Hacker News Reader

Comment by _yosefk | Hacker News Reader

Dean Baker (warned of the housing bubble since 2002, "Bernie 2016") gave the best response to Piketty that I heard from a left-wing economist:

* Piketty's data is correct

* him collecting it was a harder feat than one might think

* attributing r>g to some unchangeable nature of capitalism is wrong because "capitalism is infinitely malleable" (every market is regulated somehow, things change a lot depending for instance on whether you do or don't have patents)

* Piketty's policy prescription (a global wealth tax) is unimplementable and harmful in the sense of getting all the attention instead of people focusing on his correct assessment that r>g and then on realistically implementable policies which could change this.

View on HN

Normalizing the concept of a wealth tax is productive even if it's unimplementable. The right has used the same approach by having think tanks promote flat consumption taxes and zero corporate tax rates.

If nothing else the absence of a theoretically desirable wealth tax serves as a justification for progressive income taxes and higher capital gains taxes.

Isn't taxing income making r>g?

A wealth tax isn't unimplementable because of political will but because a lot of assets are illiquid, hard to price, easy to hide, easy to move to another country (hence the call for a global tax, but what if a few countries defect?) or a combination.

As to approaches: "the left" if there is such a thing successfully campaigned for a full confiscation of property, a 100÷ wealth tax if you like, in huge chunks of the world - I don't see a weakness in persuasive ability there. Wasn't a great idea though. A smaller wealth tax is a better idea, but still not great. Baker who one can agree or disagree with has better policy ideas, or at least better thought-out and consistent ones IMO.

On the topic of that last point, Dr. Mazzucato proposes the alternative of greater licensing of government developed technology as a more realistic alternative in her book "The Entrepreneurial State". I wrote a summary here if you're curious: https://medium.com/@seanaubin/book-review-the-entrepreneuria...

So what does Dean Baker suggest?

Reply on news.ycombinator.com