[ALB]

Apparently our press release gets a mention in today's Independent in "Andy McSmith's Diary" on page 20, if someone wants to check.

[ALB]

Jamie Rose wrote:

you really deny that opposing it would have meant accepting the rule of the Kaiser at some point down the line? His plans to move into the rest of Europe after Austro Hungary and Belgium are, by now, well documented.

Germany invaded Austro-Hungary in 1914? Is he a joker or an ignoramus? The second, I think.

[ALB]

Who better to say it !

[ALB]

ALB wrote:

"Multiculturalism" is the government policy of encouraging historically-evolved cultural groups to identify with that group and to construct and teach them a concocted history to that end. I'm opposed to it on the ground that it encourages identity politics instead of class politics. As was well explained in an article from Class War in 2007 which can be found by typing "cowley club" + "class war" + "multiculturalism" into a search engine (perhaps someone can find an easier way of accessing it. It's from the Summer 2007 and entitled "Multiculturalism — The Newspeak of the Left Cop".)

Did you also have a hand in this article too?

[ALB]

Incidentally, one illusion Piketty does not share is to imagine that banks can create credit by the stroke of a pen. In fact he takes a similar position to ours:

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What in fact do central banks do? For present purposes, it is important to realize that central banks do not create wealth as such; they redistribute it. More precisely, when the Fed or the ECB decides to create a billion additional dollars or euros, US or European capital is not augmented by that amount. In fact, national capital does not change by a single dollar or euro, because the operations in which central banks engage are always loans. They therefore result in the creation of financial assets and liabilities, which, at the moment they are created, exactly balance each other. For example, the Fed might lend $1 billion to Lehman Brothers or General Motors (or the US government) and these entities contract an equivalent debt. The net wealth of the Fed and Lehman Brothers (or General Motors) does not change at all, nor, a fortiori, does that of the United States or the planet. Indeed, it would be astonishing if central banks could simply by the stroke of a pen increase the capital of their nation or the world.(p. 550)

 

[ALB]

I can think of various things we could do:1. Publish an article length review in the Socialist Standard2. Maybe also a shorter piece on where he gets Marx wrong.3. A meeting entitled "Have You Read Piketty?"4. Use his figures to update Chapter 7 of our The Market System Must Go! Why Reformism Doesn't Work pamphlet:http://www.worldsocialism.org/spgb/pamphlets/market-system-must-go

[ALB]

LBird wrote:

I'm quite happy to play Cassius to your Brutus, Alan,

Interesting alliance between a Know Nothing and a Can't Know Anything ! Anyway, L.Bird, have you reached chapter 10 yet on "The Inequality of Capital Ownership"? If so, I'd be interested in what you think of it.

[ALB]

You really should read the book and then you would see that Mason and Piketty share the same "prognosis" of slow growth and rising inequality this century. This could even be said to be the main theme of Piketty's book. It seems that the OECD too shares one of Piketty's imagined solutions of a tax on wealth (as no doubt would Mason). I can't remember if Paul Mason's has been one of the reviews you've recommended:http://www.theguardian.com/books/2014/apr/28/thomas-piketty-capital-surprise-bestsellerI really don't understand your picking on him in particular. OK, his solutions are pathetic and he gets Marx wrong. Ironically, though, as you will discover when you get round to reading the book, he too posits a tendency for his rate of return on capital to fall but says that this can be offset by counteracting tendencies so that it is not possible to say what the outcome will be.I think we need to be careful about joining in the state-capitalist chorus against him. Some mentioned Benjamin Kunkel's review. Here's his criticism of Piketty's proposed 'solution' of a global tax on capital:

Quote:

Piketty’s proposal entails the possibility of the democratic restraint of capital not just in one or two countries but in such a preponderance of them that governments everywhere will submit their wealthiest and thus most powerful citizens to a measure bound to repel them. Yet in his account of the 20th century ‘it took two world wars to wipe away the past and significantly reduce the return on capital’; redistribution was mainly an after-effect of hostilities. If the democratic control of capital has such scant precedent, how plausible can it be in the future? Citizens in the capitalist democracies of the mid-20th century felt strong identifications with starkly different political parties. Depoliticisation over the past generation is understandable, as parties of left and right converge towards the same vacant centre. (Piketty himself stoically supports a French Socialist Party even more cringing and feckless than others in Europe.) A recent study calculated that in the US the top 10 per cent of the income distribution enjoys an effect on political outcomes 15 times that of the remaining 90 per cent. Other countries are plutocratic to similar degrees. How are the executive committees of the ruling class in countries across the world to act in concert to impose Piketty’s tax on just this class?Socialist revolution frankly seems more likely.

Ah yes, but what sort of 'socialist revolution'?:

Quote:

Suppose a revolution in an advanced country gradually or suddenly transferred to the public all shares of corporations currently in private hands. Investment could thereafter be directed by publicly held mutual funds competing with one another for long-term returns, all of which revenue would flow to the general population or the administration carrying out its will. The size of the capital stock would be unaffected by the change in ownership. A far narrower wage schedule within and among enterprises would be one likely result.

Who's for a witch-hunt against Kunkel?

[ALB]

LBird wrote:

alanjjohnstone wrote:

A serious question from me now to those who have read the book.

I’ve got one, too, for those further into the mire than me, so far. I’ve read to the end of chapter one, where I found:

Piketty, Capital, p. 71, wrote:

…the principle mechanism for convergence…is the diffusion of knowledge. In other words, the poor catch up with the rich to the extent that they achieve the same level of technological know-how, skill, and education…

I’m baffled by this conclusion by Piketty. I can’t find any evidence in the chapter for this assertion.Within the UK, the proletariat is better formally-educated than ever before, and yet they haven’t ‘caught up with the rich’.

Isn't he talking here about poor countries (rather than poor people within countries) and trying to explain the high rate of growth of a country like China and why it will eventually slow down too?

LBird wrote:

From what I’ve already read in reviews, Piketty argues that the world wars were the context of ‘convergence’ (ie, the rich paid more in money than the poor (who paid in lives, though), and so there was ‘convergence’), so what does he mean by this strange assertion, above?

The interesting thing here is that he offers an argument that should appeal to the likes of the ICC (though I don't suppose they'll be any more recognisant of him than Alan or you!): that in the period 1910-1950 the rate of growth was more rapid in Europe to make up for the destruction of capital in the world wars and the devaluation through inflation of capital invested in national debts. According to his basic thesis, a higher rate of growth means a lower share of income from capital in total income and so a slowing down in the concentration of wealth ownership.He is in fact saying that this period was exceptional and that the normal course of ownership concentration was that up to 1910 and which he says we are seeing in operation again. He writes:

Quote:

In the twentieth century it took two world wars to wipe away the past and significantly reduce the return on capital, thereby creating the illusion that the fundamental structural contradiction of capital (r > g) had been overcome.

This is on page 572 so, if you've only reached page 71, you've another 500 pages to read before you get to this.

[ALB]

alanjjohnstone wrote:

A serious question from me now to those who have read the book. YMS opened the thread in his very first message by stating due to Piketty we can now "reasonably confidently state that the top 10% own 70% of the wealth, and the top 1% own about 29%"Can i ask what are Piketty's projected figures about this share of ownership if his proposed tax rules were actually successful and fully implemented ? 

Good question. He doesn't actually say but the implication is that it would stop the top 10% coming to own more than 70% and moving towards owning the 90% they did in France and Britain before WW!.He doesn't indicate what his ideal or achievable level of inequality would be but the share of the top 10% has never fallen at any time in any country below 50% of total wealth, not even in Sweden. Commenting on a graph on page 345 of "wealth inequality is Sweden, 1810-2010, he says;

Quote:

… the concentration of wealth in Sweden in 1970-1980 attained the lowest level of inequality observed in any of our historical series (with barely 50% of total wealth owned by the top decile and slightly more than 15 percent by the top centile). This is still a fairly high level of inequality, however, and what is more, inequality in Sweden has increased significantly since 1980-1990 (and in 2010 was just slightly lower than in France) [at just under 60 percent].

Also, these are figures for percentage shares not absolute amounts. One reason why the shares of the top 1 percent and the next 9% (a distinction Piketty also makes since in recent years the top 1% have done even better than the next 9%) have fallen since 1910 in the rise in the intervening period of the share of the middle 40% who have acquired wealth in the form of a paid-for house and some statistically significant savings in total. This hasn't affected or reduced or been at the expense of the actual amounts owned by the top 10%.As to the bottom 50%, Piketty writes of

Quote:

… the poorest half of the population, whose share of total wealth has always been miniscule (generally around 5 percent), even in Sweden (where it was never more than 10 percent) (p. 347).

People should read the book. It's a mine of information to use against capitalism and indeed to show the futility of the reforms Piketty advocates.

[ALB]

LBird wrote:

… the gaps in Piketty's book …

What, apart from his non-socialist ideology, are these gaps? Are you saying that the facts and figures he has selected are biased or should be rejected? Do you agree with the criticism of the Financial Times and others who have challenged his figures on the degree of concentration of wealth ownership in recent years as overestimates? Or do you think he understimates it? What facts on the ownership of wealth would you select from your ideological point of view and how would you present them? 

[ALB]

SocialistPunk wrote:

This question is to those who are reading Piketty's book. Does he at all suggest why the rich seem to be getting a lot richer?I'm referring to the possibility it might have a little to do with the deregulation of the finance industry that happened in America and Britain in the eighties. If I am not mistaken it allowed vast sums of wealth to be stashed away in untouchable investment options and offshore banks.

Yes he does mention this but sees the basic cause of the rich getting richer over the past 60 or so years as the widening of the gap between r (the rate of return on capital) and g (the rate of increase of income per head) after 1950 (caused by a fall in g rather than a rise in r), resulting in those with property-incomes accumulating proportionately more wealth than those whose income is derived from work. Which shows up as the top 1% and the next 9% getting to own a higher and higher proportion of total wealth.Re tax havens, he makes the point (pages 465-6) that the global balance of payments (that is, of all countries together) is negative; which is theoretically impossible as the deficit of some countries should be balanced by the surplus of others. He accepts the view that

Quote:

the most plausible reason for this discrepancy is that large amounts of unreported financial assets are held in tax havens.

As you point out, financial deregulation made this easier.Tax havens contribute to the rich getting richer to the extent that they allow some of them to avoid paying income tax so leaving them with more to accumulate but this won't be the main reason why the rich have been getting richer.

[ALB]

Piiketty isn't a Marxist and doesn't claim to be and so doesn't use Marxian categories. In fact he uses those of conventional bourgeois academic economics and of national accounting. I would have thought that it is significant that despite this he reaches the conclusion (given that there's not the slightest likelihood of a global tax on capital ever being adopted)  that this century the top 10 percent will get proportionately richer and richer:

Quote:

I have also discovered some objectively disturbing trends: without a global tax on capital or some similar policy, there is a substantial risk that the top decile's share of global wealth will continue to grow indefinitely. (p. 519)

and towards the pre-WWI level of 90 percent.I can think of criticisms — that he confuses capital and wealth and the accumulation of capital with the accumulation of property titles and that he gets Marx wrong — but not that he has written a book that socialists should reject out of hand because he hasn't adopted Marxian categories.Anyway, L. Bird, read on and see, even if he's not fishing in the same pond as you, if he's not catching some of the same fish.

[ALB]

SocialistPunk wrote:

Adam, I could be wrong, but when I saw Piketty on the BBC HardTalk program I got the distinct impression that he did indeed want to salvage capitalism from itself.

Actually, according to a few throwaway lines in the book, insofar as he wants to save caitalism, it is from populist nationalist movements or "various forms of retreat into national and other identities" (p. 471) which are of course another form of capitalism. Since this (eg protectionism, controls on the movement of capital, withdrawal and break-up of EU, etc) is proposed by the state-capitalist left (as well as by the right) it is no wonder they are gunning for him.I wouldn't have thought that he would want to save capitalism from socialism as we understand it if he thought it was a realistic proposition. I think he is or was a supporter of the French "Socialist" Party. His parents were members of the French Trotskyist group Lutte Ouvrière.Having said that, his ideal solution of a "global wealth tax" is completely unrealistic and is not going to happen. It seems more likely that there will be moves in the opposite direction, as evidenced by the rise of UKIP in Britain and of the Front National in France and which could be triggered by Britain withdrawing from the EU (not that I think that's going to happen but it could).I've reached page 550 and so should finish reading it today.

[ALB]

alanjjohnstone wrote:

Piketty, in Naidu's view, is limited by his unwillingness to challenge capitalism itself……..Piketty wants desperately to salvage capitalism, even if that means proposing something that every capitalist will hate: a global wealth tax. ………

I don't know if this is your view or Naidu's but I don't think it's fair or true to say that Piketty "wants desperately to salvage capitalism". It's more that he doesn't see any practical alternative to it and therefore settles for trying to make the best of it.But to return to "the facts",  The first clause of our declaration of principles starts:

Quote:

That society as at present constituted is based upon the ownership of the means of living (i.e. land, factories, railways, etc.) by the capitalist or master class …

It clearly strengthens our case if we can produce evidence to back this up, as provided in the early years by statisticians such as in Britain Chiozza Money and Bowley. Since the last world war we now have official government statistics which researchers like Piketty can analyse. In fact, as far as I know, his book is the first to examine the inequality of wealth ownership in different countries and over time (couple of centuries). Just as significant as was (Liberal MP as well as historian) Thorold Rogers' Six Centuries of Work and Wages in its time.

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