“Mr Piketty’s crypto-Marxism, moribund ideology and muddled thinking are concealed by an intellectual sleight of hand. His book has been criticised by eminent economists and analysts, including Nobel laureates. He boasts about his reliance on statistics, yet makes unsubstantiated, even erroneous assertions. Of greater concern is what’s missing. He says inequality is conflict-provoking. Given his proclivity for data, he presumably knows of readily available sources that show if it is. Are the data omitted because they suggest that inequality is not a problem? If people with disparate incomes and wealth live harmoniously, his book and the torrent into which it feeds are fatally flawed. If the evidence did support his view, it would have been rammed down our throats”.
“Instead, he uses subterfuge. The best he can do is to declare the cause of the Marikana tragedy to be “excessive profits” and the mine manager’s “fabulous salary”. Piet le Roux, of Solidarity, explained in response to Mr Piketty that the conflict was primarily political: a turf war between rival unions. Lonmin’s profits were not excessive by industry standards, and the manager was not relevant. (Reports did mention the income of the holding company’s CEO)”.
Read Leon Louw’s weekly column Piketty fails to convince in arguments on inequality first published by Business Day on BDlive on 7 October 2015.
He is fixated on monetary measures as opposed to living standards, including life expectancy and home ownership. Thanks to technology, welfare and infrastructure in countries characterised by private capital, living standards have risen spectacularly. In her seminal critique of Mr Piketty, economist Deirdre McCloskey contrasts rates at which labour incomes rise where private capital is inhibited or encouraged (www.deirdremccloskey.org/). She opposes “stealing from poor people”, and favours inequality derived from supplying “what people want”.
Ms McCloskey points out that living standards rise only slightly where wealth is expropriated, and by hundreds of percent where it is liberated.
Like all socialists, Mr Piketty assumes income from capital to be unearned, capital under bureaucrats to be productive and the result of just transactions to be unjust. Perversely, he loves equality that follows wealth destruction in wars and depressions.
He exaggerates the illusion of inequality, by regarding government and middle-class wealth as worthless, He cherry-picks rising inequality within selected countries, while ignoring rising equality in others and globally. He wants to seize private investment, which he apparently loathes. He ignores the degree to which income from labour and capital are sides of a coin. He sees them as hostile claimants of unowned wealth, which he does not want for either, but for mystically virtuous governments. Wealth, in his world, exists as if by magic. Big Brother’s job is to seize it slice by slice.