Tuesday June 17 at 7:30pm at The Highlander Pub
We had the chance to sit down with Prof. Golub to prep this week’s event. We started talking about Thomas Piketty’s Capital in the 21st Century, and while there is of course the history, the economics and the research behind the book, we quickly got to the larger questions that rising inequality poses and that we want to explore.
How is economic inequality reshaping our world? What does it mean for democracy as finance and politics increasingly merge? How is this inequality impacting social and economic mobility for the overwhelming majority of our society? Where and how is a line to be drawn (if at all) between the freedom to amass great wealth and a more socially appropriate distribution of that wealth? And the list goes on…
You may not have time to read Piketty’s 577-page book (although there’s extra credit for bringing a dog-eared copy) but here are some links to help get everyone started.
Paul Krugman’s great review and overview of Capital in the 21st Century
Economic inequality on the global agenda
Slate makes the case against inequality…
…while Milton Freedman makes the case for freedom over equality
David Simon (creator of The Wire) offer a view from the ground up…
…while the heir to the Johnson & Johnson fortune offers a view from the top down
Should we focus our attention on social mobility…
10 ways finance can be a force for good
The marginal benefit (or not) of extreme wealth
Thinking about Piketty-style re-distribution? Try doing the math…
Stephen Colbert tries to defend the American way
Also, please take a look at our COMMENTS, and feel free to leave one yourself.
We are really looking forward to this event. We hope you can join us!
the political pub 
The linkage between growing inequalities (99% vs 1%, etc) and politics cannot be ignored. Duhamel’s column on this makes the case (for France) clear.
Looks like the same data can tell a different story depending on who the storyteller is, and probably also what story you want to read. See links below, but first a thought:
The below links attest to the (apparently) dominating role that mathematics and economics play in a discussion about Inequality. In fact, inequality is not only a difficult subject for non-economists, it is also a cruel one, because while the economy’s impact in our lives is almost without equal, the means of discussing it seems to be in the hands of the economists. We can therefore pretend to participate and discuss it from all angles – ethically, politically, collectively, even personally – but the real debate will always be out of our reach: money, wealth, poverty, etc – these objects are left for the economy to balance, not our sense of justice …
Some links:
Piketty’s data is misleading
Interview with above author (please read comments)
The argument above uses household income instead of individual income, and it also adds in a select number of governement benefits such as social security, medical and unemployment payments, which are not included in Piketty’s calculations. These adjustments reduce the inequality gap by a suprisingly large degree (by 5 times!), therefore Piketty is arguing about a problem that simply doesn’t exist. Hm.
Response here:
You cannot use pre-tax benefits to compare income
The response is that Piketty was actually correct in not including certain government benefits. If one were to include all ‘pre-tax’ benefits, then this should also include wealthy tax breaks and other such credits, thereby bringing back Piketty’s large income gap.
Finally, these last links indicate that controversy has followed Piketty’s datafor quite some time. The story(telling) continues:
New York Times
Marxist Blog
I keep saying to myself there is nothing to be ashamed about when a future nobel laureate does standup with Colbert and (maybe) makes a complete ass of himself. Is this what Americans will remember the most when they think about Piketty and his book?
I will be the first to admit I don’t really get the show: Is Colbert a liberal who parodies the right or is he a conservative parodying himself. Either way, the show is a joke, and actually it’s pretty funny.
But then I realized that Piketty is having the time of his life, this is his 15 minutes. This is where Piketty gets to taste the life of the rich and famous. That’s the American way, to capitalize! As he himself has written about …
Anyway, I’d like to add some additional gigs from Piketty’s American Tour 2014. Piketty got on some of America’s most famous stages and jammed with notable economists (Krugman, Stiglitz, and Solow). And while he sang mostly the same songs at all of his concerts (the hits, “I’ve got great historical data”, ‘income inequality is obscene”,” r>g”, and “progressive taxation”), my personal favorite was his solo gig at Columbia university.
Another comment. Why not?
Check out these links, on the the “financialization” of the real economy :
policydialogue, Keynes + Schumpeter
On Innovation :
“A unique feature of our time is that the major mid-surge panic happened in two episodes: First,
there was the collapse of the NASDAQ at the end of the Internet mania in the 1990s. That
bubble was driven by technological innovation in ICT. Second, there was the 2007-08
meltdown. In this case it was the massive wave of financial innovation with ICT that drove the
easy credit bubbles with high-risk shadow banking and the sub-prime madness in the housing
market.”
Finance and Technoogy entwined:
“ICT and finance have been intensely interdependent … The setting up of the global telecommunications infrastructure for internet would not have been possible from the 1990s without capital gains in the stock market to foster major fibre optics projects for full coverage without dividends or profits. In turn, the housing bubbles could not have been so intense without securitization (which depended on information technology) and without the possibility of trading them globally (which depended on Internet). The same can be said about derivatives, credit default swaps and all the other high-risk synthetic instruments developed in this period with the help of sophisticated computer software.”
On Finance and Profits everywhere :
“Unfortunately there is the “financialization” of the real economy. According to Krippner (2005), it was the
financial arm of the non-financial corporations that was the source of such extraordinary profits. Thus, what we have witnessed is a complete decoupling of profit-making from real
production of goods and services. It is the setting up of a massive casino operation encompassing not only the stock market and the banks –shadow or otherwise—but also the
agents of the “real” economy (Lazonick 2010).”
Conclusion :
“The world is now at the turning point. The time has come to move from the gilded prosperity at the end of the
installation period to the truly golden prosperity of the deployment period.
In other words, these major boom and bust periods prepare the economy for full expansion with the new technologies and their new common sense paradigm. However, as discussed
above, the unleashing of a healthy deployment period requires shifting the control of investment from financial to production capital; from short-term to longer-term decisions; from
quick capital gains to patient capital. Achieving this power transfer demands an active comeback of the State to radically reshape market conditions and profit opportunities away from
casino activities and in favour of the real economy. That implies a clear understanding of the problem at hand and bold institutional creativity.”
And here is another link that probably solves all of our problems but nobody outside the economic community would understand it, and everybody within that community will undermine it either with disagreement or nuance or just by ignoring its existence …
policydialogue, 2, Keynes + Schumpeter