^ the dynamic of inequality : capital over wages — Thomas Piketty
^ politics as the umpire of economics : John Maynard Keynes
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Those who read Thomas Piketty’s capitalism In the 21st century — and we all should read it — will find much that has already been said by Robert Reich, by Paul Krugman, and — above all — by John Maynard Keynes in his magisterial Economic Consequences of the Peace. (the “Peace” he was writing about wa the Versailles treaty that ended World War I. With its consequences we still live.) Keynes’s work should be read even before one starts on Piketty: in it one finds that exquisite meld of politics with economics that define how money moves in a political environment; and as we all live in a political environment, keynes describes how all of us find money moving.
The politician of Keynes’s day didn’t study eceonomics much. they were about making political agreements; the money part was set forth in the terms they knew best : transfer of territory, which had been the subject of treatiers for hundreds of years.
Today we know better. We know that transfers of money are in no way like transfer of territory. Land is but a carpet upon which (or in which) people do their business. Money, however, is the means of that business and its fruit; and its power. to transfer billions of dollars in reparations, as the Versailles treaty sought to do, was to transfer not just some land but the entire life work of a nation. Today, no one would think of doing that in a treaty. it would make a future war almost inevitable — as the Versailles Treaty in fact did.
But if international agreements no longer transfer the economy of one nation to that of another, money does continue to get transferred, both between nations and inside each of them. This sort of transfer Adam Smith and Karl Marx both saw and discussed. But we have moved beyond the ultimates of both these writers. we now know that there is no permanent cure for the imbalances in money transfers; that imbalance is the dynamic, always, and that only political action can balance it.
The correct analogy is to the NL and NBA. Every year these sports leagues conduct a drag of newly graduating talent. the order of pick goes from weakest team to strongest; and thereby the league retains balance, preventing the rich teams from forever perpetuating themselves. A kind of equality is assured. The weakest-first draft happens not by some voluntary generosity. It happens because the leagues are governed by the entire body of tem sin it. as there are more losing teams than winning ones, the losers rule.
You would think that that would be the case in our democracy too. There are far more people with small money than those with big money; and the numbers on each side grow ever more apart. How can a tax system not be enacted, that graduates from tax credits for small earners to high rates of tax for top earners ? That taxes large estates much more vigorously than we do ? How can our politics not ensure living wages to those who work, and universal benefits to those who live in our nation ?
The answer we know. These outcomes do not get enacted because the money winners all vote, and all donate, and all lobby every politician, constantly; while at the same time, the small earners either do not vote, or are divided in their vote because they are distracted from the main chance by issues of culture, faith, or mere mindset. Right now all the momentum is to increasing dominance by large money, large earners, large organizations.
Upon this vision is directed, right now, the attention of Paul Krugman, Robert Reich, Thomas Piketty.
It need not be so. History makes clear that oligarchy does not make economic injustice invincible. There have always been some oligarchs who sought to curry favor with ordinary people by enacting laws that benefitted the many. This was the case in Leo the Isaurian’s Byzantine Empire; in Lorenzo de’ Medici’s Florence;. in numerous communal movements in medieval European Cities. it was the case in our own nation at its founding, and both Teddy Roosevelt and Franklin Delano Roosevelt were money oligarchs with a moral and a political commitment to social justice.
Of course it would be better for average people to govern ourselves and to enact economic regulations that balance money between labor and capital. But are we to reject fairness laws because they’re enacted by hugely wealthy oligarchs ? I think not. the power to do good requires money just as the power to be selfish. Witness the work being done by the Clinton family in its Global Initiative.
Still, in an oligarchy, things often become aggressively unjust before the tide turns. Often it turns by revolution, not election. the history of medieval cities is full of such violent changes of policy and rulers.
And yet : our nation does not lack for oligarchic balance. For every pair of Koch Brothers there is a John Singer; for every Foter Freiss, a MacArthur Foundatilon; for every Heritage foundation, a Clinton Initiative; for every Wal-mart, a Costco. Economic fairness is far from finished even in an oligarchy.
—- Mike Freedberg / Here and Sphere