May 2, 2014 10:18 pm

Piketty wants to punish growers of the economy

From Mr Paul Bloustein.

Sir, I have been hearing and reading about Thomas Piketty’s study, Capital in the Twenty-First Century, ever since it became a staple in the progressive precincts whose fringes I sometimes prowl (“Lessons from a rock-star economist”, Gillian Tett, April 26). With Prof Piketty, I too am troubled by income inequality and have devoted some quiet time to wondering how our society could ameliorate its deleterious effects without radically mangling the most successful economic model yet devised and the freedom that has made the model possible.

I am on the horns of a dilemma, perhaps because I value freedom of thought and action more than does Prof Piketty, whose radical solution gives far more precedence to eliminating income disparity at the cost of punishing those risk-takers who generate the wealth we wish to redistribute. Oh sure, I guess we could titrate the marginal income tax rate and find the exact point at which the Laffer Curve kicks in for the majority of high earners, but that is not what Prof Piketty advocates. He wants to eliminate high incomes altogether, thus punishing those whose imagination and other positive traits have grown our economy while producing financial success.

I suggest that we consider the following thought experiment: we impose the confiscatory and coercive Piketty programme on an incredibly diverse country with a population of 315m people with varying degrees of education, motivation and interests, and then revisit the income figures a year later. The disparity would still exist of course, albeit at different levels, but the society would be, for those who value freedom, irremediably damaged.

What we do about income inequality is not just an exercise in redistributing money, but rather a discussion about our country and what we want it to be.

Paul Bloustein, Cincinnati, OH, US

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