a rational intellectual argument standing up to scrutiny. They did not dare to debate their theories instead resorted to the mantra: “There is no alternative“.
Other non-English speaking rich countries, which did not follow the economic snake oil merchants of the time had quite different and arguably better outcomes. This proves that there always was and is an alternative to the 1980s counter-Keynesian neoliberal revolution, which celebrated unrestrained greed in an ever-more permissive policy environment.
Are we now in good old fashion going to drive the snake oil merchants out of town ?
Looking at this government and the two main political parties for that matter Brian Easton (another contributor) might be correct in his pessimism that it might take another decade or so.