French Socialist economist Thomas Piketty made a big splash in the U.S. recently with his book Capital in the Twenty-First Century. The 600-page tome argues that since the owners of capital end up with capital, it must be globally taxed away to prevent inequality. With the European elections victory by the far-right Nation Front, Piketty’s countrymen are screaming at him, “Go where you belong from now on – into the dustbin of history!“
The French version of Capital in the Twenty-First Century was published in mid-2013 and received very little notoriety, despite the fact that Piketty had been the boyfriend of the 2007 Socialist Party candidate for President of France, Ségolène Royal.
At the time of publication, the French had been “enjoying” their first Socialist Party President in 24 years after Francois Hollande led the party to victory in April of 2012.
Despite inheriting what was already the most redistributive tax system of any country in Western Europe, the Socialists once in power quickly passed 84 new taxes to take public spending to 57% of GDP, the highest in the world.
To pay for his promise of hiring 60,000 teachers, as well as 150,000 subsidized entry-level public-service jobs for the longtime unemployed and the young, the Socialist Party proposed a 75% super-tax on individuals earning over $1.35 million.
After 18 months of Socialist Party leadership, a poll on the front page of Le Monde, the bible of the French left-leaning establishment, indicated that more than 70% of the French felt taxes were “excessive” and 80% believed President Hollande’s economic policies were “misguided” and “inefficient.”
With actor Gérard Depardieu, members of the Peugeot family, and the Chanel fashion owners departing France as tax exiles, Standard & Poor’s downgraded France’s credit rating and criticized its high taxes on November 4, 2013. As unemployment went above 10% for the first time since WWII, 54% of the French now believe that taxes widened social inequalities instead of reducing them.
On January 14th, 2014 the French President solemnly acknowledged the failure of his collectivist policies and announced his Socialist administration would cut $40.8 billion of taxes on companies and the self-employed plus reduce the social security charge paid by employers to 5.4%. More devastating to the Socialist Party members like Piketty, Hollande said he would pay for his Reaganesque supply-side-economics by cutting $86 billion in public spending.
With French Socialist policies imploding in France, Thomas Piketty released Capital in the Twenty-First Century in the U.S. on tax day, April 15, 2014. The book uses a tremendous amount of data from around the world to supposedly prove that under capitalism “the rate of return on capital – land, natural resources, stocks, bonds and other assets – is far higher than the growth rate of the economy.”
He blames the fall of the Roman Empire, French Revolution, Great Depression, and 2008 financial crisis on capitalism’s creating inequality. His answer is to implement a global wealth tax to help “equalize” income disparity between the workers and capital holders. The book is so viral right now that it is sold out on Amazon and The Economist magazine and Financial Times have called Piketty a “rock star economist.”
There is starting to be lots of controversy, even from progressives, about the reliability of the massive amount of data Piketty crammed into more than a hundred charts and graphs. His assumptions are often historically inaccurate, and he gets mixed up regarding the differences in accounting treatments for the U.S. versus Europe. In the next piece I publish on Piketty, I will dispute his data and conclusions.
It took 74 years for communism to collapse after Trotsky said to people who would not join his cause, “You are pitiful isolated individuals; you are bankrupts; your role is played out. Go where you belong from now on – into the dustbin of history!”
After less than two years controlling France, the Socialist Party of Thomas Piketty is now abandoning much of its collectivist policies and adopting the supply-side economics of Ronald Reagan to survive the rise of the right-wing National Front. If the French people are revolting against the collectivist and redistributive policies that Thomas Piketty wants to globalize and make even more extreme, why should he be such a “rock star” in America?
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