"So why has Tyler turned into an anti-Piketty crusader? Well, Piketty is a popular topic, and his thesis is encountering a huge amount of skepticism, so there is demand out there for a one-stop anti-Piketty shop.
But it also seems possible that Piketty has deeply worried economists and pundits who thought that concern over inequality was a thing of the past, and that laissez-faire had basically won the battle of ideas. Piketty's immense popularity might seem, to these folks, to threaten to drag us back into a dark age when radical wealth redistribution was taken seriously, not only by large segments of the public, but by a number of prominent economists as well. Piketty might seem like the vanguard of an onrushing wave of socialist thought that could succeed in turning back the tide of neoliberalism that had been advancing for at least 40 years. So Cowen - and the numerous anti-Piketty writers he links to - may simply be worried about Piketty and what he represents."
Does a bear shit in the woods? Tyler Cowen is a sock puppet of the Koch brothers, his billionaire masters.
I marvel at the weak rebuttals to Piketty that pass themselves off as deep thinking, here is one from the AEI.
The commentator gives two main critiques:
One that the elasticity of substitution of labour for capital is less than one.
I think that (putting aside tax haven effects and offshoring) we are in an age of transformational -disruptive technologies.
What does OCR do for the demand for young lawyers to be interns to do discovery? How about tax planning software?
What did Google do to librarians?
Automated driving (Google again)?
Amazon drone delivery? (Amazon has a fully automated warehouse in Kentucky)
The other (laughable) objection to Piketty is that his recommendation of a global wealth tax is a non starter.
Yes, because we could never get a large number of countries to agree to tax harmonization -like say we did with the WTO. (Bretton Woods?). Large international treaties are impossible.
Here is the world that Tyler Cowen fears- the world where students are given the opportunity to take History of Economic Thought. The world where Piketty is taught along side Marx, where students must read Keynes "The Economic Possibilities of our Grandchildren", the world where students learn that Summer's secular stagnation arguments are the same ones Marriner Eccles was making in the Great Depression.
Imagine a world where students have a choice between ideas other then the entrenched neoclassical dogma. Imagine a world where History of Economic Thought is not cancelled despite high demand and students are not forced into yet another neoclassical option that they don't want. Imagine a world of ideas where the best ideas win. A world where the best teachers get to teach. Imagine a world where inductive thinking is given its place besides deductive thinking.
The entrenched establishment is afraid of the very egalitarian concepts they claim to promote. Tyler Cowen's response, when he can no longer deny inequality is rising, is to throw is hands in the air and say nothing can be done.
Be afraid Tyler, be very afraid. Reality is not on your side. One need only look at the history of organized religion throughout the ages to understand what is going on in Econ departments today. You can kill Galileo but you can't kill his ideas.
Piketty ideas are not a "fad diet" equivalent -he is popular precisely because they resonate with the reality people have been experiencing since the 1980s. A reality that grows sharper everyday.
Unlike Cowen, Piketty thinks that something can be done to ameliorate the future and it involves significant wealth redistribution. Piketty's ideas are resonating.
May the best ideas win. Here are a few:
How about closing tax havens, how about higher progressive taxes?
While we can't defend theoretically the correct amount of inequality that should be present in society -why not have a debate anyways rather than throw our hands up and say math (deduction) can't give us the answer.
Here is my starting position based on induction, Oliver Stone made Wallstreet in 1987 as a rebuke to the excesses of the 1980s. At that time average CEO compensation was 100X the AVERAGE employee of their firm. Now it is closer to 300X? Why don't we start by moving inequality back to the halcyon (neoclassical-right wing) days of Ronald Reagan that so many pine for?