Capitalism isn't working and the reasons why

An article today that I found fascinating and have just sent off for the book.


Capitalism simply isn't working and here are the reasons why
Economist Thomas Piketty's message is bleak: the gap between rich and poor threatens to destroy us



Suddenly, there is a new economist making waves – and he is not on the right. At the conference of the Institute of New Economic Thinking in Toronto last week, Thomas Piketty's book Capital in the Twenty-First Century got at least one mention at every session I attended. You have to go back to the 1970s and Milton Friedman for a single economist to have had such an impact.

Like Friedman, Piketty is a man for the times. For 1970s anxieties about inflation substitute today's concerns about the emergence of the plutocratic rich and their impact on economy and society. Piketty is in no doubt, as he indicates in an interview in today's Observer New Review, that the current level of rising wealth inequality, set to grow still further, now imperils the very future of capitalism. He has proved it.

It is a startling thesis and one extraordinarily unwelcome to those who think capitalism and inequality need each other. Capitalism requires inequality of wealth, runs this right-of-centre argument, to stimulate risk-taking and effort; governments trying to stem it with taxes on wealth, capital, inheritance and property kill the goose that lays the golden egg. Thus Messrs Cameron and Osborne faithfully champion lower inheritance taxes, refuse to reshape the council tax and boast about the business-friendly low capital gains and corporation tax regime.

Piketty deploys 200 years of data to prove them wrong. Capital, he argues, is blind. Once its returns – investing in anything from buy-to-let property to a new car factory – exceed the real growth of wages and output, as historically they always have done (excepting a few periods such as 1910 to 1950), then inevitably the stock of capital will rise disproportionately faster within the overall pattern of output. Wealth inequality rises exponentially.

The process is made worse by inheritance and, in the US and UK, by the rise of extravagantly paid "super managers". High executive pay has nothing to do with real merit, writes Piketty – it is much lower, for example, in mainland Europe and Japan. Rather, it has become an Anglo-Saxon social norm permitted by the ideology of "meritocratic extremism", in essence, self-serving greed to keep up with the other rich. This is an important element in Piketty's thinking: rising inequality of wealth is not immutable. Societies can indulge it or they can challenge it.

Inequality of wealth in Europe and US is broadly twice the inequality of income – the top 10% have between 60% and 70% of all wealth but merely 25% to 35% of all income. But this concentration of wealth is already at pre-First World War levels, and heading back to those of the late 19th century, when the luck of who might expect to inherit what was the dominant element in economic and social life. There is an iterative interaction between wealth and income: ultimately, great wealth adds unearned rentier income to earned income, further ratcheting up the inequality process.

The extravagances and incredible social tensions of Edwardian England, belle epoque France and robber baron America seemed for ever left behind, but Piketty shows how the period between 1910 and 1950, when that inequality was reduced, was aberrant. It took war and depression to arrest the inequality dynamic, along with the need to introduce high taxes on high incomes, especially unearned incomes, to sustain social peace. Now the ineluctable process of blind capital multiplying faster in fewer hands is under way again and on a global scale. The consequences, writes Piketty, are "potentially terrifying".

For a start, almost no new entrepreneurs, except one or two spectacular Silicon Valley start-ups, can ever make sufficient new money to challenge the incredibly powerful concentrations of existing wealth. In this sense, the "past devours the future". It is telling that the Duke of Westminster and the Earl of Cadogan are two of the richest men in Britain. This is entirely by virtue of the fields in Mayfair and Chelsea their families owned centuries ago and the unwillingness to clamp down on the loopholes that allow the family estates to grow.

Anyone with the capacity to own in an era when the returns exceed those of wages and output will quickly become disproportionately and progressively richer. The incentive is to be a rentier rather than a risk-taker: witness the explosion of buy-to-let. Our companies and our rich don't need to back frontier innovation or even invest to produce: they just need to harvest their returns and tax breaks, tax shelters and compound interest will do the rest.

Capitalist dynamism is undermined, but other forces join to wreck the system. Piketty notes that the rich are effective at protecting their wealth from taxation and that progressively the proportion of the total tax burden shouldered by those on middle incomes has risen. In Britain, it may be true that the top 1% pays a third of all income tax, but income tax constitutes only 25% of all tax revenue: 45% comes from VAT, excise duties and national insurance paid by the mass of the population.

As a result, the burden of paying for public goods such as education, health and housing is increasingly shouldered by average taxpayers, who don't have the wherewithal to sustain them. Wealth inequality thus becomes a recipe for slowing, innovation-averse, rentier economies, tougher working conditions and degraded public services. Meanwhile, the rich get ever richer and more detached from the societies of which they are part: not by merit or hard work, but simply because they are lucky enough to be in command of capital receiving higher returns than wages over time. Our collective sense of justice is outraged.

The lesson of the past is that societies try to protect themselves: they close their borders or have revolutions – or end up going to war. Piketty fears a repeat. His critics argue that with higher living standards resentment of the ultra-rich may no longer be as great – and his data is under intense scrutiny for mistakes. So far it has all held up.

Nor does it seem likely that human beings' inherent sense of justice has been suspended. Of course the reaction plays out differently in different eras: I suspect some of the energy behind Scottish nationalism is the desire to build a country where toxic wealth inequalities are less indulged than in England.

The solutions – a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax – are currently inconceivable.

But as Piketty says, the task of economists is to make them more conceivable. Capital certainly does that.

http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty

Looking forward to the book, here is a man who dared to think outside the box. The RW will hate him, but his influence seems to be growing.

Good luck with that Comrade Sassy.

Laughable. Hollande has done just that and look at the mess France is in. You got that wrong as well.

Tax at 80% to spend on bone idle fat arses like yourself and Scatman. How long will the money keep flowing when it can be seen it's paying for the idle.

System of taxation which involve punitive rates have no chance and the fact you can't see it even when it has been tried so recently shows how dim you are. How can this be thinking outside the box it was done by Labour in the 60s and by French Socialist now. Do you ever read the drivel you write.

Capitalism is working like it is supposed to, people forget that capitalism has to be 'refreshed' periodically through revolution. Like the game of monopoly you play until too few people have too much money, then you flip the board, clean up and start again  :::grouch:: 

I think that is what he is trying to stop Veya, you can't class something as 'working' if it leads to war and revolution.

sure you can    that is part of the system.

War and revolution are part of being human, we would never have got anywhere if we sat there letting the chief make all the decision and never rebelling and going to form our own tribes and then generations on fighting each other, that is the process of evolution that has made us into such a powerful species.

It is not just Human but look at wolves and lions same process of pack/tribe grows in size and strength then splits at a point where it has 2 leaders and enough population to sustain 2 groups (revolution). that is the natural process by which many aggressive social animals (which humans are) expand their territorial range.

the fact that we now have spread out territory across the whole inhabitable planet is unusual. I can't think of any animal as large as us that has done it before, only a few species of insects have achieved similar. but that wont stop social units from the split/revolution process, just means they have to destroy another to have space to exists (a classic driver of evolution)

I'm all for standing up and fighting, but if it's not necessary, why do it. And I think that humans are capable of evolving into something better. Yep, idealist I know, but aim for the stars and you might get to the top of the sky, aim for what we have and you remain stagnant.

Alright said Fred wrote:Good luck with that Comrade Sassy.

Laughable. Hollande has done just that and look at the mess France is in. You got that wrong as well.

Tax at 80% to spend on bone idle fat arses like yourself and Scatman. How long will the money keep flowing when it can be seen it's paying for the idle.

System of taxation which involve punitive rates have no chance and the fact you can't see it even when it has been tried so recently shows how dim you are. How can this be thinking outside the box it was done by Labour in the 60s and by French Socialist now. Do you ever read the drivel you write.

Your too nasty for this forum....too nasty for this forum...too nasty for this forum....  

...Said Fred.

Sassy wrote:I'm all for standing up and fighting, but if it's not necessary, why do it.   And I think that humans are capable of evolving into something better.   Yep, idealist I know, but aim for the stars and you might get to the top of the sky, aim for what we have and you remain stagnant.

Better??? what is better???
non-violent? like the carrot.

I would prefer to be a lion than carrot, as mankind always have. when we cease to want to out do 'the lion' we will cease to grow, and that will be the beginning of the end for our species.

We really need to get off this rock and go find an equal to fight      

Also I have little doubt that socialist systems are refreshed by revolution as well. No system is 'fair'.

Then I have to disagree. Fighting for the sake of it, causing grief and destruction if there is another way, is something that human beings are capable of doing. There are always going to be times when you have to fight for something that cannot be attained any other way and is just. But fighting for the sake of it is pointless.

fight for life

as Nature intended

I don't buy that we are the only self aware, we are beasts nothing more nothing less. Survival is to fight, Life is to fight. we get along because it allowed us to beat all those much stronger beast in the clip, at some point we became a bigger threat to each other than any of these beasts are now. therefore it is only logical that we must now fight each other. Because Nature Demands it that is why we formed the tribes that became the nations that became empires that have crumble to ruins.

Mufasa knew the score    but we claim the world instead of just Pride rock.

Note the lack of Carrots at the top of the food chain     

I've always thought that the laissez faire capitalist system is inherently unstable in that the wealthy tend stand in the way of the very redistributive processes that enable people to become wealthy in the first place. In any ecosystem, a predator that becomes too efficient will find nothing left to prey upon.

To be less abstract -- capitalism needs a large foundation of people who have at least a little extra money once they've satisfied their basic needs, and yet capitalists' wealth-absorbing actions make it harder and harder for people to do anything but meet their basic needs -- if that, in many places.

To treat the human race as a predatory species is to deny what we are. Yes, societies have always competed with one another, but within those societies, people take care of one another. As I've said before, human beings got to the top of the food chain by cooperating, not by being born deadly like great white sharks ... in a nature analogy, we're not the lions, we're the herd circling to defend its more vulnerable members.

I agree with Veya in some respects, that human beings need and thrive upon facing challenges, but why this particular challenge? I would wager that if we could meet the basic needs of all people (which itself is an interesting question), we'd still have plenty of lions and would not turn into carrots

In fact, I like to think that the struggle to better provide for humanity is the best one of all. I would challenge anyone to come up with an objectively better or more noble war to fight.

Your words, my thoughts exactly.

I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

Santana wrote:I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

FAIL said Fred.

    

Santana wrote:I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

1) Both "pure communism" and "pure capitalism" are absolutist theories that don't work in a heterogeneous society and never will. The most workable model that we've come up with thus far is the third-way model of a mixed economy that combines market competition with a social safety net and government regulations.

2) Right-wingers have been shown in studies to be less generous, though they often do give a lot to charity, philanthropy, etc., some of the biggest givers are actually left-wing rich people, which you guys don't seem to think exist. Charity helps but not as much as welfare; studies have shown huge reductions in national poverty rates after benefits programs were established. And the real culprit in government debt is corporate welfare, not benefits for the poor -- the rich take far more tax money than the poor do. In another thread I pointed out that Britain spent ten times as much bailing out the banks as it does on a year of non-pension benefits.

3) The left-wing desire to elevate the lifestyles of the poor to something more dignified has nothing to do with envy.

veya_victaous wrote:
fight for life

as Nature intended

I don't buy that we are the only self aware, we are beasts nothing more nothing less. Survival is to fight, Life is to fight. we get along because it allowed us to beat all those much stronger beast in the clip, at some point we became a bigger threat to each other than any of these beasts are now. therefore it is only logical that we must now fight each other. Because Nature Demands it that is why we formed the tribes that became the nations that became empires that have crumbled to ruins.

Mufasa knew the score    but we claim the world instead of just Pride rock.

Note the lack of Carrots at the top of the food chain    

 

  

I AGREE with that notion that the old idea of "self awareness" somehow being a solely human trait is basically (unscientific) nonsense...

ONE only has to look at the real world behaviour shown by dozens of species of birds, cats and dogs, horses and pigs, as well as various primates and monkeys; to recognise both the sophistry and the self-delusion involved in such mental flippancies..

THE fact that "Animal Behaviour" courses that still keep that erroneous "self awareness" concept at their core are being taught at some universities only adds-to and exaggerates the problems I have with those so-called "Animal Behaviourists", and their all-too-often fraudulent claims. I simply can't accept 'Animal Behaviour' graduates being considered as genuine scientists !    

Catman wrote:

Santana wrote:I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

FAIL said Fred.

    

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

Alright said Fred wrote:

Catman wrote:

Santana wrote:I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

FAIL said Fred.

    

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

Fred, I now see you're posting in the same thread as "Santana," who signed up here the same day as you and who has posted from the same IP address as you.

I've PMed both accounts and have gotten no response, so now I'll take it public.

Which account do you want to keep, and which do you want deleted?

Ben_Reilly wrote:

Alright said Fred wrote:

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

Fred, I now see you're posting in the same thread as "Santana," who signed up here the same day as you and who has posted from the same IP address as you.

I've PMed both accounts and have gotten no response, so now I'll take it public.

Which account do you want to keep, and which do you want deleted?

 ://?roflmao?/: ://?roflmao?/: ://?roflmao?/: 

...There are at least about half a dozen others as well!

Alright said Fred wrote:

Catman wrote:

FAIL said Fred.

    

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

So which accounts are you going to delete Drinky?
  

Santana wrote:I agree with the sentiment expressed so well by Churchill. The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

There are no working examples of Socialism that have achieved a better outcome than the admittedly flawed Capitalism.

I do not pretend that greed does not exist but it does under Socialism. I do not pretend that there are too many uber rich people that could do with addressing. However this obsession with taxing everyone until the pips squeak to use Ed Balls favourite Phrase is not healthy nor is it conducive to creating a vibrant enterprising society.

I must add to hear all you let wing posters you would think that all right wingers are greedy selfish bastards and that philanthropy has never existed. There are far far too many examples to prove you wrong even in much more unenlightened times.

All you envious lefties achieve under a cloak of " I really want to make society better is to make everyone equally miserable that it seems is preferable.

I'm surprised that this A/C hasn't been deleted yet.   

So is the RW b-i-t-ch scum c u n t going to be allowed to have multiple accounts then?

Atleast one of that Nazi scumbag ID's have to be dealt with?

Ben_Reilly wrote:

Alright said Fred wrote:

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

Fred, I now see you're posting in the same thread as "Santana," who signed up here the same day as you and who has posted from the same IP address as you.

I've PMed both accounts and have gotten no response, so now I'll take it public.

Which account do you want to keep, and which do you want deleted?

Any reply?

Sassy wrote:

Ben_Reilly wrote:

Alright said Fred wrote:

If its fail then lets see how well we measure up on the success scale. I think you will lose on every metric my sponging friend.

Fred, I now see you're posting in the same thread as "Santana," who signed up here the same day as you and who has posted from the same IP address as you.

I've PMed both accounts and have gotten no response, so now I'll take it public.

Which account do you want to keep, and which do you want deleted?

Any reply?

Nope, he never got back to me, so Santana has been deactivated.

Sounds like a good idea.

Probably worth deleting Drinky and Right said Fred too, just to be on the safe side. I don''t suppose Drinky will bleat too much, he still has a plethora of other /id's he can use.

Handy Andy wrote:Probably worth deleting Drinky and Right said Fred too, just to be on the safe side. I don''t suppose Drinky will bleat too much, he still has a plethora of other /id's he can use.

I was just reading some shit on the other channel, but aren't the two regular members   ...Always full of that anyway...I mean, they must have very small penises to have to brag about their supposed wealth etc, in practically ever other miserable post that they make, whenever there is any action the news/intelligent sections anyway!   

Can't understand why that ignorant RW fuck Durham, keeps calling Ed Miliband a cock all the time, when we all know that his tiny little cock fires blanks, or rather that's what it says, it's probably a fucking impotent freak as well, which is why it's so bitter and twisted!   

What a sad state of affairs for the fat fcuk Dean, that he has to rely on those couple of inbreds to prop up his ever failing forum....Don't worry guys...Labour government coming soon, so carry on sucking each others cocks, because if you are telling the truth about your supposed wealth, which i very much doubt.......Oh...And you couldn't afford the house prices around here in Lewisham (Hither Green) so you best stay in your Northern fuckwit town!   ...............

You'll be sucking the tax mans cock before too long!  :/pwn://: