Piketty’s Own Fatal Conceit

Equality of opportunity or equality of outcomes? While those two concepts may sound similar, they are diametrically opposed in motivation and impact. Equality of opportunity is a foundation stone of political and economic liberty that rests upon the impartial application of law.By contrast, equality of outcomes is a stepping stone to tyranny that revolves around the use of coercive power to eradicate disparities deemed unacceptable by political elites.One of the foremost advocates for equality of outcomes is French economist Thomas Piketty, who was propelled into academic stardom by his 2013 book “Capital in the 21st Century.”Never mind that this 700-page volume became more of a progressive status symbol than the object of serious study, to the point where it was described by the Wall Street Journal as that year’s “most unread” bestseller.Mr. Piketty has now written “A Brief History of Inequality,” a new version of his “soak the rich” thesis that’s been shortened and simplified for the plebs. Earlier this month, he appeared on a New York Times “Ezra Klein Show” podcast to plug his new book.The prime economic villain in Mr. Piketty’s worldview is wealth inequality, which he describes as the best indicator of opportunity and power. The absence of wealth reduces choice, forcing people “to accept any working condition at any wage.”Yet, at the same time, he acknowledges that free-market economic policies have generated an “enormous rise in income per capita” that gave birth to an affluent middle class in the West. The people in the bottom half of the income spectrum “have a much better life than one century ago,” he concedes.This 10-fold increase in broad-based prosperity isn’t enough to satisfy Mr. Piketty’s passion for leveling. What really matters, so he argues, is that vast amounts of wealth remain in the hands of a small socio-economic elite.In Mr. Piketty’s view, this inequality of outcomes is so hardwired into our existing economic system that conventional policies of welfare state social democracy are mere analgesics rather than genuine cures. By way of alternative, he advocates “participatory socialism,” a suite of radical redistributionist policies guaranteed to please Senators Warren and Sanders.The core of participatory socialism revolves around a grant of $150,000 to each person on his 25th birthday to be funded by a new tax on inheritance and wealth. In other words, Mr. Piketty has set his sights, not only on what you earn, but on what you own and bequeath to your children as well.Like many leftists, he rejects the argument that his new tax regime would strangle economic growth, pointing to America’s burgeoning post-World War II prosperity despite a top marginal rate of 91 percent. Yet, Mr. Piketty is oblivious to the reality that those three golden decades following 1945 were a historical anomaly rather than a model that can be emulated.With its industrial base untouched by the world’s most destructive conflict, America could get away with economic inefficiency while the nations of Europe and Asia were digging their way out of the rubble.Mr. Piketty is quick with reassurances that complete equality is not the objective of his participatory socialist system. An income gap of “one to 10 or even one to 5 is probably sufficient to get the right incentives,” he declares.Thank you, comrade, but history teaches that such theoretical guarantees guarantee absolutely nothing. When President Taft first proposed what would become the 16th amendment authorizing the federal income tax, he suggested that a corporate rate of two percent would suffice.The federal corporate tax rate is now 21 percent, reflecting the verity that elected officials love to purchase popularity with other peoples’ money — money seized through the coercive power of government.From the ivory tower of the Paris School of Economics, it’s easy for Mr. Piketty to maintain a naïveté about the consequences of his proposals. He is free to hypothesize about a perfect balance between taxes and personal wealth. Meanwhile, here in the real world, things are messier, blurrier, and far more subject to human error.At the end of the podcast, Mr. Piketty mentions three books that have influenced his worldview. He fails to list Friedrich Hayek, who, in “Fatal Conceit: The Errors of Socialism,” wrote: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Piketty’s Own Fatal Conceit

More from the New York Sun

Army Veteran Cait Conley Wins Democratic Primary To Take on Vulnerable Congressman Mike Lawler

Senate Republicans Brace for What Could Be Tense Meeting With Trump

California Deputies Use Drone To Disarm Suspect in ‘Nationwide First’

More from the New York Sun

Army Veteran Cait Conley Wins Democratic Primary To Take on Vulnerable Congressman Mike Lawler

Senate Republicans Brace for What Could Be Tense Meeting With Trump

California Deputies Use Drone To Disarm Suspect in ‘Nationwide First’

Mamdani Emerges as Kingmaker, Propelling Democratic Socialists to Congressional Primary Victories

Political Revolution Could Be Brewing as Americans — and Britons — Feel Unrepresented by Their Elected Legislators

Democrats, in Thrall to Teachers Unions, Escalate Opposition to School Choice

Low-Tech Longevity Investments Could Unlock $5.8 Trillion in Healthcare Savings, Report Finds

The Hemingway Shelf Rises