imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
latest news
best of news




A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List


IMC Network:

Original Cities africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Wealth as a Problem

by Will Hutton Monday, Sep. 01, 2014 at 5:40 AM

The wealth of others has become more a problem and less an incentive. Capital is blind, Thomas Piketty says. Capital grows faster than the economy. Differences in wealth are inherent in capitalism but do not represent a natural law. A society can accept them or act against them.


Only a top tax rate of 80 percent can save us. Thomas Piketty’s controversial criticism of capitalism

By Will Hutton

[This article published 5/14/2014 is translated from the German on the Internet,]

A new economist who is not from the political right-wing enlivens the discussion. Whoever participated in the recent conference on new economic thinking in Toronto witnessed how the name Thomas Piketty and his book Capital in the Twenty-First Century was mentioned at least once in every lecture. The French economist unknown up to now was even praised by the Nobel Prize winners Paul Krugman and Joseph Stiglitz.

One has to go back to the 1970s and to Milton Friedman to find an economist with similar influence. Like Friedman, Piketty is a child of his time. Anxiety replaces fear of inflation today, the anxiety that the influence of the super-rich on our economy and society has become too great. Piketty does not doubt that the increasing inequality of wealth has reached an extent that endangers the future of capitalism itself. He can even prove that.


His thesis may displease those who think a successful production method presupposed the inequality of living- and income conditions. Capitalism needs unequal distribution of wealth as an incentive. Only in that way can risks be accepted and personal effort undertaken, the neoliberal economic credo declares. The state kills the goose that lays the golden egg when it tries to regulate the free market through excessive taxes on wealth, capital, inheritances and property.

Piketty is an empiricist. With economic data and tax registers from the last 200 years, he shows how the wealth of others has become more a problem and less an incentive. Capital is blind, he says. Capital grows faster than the economy when the returns – in the form of any kind of re-investments – whether in apartments or factories – exceeds the real growth of wages and production. That was always true in history except for a few phases, for example between 1910 and 1940. The inequality of wealth increases exponentially.

This process is intensified through inheritances and grotesquely overpaid “super-managers” particularly in the US and Great Britain…Piketty’s thinking is guided by the knowledge that such differences in wealth are inherent in capitalism but do not represent a natural law. A society can accept them or act against them.

The inequality of wealth in Europe and the US is twice as great as the inequality of incomes. The richest ten percent own between 60 and 70 percent of the total assets but only 25 to 35 percent of the total income. This concentration of wealth already existed before the First World War and goes back to the late 19th century. Coming into an inheritance represented the dominant element in the economic and social life.

A constant interrelation exists between wealth and income. Great wealth means earned income is supplemented by unearned capital income. The spiral of inequality is fueled again. Piketty’s book strikes in the US like a bomb because it thoroughly destroys the meritocratic myth (“Only performance counts,” “Every dishwasher can become a millionaire”) and stands up for the Matthew effect: whoever has will be given more.

The wastefulness and enormous social tensions of Edwardian England, the France of the Belle Époque and the America of the robber barons always seem to belong to the past. However Piketty shows that the phase between 1910 and 1950 when inequality decreased represents an exception. War and depression re-started the dynamic of inequality and at the same time brought the insight in the necessity of high taxes on high incomes, particularly income from assets, to maintain the social peace. The process of blind capital that multiplies faster and faster in fewer and fewer hands is underway again on a global scale – with possibly fatal consequences, as Piketty writes.

With the exception of one or two spectacular Silicon Valley startups, there is hardly an entrepreneur who can accumulate so much capital that would put in question the incredible concentration of wealth. In this sense, “the past devours the future.” Significantly, the Duke of Westminster and the Earl of Cadogan are two of Britannia’s richest men. They owe their wealth to the fields in Mayfair and Chelsea owned by their families centuries ago and the unwillingness to close the loopholes so their family wealth continued growing.


Everyone with (property) assets in branches where returns are higher than the economic growth quickly becomes richer and richer. The incentive to live from interests and incomes is greater than taking a risk. Consider only the explosive increase of rental property. Our businesses and rich persons do not need to promote innovations. They do not have to invest. All they need to do is pocket their returns and tax relief. Tax havens and compound interest accomplish the rest. The capitalist dynamic is undermined. Other forces reinforce this effect. Piketty shows how easy it is for the rich to evade taxation and emphasizes the share in tax revenue borne by middle class persons rises again and again. Even if the top one percent in Great Britain pay a third of all income tax, the income tax only amounts to 25 percent of all tax revenue. 45 percent comes from value-added or sales taxes, consumer taxes and insurance fees paid by the vast multitude.

Thus the average taxpayer must pay even more robustly for maintaining public services like education, health care and house building. The inequality of wealth leads to a profiteer economy hostile to innovation that falters and to more onerous working conditions and deteriorating public service. This may not matter to the rich. They distance themselves more and more from the rest of society not through merits or hard work but simply because they have capital that yields more returns than wages in the long term.

History shows societies in trouble try to protect themselves. They close their borders. Revolutions or wars occur. Piketty fears this could be repeated. His critics reply the aversion toward the super-rich will recede with a higher living standard of the whole population – and they have long decried the flawed data and false information – without success. People have not lost their innate sense of justice. Obviously it is manifest very differently. The growing Scottish nationalism is fed from the desire to bu9ild a country where wealth is not distributed as unequally as in England.

Piketty proposes bold solutions: a top tax rate up to 80 percent, an effective inheritance tax and a global wealth tax. This is presently inconceivable. However the challenge is to move these measures into the realm of the conceivable according to the economist Piketty. His book undoubtedly makes an important contribution to this.


Myth #1: “The state wastes tax funds”

Myth #2: “Our tax money seeps away in the social bureaucracy”

Myth #3: “Taxes, state and bureaucracy grow rampantly at the expense of citizens”

Myth #4: “Taxes brake growth and are poison for prosperity”

Myth #5: “Germany is a high tax country”

Myth #6: “Top earners face the heaviest tax burdens”

Myth #7: “The top income brackets bear the bulk of the tax burden”

Myth #8: “Wealth taxes strike the middle class”

Myth #9: “Record business taxes endanger the location Germany”

Myth #10: “The financial transactions tax strikes small investors and pensioned savers”

Myth #11: “One tax record follows another for the German treasury”

Myth #12: Tax cuts finance themselves”

Myth #13: “Higher top tax rates impair growth and employment”

Report this post as:

Local News


lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Xyloglossie attitudinale A23 8:07AM

Shadowgun Legends Hack and Cheats A23 7:24AM

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

Amy Goodman interview on cell phone safety A08 10:29PM

Mesa, Arizona police officer kills unarmed white man A08 9:50PM

Israeli leaders should be prosecuted for war crimes A08 9:48PM

Paraphysique de l'autorité A08 12:11AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy