Tuesday, May 20, 2014

Austrian School's Capital in the 21st Century

Here is an interview of German economist Andreas Marquant who recently co-authored a book titled (translated to English) "Why Others are Getting Rich at Your Expense."

http://mises.org/daily/6753/How-Fractional-Reserves-and-Inflation-Cause-Economic-Inequality

At the very end of the interview, Marquant makes a strong criticism of Piketty's book.

Piketty’s biggest error is to conclude from the data collected that under capitalism the rich get richer in relation to everyone else. I’m afraid that such a claim is nonsense. Piketty takes his data from a period that is characterized by both capitalism and socialism, and then he attributes everything he dislikes to capitalism. Yet his data is not from a capitalist world. The economic system in which we live today is a crony capitalist system or, we might say, a system of money socialism. And that’s Piketty’s greatest error: to blame capitalism for the negative effects of crony capitalism and money socialism. But perhaps it is no error. Perhaps, he only wants to be loved by politicians and the IMF. I think they love him already, though.

Marquant argues that the income inequality is a result of crony capitalism and monetary socialism, not the free market. There are some strengths in Marquant's argument because it supports Piketty's argument of inflation's contribution to the growing income inequality and the crony capitalism that has been mentioned in the other books we have read in class.

I'll have to finish reading the book before I make my final opinion of Piketty's arguments.

1 comment:

  1. I think it may be a bit unfair to say that "we haven't really had capitalism" so his arguments don't hold--for all intents and purposes we've had capitalism for 100s of years now. Well have to wait until we finish the book.

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