Tuesday, June 17, 2014

Piketty's "Capital" and Obama's "You Didn't Build That": Perfect Together

I have a couple of final observations on Thomas Piketty's book Capital in the Twenty-First Century based on Harold Meyerson's review of the book.

Piketty frames income inequality in the context of "distribution of income" and "share of Americans’ income," as if wealth is a fixed quantity that the collective—society—mysteriously creates. This view holds that each person's wealth is taken from the collective pot. On this view, the person with more wealth gained not by working productively and trading but at the expense of someone else's smaller gain or outright loss. This view leaves out the whole process discussed in my first post on Piketty's book (6/14/14); the process of production and trade, in which both traders win at no one else's expense, because both traders are producers.

Piketty's premise dovetails nicely with Obama's Rawlsian "you didn't build that" campaign. Obama tries to tell us, essentially, that what one earns is merely a matter of the foundation laid by others who came before us; the great teacher, the great parents who gave us a good education, the infrastructure we use, etc., etc., etc.

But on Obama's premise, the same must be true for that teacher, those parents, and the builders of those roads and airports: They "didn't build that" either, because they too inherited the intellectual, technological, and economic endowment that their life circumstances were built on. You can carry Obama's premise all the way back to the harnessing of fire, which was probably man's first step out of the cave. If no one could be said to have "built that," then how did modern industrial civilization get built?

Clearly, someone built something. Collectivists say "society" built that. But society is only an abstraction denoting a number of individuals. Society, as such, cannot build anything, because society doesn't exist as an entity in reality. Only individuals exist, and therefor only individuals can build anything. Modern industrial civilization is the sum of the productive efforts of uncounted industrious individuals; each of whom contributed to the extent that he applied his mind and work to build upon the personal circumstances he found himself in—his natural endowments, personal and cultural surroundings, and the inheritance of all of the productive individuals who came before him.
Piketty's whole collectivist wealth premise—an economic pie created by society, ready to be divvied up—is a floating abstraction that evaporates when one attempts to relate it to reality. But how many people will look beyond the abstraction to find the truth? The Left is counting on a lot.

As I noted two days ago, the Left is attempting to portray the most glorious achievements attained under capitalism as dark, corrupt examples of capitalist exploitation. They have succeeded in portraying The Inventive Period as the Gilded Age. Now, they are taking aim at the computer/communication revolution of the post-1980 era in the same light (See Krugman, "Why We're in a New Gilded Age").

The campaign has already begun. Tom Bowden reports at Voices for Reason on a New York Times article that portrays Steve Jobs as a criminal based on antitrust violations (which are in fact concoctions of criminality where no rights-violations took place, in effect turning innocent people into law-breakers).

In a broader article, Bowden warns us to "Get Ready for High-Tech Innovators to be Demonized".

Anti-Capitalists can not honestly critique capitalism, so they must make an end run around the true nature of capitalism. Why? Because capitalism is the only system that keeps at bay the twin enemies of human progress and well-being; parasites and power-lusters and the greed, envy and hatred that animates them. Thomas Piketty's Capital in the Twenty-First Century is the latest arrow in the anti-capitalist's quiver.  

Related Reading:

How You Build That

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