Vive l’évolution!

Plus, the Krugman of Paris, Thomas Piketty’s bœuf with capitalism and plenty more...

(Liberty Leading the People, by Eugène Delacroix, 1830. Public Domain)

“The aim of all political association is the preservation of the natural and imprescriptible rights of man. These rights are liberty, property, security, and resistance to oppression.”

~ Article II, The Declaration of the Rights of Man and of the Citizen (1789)

Joel Bowman with today’s Note From the End of the World: Bordeaux, France...

For every small step forward, a giant leap backwards lies in wait. Incrementally, then, does man begin anew, the humbling path of progress – real and perceived – stretching out infinitely before him...

Few people understand the nature of time and tide quite like the French. Over the years, they’ve had it from both directions... good and hard.

For every Descartes... a Derrida. For every Voltaire... a Foucault. Every Marie Curie... a Simone de Beauvoir.

Truly, The Land of Lights stands atop a remarkable history, at times courageous (storming of the Bastille)... other times cowardly (see the Vichy government, working hand-in-leather-glove with the Nazis during WWII)... and still others, courageous once more (La Résistance française remains a point of national pride to this day)...

Still, there is a lot of good will stored up for a culture that gave the world germ theory, the metric system and the recipe for canard à l’orange, even if it did leave behind Dadaism, Art Brut and the pseudo-economics of Thomas Piketty, sometimes referred to (by this author) as the “Paul Krugman of Paris.”

Mr. Piketty, the French economist du jour and toast of uppity-nosed cocktail parties on both sides of the Seine, is the celebrated author of the best-selling poolside companion: Capitalism in the Twenty-First Century.

Piketty’s main bœuf with capitalism can be boiled down to one indisputable and, to him, inconvenient truth: some people get filthy rich, others... not so much.

Moreover, Piketty argues, it is not hard luck or bad decisions that keep the poor from acquiring wealth. Nor is it the State, the very entity that claims a monopoly on the production of money itself, including how gets it when and at precisely what rate it will depreciate in value over time.

Rather, the impoverishing factor is... wait for it… capitalism itself! More below…

r > g

So, how does capitalism work its devilish deeds? Simple enough, says Piketty. It favors the folks with the money, in that those with capital have a shot at growing their pile faster than the average rate of economic growth.

In other words, risk-taking sometimes pays off... and when it does, the gap between rich and poor widens. That’s bad, Piketty insists. Très mauvais.

For ease of recitation, Piketty helpfully boils his argument down to a nifty little equation, r > g, where r stands for return on capital and g stands for economic growth. When the former outpaces the latter, he flatly asserts, disaster is bound to ensue.

“An apparently small gap between the return on capital and the rate of [overall economic] growth can in the long run have powerful and destabilizing effects on the structure and dynamics of social inequality,” he writes.

It is through the exploitation of capital itself, Piketty argues in classic zero-sum fashion, that “the past devours the future.”

And what must be done, dear reader? How might we escape the insatiable gnashing of this hypothetical economic ouroboros that continuously feeds upon itself?

Ah, but you've already guessed...

“Progressive taxation!” urges the career academic, who has spent a lifetime kvetching about the capital formation in the private market from the safety of public (taxpayer-funded) universities and research institutions. To that unimaginative prescription he layers minimum wage hikes across the board and confiscatory tax rates on the wealthy of up to 80%.

Greed + Envy

Here he is, counting other people’s money as only the envious can, writing in Le Monde last October:

The tax debates currently underway in France … demonstrate that the issue of tax justice and the taxation of billionaires is not going anywhere. There's a simple reason for this: the sums amassed by the world's wealthiest individuals over the last few decades are quite simply gigantic. Those who consider this a secondary or symbolic issue should take a look at the numbers.

In France, the combined wealth of the 500 largest fortunes has grown by €1 trillion since 2010, rising from €200 billion to €1.2 trillion. In other words, all it would take is a one-time tax of 10% on this €1 trillion increase to bring in €100 billion, which is equal to all of the budget cuts the government is planning for the next three years. A one-time tax of 20%, which would remain very moderate, would bring in €200 billion and allow as much additional spending.

Hmm… a socialist divvying up other people’s money before he’s even bothered robbing it from them. Imagine our surprise!

And here he was just last month, weaving a vibrant tapestry of historical revisionism, intersectional victimhood and climate alarmism with a disregard for truth and beauty that would make Duchamp demur. Again, from Le Monde:

By opposing the 2% minimum wealth tax on the 1,800 French people whose net worth exceeds €100 million, after the measure was adopted by France's lower house of Parliament, the upper house, the Sénat, has shown just how disconnected it is from the issues of our time. This is nothing new. Between 1896 and 1914, the Sénat blocked income tax measures, with arguments as fallacious as those used today.

However, let's reassure ourselves: The funding needs for social and climate challenges, as well as the public debt, are so significant that this opposition will not hold out long when faced with the current economic, political, and environmental realities, which will very soon require far more radical redistributive measures.

In short, Mr. Piketty believes what all economic alchemists before him have peddled: that he (and his meddlesome ilk) can multiply wealth by dividing it.

Evolution > Revolution

Take from the rich and give to the poor, in other words: a “remedy” as tried as it is failed. For Piketty, it is not so important how people acquire capital in the first place, whether through peaceful, voluntary actions (the free market) or by force and coercion (the State and its henchmen); only that those who have it be swiftly, forcibly relieved of their property in order to gift each and every poor sod his or her “fair share” of the loot... regardless of whether they earned it or not.

By way of “damnation by association,” the real Paul Krugman, a man who never met a government redistribution program that didn’t make him week at the knees, considers Piketty's contribution “serious, discourse-changing scholarship.” The ex-Enron advisor even went so far as to credit his kooky Keynesian colleague with inspiring “a revolution in our understanding of long-term trends in inequality.”

And yet, not all revolutions are equal… except in that, by definition, they return us to our point of origin. What’s needed, as mentioned before in these Notes, is not so much a revolution in ideas… but an evolution. Or, in terms even egghead academics can comprehend:

e > r

More about which to come in your next Note From the End of the World...

Cheers,

Joel Bowman

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