X Close

Thomas Piketty’s failed revolution Ten years on, society is governed for the wealthy

The Occupy movement knew who their enemies were. (Ramin Talaie/Corbis via Getty Images)

The Occupy movement knew who their enemies were. (Ramin Talaie/Corbis via Getty Images)


March 16, 2024   8 mins

Think back to the political situation a decade ago, and one may have in mind a calmer, less dysfunctional time. Britain’s economy was growing, just about, and real wages were beginning to rise for the first time since the summer of 2007, even if they remained well below that peak. The steadying influence of Barack Obama in the White House and the Coalition government in Whitehall seems a world away from our current post-Brexit, post-Covid age of geopolitical upheaval and spiralling living costs. Only the looming referendum on Scottish independence seemed then to present any real challenge to the status quo, whether that be viewed as threat or opportunity. Economists speak of a “misery index”, which combines the inflation rate with the unemployment rate. By this measure, economies of the UK and the US were doing well in the spring of 2014. Interest rates remained where they had been since the banking crisis, stuck rigidly below 1%. This was a gift to mortgage-holders, and house prices reflected that.

It was into this context that a 700-page book about rentiers, wealth elites, inheritance, war, and taxation, over the previous two centuries, became an extraordinary publishing sensation. Few had heard of Thomas Piketty when Capital in the Twenty-First Century appeared, but his publisher, Harvard University Press, would soon be struggling (and failing) to keep up with demand for the book. Hundreds of thousands of copies were shifted over the summer of 2014, while A-boards appeared outside the luckier independent bookshops in hipster neighbourhoods around the world declaring “PIKETTY IN STOCK!”. Sales figures topped two million within a couple of years.

Inevitably, much of the media commentary descended into banality and crass comparison. Piketty himself was instantly declared a “rock star economist”, and compared with Karl Marx, presumably because he had published a doorstopper with the word “capital” in the title. Those who’d bothered to read (at least some of) Capital in the Twenty-First Century were surprised and impressed to discover, amid lots of graphs, references to Balzac and Jane Austen in a book notionally of economics. This was clearly more intriguing than the “economics 101” that was taught at school and university.

From the perspective of the trade publishing market, the book also had the merit of being beautifully simple to understand. Capital in the Twenty-first Century is ultimately a piece of historical statistical description, containing no real theory or mathematics to speak of. Its famous formula “R>G”, which even came to adorn t-shirts, refers to the long-standing tendency (Piketty has been adamant it’s not a “law”) of returns on capital being higher than growth in income from production. As anyone who has owned an asset (such as a house) might have noticed, its value tends to rise faster than one’s pay. Scale that up to an economy as a whole, and you have a situation where existing stocks of wealth are growing faster than GDP.

Piketty’s thesis clearly chimed with narratives about inequality that had been developing on the Left since the 2008 financial crisis. The book’s focus upon the rising incomes and wealth of the top “1%” echoed the language of the Occupy movement, language which had itself been borrowed from the study of “top incomes” that Piketty had helped pioneer some years earlier. One of Britain’s most eye-catching political reactions to the banking crisis was UK Uncut, which was founded in 2010 to campaign against corporate tax avoidance, at a time when brutal cuts to benefits, higher education and local government were being unveiled. Fred “the shred” Goodwin, the CEO of RBS that had been bailed out by the British taxpayer and who had then resigned with a knighthood and a £700,000 pension, became a symbol of something morally rotten in capitalism. There was a widespread sense of an economy that was rigged in favour of the rich, which Capital in the Twenty-first Century did much to empirically substantiate.

But the extraordinary success of the book cannot be wholly explained in terms of media hype or the immediate fall-out from 2008. No doubt, the sentiments expressed by Occupy and UK Uncut remained potent ones, contributing some years later to the unexpected rise of “Left populists” such as Bernie Sanders and Jeremy Corbyn. Piketty has expressed some political sympathy with those movements, but if one were looking for a rousing, polemical denunciation of neoliberal capitalism around which to mobilise, one probably wouldn’t turn to Capital in the Twenty-First Century. Its resonance requires some deeper explanation.

The scientific study of “top incomes” originated in the early 2000s, led by the late British economist, Tony Atkinson, who struck up a collaboration with Piketty, based in Paris, and Emmanuel Saez in Berkeley. This yielded a series of academic articles and edited volumes, which passed under the radar of general readers or the media, back when nobody had ever spoken of “the 1%”. One distinguishing feature of this programme was a willingness to use novel sources of empirical data, namely tax records. Another was the study of very long-term historical trends, over not just decades but centuries. “The Top Incomes Database”, which first presented the kinds of graphs with which Capital in the Twenty-First Century is littered, was launched at a conference hosted by Atkinson and Piketty in Paris in 2011.

Given the extraordinary historical reach of this research field, there was nothing explicitly contemporary about its findings or implications, especially during those years when few politicians or commentators were worrying about inequality. Most people had a general sense that inequality had been rising since Thatcher and Reagan came to power, but political attention under New Labour was squarely focused on alleviating poverty, and not on the other end of the income spectrum (which, famously, Peter Mandelson was “intensely relaxed” about).

The global financial crisis did disrupt that complacency, but not simply because of “Fred the Shred” or because George Osborne took an axe to various social safety nets. Piketty and his publishers lucked out because the macrofinancial paradigm of the post-2008 world suddenly rendered the “R>G” tendency (which Piketty argued had been around for at least 200 years) impossible to ignore. Britain in particular experienced its longest period of wage stagnation since the industrial revolution, while asset prices (including housing) soared. Quantitative easing poured boundless cheap money into equities, facilitating the sharp ascent of BlackRock and other giant asset managers. Fiscal tightening and unprecedented monetary loosening combined to offer as devastating a demonstration of Piketty’s thesis as he could possibly have imagined.

In this Pikettyan dystopia, the wealthy didn’t need to take any risks or become Gordon Gekko to swell their portfolios further; they simply needed to take advantage of the glut of cheap credit and hire a wealth manager. Capital in the Twenty-First Century arrived with a historical account of a phenomenon that had been largely forgotten about: the idle rich, living off passive investments and inheritances. Everything that Marx had admired about capitalism — its modernism, its upheaval, the insatiable hunger for productivity gains — was nowhere to be seen. In his rather nerdish, atheoretical manner, coolly tracing the ebbs and flows of wealth since the Enlightenment, Piketty held up an image of capitalism that was less characterised by class conflict, exploitation or upheaval, and more by the sheer durability of estates and portfolios over time.

Marxists scoffed. After all, where had all this wealth originated from, if not from relations of production that were essentially exploitative? But Piketty’s analysis spoke to a range of other struggles and injustices that often had little to do with production and employment, but which became increasingly prominent as the decade wore on. Piketty’s definition of “capital” (“the sum total of nonhuman assets that can be owned and exchanged on some market”) decentred productive capital, but shone a fresh light on how wealth in general is protected and passed on, via inheritance, tax avoidance, “philanthropy” and other forms of gift-giving, all of which were politicised in the 2010s. Social scientists were soon filling in the blanks, with fascinating studies of the legal services, “family offices”, elite schools and offshore trusts that insulated the new oligarchy from political interference.

Political-economic conflict now seemed less about class, in a Marxist sense, and more about intergenerational unfairness and the sheer luck of which family (with what sized “bank of mum and dad”) one happens to be born into. One of the remarkable implications of Capital in the Twenty-First Century is that, due principally to its very high levels of top marginal income and inheritance tax, the post-1945 Keynesian era is the one phase of capitalist history in which the promise of meritocracy has ever been close to being realised. By fiscally suppressing “R>G” for 30 years (and because so much capital had been destroyed by war), people were able to work their way towards wealth ownership. The baby-boomer generation that benefited from this was the same generation that would later benefit from surging house prices, pay off their modest mortgages, and vote for Brexit. It has taken a while to recognise how much societies such as Britain have been reshaped by long-run trends in asset ownership and asset prices, but Capital in the Twenty-first Century was a key moment in this awakening.

Where has this got the Left? Piketty identifies as a “socialist”, and has produced a number of thoughtful proposals to tackle wealth inequality, such as a global wealth tax and (in his subsequent Capital & Ideology) a “citizen’s inheritance”. One could no doubt build a political movement dedicated to reversing the power of rentiers and wealth elites, as Jeremy Corbyn occasionally hinted at, launching his 2019 manifesto with a promise to go after “150 billionaires”. Tactics oriented around asset ownership, such as rent strikes, might form part of such a movement.

“Where has this got the Left?”

But Piketty is also a mild-mannered liberal technocrat, an heir to Keynes rather than Marx. Piketty anticipated the anxiety of liberals today, who believe in “hard work” and “enterprise”, but can see quite clearly that this economy rewards neither. In the decade since Capital in the Twenty-First Century was published, that has virtually become an orthodoxy. Even some of capitalism’s most passionate defenders are concerned by the rising number of young people living with their parents into their 30s due to spiralling housing costs, by the creeping power of surveillance capital, or by the rise of “universal owners” such as BlackRock. These are all symptoms of a society governed wholly in the interests of asset owners. Some have even questioned whether it is still “capitalism”, given it no longer relies on productivity gains, or whether we are descending into “neo-feudalism”.

The political question, looking back on the decade that followed Capital in the Twenty-First Century, is why this groundswell of opposition has still not translated into a genuinely transformative political program that puts these tendencies into reverse. Piketty cannot be held responsible for that, and he has done his best to identify the necessary measures that might reduce inequality. But there is nevertheless a slight unworldliness about his perspective and its emphasis upon very long-term statistical trends, which while never inevitable, come to feel almost natural and unsurprising. Even if “R>G” is merely a trend, and not a law, it expresses a slight air of fatalism, that (combined with so much other environmental and political news over the past decade) makes progress feel impossible. Like the proverbial frog in the ever-heating water, there is no moment of crisis when it might become necessary to jump out. In one of Capital in the Twenty-First Century’s most evocative phrases, Piketty describes how the “past devours the future”, as past accumulations of wealth overshadow our options in the present. This is not a fertile mood for progressive politics.

When Occupy first raised their banners declaring “we are the 99%” in Zuccotti Park and on the steps of St Paul’s Cathedral, “the 1%” was felt to be nearby, in the banks of Wall Street and the City of London. These encampments were putative acts of democracy. But as empirical attention to wealth, asset management and “high-net-worth” individuals has grown, their distance from the rest of us has come to feel ever more unbridgeable. At their best, studies of the super-rich illuminate the impacts of extreme wealth upon cities, democracy and culture, to aid public understanding. But the sheer exoticism of Elon Musk, Mayfair hedge funds and Monaco superyachts can also become a spectacle, which reduces the observer to passivity.

Piketty was right to divert attention away from the sphere of productive capital, and towards wealth in general. But this means that political conflict evaporates into the ether of long-run tendencies, asset portfolios and offshore jurisdictions. One of the great strengths (or comforts, if you like) of Marxism is that it focuses political attention upon one specific locus of activity: the workplace. You know what to do and what to demand if you are a Marxist. The same is less true if you are a “Pikettyan”. A return to Sixties-era top marginal tax rates (at over 90% for income and inheritance, even in the United States) would be a start. Piketty has made many radical and optimistic proposals of this sort. The problem is that they suggest a faith in liberal democracy and the current assortment of political parties that few people share in 2024, given the influence of big donors and media. Meanwhile, the long-term tendencies roll on.


William Davies is a writer, political economist and sociological theorist. His most recent book is This Is Not Normal: The Collapse of Liberal Britain


Join the discussion


Join like minded readers that support our journalism by becoming a paid subscriber


To join the discussion in the comments, become a paid subscriber.

Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.

Subscribe
Subscribe
Notify of
guest

221 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Christopher Chantrill
Christopher Chantrill
2 months ago

Ten years ago I read Piketty’s Capital from stem to stern. You can find my analysis by Googling “Christopher Chantrill Piketty anti-Piketty”.
But here, let’s just explode r > g.
“Piketty believes in the Marxian fallacy that wealth increases by saving and accumulation. E.g., r > g. No it doesn’t. Wealth comes from innovation and surprise. A guy invents a steam engine; pretty soon poor people can afford to cross the oceans in steamships.” OMG.
Or, some darn fool starts a business selling books online from a garage. Thirty years later Amazon is valued at $1.8 trillionen. And don’t we all wish we bought Amazon when it went public in 1997.
Earth to Davies. That was not accumulation.

Jules Anjim
Jules Anjim
2 months ago

Ground Control to Corporal Chantrill – the presence of innovation does not negate the mechanisms of savings and accumulation. You can have innovation that does nothing to increase the overall productive capacity of a nation, but still enables the accumulation of wealth by a narrow set of interests.

Jim Veenbaas
Jim Veenbaas
2 months ago

Can both be true?

Lancashire Lad
Lancashire Lad
2 months ago

Why the heck should we “Google Christopher Chantrill”? I do wish people would stop using Comments to refer to something that’d failed to gain any traction on its own terms.

Adam Bartlett
Adam Bartlett
2 months ago
Reply to  Lancashire Lad

Huh? It’s a good steer for those who find Christopher’s short comment interesting & would like to read more in the same vein.

Lancashire Lad
Lancashire Lad
2 months ago
Reply to  Adam Bartlett

Suit yourself.

Carl Valentine
Carl Valentine
2 months ago
Reply to  Adam Bartlett

I found it ‘unenlightened’ so count me out.

Deb Grant
Deb Grant
2 months ago

Exactly, without people risking their own money on new enterprises there would be no wealth yo redistribute.

J Bryant
J Bryant
2 months ago

The 1% happily encourage modern progressivism where people use race and “oppression” as cudgels to fight over the scraps not owned by the 1%. There is a mistaken sense of redistribution and progress among the masses, while the 1% smile benignly from far above the fray.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  J Bryant

The problem here in Britain is not principally the 1% but the suburban graduate class which has become pretty well entirely parasitic thanks to artificially inflated house prices.

In the moderately prosperous London borough where I live pretty well everyone I know is a millionaire but I don’t know anyone who got that way by working or by creating some kind of value. Meanwhile the rent payers and wage earners who do the useful work get poorer every year.

The big joke is that the millionaires all vote Labour in the sure knowledge that they’ll get even richer even faster under Starmer – just as they did under Blair.

Marius Kloppers
Marius Kloppers
2 months ago
Reply to  Hugh Bryant

100%

Few bothered to read the debunk of Pikketty, since it did not fit the narrative at the time.

In short the true story is “it’s the house prices, driven by the gatekeeper premium that prevents supply, that drives house prices, that drives inequality.”

Scrap planning restrictions, will fix supply, will be turn fix house prices, fixes inequality (fixes terms of trade as well BTW).

No further actions required.

https://www.forbes.com/sites/chuckdevore/2015/07/22/piketty-vs-rognlie-land-use-restrictions-inflate-housing-values-drive-wealth-concentration/

Jules Anjim
Jules Anjim
2 months ago

Scrapping planning restrictions can conversely result in the new “highest and best use” of existing land driving prices even higher. Developers don’t assume house prices are going to fall; they target sales’ values in line with existing house prices and work backwards to determine land value. As such, re-zoning and relaxation of restrictions is often just capitalised into higher land values.
However, if you had a large scale re-zoning of agricultural, rural, light industrial or other land enabling large scale residential development on the boundaries of existing cities, with all of the accordant infrastructure paid for by government, then you might create cheaper housing options.
But if you really want to kill the growth of house prices and perhaps even watch them take a precipitous dive, then you will need to kill the taxation incentives to invest in residential property, implement swingeing cuts to immigration, at the same time as regulating the bejesus out of credit provision.
Of course, your career as a politician and any associated post-political job offers will be moderately to severely impacted. And a lot of the people who were waiting for house prices to fall my now find themselves unemployed.

David Morley
David Morley
2 months ago
Reply to  Jules Anjim

The depressing thought is that it is possible for a country, or a whole civilisation, to work its way into a situation which it cannot then work its way out of. Not everything that has been done can then be undone. Decline follows.

UnHerd Reader
UnHerd Reader
2 months ago

You think Gov’ts, especially anglo saxon capitalist ones: UK/U.S/Aus, will allow house prices to crash?

Andrew Fisher
Andrew Fisher
2 months ago

But it’s not only land and house prices that have soared……

M. Jamieson
M. Jamieson
2 months ago

Totally apart from whether this would work, and acknowledging that they can be stupid, there are also often good reasons for planning restrictions. Things like protecting prime agricultural land, or considering watercourses and drainage, or even just the livibility of cities, is worthwhile, and you certainly won’t get developers considering those things just because they should.

Andrew F
Andrew F
2 months ago

Only partially true.
Without mass immigration, current housing supply would be more than sufficient.
If you consider democracy in a narrow sense, then majority of property owners are doing what is in their interest.
When property ownership declines below certain threshold, renters would vote for economic settlement which would benefit them.
You can not have democratic capitalist system without future generations not being able to build up any capital.
First step should be heavy taxation of properties not being primary residence.
Not likely, with so many current MPs being rentiers.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Hugh Bryant

Precisely! I have make the same point. This is the Wealth Revolution of our Age. And it was not driven by Greed Is Good capitalists. It was engineered by our ultra cynical progressive political/London & SE elite. I too watched as London homes soared in value by safely 100k a year from the 90s for a 2 decade bubble/spree in a basic market rigging op. Mass migration for demand. Regulatory barriers to stop supply. A crazed zero interest rate regime to underpin the Heist. I call these entitled metro Lefties ‘Propetocrats’. Their greed and entitlement was the rocket fuel for the deranged Remainiac hatred of anything (Brexit,) endangering their Midas Machine. This Property Revolution has warped both our economy and values ,- and no one in power seriously wants the party to stop.

Jeff Butcher
Jeff Butcher
2 months ago
Reply to  Walter Marvell

And yet the QE introduce during COVID inflated the assets of the very wealthiest in our society to the tune of something like 7 trillion dollars – they ain’t by and large owners of 4 bedroom detached houses in Surbiton.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Jeff Butcher

7 trillion dollars?
Where does that come from. It’s a hell of a lot more than the £400 bn of credit actually created.

Jeff Butcher
Jeff Butcher
2 months ago
Reply to  Hugh Bryant

I read about it in the FT.

UnHerd Reader
UnHerd Reader
2 months ago
Reply to  Jeff Butcher

No, but he is right about who also benefited, i recall even SWP head honchos* flipping houses in London.

*Not that they are any sort of arbiter of integrity

Andrew Fisher
Andrew Fisher
2 months ago
Reply to  Jeff Butcher

Well said! I’m very anti woke but frankly many of these comments are the usual blinkered “one explanation/ theme fits all” rather depressingly uncommon on this forum, challenging your own groupthink and orthodoxies not being high among the attributes shown.

Ten years ago, few had even heard of “woke” or identity politics.

Bernard Stewart
Bernard Stewart
2 months ago
Reply to  Walter Marvell

I enjoyed that. (Not quite sure if it’s true as well.)

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Walter Marvell

The problem is that no politician can suggest a remedy without falling foul of the media – which is entirely controlled by the rentier class. When Theresa May somewhat timidly suggested that some of this unearned wealth might be used to pay for the social care of those sitting on it, the loudest howls of outrage came from the Guardian.

Andrew Fisher
Andrew Fisher
2 months ago
Reply to  Walter Marvell

Come on, this is pretty much a one size fits all explanation verging on a conspiracy theory. You think most home owners support mass immigration do you?

There are clear much simpler explanations for all these phenomena. And few has even heard of identity politics or woke ten years ago.

The low interest rates etc (introduced by that great friend of the rich, Gordon Brown) did actually probably prevent a 1939s style Depression.

David Morley
David Morley
2 months ago
Reply to  Hugh Bryant

True – but I think it is partly generational too.

Alan Hawkes
Alan Hawkes
2 months ago
Reply to  Hugh Bryant

I suspect that the problem with the ‘suburban graduate class’ is that their degrees did not win them the glittering prizes to which they felt entitled.

Norfolk Sceptic
Norfolk Sceptic
2 months ago
Reply to  Alan Hawkes

All those Arts, Humanities and Social Science graduates that thought they were going to share out the spoils created by (some) Scientists and Engineers, and travel the World found they were, apart from a few, were confined to National Politics, while their inferiors, the Scientists, Engineers AND craftsmen and women, have prospered, albeit in a very much less prosperous world. Just look at the number of PPE and History graduates that have inhabited the Dept of Energy while it has destroyed British Industry. And the Medical Interventions need a book to describe the wickedness.

The comments of the book, on Amazon UK with the light coloured cover, are a joy to behold, though it doesn’t make up for the much harder life most of the industrious have experienced over the last 30 years.

And, for the West, it’s going to get worse, even if there is a massive change of attitude.

McLovin
McLovin
2 months ago
Reply to  Hugh Bryant

“The big joke is that the millionaires all vote Labour in the sure knowledge that they’ll get even richer even faster under Starmer” – yes, capitalists masquerading as socialists, all too common these days.

Clare Knight
Clare Knight
2 months ago
Reply to  Hugh Bryant

Are you one of the millionaires?

Mr Tyler
Mr Tyler
2 months ago
Reply to  Hugh Bryant

Yes. I have long thought this. For as long as investment in property is more profitable than investing in productive industry, why trouble with the latter?

Simon Boudewijn
Simon Boudewijn
2 months ago
Reply to  J Bryant

”The steadying influence of Barack Obama in the White House”

haha, like saying…”The trains all ran on time under Mussolini”.

The article had a wonderful line…

Piketty describes how the “past devours the future”, as past accumulations of wealth overshadow our options in the present.

haha – wealth, true wealth – the kind the writer described as just having capital – hire a ‘Wealth Manager’ and watch it grow like a snow-ball rolling down hill – this is the biggest issue in the world as:

Power corrupts, absolute power corrupts absolutely, and these ‘Global Elites’ they are absolutely corrupt till they think themselves demi-Gods, and us the ants in their ant farm…. So sick are they they drive for ‘Transhumanism’ making themselves immortal and one with AI to become actual Gods – watch WEF and Yuval Harari… Satan behind a mask….

Jules Anjim
Jules Anjim
2 months ago

“A return to Sixties-era top marginal tax rates (at over 90% for income and inheritance, even in the United States) would be a start”.
Uh, no thank you. Why don’t you volunteer to take part in that particular initiative, Bill, and report back to us in 20 years time.

Billy Bob
Billy Bob
2 months ago
Reply to  Jules Anjim

That 90% tax rate didn’t kick in until you earned around £300k in today’s money though, so very few were affected. It was literally the 1%

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Jules Anjim

Have you considered where we’ll be in 20 years time if more and more of the global economy continues to go to capital?

Jules Anjim
Jules Anjim
2 months ago
Reply to  Dennis Roberts

I have considered this, very much in fact. I started considering it about 25 years ago, and have been watching with dismay as the disaster unfolded in slow motion. The problem is not marginal taxation rates on high income earners, it is incentives in the tax system that steer rational actors toward allocating capital to residential property and listed companies.
There is nothing wrong with people wanting to invest in property or stocks, but the aggregate capital allocation has been so fundamentally skewed by taxation incentives to unproductive assets that it has rendered our economies less and less productive with each upward step in asset values. None of that will be fixed by effectively confiscating someone’s marginal income over £300k.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Jules Anjim

I’d agree that increases in the top tax rate are not especially relevant, and I’ve also no argument with the rest of your response.

But the things you have been watching with dismay have been happening whilst we’ve had low rates of tax on high earners, so I’m not sure why you think it’s the big issue your initial post seemed to imply it was.

Jules Anjim
Jules Anjim
2 months ago
Reply to  Dennis Roberts

Because I personally think that kind of extreme marginal tax rate amounts to a confiscation of income and a complete overreach by the state. At that point you might as well just round it up to 120% and put a lien on the first born male child.
There is a good reason no country would attempt to re-introduce this insane level of marginal taxation on incomes. In practice it just encourages tax avoidance through whichever means possible (to say nothing of evaporating any incentive to earn above the marginal threshold); there is ample evidence for this in just about every national jurisdiction with punitive high marginal tax rates.
It’s not the top 0.1% kicking property prices higher (putting aside their buying of political influence to enshrine the right type of framework to make it possible), it’s the top 25% of income earners who are pretty much led there in shiny bright lights by taxation incentives spruiked by every self-respecting accountant and financial adviser.
The taxation and political system needs to be re-balanced for sure, but let’s start by going after the real culprits.

Carl Valentine
Carl Valentine
2 months ago
Reply to  Jules Anjim

Absolute rubbish! A lot of the top 25%?? Most of the people on this site are in the top 25%, do you have any idea what level of income you need to be in the top 5% of earners even, roughly 100k.
People who earn 100k are not parasites they pay more than 4 times the level of tax than someone on an average wage and get nothing extra for it. It is big corporations that are destroying our economies not people on the 45% tax band.
Also about 5 million Brits are self employed and a lot avoid taxes yet use public services with abandon.

Jules Anjim
Jules Anjim
2 months ago
Reply to  Carl Valentine

It seems you might have gone off a bit half-cocked there, old chap. I’m not saying the top 25% of earners are parasites at all or that they are destroyers of economies. It’s the incentives in the taxation system to invest in residential property which just happen to be availed of by a broader section of people than the top 0.1%, and yes, even by people earning less than $100k.

Billy Bob
Billy Bob
2 months ago
Reply to  Jules Anjim

One benefit of those large top tax rates was that business owners (as it was generally those who earned above the threshold) tended to pump money back into their businesses rather than have it over to the state. This led to much more R&D spending and higher wages/bonuses for the underlings

Coralie Palmer
Coralie Palmer
2 months ago
Reply to  Jules Anjim

It would work perfectly well as one of a series of measures that Piketty suggested.

David Morley
David Morley
2 months ago
Reply to  Jules Anjim

Agreed, but if high incomes just end up being turned into unproductive assets ……

David Morley
David Morley
2 months ago
Reply to  Jules Anjim

This sounds plausible. What are the tax incentives that encourage investment in unproductive assets?

My understanding of the story is that too much money was chasing after too few houses (driving house price inflation), until a point was reached at which it became a great investment for speculators and landlords: increasing asset values, good returns from rents, low risk. Speculators money pushed prices up further in a kind of vicious cycle.

I’m happy to be corrected.

A D Kent
A D Kent
2 months ago

 I think the main reason why there was no ‘revolution’ following Piketty is best explained by a book first published over ten years previously – that’s the first edition of Steve Keen’s ‘Debunking Economics’. Economics with a big ‘E’ as learned, taught, broadcast and powerpointed by the very serious people who make the very serious decisions for us all – those who decided that his insights were worthless – is a colossal heap of dog’s mess, rendered in dog’s mess, built on foundations of dog’s mess. Add a quote from Upton Sinclair and it was (and tragically always will be) game over.

Susan Grabston
Susan Grabston
2 months ago
Reply to  A D Kent

It was no accident in my view that occupy in 2011/12 gave way to woke capitalism and cultural equity in 2013. Don’t touch my money, but here’s a bone to chew on. The fact that the bone now threatens societal breakdown in some geographies is ironic. Even the billionaire class haven’t avoided the cultural fallout.

Alan Groff
Alan Groff
2 months ago

Piketty’s book hit like a storm. It laid bare truths about wealth and growth that many felt but couldn’t name. In those days, frustration boiled under the surface, a silent acknowledgment of a system favoring the few. It was a time ripe for change, for voices like Trump and Milei to rise, echoing the collective unrest. They became symbols, rallying against a perceived elite decadence, using Piketty’s revelations as a backdrop to their narrative. It was less about the details, more about the sentiment – a world divided, calling for leaders to dismantle what many saw as a corrupt establishment. In that climate, figures like Trump didn’t just appear; they were summoned by a public craving a new order.

Danny D
Danny D
2 months ago

First off, focussing on what others have rather than on yourself is simply envy. It shouldn‘t matter whether there exist an Elon Musk or a Warren Buffett, as long as you‘re doing alright. If you do the math, when you implement an inheritance tax, not much of it is left for each person after distribution, so you took something away from someone with not much of a benefit to anyone else. Great for satisfying feelings of envy though. That‘s always been the issue with socialists. It‘s not about improving people‘s lives, but about making sure nobody can excel over anybody else. Add to that the obvious issues, like how the wealthy would simply move out of any country that tries this (see Norway) and you arrive at the need for world government. No thanks. Look in the mirror. Try to improve your own lot. My god, ask for policies that will make your life easier. Not policies that will cut others down to size so you can feel some sort of justice has been done. Do not let your worldview be driven by envy.

Andrew McDonald
Andrew McDonald
2 months ago
Reply to  Danny D

Is there genuine evidence that high taxes drive people away from the country where their wealth is generated (and where their business and social networks support their family lifestyles)? Is Elon Musk going to rebase in Dublin? Can’t see it, but happy to learn otherwise.

Hugh Bryant
Hugh Bryant
2 months ago

Well, it has worked for Google, Apple et al. Google takes £8bn out of the UK economy via Dublin and pays c£200 million in tax. Maybe Elon, being something of a visionary, is not quite so driven by greed as Pinchai and Zuckerberg an the rest of them.

David Jory
David Jory
2 months ago

Yes,most recently under President Hollande in France. Even one of his cabinet ministers was found to have squirrelled away money to Switzerland.
Personally,my family emigrated to Canada in 1968 partly to escape rising taxation. Prime Minister Thatcher’s election persuaded us back.

Thomas Wagner
Thomas Wagner
2 months ago

Is there evidence? Yes. Look at the tax persecution of Ingmar Bergman, the film director, by tax authorities in Sweden. He was arrested for tax evasion in 1976 for utilizing a Swiss subsidiary of his Swedish production company to pay foreign actors. He had wound up the subsidiary in 1974 and paid tax on the money that he took back.
The prosecution refused the case, the special prosecutor sayin it was like bringing “charges against a person who has stolen his own car, thinking it was someone else’s”.
Nonetheless, Wikipedia quotes the head of Sweden’s IRS as saying “the investigation was dealing with important legal material and that Bergman was treated just like any other suspect. He expressed regret that Bergman had left the country, hoping that Bergman was a ‘stronger’ person now when the investigation had shown that he had not done any wrong.”
There’s a classic bureaucratic non-apology.
Bergman was so shattered that he vowed never to work in Sweden again. Never is a long time, and he made a film in Sweden in 1982 and moved from Munich back to Sweden in 1984. He died at his estate on the island of Fårö in 2007. He had originally intended to leave the estate to the nation as a national park. That had changed, for obvious reasons, and the estate is now a (private) artist’s colony.

Julian Farrows
Julian Farrows
2 months ago

Because of progressive tax laws it’s cheaper for me to live abroad and not work.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Danny D

Well said. It is astonishing that no one is pointing out that ALL of the few Starmer manifesto pledges are driven by naked nasty Corbyn style class envy….even as they try to project an image of Blair-like Tory lite centrism. Non Doms!!!. VAT on private schools. Pension cap exemptions for rich doctors but not businessmen. No one on the Labour backbenches will know what VAT is. None have experience of business!! Welcome to Soviet style Traumazone.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Walter Marvell

Which isn’t just pandering but bad economics, given that 65% of the workforce is employed in the small business sector. But then you’d be hard put to name a single Labour parliamentarian who has any experience of that sector – or even knows someone who does.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Hugh Bryant

I think there is ONE in Labour’s prospective MP list who works in a bank. Labour have applied DEI Privilege Think to our productive economy. They look down on base grubby wealth creators (lock them down) and elevate NHS workers to a Higher and privileged status. Terrifying.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Walter Marvell

The idea of paying care workers properly – terrifying indeed.

Susan Grabston
Susan Grabston
2 months ago
Reply to  Walter Marvell

SMEs becoming increasingly unattractive in UK. For us, less taxation than regulation. P>S (paperwork > sales development).

Coralie Palmer
Coralie Palmer
2 months ago
Reply to  Walter Marvell

Or to look at it another way, it’s driven by the greed of the rich rather than the envy of the poor. Non-doms have helped inflate the massive property asset bubble we now live with. And the pension cap exemption for doctors is because the market needs them not to retire early.

David Morley
David Morley
2 months ago
Reply to  Walter Marvell

ALL of the few Starmer manifesto pledges are driven by naked nasty Corbyn style class envy

I’d like to hope so, but fear this is not the case. Corbyn simply wasn’t up to the job, and too stuck in the 70s – but someone needs to get this country back on the rails. If the idle rich, or overly rewarded middle aged, middle classes have to tighten their belts for a while, that’s a small price to pay.

Walter Marvell
Walter Marvell
2 months ago
Reply to  David Morley

No wealth creators. No wealth.

Norfolk Sceptic
Norfolk Sceptic
2 months ago
Reply to  Walter Marvell

It’s not just the taxes, it’s the incessant wokeness that can condemn an entrepreneur to give up, to retain their sanity.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Walter Marvell

No workers no wealth. The only strike of bankers I ever heard of happened in Ireland in 1970 and the economy kept growing.

Peter B
Peter B
2 months ago
Reply to  David Morley

Who are these “idle rich” ?
A lot of rich people work very, very hard. You can argue whether they’ve truly earned what they got paid. Much less convincing to claim they didn’t – and do not – work for it.
And who is to say who is “over-rewarded” and who is not (and what is “fair”) ? Frankly, I’d far rather let the market decided that than any politician.

Andrew F
Andrew F
2 months ago
Reply to  Peter B

I think conducting conversation on Left terms is self defeating.
It is irrelevant whether business owners worked hard.
If they had great business idea, hired great managers and then enjoyed their wealth, so what?
What I am against are rentiers.

Eleanor Barlow
Eleanor Barlow
2 months ago
Reply to  Walter Marvell

In case you haven’t heard, we have a shortage of doctors in the UK, so some incentive is needed to encourage them to stay put rather than emigrating to Australia, Canada and the US as some have done. Since politicians of all political parties are loth to raise income tax, other measures are necessary in order to slow down the UK’s descent to banana republic status.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Eleanor Barlow

You forget just how many GPs and consultants have been leaving not for foreign climes but rather quitting for early retirement, all aged 55. The reason was not poverty. It was all about 1% Rich scale pensions hitting the top limit. And you forget too what impact the protracted strikes have had on public opinion about doctors so relaxed – too relaxed – about inflicting genuine physical suffering on thousands of their patients.

Andrew F
Andrew F
2 months ago
Reply to  Walter Marvell

To be fair, the way pension life time allowance was structured by Tory government.
It should had been based on lifetime contributions and not on lifetime value of the fund.
Problem with all public sector workers is that their pensions are funded by other taxpayers who would never enjoy even fraction of public sector workers pensions.

Andrew F
Andrew F
2 months ago
Reply to  Eleanor Barlow

You can sell your labour where you like.
If you first paid full cost of taxpayers educating you in uk.

Jeff Dudgeon
Jeff Dudgeon
2 months ago
Reply to  Walter Marvell

All politics is about resentment, rage or revenge.

David Morley
David Morley
2 months ago
Reply to  Jeff Dudgeon

Any proof of that? Do people have no positive reasons at all for engaging in politics? Is that not even possible? And finally, how much did you pay for your copy of Nietzsche for dummies?

David Morley
David Morley
2 months ago
Reply to  Walter Marvell

You’re sounding a bit like the socialist who, faced with the failure of their system to operate as planned, starts crying out “not real socialism”. They then look around for others to blame for its failure. Are you saying that the problems we have are because it’s “not real capitalism”?

But perhaps Pikkety’s insight is that such failure is a built in tendency of capitalism if actions are not taken to check it. That problems you see as external (not real capitalism) are actually part and parcel of it. Whether it’s massive concentration of wealth and power in a few hands, cronyism, rent seeking whatever – if action is not taken, this is where capitalism heads.

B Emery
B Emery
2 months ago
Reply to  David Morley

We don’t have real capitalism. State intervention has killed it.
1. The sanctions regime implemented mainly by America has massively distorted global trade. People should be free to exchange goods minus tariffs, trade barriers and sanctions. That is real capitalism. All these trade sanctions add to inflation, prevent healthy competition and create barriers for innovation and have been shown to depress gdp.
2. The Fiat money system has been abused by the state to breaking point, qe has caused inflation and at the same time we are suffering inflation due to sanctions and disruption to global trade. The system has been abused that badly America is now creaking under its enormous debt pile and other countries are abandoning the dollar.
3. Tax havens also cause a distortion in the economy, they are not in keeping with true capitalism and should be disallowed. Corporations need to pay the tax they are supposed to, not rinse it round the world in tax havens. Tax havens give big business an unfair advantage over small business.

So, to have true capitalism back we would need to lift all the sanctions, have true free trade, get ourselves a gold back currency, be economically responsible by not running up massive debts with qe and shut down the tax havens which would mean massive corporations pay the tax they should.

David Morley
David Morley
2 months ago
Reply to  B Emery

I think you just made my point!

Take the following:
3. Tax havens also cause a distortion in the economy, they are not in keeping with true capitalism

Sure, just like bureaucrats lining their own pockets is not in keeping with true socialism. But it is highly likely they will try do this -perhaps even inevitable.

Likewise, the rich will put their money in tax havens if they can – almost inevitably.

Just as socialists cannot simply disown behaviours which stem from the model but weren’t intended by it, so capitalists (or apologists) cannot disown behaviours which stem from the capitalist model, but weren’t intended by it.

David Morley
David Morley
2 months ago
Reply to  David Morley

Posted elsewhere but worth repeating:

In 2023, Angus Deaton wrote:
In retrospect it is not so surprising that free markets, or at least free markets with a government that permits and encourages rent seeking by the rich, should produce not equality but an extractive elite that predates on the population at large. Utopian rhetoric about freedom has led to an unjust social dystopia, not for the first time. Free markets with rent seekers are not the same as competitive markets; indeed, they are often exactly the opposite.

B Emery
B Emery
2 months ago
Reply to  David Morley

‘so capitalists (or apologists) cannot disown behaviours which stem from the capitalist model, but weren’t intended by it.

Likewise, the rich will put their money in tax havens if they can – almost inevitably’

I don’t think they need to ‘disown behaviours’ stemming from capitalism, what behaviours do you mean? Aside from using tax havens?
The rich use tax havens because they are there to use, the loopholes are there to exploit. If you run a big corporation and every other big corporation is using these tax havens, to be competitive with them you would also really want to use the same loopholes yourself, partly just to remain competitive. If the holes in the tax system weren’t there to exploit in the first place it wouldn’t be a problem and it would be fair for all businesses.
It is constant government intervention in the capitalist model that is causing problems at the moment, not capitalism itself, which isn’t even really capitalism at this point.

‘Sure, just like bureaucrats lining their own pockets’
This is different, they are using public money from taxing the population. This increases the tax burden.

Capitalists are selling goods or services that people buy voluntarily, they (should) pay tax and tax like VAT is collected on goods. So they are contributing to the tax system, not draining it, creating jobs and products, driving innovation etc.

David Morley
David Morley
2 months ago
Reply to  B Emery

I think my post is clear enough – you maybe just need to reread it.

It is naive to think that you can set up a system in which power and wealth are unevenly distributed and not expect the rich and powerful to use that to their advantage – by funding political parties in return for policy which suits them, for example, or influencing media through payments for advertising, or influencing governments to outlaw collective bargaining by workers, by funding universities so they don’t worry too much about researching the downsides of your products (tobacco, lead in petrol) etc.

What, you thought that in a system based on self interest everyone would play by the rules? Even if playing by the rules is not in their self interest.

And then, like silly socialists who do the same when it goes wrong, you could say – not real capitalism. In real capitalism this would never happen. You need to own the downsides as well as the upsides.

B Emery
B Emery
2 months ago
Reply to  David Morley

‘It is naive to think that you can set up a system in which power and wealth are unevenly distributed and not expect the rich and powerful to use that to their advantage’

I didn’t say that, I think you should read again, you haven’t really addressed my points.
Nope I do not expect everyone in any society, socialist, capitalist or communist to play by the rules all of the time, that is utopian.
I didn’t say I expected them to I said that if loopholes are there to exploit then people will exploit them.
The same applies to all of your above scenarios like people with money influencing government etc. That again is a problem with the state and how it functions not a problem with capitalism.

‘And then, like silly socialists who do the same when it goes wrong, you could say – not real capitalism.’
We do not have real capitalism that is what I am saying. I am saying that the biggest problems with our economy at the moment, that is the sanctions on energy and goods, the problems with shipping and the inflation from qe are all a result of poor government decisions not the fault of capitalism itself, we do not have free capitalist markets. We are killing them and it is causing ridiculous inflation.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Danny D

It’s not envy. The article used the term neo-fuedalism and you should think about the implication of that rather than just thinking of envy. I expect medieval peasants were envious of their lord, but that really doesn’t define the situation they were in.

Coralie Palmer
Coralie Palmer
2 months ago
Reply to  Dennis Roberts

Quite right. It’s driven not by the envy of the poor but the greed of the rich. But ‘greed is good’ is still popular with many people, as these comments show.

Duane M
Duane M
2 months ago
Reply to  Coralie Palmer

It’s the hypnotic magic of believing that “I, too, may become a millionaire”.

Peter B
Peter B
2 months ago
Reply to  Duane M

And what is wrong with such aspiration ?
Some on the left seem to find such attitudes objectionable. But really ???

Jeff Butcher
Jeff Butcher
2 months ago
Reply to  Danny D

If the best answer you have is ‘envy’ why bother with politics at all? Why don’t we just return to some sort of feudal arrangement? Were the Suffragettes consumed with ‘envy’? What about the Chartists? Did they not have the wisdom to understand their actions were simply a product of misguided emotions?

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Danny D

And when the ultra rich start using their influence to buy positions in public office or buy up public utilities to run them at rip off prices to us (as in the UK cases of rail, water, energy and increasingly health services)? The issue isn’t with the wealth itself but with its tendency to be used to gain political power. This is not some faddish jealousy issue of the modern left, since at least as far back as Plato it has been understood that plutocracy tends to lead to demagoguery and then to tyranny.

Coralie Palmer
Coralie Palmer
2 months ago
Reply to  Desmond Wolf

Spot on. And the demagogues are cropping up all over the place. Interesting how the media are terribly keen to call them ‘populists’, an utterly meaningless term, rather than demagogues – ‘appealing to the emotional rather than the reasonable capacities in their audience’.

David Morley
David Morley
2 months ago
Reply to  Desmond Wolf

The issue isn’t with the wealth itself but with its tendency to be used to gain political power

It seems such a simple and obvious point. But some on here just don’t seem able to get it. I guess they don’t want to.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  David Morley

Thank you both. Hearteningly though, the people in disagreement seem part of an increasingly small McCarthyite minority who think that resisting a Britain where all workers’ rights are removed, all state assets flogged to the highest bidder and most of us forced to live in tents outside call centres and warehouses from which we can be fired at will makes you some kind of Cambodian communist.

Coralie Palmer
Coralie Palmer
2 months ago
Reply to  Danny D

Oh blimey the old ‘politics of envy’ blah. As opposed the politics of greed, which is of course fine.

David Morley
David Morley
2 months ago
Reply to  Danny D

Except that we now have a tide that sinks a lot of boats, rather than raising all of them.

And there are times when envy is a positive emotion. When the system is unfair, the game seems rigged, or when your kids are not getting the education or health care they need while someone else is p-ssing money away on yachts, multiple houses and luxury goods.

Peter G
Peter G
2 months ago
Reply to  David Morley

If you think rich people are p_ssing away money now, what do you think the effect would be if their choice is to spend it all now or give it to the government in inheritance taxes?

Billy Bob
Billy Bob
2 months ago
Reply to  Peter G

Either of those options is good for society. If the blow it all then they’ve spent it on businesses that create jobs and growth, if they squirrel it away and the government takes it through taxation then it can be put towards better public services

David Morley
David Morley
2 months ago
Reply to  Billy Bob

So if the wealthy buy up all the property, and charge rents so high that people can’t even afford to have families, or enjoy life a little, that would be ok because the money they spend on yachts, holiday homes abroad, luxury goods etc would create jobs and growth?

And how much of that spending would be on the British high street, for British goods? And what if the little growth we did see just got absorbed into even higher rents?

And what if the money which wasn’t spent was reinvested – but either abroad where returns are higher, or in non productive assets such as more property – like a financial version of carbon capture?

David Morley
David Morley
2 months ago
Reply to  Billy Bob

So the families who are struggling to pay the rent and make ends meet should look at the people with yachts, and Italian sports cars, and multiple thousand pound handbags (bought, perhaps, with their rent money) and say – “thank god somebody’s doing their bit for the economy – where on earth would we be without the super rich”.

B Emery
B Emery
2 months ago
Reply to  David Morley

People p*sing money away on luxury goods create jobs, the money they are spending goes into the business they are buying from which then pays workers who then pay tax on that earning. The more disposable income people have and the more they spend, the stronger the economy.

David Morley
David Morley
2 months ago
Reply to  B Emery

Which economy?

B Emery
B Emery
2 months ago
Reply to  David Morley

National, global, intergalactic. Depends on the ‘someone’ you are referring to in your post I think.
Either way people buying things using disposable income is good for any economy.
If healthcare and education are broken that is the fault of the government not your yacht owner p*sing away money.
What would you do then, stop people from spending money on whatever they like? Sanction yacht ownership? Are you sure you don’t just really want a yacht yourself?

David Morley
David Morley
2 months ago
Reply to  B Emery

You’ve clearly missed the point. Which if you look back is that envy can be a positive emotion if it leads to positive change. It can also be a justified emotion if the situation is unfair.

“Politics of envy” is a transparent piece of ideology, the purpose of which is to allow the haves to justify their position and morally criticise the have nots. If you can’t see that, you are really going to struggle to see much.

Sadly I suffer from travel sickness so a yacht wouldn’t be much use to me.

B Emery
B Emery
2 months ago
Reply to  David Morley

I don’t think I missed the point, you asked which economy. You said that people envying others that have money to spend on luxury goods could be a good thing and said p*sing away money.

I am saying that people that spend money in the luxury goods market are driving growth, innovation and supporting jobs, that envying them will make no difference when healthcare etc. are administered by the government not the yacht buyers.

‘Which if you look back is that envy can be a positive emotion if it leads to positive change.’

I disagree that envy can be a positive emotion. It’s one of the seven deadly sins as far I know.
Something being unjust is different to envy. If you envy somebody elses things just for the sake of wanting what they have, then think you should change the world so you can have the same as them – that is a very selfish impulse based on pure desire to have these things for yourself. I don’t see the positive there I’m afraid. That is very different to something being unjust and very different to someone wanting to make positive changes in society for everyones benefit.

“Politics of envy” is a transparent piece of ideology, the purpose of which is to allow the haves to justify their position and morally criticise the have nots.’

I think that everybody criticises others based on all kinds of prejudices all the time. That’s neither here nor there.

David Morley
David Morley
2 months ago
Reply to  B Emery

Look I don’t wholly disagree with you, but things rarely go according to theory once they hit reality. Soviet communism nor western capitalism.

Contrary to a popular view, truly free markets are pretty hard on producers and providers – if they don’t constantly cut costs, improve quality and/or innovate they die. Those in strong positions have every interest in “modifying” this situation in their favour if they can. At a more mundane level, they will do all they can to ensure that privilege and position stay with their own kids rather than passing to brighter kids from poorer backgrounds. It’s in their interest to rig the game if they can.

The great strength of Pikkety is that he drew his theory from reality, and gave a good picture of what really happens and why – not what should happen according to theory! And he is being vindicated by widening wealth gaps – not to mention social and ideological changes which mimic this.

B Emery
B Emery
2 months ago
Reply to  David Morley

‘Contrary to a popular view, truly free markets are pretty hard on producers and providers – if they don’t constantly cut costs, improve quality and/or innovate they die’

This is good for ALL consumers, especially those at the bottom, this is what makes goods cheaper and more accessible to everyone. They don’t necessarily have to constantly cut costs etc. It is all about remaining competitive so yes there is an element of that but it is not ‘constant’. Competition drives innovation which improves the goods we have access to and prevents monopolies on goods which keeps prices down. Do you have any evidence free markets are ‘pretty hard on producers’?

‘And he is being vindicated by widening wealth gaps – not to mention social and ideological changes which mimic this.’

Energy is more expensive due to sanctions, this hit the bottom and small businesses first. Goods are getting more expensive because of disruption to shipping and the trade war with China/ russia. This again has/ will affect the bottom and small businesses first. Food is more expensive due to sanctions and shipping disruption, again hits the bottom first. Inflation from qe again will affect the bottom first and rising interest rates (government remedy to qe inflation) makes home ownership less accessible to those at the bottom. So your wealth gap is driven not by capitalism but by government intervention in the free market and money supply.

‘At a more mundane level, they will do all they can to ensure that privilege and position stay with their own kids rather than passing to brighter kids from poorer backgrounds.’
British democracy doesn’t work too badly in that we have people in government from a range of backgrounds. What privilege and positions of power are you talking about?

David Morley
David Morley
2 months ago
Reply to  B Emery

I disagree that envy can be a positive emotion. It’s one of the seven deadly sins as far I know.

The whole system runs on envy and the desire to be envied. Social media is full of it, and consumerism is driven by it. The world is full of the gawkers and the gawked at. Envy is almost our society’s default state.

What gets wrongly labelled “the politics of envy” is when people are no longer envying what others have, but the easy lives they lead in comparison to their own. If you are struggling to put food on the table, while others have an easy life then simple envy turns to anger.

B Emery
B Emery
2 months ago
Reply to  David Morley

‘The whole system runs on envy and the desire to be envied.’

I dispute that – the system runs on necessity first – food, energy, clothing, household goods etc.

I think most people, when they make a purchase most of the time don’t do so out of envy of another’s goods but because they want something that suits them. For example you don’t buy a gaming console out of envy, you buy it because you like gaming, you don’t buy a book out envy, you buy it because you like reading, I have just spent rather too much on fabric – I didn’t do it because I saw someone else with it and envied them, I bought it because I like sewing and really loved the fabric. There is an element in advertising that plays on people’s ability to be envious, everybody is capable of envy too I’m not saying there isn’t an element of that sometimes, but I really don’t think most purchases are driven by envy at all.

‘If you are struggling to put food on the table, while others have an easy life then simple envy turns to anger’
Yes, sometimes, but this is a massive generalisation, people can struggle with money for all kinds of reasons so unless you can specifically tie down their money problems to a floor in the capitalist system – the fact they are struggling and feeling envious again is not really the fault of capitalism. They could have massive debts/ be poor at budgeting/ lost a job/ bankrupt etc etc. The church is supposed to do moral guidance – perhaps we should direct the envious to them.

David Morley
David Morley
2 months ago
Reply to  B Emery

Increasingly it is based on envy and is mimetic in nature – hence the role of influencers, and the way that advertising generally associates its product with high status groups.

Of course that doesn’t account for everything – but I think you’d be surprised how much it is even evident in food choices.

B Emery
B Emery
2 months ago
Reply to  David Morley

Advertising is a different issue though, obviously a good advert is going to play on whatever emotions it can to sell a product, yes people buy stuff because they want to be like/ mimic whatever influencer perhaps but I’m not sure if that is envy either, is wanting to mimic someone a form of envy all the time? Could it not be aspirational? Not saying some of it isn’t envy, just not what the majority of purchase decisions are based on.
What is your evidence that people are really basing the choice of what goods they buy on envy alone?

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  B Emery

The point you missed, in my opinion, is that whilst the spending of disposable income boosts growth, if that income is simply someone else’s disposable income (or perhaps even mon-disposable income) that they have had to give up to the rentier class (which is what is happening when r>g) then there is no overall effect. All that happens is the money is spent on yachts rather than at the cinema etc.

David Morley
David Morley
2 months ago
Reply to  Dennis Roberts

I think B would just say that if capitalism fails to distribute goods efficiently then it just isn’t real capitalism. But real capitalism is, of course, the thing we see on the ground, not the thing we see in text books or neoliberal theories.

B Emery
B Emery
2 months ago
Reply to  David Morley

The thing we see on the ground is sanctions on goods and energy and government spending out of control because of qe, too many regulations and increasingly isolationist foreign policies – again, it is not real capitalism. It is not a free market.

The smaller you make the market with sanctions etc. the harder it is to come by goods or distribute them efficiently.

B Emery
B Emery
2 months ago
Reply to  Dennis Roberts

I don’t really understand what you are saying I’m afraid, if the money is spent on yachts or the cinema it goes back into the economy either way?

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  B Emery

The discussion here is whether the asset class, those who do not need to work for their money, should be taxed more?
I would say yes for these arguments:
1) Argument based on desert: They don’t have to work (therefore there’s no argument based on desert for lowering their taxes. it might be argued that sometmes the passive income is the reward of previous hard work, in which case less should be taken, but in a country with more than 4 million children in poverty and many families in working poverty the asset class should not complain about pinches to their expendable income)
2) Argument based on strengthening the economy/community cohesion: The money of the asset class, as DM has argued, is more often invested in buying more limited assets (housing, shares etc) which tend to extract from rather contribute to people’s wages. Lower income people, or those families in working poverty for example, would instead be spending their money in the economy, enlivening our communities by spending money on local services, eating in their local cafes, using swimming pools, museums, building services for housing renovations or whatever it is families do when they don’t have to stay at home to save money. I think it’s that community dimension that DR might be alluding to when he suggests that spending money in the cinema is more socially beneficial than buying a big yacht (which by the way is probably one of the better things I can imagine the ultra rich spending money on, but the issue is they mainly spend it on assets that can extract more income from the rest of us).
3) Political argument: As I’ve said elsewhere, would you become concerned with the excess wealth of the the ultra rich once they start (as they already are, just look at how few working class politcians we have nowadays compared to in the postwar years) using their influence to buy positions in public office or buy up public utilities to run them at rip off prices to us (as in the UK cases of rail, water, energy and increasingly health services)? The issue isn’t with the wealth itself but with its tendency to be used to gain political power. This is not some faddish jealousy issue of the modern left, since at least as far back as Plato it has been understood that plutocracy tends to lead to demagoguery and then to tyranny.
4) Moral argument: More than 4 million children are in poverty, many of whose parents work and yet are forced to choose between eating and sleeping, living in neglected, mould-infested private accomodation, while in the US between 55 and 63% of people are living paycheck to paycheck, an affront on their dignity and wellbeing that I think justifies taxing the passive income of the very richest to remedy their situation.
You might think there are other solutions, let’s hear them.

B Emery
B Emery
2 months ago
Reply to  Desmond Wolf

‘The discussion here is whether the asset class, those who do not need to work for their money, should be taxed more?’

OK, the post I actually hit reply to was this:

‘And there are times when envy is a positive emotion. When the system is unfair, the game seems rigged, or when your kids are not getting the education or health care they need while someone else is p-ssing money away on yachts, multiple houses and luxury goods.’

My replies above are in regard to those points.

,’ an affront on their dignity and wellbeing that I think justifies taxing the passive income of the very richest to remedy their situation’

I didn’t say it didn’t. I said the biggest driver of the wealth gap today is government intervention in the free markets. Sanctions on energy, goods and rising interest rates from qe are hitting the bottom and small businesses first, harder than anything else.
Also there is the point that sometimes taxing the sh*t out of people to pay the state is fine until the state becomes enormous and crazy. I think perhaps the state is enormous and crazy enough and sometimes it is better to let people spend money in the real economy instead – which helps businesses, creates jobs and drives innovation.
I think there is a case for closing down tax havens that benefit corporations and disadvantage small businesses, if your asset class you are referring to would be the types to be rinsing money around in these then that would help.
Coming back to taxing the asset class more, OK I can see the very obvious points you are making above in that people are struggling, let’s tax people who aren’t struggling more to help them. That’s fine, makes sense.
However my point still stands that these people spending money is good for the economy. My point that government intervention in free markets and the fact that at the moment this is affecting the economy more than anything else still stands. Government sanctions on energy have cost the EU as a whole over a trillion dollars and CVLs are at their highest since records began in the sixties.
Also the point that this asset class can buy influence in politics etc, OK but ths is a problem with the function of the state NOT the capitalist system.

‘ buy up public utilities to run them at rip off prices to us (as in the UK cases of rail, water, energy and increasingly health services)?’

I agree this is a problem. I would say that in the UK our infrastructure is dated, we are a small country – this is one of the few areas where monopolies are a problem in that it is very difficult for any competitors to say build a new rail line to rival the old ones, same goes for water and power distribution networks – we have what we have – this makes free market competition in these particular industries very difficult. I’m not sure what the answer is but in the case of Britain perhaps water, power and transport – perhaps these should be looked after by the state instead to prevent the problems you have highlighted.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  B Emery

Thanks for this, lots to agree on here I think. Heartened as well that you think my points are obvious – I think they’re obvious as well! Just underdiscussed by a media largely owned by the super rich.
Your take on government intervention being the biggest driver of the wealth gap is interesting. I can see that the energy sanctions against Russia have been crippling to the EU, but given this is for a cause most of us can get behind (beginning the process of making the EU no longer dependent on Russian gas, something some have predicted can be done by 2030) this suffering to me doesn’t compare with the fact that millions of families are say losing – unnecessarily – 40% of their incomes to negligent private landlords (after all for a long time the housing crisis has been described as the single greatest driver of poverty in the UK, including by right-wing think tank the IEA).
The interesting thing about your position is you want less government intervention, but lots of the areas where you want action would really require government intervention – clamping down on tax havens, nationalising public services etc And there also instances of government retreat, say Brexit, that has cost this country, and the smaller businesses more than the larger ones, dearly.
‘However my point still stands that these people spending money is good for the economy.’ – it does! But so does my point that they generally don’t spend money in the local economy as much, preferring instead luxury products for themselves or assets which can be used to extract more money from us – making us poorer and hollowing out our communities.
‘Also the point that this asset class can buy influence in politics etc, OK but ths is a problem with the function of the state NOT the capitalist system.’ – interesting, yeh you’re right there can be rules around campaign spending and so forth. But no matter how fair you make official spending rules, running for office is a big time commitment and requires some personal savings. The poorer the working class become therefore, the less representation we can expect from that section of society, which was not true in the post war period where people like Nye Bevan rose through the unions to establish the NHS.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  B Emery

Greed is also one of the seven deadly sins.

B Emery
B Emery
2 months ago
Reply to  Desmond Wolf

I’m not a Christian I was baiting just a bit, but yes it is you are right.

However. Is it greed if:
People that have built businesses to be profitable and then expanded that business to the point they make enough profit to buy a yacht say. Is that greed? Because building a business is hard work, is that profit not what you have been working for? Should you not be able to spend that profit on what you like? And all businesses pay tax, create jobs and innovation. It isn’t like the business owner has deliberately set out to be greedy. That business owner has already paid tax into the system – the more profit the more tax they would pay – is that not good for the state?

Eleanor Barlow
Eleanor Barlow
2 months ago
Reply to  Danny D

Norway still seems to be doing ok despite the exodus of the super rich. Society as a whole gets little value from their presence as much of their money will be safely hidden in tax havens. There might be a small number of people who lose their jobs as a result – ex servants or staff in the luxury trades – but otherwise very little damage. And since Norway had the nous to set up a sovereign wealth fund, very very few will be feeling the pinch.

David B
David B
2 months ago
Reply to  Eleanor Barlow

Norway had a population a tenth that of Britain. Not even slightly comparable economically.

David Morley
David Morley
2 months ago
Reply to  David B

Ah – so if we split the U.K. into ten bits …….

Peter B
Peter B
2 months ago
Reply to  David B

Why not, exactly ?
The fact that it has a smaller population is neither here nor there.
We both had significant North Sea oil and gas revenues.
The UK has many advantages that Norway doesn’t (finance, industry, far better farmland, better top end universities).
In any case, why not benchmark yourself against the best (a rich country like Norway). There’s far more to learn than from comparing to a poorer country and gloating about your relative success.

Norfolk Sceptic
Norfolk Sceptic
2 months ago
Reply to  Eleanor Barlow

Norwegians have TEN times the oil wealth that Brits have, and their stock exchange couldn’t cope with the flood of investment, while the LSE could. And you can only spend the money once!

It’s better to pay back loans than invest, and we had the Winter of Discontent to clear up and encourage new industries, and that was expensive.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Danny D

I don’t resent Elon’s wealth – he at least is doing something constructive with it. The problem is not the entrepreneurial success of a few like him, but the rent-seeking of millions of middle class householders who become wealthy for no good reason at all and then insist, like j watson below, that this wealth should be left alone.

hugh shull
hugh shull
2 months ago
Reply to  Danny D

The idea of going back to a 90% tax is pretty deranged.

laurence scaduto
laurence scaduto
2 months ago
Reply to  Danny D

Sorry but you’re missing the point. The same phenomena that have allowed the insane growth of the billionaires has led to the rest of us being hung out to dry; every tax break for them comes out of our pockets.
In fact very few people are advocating that we rip-off the rich, despite how satisfying that would be. In reality, each of us has our own set of hopes and dreams, many of which wouldn’t fit on a spreadsheet. Accusations of “envy” are just a distraction; some might even call it gas-lighting.
The phenomena that have led us to this predicament are mostly legislative or judicial; they can be reversed. In other words our “leaders” have knowingly let us down. And will continue to do so until we find some way to rid ourselves of this curse.

Tony Taylor
Tony Taylor
2 months ago

I wonder how Picketty would view Australia, which had a Labor government remove inheritance tax 50 years ago.

Billy Bob
Billy Bob
2 months ago
Reply to  Tony Taylor

A silly idea in my opinion. A few generations later you’re heading back towards the days of the landed gentry. The only thing masking it currently in Australia is the mining boom financed by the Chinese

Anders Wallin
Anders Wallin
2 months ago

I Read a lot about that book back then, as well as a shortened version. Being a average academical Joe with a better paid job than most job in my country, born in a striving family with no money (all roots in the 90% poor rural scandinavians year 1900) the idea of meritocracy is highly appealing to me. And as a first-generation academic moving in to an area where very few academics are first-gereration, I am not overly pleased to see few kids becoming high-performers, worthy of a high salary and thus – as I was taught – life standard. Rather, kids get encouraged to take some kind of neoliberal way, starting some own business, or to become something activist red greenish. There is no real interest in taking part in a fair race. One may talk about inequalities but one do not walk the walk oneself. And at the same time, my house value has risen far more than my salary.

The Piketty obviously struck a note in a guy like me, but I just find any analysis of this too confusing, mostly if anything could be done in the name of the 1990’s meritocracy I at least imagined to experience as a young Civil Engineer in a big company with fair salary raises. To give people the feeling that this is the principal game. Back then, after all, few had a problem with grades at school and fair salary raises being fair succes factors.

Some kind of world wealth tax seems pretty far fetched. And well, do high performing people working their way up the ladders in the western world do all that bad, still now?

This aint easy, at least for me.

Adam Bartlett
Adam Bartlett
2 months ago
Reply to  Anders Wallin

Well said. The complexity of the situation is maybe the deepest reason why it’s so hard to achieve meaninful change. Any political call to action short enough to be effective inevitably has to contain over-simplifications and may even falsehoods, which creates resitance on many levels. Any even when socialists are successful on national level, international forces come into play that in a few years often makes inequality even worse than before. Disagree on global wealth tax being that far fetched though. Even the rather neo-Liberal Tony Blair was laying the ground work for that over 20 years ago (successfully pushing for changes to international banking rules that make it easier to track beneficial ownership.) I think at least a 50% chance we’ll have a global wealth tax in the next 10 year, and it will help with inequality, at least a little.

Anders Wallin
Anders Wallin
2 months ago
Reply to  Adam Bartlett

Well, hope you’re right about the last one even if I doubt it. But again, even a couple of billionaires sees logic in Pikettys way of talking. I really think this comes down to something like morality. If capitalism can become global, maybe values can. Sure, a lot of people focus on the “small entities”, like the family or the social space you’re in. Pierre Bourdieu talks about Habitats, environments where people live, each with the set of rules to play. But still, things like national school systems do exist and things like PISA polls. And I’ve worked multinationally many years with people of many nationalities, religions, traditions and still, you can become a soul mate with anyone, working well together and share common values. A work well done is pretty much an international thing.
I don’t know how, but books like the one of Piketty gets read all over the world and might be one way to sort out what¨s fair and not.

Anders Wallin
Anders Wallin
2 months ago

Where did my post go? It was published, i edited some typos, got a warning for “spam” and now its gone. Shouldn’t one be able to correct typos?

To just see my post deleted is not what I expect, as a paying member to this service.

Walter Marvell
Walter Marvell
2 months ago

Still the discussion of ‘wealth’ has an outdated underlying Dickensian idea of a tiny caste of evil capitalists and the sorry sad 99% Rest. What utter tosh. NHS Consultants, uni bosses, top civil servants, GPs, council leaders are our super rich… and doctors even keep the jobs generation to generation! Their spoilt kids are ripping art and stopping traffic. Keir proposes to exempt only the now hyper privileged vast army of 100k plus Public sector ‘workers’ from the pension tax crackdown. We still keep ignoring the new huge new class of propetocrats in London and the SE who snaffled 1 million plus tax free capital gains simply via having bricks and mortar in the right area from the 1990s. This was a revolutionary moment. Talent and enterprise no longer was the key to wealth creation. Our economy and society have been warped by a monstrous racket fed by the demand mass uncontrolled immigration and deliberate non supply. We are now – already – a proto East German socialist society culturally hostile to business, enterprise and wealth creation in the suffocated tax bashed private sector. In 10 years we will lament the progressive elite’s war on capitalism and wealth creation.. but it is already too late.

David Morley
David Morley
2 months ago
Reply to  Walter Marvell

We are now – already – a proto East German socialist society culturally hostile to business, enterprise and wealth creation in the suffocated tax bashed private sector.

Crikey – fancy that as a result of continuous Tory government!

Walter Marvell
Walter Marvell
2 months ago
Reply to  David Morley

Shock revelation ,- they are NOT in any way Tories! Pro Big State pro redistributive only high tax pro eco nuttery pro magic money pro NHS cult pro wokery pro welfarism anti Thatcherism anti defence anti law & order anti sme enterprise. Does this sound in any way orthodox Conservatism to you?? These are the policies of a weedy political adjunct to the revolutionary EU/Blairite Progressive State which has ruled since the 90 and been ‘conserved’ by the likes of Cameron, May and Johnson, not a genuine Tory Party. Hence its imminent extinction at the hands of an electorate a majority of whom are barely less hostile to and deeply suspicious of the vacuous bona fide progressives of Starmer’s Labour. They just feel total revulsion toward Fake Consocialism no matter the threat posed by Starmerism.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Walter Marvell

The state grew under Thatcher – public spending grew by an average of just over 1% a year, as she splurged our North Sea oil on fruitless tax cuts to the rich.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Walter Marvell

‘NHS consultants, top civil servants, GPs and council leaders our own super rich in the top 1%’
That is mathematically incorrect. To be in the top 1% you need to be earning at least £160,000 per year. The top salary for NHS consultants does not go above £130,000, except in very rare circumstances. It’s true, some top civil servants are paid closer to half a million, but this is very rare, and even in these cases these people are still towards the bottom of the 1%.
Instead you’d do better to think of bankers, company CEOs and (the least deserving of them all) old landowners like the Grosvenor family (value: £9.5bn, land owned: 50% of Mayfair) when imagining the 1%.

j watson
j watson
2 months ago

Excellent. At last Unherd has an article that drags us back to a real debate about what’s gone wrong with many western economies, and hence societies.
In many regards the sense of unfairness is what drove Brexit and other Populist experiments, but these fail(ed) to properly comprehend what is going wrong. And in fact in some instances a calculated strategy of distraction funded by the v wealthy. Why do the Koch Brothers et al fund so much?
There was nothing determined by the EU that stopped the UK switching more tax burden to wealth and assets, (and certainly nothing since). In fact we’d have probably led a charge of others wanting to do similar. Instead we got distracted onto the wrong target – (not that the EU didn’t need some reform though). Tories of course part compromised as it’s the v wealthy who back them, and obviously in large part to protect their asset holding. But many Tories increasingly ‘get it’ too and know we can’t let this continue or what they value in society will all be at risk.
Whether it’s immigrants, allegations of the feckless poor, liberal media Blobs or Trans Woke-ist immature students, the V Rich remain delighted if we stay away from a real diagnosis of our problems and fight perpetual culture wars. What Marx may have said were he alive now is these are all but modern versions of the ‘opium of the people’ serving to divide and rule and keep the V rich asset holders out of the firing line.
At some point though enough of us wake up and see it for what it is. We’re not all in this together. Some are gradually stripping others of their life chances and opportunities, perhaps not always deliberately but that is the inevitable consequence unless we change the rules of the game.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  j watson

I agree with a lot of what you say, but the free movement of labour is a part of the reason why wealth is increasingly going to capital.

Although it’s only a part of the reason for r>g, it’s a very visible reason. And I’m afraid a lot of people on the left failed to acknowledge it as part of the issue (and still do), thinking that it was due to something else. If any side got distracted by Brexit, it was the remain side, especially after it had been voted for.

j watson
j watson
2 months ago
Reply to  Dennis Roberts

Of course high immigration wasn’t stopped by Brexit was it, and instead we just raised costs too. However I would agree we should have applied all the article clauses that were permissible on free movement when we were in the EU – jobs having to be advertised locally first, capital limits for those staying here, benefits if claimed at rate of the home country. We didn’t because Business owners didn’t want that and we would possibly agree that’s all part of v rich controlling things. More importantly I’d have got ID cards in too and much heavier fines for Businesses employing people without them – thus targeting illegal labour much more. All permissible in the EU.
The higher costs generated by Brexit haven’t affected the v rich have they. They’ve hit everyone else though. That 4% less of GDP is Billions. Got a mate too who part runs a freight haulage company – £1k extra per refrigeration lorry every time across the channel he estimates and that cost is getting passed onto us.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  j watson

No, Brexit hasn’t had much effect on migration it seems. Migration from the EU was certainly very convenient for business and for the party in power at the time (though IIRC New Labour did want ID cards).

In general though, I don’t remember much debate about trying to bring in the various controls you mention – no-one seemed to want them, including those who would become remainers (you appear to be an exception). If they had come in, and been effective, we’d likely not have had Brexit.

j watson
j watson
2 months ago
Reply to  Dennis Roberts

Yes I agree. Too many in truth only had a v superficial comprehension of the detail of Article 21, and of course for years the issue didn’t much arise anyway – free movement had existed from day we joined. Without doubt EU expansion put that under different strain.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  j watson

I love the way you talk about the ‘rich’ as if you’re not one of them. Just like James O’Brien. The problem in this country is not the ‘V Rich’ (sic), many of whom got that way by creating value, but the parasitic suburban graduate class who got rich by sitting in houses pretending to work for the government and watching the prices go up.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Hugh Bryant

So that $200m Jeff Bezos earns every day is all deserved? Or the record profits of gas companies in the midst of a cost of living crisis? Or the rail companies receiving money from the government during the pandemic despite not offering services? And all work for the government is pretend? The phenomenon of the pointless job is as endemic to the private sector as it is to the public sector. Just look at the $1trn management consultancy industry and the poor results it offers to private companies and the state.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Desmond Wolf

Sure, the rentier class does not just consist of public sector workers. It’s a built-in consequence of over-centralisation. The bigger and richer the state becomes, the more parasites it will attract. The solution is to make the state smaller. After all, state corporatism in the UK hasn’t exactly been a resounding success, has it?

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Hugh Bryant

I can agree that the enlargement of the state has attracted parasitic companies in the last 40 years (esp. Mckinsey in the case of the NHS), but I think this reflects more the people running the state (i.e. in our case people wedded to the interests of capital and suspicious of those of labour) than some law which says enlargement necessarily leads to parasitism.
A large state, as in the case of Britain’s after WWII can do a lot to make us more productive – think of the wave of postwar council houses or the establishment of the NHS. If you take an issue like the housing crisis (the single biggest cause of poverty in the UK), I cannot see how anything but a state-driven solution can fix it (taxing second homes, increasing the purchasing powers of LAs, building council homes etc).
Other third way suggestions like co-operatives are all very nice, but only account for 0.6% of stock. Lots of people on here think that just cutting immigration will also fix housing. But of course we have an aging population so without immigrants we can’t have a decent welfare state. If anything the question here needs to be do we have enough immigrants for house building required?

j watson
j watson
2 months ago
Reply to  Hugh Bryant

The ‘rich’ in this instance HB would be c£10m+. That’s a small, but crucially important cohort. The problem for you is it just doesn’t fit with your anti-liberal, graduate theory much. That chip on your shoulder is not only weighing you down it’s blinding you to the fact the liberal Blob meme is a clever distraction strategy by the v wealthy media owners.
Now it is true that many my age who managed to get on the property ladder 30 yrs ago have houses almost 10 times the value we paid. Some of us use that to help the kids out. Some may even find a way to have a holiday flat – although not myself and the missus – and whilst I think the second home should be heavily taxed it’s the not in the league of v rich who actually own all the mortgages and 90% of the country. Come on switch on.

McLovin
McLovin
2 months ago
Reply to  j watson

The problem is that people with > £10m can afford accountants and lawyers to avoid tax if they can. That’s why the HMRC go after people well below that level – basically low hanging fruit.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  j watson

Estimates of how much unearned and unmerited wealth you and your cohort are sitting on vary from 3 to 7 £trillion. That’s enough at least to pay off the debt and possibly also fix the schools, the hospitals and everything else that’s falling apart. Give it back.
btw: most of the mortgages are owned by the CCP. Along with most of the universities.

j watson
j watson
2 months ago

Excellent. At last Unherd fully deserves the subscription by publishing an article that properly raises and stimulates thought on what’s gone wrong with western capitalism and economies, and thus societies.
The v Rich quite happy for us to argue over distractions like Brexit, immigrants, the feckless poor, liberal Blobs, woke-ist student politics nonsense etc. V happy for Unherd to spend columns and columns on this stuff too. Much less happy we zero in on how rigged the game has become in their favour.
Nothing stops us shifting more tax burden to ‘wealth’ and assets. And not the elderly in their house of 30 years that’s now worth £1m, this is not what we mean by the v wealthy. So let’s be ready for that strategic attempt to distract too.
Many are waking up to this, some a bit late but better late than never. This includes some on the Right too. They see this trend drives even more inequality and that endangers much they hold precious in life and society too. Conservatives don’t want to burn the house down do they.
Good politics can change things, but it has to be aware there are strong forces aligned against and they hold the money.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  j watson

“Many are waking up to this, some a bit late but better late than never. This includes some on the Right too.”

Personally I’d say the ‘waking up’ was coming from the right more than the left. ‘Populists’ for example. There’s a lot more to the various populist movements (all of which are different from each other, some better than others) of course, but there’s a lot more to movements on the left as well. And both sides misrepresent the other.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Dennis Roberts

Interesting. Let’s hear your favourable examples of right-wing populists then and the material good they’ve done to ordinary people, that goes beyond mere rhetoric.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  j watson

And not the elderly in their house of 30 years that’s now worth £1m, this is not what we mean by the v wealthy. 

Hmm, you keep saying this. It’s just about the most weaselly excuse of all for the parasitism of the graduate class. The problem isn’t wealth per se, it’s unearned wealth. You’ll pass that trivial million on to your kids, who by then will already have a million or so of their own and then, in a generation or two, your descendants won’t have to work or do anything useful at all.

j watson
j watson
2 months ago
Reply to  Hugh Bryant

Our abode some way off a £1m at the moment but with asset prices continuing to rise it’s v poss before I die I become an asset millionaire. I am an adult graduate though I grant you – went back to school after 22 years in the RN.
You can’t help yourself ‘playing the man not the ball’ though HB. Always been your fatal flaw and weakens your arguments. It also means you keep falling for the v Rich’s distraction ‘divide and rule’ strategy. Your chippiness blinds you.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  j watson

Your chippiness blinds you.
Well, my ‘abode’ is worth a great deal more than a £million. The difference between us is that I don’t try to extrapolate my self-interest into a general principle.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Hugh Bryant

How can you persist in making this false equivalence between the danger posed by billionaires who spend their money on buying up the press (like the owner of Unherd now going for the telegraph) and public utilities and people who have saved up a million through homeownership which will most likely be spent on their children, who will in turn spend their money in the wider economy. Clearly one group is more of a threat than the other!
And quite how you calculate that in a generation or two JW’s descendants will all not need to work (factoring in rising house prices, stagnant wages, higher living costs and the fact inheritence is generally divided among two or more children) isn’t clear to me.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Desmond Wolf

You misunderstand me. My argument isn’t just with the parasitism of the graduate class, but with rent-seeking behaviour generally and the state corporatist ideology that you and mr watson endorse which encourages it.

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Hugh Bryant

Fair. And I don’t support a corporatist ideology. I don’t think it’s the job of government to assist corporations in extracting maximum capital from labour. I’m not a Thatcherite or Blairite (alhough I’ll admit Blair’s government did show some concern for the wider country in its education and health spending and in creating the minimum wage).

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  j watson

Yes I thought the same and wonder why. I think it may be because Unherd’s £630m hedgefund manager owner Paul Marshall is just about aware that capitalism isn’t working out for everyone. If you watch his keynote speech for the alliance for responsible citizenship, he says free markets have proven to be the best way of raising the global poor out of poverty (which I suppose justifies all the US-European coups against protectionist left-wing governments across the global south in the 1950s and 60s), but that the fruits of capitalism, he croaks in his flemmy voice, ‘have not been recognized by many of the younger generation who do not see the benefits trickle down to them in the way they did to us Boomers.’ I wonder what makes the wolf feel bad for his sheep. Perhaps he’s had a chat with his son Winston – not that, having gone to St Paul’s, Winston necessarily knows any poor people..
But as you say, we have to be grateful for the rare ocassions Unherd deigns to invite us to consider the real reasons behind our decline, but only after everyone has spent most of their anger on 12 columns about the real villains: refugees, muslims, trans people and climate change activists.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Desmond Wolf

Do you know any ‘poor people’?

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Hugh Bryant

Yes. Next question.
But actually it was childish of me to bring in W Marshall’s background since, though it may have some predictive power regarding his political views, the best guide to his views and his effect on politics is of course his actual views, which (if you see look at the interviews he gives) fairly evidently show no interest in the ways the rentier class (which I would argue his father is a part of) are accountable for the poverty and lack of productivity that me and you both agree is a big problem in this country.
Now of course, some of what he speaks about might be legitimate – I’m sure there are issues of immigrant integration in this country, I’m sure there is a lack of forgiveness and shrillness among some on the left who take pride in outing people with the ‘wrong’ views, but to me these problems matter less than say the fact that more than 4 million children are living in poverty or that the average pension now pays better than the average wage.
Not only that, but it’s a classic trick of the right being used to undermine democracies all over the place, from Hungary to India – this attempt to convince us that the essential dividing line in society is culture/race rather than class, and then using it as an excuse to crack down on press freedom and freedom to protest.

AC Harper
AC Harper
2 months ago

Long-term tendencies roll on… if the increase in wealth and inequality is unstable it will correct itself in time. If the increase in wealth and inequality is stable then it will take artificial interference to modify. Such interference is either ineffective or generates unforeseen consequences.
I guess there are some people with no patience and little career benefit in espousing it.

Billy Bob
Billy Bob
2 months ago
Reply to  AC Harper

Most violent revolutions are preceded by a period of vast inequality so perhaps that’s how it corrects itself

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Billy Bob

Indeed. Or war.

Personally, I think doing something about it, or at least stopping central banks facilitating it, rather than allowing it to ‘correct itself in time’ by violence is preferable.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Billy Bob

Or we could stop taxing productive activity and pumping the receipts into the housing market?

David Morley
David Morley
2 months ago
Reply to  Billy Bob

It’s not to be wished for, but it does seem to be the case that the rich and powerful don’t really seem to get it until they see the blade of the guillotine.

As Mark Blyth puts it (both literally and metaphorically), the Hamptons is not a defensible position.

Walter Marvell
Walter Marvell
2 months ago

The author asks – why has there been no political reaction to the asset bubble? God how naive. Our London political elite are the primary beneficiaries of the rigged property boom!!!! Tony led the way snaffling 30 odd properties and every top civil servant saw their homes soar in value to the 3-4 mill of Ed and Keir. Hmmm. I wonder why our Progressive State stayed wedded to mass migration and zero house building for 20 years??? I wonder why these trillions in capital gains have gone untaxed?? What a dumb question. Wake up to the new reality of the propetocracy and who the New Rich are (90k & gold plated pensions for MPs this week..nice!!)

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Walter Marvell

Absolutely. New Labour’s most consequential act was to exclude housing costs from the official methodology for calculating inflation – thereby making it quite unnecessary for any government to consider them when formulating policy.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Hugh Bryant

Thats fascinating. I so wish this scam was tackled properly by Unherd.

Arthur King
Arthur King
2 months ago
Reply to  Walter Marvell

It happen in Canada as well. Our nation is in a worse situation than the UK.

Hugh Bryant
Hugh Bryant
2 months ago
Reply to  Arthur King

Yes, whenever I despair of Sunak and Starmer I remind myself that things could be worse: we could have Trudeau.

M. Jamieson
M. Jamieson
2 months ago
Reply to  Hugh Bryant

Not just JT, his predecessors carry lots of blame here.He was only elected in 2015.

Andrew F
Andrew F
2 months ago
Reply to  Arthur King

If so, it is clearly not the case that lack of land for house building is the main problem?
It must be planning laws or immigration or mixture of both?

Mike Bell
Mike Bell
2 months ago
Reply to  Walter Marvell

I suggest you don’t mix up ‘propetocracy’ with the MP’s salary.
The first is very important.
If you don’t pay MPs properly, good people will not stand. The current state of politics is partly down to the deteriorating quality of MPs which is related to their difficulty voting themselves a pay rise. This was the driver behind the ‘expenses’ crisis: they all supplemented an inadequate salary with addition sources of income. It was an open secret. It was ‘just the way it’s done’.

Walter Marvell
Walter Marvell
2 months ago
Reply to  Mike Bell

I agree in principle. But then one must ask a more fundamental question; is the selection process for MPs meritocratic? The answer is a resounding No. Parliament’s decline goes deeper than pay.

Norfolk Sceptic
Norfolk Sceptic
2 months ago
Reply to  Walter Marvell

The Heir to Blair’s A Lists was a critical component of us getting to where we are now.

Carl Valentine
Carl Valentine
2 months ago
Reply to  Mike Bell

50% of Tory ministers under May and Johnson were given jobs in the departments that they had oversight for, this is corruption no less, they were supposed to be looking after tax payers interests.

Carl Valentine
Carl Valentine
2 months ago
Reply to  Walter Marvell

Strange that you only name Labour politicians? ‘Ed and Keir’ are paupers compared to the obscene wealth of Osbourne, Cameron and Sunak to name but a few ‘Tories’

Walter Marvell
Walter Marvell
2 months ago
Reply to  Carl Valentine

Not strange Carl. I do not deny the Tory wealth. Huge numbers of Tory and Labour MPs are property landlords. The difference is that Keir and Ed and Labour are openly hostile to wealth creators and ‘privilege’ whilst enjoying tons of both themselves.

David Morley
David Morley
2 months ago
Reply to  Walter Marvell

Is there a source for the claim that huge numbers on both sides of the fence are property landlords?

Dennis Roberts
Dennis Roberts
2 months ago

The tendency for R>G to operate over the recent several decades has been facilitated by the Greenspan Put and subsequent central bank policies. Crashes destroy capital, ie for a brief period R < < G, giving opportunity for others. Whilst painful, they are essential as otherwise ultimately almost everything will be owned by a small number of people. We're not there yet but that's the direction of travel.

Duane M
Duane M
2 months ago
Reply to  Dennis Roberts

Capital is also destroyed by war, and as Piketty pointed out, that has a leveling effect on wealth distribution. And the world is drifting toward war, again.

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Duane M

Yeah, I’ve said that on another post here too. The occasional recession seems preferable to war though.

Adam Bartlett
Adam Bartlett
2 months ago

Thanks for this – beautifully written & wise. I’d take issue with parts that could be taken to suggest the struggle here is the 99% v the 1%, remote & unassailable in their Olympian Heights. There’s quite a few in the 1%, even the top 0.0001% , who’d like inequality addressed. And many, maybe over a quarter, of the 99% who will like things as they are – and who tend to be more articulate, motivated & outspoken than those who would like change.
 
I’ve seen it all first hand as was politically active in this arena for over a decade. In UK, 2014 – 2015 were peak years for champagne socialism. Thanks to the Eds, the Labour party would have all sorts of events attended by the 0.0001% Davos types. I got to talk one to one on these issues with folk like Larry Summers, wall street titan Glenn Hutchins & many others. Back in 2014 & 2015 not just Piketty, but Pickett’s The Sprit Level was on the front of their minds – a more theoretical work still well grounded in empirical evidence, which showed to devastating effect why high levels of inequality are so harmful. I’d eat my hat if those 0.1%s didn’t sincerely want to do something about it – they put huge amounts of work into the attempt. For example, ‘The Commission for Inclusive prosperity’, a global alliance of progressive elites which has mostly vanished now, but was huge in 2014 / 2015 (Albeit mostly behind the scenes, helping to confirm it was a genuine attempt, not something done for show.) Conversely, when out canvassing (knocking door to door) in the weeks leading up to an election, I’d quite often get into conversation with regular people who were passionately anti socialist. Or others who while respecting the desire to improve the lot of the struggling, were most concerned about protecting their gains from redistribution. (I.e., the sort of folk who might vote for Seir Keir’s labour, but not for Corbyn’s). These people were often living in quite modest or even run down looking properties. For all the articles we have on unherd analysing our current malaise, it’s important to understand that for folk with certain outlooks, life in 2024 in a technological paradise. Even for some on household incomes below 100k. And speaking of which, it’s not entirely true that skilled labour is no longer well rewarded. For example, while most young lawyers face dire financial struggle if the lack supportive parents, here in London we have fresh graduates are starting jobs in corporate law at 170K in their first year. All this said, not trying add to an already pessimistic analysis. I think it will change – but what it likely needs is a combination of a crisis & a charismatic leader in the right place at the right time. Work on crafting strategy & shovel ready practical measures is not valueless. But my man John McDonnell had plenty of those – but they did no good. Too many activist members of the 99% happy with the way things are.

UnHerd Reader
UnHerd Reader
2 months ago
Reply to  Adam Bartlett

John Mc is great, butr he seriously lost it offering 60 billlion to the Waspi Women(who clearly do deserve a decent package( my late sister passed the year she should have started state pension, so lost five years if it had come in earlier, ) in the last few days of the GE, more planning was needed, its a huge sum.

Christopher Barclay
Christopher Barclay
2 months ago

‘The political question, looking back on the decade that followed Capital in the Twenty-First Century, is why this groundswell of opposition has still not translated into a genuinely transformative political program.’ The explanation is simple. Transformation in the UK would involve generating new businesses and industries that could reverse the UK’s chronic current account deficit. It is far easier to allow millions not to work, civil servants to watch daytime TV at home, raise tax rates and to sell off more parts of the UK to foreigners.
Then there are the two dominant political parties. The Conservatives represent the rentiers. Labour represent the people who don’t work and the people to get paid to do little of any worth in the public sector.

Eleanor Barlow
Eleanor Barlow
2 months ago

Doctors, nurses, police, fire, ambulance and Armed Forces are all part of the public sector. Do you regard them as doing little of any worth?
We’d soon all know about it if their jobs were abolished.

Norfolk Sceptic
Norfolk Sceptic
2 months ago
Reply to  Eleanor Barlow

Individually, they might be productive or, more accurately, lessen waste and destruction by, for example, ensuring productive people have a full length career, or even encouraging the belief that they can have a comfortable retirement, so it’s worthwhile to be productive in the meantime.

However, the private sector is renound for continuous improvement, in productivity, better working conditions, better service, yet the state of the NHS has deteriorated and yet doctors are promised pension cap removal. And the way they were led, like sheep, into destructive behaviour, with the recent gender and medical interventions show that they should go out of business. What were the Public Health specialists doing? How many DEI and Climate Change consultants do the NHS have? Why do NHS still push Low Fat Diets? Why can’t expensive equipment, like MRI equipment, be available 16 hours a day: it would solve the parking problem for those involved?

And it is the government that defines the rules and, for the last 25+ years we have had Socialism forced upon us, and money thrown at those that work in socialist,
rigid, bureaucratic organisations that are answerable to no one. The NET Zero policies have allowed crackpot government to effectively take over private companies, dictate the market, and throw other people’s money at the complient wealthy. It destroying industry.

And the country cannot afford even higher taxes, that’s the problem. And the government, or is it the BoE, should stop printing money.

Carl Valentine
Carl Valentine
2 months ago

A lot of people on Unherd talk a load of b*llocks, has anyone else noticed?

Christopher Barclay
Christopher Barclay
2 months ago

Like most coffee table books, the percentage of purchasers of Capital in the Twenty-First Century who also read the book is in the single digits.

Pete Marsh
Pete Marsh
2 months ago

There are repeated references to soaring house prices above. Yet none about the UK population soaring by over 20% in the last 30 years (which has accelerated, and is logistically impossible to keep up with).
Doesn’t simple supply and demand have an effect these days?

Dennis Roberts
Dennis Roberts
2 months ago
Reply to  Pete Marsh

Supply and demand of physical property of course has an effect. But so does the supply and demand of credit and in the west we’ve had v low interest rates for a long time, and loose credit before that. Soaring house prices is one way that capital is getting increasing amounts of the economy.

Neil Ross
Neil Ross
2 months ago

“The steadying influence of Barack Obama in the White House and the Coalition government in Whitehall seems a world away from our current post-Brexit, post-Covid age of geopolitical upheaval and spiralling living costs.”
So steadying that only 2 years latter the US and UK populations voted for Trump and Brexit!! Just ignore that for example my salary had been frozen for 6 years, final salary scheme closed, trade deficit with rest of EU was growing each year, immigration from EU was increasing rapidly again, Turkey and EU were reenergising accession talks, Eurozone crisis fall out and East European expansion resulted in EU ignoring UK issues, Merkel had taken control of EU etc, etc. and by the way Russia took control of Crimea!
Stop rewriting history, there was nothing steady about US, EU and UK in 2014.

UnHerd Reader
UnHerd Reader
2 months ago

Not sure about this. The author seems to think that Obama was a steadying force , so that’s thrown up doubts for me on the rest of his thinking.
We have been in neofeudalism for some time now.
The 1% have their thralls, in the form of accepted victim groups and the rest are left to grub around for the scraps.
Anyone who didn’t think democracy and freedom to live as you see fit within the law died years ago, hasn’t been paying attention.
The Industrial Revolution helped to end feudalism , although it also prevented artisans from working at home. Nevertheless, the benefits to the average person outweighed the deficits.
I suppose this is why the Industrial Revolution is now being demonised.
In order to escape neofeudalism, we need anther revolution like the industrial one.
But I’ve no idea what that is at the moment.

Hunter Hustus
Hunter Hustus
2 months ago

Piketty’s book and assertions were, and continue to be, ridiculous. He was credibly debunked when the book hit the stores. Yes I read it when it came out. And I am literate in political economy.

Ian_S
Ian_S
2 months ago
Reply to  Hunter Hustus

Please say more. What were the main problems with his argument?

Desmond Wolf
Desmond Wolf
2 months ago
Reply to  Ian_S

Yes I’m listening as well.

Rick Frazier
Rick Frazier
2 months ago
Reply to  Desmond Wolf
Rick Frazier
Rick Frazier
2 months ago
Reply to  Ian_S
David Morley
David Morley
2 months ago

The political question, looking back on the decade that followed Capital in the Twenty-First Century, is why this groundswell of opposition has still not translated into a genuinely transformative political program that puts these tendencies into reverse.

Is it not because too many little fish are also invested in the interests of the big fish, economically, ideologically and culturally. The home owners, the buy to rent people, the middle class people pretending to be something they are not by buying “designer” goods, the emulation of the rich (the old money aesthetic is the latest middle class trend).

in other words, a group which bears the same relationship to the really asset rich as the petit bourgeoisie in Marx bore to the bourgeoisie proper.

Allison Barrows
Allison Barrows
2 months ago

“The steadying influence of Barack Obama”, eh? The guy who reignited racialism? Mr. Fundamentally Transform America? Good grief. Just as Jimmy Carter gave us Ronald Reagan, Barack Obama gave us Donald Trump. How do people like this author manage to get through a day without walking into walls right in front of them?

Duane M
Duane M
2 months ago

Piketty’s revolution did not fail. It never began. Because, he did not set out to start a revolution, but rather to reframe the economic perspective. In which he has been highly successful.
Piketty did not lay out a plan of action or try to start a popular organization for changing the system. He laid out a clear economic analysis and made a few thoughtful suggestions, e.g., a progressive tax on inherited wealth.
To write as if Piketty has failed at revolutionizing global capitalism is to pretend that he ever sought to do so. Which is plainly false.

Alex Lekas
Alex Lekas
2 months ago

The steadying influence of Barack Obama in the White House
The influence that took 50 years of progress in race relations and pi$$ed all over it, treating BLM as something legitimate while engaging in the serial droning of goatherders and wedding parties. Its steadying hand remains visible under the current figurehead. How does the author expect to be taken seriously while making claims like that?

UnHerd Reader
UnHerd Reader
2 months ago

The UK Left has abandoned domestic issues for global ones, and has little interest in economics unless tghrough the prism of IdPol.
“Desperate neglect’: teachers washing clothes and finding beds as poverty grips England’s schoolsSchools risk being overwhelmed by hungry, exhausted children from freezing homes, headteachers and campaigners warn
‘If a child is hungry, it doesn’t matter if you’re a bloody good teacher’
Example , how can they tolerate this, where are the huge London mass marches? From Guardian

UnHerd Reader
UnHerd Reader
2 months ago

“Britain in particular experienced its longest period of wage stagnation since the industrial revolution, while asset prices (including housing) soared. Quantitative easing poured boundless cheap money into equities, facilitating the sharp ascent of BlackRock and other giant asset managers. Fiscal tightening and unprecedented monetary loosening combined to offer as devastating a demonstration of Piketty’s thesis as he could possibly have imagined.”
Socialism for the rich, great article btw.

laurence scaduto
laurence scaduto
2 months ago

The phrase “Drunk as a lord” has been bouncing around in my mind since about 2010. That there was a cohort of drunken, worthless wastrels; living off inherited wealth, while the rest of the populace worked for its living; was shameful. WWI and the Depression put an end to all that. With an hard shove from Socialism.

Andrew Holmes
Andrew Holmes
2 months ago

I love the citation of 90% tax rate as a solution, when, in the United States at least, virtually no one paid at that rate because of multitudinous exceptions.
What’s always missing from these proposals is a definition of what inequality is intolerable. Again, in the US, the most vocal advocates for the poor and railers against inequality, Elisabeth Warren and Bernie Sanders, are both multi-millionaires. Apparently, the gap between multi-million and poverty level isn’t the inequality they have in mind.
Nor does the good done by many people of great wealth ever be acknowledged. No government thought to invest in research into toilets, sanitation workable in rural Africa before Bill Gates, not to mention his vast investment in maleria research. Bezos and Musk have done like in addition to creating new enterprises that, proven by their successes, are useful to millions.
Somehow, that which is done by government is benign, despite endless proven cases of self-serving games played by politicians and bureaucrats. I make no claim denying the worth of government actions and policies. But I believe that non-governmental centers of wealth and power are essential to a well-functioning economy.

Deb Grant
Deb Grant
2 months ago

I haven’t got time to pick all the holes in this sloppy article, devoid of such facts and evidence as the author criticised in Picketty’s book – there are simply too many. So let me start with just a few:

1. Capitalism is purely barter – the only real way to add value to human endeavour. We should stop fretting about it and each do what we can to make it work better. Money printing doesn’t work, as evidenced right now, after GFC and Covid ‘quantitative easing.’ inflation follows.

2. The Global Financial Crisis was a handbrake – the fallout resulted in a loss of faith in the one sector that everyone relies on more than government’s – banks. We haven’t recovered from that breach of trust and some countries’ economies are still fragile.

3. Socialism is levelling down. We need people to succeed, and we need the highest number of wealthy people we can get to pay for the welfare of those who, for one reason or another, struggle – and I don’t mean young westerners starting out who will improve their position throughout life.

4. The world is wealthier now than at any moment in history – but the privileged young don’t want to work as hard as we did. They’ll inherit the gains from property value increases quite soon so will be asset rich. Will they be against ownership then?

Billy Bob
Billy Bob
2 months ago
Reply to  Deb Grant

The young on average are working longer hours than their predecessors and being more heavily taxed to pay the end of life costs of a generation much richer than themselves

Ken Bowman
Ken Bowman
2 months ago
Reply to  Billy Bob

I am in the “end of life Cohort” and have sympathy for the general tenor of your comment but does it stand examination? Do the young work longer hours? Any evidence? It does not accord with what I observe. The five and a half day week was still common when I was young. The evening “rush Hour” used to be 5 to 6 it now appears to be 4 to 5.
Are the young paying for the elderly? 850 thousand are not working so not them. Large numbers will be in low paid jobs so not them. As for most government expenditure most of it will be financed by the high earners not the young.There time will come.
Almost as an aside, I who have made provision for my end of life care will if I end in a care home pay high fees in order to subsidise those who have made no provision. I would then almost certainly be making a greater contribution than the young to general “end of life” costs.

Deb Grant
Deb Grant
2 months ago
Reply to  Billy Bob

No, the young are not working longer hours. There aren’t any stats for the unpaid hours many salaried emoyrees with responsibilities and small business owners work,which I can tell you is huge. The kids aren’t interested, they want work life balance, which is code for doing less.

Klive Roland
Klive Roland
2 months ago
Reply to  Deb Grant

As asset prices continue to soar, 2 or 3 siblings in their 50s or 60s splitting a home inherited from their parents will not see much of a difference to their lives if they are not already on the property ladder. The situation of their kids will be even worse.
The relation between hard work, economic production and a comfortable life is evaporating before our eyes while the rich continue to buy up assets which they then charge the rest of us more and more to use as those same assets become more and more unobtainable through their ever-rising value.

Deb Grant
Deb Grant
2 months ago
Reply to  Klive Roland

Come on, most of us worked our socks off for it. Some of us continue with voluntary work and/or childcare. The mortgages were huge to us. It took us a working lifetime to get there.

Boomers didn’t have the level of welfare or maternity support available now.

If there are no investors, there are no businesses. No investor shareholders, no pension pland. Most shareholders are funds holding small investments invested in money for retirement. Without that, what?

Klive Roland
Klive Roland
2 months ago
Reply to  Deb Grant

The point I made is not a moral judgement of you or anyone else. It is an observable fact. Look at asset price trends over the last half century and look at median wage as a percentage of house prices over the same period.
Of course we need investment, the problem is inequality and the increasingly dim prospects for all but the wealthiest if it becomes impossible to live decently through honest work.

Deb Grant
Deb Grant
2 months ago
Reply to  Klive Roland

That’s still more than I had.

John Riordan
John Riordan
2 months ago

This argument is full of holes (regarding 90% tax rates on anything as a good idea is so stupid that it calls into question the sanity of the author), but it’s the present-day context in which Piketty’s theories fail that is the real problem with continuing to regard his ideas as sound.

The point is that although we do have a modern problem with concentrations of wealth driving an ever-greater disparity in the wealth divide, the thing that is driving this process is not the power of capital in private hands in free markets, but government policy itself. It was the defective response to the 2008 banking crisis that set this particular wheel in motion, and it is absurd to conclude that governments should respond to the effects of their own defective monetary policies by introducing defective fiscal policy in the form of punitive tax-rates.

It is even more absurd to think that if this was done and that western governments found themselves in receipt of windfalls of tax revenue, that this would actually be spent properly: everything about the western economic consensus since the banking crisis shows that the more money the liberal establishment gets its hands on, the more stupidly and destructively it is spent.

Walter Schwager
Walter Schwager
2 months ago

Nice analysis, although I now feel guilty as a rentier. Remember Buffett’s statement that he was paying less tax than his secretary? The only property asset class that has collapsed is commercial real estate: who needs offices now, and people buy online, no malls needed

Tom K
Tom K
2 months ago

‘The steadying influence of Barack Obama in the White House and the Coalition government in Whitehall’
The arrogant, stuffed shirt, technocratic complaisance of this period is precisely what led to our current problems, whether that’s through getting economies hooked on money printing, or geopolitical complaisance in facilitating the rise of the Chinese Communist Party, bankrolled through international capital supported by Western government idiocy.
We are all paying the price now.

Daniel P
Daniel P
2 months ago