How a French economist is reinvigorating the inequality debate
By Bernard Healy-Garcia
A little over a year ago, my Economics professor Dr. Hilary Hoynes, showed us a video on wealth inequality. The video breaks down the economic data very simply in order for the average lay- person to understand. Thomas Piketty did exactly what this video did, but for the entire world. His new book, “Capital in the Twenty-First Century” has already drawn praise and criticism from the academic world. The part that has attracted the most criticism is Piketty’s predictions for the future of capitalism in the United States and how technological advances will only go so far to contribute to more growth.
The Occupy movement, and Marx’s philosophy have failed to achieve their goal: riling up the proletariat to stand up to their oppressors and end the inequality. Most people will read the statistics of wealth inequality and then go back to drinking their Budweiser and watching Dancing with the Stars. The reality is that yes, the rich are getting richer, and the poor are getting poorer. Income and wealth inequality is necessary for a capitalistic society. For one to prosper, one must suffer. This was acceptable when the people suffering were Chinese factory workers, while the ones who prospered were Americans shopping the latest fashion trend. Times have changed, and the revolution isn’t happening.
The American people aren’t starving. They aren’t willing to have the heads of the elite on stakes yet. Is it because the average person believes they have a shot at being part of the oligarchy? Is it because we are all potential Horatio Alger protagonists? Has what was once thought to be a safe way to attain a high salary — college education — become suddenly unstable? Have the scales been tipped more against us? The answer is yes to all of these questions. As Piketty stated, the elites have the one necessary tool to gain more wealth — capital. The average Joe doesn’t have the expendable capital to invest in the market, and the educated population can’t invest because of the massive student debt they are burdened with. So the elite are able to compound their wealth to establish intergenerational wealth. When close to a third of the American middle class is living “pay check to pay check” something is wrong. The post-World War II prosperity that Americans took for granted is now over.
The American public needs to wake up and galvanize themselves and fight back against this inequality. People shouldn’t have a problem with certain individuals making more money; that is completely fine. But is it fair when the laws that were made to control the rampant capitalism that caused the Great Recession, disappear like the lifesavings of many in 2008? No. It’s simply not fair when the starting line is different for the wealthy and everyone else.
Piketty explicitly expresses that unless something changes, the inequality will continue. As with Karl Marx before, the information is out there. Will the people demand more equality, more regulation, and better financial oversight?
They should, because unless the American public wants to live in a banana republic, they should call their representatives, stop working for corporations and see how much the elites really need the proletariat. Piketty is continuing the gospel that Marx started: something isn’t right with capitalism. What Marx missed in “Das Kapital”, Piketty enforces with hard data. But what Piketty suggests is that capitalism must be controlled, without this control, is when the inequality grows.
But once the public realizes that they outnumber and can exercise their power by way of democracy, only then will the wealthy know that they cannot eat their money.