Thomas Piketty, the alleged economist from France, was recently in India, and was interviewed by Indian Express.
He has done some research on income inequality in over 20 countries, and has come up with some fancy numbers of 1 percent and 50 percent and some such. According to him, there is glaring income inequality in the world, and in India, and the gap is only increasing, with ever more accumulation of wealth with the ever smaller percentage of people in the top income and wealth bracket. His prescription: increase taxes, and launch more government programmes to distribute the money so collected. That is, have more socialism than at present, collectivise incomes, and then redistribute the money so collected, through the bureaucracy.
His whole research is so mundane, statement of problem so devious, and solution so laughable; that it is evident that he is being hosted in India as a celebrity only because he is saying what the Left wants to hear.
First on the income inequality: Yes, there is income inequality in all societies, because each profession pays different amounts, and not all people in a society can be in the same profession, howsoever ideal or desirable this may seem. Even if all professions except agriculture are abolished, and all human beings are given agricultural land in plots of equal size, and the land available to each individual is kept equal generation after generation, in spite of generational changes in family sizes; there would still be income inequality. Because, not all plots would have the same yield, not all plots would have same rainfall, not all people would be equally industrious, not all plot could be saved from unseasonal rains and other natural factors.
And if same wage is forced on all professions, why would anybody slog for ten years to become a brain surgeon or rocket scientist? After all, the job of a cricket player in the league of the village in Jharkhand is really cool if it pays the same wages as that of a surgeon in Mumbai.
And therefore, income inequality is an inescapable fact of human existence on this planet, and just because it is there and we do not like it, that does not make it a problem that has a solution, or even worth attempting a solution.
As a solution, Piketty is advocating pooling of incomes and then redistributing from the pool, that is, in essence, collectivisation of incomes. But what is new in this? Hasn’t collectivisation been tried in USSR, Eastern Europe, Latin America, Cuba, North Korea; and in the Welfare States of Western Europe? What did we get as a result? In the full blown socialist countries collectivisation failed miserably even after the murder of 120 million human beings by the Leftists. And in the so called democracies of Europe, the collectivisation lite-Welfare State- has bankrupted those countries and has destroyed families and societies as a result.
In the ‘tax & spend countries’ of the Europe (the Welfare States) ( a model he is suggesting for India), as the people figured out that the work is for the suckers, and a fairly grand life is possible on Welfare handouts, more and more people stopped working, and signed up for unemployment benefits. They also got free housing, free medical care, and free old age care. Since State was there to take care of them they figured that having families and raising kids was also not worth the trouble, and so in Europe we now has an ageing population entitled to everything free, but not enough young people entering the work force to fund those entitlements. In desperation, the European elite tried to import immigrants in bulk, but the immigrants themselves signed up for Welfare payments instead of working to fund them, and in addition, are beating up the oldies and ravaging women. The Europe is gone, gone forever, destroyed by the Welfare State, the socialism lite, put in place surreptitiously by the Leftists, using democratic process, in which, to win power, politicians outbid each other in promising freebies to the voters. Democracy has done for the Leftists what revolution could not do. By 2050, there would be no Europe as we know it.
The income inequality in the industrialised countries of the west is the doing of the Leftists. They infiltrated trade unions, and using militant agitation, forced ever upward revisions of minimum wages, rendering manufacturing and low end services-hotel waiters, plumbers, electricians, and other artisans- uneconomical. They then forced handsome unemployment benefits for the people whose jobs they destroyed. They essentially destroyed middle class. Western societies now have only high end and high paying jobs like IT and financial services, underlain by a vast class on Welfare, with no middle class. And using their control on media, academia, and popular culture; they are successfully blaming Capitalism for the above result of their blocking of the working of the market.
Collectivisation does not work. Primitive societies were essentially collectivist. If collectivisation had worked, we would have stayed primitive, in the jungles, living the pristine life. Human beings grew in numbers only because ancients switched to Private Property, Trade, and consequent division of labour. Modern Civilisation can not be maintained without private property, freedom of trade, and right to enter into contracts with fellow human beings. And without modern Civilisation, it would be impossible to feed 7 billion human beings. If collectivisation is tried, a large portion of humanity will die.
We need to go back to the initial contract: who doesn’t work, doesn’t eat. There is always work for everybody. Only, a given individual may not get the work he likes at the given wages, but work itself is always there. And then there is game in the forests, birds in the sky, and fish in water; to hunt and to feed oneself. Our fellow human beings do not own us a living. The Leftists may come to us with the plans to loot those richer than us, and split the loot between the Leftists and us; but it would be a crime, even if the weapon is ballot. And crime has never fed anybody for any length of time. It destroys societies and countries.
(To read similar past articles, click on the titles below.-Ed)