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Piketty v. Du Fresne

It appears ( I have not seen it as yet) that this week's Listener has given top billing to a letter that I wrote regarding Karl du Fresne's rather lame 'tugging of the forelock' to to all our wonderful wealthy benefactors in last weeks issue. See my previous comments of Piketty's book here. And I understand that Patrick Smellie has written the lead story on Piketty's thesis. 

The paradox of the panegyric to ‘New Philanthropy’ in your 17 May being published at the same time as stories appeared in the ‘New York Times’, ‘Time’ and virtually every other journal of record praising French economist Thomas Piketty’s ‘Capital in the Twenty-First Century’ is remarkable.

One must assume that the motivation for your article was simply to encourage less reticence by similarly endowed individuals in our community – if so, well done! If it otherwise represents fawning praise to those who have inherited, or devised means by which to accumulate vast riches, and now seek approbation for their generosity, then it less laudable. 

Piketty’s thesis, based on historical analysis of the vast tax records in the US and France in particular, but from a great many other sources throughout the West, outlines the troubling parallels with the accumulation of wealth in pre-revolutionary France when the ‘1%’ managed to accumulate a similar share of the country’s wealth to that which pertains today.

Piketty blames the inadequacy of taxation systems generally for the manner in which modern ‘robber barons’, have managed to accumulate the wealth that they are now praised for voluntarily, and partially sharing. Piketty’s thesis applies equally in this country, and self-interest must therefore be given equal billing with altruism. Even our wealthy are capable reading recent tea-leaves, and hearing the faint ring of tumbrels in the streets.

The fact that elements (but by no means all) of the 1% see it as in their best interests to dispose of what is generally a very small proportion of their wealth in this manner hardly warrants the acknowledgment provided by Karl du Fresne’s article. More attention to taxation equity by present and future governments would be a preferable alternative. 

There are probably a heap of people out there who will find my view on the matter abhorrent, but that's okay. The fact that our benefactor class is apparently, comparatively more generous than in other similar countries probably indicates a more inequitable taxation system leading to an easier path to great wealth, combined with a good old dose of catholic guilts. Certainly the lack of a capital gains tax ranks as one of the great current stupidities - one where we are virtually alone in OECD, and one for which I suspect we will pay dearly in due course. 

I just believe that despite probably valid criticism, Piketty has hit on the absolute truth regarding the so called "trickle-down" effect, and the ability of the wealthy to screw the tax system more effectively the more wealthy they get. For them to claim kudos for their generosity while choosing the beneficiaries of their limited largesse sticks in the craw, or mine at least. John Key's claim that 10% pay 70% of the tax take is irrelevant - it is what is being evaded by the top 1% that matters. 

If we remain unable to devise the means by which to halt blatant tax evasion, and lack the wit to impose a more equitable taxation system, our society is facing a revolution, one way or another.  Even if such is not of the French model, those in politics had better take very close note of what Piketty is saying - it is not new, but is is for once easy to digest, and well supported - very well supported indeed!




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Reader Comments (1)

I am looking forward to reading Piketty and have enjoyed the commentary including yours Bill, but as to your view that 'our society is facing a revolution, one way or another' I think it has already occurred in Australia at least. Unfortunately it is not us peasants who are revolting, satiated as we are here by reality television, costly celebrations of Great War hagiography, and sport of course. The 1% have already won.
Certainly here in Oz the voracious lunatics have long since taken over the asylum, as this nasty greedy government makes true the Great Australian Saying 'I'm alright Jack '' [so bugger the rest of you]. The sliver of difference between the major political parties here offers no relief, as each party competes in cruelty, selfishness and stupidity. It is a race to the bottom here with a parlous taxation system, reduced services, attacks on citizens, military adventurism combined with greatly reduced international aid, and absurd climate denial-ism. Liberal and Labor have 'agreed' on a 30-something% renewable target, when we are best placed in the world to capitalise on these energy sources, while Austria and Sweden have achieved 61% and 68% respectively. The revolution is lost. Bring on the counter-revolution.

May 25, 2015 | Unregistered CommenterDeb Campbell

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