AEI Hosts Peter Barnes on Piketty and New Equality
|July 14, 2014||Posted by Staff under Good Press|
This 2014 excerpt of the Schumacher Center for a New Economics blog, Jly 7, is by their Staff.
Thomas Piketty’s book Capital in the 21st Century shows that owners of capital assets – including stocks, bonds, and real estate – have historically realized a financial return higher than wage growth, favoring those with capital assets over those living on wages alone.
Though this bias of the economic system is recognized intuitively, the myth of a level playing field has persisted, largely based on the exception to the rule following World War II. Pent up demand for new goods meant an unusual period of wage growth that was almost equal to the income from rents, dividends, and interest.
Piketty imagines possible mechanisms for adjustment, his preferred being a global progressive tax on capital assets. It would rely on transparency regarding reporting of assets and the cooperation of all nation states – so hard to achieve.
Peter Barnes proposes a more pragmatic approach. In his new book, With Liberty and Dividends for All: How to Save Our Middle Class When Jobs Don’t Pay Enough, he suggests a tax on assets such as atmosphere. Those using up that commons, environmental polluters for instance, would pay a tax into a fund for equal distribution to all citizens of a region.
His latest book is an evolution of Barnes’s thinking, starting in the 1970′s with Who Owns the Land. An author and entrepreneur, Barnes co-founded Working Assets (now Credo) and has written extensively on capitalism and the commons.
Barnes names Thomas Paine, as one of the influences on his thinking. In the 1797 pamphlet, Agrarian Justice, Paine proposes a “ground rent” on land, paid into a fund from which cash payments would be made to citizens when they reached twenty-one.
Peter Barnes will discuss inequality of wealth distribution and ways to address it in a Schumacher Lecture titled “Economics for the Anthropocene.” Sunday, July 27th, 7:30PM at the American Institute for Economic Research. The Lecture will be available online later this summer.
Ed. Notes: These are good ideas that I wish were more popular. I think part of the problem is mixing commons and taxes. Commons belong to community whiles taxes belong to government. Paying taxes to politicians does not mean you’ll ever see the money again. But a commons means you get to take your turn using the resource, without having to go through any bureaucracy. If wannabe reformers did not bundle commons and government together but reinforced their distinct differences, then people might warm up to the idea of sharing the common wealth, which is the worth of Earth. Doing that would both protect the environment and narrow the income gap.