“Economics is ultimately the study of wealth creation through the allocation of resources. What we do know, with some certainty, is that wealth inequality is fundamentally caused not by a failure of the market but by governments wishing to regulate and control the choices of their citizens”.
- Education inequality prevails in many countries and has created an underclass of citizens too unskilled to compete in the new economy. ‘The nationalisation of education departments by governments and their proxies, the teacher unions, has rubbished standards’.
- ‘Government attempts to regulate the economy on behalf of specific interest groups have the direct effect of increasing transaction costs, impacting on entrepreneurship and destroying any opportunity of job creation’.
- ‘The ruling class and its control of the institutions that are meant to prevent corruption drive a culture of graft’.
Read the full opinion of John Catsicas, managing director of John Nicholas & Company, Piketty’s hypothesis on inequality deeply flawed first published by Business Day in BDlive on 2 October 2015.
Excerpts:
Not surprisingly, Piketty’s proposed solution to the Greek credit crisis further underscores his immaturity in understanding basic macroeconomics. No government can spend more than it earns, especially if it is funded by foreign credit. The whole basis of sustaining any debt market is that defaulters will be punished. This philosophy has evolved over the millennia to underpin the efficient allocation of scarce resources.
One is reminded of the late Margaret Thatcher, who often quoted the following: “You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else.”