How Piketty's Bombshell Book Blows Up Libertarian Fantasies

[xchrom]

http://www.alternet.org/economy/how-pikettys-bombshell-book-blows-libertarian-fantasies



***SNIP

How did libertarians get it all so backwards? Well, as Piketty points out, people like Milton Friedman were writing at a time when inequality was indeed less pronounced in the U.S. than it had been in previous eras. But they mistook this happy state of affairs as the magic of capitalism. Actually, it wasn’t the magic of capitalism that reduced inequality during a brief, halcyon period after WWII. It was the forces of various economic shocks plus policies our government put in place to respond to them that changed America from a top-heavy society in the Gilded Age to something more egalitarian in the post-war years.

As you’ll recall, if you watched the movie Titanic, the U.S. had a class of rentiers (rich people who live off property and investments) in the early part of the 20th century who hailed from places like Boston, New York and Philadelphia. They were just as nasty and rapacious as their European counterparts, only there weren’t quite so many of them and their wealth was not quite as concentrated (the Southern rentiers had been wiped out by the Civil War).

The fortunes of these rentiers were not shock-proof: If you remember Hockney, the baddie in James Cameron’s film, he survives the Titanic but not the Great Crash of ’29, when he loses his money and offs himself. The Great Depression got rid of some of the extreme wealth concentration in America, and later the wealthy got hit with substantial tax shocks imposed by the federal government in the 1930s and '40s. The American rentier class wasn’t really vaporized the way it was in Europe, where the effects of the two world wars were much more pronounced, but it took a hit. That opened up the playing field and gave people more of a chance to rise on the rungs of the economic ladder through talent and work.

After the Great Depression, inequality decreased in America, as New Deal investment and education programs, government intervention in wages, the rise of unions, and other factors worked to give many more people a chance for success. Inequality reached its lowest ebb between 1950 and 1980. If you were looking at the U.S. during that time, it seemed like a pretty egalitarian place to be (though blacks and many women would disagree).

[Enthusiast]

1. K&R! This post should have hundreds of recommendations!

Come on, people!

[AngryAmish]

2. After two world wars and 100 years of war in China

the civilized world was burned to the ground. Except the USA. The world needed stuff and it bid up middle class wages.

The world rebuilt. We opened the trade borders and grew our population with immigration. There is more competition for middle class jobs (and now robots are taking over).

These are structural problems. Without trashing a lot of treaties I don't see a way out.

[Ishoutandscream2]

13. Damn good post, AA

Spot on. Good to see you.

[Turbineguy]

3. Very few people can afford to be Libertarian.

Of course, they make sure they don't know that.

[Major Nikon]

5. I prefer to call them looneytarians

As Chomsky pointed out, libertarianism is as simple as the belief that all governmental power should be justified. Looneytarians believe that personal liberty trumps all other considerations and they also believe in the fantasy that if the market were just allowed to be virtually free from governmental interference, market forces would compensate for all the ills of society including racism and inequality. So in that respect there's really only two types of looneytarians. Those who are smart enough to know what they preach is complete nonsense, but do so for self serving interests, and useful idiots.

[Turbineguy]

9. This is also the fatal flaw in Atlas Shrugged

The heroes (whatever else you may think of them) are honest. They do not lie. In real life, these type of people lie all the time.

[Major Nikon]

10. Ayn Rand's definition of a hero is a sociopath

She considered empathy to be a vice rather than a virtue.

So naturally her idea of a hero is going to lie or do whatever else it takes to further self interest.

[LisaLynne]

4. Ah, very interesting.

K&R

[deutsey]

6. K&R

[TBF]

7. Not just extreme fantasies of the repugs (libertarians, same diff ...) -

it blows up the fantasies of capitalism itself.

That is why you are not getting recs - people want to believe their little fantasies are true.

They want to believe capitalism can work if you just tax and regulate. It can work for a time for some - as we can note historically by looking at the period from the late 1930s-80s in the US. But as you noted the inequality was still lurking with many women and minorities blocked (one way or another) from the workforce.

So, the "American Dream" of capitalism really only worked for a number of white males during that period, but even that was not sustainable. And now we are dealing with both the economic and environmental effects of it. That is why the republican/libertarian males are so bent out of shape right now. Not only did their fantasy land not continue, but a black president has been elected. These two factors together have knocked them for a loop.

[eppur_se_muova]

8. The economy is a social construct ? Who knew ?

Next, they'll realize that "conversation" requires more than one participant.

[MisterP]

11. (right-) libertarianism was created by a capitalism-worshipper who had no idea

what it took or any clue about economics, and a militarist who never saw battle

plus the Hunts, Kocks, DeVoses, und so weiter

[WillyT]

12. K & R !!!