Kinsley, Piketty and Henry
Michael Kinsley has had a long and distinguished career writing about politics and sometimes economics from the left-center perspective. UrbanTools has noticed that for decades he often prefaces an essay or column with " my favorite economist, the 19th-century American Henry George, and his best-selling book, Progress and Poverty (1879)." Well, we like Henry George too, so it's always nice to see how Kinsley uses Henry George situationally.
In this month's Vanity Fair – oh the irony – Kinsley tackles Capital in the Twenty-First Century by Thomas Piketty. We need not go into Piketty here, but the basic takeaways are the left thinks they found a new liberator, and the right thinks they found some mistakes in his spreadsheets, behind which hides a French Leninist in waiting.
Both sides are mostly wrong of course but Kinsley gives it a good shot by using back of the napkin calculations using US figures.
Kinsley agrees with Piketty that his tax on massive global wealth would be pretty impossible/utopian to achieve, especially because as Piketty acknowledges it's very hard to get at. Why? Because most of it is capital, most of which still zips around the world across borders and under mattresses. "Only the little people pay taxes", said a very little person once.
So Mr. Kinsley concludes Piketty has not quite an impossible dream but an "improbable" one. Yet the essay starts out with an encomium to Henry George, his "favorite economist" who years before financial globalization and mobile capital, discovered a resource for the world that cannot be hidden and cannot be avoided.
Land values do not exist just in the dirt. They are the basis for most of the great fortunes anywhere and anytime. They metastasize into grants of monopoly privilege and legal rent seeking, the better to make them grow.
The reason many many people cannot afford to live decently? Their paltry wage and sales taxes pay for government and debt, while the global wealthy shower money on cities like New York, London and Moscow by putting it into real estate.
Mr. Piketty does not promote a pipe dream, but he would do well to search for the root of the problem and start there. If Joseph Stiglitz, Milton Friedman, and the Altoona Pennsylvania city Council can do it so can he.
We look forward to the day when Michael Kinsley understands he is not alone in his search for true economic justice using lessons of classical political economy . Perhaps there is room for both Vanity Fair and Progress and Poverty?