I went to see Thomas Piketty tonight, author of the socialist tract of our time, Capital in the Twenty-First Century. The left has run out of all of the standard criticisms of capitalism, that it will crush the working class, savage our living standards, prevent production for need rather than profit, and et cetera ad infinitum. That we live in a world of material abundance hasn’t tipped the balance away from the fifty per cent of every society who are frustrated because others do better than they do and want redress. Hence the stellar issue of our time, the demand for equality. It was a short Q&A after with only three questions that ended up being asked, and so I was left with the microphone in my hand but no chance to ask what I had in mind. This was my question:
We are meeting in the Melbourne Town Hall, built when Australia was the richest country in the world, and Melbourne was the richest city in the world’s richest country.
Back then, no one had a car, a computer, a radio or TV. Few had indoor plumbing, hot and cold running water and electric lights. No one flew to London, went to the movies or surfed the net.
What possible difference could it make to anyone whether income distribution in some measure that is invisible to everyone without a dataset and a computer happens to be more skewed in one direction today than it was at some moment in the past?
I have asked a similar question before to someone at an Economics Society meeting in Melbourne, and the chap point blank refused to answer my question because, he said, it didn’t make sense to him.
But the fact is that the poor will always be with us and so will the rich. We have the richest poor people who have ever lived, and there is no reason to think that if we manage our affairs properly, that the standard of living of the poorest amongst us in fifty years will have an income level that is only attainable by the top ten percent of our population today.
So the sad thing is that the one thing we have discovered by increasing wealth and raising living standards to levels inconceivable a century ago has hardly affected the average level of contentment. As for distribution of wealth, the person who did ask the third question instead of me went on a long rant against the capitalist system. My expectation was that Piketty would at least defang to some extent the premise of his question, but he didn’t. So he really is nothing other than a soap box rabble rouser with no other genuine intent other than to stir up as much trouble as he can.