Thomas Piketty talks bo***cks in his book ‘Capital in the Twenty-First Century’. President Hollande’s idiotic policies are driving away France’s Golden Geese from its shores in droves. Just ask Gerard Depardieu.
Now Christine Lagarde, the French managing director of the International Monetary Fund, is following suit in her recent address to the Inclusive Capitalism Conference. She doesn’t see the irony in the IMF promoting social equality. See http://www.imf.org/external/np/speeches/2014/052714.htm .
She says that persistent ethical failings among bankers, together with rising inequality, are undermining growth and financial stability. “The industry still prizes short-term profit over long-term prudence, today’s bonus over tomorrow’s relationship.” She may well be right about the banking industry, but to say that rising inequality is a barrier to growth, and could undermine democracy and human rights, is pure ideological cant.
Listen to her words: “One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy.” She quoted Oxfam’s claim that the world’s richest 85 people control the same wealth as the poorest half of the global population of 3.5 billion people.
“We must recognise that reducing inequality is not easy. Redistributive policies always produce winners and losers. Yet if we want capitalism to do its job – enabling as many people as possible to participate and benefit from the economy – then it needs to be more inclusive. That means addressing extreme income disparity.”
This is not rational economic theory, rather mere sentimentality. Her options to address inequality include more progressive taxation and greater use of property taxes. In other words Capitalism must stop being Capitalism. Risk takers must subsidize the risk averse, and the political elite will sort it all out. Just like Hollande in France? What arrogance! Jesus understood that “the poor you will always have with you …” Mathew 26:11.
How can the boss of the IMF fail to grasp both the moral jeopardy in her proposals, and that inequality is the engine of wealth creation? Redistribution is just interference by incompetents, knaves and the naive. The winners in Redistribution she refers to are the parasites in the political elite.
I’m not saying that “Greed is Good”. However, we should never lose sight of the fact that there is a Calvinistic morality in profit. The alternative, the slime mould of collectivism, will always create a dependency culture that ultimately destroys innovation, precipitates the entry of organized crime into business, and undermines the ability of trade to generate wealth.
And in the words of that great American vaudeville singer and philosopher, Sophie Tucker: “I’ve been rich and I’ve been poor. Believe me, honey, rich is better.”